Opinion
0111954/2006.
January 11, 2008.
Patricia Gary, pro se New York, NY, for the Plaintiff.
Joseph F. Battista, Esq. Eschen, Frenkel Weisman, LLP, Bay Shore NY, for the Defendant.
DECISION AND ORDER
Papers considered in review of this motion to dismis:
Papers Numbered 1 2 3
Notice of Motion and Affidavits Annexed ........ Answering Affidavits ........................... ReplyingAffirmation ............................Defendant GMAC Mortgage moves to dismiss the complaint (denominated a "counterclaim" by the self-represented plaintiff), pursuant to CPLR 3211 and 3212, and upon the grounds that the complaint is abandoned and that plaintiff Gray failed to comply with previous court orders, or to comply with CPLR 3025 concerning amendment of pleadings. For the reasons set forth below, defendant's motion is granted.
By decision and order of May 23, 2006, this court severed the counterclaim set forth in Patricia Gary's otherwise dismissed amended answer in the litigation known as GMAC Mortgage v Patricia Gary and the NYS Environmental Control Board (Index. No. 601163/2004). In that decision, the court permitted Gary to purchase a new index number and request for judicial intervention and commence a separate action based on the allegations contained in the counterclaim. The subject of plaintiff's separate action was set forth in the court's earlier decision and order of November 18, 2005 which found that plaintiff's counterclaim sufficiently raised a claim that GMAC violated the United States Fair Credit Reporting Act ( 15 USC §§ 1681, et seq.) and the analogous New York Fair Credit Reporting Act (General Business Law §§ 380, et seq.), and that she should be allowed to re-plead this claim. Although Gary apparently misunderstood the court's directive, and subsequently filed papers that were much broader in scope and failed to adhere to the court's ruling, in the court's decision of May 23, 2006, it again permitted her to pursue this claim if she filed a request for judicial intervention and purchased an index number "within 30 days of entry of this order"; failing that, the court indicated that the counterclaim "shall be deemed abandoned."
Although the decision of May 23, 2006 cautioned that the New York Fair Credit Reporting Act in general provides a two-year statute of limitations, citing General Business Law § 380-n, contrary to GMAC's assertions (see GMAC Reply ¶ 4), the decision did not hold that the statute of limitations had necessarily run.
The May 23, 2006 decision was entered on June 1, 2006. GMAC filed and served copies of the decision with Notice of Entry on June 30, 2006 (Not. of Mot. Ex. H, Aff. of Service). On August 25, 2006, Gary purchased the within index number and filed a summons and "counterclaim" as a separate action. According to the affidavit of service in the court's file, she served the summons and "counterclaim" (hereinafter "counterclaim/complaint") on August 29, 2006 by delivery to GMAC's attorneys' office in Bayshore, New York. According to Supreme Court Records Online, the request for judicial intervention was filed on September 27, 2006. The RJI was filed not by Gary, but by GMAC, defendant in this action and the plaintiff in the earlier action, and filed at the time GMAC filed the instant motion to dismiss.
GMAC, which has not served an answer, timely moves to dismiss the counterclaim/complaint on several grounds (CPLR 3012 [c] [30 days to answer when papers not personally served on the party]). It moves to dismiss first based on Gary's failure to follow the court's directive to file an RJI and purchase an index number within 30 days of entry of the order. It argues that by the express terms of the order, the counterclaim should now be deemed abandoned. Gary protests that GMAC did not mail her a copy of the entered order until June 30, 2006, and that she had expected, although the court order did not indicate, that as a self-represented litigant, she would receive notice of entry before the 30-day period had commenced, so that she would have sufficient time to undertake the court's directives (Aff. in Opp. para 4, n. 4). Although the court is willing to overlook her misunderstanding of the May 23, 2006 order as it concerns when the 30-day period was to commence, there is much less excuse for her failure to follow the court's directives within 30 days of the actual mailing of the decision with notice of entry. According to GMAC's affidavit of service, a copy of the decision with notice of entry was mailed to her on June 30, 2006. She should therefore have filed an RJI and purchased an index number no later than August 4, 2006, given that five days are allotted for receipt of service (CPLR 2103 [b] [2]). Gary appears to blame slow mail delivery, as well as the fact that she has a great deal of responsibility for the legal affairs of her ailing mother, as the reasons why she filed 21 days late. She also contends, unconvincingly, that she did not understand that she was to file an RJI.
Plaintiff served her counterclaim/complaint by service upon GMAC's attorneys, rather than on the defendant company itself pursuant to CPLR 311 (a). GMAC's notice of motion indicates that it moves to dismiss based in part on CPLR 3211, however there is no discussion in the attached affirmation as to which sections of the statute it relies on. In its Reply affirmation, GMAC argues that Gary served the counterclaim/complaint on GMAC's attorneys but not on GMAC itself, and that therefore the court does not have jurisdiction pursuant to CPLR 3211 (a) (8). Inasmuch as this issue is not raised in the initial moving papers, the court will not address it.
GMAC further argues that because Gary failed to adhere to the court's directive concerning the 30-day period, she has improperly filed the instant counterclaim, which amends the previous one which was severed, and that she should have sought court permission pursuant to CPLR 3025(b).
Turning to the substance of the counterclaim/complaint, it again in part addresses issues that pre-date the parties' 2002 stipulation which allowed Gary to retain her home and continue to repay her mortgage. As stated repeatedly by the court in prior decisions, the stipulation resolved the parties' previous issues and waived litigation concerning all events leading up to the stipulation. However, the crux of her actual claim here is twofold: that a credit report from CIS Information Services dated July 17, 2003 incorrectly references her account with GMAC as being a "collection account" (Counterclaim/Complaint Ex. C), and that GMAC reported her account delinquent beginning in January 2006 (Counterclaim/Complaint Ex. D). The second claim is without merit, as GMAC was granted summary judgment on November 18, 2005 as to the issue of Gary's liability in the mortgage foreclosure action.
In a pre-answer motion to dismiss, the court must accept as true the allegations in the complaint and any submissions in opposition to the motion. In determining a motion pursuant to CPLR 3211(a), the court must "accept the facts as alleged in the complaint as true, accord plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." ( Leon v Martinez, 84 NY2d 83, 87-88; accord Campaign for Fiscal Equity, Inc. v State of N.Y., 86 NY2d 307, 318). Allegations consisting of bare legal conclusions or factual claims which are either inherently incredible or clearly contradicted by documentary evidence, are not entitled to such consideration ( Franklin v Winard, 199 AD2d 220, 220 [1st Dept. 1993]). "In ruling on a motion to dismiss, the court is not authorized to assess the merits of the complaint or any of its factual allegations, but only to determine if, assuming the truth of the facts alleged, the complaint states the elements of a legally cognizable cause of action." ( P. T. Bank Cent. Asia v ABN AMRO Bank N.V., 301 AD2d 373, 376 [1st Dept. 2003]).
The Federal Fair Credit Reporting Act (FCRA), requires consumer reporting agencies to adopt reasonable procedures to meet the needs of commerce for consumer credit, personnel, insurance, and other information that are "fair and equitable" for the consumer as concerns confidentiality, accuracy, relevancy, and proper utilization (FCRA, § 1681 [b]). Where noncompliance with the Act's provisions is found to have been "willful," a claimant will be awarded actual and punitive damages; if "negligent," the damages are restricted to actual damages (FCRA §§ 1681 [n], [o]). Liability under either of these two subsections will be found only where some other section of the Act has been violated ( Thornton v Equifax, 619 F2d 700, 703 [8th Cir.] [citations omitted], cert. denied 449 U.S. 835).
Gary alleges that the July 2003 credit report of CIS Information Services incorrectly reported her mortgage account with GMAC as in collection at a time when she was meeting her financial obligations, and that GMAC fraudulently provided this incorrect information to the reporting agency. Under subsection 1681s-2 of the federal Fair Credit Reporting Act, which sets forth the responsibilities of those who furnish information to consumer reporting agencies, entities reporting consumer information to a consumer reporting agency must not furnish any information that they know or have reasonable cause to believe is inaccurate (FCRA § 1681s-2 [a] [1] [A]). When a consumer notifies the consumer reporting agency that information is disputed, the agency must within five days contact the entity who provided the disputed information, and the entity is required to conduct and complete an investigation within 30 days from the date of notice by the consumer which will result in the verification or retraction of the information in dispute (FCRA § 1681i [a] [1] [A]; [2]). Where incorrect information is deleted, the consumer reporting agency shall, at the consumer's request, also notify persons as designated by the consumer who received within the prior two years a consumer report for employment purposes, or within the prior six months for any other purpose, which contained the inaccurate information (FCRA § 1681i [d]). Actions brought under the federal Act must be commenced "not later than the earlier of "(1) two years after the date of discovery by the plaintiff of the violation, or (2) five years after the date on which the violation that is the basis for such liability occurs (FCRA § 1681p).
The New York Fair Credit Reporting Act (NY FCRA), makes similar requirements that entities provide accurate information. Persons and entities are not allowed to "knowingly and willfully introduce . . . or cause to be introduced, false information into a consumer reporting agency's files for the purpose of wrongfully damaging or wrongfully enhancing the credit information," and where convicted of such act, shall be fined not more than five thousand dollars or imprisoned not more than one year, or both (NY FCRA § 380-o [2]). It allows consumers to dispute the information with the reporting agency which must re-investigate and promptly notify the consumer of the result of the investigation and any rights that the consumer has as a result of the investigation (NY FCRA § 380-f [a]). In addition, where credit, insurance, or a lease is denied or increased in price because of information in a consumer report, the user of the report must advise the consumer against whom the action was taken, supply the name and address of the consumer reporting agency, and inform the consumer of her right to inspect and receive a copy of the report (NY FCRA § 380-i [a]). Claims brought under the Act have a two-year statute of limitations which commences from the date on which the liability arises, except where a defendant "materially and willfully misrepresented any information required . . . to be disclosed to an individual" and the information "so misrepresented is material to the establishment of the defendant's liability to that individual," at which point the statute allows a plaintiff to bring an action within two years of discovery by the individual (NY FCRA § 380-n).
GMAC moves to dismiss the counterclaim/complaint based on the running of the statute of limitations of both statutes. The CIS credit report is dated July 17, 2003 and appears to have been prepared for and issued to GMAC. Although it is not clear when Gary first acquired a copy of the report, she included it as exhibit I of her Notice of Cross-Motion filed with the court on July 13, 2005 in GMAC Mortgage v Gary, Index No. 601163/2004. Thus, the court deems that she "discovered" the document one month before she made her cross-motion, i.e., June 13, 2005. As the federal Fair Credit Reporting Act requires that an action must be commenced by the earlier of either two years after the date of discovery by the plaintiff or five years after the date of the violation, the statute of limitations here ran on June 13, 2007, two years from the deemed date of discovery by plaintiff. In contrast, the New York Fair Credit Reporting Act requires commencement of an action within two years of the date of the violation, or within two years of discovery, if the action is "willful." Gary alleges that GMAC acted willfully, and thus the statute of limitations commenced running from the date of discovery, and expired on June 13, 2007.
Under New York law, counterclaims are deemed timely if they were timely when the complaint was initially brought (CPLR 203 [d]), and are said to "relate back" to the original claim. However, where a counterclaim is raised for the first time in an amended answer, the relation back doctrine does not apply and the statute of limitations is not tolled, unless the claim arises from the same transaction on which the plaintiff's claim is based ( Coleman, Grasso and Zasada Appraisals, Inc. v Colema, 246 AD2d 893 [3rd Dept. 1998], lv denied 96 NY2d 715; Joseph Barsuk, Inc. v Niagara Mohawk Power Corp., 281 AD2d 876 [4th Dept.], lv denied 97 NY2d 638; Shays, Kemper v Nachman, NYLJ, Sept. 20, 2002, p. 18, col. 3 [Sup. Ct. NY County 2002]). Here, Gary's initial Answer of May 21, 2004, to GMAC's complaint in Index No. 601163/2004 did not include a counterclaim. She filed an amended Answer on about December 29, 2005 with a counterclaim alleging violations of the state and federal Fair Credit Reporting Acts. This cause of action was timely, as it was interposed prior to the June 13, 2007 running of both statutes of limitations.
In order to defeat GMAC's motion to dismiss, Gary is required to show not only the commission of a wrong act, but that she suffered damages from that act. There is nothing to suggest that she undertook to dispute the contents of the credit report as set forth in the state and federal FRCA. However, the documentary evidence submitted as part of the counterclaim/complaint, and in her papers previously submitted in the matter of GMAC Mortgage v Patricia Gary and NYC Environ. Cont. Bd., shows that she continued to argue through letters with GMAC after the May 2002 settlement. The court has examined these documents so as to discern what damages she may have suffered because of the July 2003 credit report. Correspondence shows that in September 2002, there was a mix-up concerning what company was handling her insurance although her premium was not held in default, and in September 2003 GMAC assured Gary that her homeowner's insurance had been paid and was current (see Gary Notice of Motion to Relieve, filed in GMAC Mortgage v Gary, et al., Index No. 601163/2004, Ex. P, Letters of 9/30/02, Allen to GMAC; 9/26/03, Schrader to Gary). GMAC repeatedly contacted her about the need for hazard insurance, including after she defaulted in September 2003 (Gary Notice of Motion to Relieve, filed in GMAC Mortgage v Gary, et al., Index No. 601163/2004, Ex. R, Letters of 9/06/02, GMAC to Gary; 9/28/03, GMAC to Gary, etc.). She contacted GMAC sometime in the late summer or early fall of 2003 for unspecified reasons, as established by the notices from GMAC dated October 31, 2003, and November 12, 2003, thanking her for her "inquiry regarding [her] account" and indicating that it would respond within 20 business days (Counterclaim/Complaint, Ex. X, Letters of 10/31/03 and 11/12/03, GMAC Mortgage Loan Servicing to Gary).
This is not to say she did not pursue claims against GMAC by contacting various state agencies and officials. For instance, in a letter dated June 2, 2004 to the New York State Department of Banking, she wrote that she believed GMAC had violated the Fair Credit Reporting Act, based on its reporting of information "on my credit history from 1998 to present that . . . was known to them or should have been known to them to be false" (Counterclaim/Complaint Ex. X, Letter of 6/2/04, Gary to Connors, p. 2). As indicated above, events earlier than May 2002 are not at issue.
Gary makes many generalized allegations concerning GMAC's actions over the course of several years, and asserts that her credit history has been ruined, but offers little to show that as a result of post-May 2002 actions by GMAC, her credit was damaged due to incorrect reporting by GMAC. For example, she includes a copy of a letter she wrote dated September 23, 2002, to GMAC's attorneys, concerning issues of insurance coverage and stating on the second page that because of the (first) foreclosure procedure, her credit history was "ruined," and that she had been recently informed that "people, assumingly brokers, realtors, and/or developers, from as far as Michigan," were seeking to purchase her home because it was listed as being in foreclosure (Counterclaim/Complaint Ex. X, Letter of 9/23/02, Gary to Gorden). She has not offered any support for this assertion, such as an advertisement or a credit report, or a letter to a credit reporting agency pointing out this erroneous information reported after May 2002 and prior to her default in September 2003. Although she includes a copy of a letter from a company called Take Charge America, Inc., which verified that she had opened an account with that organization in March 2000 and closed it on August 19, 2003 (Counterclaim/Complaint Ex. Y, Letter of 6/20/06, Russo to Gary), there is nothing to suggest that Take Charge closed her account because of the inaccurate credit reporting statement.
In conclusion, although plaintiff establishes that she has for years been dissatisfied with GMAC, and offers sufficient unrebutted evidence to show that GMAC may have improperly reported her credit status, she has not sufficiently alleged that her credit was actually affected by post-May 2002 actions on the part of GMAC. She may not rely on the events that culminated in the signing of the May 2002 stipulation. Given the many instances of her failure to adhere to the court's directives, combined with her inability to sufficiently state a cause of action, defendant GMAC's motion to dismiss the counterclaim/complaint is granted with prejudice. It is
GMAC points out that the July 2003 CSI credit report indicates that the mortgage was not reported late subsequent to the discontinuance of the original foreclosure action in 2002 (Reply Aff. ¶ 8), and contends that a "careful reading of the credit report indicates that the GMAC Mortgage was last reported delinquent in June 2002" (Not. of Mot., Battista Aff. ¶ 14). This does not explain why the account is also denoted as being in "collection." If the court has misapprehended the term, GMAC has failed to rectify any misunderstanding.
ORDERED that defendant GMAC's motion to dismiss is granted with prejudice and the counterclaim/complaint is dismissed.
ORDERED that the clerk of the court is to enter judgment accordingly.
This constitutes the decision and order of the court.