United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
AMY J.
ST. EVE, District Court Judge
On June
30, 2016, Plaintiff Michael Robert Pappas brought a one-count
First Amended Complaint against Experian Information
Solutions, Inc. (“Experian”) for violating the
Fair Credit Reporting Act (“FCRA”), 15 U.S.C.
§ 1681, et seq. Before the Court are the
parties' cross-motions for summary judgment brought
pursuant to Federal Rule of Civil Procedure 56(a) and
Northern District of Illinois Local 56.1. For the following
reasons, the Court grants Defendant's motion for summary
judgment and denies Plaintiff's motion for summary
judgment. The Court dismisses this lawsuit in its entirety.
FACTUAL
BACKGROUND
Plaintiff
Michael Robert Pappas is an Illinois resident and a consumer
as defined by the FCRA. (R. 103, Def.'s Rule 56.1 Stmt.
Facts ¶ 1; R. 107, Pl.'s Rule 56.1 Stmt. Facts
¶ 1.) Experian is a credit reporting agency
(“CRA”) as defined by the FCRA. (Def.'s Stmt.
Facts ¶ 2.) Experian's business consists, in part,
of compiling consumer credit information and providing that
information to third parties. (Id.; Pl.'s Stmt.
Facts ¶ 2.) Experian maintains credit information about
Plaintiff. (Def.'s Stmt. Facts ¶ 2.)
On
April 27, 2013, Plaintiff filed a petition for Chapter 13
bankruptcy protection in the United States Bankruptcy Court
for the Northern District of Illinois. (Def.'s Stmt.
Facts ¶ 6; Pl.'s Stmt. Facts ¶ 8.) At that
time, Plaintiff owned investment rental properties in Plano,
Plainfield, and Diamond, Illinois. (Def.'s Stmt. Facts
¶ 6; Pl.'s Stmt. Facts ¶ 1.) U.S. Bank Home
Mortgage (“U.S. Bank”) owned the mortgage loans
and Cenlar Central Loan Administration (“Cenlar”)
serviced the Plainfield property. (Pl.'s Stmt. Facts
¶¶ 6, 7.) Plaintiff attempted to sell these
Illinois rental properties prior to filing for Chapter 13
bankruptcy protection, but failed to do so. (Def.'s Stmt.
Facts ¶ 8.) Accordingly, Plaintiff filed for bankruptcy
protection to minimize the loss on the properties by using
Chapter 13 as a reorganization mechanism. (Id.) As a
credit analyst and loan originator, Plaintiff knew that
filing for bankruptcy protection would negatively impact his
ability to obtain new credit. (Id. ¶¶ 5,
14.) Indeed, Plaintiff testified at his deposition that it
makes sense “banks don't want to lend to people who
are immediately coming out of bankruptcy.”
(Id. ¶ 14.)
The
bankruptcy court entered an order of discharge on February 4,
2014. (Pl.'s Stmt. Facts ¶ 14.) The discharge order,
however, did not specify which debts were included in the
court's discharge. (Def.'s Stmt. Facts ¶ 19.)
Nevertheless, Plaintiff's confirmed Chapter 13 bankruptcy
plan called for him to surrender the Plano, Plainfield, and
Diamond properties. (Id. ¶ 15.) U.S. Bank filed
a foreclosure action in the Circuit Court of Kendall County,
Illinois on June 9, 2014 and the Circuit Court entered an
order confirming the sale of the Plano property on July 27,
2015. (Id. ¶ 16.) Also, U.S. Bank filed for
foreclosure of the Plainfield property (Circuit Court of Will
County) that was completed on June 11, 2014 and Diamond
property (Circuit Court of Grundy County) that was completed
on June 9, 2016. (Id.)
In the
interim, on April 17, 2015, Plaintiff obtained a tri-merge
credit report, which combines the three national CRAs'
credit information. (Def.'s Stmt. Facts ¶
22; R. 88-14, Ex. N, 4/17/15 SettlementOne Report.)
Plaintiffs April 2015 credit report showed that the U.S. Bank
and Cenlar accounts included past due notifications - despite
the bankruptcy discharge. (Def.'s Stmt. Facts
¶ 22; R. 111, Def.'s Add'l Facts ¶
21.) U.S. Bank and Cenlar had provided Experian with this
account information reported on Plaintiff's April 2015
credit report. (Def.'s Stmt. Facts ¶
46.)[1]
The April 2015 credit report also indicated that foreclosure
proceedings were pending in relation to the Illinois rental
properties. (Def.'s Stmt. Facts ¶ 22; Ex. N,
SettlementOne Report at 8.) On May 28, 2015, Experian
received a dispute letter from Plaintiff asking it to
“update the subject credit file(s) to reflect the
discharged status of the debts as indicated on the Final
Report from the [bankruptcy] Trustee.” (Def.'s
Add'l Facts ¶ 22; Pl.'s Stmt. Facts ¶ 28.)
Plaintiffs dispute letter specifically requested that
Experian investigate several accounts, including the accounts
with U.S. Bank and Cenlar. (Def.'s Add'l Facts ¶
23.) Before Experian received Plaintiff's dispute letter
on May 28, 2015, U.S. Bank had deleted its reporting for one
of the accounts. (Id. ¶ 24.) Thus, in response
to Plaintiffs dispute letter, Experian reviewed the
correspondence and accompanying documents and then updated
the remaining U.S. Bank and Cenlar accounts to reflect that
they had been discharged in Plaintiffs Chapter 13 bankruptcy.
(Id. ¶ 25.) Experian completed its response to
Plaintiff's first dispute letter on June 2, 2015 and sent
Plaintiff a new copy of his consumer disclosure on June 2,
2015. (Id. ¶¶ 27, 28.) In addition,
Plaintiff sent a duplicate dispute letter on June 1, 2015, to
which Experian responded on June 3, 2015 by re-applying the
updates it made in the first letter. (Id. ¶ 29;
Pl.'s Stmt. Facts ¶ 33.) Experian maintains that
after updating Plaintiff's accounts pursuant to his May
and June 2015 dispute letters, it provided Dispute Resolution
Notifications (“DRNs”) to U.S. Bank and Cenlar.
(Def.'s Add'l Facts ¶¶ 27, 29.) Plaintiff,
on the other hand, contends that U.S. Bank and Cenlar never
received these DRNs. (Pl.'s Stmt. Facts ¶ 31.)
Also in
the spring of 2015, Plaintiff decided to buy a vacation home
in Wisconsin. (Pl.'s Stmt. Facts ¶ 25.) When he
contacted a mortgage broker at Compass Mortgage in
Warrenville, Illinois, the broker told Plaintiff he would not
qualify for a mortgage loan while there were two pending
foreclosure actions related to the Illinois rental
properties. (Def.'s Stmt. Facts ¶ 23.) In May 2015,
Plaintiff contacted a mortgage broker at 1st Advantage
Mortgage, who also informed Plaintiff that he would not be
able to get a mortgage loan until the remaining foreclosures
actions in the Illinois courts had been completed.
(Id. ¶ 24.) In fact, Plaintiff testified at his
deposition that the mortgage underwriters' ultimate
concern preventing him from getting a mortgage loan for his
Wisconsin vacation property concerned the two pending
foreclosures on the surrendered properties. (R. 112-2,
Pl.'s Dep., at 113-15; Def.'s Stmt. Facts ¶ 16.)
Plaintiff eventually bought a vacation home in Wisconsin by
paying approximately $400, 000 in cash. (Pl.'s Dep., at
116; Def.'s Stmt. Facts ¶ 26.)
LEGAL
STANDARD
Summary
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact
exists if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In determining
summary judgment motions, “facts must be viewed in the
light most favorable to the nonmoving party only if there is
a ‘genuine' dispute as to those facts.”
Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769,
167 L.Ed.2d 686 (2007). The party seeking summary judgment
has the burden of establishing that there is no genuine
dispute as to any material fact. See Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986). After “a properly supported motion for
summary judgment is made, the adverse party ‘must set
forth specific facts showing that there is a genuine issue
for trial.'” Anderson, 477 U.S. at 255
(quotation omitted). “To survive summary judgment, the
non-moving party must show evidence sufficient to establish
every element that is essential to its claim and for which it
will bear the burden of proof at trial.” Life
Plans, Inc. v. Security Life of Denver Ins. Co., 800
F.3d 343, 349 (7th Cir. 2015).
ANALYSIS
“Congress
enacted FCRA in 1970 to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and
protect consumer privacy.” Safeco Ins. Co. of Am.
v. Burr, 551 U.S. 47, 52 (2007). “Credit reporting
agencies prepare reports that provide information about a
person's finances - such things as bill-payment history,
loans, current debt, and other information” that
“is intended to help lenders decide whether to extend
credit or approve a loan and what interest rate to
charge.” Brill v. TransUnion LLC, 838 F.3d
919, 919-20 (7th Cir. 2016).
In his
First Amended Complaint, Plaintiff alleges that Experian
violated the FCRA by failing to follow reasonable procedures
to ensure the accuracy of his credit information and failing
to properly reinvestigate after he complained of this
inaccuracy. See 15 U.S.C. §§ 1681e(b),
1681i(a). The FCRA “provides that ‘whenever a
consumer reporting agency prepares a consumer report it shall
follow reasonable procedures to assure maximum possible
accuracy of the information concerning the individual about
whom the report relates.'” Childress v.
Experian Info. Sols., Inc., 790 F.3d 745, 746 (7th Cir.
2015) (quoting 15 U.S.C. § 1681e(b)). To establish that
a CRA failed to follow reasonable procedures pursuant to
§ 1681e(b), a consumer must show that there was
inaccurate information in his consumer credit report due to
the CRA's failure to follow reasonable procedures and
that this inaccuracy caused him to suffer damages. See
Lamar v. Experian Info. Sys., 408 F.Supp.2d 591, 595
(N.D. Ill. 2006); Sarver v. Experian Info. Sols.,
Inc., 299 F.Supp.2d 875, 876 (N.D. Ill. 2004). Moreover,
“[o]nce a consumer report exists, [the FCRA] triggers
various duties on the part of a reporting agency, including
the obligation to reinvestigate when a consumer contends that
[her] consumer report is inaccurate or incomplete[.]”
Ruffin-Thompkins v. Experian Info. Sols., Inc., 422
F.3d 603, 607 (7th Cir. 2005) (citation omitted). In other
words, a CRA must “reinvestigate items on a credit
report when a consumer disputes the validity of those
items.” Sarver v. Experian Info. Sols., Inc.,
390 F.3d 969, 970-71 (7th Cir. 2004).
Before
any discussion of the reasonableness of Experian's
reinvestigation or its procedures ensuring accuracy is
necessary, the Court turns to whether Plaintiff has set forth
evidence creating a genuine dispute for trial that he
suffered damages as a result of the inaccurate information in
his April 2015 credit report. See Ruffin-Thompkins,
422 F.3d at 607-08; see alsoSarver, 390
F.3d at 971 (plaintiff “must show that he suffered
damages as a result of the inaccurate information”).
“The FCRA does not presume damages; instead, [] the
consumer must affirmatively prove that she is entitled to
damages.” Ruffin-Thompkins, 422 F.3d at 610;
see also Sarver, 390 F.3d at 971 (“the FCRA is
not a strict liability statute”). In addition,
“[w]ithout a causal relation between the violation ...