Lloyd v. TD Bank USA, N.A.

Background

Susan Lloyd filed claims under the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Unfair Trade Practices and Consumer Protection Law, and state-law theories of fraud, breach of contract, and intentional or negligent infliction of emotional distress. In her amended complaint, she added an Americans with Disabilities Act claim against Target Corporation. Lloyd represented herself.

The credit-related claims concerned a Target-branded credit card issued by TD Bank in February 2016. Lloyd alleged that TD Bank reported that the account had been charged off in October 2019 and sought to collect $1,800, even though she believed the balance was zero. She also alleged that TD Bank used Javitch Block to collect the debt and failed to respond to her validation or verification letters. The disability claim alleged that Lloyd, who described herself as a person with disabilities and a mobility-scooter user, could not fully use or enjoy two Target stores in Ohio and one in Pennsylvania.

Legal standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally plausible claim. The court accepted well-pleaded factual allegations as true, but not unsupported legal conclusions. It also applied a less demanding pleading standard because Lloyd was representing herself, while explaining that she still had to allege enough facts to support her claims.

Americans with Disabilities Act claim

The court dismissed the disability claim as to TD Bank because the complaint did not allege that TD Bank operated Target stores or was otherwise responsible for their operation. The court dismissed the claim as to Target because Lloyd added it to a complaint otherwise focused on TD Bank’s credit-card activities. The court characterized the amended complaint as a “kitchen sink” or “shotgun” pleading that improperly combined unrelated claims and defendants, making it difficult to determine which allegations applied to whom.

The court stated that the disability claim was dismissed with prejudice as to TD Bank and without prejudice as to Target. The court later denied Lloyd’s request to file a second amended complaint, finding the proposed amendment futile because the amended claims would still fail to state a claim for relief.

Fraud claim

The court held that Lloyd’s fraud claim was preempted by the Fair Credit Reporting Act to the extent it challenged TD Bank’s furnishing of information to credit-reporting agencies. The court also found no factual allegations supporting malice or a willful intent to injure, which the court identified as an exception to the relevant preemption provision. Independently, the court concluded that Lloyd did not allege that TD Bank knew its reported information was false or intended to induce her reliance. Count Two was dismissed with prejudice.

Breach-of-contract claim

The court explained that a Minnesota breach-of-contract claim requires an agreement, performance of required conditions by the plaintiff, and a breach by the defendant. The court found that Lloyd did not identify a specific promise or duty that TD Bank failed to perform. Her allegation that the contract did not say TD Bank could use a third party to collect the debt was insufficient. Count Three was dismissed with prejudice.

Fair Debt Collection Practices Act claim

The court held that the Fair Debt Collection Practices Act generally applies to debt collectors, not creditors collecting their own debts. Because TD Bank was a creditor collecting its own debt rather than a debt collector under the statute, the Act did not apply to TD Bank. Count Four was dismissed with prejudice.

Fair Credit Reporting Act claim

The court explained that a furnisher of credit information may have duties under the Fair Credit Reporting Act after a credit-reporting agency notifies it that a consumer disputes the completeness or accuracy of reported information. The court found that Lloyd did not allege a factual inaccuracy. Instead, she appeared to challenge the reporting based on legal issues, including whether TD Bank had properly notified her about reporting the account’s late-payment and charged-off status and whether it had verified or validated the debt.

The court also stated that Lloyd did not allege that she never owed TD Bank money, that she did not incur the $1,800 in charges, or that the account was not properly charged off. Although she alleged that she paid the card in full by late 2018, she did not allege that she had not incurred the additional charges charged off in 2019. Count Five was dismissed with prejudice.

Trade-practices and emotional-distress claims

The court dismissed the Unfair Trade Practices and Consumer Protection Law claim because Lloyd did not identify a specific statute or statutory duty that TD Bank violated and did not provide enough factual support. Count Six was dismissed with prejudice.

The court found that Lloyd’s intentional or negligent infliction of emotional distress claim, like her fraud claim, was preempted by the Fair Credit Reporting Act. Count Seven was dismissed with prejudice.

Order

The court granted TD Bank’s motion to dismiss the amended complaint. Count One was dismissed with prejudice as asserted against TD Bank and without prejudice as asserted against Target. Counts Two through Seven were dismissed with prejudice. The court dismissed the amended complaint as outlined in the order, denied Lloyd’s motion for leave to file a second amended complaint, denied TD Bank’s earlier motion to dismiss the original complaint as moot, and granted Target Corporation’s motion to join TD Bank’s motion to dismiss. Judgment was ordered to be entered accordingly.