Plaintiff whose credit information had been reported incorrectly did not have private right of action under Fair Credit Reporting Act absent malice

TAREQ DAJANI v. NEW SOUTH FEDERAL SAVINGS BANK (Tenn. Ct. App. December 31, 2008).

Consumer sued mortgagee-bank asserting a claim of negligence for mistakenly reporting to credit reporting agencies that his mortgage was in foreclosure. The trial court denied customer's second motion to amend his complaint based on futility and granted summary judgment in favor of bank. We affirm.

Opinion may be found at the TBA website:

http://www.tba2.org/tba_files/TCA/2008/dajanit_Corr_123108.pdf

"Mr. Dajani’s second proposed amended complaint does not specifically plead subsection 1681h(e) or contain an allegation that New South supplied the incorrect foreclosure information “with malice or willful intent to injure” Mr. Dajani.  The only mention of malice came during the September 21, 2007 hearing.  Mr. Dajani stated that New South acted “with malice or reckless disregard” when it allegedly continued to furnish the inaccurate information to credit reporting agencies after it received notice of the error.   However, the statement was presented in the context of subsection 1681s-2.  Throughout the September 21st proceeding, the parties limited argument to subsection 1681s-2, discussing whether the provisions of either (a) or (b) applied to the facts of this case." Id.

"The trial court afforded Mr. Dajani multiple opportunities to amend his complaint and plead with specificity the FCRA provisions that New South allegedly violated.  On August 23, 2007, the trial court directed Mr. Dajani to submit a new motion to amend “clearly setting forth the FCRA allegations that you are referring to in your reply brief.”  Instead, the proposed amended complaint referred only to the general codification of the FCRA.  Considering the allegations as limited by the parties to 15 U.S.C.A. § 1681s-2, the trial court did not abuse its discretion in denying the motion to amend based on futility since Mr. Dajani has no private right of action against New South. The only remaining claim from  Mr. Dajani’s original complaint was for negligence.  As discussed above, the FCRA preempts a consumer from asserting a negligence claim against a furnisher of information." Id.