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Banno v. Experian Information Solutions, Inc.

United States District Court, N.D. Illinois, Eastern Division

July 20, 2017



          John Z. Lee United States District Judge.

         Plaintiff Pamela Banno (“Banno”) has sued Experian Information Solutions, Inc. (“Experian”) alleging violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. Banno and Experian have filed cross-motions for summary judgment. For the reasons stated herein, Banno's motion for summary judgment is denied, and Experian's motion for summary judgment is granted.

         Factual Background[1]

         In 2003, Banno purchased a residential property in Joliet, Illinois (“the Joliet property”). See Def.'s LR 56.1(a)(3) Stmt. ¶ 5, ECF No. 67. Banno financed the purchase by taking out a mortgage. Id. The mortgage was eventually transferred to Ocwen Loan Servicing (“Ocwen”), a corporation that services mortgage loans and furnishes data to credit reporting agencies. Id.; Pl.'s LR 56.1(b)(3)(C) Stmt. ¶ 2, ECF No. 80.

         Experian is a credit reporting agency that compiles consumer credit information, including consumer bankruptcy information. Def.'s LR 56.1(a)(3) Stmt. ¶ 2. Experian obtains bankruptcy information through its public records vendor, LexisNexis Risk & Information Analytics Group, Inc. (“Lexis”). Id. ¶ 17. When Experian learns from Lexis that a consumer's bankruptcy has been discharged, any account that Experian has recorded as included in the consumer's bankruptcy is automatically updated to reflect the discharge, as well as to report a $0 recent balance and no monthly payment obligation. Id. ¶¶ 22-23.

         Experian has several policies in place for handling disputes with consumers over the accuracy of the information in their files. When a consumer contacts Experian with a nonfrivolous dispute, Experian logs the dispute and reinvestigates it. Id. ¶ 24. To reinvestigate a dispute, Experian first decides whether the dispute can be resolved “internally”-that is, based on Experian's internal policies and the information provided by the consumer. Id. ¶¶ 24-25. When a dispute is resolved internally, Experian sends a Dispute Response Notification (DRN) to any relevant data furnishers in order to notify them of any changes made as a result of the dispute, as well as the basis for the changes. See Id. ¶¶ 26-27. By contrast, when a dispute cannot be resolved internally, Experian sends an Automated Consumer Dispute Verification (ACDV) to data furnishers to request additional information about disputed accounts. Id. ¶ 26. DRNs and ACDVs convey information using “industry standard codes, as well as free form text fields to communicate the nature of the consumer's dispute.” Id.

         In October 2013, Banno filed a Chapter 13 bankruptcy petition. Pl.'s LR 56.1(b)(3)(C) Stmt. ¶ 6. By that time, according to her bankruptcy filings, she owed Ocwen $173, 549 on her mortgage. Def.'s LR 56.1(a)(3) Stmt. ¶ 7. Banno's bankruptcy plan required her to surrender the Joliet property to Ocwen in full satisfaction of this debt. Id. ¶ 12. Despite this requirement, Banno continued to reside at the Joliet property throughout the period relevant to this case. Id.[2]

         On May 15, 2014, the bankruptcy court entered a discharge order in Banno's bankruptcy case. Id. ¶ 13. The next day, Lexis notified Experian of the discharge. Id. ¶ 31. Upon receiving this notification, Experian automatically updated its records of Banno's account with Ocwen to reflect that the account had been discharged in bankruptcy and to report a $0 recent balance. Id. ¶ 32.

         On June 26, 2014, Experian received a dispute letter from Banno, as well as a copy of her bankruptcy schedules. Id. ¶ 33; id., Ex. D. The letter asked Experian to “update [Banno's] credit file(s) to reflect the discharged status of the debts” included in her bankruptcy. Id., Ex. D, at 2. Upon processing this dispute, Experian found that, with the exception of one department store account, all of the accounts identified on Banno's bankruptcy schedules were already reporting as discharged in Banno's consumer file. Def.'s LR 56.1(a)(3) Stmt. ¶ 35. Experian updated the department store account to reflect the discharge and to list a $0 recent balance. Id. ¶ 34; id., Ex. F, at 3. After updating this account, Experian sent the department store a DRN to notify it of the changes made. Def.'s LR 56.1(a)(3) Stmt. ¶ 36. Experian also sent Banno an abbreviated consumer disclosure to show her the changes. Id. ¶ 37; id., Ex. F.

         Over a year later, on July 16, 2015, Banno obtained her annual credit report from the Internet.[3] Def.'s LR 56.1(a)(3) Stmt. ¶ 38. The report listed Banno's Ocwen account as “Discharged through Bankruptcy Chapter 13, ” reflected a $0 recent balance, and showed no current monthly payment obligation. Id. ¶ 39; id., Ex. H. The monthly details in the “Account History” section of the report, however, listed an account balance of $173, 170 and a monthly payment obligation of $1, 518 on Banno's Ocwen account for each month from December 2013 to April 2015. Id., Ex. H, at 6.

         On August 11, 2015, Experian received a second dispute letter from Banno, along with another copy of her bankruptcy schedules. Def.'s LR 56.1(a)(3) Stmt. ¶ 41; id., Ex. E. The letter again asked Experian to “update [Banno's] credit file(s) to reflect the discharged status of the debts” included in her bankruptcy. Id., Ex. E, at 2. In addition, the letter stated: “[The Ocwen] account was discharged in my bankruptcy . . . . The account status should be marked as ‘discharged' and [t]here should be no derogatory reporting after the bankruptcy filing date.” Id. According to Banno, the letter's reference to “derogatory reporting” was sufficient to put Experian on notice of a dispute regarding the information in the Account History section of her Ocwen account. See Pl.'s LR 56.1(b)(3)(B) Stmt. ¶¶ 41, 53, ECF No. 83. Experian disagrees with this assertion. Def.'s LR 56.1(a)(3) Stmt. ¶¶ 41, 53.

         Experian processed Banno's second dispute letter within a few days after receiving it. Id. ¶ 43; Pl.'s LR 56.1(b)(3)(C) Stmt. ¶ 28. Because all of the accounts that had been included in Banno's bankruptcy were already reporting as discharged and listed a $0 recent balance, Experian concluded that nothing in the accounts needed to be modified in response to the letter. See Def.'s LR 56.1(a)(3) Stmt. ¶ 44.[4] After processing the letter, Experian sent a DRN to Ocwen. Id. ¶ 45. Neither Banno's dispute letter nor her bankruptcy schedules were attached to the DRN. Pl.'s LR 56.1(b)(3)(C) Stmt. ¶ 29. Experian also sent Banno a new copy of her consumer disclosure. Def.'s LR 56.1(a)(3) Stmt. ¶ 45. Although the Ocwen account was reported as discharged and listed a $0 recent balance in one section of the consumer disclosure, the Account History section still listed a balance of $173, 170 and a scheduled payment amount of $1, 518, this time from December 2013 to May 2015. Pl.'s LR 56.1(b)(3)(C) Stmt. ¶ 33.

         According to Experian, the information in the Account History section of a consumer disclosure is included merely to inform the consumer of what information her creditors are reporting to Experian. Def.'s LR 56.1(a)(3) Stmt. ¶ 49. This information is not included in credit reports that Experian provides when a creditor requests the consumer's credit information. Id. ¶ 50.[5] Experian sometimes uses summaries of the information in the Account History section to create a certain product that gives specialized information about a consumer's “balance trends.” Id. ¶ 48. But only a small number of its clients purchase this product. Id. ¶ 51. Furthermore, when a client purchases this product with respect to a specific consumer, the purchase is reflected in the consumer's file. Id. Nothing in Banno's file indicates that any Experian client ever purchased this product with respect to her credit information. Id. ¶ 52.

         Legal Standard

         “The court shall grant summary judgment 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); accord Shell v. Smith, 789 F.3d 715, 717 (7th Cir. 2015). To survive summary judgment, the nonmovant must “do more than simply show that there is some metaphysical doubt as to the material facts, ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and instead must “establish some genuine issue for trial such that a reasonable jury could return a verdict in her favor.” Gordon v. FedEx Freight, Inc., 674 F.3d 769, 772-73 (7th Cir. 2012). The nonmovant bears the burden of production and cannot avoid summary judgment by “simply rest[ing] upon the pleadings.” Siegel, 612 F.3d at 937.

         In reviewing a motion for summary judgment, a court “must construe all facts and reasonable inferences in favor of the nonmoving party.” Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007). But “[i]nferences that are supported by only speculation or conjecture will not defeat a summary judgment motion.” Id. (internal quotation marks omitted). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise ...

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