United States District Court, E.D. Pennsylvania
ORDER - MEMORANDUM
C.
Darnell Jones, II Judge
AND
NOW, this 26th day of March, 2018, upon
consideration of Plaintiff's Complaint (ECF No. 1),
Defendant Bank of America, N.A.'s Motion to Dismiss (ECF
Nos. 26 and 27) and all responses and replies thereto (ECF
Nos. 29 and 36), Defendant JP Morgan Chase's Motion to
Dismiss or in the Alternative to Compel Arbitration (ECF No.
11) and all responses and replies thereto (ECF Nos. 20 and
25), and Defendant Northland Group Inc.'s Motion to
Dismiss (ECF Nos. 21 and 22) and all responses and replies
thereto (ECF Nos. 28 and 33), it is hereby
ORDERED as follows:
1. Defendant Bank of America, N.A.'s Motion (ECF Nos. 26
and 27) is DENIED.
2. Defendant JP Morgan Chase's Motion to Compel
Arbitration (ECF No. 11) is GRANTED.
Plaintiff's claim against Defendant JP Morgan Chase shall
be referred to the federal arbitration program forthwith.
3. Defendant Northland Group Inc.'s Motion (ECF Nos. 21
and 22) is GRANTED. Plaintiff's claim
against Defendant Northland Group Inc. is hereby
DISMISSED without prejudice. Plaintiff is
granted leave to amend Count II of the Complaint within
fourteen (14) days of the date of this Order-Memorandum.
Relevant
Background
The
following facts are presented in the light most favorable to
Plaintiff. In February 2008, Plaintiff entered into an
agreement with Defendant Bank of America, N.A.
(“BoA”) to cosign her then-husband's student
loans. (ECF No. 27, ex. A.) In August of the same year,
Plaintiff entered into an almost identical agreement with
Defendant JP Morgan Chase Bank, N.A. (“Chase”).
(ECF No. 11, ex. A.) Plaintiff and her former husband
divorced four years later. (ECF No. 1, ¶ 11.) As part of
the stipulated Divorce Agreement, Plaintiff's former
husband assumed sole responsibility of his outstanding
student loan debt, and was required to indemnify Plaintiff
for any of her obligations related thereto. (ECF No. 1,
¶ 11.) Despite the terms of Plaintiff's Divorce
Agreement, in late 2016, Defendant Northland Group, Inc.
(“NGI”) contacted Plaintiff by mail and demanded
that Plaintiff pay toward an outstanding balance on her
former husband's Chase loan. (ECF No. 1, ¶ 12.) And
around that time, Plaintiff noticed that her credit reports -
as provided by the defendant credit agencies - reflected
negative credit information with respect to the Chase and BoA
student loans. (ECF No. 1, ¶ 16.) Plaintiff formally
disputed the accuracy of the BoA and Chase trade lines with
Defendants Trans Union, LLC (“Trans Union”) and
Equifax. (ECF No. 1, ¶ 17.) In the filed disputes,
Plaintiff enclosed her Divorce Agreement and informed the
defendant credit agencies that Plaintiff's former husband
was required by court order to indemnify Plaintiff for any of
her responsibilities under the loan agreements. (ECF No. 1,
¶ 18.) Both Trans Union and Equifax acknowledged receipt
of Plaintiff's dispute, and the dispute was forwarded to
Defendants Chase and BoA for review. (ECF No. 1, ¶
19-20). At some point thereafter, Plaintiff was informed that
her accounts with Defendants Chase and BoA had been
“verified, ” and that there would be no changes
made to the disputed credit information. (ECF No. 1, ¶
21.)
In
March 2017, Defendant NGI made two additional attempts to
collect payment from Plaintiff. (ECF No. 1, ¶ 24.) In
May 2017, Plaintiff again disputed the accuracy of the
reported credit information related to the Chase and BoA
student loans with Defendants Trans Union and Equifax. (ECF
No. 1, ¶ 27.) In her second dispute, Plaintiff again
advised the defendant credit agencies that Plaintiff's
husband was under court order to pay any remaining balances
on the reported loans. (ECF No. 1, ¶ 28.) Plaintiff
enclosed her Divorce Agreement for their reference. (ECF No.
1, ¶ 28.) Both Defendant Trans Union and Defendant
Equifax acknowledged receipt of Plaintiff's second
dispute, and reportedly forwarded said dispute to Defendants
Chase and BoA. (ECF No. 1, ¶ 29-30.) Once again,
Defendants Trans Union and Equifax notified Plaintiff that
her accounts with Defendants Chase and BoA had been
“verified, ” and that no changes would be made to
the disputed credit information. (ECF No. 1, ¶ 31.)
After
Plaintiff's second attempt to dispute the alleged
inaccuracies in her credit report Defendant NGI contacted
Plaintiff in an effort to collect on outstanding balances
owed to Defendant Chase. (ECF No. 1, ¶¶ 35, 38.)
According to Plaintiff, each time Defendants NGI engaged in
collection efforts on behalf of the Defendant Chase, the
amount sought in collection differed from the amounts
reflected in Plaintiff's credit reports. (ECF No. 28, p.
4.) Based on all of the foregoing, Plaintiff's credit
score dropped substantially, Plaintiff was denied for a
personal loan, and two of Plaintiff's credit cards were
closed. (ECF No. 1, ¶ 41.)
The
instant action alleges violations of the Fair Credit
Reporting Act, Fair Debt Collection Practices Act, and state
tort law. Defendants BoA and NGI timely filed Motions to
Dismiss the Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6). Defendant Chase also seeks dismissal of
the Complaint for failure to state a claim, but asks that in
the alternative, the Court compel Plaintiff to arbitrate her
claims against Defendant Chase. The Court considers each
Defendant's Motion herein.
Standard
of Review
In
deciding a motion to dismiss pursuant to Rule 12(b)(6),
courts must “accept all factual allegations as true,
construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable
reading of the complaint, the plaintiff may be entitled to
relief.” Phillips v. Cnty. of Allegheny, 515
F.3d 224, 233 (3d Cir. 2008) (internal quotation marks
omitted). After the Supreme Court's decision in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007),
“[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. at 678
(citing Twombly, 550 U.S. at 556). This standard,
which applies to all civil cases, “asks for more than a
sheer possibility that a defendant has acted
unlawfully.” Id. at 678; accord Fowler v.
UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)
(“[A]ll civil complaints must contain more than an
unadorned, the-defendant-unlawfully-harmed-me
accusation.”) (internal quotation marks omitted).
Analysis
In the
interests of clarity, the Court considers the merits of ...