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Thomas v. Hyundai Capital America

United States District Court, D. Colorado

October 9, 2018

CHRISTOPHER THOMAS, Plaintiff,
v.
HYUNDAI CAPITAL AMERICA, SRA ASSOCIATES, LLC, EQUIFAX INFORMATION SERVICES, LLC, EQUIFAX, INC., and EXPERIAN INFORMATION SOLUTIONS, INC., Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Kristen L. Mix United States Magistrate Judge.

         This matter is before the Court on Defendants Equifax Information Services, LLC and Equifax Inc.'s Motion to Dismiss [#10][1] (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 GRANTED.

         I. Background

         In 2014, Plaintiff[2] 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”).[3] 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.

         On 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”).[4] Id. ¶¶ 31, 33.

         Defendant 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.

         In 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.

         TransUnion 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].[5] 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.

         Plaintiff's 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.

         II. Standard of Review

         The 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)).

         “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.” 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).

         To 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 omitted).

         III. ...


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