• Court Dismisses Negligent Misrepresentation Claim Brought by Company Extending Commercial Credit against Equifax
  • June 10, 2010
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Aclys Int'l, lLC v. Equifax, Inc., 2010 U.S. Dist. LEXIS 43923 (D. Utah May 5, 2010)
    Facts: Aclys International, LLC, (Aclys) brought negligence and negligent misrepresentation claims against Equifax because of omissions on a credit report.  Aclys had retained a third party to investigate some potential business partners, and the third party had obtained a credit report pertaining to one of those potential business partners from Equifax. Aclys relied on the credit report, which did not identify two substantial default judgments, in extending more than five million dollars in purchase-order financing. Ultimately, the business partner defaulted on the loans, and Aclys sought to recover its damages from Equifax. Equifax moved for judgment on the pleadings, arguing that Aclys’s claim was barred by the economic loss rule. The court agreed and dismissed Aclys’s claims.

    • Economic Loss Rule. The economic loss rule prevents a party from claiming economic damages in negligence absent physical property damage or bodily injury. Because Aclys sought damages for purely economic losses sustained as a consequence of relying on the Equifax credit report, its loss fell squarely within the economic loss rule.
    • Economic Loss Rule. A claim of negligent misrepresentation falls outside the economic loss rule only when the party making the misrepresentation owes an independent duty of care.
    • FCRA. The FCRA did not impose any duties on Equifax in favor of Aclys. Aclys obtained a consumer credit report for the purpose of extending millions of dollars of purchase order financing, not consumer financing.  Moreover, the FCRA was enacted to protect consumers from consumer reporting agencies (“CRAs”) that disseminated inaccurate credit information about them, not businesses such as Aclys that use credit reports to make decisions about whether to issue credit.
    • FCRA. The FCRA does not require CRAs to include all relevant information about an individual. Rather, the FCRA only requires that the information present on a credit report be accurate. In this case, Aclys made no allegation that the information included on the Equifax credit report was incorrect. Rather, Aclys claimed only that some information was omitted. Equifax’s statutory duty to report information did not extend to including all available credit information on an individual.
    • Duty of Care. Equifax did not owe a common law duty of care to Aclys, so the economic loss rule applied to bar Aclys’s negligent misrepresentation claim against Equifax.