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Sonichsen v. Fifth Third Bank

United States District Court, N.D. Illinois, Eastern Division

September 18, 2017

NANCY SONICHSEN, Plaintiff,
v.
FIFTH THIRD BANK, Defendant.

          MEMORANDUM OPINION AND ORDER

          ANDREA R WOOD UNITED STATES DISTRICT JUDGE

         Plaintiff Nancy Sonichsen has sued Defendant Fifth Third Bank (“Fifth Third”) alleging a violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. Before the Court is Fifth Third's motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 11.) Fifth Third argues, first, that Sonichsen's claim is barred by the doctrine of res judicata and, second, that Sonichsen fails to allege any damages. For the reasons discussed below, the motion is denied.

         BACKGROUND

         For purposes of the instant motion, the Court accepts the facts alleged in the complaint as true and draws all inferences in Sonichsen's favor. See Carlson v. CSX Transp., Inc., 758 F.3d 819, 826 (7th Cir. 2014).

         In early 2012, Sonichsen had two liens on her property-both held by Fifth Third. One lien was a Home Equity Line of Credit (“HELOC”); the other was a standard mortgage. (Compl. ¶ 5, Dkt. No. 1.) In July 2012, Sonichsen refinanced her property with Fifth Third. As a result, the HELOC was completely paid off. Sonichsen did everything required to close the HELOC and instructed Fifth Third to close it. (Id.) Her HELOC was still being reported as open on her credit report, however, and it was hurting her credit rating. (Id. ¶ 8.)

         In July 2016, Sonichsen sent a letter to Fifth Third demanding that they stop the “false reporting of the HELOC as being open.” (Id.) Fifth Third did not respond. (Id.) So, in September 2016, Sonichsen sent a letter to Equifax, a credit reporting agency, to dispute the false information. (Id. ¶ 9.) Equifax responded, informing Sonichsen that Fifth Third continued to assert that her HELOC was open. (Id. ¶ 10.) Sonichsen now comes before this Court claiming that Fifth Third has violated FCRA § 1681s-2(b) by providing false information regarding the HELOC to Equifax. (Id. ¶ 12.)

         This is not Sonichsen's first lawsuit against Fifth Third. Their first dispute (the “First Case”) was filed in 2015.[1] Sonichsen v. Fifth Third Bank, No. 15-cv-06265 (N.D. Ill.). In the First Case, Sonichsen alleged violations of the FCRA because her credit report incorrectly listed that: (1) her property was in foreclosure, and (2) the HELOC was open. (Second Am. Compl. ¶¶ 15, 25, Sonichsen v. Fifth Third Bank, Case No. 15-cv-06265, Dkt. No. 30-1.) Sonichsen further alleged that, sometime around April 2015, she was approached with an investment opportunity but could not take advantage of it because of the false foreclosure information on her credit report. (Id. ¶¶ 28-43.) In June 2015, Sonichsen sent a letter to Experian disputing the foreclosure information. The foreclosure was removed from Sonichsen's credit report, but the report continued to show incorrectly that the HELOC was open. (Id. ¶¶ 53-55.) Sonichsen thus sued Fifth Third claiming that the false information on her credit report had caused her to miss out on the investment opportunity.

         In April 2016, the district court entered judgment in favor of Fifth Third on the FCRA claim in the First Case. (Apr. 7, 2016 Order at 1, Sonichsen v. Fifth Third Bank, No. 15-cv-06265 (N.D. Ill.), Dkt. No. 39 (granting Fifth Third's motion for judgment on the pleadings).) In so doing, the court held that Sonichsen's FCRA claim based on the foreclosure information failed because any damages suffered as a result of the lost investment opportunity accrued before Fifth Third had a duty to correct the allegedly false foreclosure information, as Sonichsen sent the letter disputing the false foreclosure information only after she allegedly missed out on the investment opportunity.[2] The court in the First Case further held that Fifth Third's duty to correct inaccurate information arose only after receiving notice from Experian-so after any damages had accrued. In addition, the court found that Sonichsen's FCRA claim based upon the open HELOC failed because Fifth Third had not been put on notice that Sonichsen was disputing that information, as Sonichsen's letter to Experian only disputed the foreclosure. Accordingly, for purposes of the First Case, Fifth Third had no duty under the FCRA to correct the open HELOC information.

         DISCUSSION

         I. Legal Standard

         To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).[3]Facts that are “merely consistent with” a defendant's liability and conclusory statements are, by themselves, insufficient. Id. at 678 (citing Twombly, 550 U.S. at 556). Instead, a claim can be considered plausible when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

         II. Res Judicata

         Fifth Third first argues that Sonichsen's claim is barred by the doctrine of res judicata. “Under res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action.” Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir. 1986) (internal quotation marks omitted). The elements of res judicata are: (1) identity of the parties in the earlier and subsequent action, (2) a final judgment on the merits in the earlier action, and (3) identity of causes of action in the earlier and subsequent action. See Matrix IV, Inc. v. Am. Nat. Bank & Trust Co. of Chi., 649 F.3d 539, 547 (7th Cir. 2011). The first element is satisfied in this case because the First Case was between Sonichsen and Fifth Third-the same parties as here. The second element is also met because Sonichsen's First Case was decided on a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), which constitutes a final judgment on the merits. Hence, the Court proceeds to the analysis of the third element.

         To determine whether there is identity of the causes of action, the Seventh Circuit uses the “same transaction” test. Under that test, a cause of action consists of a single core of operative facts that give rise to a remedy. See Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589, 593 (7th Cir. 1986). Once a transaction has caused injury, all claims arising from that transaction must be brought in one suit or be lost. Thus, ...


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