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Bondi v. Great Southern Bank

United States District Court, D. Minnesota

March 9, 2017

Michael A. Bondi, Plaintiff,
v.
Great Southern Bank, Experian Information Solutions, Inc., and Evans & Green LLP, Defendants.

          MEMORANDUM AND ORDER

          Paul A. Magnuson United States District Court Judge

         This matter is before the Court on Defendant Great Southern Bank's Motion to Dismiss. For the following reasons, the Motion is denied.

         BACKGROUND

         Defendant Great Southern Bank (“GSB”) financed Plaintiff Michael Bondi's purchase of his home. When Bondi defaulted on the mortgage, he and GSB agreed that Bondi would pay GSB a quarter of the outstanding debt to fully settle the account. Bondi made the payments to GSB's attorneys, who are also Defendants here. In August 2015, Bondi received a letter from the attorneys that the debt had been paid off. (Am. Compl. (Docket No. 19) Ex. 2.)

         Bondi contacted credit agencies in January 2016 to ask why they were still reporting that he had an outstanding balance with GSB. (Id. ¶ 38.) The credit agencies in turn contacted GSB, which reported back to the agencies that Bondi had a balance of more than $54, 000 and that he had not made a payment since January 1, 2012. (Id. ¶ 42.) Bondi alleges that this information was “false, misleading and inaccurate, ” and that GSB did not conduct a reasonable investigation into the dispute. (Id. ¶¶ 42, 48.) According to Bondi, there is evidence that GSB knew that the information it provided to the credit agencies was inaccurate at the time it provided that information. (Id. ¶ 49.) GSB did not correct the information it provided to the credit agencies until May 2016. (Id. ¶ 53.)

         Bondi alleges that GSB violated the Fair Credit Reporting Act (“FCRA”) in failing to reasonably investigate his dispute with the credit agencies and failing to update or remove the inaccurate information from Bondi's credit report. He claims that GSB's violations of the FCRA caused damage to his credit rating and restricted his access to banking services, and caused him “great frustration, humiliation, out-of-pocket losses, and mental anguish.” (Id. ¶¶ 53-54.) Because it took GSB five months to correct Bondi's credit report, he was unable to refinance his mortgage to remove his in-laws as co-signors. (Id. ¶ 55.) Bondi seeks both actual damages and statutory damages, and attorney's fees.

         GSB seeks a dismissal of Bondi's claim, asserting that because Bondi did not make payments directly to GSB as the settlement agreement ostensibly required, GSB had no record of those payments and thus did not violate the FCRA in communicating Bondi's failure to pay to the credit-reporting agencies.

         DISCUSSION

         When evaluating a motion to dismiss under Rule 12(b)(6), the Court assumes the facts in the Complaint to be true and construes all reasonable inferences from those facts in the light most favorable to Bondi. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). However, the Court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions that Bondi draws from the facts pled. Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         A. The FCRA

         The FCRA provides a private cause of action against a furnisher of information to credit-reporting agencies only if the furnisher has notice that the data is inaccurate and fails to undertake a reasonable investigation after receiving the notice. According to GSB, Bondi's allegations fail to state a claim under the FCRA for a multitude of reasons.

         First, GSB argues that only a factual inaccuracy is actionable under the FCRA. According to GSB, Bondi failed to allege how GSB's statement to the credit agencies was inaccurate: was it inaccurate because Bondi paid the debt in full or because he settled the debt in full? GSB argues that whether Bondi settled the debt is a legal question that cannot be the subject of a claim under the FCRA, and thus that Bondi's failure to specifically plead the exact inaccuracy is fatal to his claims.

         But this hair-splitting is unwarranted here. There is no dispute that Bondi fully complied with the monetary terms of the settlement agreement, and indeed GSB's attorneys told Bondi that he had satisfied the debt in full. For GSB to argue that Bondi's alleged failure to comply with the technical terms of the settlement agreement somehow means ...


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