Harris v. Piedmont Fin. CNAC

DARRYL C. HARRIS, Plaintiff, v. PIEDMONT FINANCE CNAC, Defendant.

Case No. 5:20-CV-00669-M

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

June 16, 2021

ORDER

These matters come before the court on Defendant's Motion to Dismiss or Stay and Compel Arbitration [DE 12], Plaintiff's Motion to Compel Production of Documents [DE 16] and Plaintiff's Second Motion to Compel Production of Documents [DE 17]. Plaintiff responded to Defendant's motion, but Defendant filed no reply and filed no response(s) to Plaintiff's motions. For the reasons that follow, Defendant's motion is granted in part and denied in part, and Plaintiff's motions are denied without prejudice.

I. Background

The following are factual allegations (as opposed to statements of bare legal conclusions, unwarranted deductions of fact, or unreasonable inferences) made by the Plaintiff in the operative Complaint (DE 1), which the court must accept as true at this stage of the proceedings for a Rule 12(b)(6) analysis pursuant to King v. Rubenstein, 825 F.3d 206, 212 (4th Cir. 2016).

Without notifying Plaintiff, the Defendant reported to a credit reporting agency that it repossessed Plaintiff's truck and, when it learned the report was incorrect, Defendant did not promptly notify the credit agency nor take steps to remove the information until Plaintiff threatened Defendant with a lawsuit.

II. Legal Standards

A. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)

When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all of the well-pleaded factual allegations contained within the complaint and must draw all reasonable inferences in the plaintiff's favor, Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir. 2017), but any legal conclusions proffered by the plaintiff need not be accepted as true, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ("[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). The Iqbal Court made clear that "Rule 8 marks a notable and generous departure from the hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79.

To survive a Rule 12(b)(6) motion, the plaintiff's well-pleaded factual allegations, accepted as true, must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Twombly's plausibility standard requires that a plaintiff's well-pleaded factual allegations "be enough to raise a right to relief above the speculative level," i.e., allege "enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct]." Id. at 555-56. A speculative claim resting upon conclusory allegations without sufficient factual enhancement cannot survive a Rule 12(b)(6) challenge. Iqbal, 556 U.S. at 678-79 ("where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged--but it has not 'show[n]'--'that the pleader is entitled to relief.'" (quoting Fed. R. Civ. P. 8(a)(2)); Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) ("'naked assertions' of wrongdoing necessitate some 'factual enhancement' within the complaint to cross 'the line between possibility and plausibility of entitlement to relief.'" (quoting Twombly, 550 U.S. at 557)).

B. Motion to Compel Arbitration

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., embodies the "liberal federalpolicy favoring arbitration agreements," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and allows parties to agree to arbitrate as an effective and cost-efficient means to resolve disputes. The FAA requires a district court to stay "any suit or proceeding" pending arbitration of "any issue referable to arbitration under an agreement in writing for such arbitration" once a party to the arbitration agreement moves the court for a stay. 9 U.S.C. § 3.

This stay-of-litigation provision is mandatory. A district court therefore has no choice but to grant a motion to compel arbitration where a valid arbitration agreement exists and the issues in a case fall within its purview.

Adkins v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002) (quoting United States v. Bankers Ins. Co., 245 F.3d 315, 319 (4th Cir. 2001)); see also Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 301-02 (2010) (compelling arbitration is appropriate under the FAA only when there is "a judicial conclusion" that there is a validly formed, express agreement to arbitrate).

When faced with a motion to compel arbitration, the court analyzes two "gateway matter[s]." Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83-84 (2006). First, the court must determine "whether the parties are bound by a given arbitration clause." Id. at 84; see also Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938 (4th Cir. 1999) (court must determine whether "a valid agreement to arbitrate exists between the parties"). Second, if the court concludes there is such an agreement, the court next examines "whether an arbitration clause in a concededly binding contract applies to a particular type of controversy." Howsam, 537 U.S. at 84; see also Phillips, 173 F.3d at 938 (the court also asks whether "the specific dispute falls within the substantive scope of that agreement.").

The burden lies on the movant to demonstrate, inter alia, "a written agreement that includes an arbitration provision which purports to cover the dispute[.]" Adkins, 303 F.3d at 500-01 (quotation marks and citation omitted). In examining a motion to compel arbitration, a districtcourt may consider materials outside the pleadings, including the purported written agreement to arbitrate itself, to determine whether the parties agreed to arbitrate. See Berkeley Cty. Sch. Dist. v. Hub Int'l Ltd., 944 F.3d 225, 234 (4th Cir. 2019). Furthermore, the court "accept[s] as true" the allegations in the complaint that "relate to the underlying dispute between the parties." Id. at 233 (citations omitted). If, however, the "'making of the arbitration agreement be in issue,' then 'the court shall proceed summarily to the trial thereof.'" Id. at 234 (quoting 9 U.S.C. § 4). The court is "obliged to conduct a trial" only "when a party unequivocally denies 'that an arbitration agreement exists,' and 'show[s] sufficient facts in support thereof," under a summary judgment standard. Id. (quoting Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc., 807 F.3d 553, 564 (4th Cir. 2015)).

When a "proponent of an arbitration agreement offers credible, admissible evidence to support a finding of an agreement to arbitrate, the opponent cannot rely on mere unawareness of whether it had made an arbitration agreement." Dillon v. BMO Harris Bank, N.A., 173 F. Supp. 3d 258, 264 (M.D.N.C. 2016) (citing Almacenes Fernandez, S.A. v. Golodetz, 148 F.2d 625, 628 (2d Cir. 1945)). "In disputed cases, the party opposing arbitration must unequivocally deny that there was an arbitration agreement and produce evidence to substantiate the denial." Id. (citing Drews Distrib., Inc. v. Silicon Gaming, Inc., 245 F.3d 347, 352 n.3 (4th Cir. 2001)). This burden on the opponent arises, however, only after the proponent produces credible, admissible evidence that satisfies the court of the existence of an arbitration agreement. See id. (citing 9 U.S.C. § 4).

III. Analysis

Defendant proffers two arguments for dismissal of this case: (1) Plaintiff's claim under the Fair Credit Reporting Act ("FCRA") is barred by the statute of limitations; and (2) Plaintiff's claim is subject to an arbitration provision in the contract governing the sale of Plaintiff's truck. Thecourt will address each challenge in turn.

A. Statute of Limitations

In his Complaint, the Plaintiff does not identify the sections of the FCRA he claims Defendant violated. Construing the pro se Plaintiff's allegations liberally, the court finds he alleges the following "claims" under the FCRA: (1) Defendant failed to promptly notify a credit reporting agency that the information it provided was inaccurate in violation of 15 U.S.C. § 1681s-2(a)(2); (2) Defendant failed to provide a notice, in writing, to the Plaintiff of furnishing negative information to a credit reporting agency in violation of 15 U.S.C. § 1681s-2(a)(7); and (3) Defendant, upon notice of a dispute, failed to investigate, report, and delete inaccurate information in violation of 15 U.S.C. § 1681s-2(b)(1). However, as set forth in § 1681s-2(c), the "FCRA explicitly bars private suits for violations of § 1681s-2(a), but consumers can still bring private suits for violations of § 1681s-2(b)." Saunders v. Branch Banking & Trust Co., 526 F.3d 142, 149 (4th Cir. 2008); see also Taylor v. First Premier Bank, 841 F. Supp. 2d 931, 933 (E.D. Va. 2012) (noting that "[n]o private cause of action exists pursuant to subsections of FCRA other than subsection (b)"). Therefore, Plaintiff's only possible claim arises under § 1681s-2(b)(1)¹ and, because Defendant raises a single argument with respect to this claim,² the court must determine whether the claim is barred by the applicable statute of limitations.

A two-year statute of limitations governs claims arising under § 1681s-2(b). See Croft, 166 F. Supp. 3d at 641 (citing 15 U.S.C. § 1681p). Section 1681p provides as follows:

An action to enforce any liability created under this subchapter may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction, not later than the earlier of—

(1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or

(2) 5 years after the date on

...