DEL AMORA v. METRO FORD SALES AND SERVICE INC.

In early 2001, Plaintiff Mike Del Amora was in the process of getting a divorce. His estranged wife's brother, Jesus Roman, worked as a salesman for Defendant Metro Ford Sales and Service, Inc. In that position, Roman was authorized to obtain and review credit reports in connection with making car sales. Roman knew that he was only allowed to obtain the credit reports of customers who were interested in purchasing vehicles from Metro Ford and who gave Roman permission to check their credit histories.

On January 31 and March 27, 2001, Roman used his position at Metro Ford to obtain credit reports on Del Amora. Del Amora was not interested in buying a car from Metro Ford and did not give Roman permission to check his credit. Roman was motivated solely by personal reasons related to his sister's separation, and not by any desire to further Metro Ford's business. The parties acknowledge that Roman obtained both credit reports without Metro Ford's knowledge or consent. When Del Amora learned that Roman had obtained his credit report, he filed this lawsuit alleging that Metro Ford willfully violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681b(f) & 1681(q).

Metro Ford now seeks summary judgment on the grounds that it cannot be vicariously liable for Roman's willful misconduct, relying on Judge James Moran's decision in Kodrick v. Ferguson, 54 F. Supp.2d 788 (N.D.Ill. 1999). Del Amora initially failed to respond to Metro Ford's motion, thereby admitting all the facts as set forth by the company in its summary judgment submission. Local Rule 56.1(b)(3)(B); Hudson v. West Harvey/Dixmoor Sch. Dist. No. 147, 168 F. Supp.2d 851, 852 (N.D.Ill. 2001). At our instruction that Del Amora address Metro Ford's legal arguments in light of a conflicting Circuit-level decision, Jones v. Federated Fin. Reserve Corp., 144 F.3d 961 (6th Cir. 1998), he filed a cross-motion for summary judgment seeking to hold Metro Ford liable for Roman's actions pursuant to that case.

The FCRA prohibits any person from using or obtaining a consumer report for other than permissible purposes. 15 U.S.C. § 1681b(f). Any person who willfully or negligently fails to comply with any requirement of the Act with respect to any consumer is liable to that consumer for actual damages, attorneys' fees and costs. 15 U.S.C. § 1681no. Willful violations may also result in punitive damages. 15 U.S.C. § 1681n. In addition, any person who knowingly obtains a credit report under false pretenses shall be fined, imprisoned or both. 15 U.S.C. § 1681q.

In this case, the parties agree that Roman, a non-supervisory employee, obtained Del Amora's credit reports for an improper purpose under false pretenses in violation of these sections. The only question is whether Metro Ford can be vicariously liable for Roman's willful misconduct. Metro Ford argues that Del Amora should not be able to proceed on this theory because he failed to allege it in his complaint. The Court disagrees. The Federal Rules of Civil Procedure do not require a plaintiff to plead a legal theory. Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1041 (7th Cir. 1999). The complaint plainly says that Metro Ford violated the FCRA. Fairly read, this allegation encompasses the possibility of a theory of vicarious liability: corporations necessarily act through their agents. Shager v. Upjohn Co., 913 F.2d 398, 404 (7th Cir. 1990). Metro Ford is in no way unfairly prejudiced or surprised by Del Amora's argument; indeed, it affirmatively raised the issue in its summary judgment motion. (Def. Memo, p. 4) (". . . Metro Ford cannot be held liable for Jesus Roman's independent actions in this case"). On these facts, it would be inappropriate to preclude Del Amora from raising the argument. See Barbian v. Panagis, 694 F.2d 476, 487 n. 9 (7th Cir. 1982) (the court must construe a complaint liberally on a motion for summary judgment).

A. Vicarious Liability Under the FCRA

The FCRA does not specifically provide for vicarious liability. Del Amora argues that we should follow the lead of Jones and fill in this statutory gap with common law agency principles. Metro Ford urges us instead to follow Kodrick and leave such gap-filling to Congress. Although neither case is binding on this Court, we find it useful to review both here.

In Jones, the plaintiff's ex-husband pressured his friend Janice Caylor, an employee of the defendant, to procure the plaintiff's credit report for personal reasons related to his divorce. Caylor was authorized to request credit reports from clerks who operated the company's credit report request system, as long as she supplied a customer name, address and social security number. There was no evidence suggesting that any other employee knew of Caylor's improper request on behalf of the plaintiff. 144 F.3d at 962-63.

On appeal from verdicts in favor of the defendant, the Sixth Circuit considered only whether a principal may be vicariously liable for an agent's tortious conduct under the FCRA based upon an apparent authority theory. Id. at 965. After concluding that such a theory is compatible with the Act's purposes of protecting consumers from improper use of credit reports and deterring violations, the court found that the company could be liable for Caylor's actions if it "created an appearance of authority that caused the credit reporting agency reasonably and prudently to believe that Caylor had made a proper request for a permissible purpose, and there was reliance on Caylor's apparent authority." Id. at 966. The court viewed this theory as a basis for finding either a willful or negligent violation on the part of the company.

In Kodrick, defendant Cheryl Ferguson worked for co-defendant Accubanc Mortgage as a senior loan officer. In that position, Ferguson was authorized to obtain and review confidential credit histories of Accubanc's customers. On two occasions, Ferguson used her authority to obtain the plaintiff's credit report, ostensibly to process a real estate loan. However, the plaintiff had not applied for a loan, nor did she have any business relationship with Accubanc. Rather, Ferguson wanted information on the plaintiff because the plaintiff was married to Ferguson's ex-husband. Ferguson acted without supervisory approval and did not have a high rank sufficient to deem her Accubanc's alter ego. 54 F. Supp.2d at 789.

The court rejected the theory of vicarious liability for subscribers with rogue employees on the grounds that the FCRA is silent on the issue and places the duty to prevent impermissible uses of credit reports not on subscribers, but on consumer reporting agencies and individuals who knowingly violate the law. Id. at 794. However, the court ultimately confined its holding to the particular scenario at issue in the case:

We hold only that a subscriber is not liable under § 1681n or § 1681o for its employee's unauthorized willful violations of the Fair Credit Reporting Act, where the employee of the subscriber obtained the report under false pretenses and for ...