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Houghton v. Insurance Crime Prevention Institute and John Andrew Hoda

argued: June 2, 1986.

JOSEPH M. HOUGHTON, APPELLANT
v.
THE INSURANCE CRIME PREVENTION INSTITUTE AND JOHN ANDREW HODA



On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 84-5843)

Author: Sloviter

Before ALDISERT, Chief Judge, GARTH, and SLOVITER, Circuit Judges.

SLOVITER, Circuit Judge.

Joseph M. Houghton, who had filed a complaint under the Fair Credit Reporting Act, ("FCRA" or "Act"), 15 U.S.C. § 1681-1681t, appeals from the order dismissing his complaint as time barred. He argues that the district court should have applied the discovery rule to the two-year statute of limitations set forth in the Act. It is a narrow, but novel, issue. We agree with the district court that the complaint is barred, and we will affirm the district court's order.

I.

FACTS

On November 29, 1984, Joseph M. Houghton filed a complaint alleging that defendants The Insurance Crime Prevention Institute (ICPI), an organization funded by property and casualty insurance companies, and John Andrew Hoda, an employee of ICPI, violated the FCRA, 15 U.S.C. § 1681q, by obtaining under false pretenses information on a consumer from a consumer reporting agency. The complaint alleged that on or about July 6, 1982, Hoda, on behalf of ICPI, an agency which seeks to investigate suspected fraudulent claims, submitted to the Mid-East Index Bureau, a division of Central Index Bureau (CIB), card files stating that Houghton was involved in an accident on October 15, 1980 and that he had made a claim with Kemper Insurance Company regarding the accident. Houghton contends this information was false and fraudulent, because he was not involved in an accident on that date, had made no claim with Kemper as of that time, and had no bodily injury claim pending with Kemper at that time. The complaint alleges that defendants knew or should have known that this information was false and fraudulent and that defendants submitted the information to CIB so that, in return, defendants could obtain from CIB its accumulated confidential medical records, documents and information from other insurance carriers about Houghton.*fn1

The complaint alleges that defendants had no permissible purpose under FCRA, 15 U.S.C. § 1681b, to obtain the information from CIB, a consumer reporting agency within the meaning of the Act, and that defendants disseminated to others the information received with the specific intent to discredit and harass plaintiff and to interfere in his personal affairs. Houghton sought compensatory and punitive damages, attorneys' fees and costs pursuant to 15 U.S.C. § 1681n.

Defendants filed an answer on January 14, 1985, denying the material allegations in the complaint and asserting an affirmative defense that the complaint was barred by the two-year application statute of limitations set forth in FCRA, 15 U.S.C. § 1681p. At the same time defendants filed a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) on this ground. Since the action complained of took place on July 6, 1982, it is apparent that the complaint filed November 29, 1984 was not filed within the two-year period.

Houghton then amended the complaint to include the following paragraph:

Plaintiff did not become aware of the existence of said [index] card . . . prior to October 24, 1983, when a copy of said card was forwarded to plaintiff's counsel by the Secretary and Counsel of the American Insurance Association. . . . Moreover, plaintiff exercised all due diligence in obtaining said card and could not have obtained said card sooner, as plaintiff on numerous occasions prior to October 24, 1983, demanded of CIB all cards and reports in their possession regarding plaintiff, but said care was either inadvertently or intentionally withheld until October 24, 1983.

By this amendment, Houghton sought to invoke the discovery rule to toll application of the two-year statute if limitations until his discovery of the relevant facts.

The district court then granted the motion to dismiss, holding:

Plaintiff's amended complaint is barred by the two-year statute of limitation in the Fair Credit Reporting Act, 15 U.S.C. § 1681p, and does not come within the "discovery" exception therein since the disclosure was not one required to be disclosed by defendants to plaintiff and the Central ...


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