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Vito Pesce v. Nuvell Credit Company

May 26, 2011

VITO PESCE, PLAINTIFF,
v.
NUVELL CREDIT COMPANY, LLC , DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Vito A. Pesce ("Pesce" or "Plaintiff"), brought this action against Defendant Nuvell Credit Company, LLC ("Nuvell" or "Defendant"), alleging a violation of the Fair Credit Reporting Act ("FCRA"). (R. 1.) Pesce contends that Nuvell violates the FCRA by reporting his alleged debt to credit bureaus in March 2010 without notifying them that that debt was in dispute. (Id. at 2-3.) On April 5, 2011, Nuvell filed an answer and counterclaim for breach of contract, submitting that Pesce owes it a balance of $5,611.62 for violating a lease agreement over a 2005 Saab 9-3. (R. 18 at 9-11.)

On April 26, 2011, Pesce filed a motion to dismiss Defendant's counterclaim. (R. 21.) Although he concedes that the Court can exercise supplemental jurisdiction over Nuvell's state-law counterclaim, Pesce argues that "exceptional circumstances" or "other compelling reasons" exist that warrant the Court's dismissing the breach-of-contract counterclaim. (Id. at 3-5.) He argues that allowing Nuvell to bring this counterclaim would "quell attempts to assert FCRA rights." (Id. at 3.) Plaintiff further argues that the counterclaim fails under Federal Rule of Civil Procedure 8 because Nuvell's allegation that a third party assigned it the Saab lease is inconsistent with the document that Nuvell attached to its answer and counterclaim. (Id. at 5-7.)

The Court denies Pesce's motion to dismiss Nuvell's counterclaim. In the first place, Plaintiff's FCRA claim and Defendant's breach-of-contract claim arise from a common nucleus of operative fact. Concerns of judicial efficiency and economy suggest that the parties should litigate them together in one forum. No exceptional circumstances exist that would justify the Court's decision not to exercise supplemental jurisdiction over Nuvell's state-law counterclaim. Pesce's argument that allowing the counterclaim to proceed would discourage people from bringing FCRA claims is not convincing. If the Court were to decline to exercise supplemental jurisdiction over Nuvell's counterclaim, Defendant could nevertheless bring its breach-of-contract claim in state court. This would entail additional inconvenience for Plaintiff in having to litigate two separate cases that involve substantially the same subject matter.

Second, Nuvell's counterclaim meets the requirements of Rule 8. Defendant explicitly alleges that a third party assigned the relevant lease to Nuvell. (R. 18 at 9.) The document attached to the pleading that Pesce relies neither contradicts Nuvell's counterclaim nor renders it implausible.

BACKGROUND

On February 28, 2011, Pesce sued Nuvell in this Court for an alleged violation of the FCRA. (R. 1.) According to the Complaint, the present case results from Pesce's termination of a lease with Saab Financial in March 2008. (Id. at 2.) Following this termination, Plaintiff alleges that Saab Financial never billed him and reported the relevant account to TransUnion as closed, and paid as agreed, displaying a $0 balance. (Id.) Almost two years later, Nuvell allegedly wrote to Pesce with respect to a purported debt of $6,567.75 owed for the Saab Financial account, notifying him that Nuvell would report this information to the credit bureaus. (Id.) The Complaint provides that Pesce wrote back a week later, disputing that "the alleged debt was valid and owing," and then wrote a second letter to the same effect twelve days after sending the first. (Id.) Notwithstanding these letters, Plaintiff alleges that "Nuvell reported [his] alleged debt to the credit bureaus in March 2010 . . . [and] failed to report that the alleged debt was in dispute[.]" (Id. at 2-3.)

Pesce maintains that, "Nuvell was required[,] under 15 U.S.C. § 1681s-2(b), to respond to the request for reinvestigation initiated by plaintiff by completing an inquiry into the facts underlying the trade-line and providing accurate information to the credit reporting agencies regarding that trade-line." (Id. at 4.) He also contends, among other things, that Nuvell violated the FCRA in knowingly reporting erroneous credit information. (Id.)

On April 5, 2011, Nuvell filed its answer, affirmative defenses, and counterclaim for breach of contract. (R. 18.) Defendant's counterclaim alleges that, on June 25, 2005, Pesce entered into a four-year lease with Motors Werks Partners L.P. for a 2005 Saab 9-3. (Id. at 9.) Subsequently, Motors Werks assigned the lease to Nuvell, which "performed all of its obligations under the terms of the Lease[.]" (Id.) According to the terms of the contract, "Pesce was required to remit monthly payments in the amount of $437.85" for forty-eight months. (Id.) The contract further required that, should Pesce return the vehicle prior to the end of the lease, he would owe, among other things, any unpaid monthly payments. (Id. at 9-10.) It also provided that, in the event of default, "Nuvell is entitled to its attorneys' fees, collection costs, and court costs." (Id. at 10.) Subsequently, "Pesce returned the vehicle to Motor Werks, terminating the Lease over fifteen (15) months before the End Date[,]" at which time Pesce "owed a balance of $5,611.62[.]" (Id.) On the basis of these allegations, Defendant contends that Pesce is liable to it in that amount for breach of contract. (Id. at 11.)

On April 26, 2011, Pesce filed the motion to dismiss Nuvell's counterclaim that is presently before the Court.

LEGAL STANDARD

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Pursuant to Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ.P. 8(a)(2). As the Seventh Circuit recently explained, this "[r]ule reflects a liberal notice pleading regime, which is intended to 'focus litigation on the merits of a claim' rather than on technicalities that might keep Relators out of court." Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)). This short and plain statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Under federal notice-pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, -- U.S. --, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570); see also Cooney v. Rossiter, 583 F.3d 967, 971 (7th Cir. 2009) (holding that the amount of factual allegations required to state a plausible claim for relief depends on the complexity of the legal theory). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94 (2007); Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009) (holding that the court construes complaints in the light most favorable to the plaintiff, drawing all reasonable inferences in the plaintiff's favor).

ANALYSIS

In moving to dismiss Defendant's counterclaim, Pesce argues that the Court should decline to exercise supplemental jurisdiction over the same, lest the Court discourage the filing of FCRA claims. (R. 21 at 3-5.) He also argues that the counterclaim fails to satisfy the pleading requirements of Federal Rule of Civil Procedure 8. (Id. ...


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