United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
Kristen L. Mix United States Magistrate Judge.
matter is before the Court on Defendants Equifax Information
Services, LLC and Equifax Inc.'s Motion to
Dismiss [#10] (the “Motion”). Plaintiff
filed a Response [#18] in opposition to the Motion, and
Defendants Equifax Information Services, LLC and Equifax,
Inc. (collectively, “the Equifax Defendants”)
filed a Reply [#21]. The Motion has been referred to the
undersigned for a recommendation regarding disposition
pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.L.CivR
72.1(c). See [#28]. The Court has reviewed all
briefing on the Motion, the entire case file, and the
applicable law, and is sufficiently advised in the premises.
For the reasons set forth below, the Court respectfully
RECOMMENDS that the Motion [#10] be
2014, Plaintiff leased a Hyundai Veloster
(“Vehicle”) from Shortline Automotive, Inc.
(“Shortline”). Compl. [#1] ¶ 9.
Plaintiff alleges that he signed several documents related to
the Vehicle but did not receive a copy of the contract.
Id. ¶¶ 10-11. Shortline, which is not a
party to the suit, assigned Plaintiff's contract to
Defendant Hyundai Capital America d/b/a Hyundai Motor Finance
(“HMF”). Id. ¶ 14. Defendant HMF
serviced the contract and accepted loan payments from
Plaintiff for thirty-five months. Id. ¶ 15. On
September 17, 2017, Defendant HMF sent Plaintiff a statement
indicating that Plaintiff's balance on the account was
-$0.07 for overpayment during the lease term. Id.
¶ 17. Defendant HMF also told Plaintiff that the Vehicle
would be subject to an independent inspection for excess wear
and usage. Id. ¶ 19.
October 19, 2017, Defendant HMF sent Plaintiff a letter
indicating that he owed an additional $623.42 for excess wear
and use, a $400 Disposition Fee, and $81.87 in sales/use tax
(“Tax Fee”) (collectively, the
“Fees”). Id. ¶ 20. Plaintiff sent
Defendant HMF a letter requesting information about the Fees,
a line-item accounting of the excess wear and use fee, and a
copy of the contract. Id. ¶¶ 22-23.
Plaintiff did not recall a Disposition Fee being provided for
under the contract and therefore requested information
regarding the contractual basis for the Disposition Fee.
Id. ¶ 24. In response, Defendant HMF sent
Plaintiff an itemized list of defects and overdue repairs for
which Plaintiff allegedly owed $623.42, but did not send
Plaintiff a copy of the contract. Id. ¶¶
26-28. Plaintiff then sent a check for $623.42, the amount
owed for excess wear and use, to Defendant HMF indicating in
the check's memo line that the check constituted payment
in full. Id. ¶¶ 29-30. Defendant HMF
accepted Plaintiff's check and referred the collection of
the remaining Fees to a collection agency, Defendant SRA
Associates, LLC (“SRA”). Id. ¶¶
SRA sent Plaintiff a letter demanding payment of $481.80,
which is the total of the unpaid Fees minus the lease term
overpayment of -$.07. Id. ¶ 34. Plaintiff told
Defendant SRA that he would not pay the amount demanded
because, “HMF has already accepted payment by accord
and satisfaction, the additional fees were not provided in
the contract, no copy of the contract was provided to [ ]
Plaintiff, and sales tax is not collectible without a nexus
between the good/service and the consumer.”
Id. ¶ 35.
February of 2018, Plaintiff was notified that derogatory
information had been reported on consumer reports from
Defendant Experian Information Solutions, Inc.
(“Experian”), the Equifax Defendants, and
TransUnion, LLC (“TransUnion”), which is not a
party to this action. Id. ¶ 38. The consumer
reports indicated an overdue balance of $481 due to Defendant
HMF. Id. ¶¶ 38-39. In response, Plaintiff
sent a letter to the Equifax Defendants, Defendant Experian,
and Transunion disputing the derogatory information on their
corresponding consumer reports. Id. ¶¶ 41,
45. As a result of the derogatory information, American
Express closed Plaintiff's business credit card and
demanded full payment of the outstanding balance.
Id. ¶¶ 42-43. Plaintiff's credit score
also fell by approximately fifty points due to the derogatory
information. Id. ¶ 44.
ultimately determined that the information provided by
Defendant HMF was unsubstantiated. Id. ¶ 45. On
March 8, 2018, the Equifax Defendants notified Plaintiff that
the dispute review was complete and that the derogatory
information provided by Defendant HMF would not be removed
from Plaintiff's consumer report. Id. ¶ 46.
The Equifax Defendants' letter stated that, “you
may request a description of the procedure used to determine
the accuracy and completeness of the information, including
the business name, and address of the furnisher of
information contacted, and if reasonably available the
telephone number.” Id. ¶ 47; Exhibit
J [#1-10]. Plaintiff requested a description of the
Equifax Defendants' procedures used to determine the
accuracy and completeness of the derogatory information, but
the Equifax Defendants did not respond. Id.
¶¶ 49-50. Plaintiff asserts that he has been
“chasing the underlying contract for months, first
asking [Defendant] HMF, then [Defendant] SRA, then [the]
Equifax [Defendants] and [Defendant] Experian.”
Id. ¶ 55.
Complaint [#1] asserts two claims against the Equifax
Defendants, both of which arise under the Fair Credit
Reporting Act (“FCRA”): (1) violation of 15
U.S.C. § 1681i(a)(1)(A) for failure to conduct a
reasonable reinvestigation (Claim 13), and (2) violation of
15 U.S.C. § 1681i(a)(7) for failure to provide a
description of the reinvestigation procedures (Claim 14).
Id. ¶¶ 215-216, 220, 223-227. Plaintiff
seeks compensatory damages, court costs, attorneys' fees,
pre- and post-judgment costs, as well as a declaration
stating that, “(1) the Disposition Fee is not
collectible under the contract; (2) the Tax Fee is not
collectible under the contract or any other provision of law;
and (3) the contract was satisfied in full pursuant to the
doctrine of accord and satisfaction.” Compl.
[#1] at 30-31.
Standard of Review
purpose of a motion to dismiss pursuant to Rule 12(b)(6) is
to test “the sufficiency of the allegations within the
four corners of the complaint after taking those allegations
as true.” Mobley v. McCormick, 40 F.3d 337,
340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a
complaint may be dismissed for “failure to state a
claim upon which relief can be granted”). “The
court's function on a Rule 12(b)(6) motion is not to
weigh potential evidence that the parties might present at
trial, but to assess whether the plaintiff's complaint
alone is legally sufficient to state a claim for which relief
may be granted.” Sutton v. Utah State Sch. for the
Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)
(citation omitted). To withstand a motion to dismiss pursuant
to Rule 12(b)(6), “a complaint must contain enough
allegations of fact to state a claim for relief that is
plausible on its face.” Robbins v. Oklahoma,
519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007));
see also Shero v. City of Grove, Okla., 510 F.3d
1196, 1200 (10th Cir. 2007) (“The complaint must plead
sufficient facts, taken as true, to provide ‘plausible
grounds' that discovery will reveal evidence to support
the plaintiff's allegations.” (quoting
Twombly, 550 U.S. at 570)).
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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). “A pleading that offers labels and conclusions
or a formulaic recitation of the elements of a cause of
action will not do. Nor does a complaint suffice if it
tenders naked assertion[s] devoid of further factual
enhancement.” Id. (brackets in original;
internal quotation marks omitted).
survive a motion to dismiss pursuant to Rule 12(b)(6), the
factual allegations in the complaint “must be enough to
raise a right to relief above the speculative level.”
Christy Sports, LLC v. Deer Valley Resort Co., 555
F.3d 1188, 1191 (10th Cir. 2009). “[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, ” a factual
allegation has been stated, “but it has not show[n][ ]
that the pleader is entitled to relief, ” as required
by Fed.R.Civ.P. 8(a). Iqbal, 556 U.S. at 679 (second
brackets added; citation and internal quotation marks