312 F.3d 357 (8th Cir. 2002), 01-2616, Phillips v. Grendahl

Docket Nº:01-2616.
Citation:312 F.3d 357
Party Name:Lavon PHILLIPS, Plaintiff
Case Date:December 05, 2002
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 357

312 F.3d 357 (8th Cir. 2002)

Lavon PHILLIPS, Plaintiff—Appellant,


Mary K. GRENDAHL; Econ Control, Inc., doing business as Sherlock Information System; McDowell Investigations, Defendants—Appellees.

No. 01-2616.

United States Court of Appeals, Eighth Circuit

December 5, 2002

Submitted: March 15, 2002.

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[Copyrighted Material Omitted]

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Thomas J. Lyons, argued, Little Canada, MN (Joseph W. Dicker, Minneapolis, MN, on the brief), for appellant.

Scott Johnson, argued, Minneapolis, MN (Richard Jensen, on the brief), for Mary K. Grendahl and McDowell Agency.

Counsel Submitting a brief on behalf of Econ Control, Inc., as Mark G. Ohnstad, Edina, MN.

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Before HANSEN, Chief Judge, JOHN R. GIBSON, Circuit Judge, and GOLDBERG,1 Judge.

JOHN R. GIBSON, Circuit Judge.

Lavon Phillips appeals from the district court's entry of summary judgment against him in his Fair Credit Reporting Act and Minnesota tort law claims against his prospective mother-in-law, Mary K. Grendahl; a detective agency, McDowell Agency, Inc.;2 and Econ Control, Inc., doing business as Sherlock Information System. The district court held that there was no evidence that Grendahl or the other defendants had obtained a credit report on Phillips by false pretenses. The court rejected Phillips's contention that he had pleaded a claim for wrongful disclosure of a consumer report and stated that such a claim would not be viable anyway because the document at issue in this case was not a "consumer report" covered by the Fair Credit Reporting Act. Finally, the court held that Phillips's invasion of privacy claim failed because there was no publication of a matter that would be "highly offensive to a reasonable person." Phillips challenges each of the district court's conclusions. We affirm in part, reverse in part, and remand for trial.


We review a grant of summary judgment de novo. Darby v. Bratch, 287 F.3d 673, 678 (8th Cir. 2002). We will affirm if, viewing the record in the light most favorable to Phillips, there are no genuine issues of material fact and the defendants are entitled to judgment as a matter of law. Id.; Fed.R.Civ.P. 56(c).

Mary Grendahl's daughter Sarah became engaged to marry Phillips and moved in with him. Mary Grendahl became suspicious that Phillips was not telling the truth about his past, particularly about whether he was an attorney and whether he had done legal work in Washington, D.C. She also was confused about who his ex-wives and girlfriends were and where they lived. She did some preliminary investigation herself, but she felt that she was hampered by not being able to use a computer, so she contacted Kevin Fitzgerald, a family friend who worked for McDowell, a private investigation agency. She asked Fitzgerald to do a "background check" on Phillips, and she also gave him the name of the woman Phillips had lived with before Sarah Grendahl.

Fitzgerald began his search by obtaining Phillips's social security number from a computer database. He also searched public records in Minnesota and Alabama, where Phillips had lived earlier. He discovered one suit against Phillips for delinquent child support in Alabama, a suit to establish child support for two children in Minnesota, and one misdemeanor conviction for writing dishonored checks.

Fitzgerald then supplied the social security information to Econ Control and asked for "Finder's Reports" on Phillips and the former girlfriend.3 Fitzgerald testified that he believed that Finder's Reports were not consumer reports and

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therefore that they were not subject to the Fair Credit Reporting Act.

Econ Control was in the business of furnishing credit reports, Finder's Reports, and credit scoring for credit grantors and for private investigators. William Porter, president of Econ Control, testified in his deposition in this case that he had been advised by a representative of Computer Science Corporation that one of their products, called a "Finder's Report," could be obtained without authorization of the person who was the subject of the report because the Finder's Report contained no information on credit history or creditworthiness. Porter testified that a Credit Report, on the other hand, requires authorization from the subject.4 Fitzgerald learned of Econ Control from a presentation by Porter at a meeting of the Minnesota Private Investigators Association. Porter told the investigators at the seminar that no authorization was necessary to obtain a Finder's Report and that it would be useful in trying to locate people. Porter handed out sample Finder's Reports which showed information on a fictional consumer, including address, aliases, birth-date, employer addresses, and the identity of firms with which the consumer had credit accounts and firms that had made inquiries about the consumer.

Robert McDowell, on behalf of McDowell Agency, had signed an Econ Control registration agreement, titled "Agreement for Consumer Credit Services." One clause of the registration agreement stated:

3. I certify that I will order consumer reports, as defined by the Fair Credit Reporting Act, only when they are intended to be used as a factor in establishing a consumer's eligibility for new or continued credit, collections of an account, insurance, licensing, employment purposes, or otherwise in connection with a legitimate business transaction involving the consumer. Such reports will be used for no other purpose. Each time I request a report I intend to use for employment purposes, I will specifically identify it to [Econ Control] at the time I request the report.

Kevin Fitzgerald was listed in the registration agreement as an individual who was authorized "to request credit worthiness scores" for McDowell. To obtain the Finder's Report on Phillips, Fitzgerald simply faxed Econ Control a request listing Phillips's name, date of birth, address and social security number. Econ Control did not ask why McDowell wanted the report, and McDowell did not tell. Econ Control obtained a report from Computer Science Corporation on Phillips and passed it onto McDowell.

Fitzgerald met with Mary Grendahl and gave her the results of his investigation, including the Finder's Report. Someone wrote on the copy of the Finder's Report on Phillips: "Credit inquiry report and Employment Trace."

Phillips learned that Sarah Grendahl's family had investigated his past when Laura Grendahl, Sarah's sister, telephoned Sarah about nine months after the investigation. Phillips's complaint alleges that he also spoke to Laura and that she asked him in this telephone conversation whether he had ever written a bad check and how much back child support he owed. After further unpleasantness between Sarah and her family, Mary Grendahl telephoned and left the following voicemail for Sarah:

Sarah this is mom. I didn't directly do a credit report. I hired a PI and they have every right to do that.

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The record contains evidence that each defendant has some familiarity with the fact that the law limits access to consumer credit reports. Mary Grendahl owns the Park Apartments in Minneapolis. The apartment business office obtains credit information on prospective tenants as part of its business. The office always obtains the tenant's written permission to obtain a credit report, "[b]ecause it's necessary to have their signature to get a credit report," according to Mary Grendahl. Porter, the president of Econ Control, testified that he had read the section of the Fair Credit Reporting Act governing resale of credit information. Fitzgerald testified that sometime during his employment with McDowell, he had heard of the Fair Credit Reporting Act.

Phillips brought this suit against Mary Grendahl, McDowell Agency, and Econ Control, alleging, "Defendants willfully and maliciously obtained Plaintiff's credit report for impermissible and illegal purposes in violation of the Fair Credit Reporting Act § 1681q." Phillips also alleged that the defendants had invaded his privacy by disclosing "private and confidential facts to third parties," which was "highly offensive" to Phillips and of no legitimate concern to the public. He also alleged that the defendants had unreasonably intruded upon his seclusion. Phillips appended to his complaint a "Credit History" on himself, complete with lists of charged-off credit card accounts, delinquent child support obligation, government tax lien, and three judgments against him, and also showing that Sherlock Information (the trade name of Econ Control) had requested a credit history on him.

Phillips and the defendants filed cross motions for summary judgment. The district court held that there was no evidence that any defendant had misrepresented the purpose of the inquiry, which was "a parent's attempt to learn background information about a future son-in-law," and that Phillips had therefore failed to produce evidence that anyone obtained a consumer report on him by false pretenses. Nor, the district court stated, was there evidence that the defendants' conduct was knowing or willful. Next, the court held that Phillips's complaint could not be read to state a claim for violating 15 U.S.C. § 1681b(f), which prohibits using or obtaining consumer reports except for purposes authorized by section 1681b. Additionally, the court stated that even if the complaint could be read to state a claim under section 1681b, it was doubtful whether the Finder's Report could be characterized as a "consumer report" because it was not used in a credit or employment decision and it had no information bearing on Phillips's creditworthiness. Finally, the court held that the facts did not satisfy the elements of an Invasion of Privacy claim:

The request of a parent to obtain...

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