Deceased Reporting: Renninger v. Chexsystems

This Folder Examines Those Cases Where the Credit Reporting Agencies [or Furnishers] Report You as Deceased When You Are Plainly Alive
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David A. Szwak
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Deceased Reporting: Renninger v. Chexsystems

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Not Reported in F.Supp., 1998 WL 295497 (N.D.Ill.)

United States District Court, N.D. Illinois.
Dana RENNINGER, Plaintiff,
CHEXSYSTEMS and Equifax Credit Information Services, Inc., Defendants.
No. 98 C 669.
May 22, 1998.


*1 This matter is before the Court on Defendant Equifax's motion, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss Plaintiff's complaint. For the following reasons, this motion is granted.

The following facts are taken from Plaintiff's complaint, the allegations of which must be assumed true for the purposes of this motion.
Plaintiff Dana Renninger ("Renninger") is a living, breathing person (or at least she alleges as much). Defendant ChexSystems, Inc. ("ChexSystems") is a Minnesota corporation that acts as a "consumer reporting agency" as that term is defined under § 1681a of the Fair Credit Reporting Act (FCRA). Defendant Equifax Information Services, Inc. ("Equifax") is a Georgia corporation similarly acting as a consumer reporting agency under § 1681a of the FCRA.
The problem in this case boils down to this--though Renninger is apparently alive and well, Defendants have listed her as dead in their records since at least 1992. The problem apparently derives from a mixup with the Social Security Administration's (SSA) records, in which Renninger's social security number was erroneously reported for a deceased person, Laura Schneeman. In June 1992, Renninger contacted the SSA about the problem, and the SSA immediately corrected the mistake in its records.
After Renninger corrected the problem with the SSA, she sent letters to the three major credit reporting agencies--TRW n/k/a Experian, TransUnion and Equifax--advising them of the mistake that SSA had made and asking that they update their records to show she was alive. TRW and TransUnion subsequently corrected Renninger's credit files so that she was no longer listed as dead. Equifax, however, failed to correct its credit file on Renninger and still (at least at the time her complaint was filed) lists her social security number as belonging to a dead person.
Renninger began having problems because of her inaccurate credit information in 1992. Though Renninger had a checking account in good standing from 1986 to 1990 before leaving Chicago, she ran into problems when she moved back to Chicago and tried to reopen the checking account two years later. She was turned down at LaSalle Bank, First Chicago, and Success National Bank--all based on a report from Defendant ChexSystems that she was dead. Renninger also was initially unable to reestablish her phone service in 1992 based on a credit report listing her as dead. She ultimately was able, however, to obtain a checking account at Mid Town Bank and to get phone service.
Subsequently, Renninger sent another letter to Equifax informing them she was not dead. In April 1993, Renninger tried to open an account at St. Paul Federal Bank, but was again turned down allegedly because of a ChexSystems report that she was dead. She then sent ChexSystems a letter providing them with information from the SSA that her social security number did not belong to a dead person.
Renninger also alleges that her credit problems continued in 1995, when she apparently wanted to buy a house. Prior to applying for a mortgage, Renninger wanted to confirm that her credit reports were accurate. She allegedly tried to order a credit report from Defendant Equifax through its telephone ordering system. Equifax, however, never responded. Renninger then claims to have written another letter to Equifax asking that her records be corrected.
*2 Renninger's credit problems persisted into 1996, at which time she sought to open a checking account at a new bank. In February 1996, Renninger approached Mid City Bank about opening an account, but ChexSystems again reported her as dead. Eventually, Renninger worked with Mid City and, due to accurate credit reports from TRW and TransUnion, was able to open an account there.
Renninger contends that she again wrote ChexSystems, in February 1996, to have her credit information corrected. ChexSystems responded by letter on March 9, 1996, informing Renninger that their records revealed that she was reported dead by the SSA. ChexSystems requested that Renninger provide them with the necessary verification from the SSA that her social security number was listed as active. Finally, ChexSystems offered that, upon receipt of this verification from the SSA, they would contact any financial institution that had been given inaccurate information in the previous six months.
Renninger also tried to again order her credit report from Equifax through its telephone ordering system in 1996. Having received no response, she wrote a letter to Equifax in February 1997 seeking a copy of this report. On February 19, 1997, Equifax responded by letter stating that their current records indicated that the SSA had reported Renninger as dead. In order to correct this error, Equifax informed Renninger that she should provide them with a A Report of Confidential Social Security Benefit Information regarding her current status with the SSA.
Renninger contends that she has repeatedly requested Defendants to correct her credits reports, and that she has sent them copies of her social security records. She alleges that Defendants have failed to employ reasonable procedures to timely and properly reinvestigate the accuracy of the SSA record that she was dead. Renninger alleges that, despite her efforts to correct this information, Defendants have wilfully or negligently failed to correct her reports and have continued to publish inaccurate information.
Renninger claims several injuries as a result of Defendants' erroneous records. She contends that she has been denied credit and has been unable to open a checking account at several banks. In addition, Renninger asserts that she has been deterred from purchasing a home since 1995 because of her belief that she would be denied a mortgage based on Defendants' erroneous records. Renninger contends that she has suffered irreparable injury because of Defendants' unwillingness to correct their records.
Renninger subsequently filed this complaint against Defendants ChexSystems and Equifax alleging violations of the FCRA. Pursuant to § 1681n and o of the FCRA, Renninger seeks to hold Defendants liable for her actual damages (including her mental anguish and costs incurred in repairing her credit history), punitive damages, costs and reasonable attorneys' fees. Defendant Equifax has now filed a motion to dismiss, asserting that Renninger has not alleged a claim upon which relief can be granted. Before addressing the substance of this motion, however, the Court must first set forth the proper legal standard.

*3 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint, not to decide the merits of the case. Defendants must meet a high standard in order to have a complaint dismissed for failure to state a claim upon which relief may be granted. In ruling on a motion to dismiss, the court must construe the complaint's allegations in the light most favorable to the plaintiff and all well-pleaded facts and allegations in the plaintiff's complaint must be taken as true. Bontkowski v. First National Bank of Cicero, 998 F.2d 459, 461 (7th Cir.), cert. denied, 510 U.S. 1012, 114 S.Ct. 602, 126 L.Ed.2d 567 (1993). The allegations of a complaint should not be dismissed for failure to state a claim "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). See also Hartford Fire Insurance Co. v. California, 509 U.S. 764, 113 S.Ct. 2891, 125 L.Ed.2d 612 (1993); Sherwin Manor Nursing Center, Inc. v. McAuliffe, 37 F.3d 1216, 1219 (7th Cir.1994), cert. denied, 516 U.S. 862, 116 S.Ct. 172, 133 L.Ed.2d 113 (1995). Nonetheless, in order to withstand a motion to dismiss, a complaint must allege facts sufficiently setting forth the essential elements of the cause of action. Lucien v. Preiner, 967 F.2d 1166, 1168 (7th Cir.), cert. denied, 506 U.S. 893, 113 S.Ct. 267, 121 L.Ed.2d 196 (1992).
In reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court is limited to the allegations contained in the pleadings themselves. Documents incorporated by reference into the pleadings and documents attached to the pleadings as exhibits are considered part of the pleadings for all purposes. Fed.R.Civ.P. 10(c). In addition, "[d]ocuments that a defendant attaches to a motion to dismiss are considered a part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Venture Associates Corp. v. Zenith Data Systems Corp., 987 F.2d 429, 431 (7th Cir.1993). It is with these principles in mind that we turn to the motion before us.

It is first important to note that this motion is brought solely by Defendant Equifax, and thus only those allegations in the complaint which implicate Equifax are relevant to the Court's analysis. Though its motion is couched in terms of a timeliness argument, Equifax basically argues that Renninger has alleged no facts (at least that have occurred in the last two years--the applicable limitations period) to support a FCRA claim against Equifax. Absent any allegation that Equifax issued an inaccurate credit report about Renninger in the two years preceding this lawsuit, Equifax claims that it must be dismissed from this case.
The issue on this motion centers on whether Equifax breached any duty under § 1681e(b) of FCRA. Section 1681e(b) provides that:
Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.
*4 15 U.S.C. § 1681e(b). Equifax does not dispute its qualification as a "consumer reporting agency," and there is no question that Renninger has sufficiently alleged that Equifax failed to employ reasonable procedures to ensure the accuracy of its information. What Equifax does attack, however, is whether Renninger has alleged the preparation of any "consumer report" so as to trigger Equifax's duty under the statute.
The term "consumer report" is defined by FCRA as follows:
[A]ny written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for ... [listed authorized purposes].
15 U.S.C. § 1681a(d)(1). Upon close examination of her complaint, it is apparent that Renninger does not allege that Equifax issued an inaccurate "credit report" to any third-party user of that information. Though Renninger does contend that inaccurate credit reports caused her to be denied checking accounts at several banks, her complaint specifically alleges that Defendant ChexSystems was the supplier of these reports. In addition, the other allegations of credit problems which do not identify the supplier of the false report--such as Ameritech's denial of phone service in 1992--are barred by the statute of limitations. Thus, Equifax argues that Renninger's complaint is wholly devoid of any allegation that Equifax issued an inaccurate "credit report," and that therefore her FCRA claim against Equifax must be dismissed.
Renninger acknowledges that an inaccurate "credit report" is a necessary element of her FCRA claim. Renninger argues, however, that the February 19, 1997 letter sent by Equifax to her qualifies as a "credit report" under the statute. This letter, stating that Equifax's records indicated Renninger to be dead, was written in response to Renninger's request for a copy of her credit report. Renninger contends that she sought this report to determine her "eligibility for credit or insurance," a purpose expressly provided for in the statutory definition of a "consumer report." Furthermore, since Equifax collected the information for the statutory purpose of providing credit history information, Renninger asserts that any report of that information should qualify as a "consumer report." Indeed, the Ninth Circuit has recently noted that it found no precedent requiring that an inaccurate report be actually disseminated in order to support a FCRA claim. See Guimond v. TransUnion Credit Information Co., 45 F.3d 1329, 1333 fn. 3 (9th Cir.1995).
Equifax vigorously disputes the notion that the term "consumer report" can include correspondence between a consumer reporting agency (Equifax) and a consumer (Renninger) herself. Equifax contends that the statutory language clearly indicates that FCRA liability can only be imposed when an inaccurate credit report regarding a consumer is issued to a third-party user of that information. In contrast, Equifax asserts, the statutory section setting forth the information which a consumer reporting agency must disclose to a consumer at the consumer's request is not included within the definition of a "consumer report," but rather is referred to as a "consumer disclosure." See 15 U.S.C. § 1681g(a). Thus, Equifax argues that its disclosure to Renninger of the contents of her credit file cannot be construed as a "consumer report" to support a FCRA claim in this case.
*5 This distinction between consumer reports and disclosures was recognized by the Fifth Circuit in its decision in Hyde v. Hibernia National Bank in Jefferson Parish, 861 F.2d 446 (5th Cir.1988), cert. denied 491 U.S. 910, 109 S.Ct. 3199, 105 L.Ed.2d 706 (1989). In discussing when a FCRA cause of action arises, the Hyde court explained that:
A consumer may learn that a credit agency possesses erroneous information in its files, but he has no cause of action in tort against the credit agency until the agency somehow injures him. The statute does not allow suit against the credit agency for creating, possessing, or revealing to a consumer credit files containing erroneous information, but establishes a cause of action to redress specific injuries sustained by the consumer. The requirement that a consumer sustain some injury in order to establish a cause of action suggests that the statute should be triggered when the agency issues an erroneous report to an institution with which the consumer is dealing.
Id. at 449 (emphasis added). Thus, the Hyde court made a clear distinction between revealing the contents of a credit file to a consumer--a "consumer disclosure"--and issuing an erroneous report to an institution with which a consumer is dealing--a "consumer report"--holding that only the latter should trigger the protection of the statute.
Finally, Equifax questions the verity of the Guimond court's statement that "[n]o court has held that the prima facie case [for a FCRA claim] required that an inaccurate report was ever disseminated." Guimond, 45 F.3d at 1333 fn. 3. Equifax insists that, to the contrary, the majority view has always been that FCRA liability does not arise until an inaccurate consumer report has actually been issued to a third party. See, e.g., King v. MTA Bridges and Tunnels, 933 F.Supp. 220, 225 (E.D.N.Y.1996); Wilson v. Porter, Wright, Morris & Arthur, 921 F.Supp. 758, 759-60 (S.D.Fla.1995). Thus, Equifax vehemently argues that, absent an allegation that it ever issued an inaccurate report to a third-party, prior case law dictates that Renninger's FCRA claim cannot stand.
Though the case law on this issue is relatively sparse, the Court is convinced that a proper reading of the statute does not encompass Renninger's claims against Equifax in this case. The definition of "consumer report" under FCRA contemplates that the information will be used to determine a consumer's eligibility for legitimate credit or employment purposes, a requirement which seemingly mandates that the information be provided to a third-party user. In this Court's view, Equifax's letter response to Renninger's request for her credit file information is not a "consumer report" so as to trigger liability under FCRA. To hold otherwise, as Equifax points out, would potentially subject a consumer reporting agency to liability any time they disclosed the contents of their files upon a consumer's request (which they are required to do under § 1681g). This Court thinks it unwise to place consumer reporting agencies between that rock and hard place, and thus we find that no "consumer report" was issued in this case.
*6 Underpinning this conclusion is the fact that a consumer is not injured by an inaccurate credit report unless that false information is communicated to and acted upon by a third-party user. In arguing that Equifax's letter should be considered a "consumer report," Renninger claims that she has suffered mental anguish because of the whole ordeal. However, though actual damages for mental pain and suffering are allowed under the statute, courts have specifically rejected such damages when there is no allegation that any third-party user ever learned of the inaccurate information in the agency's files. See Casella v. Equifax Credit Information Services, Inc., 56 F.3d 469 (2d Cir.1995), cert. denied 517 U.S. 1150, 116 S.Ct. 1452, 134 L.Ed.2d 571 (1996). Furthermore, Renninger's contention that she was deterred from even applying for a mortgage (because of Equifax's inaccurate information) has been held to present much too speculative an injury to support a FCRA claim. Casella, 56 F.3d at 475 (in the absence of any allegation that consumer made an offer to purchase property or apply for a home mortgage, assertion of "lost opportunity" damages was too speculative). Thus, the Court's conclusion in this case is further bolstered by the fact that Renninger has not alleged any cognizable injury which resulted from Equifax's inaccurate credit information.
In her pleadings in this case, Renninger has lamented about her situation-- being reported as dead--as if it were a fate worse than death in our credit-driven world. The Court is sympathetic to the hassles that she has suffered through as a result of the SSA's and Defendants' mixups. However, this Court's job is not to be sympathetic, but instead to interpret and apply the law as written. In this case, Renninger has failed to allege that Equifax issued an inaccurate "credit report" so as to state a FCRA claim. Thus, Defendant Equifax's motion to dismiss is granted.

For the foregoing reasons, Defendant Equifax's motion to dismiss is granted.
Renninger v. ChexSystems
Not Reported in F.Supp., 1998 WL 295497 (N.D.Ill.)
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association
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