UPDATED: 7/29/13 5:05 pm ET
A Chrysler-Dodge-Jeep store in North Carolina has lost a bid to eliminate punitive damages from a lawsuit alleging its finance manager committed identity theft.
A federal judge refused to dismiss the punitive damages claim and a claim for intentional infliction of emotional distress against Dixie Motor Co. for the manager's alleged unauthorized disclosure of two customers' personal identifying information.
The suit contends the female manager, who no longer works at the Williamston, N.C., dealership, illegally disclosed confidential credit file information to an imprisoned friend and used customer information to falsify a credit application.
The plaintiffs, Ashley Owens and her mother, sued Dixie for violating the Fair Credit Reporting Act and state identity theft, negligence, contract and deceptive trade practices laws.
Defense lawyer Mary Webb of Raleigh, N.C., said she couldn’t discuss the case because “the litigation is pending.” However, both the store and Pierce have filed answers denying liability, and the store asserted that any misconduct by Pierce was unauthorized.
According to the lawsuit, in October 2011 Owens applied for financing on a 2010 Dodge Charger at Dixie, where her mother had previously bought a used 2004 Chrysler Pacifica. The finance manager ordered a credit report and unsuccessfully tried to persuade Owens to sign up for credit repair services from a separate company that she ran, the suit says.
Dixie ultimately rejected the credit application, and Owens didn't buy the Charger.
The finance manager also pulled the mother's personal information from her earlier vehicle purchase and used it to falsify a credit application, obtain a credit report without authorization, and send the mother's information to the inmate, the suit claims.
Feeling threatened by the inmate and afraid that other prisoners would get her information, Owens notified police. The suit contends that the finance manager told police she'd accidentally sent the credit file to the inmate and disclosed the contents of the credit report to police without Owens' consent.
The Owens' lawyer, Suzanne Begnoche of Chapel Hill, said the investigation didn't lead to criminal charges "apparently because the investigating officer accepted [the finance manager's] statement that the mailing of the documents to the prison was an accident."
The suit said that after the Owens' attorney began investigating the situation, strangers showed up at the mother's home and vandalized her car. It said the two women remain vulnerable to identity theft and financial fraud and "have suffered emotional distress, anxiety, depression, neurosis, phobia and paranoia from dealing with this matter."
In her decision, U.S. District Judge Louise Flanagan said that the plaintiffs' allegations of "severe emotional distress" are sufficient to remain in the case, even without a formal medical diagnosis.
The judge also said that at this stage of the case "at least some surviving claims may lead to punitive damages."
On a final issue, the judge rebuffed a bid by the dealership's surety carrier to get out of the suit. She said the state surety law "protects any purchaser of a motor vehicle from damages associated with illegal activity," which would include claims that Dixie committed unfair business practices by misusing information Owens' mother had provided to facilitate her earlier purchase and financing of a vehicle.
Owens' lawyer Begnoche said trial is tentatively set for November. She also said the mother's claims against the credit reporting agency Equifax have been settled.
You can reach Eric Freedman at firstname.lastname@example.org