Nichols v. Synchrony Bank

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CHRISTOPHER LYLE NICHOLS, Plaintiff, v. SYNCHRONY BANK, et al., Defendants.

Civil Action No. 7:22-cv-00565

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

March 13, 2023

MEMORANDUM OPINION

HON THOMAS T. CULLEN, UNITED STATES DISTRICT JUDGE

Plaintiff Christopher Lyle Nichols (“Nichols”) brought this action against Defendants Synchrony Bank (“Synchrony”) and Tenaglia & Hunt, P.A., P.C (“T&H”), asserting several violations of the Fair Debt Collection Practices Act (“FDCPA”) and claims for breach of contract, fraud, and intentional infliction of emotional distress stemming from a debt previously owed on a Lowe's credit card. The matter is before the court on Synchrony's motion to dismiss all counts asserted against it. For the reasons explained below Synchrony's motion to dismiss will be granted in part and denied in part.

I. Background

This dispute began in 2016 after Nichols opened a Lowe's credit card through Synchrony Bank. (Compl. ¶ 10 [ECF No. 1].) After accruing a debt on the card, Nichols and his wife apparently contacted Freedom Debt Relief^[1] (“FDR”) to help them settle it. (Id. ¶ 12.) In June of 2018, Nichols was informed that FDR had settled the debt owed to Synchrony.

(Id. ¶ 13.) Specifically, Nichols owed $4,960.45 on his card, but, according to Nichols, Synchrony agreed to settle the debt for $1,488.14, which was to be paid in three installments by FDR. (Id. ¶ 14; Pl.'s Ex. A [ECF No. 1-1].)

Following this agreement, Nichols claims that FDR made the required payments to Synchrony on his behalf.^[2] (Id. ¶ 15.) But for some unknown reason, Synchrony was unable to deposit the last two payments. (Id. ¶ 16.) As a result, Synchrony contacted FDR in February 2020 regarding the outstanding balance on Nichols's account. (Id. ¶ 17.) During the ensuing discussions between FDR and Synchrony, the bank agreed to honor its original settlement agreement pending clearance of a lump sum payment of the remaining balance-$997.05. (Id; Pl.'s Ex. C [ECF No. 1-3].) Given Synchrony's willingness to honor the terms of its agreement, FDR overnighted the lump sum payment to Synchrony. (Id. ¶ 18; Pl.'s Ex. D [ECF No. 1-4].) That payment was allegedly processed and accepted by Synchrony. (Id. ¶ 19.) At this point, Nichols understood his debt to be settled. (Id. ¶ 20.)

But on January 13, 2021, T&H-a debt collection agency-filed a Warrant in Debt in the Botetourt General District Court against Nichols, alleging that he owed $3,510.31 on the Synchrony credit card account. (Id. ¶ 21; Pl.'s Ex. F [ECF No. 1-6].) That same day, Nichols retained counsel to defend him against the Warrant in Debt. (Id. ¶ 22; Pl.'s Ex. G [ECF No. 1-7].) On May 5, 2021, this Warrant in Debt was “non-suited”^[3] by T&H. (Id. ¶ 23; Pl.'s Ex.'s H(1) &(2) [ECF Nos. 1-8, 1-9].) Nichols alleges that that basis for T&H's dismissal of the Warrant in Debt was T&H's knowledge that the debt had been previously settled. (Id. ¶ 24.)

Less than a year later, on February 22, 2022, T&H filed a second Warrant in Debt against Nichols, again alleging that $3,510.31 remained unpaid on the Synchrony credit card. (Id. ¶ 26; Pl.'s Ex. I [ECF No. 1-10].) Once notified of the pending Warrant in Debt, Nichols called T&H's attorney of record, Kevin Bell, who told Nichols that he would look into the matter. (Id. ¶ 27.) Nichols also provided Mr. Bell with documentation supporting his position that the debt had been settled, along with proof of the payments made to Synchrony on his behalf. (Id.) Thereafter, on March 11, 2022, Mr. Bell emailed Nichols that he was “proceeding to request the court to dismiss the case” and close the file. (Id. ¶ 28; Pl.'s Ex. J [ECF No. 111].) The Warrant in Debt was subsequently dismissed without prejudice on April 13, 2022. (Id. ¶ 29; Pl.'s Ex. K [ECF No. 1-12].)

On August 1, 2022, despite the prior dismissals, T&H filed a third Warrant in Debt alleging that $3,510.31 remained unpaid. (Id. ¶ 31; Pl.'s Ex. L [ECF No. 1-13].) Ten days later, Nichols again reached out to Mr. Bell and reminded him that the Synchrony account had been settled. (Id. ¶ 32.) While waiting to “hear back” from Mr. Bell, Nichols filed a complaint with the Consumer Financial Protection Board (“CFPB”) on August 15, 2022, and retained counsel who, on August 22, 2022, filed a notice of appearance with the Botetourt General District Court. (Id. ¶¶ 33, 34; see Pl.'s Ex.'s N & O [ECF Nos. 1-15, 1-16].) Thereafter, on August 26, 2022, T&H seemingly requested that Nichols agree to its “non-suit” of the Third Warrant in Debt because his account had been “paid/settled.” (Id. ¶ 35.) Nichols did not agree to T&H's non-suit because, according to him, there was no indication that it would be “with prejudice” or that T&H would not file another Warrant in Debt in the future to collect on the same alleged debt. (Id. ¶ 40.)

Also on August 26, 2022, Nichols received a phone call from Jenna Busse from Synchrony Consumer Relations in response to the CFPB complaint that Nichols filed on August 15, 2022. (Id. ¶ 36.) During this phone call, Ms. Busse apologized for the miscommunication concerning Nichols's account and told Nichols to expect an email from her clarifying that his account was paid/settled in full. (Id.) Nichols subsequently received a letter on September 8, 2022, stating that his account had been settled as of August 22, 2022. (Id; Pl.'s Ex. Q(1) [ECF No. 1-18].)

Nichols received two additional communications from Synchrony on August 26, 2022, concerning his account. The first was a letter from Synchrony regarding its position that it “recently received [Nichols's] request to verify information in regard to [Nichols's account],” and that Synchrony “believe[s] the information previously provided is accurate and complete.' (Id. ¶ 37; Pl.'s Ex. Q(2) [ECF No. 1-19] (cleaned up).) The second communication from Synchrony provided a “Complaint ID” and stated that Synchrony “has responded that it is still working on [Nichols's] issue.” (Id; Pl.'s Ex. Q(3) [ECF No. 1-20].)

Following these communications, Nichols received even more letters from Synchrony and T&H regarding his account and the third pending Warrant in Debt. On August 27, 2022, Nichols received a letter from Synchrony (dated August 23, 2022) stating that his account had been settled in full. (Id. ¶ 38; Pl.'s Ex. R [ECF No. 1-21].) Two days later, on August 29, 2022, Nichols received another letter from Synchrony (also dated August 23, 2022) stating that Synchrony was still investigating Nichols's inquiry into the Lowe's account in order to “provide [him] with a meaningful response.” (Id. ¶ 39; Pl.'s Ex. S [ECF No. 1-22].) Thereafter, on September 2, 2022, Nichols received another request from T&H to non-suit the third pending Warrant in Debt because the account was “Paid/Settled.” (Id. ¶ 40; Pl.'s Ex. T(1) [ECF No. 1-23].) But Nichols refused to stipulate to the nonsuit because there was no indication that it would be with prejudice. (See id.) Finally, on September 16, 2022, Nichols received a letter from Synchrony (dated September 6, 2022) stating that the lump-sum payment of $997.05 was credited to Nichols's account on March 10, 2022, and that he did not owe anything further on his account. (Id. ¶ 41; Pl.'s Ex. T(2) [ECF No. 1-24].) Despite this communication, Nichols avers that Synchrony reported his Lowe's account to credit reporting bureaus as a “charge off”^[4] and that at least one reporting agency still listed the account as a charge off. (Id. ¶¶ 42-44; Pl.'s Ex. U [ECF No. 1-25].) Nichols subsequently filed this action on September 30, 2022. (See ECF No. 1.)

Nichols's Complaint asserts ten counts based on the ordeal surrounding his Lowe's account: seven violations of the FDCPA (Counts I-VII); breach of contract (Count VIII); fraud (Count IX); and intentional infliction of emotional distress (Count X). (Id. ¶¶ 45-72.) Synchrony filed the instant motion to dismiss all counts brought against it on January 18, 2022.^[5] (See ECF No. 17.) The motion has been fully briefed by the parties. Because oral argument would not aid the court in deciding the legal issues raised in Synchrony's brief, the court will dispense with oral arguments on the motion. Therefore, the matter is ripe for disposition.

II. Standard of review

To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. In determining facial plausibility, the court must accept all factual allegations in the complaint as true. Id. The complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” and sufficient “[f]actual allegations . . . to raise a right to relief above the speculative level ....” Twombly, 550 U.S. at 555 (internal quotation marks omitted). Therefore, the complaint must “allege facts sufficient to state all the elements of [the] claim.” Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003). Although “a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,” a pleading that merely offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.

III. Analysis

Synchrony argues that Nichols's common law claims are preempted by the Fair Credit Reporting Act (“FCRA”) or, in the alternative, that they are legally insufficient to...