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Harris v. Equifax Information Services

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

April 17, 2019

WILLIAM HARRIS, et al., Plaintiffs,
v.
EQUIFAX INFORMATION SERVICES, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          THOMAS E. JOHNSTON, CHIEF JUDGE.

         Pending before the Court is Defendant Wells Fargo Bank, N.A.'s (“Wells Fargo”) Motion to Compel Arbitration and Dismiss Action.[1] (ECF No. 20.) For the reasons discussed herein, the Court GRANTS the motion.[2] (ECF No. 20.)

         I. BACKGROUND

         This action arises out of a dispute between Plaintiffs William and Judy Harris (“Plaintiffs”) and their loan servicer, Wells Fargo, regarding the credit reporting on Plaintiffs' mortgage loan. (See ECF No. 1.) On March 17, 2003, William Harris signed a note in favor of Wells Fargo Financial West Virginia, Inc. (“Wells Fargo Financial WV”), secured by a deed of trust on their property for a mortgage loan. (See ECF No. 21 at 2.) On the same day, both Plaintiffs signed an arbitration agreement (the “Arbitration Agreement”) with Wells Fargo Financial in which Plaintiffs agreed to arbitrate any claim, dispute, or controversy of any kind arising out of Plaintiffs' loan. (See ECF No. 20-1 at 13.) Plaintiffs' loan was eventually assigned to Wells Fargo d/b/a Wells Fargo Home Mortgage. (See ECF No. 1 at 2, ¶ 3; see also ECF No. 20 at 2.)

         On June 10, 2013, Plaintiffs filed an action against Wells Fargo Financial and Wells Fargo in the Circuit Court of Wood County, West Virginia, alleging that their mortgage was void due to Wells Fargo's alleged fraudulent servicing of Plaintiffs' mortgage loan. (See ECF No. 1 at 2, ¶ 5.) Plaintiffs agreed to arbitrate the dispute pursuant to the Arbitration Agreement. (See ECF No. 20-2.) On October 17, 2016, Plaintiffs and Wells Fargo entered into a settlement agreement and release (the “Settlement Agreement”) in which Wells Fargo agreed, in relevant part, to request deletion of Plaintiffs' credit line and/or any negative references on Plaintiffs' trade line with Wells Fargo. (See ECF No. 1 at 2, ¶¶ 6-7.) The Settlement Agreement also included two integrating clauses that state, in part, the following:

Complete Agreement: This Agreement represents the complete agreement between the Settling Parties concerning the subject matter hereof, supersedes all prior or contemporaneous agreements, representations or negotiations, if any, and may not be modified, except by a writing signed by all Parties hereto. . . .
Integration Clause: This Agreement contains the entire agreement between and among the Parties hereto, and supersedes all prior and contemporaneous discussions, negotiations, understandings and agreements, whether oral or written, express or implied, between or among them relating to the subject matter of this Agreement.

(ECF No. 24-1 at 4.)

         On December 20, 2016, Wells Fargo advised Plaintiffs that it had requested the credit correction on November 18, 2016. (ECF No. 1 at 2, ¶ 8.) However, on or around March 2017, Plaintiffs sought a vehicle loan and were denied favorable rates and terms due to their trade line with Wells Fargo still reflecting incorrect credit information. (See Id. at 3, ¶¶ 9-11.) Plaintiffs subsequently sent letters to Wells Fargo to notify them that their credit report was still incorrectly reporting that they were in arrears on their account with Wells Fargo. (Id. at ¶ 13.) Wells Fargo replied, asserting that the credit line and the negative reporting should have been removed. (Id. at ¶ 14.)

         Plaintiffs also contacted TransUnion and Equifax Information Services, LLC (“Equifax”) to inform them that Plaintiffs' mortgage account was being reported inaccurately. (Id. at ¶ 15.) TransUnion fixed the incorrect reporting; however, Equifax continued to report the incorrect mortgage information. (See Id. at 3-4, ¶¶ 16-22.)

         On April 12, 2018, Plaintiffs filed the present action against Equifax[3] and Wells Fargo asserting claims of false credit reporting. (See Id. at 5-11.) Most relevant here, Plaintiffs alleged a count for breach of contract and three counts for violations of the Fair Credit Reporting Act against Wells Fargo for Wells Fargo's alleged breach of the Settlement Agreement and false credit reporting. (See Id. at 5-8.)

         On October 16, 2018, Wells Fargo filed the present motion to compel arbitration. (ECF No. 20.) Plaintiffs timely responded to the motion, (ECF No. 24), and Wells Fargo timely replied, (ECF No. 27). As such, the motion is fully briefed and ripe for adjudication.

         II. LEGAL STANDARD

         The Federal Arbitration Act (“FAA”) was in enacted in 1925 to “reverse the longstanding judicial hostility to arbitration agreements . . . and to place [them on] the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991). It provides that arbitration clauses in contracts concerning interstate commerce are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Thus, “due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the ...


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