Pittman v. Experian Info. Solutions, Inc.

Decision Date23 August 2018
Docket NumberNo. 17-1677,17-1677
Citation901 F.3d 619
Parties Howard PITTMAN, Plaintiff-Appellant, v. EXPERIAN INFORMATION SOLUTIONS, INC., et al., Defendants, Servis One, Inc., dba BSI Financial Services; iServe Servicing, Inc., Defendants-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED: Edward A. Mahl, MICHIGAN CONSUMER CREDIT LAWYERS, Southfield, Michigan, for Appellant. Christian K. Mullett, ORLANS PC, Troy, Michigan, for Appellee Servis One. Mickey J. Lee, MAURICE WUTSCHER LLP, Indianapolis, Indiana, for Appellee iServe Servicing. ON BRIEF: Edward A. Mahl, MICHIGAN CONSUMER CREDIT LAWYERS, Southfield, Michigan, for Appellant. Christian K. Mullett, ORLANS PC, Troy, Michigan, for Appellee Servis One. Mickey J. Lee, MAURICE WUTSCHER LLP, Indianapolis, Indiana, for Appellee iServe Servicing.

Before: BOGGS, CLAY, and DONALD, Circuit Judges.

CLAY, Circuit Judge.

Plaintiff Howard Pittman ("Pittman") sued two mortgage servicers, iServe Servicing, Inc. ("iServe") and Servis One, Inc., d/b/a BSI Financial Services ("BSI"), for negligent and willful violation of the Fair Credit Reporting Act ("FCRA") pursuant to 15 U.S.C. §§ 1681n and 1681o. He also sued BSI for breach of contract. Pittman appeals from several decisions entered by the district court denying Pittman's motion for leave to file a second amended complaint, denying Pittman's motion to compel depositions of iServe representatives, granting iServe's motion for summary judgment and dismissing it from the case, and granting BSI's motion for summary judgment and dismissing the case.

For the reasons set forth below, we AFFIRM in part and REVERSE in part the district court's judgment and REMAND for proceedings consistent with this opinion.

BACKGROUND
I. Factual History

On August 19, 2008, Pittman purchased a home located at 5930 Willow Road, West Bloomfield, Michigan 48324 with a $262,138.00 loan from Citicorp Trust Bank. The loan is evidenced by a note and is secured by a mortgage. The note requires that Pittman make monthly payments of $1,980.42 beginning on September 25, 2008.

On July 27, 2010, Citicorp assigned the loan to Pacifica. From July 2010 until June 2012, iServe serviced the loan. In June 2012, BSI began servicing the loan.1

Pittman failed to make two mortgage payments in August and September 2011. Pittman then submitted a loan modification application to iServe. In late 2011, iServe granted Pittman a Trial Modification Plan ("TPP")2 on his mortgage, pursuant to the Home Affordable Mortgage Program ("HAMP"). Under the TPP, Pittman was to make "trial period payments in a timely manner" for January, February, and March 2012 in the amount of $1,357.80. (R. 90-1, TPP, PageID # 1739.) The TPP said "[a]fter all trial period payments are timely made and you have submitted all the required documents, your mortgage will be permanently modified." (Id. ) Pittman made the three trial payments. Even though Pittman fully performed, the TPP was never made permanent in writing by iServe. However, Pittman continued to make the reduced monthly payments.

On May 31, 2012, Pittman received notice that the servicing of the loan had been assigned to BSI and that he was to send payments to BSI as of June 14, 2012.

On July 26, 2012, BSI sent Pittman a notice of default. Pittman sought the help of an attorney, Gilbert Borman, to assist him in making inquiries about the default and the loan modification to iServe and BSI. On January 17, 2013, Borman wrote to iServe that Pittman's "modification did not transfer over" from iServe to BSI and Borman was "informed by [a member of BSI's Loss Mitigation Department] that the reason the modification did not transfer over is that [iServe] did not properly report the modification to the Treasury Department." (R. 88-14, 1/17/13 Fax, PageID # 1603.) On January 30, 2013, iServe's Risk Manager emailed BSI's Loss Mitigation Department and said "[t]he borrower was on a trial modification with iServe in December 2011 and made all payments on time, contractually entitling him to a permanent mod [sic] in April 2012. iServe did not process the permanent modification prior to the loan being transferred to BSI on June 14, 2012." (R. 56, 1/30/13 Email, PageID # 885.) On April 25, 2013, Borman received an email from iServe's Senior Counsel stating that "[a]ccording to iServe's understanding from HAMP and BSI, Mr. Pittman's loan modification has been made permanent, so his concerns have been completely resolved." (R. 88-5, 4/25/13 Email, PageID # 1529.) During this time, BSI's Loss Mitigation Department told Pittman "to continue to make the trial payment amount." (R. 88-25, 3/16/13 Email, PageID # 1655.)

On June 4, 2014, Pittman obtained a credit report, which showed that both iServe and BSI had reported his mortgage payments as past due. On June 11, 2014, Pittman sent letters to the three major credit reporting agencies ("CRAs") disputing the information furnished by iServe and BSI. On August 20, 2014, Pittman again sent dispute letters to the three major CRAs. The complaints were referred to the Servicers for their investigation. The Servicers concluded that the loan payments were untimely as reported because there was no loan modification agreement and Pittman was not making the payments under the original contract.

Pittman also learned that BSI had not made property tax payments from his escrow account as required by the mortgage agreement. The amounts were $3,935.97 for 2013 and $2,355.50 for 2014.

II. Procedural History

On August 29, 2014, Pittman filed suit in the 48th District Court against Experian Information Solutions, Inc., Trans Union, LLC, Equifax Information Services, LLC, and BSI. He sued all Defendants for: (1) negligent violation of FCRA; and, (2) willful violation of FCRA. On September 16, 2014, the suit was removed to federal court.

On November 11, 2014, Pittman filed an amended complaint. The amended complaint added iServe as a defendant. Pittman again sued all Defendants for: (1) negligent violation of the FCRA; and, (2) willful violation of FCRA. He also sued BSI for breach of contract.

Upon stipulation of the parties, the claims against Trans Union, Experian, and Equifax were dismissed with prejudice and without fees or costs.

On January 9, 2015, Pittman filed a motion for leave to file a second amended complaint in order to add Pacifica as a party and to add additional counts. On February 25, 2015, Pittman filed an amended motion for leave to file a second amended complaint. On February 26, 2015, Pittman withdrew this motion. On June 24, 2015, the district court entered an order striking the amended motion for leave to file a second amended complaint because Pittman did not attach a copy of the second amended complaint to the motion and the court was not sure which complaint Pittman wanted to file. On June 29, 2015, Pittman filed a renewed motion for leave to file a second amended complaint. On November 9, 2015, Pittman filed a notice of withdrawal of his renewed motion.

On November 25, 2015, BSI filed a motion for judgment on the pleadings. On November 30, 2015, iServe filed its answer to the amended complaint with affirmative defenses. On December 1, 2015, Pittman sent a notice of deposition to iServe. On December 4, 2015, Pittman filed a motion to compel depositions of iServe's representatives. On December 11, 2015, iServe filed a motion for judgment on the pleadings. On January 18, 2016, Pittman filed a combined motion to consolidate cases and for leave to file a second amended complaint.

On May 11, 2016, the district court conducted a hearing on the pending motions.3 The district court ruled on the motions at the hearing and, on May 13, 2016, issued a written order denying both BSI's and iServe's motions for judgment on the pleadings, denying Pittman's motion to amend the complaint, and denying Pittman's motion to compel the depositions of iServe's representatives. The district court granted Pittman's motion to consolidate cases, but later "unconsolidated[d]" the cases. (R. 83, Order Unconsolidating Cases, PageID # 1418.)

On August 12, 2016, both Pittman and iServe filed motions for summary judgment. Pittman sought summary judgment on all of his claims. iServe sought summary judgment on Pittman's claims against it.

On November 30, 2016, the district court denied Pittman's motion for summary judgment, granted iServe's motion for summary judgment, and dismissed iServe from the case. The district court found that the TPP was not a legally enforceable permanent modification agreement and that Pittman was barred under Michigan law from arguing estoppel. The district court also found that Pittman failed on the threshold question of his FCRA claim—whether there was a reporting error. The district court concluded that "[b]ecause the [TPP] was neither permanent nor enforceable, and because he was on notice that his credit score could be adversely affected during the trial period, Pittman cannot show iServe or BSI made an error in reporting his loan payments as overdue." (R. 96, Order, PageID # 2380.) Consequently, the district court denied Pittman's motion for summary judgment and granted iServe's motion for summary judgment. Finally, the district court denied Pittman's motion for summary judgment on the breach of contract claim against BSI because a question of fact on a material issue remained—whether Pittman was the first to "materially" breach the contract.

On January 10, 2017, BSI filed a motion for leave to file a late motion for summary judgment and the motion for summary judgment itself. On January 11, 2017, BSI filed an amended motion for leave to file a motion for summary judgment and the motion for summary judgment itself. On January 31, 2017, the district court granted BSI's motion for leave to file a motion for summary judgment because of the findings associated with the November 30, 2016 order and because ruling on the motion "may prevent an unnecessary trial." (R. 104, Order Granting Leave, PageID...

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