United States District Court, D. Minnesota
Dana D. Kruckow, Plaintiff,
Merchants Bank, Rushford State Bank, Craig Schroeder, individually, and Paul A. Kruckow, individually, Defendants.
J. Lyons, Jr, Esq., Consumer Justice Center P.A., counsel for
Charles E. Nelson, Esq., Kathryn E. Wendt, Esq., and Kirstin
D. Kanski, Esq., Lindquist & Vennum LLP, counsel for
Defendant Merchants Bank.
P. Boyle, Esq., and Sarah E. Doerr, Esq., Moss & Barnett,
PA, counsel for Defendant Rushford State Bank.
Kristin B. Rowell, Esq., Anthony Ostlund Baer & Louwagie
P.A., counsel for Defendant Craig Schroeder.
Charles A. Bird, Esq., and Grant M. Borgen, Esq., Bird,
Jacobsen & Stevens, P.C., counsel for Defendant Paul A.
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE
accordance with Local Rule 7.1(j), Plaintiff Dana D. Kruckow
has requested permission to file a motion for reconsideration
of the Court's July 19, 2017 Memorandum Opinion and Order
(Doc. No. 83). (Doc. No. 90.) Defendants opposed this
request. (Doc. Nos. 96-99.) For the reasons outlined below,
the Court grants in part and denies in part Plaintiff's
Court assumes the reader's familiarity with the facts of
the case, which are more fully set out in the Court's
July 19, 2017 Memorandum Opinion and Order (Doc. No. 83). In
short, Defendant Paul A. Kruckow allegedly forged
Plaintiff's signature (his then-wife) to obtain loans by
fraud from Defendants Merchants Bank and Rushford State Bank.
Plaintiff contends that the loan officer, Defendant Craig
Schroeder, knew about and facilitated the fraud. When
Plaintiff raised the issue of the loans to the banks, they
forgave her obligation to repay the loans. As relevant here,
Plaintiff brought claims against Defendants for violating the
Fair Credit Reporting Act (“FCRA”) when they
obtained Plaintiff's credit report on three separate
occasions. The first credit report- February 8, 2013-was
obtained by Schroeder during the life of a loan held by
Merchants Bank. The second credit report-November 8, 2013-was
obtained in advance of two loans closed on November 15, 2013
with Rushford State Bank. And the last credit report-October
31, 2014-was allegedly obtained by Schroeder for Paul Kruckow
to use for his divorce petition, which was filed in
Court dismissed the claims against the banks and Schroeder
for the first two reports because the Court concluded that
Plaintiff had failed to plausibly allege that the banks and
Schroeder did not have a permissible purpose to obtain the
reports. In so concluding, the Court rejected Plaintiff's
allegations that Schroeder was complicit in Paul
Kruckow's fraud because Plaintiff had failed to plausibly
allege why Schroeder would participate in the scheme.
filed a letter requesting permission to file a motion to
reconsider. Under Local Rule 7.1(j), a party must show
“compelling circumstances” to obtain permission
to file a motion to reconsider. D. Minn. L.R. 7.1(j). A
motion to reconsider should not be employed to relitigate old
issues, but rather to “afford an opportunity for relief
in extraordinary circumstances.” Dale & Selby
Superette & Deli v. United States Dept. of Agric.,
838 F.Supp. 1346, 1348 (D. Minn. 1993). Plaintiff argues that
the Court made two main errors: (1) the Court incorrectly
rejected the allegations that Schroeder participated in the
fraud; and (2) the Court erroneously analyzed the second
credit report as part of an ongoing credit relationship and
applied the wrong standard.
the Court did not err by disregarding as implausible
Plaintiff's allegation that Schroeder was complicit in
the fraud. Plaintiff contends that the Court erred because
Schroeder or the Banks did not produce an affidavit
explaining why the reports were pulled. Plaintiff, however,
misstates the legal standard. On a motion to dismiss under
Rule 12(b)(6), the Court is charged with “consider[ing]
whether there are lawful, ‘obvious alternative
explanation[s]' for the alleged conduct.”
McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir.
2015), cert. denied sub nom. McDonough v. Anoka Cty.,
Minn., 136 S.Ct. 2388 (2016). Here, the Court found the
alternative explanation that Schroeder did not know about the
fraud sufficiently convincing given that Plaintiff failed to
allege any benefit Schroeder would receive from his
participation. In fact, Plaintiff alleged the opposite:
Plaintiff quoted Schroeder's statement to police where he
said he had nothing to gain. (Am. Compl. ¶ 83i). Thus,
Plaintiff has failed to show that compelling circumstances
warrant revisiting the Court's decision.
Plaintiff argues that the Court misstated the facts and
applied the wrong standard to its analysis of the November 8,
2013 credit report. In its Memorandum Opinion and Order, the
Court misstated that the November 8 report was obtained
during the life of a loan with Rushford State Bank. Instead,
the report was obtained in advance of two loans closing on
November 15, 2013.
state a claim for civil liability based on Section 1681b, a
plaintiff must allege both that the defendant used or
obtained the plaintiff's [consumer] report for an
impermissible purpose, and that the violation was willful or
negligent.” Braun v. United Recovery Sys.,
LP, 14 F.Supp.3d 159, 166 (S.D.N.Y. 2014)
(collecting cases). As relevant here, Plaintiff alleged that
Defendants engaged in willful conduct, which is necessary to
recover statutory damages. A willful violation includes
reckless conduct. See, e.g., Saumweber v. Green
Tree Servicing, LLC, Civ. No. 13-03628, 2015 WL 2381131,
at *5 (D. Minn. May 19, 2015). Rushford State Bank and
Schroeder moved to dismiss the claims for the November 8,
2013 consumer report on the basis that they had a permissible
purpose to pull Plaintiff's credit report. Whether a
permissible purpose exists is a question of law. Id.
at *3. But whether the violation was willful is generally a
question of fact. See Zaun v. J.S.H. Inc., of
Faribault, Civ. No. 10-2190, 2010 WL 3862860, at *2 (D.
Minn. Sept. 28, 2010). As explained in the memorandum, Courts
are split on whether a business violates FCRA when an
imposter causes the business to obtain a credit report.
(See Doc. No. 83 at 11 (Collecting cases).) But
given the Court's misstatement of the facts leading up to
the second credit report, the Court concludes that
Plaintiff's request to file a motion to reconsider should
be granted as to the November 8, 2013 credit report. In
particular, the Court is concerned that Rushford State Bank
did not implement the proper mechanism to confirm
Plaintiff's desire to co-sign the loan given that this
was the first loan at Rushford State Bank. See Andrews v.
TRW, Inc., 225 F.3d 1063 (9th Cir. 2000), rev'd
on other grounds, 534 U.S. 19 (2001). The parties should
focus their briefing on the FCRA claim because the related
claims will survive or not based on that claim. In addition,
the parties should bear in mind what the Court has already
determined: Plaintiff has failed to plausibly allege that
Rushford State Bank or Schroeder was aware of Paul
Kruckow's alleged fraud.
IT IS HEREBY ORDERED that Plaintiff's
request for leave to file a motion for reconsideration (Doc.
No. ) is GRANT ...