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Whiting v. Harley-Davidson Financial Services

February 7, 2008


The opinion of the court was delivered by: Milton I. Shadur Senior United States District Judge


Daniel Whiting ("Whiting") has sued Harley-Davidson Financial Services ("Financial Services"), alleging that Financial Services willfully and negligently violated the Fair Credit Reporting Act ("Act," 15 U.S.C. §§1681-1681u)*fn1 when it reported assertedly "derogatory and inaccurate statements" about Whiting's credit history to various credit reporting agencies (F. St. ¶¶1-3). Financial Services has now moved for summary judgment under Fed. R. Civ. P. ("Rule") 56. For the reasons stated here, that motion is granted in part and denied in part.

Summary Judgment Standard

Every Rule 56 movant bears the burden of establishing the absence of any genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). For that purpose courts consider the evidentiary record in the light most favorable to nonmovants and draw all reasonable inferences in their favor (Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002)).*fn2 But to avoid summary judgment a non-movant "must produce more than a scintilla of evidence to support his position" that a genuine issue of material fact exists (Pugh v. City of Attica, 259 F.3d 619, 625 (7th Cir. 2001)) and "must set forth specific facts that demonstrate a genuine issue of triable fact" (id.). Ultimately summary judgment is warranted only if a reasonable jury could not return a verdict for the non-movant (Anderson v. Liberty Lobby, Inc., 466 U.S. 242, 248 (1986)).

What follows is a summary of the facts viewed in the light most favorable to non-movant Whiting, but within the limitations created by the extent of his compliance (or noncompliance) with the strictures of LR 56.*fn3 And that obviates any need, in the evidentiary recital, to repeat "according to Whiting " or the like or to identify any conflicting account, though inclusion of the latter is sometimes called for as a purely informational matter.


On April 9, 2005 Whiting purchased a 2004 Harley Davidson motorcycle (F. St. ¶¶4, 6). To finance the purchase Whiting entered into a "Promissory Note (Simple Interest) and Security Agreement" ("Agreement") with Eaglemark Savings Bank ("Eaglemark"), a subsidiary of Harley-Davidson Credit Corporation (F. St. ¶4). Under the Agreement Whiting agreed to repay a loan of $15,420 over seven years at an annual percentage rate of 12.99% (F. St. ¶7), with interim monthly payments of $347.73 (F. St. ¶8).

Before this opinion turns to the more essential facts of this specific dispute, some explanation is in order as to how Financial Services routinely handles accounts such as Whiting's. First, it operates as the servicer of loans--such as Whiting's--that originate with Eaglemark (F. St. ¶4; F. Ex. 5 ¶4). In that role it issues to borrowers monthly statements regarding their accounts, with information as to the amount currently owed, any late charges and any unpaid amounts from prior statements (F. St. ¶10).

Second, for loan servicing purposes Financial Services maintains a computer program that its customer service representatives use to make notes whenever they communicate with customers at either's instance (F. St. ¶11). Those notes--commonly referred to as "loan history notes"--are ordinarily made by the customer service representative right as the exchange with a customer takes place (F. St. ¶¶12-13).

Finally, Financial Services' customers can make loan payments in a variety of ways, including wire transfers, individual electronic transfers, personal checks, certified checks and money orders (F. St. ¶17). Alternatively they may use a "DirectPay" system that electronically debits loan payments from personal checking or savings accounts (F. St. ¶15). JP Morgan Chase, not Financial Services, administers the DirectPay system (F. St. ¶15; F. Ex. 5 ¶¶19-20).

With that as a background, it is time to explore Whiting's dealings with Financial Services. From May 2005 through November 2005 Whiting made all of his required monthly loan payments on time and in full (F. St. ¶19). About August 30, 2005 Whiting, who had enlisted in the United States Army Reserves in October 2002, was ordered to active duty (F. St. ¶¶20-21). In October 2005 Whiting reported to Fort Bliss, Texas, where he learned of benefits available to him under the Servicemembers Civil Relief Act ("Servicemembers Act," 50 App. U.S.C. §§501-596)(F. St. ¶22). Among those benefits was a limitation on the interest rate that a servicemember must pay during his or per period of military service (F. St. ¶26). Under the Servicemembers Act an active member of the military pays no more than 6% annual interest (50 App. U.S.C. §527(a)(1)).

From Texas Whiting was deployed to Iraq (W. Add. St. ¶2). Before leaving Whiting set up his DirectPay account so that two years' worth of payments would be withdrawn on a monthly basis (id.). During Whiting's absence his father, Ronald Whiting, handled all of his son's financial matters and received and reviewed his mail daily (F. St. ¶24; W. Add. St. ¶3). About October 5, 2005 Ronald Whiting called Financial Services to alert them to his son's active military status and to have the interest rate on his loan adjusted per the Servicemembers Act (F. St. ¶23; F. Ex. 3 at 18 and 19). Later the father also faxed a copy of his son's activation order to Financial Services (W. Add. St. ¶¶6, 11-12).

Ronald Whiting testified, in response to the question "did you have any further contact with Harley-Davidson after having sent over that fax?" (his Dep. 12), "I don't believe so" (id. 13). Although that "I don't believe so" cannot suffice to undercut the only reasonable inference that can be drawn from the evidence recounted a bit later as to a November 10, 2005 telephone call, the same cannot be said as to his more direct disclaimer as to an October 6 letter sent by Financial Services (the day immediately after the fax sent by Ronald Whiting). In that respect Whiting asserts that neither he nor his father ever received that letter (W. Add. St. ¶3; F. St. ¶¶25, 27), which set forth the new payment amount that would apply while Whiting remained on active military status--$279.34 (F. St. ¶25). That is of course hearsay as to Ronald Whiting and is hence inadmissible (see Rule 56(e)), as is equally true of a number of other statements by Whiting as to what his father assertedly did or knew (or did not do or know).

But in this instance Ronald Whiting's own Dep. 12 disclaims his ever having seen the letter--and that suffices for present purposes even though Financial Services maintains that the October 6 letter was sent pursuant to its ordinary course of business and was mailed to the address that Whiting had provided on his loan application (F. St. ¶¶25, 28)--the same address where Ronald Whiting resided during the time period relevant to this litigation (F. St. ¶29). True enough, Whiting does not dispute the contents of the letter or the facts (1) that such a letter would have been sent to the address listed on his loan application and (2) that the address was also Ronald Whiting's residence (W. St. ¶¶26, 28-29). Nonetheless, however improbable Ronald Whiting's disclaimer of receipt of the letter may appear to be, on the current motion his version must be credited.

As Ronald Whiting understood the situation, following his telephone call Financial Services would calculate the new monthly payment that Whiting owed while on active military duty and would somehow arrange for that amount to be debited via the DirectPay system (W. Add. St. ¶¶6, 8, 10).*fn4 Ronald Whiting never attempted to make a debit adjustment on his own. For one thing he lacked proper authorization to access his son's DirectPay account, and for another he did not know how to make the adjustment in any event (W. Add. St. ¶¶6, 10).*fn5

On November 10, 2005 one other exchange as to Whiting's account took place with Financial Services (F. St. ¶30). "Loan history notes" stored on Financial Services' computers reflect that someone referred to as "Randall" called Financial Services from phone number (708)423-5202 (id.), which Ronald Whiting described at his Dep. 16 as "my work number, one of my work numbers." According to that note "Randall" wanted to change the amount of the monthly payment to be withdrawn through the DirectPay system (F. St. ¶32). That note then went on to say that "Randall" was transferred to a different extension where he could speak with a representative affiliated with the DirectPay system (F. St. ¶33; F. Ex. A to Ex. 5, HDFSI/Whiting 000028; F. Ex. 6 at 52; F. Ex. 6 at 80). As indicated earlier, the only reasonable inference that can be drawn in this area is that "Randall" was indeed Ronald Whiting.*fn6

Loan history notes next show that on the same day that "Randall" called, the amount to be debited automatically from Whiting's personal bank account via the DirectPay system was changed from $347.73 (the monthly payment Whiting had originally agreed to make) to $142.56 (F. St. ¶34). That amount is well below the $279.34 figure that Whiting actually owed under the 6% interest rate mandated by the Servicemembers Act.

That result permits of only one reasonable inference: that it was Ronald Whiting who engineered that change in the debited payments. And that is quite apart from Financial Services' statement that its own employees cannot make any modifications to the DirectPay system, even upon customer request (F. St. ¶16), and that arranging "payment amounts...always remained [Whiting's] or his agents' responsibility" (F. Add. St. ¶6). In that regard it is noteworthy that although Whiting seeks to deny Financial Services' assertion that its employees cannot make modifications to the DirectPay system (W. St. ¶16), he does so by advancing matters that either do not support the denial or (as is the case with his assertion that his father communicated with Financial Services only on October 5, 2005) are inadmissible because they were made without "personal knowledge" (which is required by Rule 56(e)).

In principal part, then, Whiting acknowledges the contents of the loan history notes from November 10, 2005 (W. St. ¶¶30-32, 34-35). And as for any possible exception to that admission, although Whiting attempts to deny that his father ever spoke with Financial Services or a representative of the DirectPay program on that day (W. Add. St. ¶6), that attempted disclaimer ...

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