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Barry v. Experian Information Solutions, Inc.

United States District Court, S.D. West Virginia, Charleston Division

July 5, 2018

ANGELA BARRY, Plaintiff,
v.
EXPERIAN INFORMATION SOLUTIONS, INC. et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          THOMAS E. JOHNSTON, CHIEF JUDGE

         Plaintiffs Angela Barry (“Ms. Barry”) and Robert Barry (“Mr. Barry”) bring this action against Defendant Farm Bureau Bank FSB (“Farm Bureau”) alleging various causes of action arising out of allegedly inaccurate information contained in credit reports requested by Plaintiffs.[1]Pending before the Court is Farm Bureau's Motion for Summary Judgment.[2] (ECF No. 121.) For the reasons discussed below, the Court GRANTS the motion.

         I. BACKGROUND

         This case arises out of four disputed credit reports acquired by Plaintiffs from the website annualcreditreport.com. Equifax Information Services, LLC (“Equifax”) and Experian Information Solutions, Inc. (“Experian”) each provided a credit report for Mr. Barry through the website on February 17, 2016. (See ECF No. 70-1 at 9-34, 48-52.) Subsequently, Equifax and Experian each provided a credit report for Ms. Barry via the same website on February 25, 2016. (See Id. at 1-8, 44-47.) Plaintiffs disputed the contents of those reports and alleged that the two credit reporting agencies failed to correct them on two occasions. Following the dismissal of all Defendants except Farm Bureau, the remaining claims in this action bring into question the actions and inactions of Farm Bureau in the way it allegedly reported information to the credit agencies regarding Ms. Barry's reports.[3]

         With respect to the Equifax report obtained on February 25, 2016, Ms. Barry alleges that the reports included multiple errors about an account under Plaintiffs' names with Farm Bureau. (See ECF No. 70 at ¶¶ 13, 15, 56.) Ms. Barry avers that information related to this account incorrectly identified an outstanding account balance and erroneously indicated that payments were past due. (See Id. at ¶ 56.) She claims that this was not possible as the account was affected by Plaintiffs' Chapter 13 bankruptcy filed in November 2013 and the payment plan that resulted from it. (See id.; see also Id. at 24 ¶ 1.) Ms. Barry first sent a dispute letter to Equifax on March 25, 2016, alerting the company of the alleged errors. (Id. at ¶ 57; see also ECF No. 70-1 at 35- 36.) After Equifax supposedly failed to correct the report, Ms. Barry sent a second dispute letter to Equifax on June 30, 2016. (ECF No. 70 at ¶ 67; see also ECF No. 70-1 at 39-40.) Again, Ms. Barry alleges that Equifax failed to correct the report after the second dispute letter. (ECF No. 70 at ¶ 69.)

         As to the report furnished by Experian on February 25, 2016, Ms. Barry similarly alleges that her report contained errors regarding an account in her name with Farm Bureau.[4] (See Id. at ¶¶ 76, 99.) She asserts that information related to that account wrongfully reported it as adverse and delinquent. (See Id. at ¶ 99.) Again, Ms. Barry avers that the couple's Chapter 13 bankruptcy altered the nature of that account and that Experian's report failed to consider this. Like with Equifax, Ms. Barry sent a dispute letter to Experian on March 25, 2016.[5] (Id. at ¶ 100; see also ECF No. 70-1 at 53-54.) Because Experian allegedly failed to correct the errors in the report, Ms. Barry sent to Experian a second dispute letter on June 30, 2016. (ECF No. 70 at ¶ 110; see also ECF No. 70-1 at 57-58.) Despite these letters, Ms. Barry claims that Experian still did not fix the errors contained in her credit report. (ECF No. 70 at ¶ 112.)

         Plaintiffs originally filed two separate actions in this Court on October 11, 2016. (ECF No. 1; see also Civil Action No. 2:16-cv-09518, ECF No. 1.) Upon motion by one of the previously terminated Defendants, the Court consolidated the two cases on April 25, 2017, and ordered Plaintiffs to file a consolidated complaint in the above-styled civil action, which serves as the lead case. (ECF No. 67.) The consolidated complaint (the “Complaint”) subsequently was filed on May 10, 2017. (ECF No. 70.) Ms. Barry alleges the following four counts against Farm Bureau in the Complaint: (II) violations of the federal Fair Credit Reporting Act (“FCRA”); (IV) defamation; (V) violations of the West Virginia Consumer Credit and Protection Act (“WVCCPA”); and (VI) a violation of 11 U.S.C. § 362(a) for defying the stay triggered by Plaintiffs' Chapter 13 bankruptcy proceedings. (Id. at ¶¶ 144-156, 164-175; see also Id. at 24-25 ¶¶ 1-9.) Ms. Barry demands a wide array of relief, including actual, statutory, and punitive damages, in addition to attorney's fees and costs and “other relief as the Court shall deem just and proper under the attendant circumstances.” (Id. at 25-26.)

         Farm Bureau filed its Motion for Summary Judgment on March 15, 2018. (ECF No. 121.) Plaintiffs responded to the motion on March 29, 2018, (ECF No. 125), and Farm Bureau filed its reply in support of the motion on April 5, 2018, (ECF No. 126). As such, the motion is fully briefed and ripe for adjudication.

         II. STANDARD OF REVIEW

         Rule 56 of the Federal Rules of Civil Procedure governs motions for summary judgment. This rule provides, in relevant part, that summary judgment should be granted if “there is no genuine issue as to any material fact.” Summary judgment is inappropriate, however, if there exist factual issues that reasonably may be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). “Facts are ‘material' when they might affect the outcome of the case, and a ‘genuine issue' exists when the evidence would allow a reasonable jury to return a verdict for the nonmoving party.” News & Observer Publ. Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). When evaluating such factual issues, the Court must view the evidence “in the light most favorable to the opposing party.” Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970).

         The moving party may meet its burden of showing that no genuine issue of fact exists by use of “depositions, answers to interrogatories, answers to requests for admission, and various documents submitted under request for production.” Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir. 1984). Once the moving party has met its burden, the burden shifts to the nonmoving party to “make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If a party fails to make a sufficient showing on one element of that party's case, the failure of proof “necessarily renders all other facts immaterial.” Id. at 323.

         III. DISCUSSION

         Farm Bureau's motion challenges all four counts directed toward it in the Complaint: Counts II, IV, V, and VI. With regard to Count II, which alleges a cause of action under the FCRA, Farm Bureau argues that the information it provided to the credit reporting bureau[6] both before and after Ms. Barry disputed the information was accurate and, thus, was not “inaccurate” for purposes of the FCRA. (ECF No. 122 at 4-5.) Farm Bureau further argues that the defamation and WVCCPA claims alleged in Counts IV and V, respectively, are preempted by the FCRA. (Id. at 5-7 (citing 15 U.S.C. §§ 1681h(e), 1681t(b)(1)(F)); see also Id. at 9-10 (citing Evans v. Trans Union LLC, No. 2:10-cv-00945, 2011 WL 672061, at *1 (S.D. W.Va. Feb. 14, 2011)).) Finally, the motion argues that the allegations contained in Count VI regarding violation of the stay under 11 U.S.C. § 362(a) cannot be addressed by this Court as it lacks subject-matter jurisdiction to consider the claim. (Id. at 7-9, 10.) Alternatively, Farm Bureau avers that the automatic stay does not prevent Farm Bureau from accurately reporting deficiencies to a credit reporting agency and that Ms. Barry has not alleged any intent to violate the stay as required by statute. (Id. (citing 11 U.S.C. § 362(k)(1))[7].)

         A. Count II: Violations of the FCRA

         Finding that “[i]naccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system, ” Congress enacted the FCRA in 1970 to promote the accuracy and fairness of credit reporting. 15 U.S.C. § 1681(a)(1). Section 623 of the FCRA sets forth specific requirements for “furnishers of information to consumer reporting agencies, ” including obligations to provide accurate information initially to those agencies and a continuing duty to investigate and report corrections to the agencies regarding any disputed information. See § 1681s-2(a), (b). Notably, “the FCRA does not impose upon furnishers a duty to report credit information at all; instead, the FCRA dictates how and under what circumstances information may be reported, if a furnisher so chooses.” Evans, 2011 WL 672061, at *3. As Farm Bureau correctly notes in its supporting memorandum, the “FCRA explicitly bars private suits for violations of § 1681s-2(a), but consumers can still bring private suits for violations of § 1681s-2(b).” Saunders v. Branch Banking & Tr. Co. of Va., 526 F.3d 142, 149 (4th Cir. 2008); see also Johnson v. MBNA Am. Bank, NA, 357 F.3d 426, 431-33 (4th Cir. 2004).

         Following notice from a consumer reporting agency that someone has disputed “the completeness or accuracy of any information” provided in a credit report, § 1681s-2(b) obliges information furnishers to “conduct an investigation with respect to the disputed information” and report inaccuracies to all consumer reporting agencies to which it provides information. See § 1681s-2(b)(1)(A). Further, furnishers must “review all relevant information provided by the consumer reporting agency pursuant to [§ 1681i], ” which states that the agency must notify all relevant information furnishers within five business days from receiving notification of a consumer's dispute. See §§ 1681i(a)(2), 1681s-2(b)(1)(B). Upon notice of the dispute, the furnisher has thirty days to review the information, complete its investigation, and report any corrected information.[8] The furnisher's duty to investigate is triggered once the consumer reporting agency notifies it of the dispute. See, e.g., Mavilla v. Absolute Collection Serv., Inc., 539 Fed.Appx. 202, 208 (4th Cir. 2013) (per curiam) (unpublished opinion) (citations omitted). The private right of action afforded by the FCRA applies to willful or negligent noncompliance with either § 1681i or § 1681s-2(b). See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (citing 15 U.S.C. §§ 1681n, o).

         Here, Farm Bureau admits to furnishing information to consumer reporting agencies, (ECF No. 122 at 4), signifying that it must abide by the applicable requirements in 15 U.S.C. § 1681s-2. The briefing solely focuses on whether Farm Bureau's reporting, as a matter of law, was accurate under the FCRA and does not contest the adequacy of Farm Bureau's investigations. (See ECF No. 122 at 4-5; ECF No. 125 at 2-3.) While at least one district court has held that “[t]he inaccuracy of furnished information, without evidence that the furnisher's investigation was unreasonable, does not create liability by itself, ” Phillips v. Trans Union, LLC, No. 3:16-CV-00088, 2017 WL 3911018, at *5 (W.D. Va. Sept. 6, 2017) (citing Johnson, 357 F.3d at 431; Blick v. Wells Fargo Bank, N.A., No. 3:11-CV-00081, 2012 WL 1030137, at *9 (W.D. Va. Mar. 27, 2012), aff'd, 474 Fed.Appx. 932 (4th Cir. 2012)), other courts have noted that plaintiffs must make an initial showing “that an actual inaccuracy exist[s]” to state a claim under the FCRA, see Keller v. Experian Info. Sols., Inc., No. 16-CV-04643-LHK, 2017 WL 130285, at *5 (N.D. Cal. Jan. 13, 2017) (“[E]ven if a furnisher or [credit reporting agency] fails to conduct a reasonable investigation or otherwise fails the fulfill its obligations under the FCRA, if a plaintiff cannot establish that a credit report contained an actual inaccuracy, then the plaintiff's ‘claims fail as a matter of law.'” (quoting Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010))); see also Hernandez v. Wells Fargo Home Mortg., No. 2:14-CV-1500 JCM, 2015 WL 1204985, at *2-3 (D. Nev. Mar. 16, 2015), aff'd, 713 Fed.Appx. 702 (9th Cir. 2018). Regardless of which approach prevails, however, Ms. Barry's claim under Count II cannot survive summary judgment.

         Based upon the parties' arguments in the briefing, the question here boils down to whether Farm Bureau's reporting of information indicating that Ms. Barry's account was past due, adverse, and/or delinquent despite the account's inclusion in and payments made in accordance with her Chapter 13 bankruptcy plan is accurate under the FCRA.[9] In answering that question in the affirmative, the Court notes that the Fourth Circuit has not directly addressed this issue but finds instructive a line of cases from the Northern District of California. Those cases, totaling “approximately 170 nearly identical cases, ” involved the following factual scenario:

[E]ach plaintiff filed for Chapter 13 bankruptcy protection, whereupon a bankruptcy court confirmed a financial reorganization plan. Thereafter, each plaintiff assert[ed] that they ordered credit reports which showed effectively “inaccurate, misleading, or incomplete” information for accounts that were included in their confirmed bankruptcy plans. Despite each plaintiff notifying the credit reporting agencies of the alleged inaccuracy, they assert[ed] that their credit reports continued to show the inaccurate account information.

Mamisay v. Experian Info. Sols., Inc., No. 16-CV-05684-YGR, 2017 WL 1065170, at *3 (N.D. Cal. Mar. 21, 2017). The legal question at the summary judgment stage of litigation became whether the FCRA “prohibit[ed] defendants from reporting historically accurate information about delinquent accounts-such as the account's outstanding balance-after a Chapter 13 bankruptcy plan is confirmed, but before the debt has been discharged.” Id. (emphasis in original).

         In analyzing the effect of a Chapter 13 confirmation order, the court in Mamisay found that it did not absolve or erase debt owed to a financial institution. Id. at *5. The court reasoned that, for example, a bankruptcy petition could be dismissed if the debtor fails to comply with the plan, meaning the debt would then be owed as if bankruptcy was never filed. See Id. As such, “the legal status of a debt does not change until the debtor is discharged from bankruptcy.” Id. (citations omitted); see also 11 U.S.C. § 1328(a) (providing that if a Chapter 13 debtor successfully completes all payments under a confirmed plan, the indebtedness is discharged). Taken one step further, it would not be inaccurate to report a debt's balance as outstanding or the account as delinquent subsequent to a Chapter 13 plan's confirmation, but before the debt has been discharged, if the debtor no longer makes the payments required under the loan schedule. See Mamisay, 2017 WL 1065170, at *4-7 & n.8; see also Mosley v. Monterey Fin. Servs., LLC, No. 1:16-cv-03614-MHC-AJB, 2017 WL 8186861, at *4 (N.D.Ga. May 10, 2017) (“[R]eview of the cases cited by both parties and unearthed in the Court's own research has shown that district courts . . . have repeatedly and persuasively rejected the argument that it is ‘inaccurate or misleading' as a matter of law simply to report delinquent debts that have not been discharged in bankruptcy.”) (collecting cases).

         Here, the Complaint and Ms. Barry's response to the motion repeatedly state that the Farm Bureau account could not be adverse and delinquent as reported “because the account is being paid through the Plaintiffs' Chapter 13 plan . . . .” (ECF No. 70 at ¶¶ 99-100, 108, 111; ECF No. 125 at 2-3.) Ms. Barry argues that “reporting of the loan as past due and delinquent based on the pre-confirmation terms was inaccurate” and that “reporting the account as past due during the Chapter 13 bankruptcy was, at the very least, incomplete.” (ECF No. 125 at 3; see also ECF No. 70-1 at 40 (“The Farm Bureau Bank FSB account . . . should be showing paid on time through a Chapter [13] plan or it should stop as of the date of the filing [of] the Chapter 13 [confirmation], and indicate it is being paid through the plan.”).) However, the cases cited above that the Court finds persuasive run counter to that proposition. Even if Ms. Barry only technically fell behind on her loan payments because the monthly payment under the Chapter 13 plan did not satisfy the monthly payment she originally promised to pay Farm Bureau under the loan's terms, (see ECF No. 122 at 8), the rationale previously discussed leads the Court to conclude that the information reported still is not inaccurate. Again, the entry of a confirmation order does not change the debt's legal status. See, e.g., Mamisay, 2017 WL 4065170, at *5. A Chapter 13 plan allowing Ms. Barry to pay the loan at a lower monthly rate does not concurrently insinuate that the account cannot become delinquent; under the plan she is no longer making payments according to the loan's terms.

         Using the case law's reasoning, if Ms. Barry fails to make the payments as prescribed under the bankruptcy plan and it subsequently is dissolved, then she would be held to the loan's terms as if she never filed bankruptcy. See Id. In that scenario, her account would be overdue at an amount representing the difference between the payments made under the bankruptcy plan and the payments that she originally agreed to pay during the plan's existence. Further, other district courts have rejected the proposition advanced by Ms. Barry that the failure to report that an account is included in a Chapter 13 bankruptcy proceeding is incomplete for purposes of the FCRA. See, e.g., Doster v. Experian Info. Sols., Inc., No. 16-CV-04629-LHK, 2017 WL 264401, at *5 (N.D. Cal. Jan. 20, 2017) (“[E]ven if Plaintiff is correct that Plaintiff's credit report did not reflect the terms of Plaintiff's Chapter 13 bankruptcy plan, this would not be an inaccurate or misleading statement that could sustain a FCRA claim . . . .”).

         For these reasons, the Court finds that Ms. Barry has failed to show an inaccuracy in Farm Bureau's reporting of her account. As there is no inaccuracy under the FCRA, Ms. Barry's claim pursuant to 15 U.S.C. § 1681s-2(b) must fail. Cf. Chiang v. Verizon New England Inc., 595 F.3d 26, 41 (1st Cir. 2010) (“Chiang was required to present evidence of actual inaccuracies in his account . . . . He has not done so. . . . For this reason, too, summary judgment was appropriate on Chiang's FCRA claim.”). Accordingly, the Court GRANTS summary judgment to Farm Bureau on Count II.

         B. Count IV: Defamation

         Farm Bureau argues in its motion that Ms. Barry's defamation claim is preempted by the FCRA. (ECF No. 122 at 5-7.) The FCRA contains two preemption provisions applicable to the duties of information furnishers enumerated in 15 U.S.C. § 1681s-2, and each of the two has been amended since the FCRA's implementation. See 15 U.S.C. §§ 1681t(b), 1681h(e). Section 1681t(b) provides the following:

No requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under . . . (F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish ...

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