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Allen v. Experian Information Solutions

May 12, 2006

MICHAEL ALLEN, PLAINTIFF,
v.
EXPERIAN INFORMATION SOLUTIONS, INC., EQUIFAX INFORMATION SERVICES, LLC., AND KROLL FACTUAL DATA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Stiehl, District Judge

MEMORANDUM & ORDER

This matter is before the Court on two motions for summary judgment filed by Equifax Information Services (Doc. 62), and Experian Information Solutions (Doc. 66). Plaintiff has now settled his claim with Equifax (see Docs. 72, 77); however, Kroll Factual Data Corporation filed a motion to join in the motions for summary judgment filed by its co-defendants Equifax and Experian. Therefore, even though Equifax has been dismissed from the action, the motion for summary judgment remains pending as it applies to defendant Kroll's claims and will be considered by the Court.

BACKGROUND

Plaintiff filed an amended complaint (Doc. 54) against Equifax Credit Information ("Equifax"), Experian Information Solutions ("Experian") and Kroll Factual Data Corporation ("Kroll") alleging violation of the Fair Credit Reporting Act, Section 15 U.S.C. 1681 et seq.("FCRA"). The amended complaint alleges that plainitff had a $50,000 line of credit from Farmers State Bank. Plaintiff applied for a loan from Farmers State Bank on August 25, 2004, seeking an additional $50,000 line of credit to be consolidated into one $100,000 line of credit. This loan was denied. Plaintiff asked Patricia Goetten, a loan officer at Farmers State Bank to check and see if he could acquire, when his home remodeling was complete, a fixed rate loan of $197,000 which would effectively consolidate his home mortgage as well as his line of credit loans into one fixed rate loan. This loan was also denied. Plaintiff learned that a likely reason for the denial was because his credit report contained an account line reading CBUSASEARS, bankruptcy. Plaintiff contacted the three major credit reporting agencies as well as Kroll, who had compiled the three reports into one "tri-merge report."

Plaintiff then reapplied for a fixed rate loan on September 25, 2004. Again, the loan was denied. Plaintiff alleges this loan was denied because a new tri-merge report generated by Kroll contained an inaccurate report which signaled a "Caution," resulting in denial of the loan. According to plaintiff, this caution was generated because the past bankruptcy was again inaccurately reported by Experian after the plaintiff had notified Experian of the inaccuracy. Plaintiff also contends that Kroll, after discovering in its own investigation that the bankruptcy report was in error, negligently re-reported the bankruptcy on the subsequent tri-merge report.

Plaintiff asserts that the denial of credit constituted economic damage and that in addition, he was damaged emotionally, suffering extreme emotional distress, including physical symptoms of loss of sleep, headaches, a nervous stomach and various other difficulties.

Plaintiff alleges in Count I that Experian and Kroll violated the FCRA by: reporting inaccurate information; failing to have reasonable procedures to insure accuracy; and failing to conduct a reasonable investigation after plaintiff made written disputes about the report. In Count II plaintiff alleges that the violations were willful and have resulted in denial of credit to him.

SUMMARY JUDGMENT STANDARDS

Summary judgment is properly granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Material facts are those that "might affect the outcome of the suit" under applicable substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court views the facts in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Experian and Kroll have the burden of showing that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. However, plaintiff retains the burden of producing enough evidence to support a reasonable jury verdict in her favor. See Anderson, 477 U.S. at 256. "[A] party who bears the burden of proof on a particular issue may not rest on its pleading, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial." Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir. 1988) (emphasis in original).

"[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-248 (emphasis in original).

DISCUSSION

A credit reporting agency "is not automatically liable even if the consumer proves that the agency prepared an inaccurate report because the FCRA does not make reporting agencies strictly liable for all inaccuracies." Sarver v. Experian Info. Solutions, Inc., 390 F.3d 969, 971 (7th Cir. 2004). The "reasonableness of a reporting agency's procedures is normally a question for trial unless the reasonableness or unreasonableness of the procedures is beyond questions." Id.

Therefore, to avoid the motions for summary judgment, the plaintiff must produce enough evidence to create a genuine issue of material fact with regard to each element of his claim. To establish a violation of 15 U.S.C. § 1681e(b), plaintiff must show: inaccurate information was included in plaintiff's credit report; the inaccuracy was due to the defendants' failure to follow reasonable procedures; the plaintiff suffered actual damages; and the plaintiff's damages were caused by the inclusion of the inaccurate entry. See, Sarver v. Experian Info. Solutions, Inc., 299 F. Supp. 2d 875, 876 (N.D. Ill. 2004):

With respect to damages, the Seventh Circuit has "maintained a strict standard for a finding of emotional damage because they are so easy to manufacture." Id. Thus the requirement in this circuit is that there must be more than mere statements or conclusions by the plaintiff to support a claim for emotional damages. Id. For punitive damages to be appropriate, the defendants must be shown to have acted willfully. "To act willfully, a defendant must knowingly and intentionally violate the FCRA, and [the defendant] must ...


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