• Court Denies Credit Furnisher’s Motion for Summary Judgment in Part Because Credit Furnisher’s Argument is More Suited for a Motion to Dismiss
  • October 18, 2010 | Author: Ryan Langston
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Cosmas v. American Express Centurion Bank, 2010 U.S. Dist. LEXIS 58780 (D. N.J. June 11, 2010)

    Facts: Plaintiff originally filed suit against American Express Centurion Bank (“Defendant” or “AMEX”) alleging claims under the FCRA and various state law claims.  Plaintiff was issued a Business Gold Card as an employee for Tri State Environmental Co., Inc. (TriState”). Plaintiff had the card for nine years and TriState paid the bill each month. At the time of TriState’s bankruptcy, the card had a $48,000 balance. AMEX hired a collection agency to collect the unpaid balance. The collection agency filed suit against Plaintiff in state court. Plaintiff prevailed and the state court held that he was not liable for the business debt. However, AMEX continued to report the account as delinquent. Although Plaintiff allegedly wrote multiple letters to AMEX and Equifax, AMEX did not cease reporting the derogatory account. Plaintiff also had a personal credit card account issued by AMEX on which he had accumulated over 600,000 Membership Reward points. Correspondence from AMEX indicated that AMEX revoked Plaintiff’s Reward points because he failed to pay the business card balance.

    Defendant moved for summary judgment on all of Plaintiff’s claims, and Plaintiff moved for partial summary judgment on his claims under the FCRA.  The Court granted Defendant’s motion as to Plaintiff’s first count asking for specific performance, but denied AMEX’s motion as to Plaintiff’s FCRA state-law claims.  The court denied without prejudice Defendant's motion for summary judgment on Plaintiff’s state law claims and directed Defendant to file a motion within fourteen (14) days addressing whether the state law claims were preempted.  Plaintiff’s motion for partial summary judgment was also denied.

    • Statute of Limitations. AMEX contends that Plaintiff’s claims are time barred under § 1681pbecause Plaintiff did not file suit until three years after discovering the delinquent account. The Court held, however, that Plaintiff’s claims were based on AMEX's continued reporting of the delinquency after entry of the state court judgment in August of 2006. Counting from the August 2006 date, the Court held that Plaintiff’s filing date of November 2007 was within the FCRA limitations period.
    • Credit Furnisher. AMEX argued that the FCRA applies only to CRAs and that it could not be held liable because it did not provide a consumer report as required under § 1681s-2(a). The Court disagreed, holding that even though Plaintiff did not cite to a specific subsection of the FCRA, it was clear from his pleading that Plaintiff alleged violation of § 1681s-2(b).
    • Summary Judgment. AMEX further argued that Plaintiff’s FCRA claim was insufficiently pled under Rule 8(a)(2), because he failed to cite the specific FCRA subsection applicable to AMEX's actions. The Court disagreed stating that such a challenge may be raised on a Rule 12(b)(6) motion to dismiss, but is inappropriate at summary judgment. Additionally, the Court found AMEX’s argument disingenuous because it was evident from the record that AMEX was well aware of the basis for Plaintiff's claims.
    • Reasonable Procedures. To succeed under the FCRA, Plaintiff must not only demonstrate that AMEX received notice of his dispute, but also that AMEX failed to conduct a reasonable investigation and correct any inaccurate information uncovered by the investigation. Whether a furnisher has conducted a reasonable investigation is generally a question of fact for the jury. Additionally, the Court held that a fact issues existed as to whether Plaintiff suffered damages from AMEX’s alleged FCRA violation. Therefore, the Court denied Plaintiff’s motion for partial summary judgment.