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SCHAFFNER v. U.S. BANK N.A.

January 14, 2004.

ROBERT J. SCHAFFNER, NANCY A. SCHAFFNER, and IMAGINATIVE GRAPHICS, INC., Plaintiff's,
v.
U.S. BANK N.A., doing business as U.S. BANK HOME MORTGAGE, Defendant



The opinion of the court was delivered by: JAMES J. BRADY, District Judge

MEMORANDUM OPINION

Before the court is defendant's motion to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the motion is granted.

BACKGROUND

  The following facts, taken from plaintiffs' amended complaint, are accepted as true for purposes of this motion. Plaintiff's Robert J. Schaffner and Nancy A. Schaffner own the corporate co-plaintiff Imaginative Graphics, Inc. ("Imaginative"). Plaintiff's obtained a business loan from Amalgamated Bank of Chicago ("Amalgamated Bank"), which is not a party to this action. In the summer of 2001, plaintiffs applied for additional financing from Amalgamated Bank. The financing was delayed and ultimately denied, in part because of adverse credit information reported by defendant Page 2 U.S. Bank N.A. ("U.S. Bank") to one or more of the major credit bureaus. Attached to the amended complaint as Exhibit A is a document titled "Underwriting Findings," which lists the adverse information as one of the reasons for the denial of additional financing.

  The adverse credit information related to a residential mortgage loan that the Schaffners had obtained from U.S. Bank's predecessor. Payments were made on time, and the loan was paid in full on April 16, 1999. U.S. Bank, however, reported that the Schaffners had made late payments and that the loan had been placed in collection or foreclosure. U.S. Bank sent this misinformation to the major credit bureaus electronically; the bureaus then sent the misinformation to Amalgamated Bank.

  On September 9, 2002, shortly after the Underwriting Findings were issued, U.S. Bank acknowledged its error and sent the credit bureaus a "Universal Data Form" requesting that the bureaus "[r]emove all late payments and the `collection' remarks" and indicating that the residential mortgage loan had been paid in full in April 1999. (Amended Complaint, Ex. B, Universal Data Form.)

  As a result of the denial of their application for additional business financing, plaintiffs were unable to pay Imaginative's bills during its slow season. In addition, the Schaffners suffered distress and were unable to pay their own salaries. Page 3

  In November 2002, plaintiffs filed the instant action against U.S. Bank. The complaint later was amended to cure a defect in its jurisdictional allegations. Count I of the amended complaint alleges that U.S. Bank's publication of false credit information defamed the Schaffners. Count II, which is asserted by all plaintiffs, is a tortious interference with economic advantage claim.

  Defendant now moves to dismiss the complaint.

  DISCUSSION

  The purpose of a 12(b)(6) motion to dismiss is to test the sufficiency of the complaint, not to resolve the case on the merits. 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1356, at 294 (2d ed. 1990). Dismissal is appropriate only if "`it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir. 1997) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).

 A. Count I — Defamation

  One of U.S. Bank's arguments is that plaintiffs' defamation claim is preempted by § 1681h(e) of the Fair Credit Reporting Act ("FCRA"), which provides in relevant part:

  Except as provided in sections 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against . . . any person who furnishes information to a Page 4 consumer reporting agency . . . based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or ...


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