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Vecchione v. Monarch Recovery

United States District Court, M.D. North Carolina

December 9, 2014



JAMES A. BEATY, District Judge.

This matter is currently before the Court on the Motion to Dismiss [Doc. #18] filed by Defendant Monarch Recovery. The Motion is fully briefed and is now before the Court for review. For the reasons discussed below, the Court grants Defendant's Motion to Dismiss.


The factual allegations contained in Plaintiff's Amended Complaint, [1] taken as true for purposes of Defendant's Motion to Dismiss, alleged that Defendant initiated a hard pull of Plaintiff's credit report from Experian without a permissible purpose, which reduced Plaintiff's credit score. Specifically, Plaintiff asserted that Defendant initiated the hard pull on October 19, 2012. Furthermore, Plaintiff stated that he faxed Defendant a proof of authorization to view Plaintiff's credit report, but Defendant did not provide any such proof after such request. Plaintiff asserted that these actions have resulted in credit denials, credit delays, an inability to apply for credit, loss of use of funds, mental anguish, emotional distress, humiliation, loss of reputation, and expenditures for fees and costs.

Based on these facts, Plaintiff alleged that Defendant violated the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA") through willful and negligent means by obtaining Plaintiff's consumer credit report without a permissible purpose. Plaintiff further asserted that Defendant violated the North Carolina Debt Collection Act, N.C. G.S. § 75-50 to 75-56 ("NCDCA") by misleading the credit reporting bureau into believing that Defendant had permission to obtain his credit reports. Plaintiff also seems to have asserted that Defendant's acts were unconscionable under the NCDCA because it willfully pulled Plaintiff's credit report with no permissible purpose, which violated Plaintiff's privacy rights and caused a decrease in his credit score.

The Court previously granted the Defendant's Motion to Dismiss as to Plaintiff's original Complaint. In doing so, however, the Court allowed Plaintiff an opportunity to amend his Complaint to cure the deficiencies found in the Complaint. When the Court granted the Motion to Dismiss, it noted that Plaintiff failed to allege facts sufficient to state a required element of his FCRA claim. Specifically, the Court found that Plaintiff failed to allege that Defendant obtained Plaintiff's consumer report for an impermissible purpose. The original Complaint did not include any state law claims or claims for negligent violations of the FCRA, but the original Complaint did include a claim under the Fair Debt Collections Practice Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), which Plaintiff no longer alleges in his Amended Complaint.

Defendant has now filed a Motion to Dismiss Plaintiff's Amended Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, in which it argued that Plaintiff failed to sufficiently state his claims. Plaintiff filed a response and argued that he has sufficiently stated his claims, or in the alternative, Plaintiff requested that the Court provide him another opportunity to amend his Complaint.


In reviewing a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), the Fourth Circuit has directed that courts "take the facts in the light most favorable to the plaintiff, ' but [they] need not accept the legal conclusions drawn from the facts, ' and [they] need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.'" Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

"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 . (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id . "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of "entitlement to relief."'" Id . (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955) (citations omitted). Thus, dismissal of a complaint is proper where a plaintiff's factual allegations fail to "produce an inference of liability strong enough to nudge the plaintiff's claims across the line from conceivable to plausible.'" Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 256 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 683, 129 S.Ct. 1937).


In its Motion to Dismiss, Defendant asserted that Plaintiff's Amended Complaint should be dismissed, pursuant to Rule 12(b)(6). Specifically, Defendant asserted that Plaintiff's claims in Count I and II brought pursuant to the FCRA fail to state a claim because Plaintiff has not sufficiently alleged that Defendant lacked a permissible purpose to obtain Plaintiff's credit report. Furthermore, as to Count I for the willful violation of the FCRA, Defendant argued that this claim also fails because Plaintiff failed to sufficiently assert that Defendant had the culpable mental state required for such claim. Defendant also argued that insomuch as Plaintiff is attempting to assert a claim in Count I pursuant to 15 U.S.C. § 1681q of the FCRA, any such claim must fail because that provision is a criminal provision, and not one allowable in a civil cause of action. As to Count II of Plaintiff's Amended Complaint, Defendant asserted that Plaintiff has failed to allege actual damages, and thus, failed to state a claim for a negligent violation of the FCRA. Finally, as to Plaintiff's newly asserted state law claim under the NCDCA, Defendant argued that such claim should be dismissed because Plaintiff has failed to allege any of the required elements of the claim or any conduct constituting unfair acts.

A. FCRA Non-Compliance Claims

As stated above, in its Motion to Dismiss, Defendant asserted that Plaintiff has failed again to assert sufficient facts establishing that it obtained Plaintiff's credit report for an impermissible purpose. The FCRA imposes civil liability against "[a]ny person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose...." 15 U.S.C. § 1681n(b). To state a claim for willful or negligent acquisition of a credit report in violation of the FCRA, "a plaintiff must allege facts showing each of the following: (i) there was a consumer report; (ii) the defendants used or obtained it, (iii) the defendants did so without a permissible statutory purpose, and (iv) the defendants acted with the specified culpable mental state." ...

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