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Perry v. Toyota Motor Credit Corp.

United States District Court, W.D. Virginia, Abingdon Division

January 25, 2019

TIMOTHY E. PERRY, Plaintiff,
v.
TOYOTA MOTOR CREDIT CORPORATION DBA TOYOTA FINANCIAL SERVICES, ET AL., Defendants.

          Matthew Felty and Brandon Snodgrass, Snodgrass & Felty, P.C., Abingdon, Virginia, and Leonard A. Bennett and Susan M. Rotkis, Consumer Litigation Associates, P.C., Newport News, Virginia, for Plaintiff;

          Ryan J. Munitz and Anna S. McLean, Sheppard Mullin Richter & Hampton LLP, Washington, D.C., and San Francisco, California, for Defendant Toyota Motor Credit Corporation; David N. Anthony, Troutman Sanders LLP, Richmond, Virginia, for Defendant Experian Information Solutions, Inc.

          OPINION AND ORDER

          James P. Jones, United States District Judge

         In this action under the Fair Credit Reporting Act (“FCRA”), plaintiff Timothy Perry alleges that defendants Toyota Motor Credit Corporation (“Toyota”), Experian Information Solutions, Inc. (“Experian”), Equifax Information Services, LLC (“Equifax”), and Trans Union, LLC (“Trans Union”) violated the FCRA by furnishing and reporting his Toyota vehicle lease account as due and owing, with a past-due balance, and without reference to its inclusion in his bankruptcy. He also alleges that Toyota, Equifax, and Trans Union violated the FCRA by furnishing and reporting his Toyota account as reaffirmed. Defendants Toyota and Experian have moved to dismiss the Complaint, asserting that they did not violate the FCRA because they furnished and reported Perry's Toyota account accurately. For the reasons that follow, I will grant Experian's motion, and I will grant in part and deny in part Toyota's motion. I find that at this point, Perry has stated a plausible claim when he alleges that Toyota falsely reported that he had “reaffirmed” his vehicle lease, rather than that he had “assumed” it.

         I.

         The Complaint alleges the following facts, which I must accept as true for the purpose of deciding the Motion to Dismiss.

         Perry began leasing a vehicle from Toyota[1] on February 20, 2016. On March 25, 2016, Perry filed a petition for Chapter 7 bankruptcy, and the Toyota lease was included in the petition. Toyota was notified of this, and on March 29, 2016, Toyota sent Perry's bankruptcy counsel a letter regarding the vehicle lease. In the letter, Toyota stated that it would no longer send billing statements to Perry and would not report his account payment history to the three major credit reporting agencies (“CRAs”) “unless a Lease Assumption Agreement has been completed and sent to [Toyota] in accordance with Section 365 of the Bankruptcy Code.” Compl. ¶ 17, ECF No. 1. On April 20, 2016, Perry voluntarily assumed the vehicle lease.

         On June 21, 2016, the bankruptcy court granted a discharge of Perry's debts. The order of discharge stated, “This order does not prevent debtors from paying any debt voluntarily or from paying reaffirmed debts according to the reaffirmation agreement. 11 U.S.C. § 524(c) (f).” Compl. ¶ 23, ECF No. 1.

         Perry continued to receive billing statements from Toyota after the bankruptcy court's order of discharge, and he paid these bills through January 2017. In January 2017, Perry contacted Toyota to make arrangements to surrender the vehicle because he was no longer able to make payments on the lease. Between January and June 2017, Perry and Toyota corresponded regarding arrangements for Toyota to repossess the vehicle, and Toyota did so on or about June 9, 2017. Toyota continued to send billing statements during this time, and its employees told Perry that he had signed an assumption of the lease and was still responsible for paying the debt.[2] Perry did not make any payments after January 2017.

         On or around June 16, 2017, Perry obtained a copy of his credit report from Experian, Equifax, and Trans Union and learned that each CRA was reporting his account with Toyota as due and owing, with a past-due balance, and without reference to the account's inclusion in the bankruptcy. In July 2017, Perry sent a letter to each CRA disputing their reporting of the Toyota account, and he copied Toyota on this and subsequent correspondence with the CRAs.

         Equifax responded to Perry's letter and stated that the account would be updated to show that it was included in the bankruptcy discharge. However, Perry obtained his Equifax credit report on October 17, 2017, and it showed the Toyota account as due and owing, with a past-due balance. It also indicated that the debt had been reaffirmed. Perry sent a second dispute letter to Equifax in November 2017, but when he obtained another credit report from Equifax in January 2018, it was identical to the previous report. Perry sent a third dispute letter to Equifax in February 2018, and Equifax responded stating that it had verified the account. Equifax's dispute response still showed a past-due balance and that the debt had been reaffirmed. Equifax is still reporting this allegedly inaccurate information.

         Perry did not receive a response to his first dispute letter from Experian, and when he obtained his Experian credit report again in August 2017, it showed that his Toyota account had a past-due balance and that the vehicle had been involuntarily repossessed. Perry then sent a second dispute letter to Experian, to which Experian responded stating that it had reinvestigated the dispute and updated the report. In the report included with this response, the reference to involuntary repossession had been removed, but it still showed a past-due balance and made no reference to the account being included in bankruptcy. Between October and November 2017, Perry sent two additional dispute letters to Experian, and he received similar responses from it. Experian is still reporting this allegedly inaccurate information.

         Trans Union responded to Perry's first dispute letter and stated that its investigation of the dispute was complete and the information had been updated. His Trans Union credit report showed no balance on the Toyota account and that the account was included in the bankruptcy discharge. It also removed the reference to a reaffirmation of the debt. Perry obtained another copy of his Trans Union credit report in January 2018, and this report again showed that the Toyota account was past due, the debt had been reaffirmed, and no reference to the account being included in bankruptcy. Perry sent Trans Union another dispute letter, and Trans Union responded stating that its investigation indicated that the account was verified as accurate. The enclosed report showed the same information as the prior report. Trans Union is still reporting this allegedly inaccurate information.

         In Toyota's response to Perry's first dispute letter, it stated that it had researched its records and determined that the information it was furnishing to the CRAs was correct. A second letter from Toyota stated that it would update the account to show that Perry had disputed it. Toyota sent similar letters to Perry in response to the additional dispute letters it had been copied on. Toyota is still furnishing this allegedly inaccurate information.

         Perry alleges that Experian, Equifax, and Trans Union had forwarded his dispute to Toyota, but when Toyota received information about the dispute, it only reviewed its internal system and ultimately furnished the same information back to the CRAs. Perry alleges that Toyota did not review its previous communications with him when investigating the dispute.

         In December 2017, Perry received a letter from Alltran Financial LP (“Alltran”), a debt collector, requesting that he pay the debt on the Toyota account in full. Perry responded to this letter and disputed the debt, stating that it was included in the ...


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