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Steinmetz v. American Honda Finance

United States District Court, D. Nevada

September 16, 2019

AMERICAN HONDA FINANCE, et al., Defendants.


         Presently before the court is defendant Experian Information Solutions, Inc.'s (“Experian”) motion to dismiss, filed on February 25, 2019. (ECF No. 32). On March 11, 2019, plaintiff Eric Steinmetz (“Steinmetz”) filed an amended complaint. (ECF No. 44).

         Also before the court is defendant Experian's motion to dismiss plaintiff's amended complaint. (ECF No. 50). Steinmetz filed a response (ECF No. 63), to which Experian replied (ECF No. 72).

         Also before the court is defendant American Honda Finance Corporation's (“American Honda”) motion to dismiss plaintiff's amended complaint. (ECF No. 60). Steinmetz filed a response (ECF No. 92), [1] to which AHF replied (ECF No. 99).

         I. Background

         Steinmetz filed for chapter 13 bankruptcy on June 30, 2016. (ECF No. 44 at 7). Steinmetz's chapter 13 plan was confirmed on February 15, 2017. Id. Pursuant to the terms of his chapter 13 plan, Steinmetz made ongoing payments on two automobile loans to American Honda and Mechanics Bank. Id. Steinmetz was discharged on July 16, 2017. Id. After his discharge, Steinmetz continued making payments on the American Honda and Mechanics Bank loans. Id. at 8. Steinmetz's post-bankruptcy payments were not reported in his “consumer file” by credit reporting agencies (“CRAs”). Id.

         Although Steinmetz alleges only three causes of action-a violation of the Fair Credit Reporting Act (“FCRA”) 15 U.S.C. § 1681 et seq. against all defendants, a violation of Nevada Revised Statutes (“NRS”) § 598C against the CRA defendants, and a violation of NRS § 41.600 against Experian-Steinmetz's prolix complaint details a litany of allegedly-wrongful actions underlying those claims. (See generally ECF No. 44).

         As relevant here, Steinmetz alleges that American Honda, as a “furnisher” under the FCRA, failed to report positive payment history to the CRAs. Id. Further, Experian did not report positive payment on his American Honda and Mechanic's Bank accounts, listed multiple “charge-offs”[2] on his Syncb/Sam's Club account, and reported inconsistent bankruptcy-inclusion dates across several of his accounts. Id. Experian's file on Steinmetz included information on his addresses and name, but Experian represented to Steinmetz that his address information did not affect his credit score. Id. Experian disclosed the source of the address information using a coding system, rather than “plain English.” Id. Steinmetz argues that these aspects of Experian's consumer reports, consumer disclosures, and consumer file for Steinmetz were inaccurate under the FCRA. Id.

         Experian Marketing Solutions offers “behavioral data” services including OmniView, ConsumerView, TrueTouch, and MetroNet. Id. No information from these services was included in the disclosures Experian sent to Steinmetz. Id.

         II. Legal Standard

         A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

         “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id.

         Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that defendant is liable for the alleged misconduct. Id. at 678.

         Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged - but it has not shown - that the pleader is entitled to relief.” Id. at 679. When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.


         III. Discussion

         As an initial matter, the court denies Experian's motion to dismiss (ECF No. 32) as moot in light of Steinmetz's amended complaint (ECF No. 44). The court now turns to the pending motions to dismiss Steinmetz's first amended complaint.

         A. Steinmetz's claim against American Honda Finance Corporation

         “[T]o sustain either a § 1681e or a § 1681i claim, a consumer must first ‘make a prima facie showing of inaccurate reporting by the CRA.'” Shaw v. Experian Info. Sols., Inc., 891 F.3d 749, 759 (9th Cir. 2018) (quoting Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010). Although § 1681e refers to “maximum possible accuracy” rather than mere technical accuracy, “this does not relieve [plaintiffs] of the burden to prove that the inaccuracy is ‘misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.'” Id. at 757 (quoting Carvalho, 629 F.3d at 890).

         After a debtor makes all of his payments under the bankruptcy plan, “all debts provided for by the plan or disallowed under section 502” are discharged. 11 U.S.C. § 1328. “The Ninth Circuit Bankruptcy Court broadens the meaning of ‘provided for' to include any debt when it is ‘dealt with' in any manner and ‘upon any terms'-not simply when a debt is paid through a bankruptcy trustee.” Reichardt v. Trans Union LLC, No. CV-18-00223-TUC-RCC, 2019 WL 1359119, at *3 (D. Ariz. Mar. 26, 2019) (citing In re Gregory, 19 B.R. 668, 669-70 (B.A.P. 9th Cir. 1982), aff'd sub nom. 705 F.2d 1118 (9th Cir. 1983)) (alterations omitted); see also Rake v. Wade, 508 U.S. 464, 473 (1993) (“The most natural reading of the phrase to ‘provid[e] for by the plan' is to ‘make a provision for' or ‘stipulate to' something in a plan.” [alteration in original]).

         After a debt is discharged, a CRA “reporting ‘zero balances' is accurate, given that plaintiffs have cast off their personal liability-that is, plaintiffs technically owe nothing more on those accounts.” Horsch v. Wells Fargo Home Mortg., 94 F.Supp.3d 665, 674 (E.D. Penn. 2015). Thus, this court comes to the same conclusion as the court did in Reichardt: “[a] credit reporting agency need not continue to report a mortgage account when the debtor's personal liability on the mortgage account was discharged through bankruptcy, regardless of whether the debtor continues to make payments on the mortgage.” Reichardt, 2019 WL at *3 (citing Horsch, 94 F.Supp.3d at 674-75; Schueller v. Wells Fargo & Co., 559 Fed.Appx. 733, 734 (10th Cir. 2014)).

         Here, Steinmetz alleges that both Equifax and Experian “reported the American Honda and Mechanics Bank [t]radelines as having balances of $0 and statuses of bankruptcy chapter 13[.]” (ECF No. 44 at 15, 24). Steinmetz argues that such a determination was “inaccurate as [he] continued to make his car payments both during and after his [c]hapter 13 bankruptcy.” Id.

         Steinmetz undisputedly listed his debt to American Honda in his bankruptcy schedules. (ECF No. 44 at 7). As a result, that debt was discharged, and Steinmetz had no personal liability-a zero balance-on the loan. Despite Steinmetz's assertion to the contrary, reporting a zero balance and a bankruptcy chapter 13 status is neither inaccurate nor misleading. American Honda had no legal obligation to report the Steinmetz's positive payment history after the debt was discharged because Steinmetz had no personal liability on the loan.

         Steinmetz failed to make a prima facie showing that American Honda reported inaccurate information. His claim fails, and American Honda's motion to dismiss is granted.

         B. Steinmetz's claims against Experian

         Steinmetz perfunctorily alleges three claims against Experian. (ECF No. 44 at 52-53). Resolving Steinmetz's first claim “requires a short journey through an array of statutes (all from Title 15 of the code) with a numbering system . . . that only a lawyer could love.” Gillespie v. Trans Union Corp., 482 F.3d 907, 908 (7th Cir. 2007). The “general allegations” in Steinmetz's complaint catalogue several violations of discrete sections of the FCRA-§§ 1681e, 1681g, 1681i, and 1681s-that Steinmetz incorporates by reference into a single claim: “violation of 15 U.S.C. § 1681 et seq. (FCRA).” Steinmetz also scatters various accusations that Equifax violated NRS §§ 598C.130, 598C.160, 598.0915(5), 598.0923(3), and 41.600 throughout his general allegations. ...

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