United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DISMISSING CASE WITH PREJUDICE
DAVID M. LAWSON, District Judge.
The plaintiff filed a complaint alleging that the defendant violated the Fair Credit Reporting Act when it reported that the plaintiff's bankruptcy-discharged home mortgage loan had a zero balance and no payment activity. The defendant has filed a motion for summary judgment contending that its report was accurate and that no violation of the Act occurred. The Court heard oral argument on the motion on May 5, 2015. The language of the statute and applicable regulation, and the meager but persuasive case law on point, all indicate that the defendant is correct. The Court agrees, and therefore will grant the motion and dismiss the complaint.
The basic facts of the case are undisputed. On January 24, 2006, plaintiff Jeffrey Groff and his wife, Susan Groff, signed a promissory note and mortgage to purchase their home in White Lake, Michigan. The Groffs had trouble making their mortgage payments, and, on December 16, 2010, they executed a loan modification agreement with their lender, defendant Wells Fargo Home Mortgage (a division of Wells Fargo Bank, N.A.). However, the Groffs still were unable to keep up with their debts, and on October 25, 2011, they filed a voluntary bankruptcy petition under Chapter 7 of the Bankruptcy Code. They received a discharge of their debts on January 31, 2012, which included the mortgage loan.
The Groffs acknowledge that they never reaffirmed the mortgage loan with Wells Fargo, but they nevertheless continued making monthly payments so that the bank would not foreclose on their home. However, in reports to consumer credit reporting agencies, Wells Fargo reported the loan account as closed, with a zero balance, and it did not report any activity on the account (including any payments made by the Groffs) after January 2012. Mr. Groff discovered the absence of any payment notations in the reporting of the mortgage loan in 2014, when he obtained a copy of his credit report. He sent letters to the three major credit reporting agencies notifying them of the omission of payments from the trade line concerning the loan. Wells Fargo was notified of the dispute, but, after investigating it, the bank continued to report the loan as closed, with a zero balance, and with no payment activity.
Plaintiff Jeffrey Groff filed his complaint on June 6, 2014, and an amended complaint on July 14, 2014, alleging two counts against the defendant for negligent and willful violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2. Discovery closed on February 27, 2015, and the defendant filed its motion for summary judgment on March 13, 2015.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A trial is required only when "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The parties have not seriously contested the basic facts of the case. Where the material facts are mostly settled, and the question before the court is purely a legal one, the summary judgment procedure is well suited for resolution of the case. See Cincom Sys., Inc. v. Novelis Corp., 581 F.3d 431, 435 (6th Cir. 2009).
The Fair Credit Reporting Act (FCRA) "exists to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.'" Boggio v. USAA Fed. Saving Bank, 696 F.3d 611, 614 (6th Cir. 2012) (quoting Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007)). "To that end, [15 U.S.C § 1681s-2] is designed to prevent furnishers of information' from spreading inaccurate consumer-credit information." Ibid. Section 1681s-2 imposes a duty on any entity that provides information about a consumer's credit history, upon receiving a report that the consumer disputes the accuracy or completeness of the information provided, to investigate and, if needed, to correct the report of any "inaccurate or incomplete" information. Section 1681s-2(b) imposes five distinct duties on a furnisher of information that has been notified of a dispute (investigate the dispute; review all relevant information; report the results to the consumer reporting agency; if the information is incomplete or inaccurate, report those results to all other consumer reporting agencies; and if the disputed item is found inaccurate or cannot be verified, modify, delete, or block the item), and a plaintiff may prevail by showing that the entity violated any one of them. Boggio, 696 F.3d at 618 (holding that the "FCRA expressly creates a private right of action against a furnisher who fails to satisfy one of five duties identified in § 1681s-2(b)").
"A consumer who demonstrates that a furnisher was negligent in breaching one of these duties with respect to that consumer's disputed information is entitled to actual damages under § 1681o, " and "if a consumer can establish that a furnisher willfully violated one of its duties, then under § 1681n the consumer may recover actual or statutory damages, as well as punitive damages." Ibid. "Costs and reasonable attorney's fees are also authorized under both §§ 1681n and 1681o." Ibid.
The plaintiff contends in this case that the defendant's zero balance/zero payment report was inaccurate. The FCRA does not define the terms "accurate" or "complete, " but the Federal Trade Commission has promulgated a regulation that defines the term "accuracy" for consumer credit reporting:
Accuracy means that information that a furnisher provides to a consumer reporting agency about an account or other relationship with the consumer correctly:
(1) Reflects the terms of and liability for the account or other relationship;
(2) Reflects the consumer's performance and other conduct with respect to the account or ...