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Davenport v. Sallie Mae, Inc.

United States District Court, Fourth Circuit

August 2, 2013

SALLIE MAE, INC., et al., Defendants.


PETER J. MESSITTE, District Judge.

James E. Davenport, pro se, has sued Sallie Mae, Inc., and SLM Corporation (collectively "Sallie Mae"), alleging numerous federal and state law violations resulting from Sallie Mae's reporting of Davenport's credit history to various credit reporting agencies. Sallie Mae has filed a Motion to Dismiss (Paper No. 26). Davenport has responded with a Memorandum in Opposition (Paper No. 31), and Sallie Mae has responded (Paper No. 41). For the reasons that follow, Sallie Mae's Motion to Dismiss (Paper No. 26) is GRANTED IN PART and DENIED IN PART.


On or about July 19, 2006, Davenport signed a Federal PLUS Loan Application and Master Promissory Note ("Note") in favor of Sallie Mae to obtain a loan to finance his daughter's post-secondary education. On December 4, 2006, Sallie Mae disbursed $6, 800 of loan proceeds to Union College on behalf of the daughter. The daughter was continuously enrolled in college from the fall of 2006 until her graduation in May 2010.

Davenport alleges that his contract with Sallie Mae provided that repayment of the loan principal would be deferred during the period of his daughter's post-secondary studies and would only begin six-months after her graduation, with the understanding that in the meantime interest would accrue and be capitalized. Sallie Mae contends that the original Note included no such deferment provision; to the contrary, it says, Davenport agreed to repay the loan in periodic installments beginning on December 4, 2006, the day of the disbursement for the loan to Union College. From early 2007 until approximately June 2010, Sallie Mae and Davenport engaged in several communications via e-mail, phone, and mail regarding their disagreement over when the repayment period of the loan would begin. Davenport alleges that, during this back and forth, Sallie Mae's representatives took contradictory positions regarding the date when his first repayment was supposedly due.

On or about May 24, 2010, Davenport received correspondence from Sallie Mae, stating that his loan repayment was 90-days overdue and that his delinquency had been reported to consumer credit reporting agencies ("CRAs"). Davenport informed three CRAs (Equifax, Experian, and Trans Union) that he disputed this.[1] After receiving notice from these CRAs that Davenport disputed its report, Sallie Mae states that it had verified the accuracy of the report, in consequence of which the CRAs ended their investigations. Davenport continues to dispute the accuracy of Sallie Mae's report. He submits that his credit rating suffered due to Sallie Mae's reporting to the CRAs.

In this suit. Davenport asserts twelve causes of action against Sallie Mae: (1) negligent violation of the Fair Credit Reporting Act ("FCRA"); (2) willful violation of the FCRA; (3) malicious defamation; (4) violation of the Fair Debt Collection Practices Act ("FDCPA"); (5) violation of the Maryland Consumer Debt Collection Act ("MCDCA") and consequent violation of the Maryland Consumer Protection Act ("MCPA"); (6) interference with contract; (7) interference with economic relationships; (8) injurious falsehood; (9) injurious falsehood amounting to defamation; (10) civil conspiracy; (11) intentional infliction of emotional distress; and (12) breach of contract. Sallie Mae has moved to dismiss all counts pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.


"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint." Republican Party of NC. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Thus, to survive a 12(b)(6) motion, the 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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "The plausibility standard requires a plaintiff to demonstrate more than a sheer possibility that a defendant has acted unlawfully.'" Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). While the court liberally construes all documents filed by a pro se plaintiff and holds the pleadings to "less stringent standards than formal pleadings drafted by lawyers, " Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal citations omitted), the complaint must still set forth sufficient facts "to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.

In weighing the legal sufficiency of the complaint, the "court accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff...." Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted). But such deference is not accorded to labels and legal conclusions, formulaic recitations of the elements of a cause of action, and bare assertions devoid of further factual enhancement. Iqbal, 556 U.S. at 678. In addition, the court may consider documents submitted in connection to the motion to dismiss so long as they "are referred to in the complaint and upon which plaintiff relies in bringing the action." Biospherics, Inc. v. Forbes, Inc., 989 F.Supp. 748, 749 (D. Md. 1997), aff'd, 151 F.3d 180 (4th Cir. 1998).


A. Counts One and Two: Negligent and Willful Violation of FCRA

Sallie Mae argues that its report to the CRAs was accurate as a matter of law and, therefore, it cannot be held liable for what Davenport simply declares is an inaccurate report.[2] This argument completely ignores the scope of furnishers' FCRA duties and, in any case, is a premature dispute relating to the merits of the Complaint that cannot be decided at this early stage of litigation.

Davenport's FCRA causes of action allege violations of subsections (A) through (D) in § 1681s-2(b)(1), which provides that a furnisher of information is liable to the consumer when it has failed in at least one of the following duties:

(1) To investigate with respect to the disputed information; (2) to review all relevant information provided by the CRA; (3) to report the results of its investigation to the CRA; [and] (4) if the investigation shows the disputed information is incomplete or inaccurate, to report those results to all other CRAs to which it furnished the original information....

Beachley v. PNC Bank, Nat. Ass'n, 2011 WL 3705239, at *2 (D. Md. Aug. 22, 2011). Furnishers must review reports not only for inaccuracies in the information reported but also for omissions that render the reported information misleading, such as a failure to note a continuing consumer dispute. Saunders v. Branch Banking & Trust Co. of VA, 526 F.3d 142, 150 (4th Cir. 2008).

To bring a cause of action under § 1681s-2(b), Davenport must establish: (1) that he notified the CRAs of the disputed information, (2) that the CRAs notified Sallie Mae of the dispute, and (3) that Sallie Mae then failed to investigate and modify the inaccurate information. See Ausar-El v. Barclay Bank Delaware, 2012 WL 3137151 (D. Md. July 31, 2012) (citations omitted). Emphatically, he "does not have to prove that the underlying allegations that gave rise ...

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