Gordon Rees Scully Mansukhani Hartford partners Thomas C. Blatchley and Joseph J. Blyskal and Of Counsel Aubrey E. Blatchley, with the assistance of Mary Joyce Cusano, recently secured a major win for the firm’s client, a national bank and trust company, at the Second Circuit Court of Appeals.
The panel affirmed a Connecticut District Court decision dismissing the plaintiffs’ Fair Credit Reporting Act (“FCRA”) complaint because the plaintiffs failed to notify the consumer reporting agency of the alleged credit reporting error.
The plaintiffs alleged the firm’s client violated the FCRA and state law by not investigating an error on Plaintiffs’ credit report and correcting it after being notified directly by the plaintiffs.
The Honorable U.S. District Court Judge Vanessa Bryant granted the defendant bank’s motion to dismiss with prejudice for the plaintiffs failure to state a claim that they reported the error to a consumer reporting agency or that an agency notified the firm’s client of the issue. The District Court dismissed the entire complaint with prejudice, including the federal FCRA and state consumer law and tort claims.
The plaintiffs appealed the decision, which the Second Circuit then upheld.
The plaintiffs’ secured a loan from the firm's client to buy a home in Connecticut. The bank began foreclosure proceedings in 2011 and three years later, the loan had been foreclosed.
When the plaintiff noticed a February 2016 credit report listed the mortgage as still open, he informed the bank of the error. In March 2016, the bank acknowledged the error and sent a notice of correction to the plaintiffs.
Plaintiffs alleged that the bank violated the FCRA by “negligently and willfully failing to perform a reasonable reinvestigation and correction of inaccurate information.” Plaintiffs also brought state statutory and common law claims, and sought attorneys’ fees and costs.
The Hartford team argued in its motion to dismiss that its "duty of investigation is only triggered after a furnisher of information receives notice of a dispute from a consumer reporting agency" and that the plaintiffs’ failed to allege that the firm’s client received notice of a dispute from a consumer reporting agency.
In a lengthy and well-reasoned decision, the District Court agreed and dismissed the suit. The Second Circuit affirmed the dismissal with prejudice.