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Stephen M. Daniels v. Wesley Gardens Corporation

April 27, 2011


The opinion of the court was delivered by: Michael A. Telesca United States District Judge



Plaintiff, Stephen M. Daniels ("Plaintiff"), brings this action pursuant to the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., New York State's Fair Credit Reporting Act ("NYFCRA"), N.Y. Gen. Bus. Law §§ 380 et seq., New York Correction Law 23-A, N.Y. Correct. Law § 750-755, and the New York State Human Rights Law ("NYSHRL"), N.Y. Exec. Law § 296 et seq., alleging that the Defendants, Wesley Gardens Corporation ("Wesley"), Rochester Area Association of Homes & Services for the Aging ("RAAHSA"), Genesee Health Facilities Association, Inc. ("GHFA") and Health Care Foundation of the Finger Lakes ("HCFFL") unlawfully prepared, disseminated and used sealed arrest information for the purpose of making employment determinations regarding the Plaintiff.

Defendants GHFA and HCFFL now move to dismiss Plaintiff's First and Second Causes of Action under the FCRA and NYFCRA respectively, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Rule 12(b)(6)"). (Docket #12.) GHFA and HCFFL also move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure with respect to Plaintiff's Fourth Cause of Action under the NYSHRL.*fn1 (Docket #21.) GHFA and HCFFL specifically contend that they are not Consumer Reporting Agencies ("CRAs") within the meaning of the FCRA and NYFCRA, and therefore they are not subject to the provisions of those statutes. They further argue that Plaintiff's Fourth Cause of Action, for aider and abettor liability under the NYSHRL, must be dismissed because the Plaintiff has stipulated to the dismissal of Defendant Wesley, the alleged principal of the violations under the NYSHRL. For the reasons set forth below, this Court denies Defendants' Motion to Dismiss Plaintiff's First and Second Causes of Action. Further, this Court denies Defendants' motion for summary judgment with respect to Plaintiff's Fourth Cause of Action.


The following facts are taken from the Complaint.*fn2 (Docket #1.) In May 2009, Plaintiff applied for a position as a Licenced Practicing Nurse with Wesley, a nursing home in Rochester, New York. During the application process, Plaintiff disclosed to Wesley that he had been convicted of two violations however, the records of the convictions were sealed pursuant to New York Criminal Procedure Law § 160.55. Plaintiff was then interviewed and given a conditional offer of employment, provided that he submit to a further criminal background check.

Plaintiff completed and signed an authorization form that was submitted to RAAHSA, GHFA and HCFFL who "prepared and provided" to Wesley a criminal history report on the Plaintiff. The authorization form also inquired whether Plaintiff had been convicted of a violation, to which Plaintiff responded in the affirmative. The background check that was "prepared and provided" to Wesley contained the records of the sealed violations. Plaintiff alleges that the provision of such records was unlawful.

After receiving the completed criminal background check from RAAHSA, GHFA and HCFFL, Wesley refused to hire the Plaintiff. Plaintiff states that the reason for his rejection was that the background check revealed his sealed violation convictions. Plaintiff was not aware of his rights with respect to the sealed convictions at the time, and he was not notified that he had a right to receive a copy of the background check or to dispute its accuracy.

Plaintiff has since entered into a settlement agreement with Wesley and, pursuant to the agreement, the parties (Plaintiff and Wesley) stipulated to the dismissal of Wesley from this action. (Docket #22.) Accordingly, on December 8, 2010, this Court signed the Stipulation and Order dismissing the case with prejudice against Wesley. (Docket # 19.)


A. Motion to Dismiss

In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.2007); Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.2006). A complaint generally need only contain a "short and plain statement of the claim showing that the Plaintiff is entitled to relief" to satisfy federal notice pleading requirements. See Fed.R.Civ.P. 8(a); Gregory v. Daly, 243 F.3d 687, 692 (2d Cir.2001). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). A court's belief or disbelief in a complaint's factual allegations or its belief that a "recovery is very remote and unlikely" does not factor into a decision under Rule 12(b)(6). See id.

The plaintiff must, however, satisfy "a flexible 'plausibility standard.'" See Iqbal v. Hasty, 490 F.3d 143, 157 (2d Cir.2007). A claim that is not plausible on its face must be "supported by an allegation of some subsidiary facts to survive a motion to dismiss." See Benzman v. Whitman, 523 F.3d 119, 129 (2d Cir.2008). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1969 (2007). The Court, therefore, does not require "heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." See id. at 1974. However, the court may disregard a plaintiff's "legal conclusions, deductions or opinions couched as factual allegations." See, e.g., In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir.2007) (citation omitted).

Defendant argues that Plaintiff has not set forth sufficient facts to support his claim that GHFA and HCFFL are Consumer Reporting Agencies (CRAs) within the meaning of the FCRA and the NYFCRA.*fn3 The statutes read, in pertinent part, "[t]he term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties." 15 U.S.C. § 1681a(f); N.Y. Gen. Bus. Law § 380-a(e). Defendant argues that Plaintiff has not alleged that GHFA and HCFFL engage in the practice of "assembling or evaluating" consumer information. Plaintiff's Complaint alleges that Defendant GHFA and HCFFL "prepared and provided" Plaintiff's criminal background to Wesley. ...

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