IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

EVERARDO HOYOS, )

)

Plaintiff, ) 

)

v. ) 20 C 408

)

EXPERIAN INFORMATION ) Judge John Z. Lee

SOLUTIONS, INC., EQUIFAX )

INFORMATION SERVICES, LLC, )

and TRANSUNION DATA )

SOLUTIONS, LLC, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Everardo Hoyos has sued Equifax Information Services, LLC 

(“Equifax”), and Trans Union, LLC, incorrectly identified as TransUnion Data 

Solutions, Inc., (“Trans Union”), alleging that they violated the Fair Credit Reporting 

Act (“FCRA”), 15 U.S.C. § 1681, et seq.

1 Specifically, he alleges that Defendants failed

to assure the maximum possible accuracy of the credit information they reported, in 

violation of § 1681e(b), and failed to conduct a reasonable reinvestigation of disputed 

matters, in violation of § 1681i(a). Equifax has moved to dismiss the complaint for 

failure to state a claim, and Trans Union has moved for judgment on the pleadings. 

For the following reasons, the motions are granted, and this case is dismissed.

1 Experian Information Solutions, Inc. has already been dismissed from the case 

pursuant to a settlement agreement. See 2/18/20 Minute Entry, ECF No. 21.

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I. Background2

Hoyos incurred two debts for goods and services on consumer credit cards he 

had from Comenity Capital Bank and Webbank (“the Debts”). Compl. ¶¶ 3, 10, ECF 

No. 1. At some point, Midland Funding, LLC (“Midland”) acquired the Debts. Id. 

¶ 11. But Hoyos alleges that he never had any contract with Midland, and that

Midland is not the owner of the Debts. Id. ¶¶ 12, 14, 20. Hoyos’s counsel sent letters 

to Midland, stating Midland’s reporting of the Debts was not accurate because 

Midland did not own them. Id. ¶ 15. Midland responded that it had conducted an 

internal investigation to verify the reporting and sent Hoyos evidence it claimed 

proved its ownership of the Debts. Id. ¶¶ 16, 18. Hoyos alleges that the documents 

were insufficient to prove Midland’s ownership because they did not include a 

purchase agreement. Id. ¶¶ 17, 19. 

Hoyos’s counsel sent letters to Defendants informing them that the 

information provided by Midland to the CRAs was inaccurate. Id. ¶¶ 4–9, 22. 

Defendants then notified Midland of the disputes and Midland responded through

the Automatic Consumer Report Dispute Verification (“ACDV”) process confirming 

its ownership. Id. ¶¶ 67, 70, 96, 98. Relying on Midland’s response, Defendants 

continued to report that Midland owned the Debts. Id. ¶¶ 70, 98. 

2 On a motion to dismiss, the Court takes all well-pleaded facts as true and draws all 

reasonable inferences in plaintiff’s favor. Kanter v. Barr, 919 F.3d 437, 441 (7th Cir. 2019).

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II. Legal Standard

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must 

“state a claim to relief that is plausible on its face.” 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

Additionally, when considering motions to dismiss, the Court accepts “all wellpleaded factual allegations as true and view[s] them in the light most favorable to the 

plaintiff.” Lavalais v. Vill. of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013) (citing 

Luevano v. Wal-Mart Stores, Inc., 722 F.3d 1014, 1027 (7th Cir. 2013)). At the same 

time, “allegations in the form of legal conclusions are insufficient to survive a Rule 

12(b)(6) motion.” McReynolds v. Merrill Lynch & Co., Inc., 694 F.3d 873, 885 (7th 

Cir. 2012) (citing Iqbal, 556 U.S. at 678). Additionally, “[a] motion for judgment on 

the pleadings is subject to the same standard as a motion to dismiss under Rule 

12(b)(6).” Gill v. City of Milwaukee, 850 F.3d 335, 339 (7th Cir. 2017) (citing 

Buchanan-Moore v. Cty. of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009)).

III. Analysis

The FCRA requires CRAs to implement “reasonable procedures to assure 

maximum possible accuracy of the [reported] information.” 15 U.S.C. § 1681e(b). 

When a consumer disputes information contained in a report, CRAs must carry out 

“a reasonable reinvestigation to determine whether the disputed information is 

inaccurate.” Id. § 1681i(a)(1)(A). That said, a claim cannot proceed under either of 

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these provisions unless, as a threshold matter, the plaintiff has alleged that the 

report contains factually inaccurate information. See Denan v. Trans Union LLC, 

959 F.3d 290, 296 n.4, 297 (7th Cir. 2020).

Hoyos contends that he has alleged a factual inaccuracy by asserting that 

Midland is not the true owner of the Debts, contrary to the Defendants’ reports. Pl.’s 

Resp. Mot. Dismiss and Mot. J. Pleadings at 3, ECF No. 44. In support, he cites In 

re Meyer, 151 F.3d 1033, 1998 WL 538160, at *4 (7th Cir. 1998) (unpublished opinion), 

for the proposition that “ownership is a pure question of fact.” See id. at *13. But In 

Re Meyer concerned the ownership of a corporation, rather than a debt, and had 

nothing to do with the FCRA. See id.; see also Chuluunbat v. Calvary Portfolio Servs., 

No. 20 C 164, 2020 WL 4208106, at *3 (N.D. Ill. July 22, 2020) (distinguishing In Re 

Meyer on these grounds). Additionally, Seventh Circuit Rule 32.1 precludes the Court 

from treating as precedent unpublished Seventh Circuit opinions issued before 

January 1, 2007. 7th Cir. Rule 32.1(b), (d). Therefore, In Re Meyer provides no 

guidance here. 

The Seventh Circuit’s holding in Denan, 959 F.3d 290, is more informative. 

There, the plaintiffs sued Trans Union for reporting debts that it allegedly knew were 

“legally invalid.” See id. at 292–93. But the Seventh Circuit held that Trans Union 

was not required to verify the legal validity of the reported debts because it was a 

legal question that “exceed[ed] the competencies of consumer reporting agencies.” See 

id. at 295. Furthermore, because the plaintiffs had failed to allege that Trans Union’s 

report of the debt contained a factual inaccuracy (as opposed to a legal one), the 

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Seventh Circuit affirmed the dismissal of the claims brought under § 1681i(a) and 

§ 1681e(b). See id. at 296–97. 

The question here is whether Plaintiff’s claim that Midland does not own the 

Debt—and, as a result, Defendants’ report of the Debt is inaccurate—should be 

considered a challenge to the factual accuracy or legal accuracy of Defendants’ report. 

Put another way, are Defendants’ statements that Midland owns the Debt a factual 

statement or a legal one? Two district courts in this circuit have considered this 

question—Chuluunbat, 2020 WL 4208106, at *3, and Rodas v. Experian Info. Sols., 

Inc., No. 19-CV-07706, 2020 WL 4226669, at *2 (N.D. Ill. July 23, 2020). 

In Chuluunbat, the plaintiff alleged that the CRA defendants violated the 

FCRA by inaccurately reporting that his debt was owned by Cavalry Portfolio 

Services (“Cavalry”) without obtaining sufficient documentation of such ownership. 

See 2020 WL 4208106 at *3. Defendants argued that such a claim was not based 

upon a factual inaccuracy, and the court agreed. As the court explained, in order to 

determine ownership, “one must first determine whether there exists an instrument 

through which ownership of the Debt was transferred to Cavalry, whether the 

instrument was properly executed, and whether the instrument is legally 

enforceable.” Id. Because the power to resolve these mixed questions of law and fact 

“exceeds the competencies” of CRAs, the court dismissed the claims against the CRA 

defendants. Id.

In Rodas, the plaintiff alleged that the defendants had inaccurately reported 

that Midland owned his debt in violation of the FCRA. 2020 WL 4226669 at *1. The 

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Rodas court held that the plaintiff’s claim was based on a “potential legal inaccuracy” 

and that whether the original creditor had transferred or assigned ownership to 

Midland was a question of law for a tribunal to determine before plaintiff may assert 

ownership as a factual inaccuracy under the FCRA. Id. at *2. As a result, the court 

likewise dismissed the claim. 

The Court finds these cases persuasive. Whether ownership of a debt involves 

closely intertwined questions of law and fact as the court held in Chuluunbat, 2020 

WL 4208106 at *3, or a question of law as the court held in Rodas, 2020 WL 4226669 

at *2, the question of ownership requires the resolution of complex issues beyond “the 

competencies of consumer reporting agencies” and is best left to the courts. See 

Denan, 959 F.3d at 295. Therefore, until such time a court concludes that Midland 

does not own the Debts, Hoyos cannot pursue claims under § 1681e(b) or § 1681i(a) 

of the FCRA on the basis that Defendants’ report of ownership is inaccurate. See 

Denan, 959 F.3d at 296 (citing DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st 

Cir. 2008)); Rodas, 2020 WL 4226669, at *2 (citing Garland v. Marine Credit Union, 

No. 18 C 270, 2018 WL 5313769, at *4 (E.D. Wisc. Oct. 26, 2018)); Chuluunbat, 2020 

WL 4208106, at *3.

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IV. Conclusion

For the reasons discussed above, Equifax’s motion to dismiss and Trans 

Union’s motion for judgment on the pleadings are granted. This case is dismissed.

IT IS SO ORDERED. ENTERED: 8/17/20

 __________________________________

JOHN Z. LEE

United States District Judge

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