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Mark Sutherland v. Urban Partnership Bank

February 21, 2012


The opinion of the court was delivered by: Judge Edmond E. Chang


Plaintiff Mark Sutherland alleges that Urban Partnership Bank violated the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b), which governs the furnishing of information about loans and debts to credit reporting agencies.*fn1 Sutherland alleges that Urban, as a furnisher of information under the Act, transmitted inaccurate information regarding Sutherland's loans. Urban's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is before the Court. R. 17. For the following reasons, the motion to dismiss is denied.


At this stage of the litigation, Plaintiff's allegations are taken as true and reasonable inferences are drawn in his favor. Mark Sutherland was a long-time customer of ShoreBank, which was later acquired by Defendant Urban Partnership Bank. R. 13 ¶¶ 5, 28. Sutherland drew several loans under his name. The loans at issue are loans numbers ending with 911, 960, 501, and 502 (for convenience's sake, and to comply with Federal Rule of Civil Procedure 5.2(a)(4), the opinion refers only to the last 3 digits of the loan number).*fn2 Id. ¶¶ 6-24.

With regard to loans 501 and 502, Sutherland and ShoreBank entered into Loan Modification Agreements extending the maturity dates and modifying the terms of those two loans on more than three separate occasions. R. 13 ¶¶ 14-22. The Agreements were then made retroactive effective as of the date the loan had matured. Id. ¶ 5. During periods of negotiation, it was ShoreBank's practice to accept continued payments based on the loan terms. Id. According to Sutherland, he made on-time payments for various months in 2010, yet ShoreBank reported several payments as delinquent to the Reporting Agencies. Id. ¶¶ 25-27.

In August 2010, ShoreBank failed, and Urban acquired all of ShoreBank's assets.*fn3 Upon the maturity of his loans at that time, Sutherland entered into negotiations with Urban to extend and modify the terms of loans 501 and 502. R. 13 ¶ 34. Urban advised Sutherland that as long as he continued making interest payments while the parties documented another Agreement, the loans would not be reported as delinquent. Id. ¶¶ 18, 24. During negotiations, but before the parties had entered into a modification Agreement, Urban reported to the Reporting Agencies that Sutherland's September to December 2010 payments were delinquent. Id. ¶ 32.

Sutherland learned about these reports and informed both ShoreBank and Urban that its reports to the Reporting Agencies were misleading and inaccurate. R. 13 ¶ 33. Around September 1, 2010, Sutherland contacted the Reporting Agencies to dispute the reports furnished by his creditors. Id. ¶ 35. The Reporting Agencies notified Urban of Sutherland's dispute of the reports supplied by Urban and ShoreBank. Id. ¶

36. As a result of the mistaken credit reports, Sutherland alleges, the reports affected Sutherland's personal credit scores and his ability to obtain financing to support his business ventures and personal mortgage. Id. ¶¶ 45-46.


Under the Federal Rules of Civil Procedure, a complaint generally need only include "a short an plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). 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. v. Twombly, 550 U.S. 544, 555 (2007). The Seventh Circuit has explained that this rule "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 plaintiffs 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)).

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 Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "[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); McGowan v. Hulick, 612 F.3d 636, 637 (7th Cir. 2010) (courts accept factual allegations as true and draw all reasonable inferences in plaintiff's favor). 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, 556 U.S. -, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). These allegations "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. And the allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 129 S.Ct. at 1950.



Urban first argues that the claim under the Fair Credit Reporting Act must be dismissed because Sutherland does not sufficiently allege that Urban was notified by a Reporting Agency. R. 19 at 2. Urban acknowledges that Sutherland has furnished a letter that ostensibly notifies the Reporting Agencies as to the dispute raised by Sutherland. But Urban argues that the information contained in the notice was insufficient. The crux of Urban's argument is that, based on the facts stated in Sutherland's amended complaint, the Court may infer only that a Reporting Agency merely requested Urban to verify Sutherland's account. R. 19 at 2. According to Urban, such verification amounts to an "inquiry" that is insufficient to trigger a claim under § 1681s-2(b) of the Act.*fn4 R. 19 at 2. But Urban ...

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