Spira v. TransUnion, LLC

Background

Israel Spira sued TransUnion, LLC, Equifax Information Services, LLC, Experian Information Solutions, Inc., and LoanCare, LLC under the Fair Credit Reporting Act. The opinion refers to TransUnion, Equifax, and Experian as the consumer-reporting-agency defendants. Spira alleged that LoanCare, his mortgage servicer, improperly failed to accept or apply mortgage payments while his New York Homeowners Assistance Fund application and later review were pending. LoanCare then reported that Spira was 60 days delinquent, and the consumer-reporting agencies published that information in his credit reports.

Spira alleged that the consumer-reporting agencies willfully and negligently violated sections 1681e(b) and 1681i(a) of the Fair Credit Reporting Act by failing to ensure maximum possible accuracy and to remove inaccurate information after his disputes. LoanCare was voluntarily dismissed by stipulation after Spira and LoanCare reported reaching a settlement in principle.

Motion and Legal Standard

The consumer-reporting-agency defendants moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The court applied the same standard used for a motion to dismiss for failure to state a claim under Rule 12(b)(6). At this stage, the court treated well-supported factual allegations as true and viewed reasonable inferences in Spira’s favor, but it did not accept bare legal conclusions.

To state a claim under the Fair Credit Reporting Act provisions at issue, a plaintiff must allege that the credit report contained an inaccuracy. The court explained that information is inaccurate when it is plainly incorrect or materially misleading. It also discussed Second Circuit decisions holding that the disputed information must be objectively and readily verifiable; disputes turning on unresolved legal questions generally are not actionable inaccuracies under the Act.

Court’s Analysis

The court rejected the defendants’ argument that Spira’s claim necessarily involved the type of unresolved legal dispute addressed in those earlier decisions. In this case, the court said, the parties did not dispute the debt’s validity, its amount, or whether the mortgage payments had been timely applied.

Instead, Spira argued that the delinquency should not have been reported because LoanCare—not Spira—was responsible for the payments not being processed. The court treated that as a dispute about whether LoanCare should have accepted the payments, separate from whether the payments were actually applied and whether the mortgage debt went unpaid.

The court concluded that Spira’s debt existed as reported and went unpaid for 60 days. It held that the consumer-reporting agencies accurately reported the deficiency. Spira’s good-faith explanation and argument that the report did not reflect his willingness or ability to pay did not make the report materially misleading. The court also stated that the agencies were not required to resolve the dispute between Spira and LoanCare or add an explanation to an otherwise accurate report.

Disposition

The court GRANTED the defendants’ Motion for Judgment on the Pleadings. It dismissed Spira’s Complaint with prejudice, directed the clerk to terminate the motion and the action, and directed entry of judgment in favor of TransUnion, LLC, Equifax Information Services, LLC, and Experian Information Solutions, Inc. The court noted that Spira could file a brief statement describing the dispute under 15 U.S.C. § 1681i(b), but it did not provide any additional remedy in this action.