• Court Finds That Plaintiff’s Lawsuit against Furnisher Barred by Res Judicata
  • March 9, 2010 | Author: Matthew Kasey Ratliff
  • Law Firm: Strasburger & Price, LLP - Dallas Office
  • Facts: Plaintiff’s son opened a GE credit account using Plaintiff’s personal identifying information. Thereafter, a delinquent balance on the GE credit account appeared on Plaintiff’s credit report. Plaintiff sent letters disputing the GE balance to various credit reporting agencies (“CRAs”). The CRAs notified GE of Plaintiff’s dispute but GE did not instruct the CRAs to note the GE debt as “disputed” on Plaintiff’s credit report. Plaintiff filed suit against GE alleging violations of the Fair Credit Reporting Act (“FCRA”). In the course of that litigation, GE served an Offer of Judgment on Plaintiff pursuant to Fed. R. Civ. P. 68. Plaintiff accepted the offer and filed a Notice of Acceptance and the court subsequently dismissed Plaintiff’s complaint against GE “with prejudice and on the merits.” Meanwhile, Plaintiff requested a copy of his credit report from CRA Experian. The report continued to note the disputed GE debt and Plaintiff disputed the debt with Experian. Experian subsequently notified GE of the dispute; however, GE declined to direct Experian to delete the account from Plaintiff’s credit report or to note the debt as “disputed.” Plaintiff filed a second lawsuit alleging that GE violated the FCRA by failing to conduct a reasonable investigation of his recent dispute and failing to denote the GE debt as “disputed.” GE filed a motion to dismiss on the basis of res judicata. The court granted GE’s motion.

    • Res Judicata. To establish that res judicata bars Plaintiff’s claim, GE must show that: (1) the first suit resulted in a final judgment on the merits; (2) the first suit was based on proper jurisdiction; (3) both suits involve the same parties (or those in privity with them); and (4) both suits are based upon the same claims or causes of action.
    • Res Judicata.  The record indicates that both Plaintiff and GE were parties to the first lawsuit and that the court dismissed the action “with prejudice and on the merits.” Accordingly, the first three elements of the res judicata analysis are satisfied. 
    • Res Judicata. To determine whether both suits are based on the same claims, a court looks to see if the claim is barred by res judicata if it arises out of the same nucleus of operative facts as the prior claim. Plaintiff contends that the present lawsuit asserts new facts, however, like the dispute letters that form the basis of Plaintiff’s first lawsuit, the correspondence forming the basis for Plaintiff’s second lawsuit contested Plaintiff’s ownership of the GE account and sought the removal of the disputed debt from his credit report. The facts underlying both claims, therefore are related in time, space, origin, and motivation. 
    • Res Judicata. Plaintiff also argues that his present action states a new cause of action, however, Plaintiff had a full and fair opportunity to raise this claim in the prior lawsuit and res judicata bars him from asserting it now. In summary, the court determines that Plaintiff’s suits are based upon the same claims, and that Plaintiff previously had a full and fair opportunity to litigate the issues now before the court.