Remis v. Trans Union LLC

Background

Capital One filed a Florida collection action against Richard Remis concerning a charged-off credit-card account and an alleged debt of $7,200.41, plus $350 in costs. Remis, who was represented by counsel, later signed a settlement agreement stating that he was indebted to Capital One for those amounts and agreeing to pay $2,500 as a settlement in full. The Florida county court ratified and approved the agreement and dismissed that case.

Remis then sued Capital One and Trans Union in Minnesota. His complaint alleged that Capital One inaccurately reported a charged-off credit-card balance of $7,550 as his debt even though it belonged to another person with the same first and last name but a different middle name. He alleged that Capital One failed to verify the debt, investigate his dispute, and correct the reporting. He asserted willful and negligent violations of Section 1681s-2(b) of the Fair Credit Reporting Act. The opinion also notes that Remis asserted a claim under Section 1681s-2(a)(8)(A), but that section does not provide consumers with a private right to sue.

Motion to dismiss

Capital One moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. Capital One argued that Remis’s Florida settlement agreement prevented him from alleging that the debt was not his and therefore prevented him from showing that Capital One reported inaccurate information.

The court explained that a claim under Section 1681s-2(b) requires the plaintiff to show, among other things, that the information reported was inaccurate. The court applied judicial estoppel, a rule that generally prevents a party from taking a position in one legal proceeding and then taking a clearly inconsistent position in a later proceeding. It found that all three relevant factors were satisfied: Remis’s current position conflicted with his Florida stipulation; the Florida court approved that stipulation; and allowing Remis to deny ownership of the debt would give him an unfair advantage after he used the stipulation to avoid a judgment for the full amount.

The court rejected Remis’s argument that the stipulation was ambiguous about the debt or the identity of the defendant. It found that Remis’s own allegations connected the Florida debt to the debt at issue here and that he signed the stipulation admitting that he owed it. The court therefore held that Remis was estopped from asserting that he did not own the debt and could not make the required showing that Capital One reported inaccurate information.

Ruling

Judge Donovan W. Frank granted Capital One’s Motion to Dismiss. The court dismissed Remis’s claims against Capital One with prejudice. The order did not rule on or state a disposition for the claims against Trans Union.