Aklagi v. Nationscredit Financial, Case No. 01-2244-JPO.
| Citation | 196 F.Supp.2d 1186 |
| Decision Date | 22 April 2002 |
| Docket Number | Case No. 01-2244-JPO. |
| Parties | Alex AKLAGI and Valentina G. Aklagi, Plaintiffs, v. NATIONSCREDIT FINANCIAL Services Corporation, d/b/a EquiCredit Corporation of Virginia, Defendant. |
| Court | United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas |
John R. Campbell, Loughlin, Johnson & Campbell, Carlos D. Romious, Kansas City, MO, for Plaintiffs
Elizabeth Drill Nay, Thomas M. Martin, Scott M. Brinkman, Scott A. Wissel, Lewis, Rice & Fingersh, L.C., Kansas City, MO, for Defendant.
This case arises from an identity theft incident. It involves a claim under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., and a state law claim of defamation.1 The defendant, NationsCredit Financial Services Corporation, d/b/a EquiCredit Corporation of Virginia ("EquiCredit"), has filed a motion for summary judgment (doc. 39). The court has reviewed EquiCredit's motion and memorandum in support (doc. 40), the memorandum in opposition filed by the plaintiffs, Alex Aklagi and Valentina G. Aklagi (doc. 45), plaintiffs' supporting exhibits (doc. 46), and EquiCredit's reply memorandum (doc. 47). For the reasons explained below, EquiCredit's motion for summary judgment is granted and this case is dismissed.
In the spring of 1999, an individual purporting to be plaintiff Valentina Aklagi (the "thief") obtained a mortgage loan from EquiCredit to purchase real estate located at 536 Maryland Avenue, North Oak, Virginia. During the process of obtaining the loan, the thief produced a number of fraudulent documents, including: (1) a Virginia identification card containing the thief's picture and signature as Valentina Aklagi; (2) counterfeit copies of 1997 and 1998W-2 wage and tax statements for Tina V. Aklagi indicating that Tina V. Aklagi lived in Elizabeth City, North Carolina, and worked for Textran Systems in Chesapeake, Virginia; (3) copies of stubs from checks issued by Textran Systems to Tina V. Aklagi dated March 26, 1999, and April 9, 1999; (4) bank statements from First Advantage Federal Credit Union in Newport News, Virginia, indicating that Tina V. Aklagi lived in Elizabeth City, North Carolina, and had various accounts at the credit union; and (5) a verification of employment form stating that Mrs. Aklagi worked at Textran Systems which was signed under penalty of law by an individual named Carol Fields as payroll assistant at Textran Systems.
Discrepancies existed in some of the loan documents. For example, on the thief's loan application, the thief reported owning real estate with a value of $390,000, but the real estate schedule only listed real estate with a total value of $255,000. EquiCredit's records do not indicate that anyone processing the loan questioned this discrepancy.
Also on the loan application, the thief reported that she had been present at her job for a period of five years at Chesapeake, Virginia, and yet she reported that she had resided at 6609 West 123rd Street, Overland Park, Kansas, within two years prior to the date of the loan application. EquiCredit obtained Mrs. Aklagi's credit report from Equifax Information Services. The credit report stated that Mrs. Aklagi was employed at Providence Medical Center and that her address was 6609 West 123rd Street, Overland Park, Kansas. Michelle Flor, an employee of EquiCredit, questioned the applicant's "work situation when in Kansas." However, EquiCredit's records do not explain the discrepancy between these addresses.
The Equifax credit report also stated that Mrs. Aklagi's birthdate was November 8, 1964. However, a visual verification of identification form reflects that the thief produced a Veterans Administration identification card containing a birthdate of November 15, 1964.
After the thief answered a variety of questions to explain the discrepancies in the various loan documents, the thief closed on the loan and paid $9,000 in cash at the closing. According to EquiCredit's expert witness, James F. Lynn, EquiCredit acted in accordance with its own internal lending policies and procedures, as well as generally accepted practices and procedures common to the mortgage industry during the entire credit underwriting process. Lynn states that the thief perpetrated a sophisticated pattern of fraud and deception against EquiCredit that was deliberately designed to sabotage the normal and appropriate due diligence exercised by EquiCredit with regard to this mortgage loan. Nothing arose during the underwriting process that would have alerted EquiCredit that a fraud was being perpetrated. The Aklagis have not identified any witness, expert or otherwise, who controverts Lynn's above-described testimony.
In late 1999, the Aklagis attempted to obtain financing through First Western Mortgage Company. They were unable to do so because of two foreclosures on their credit record, one by EquiCredit and the other by NovaStar.3 Mr. Aklagi then contacted EquiCredit, and it was by this means that EquiCredit first became aware an alleged fraud had been committed. The Aklagis were instructed to contact EquiCredit's attorneys with the firm of Bierman & Geesing. According to Mr. Aklagi, however, EquiCredit's lawyer refused to take information from him, ignored him, and treated him like a "crook." Therefore, in December of 1999, the Aklagis hired their own attorney, Carlos Romious.
EquiCredit received a letter from Romious dated December 9, 1999. The letter stated that Romious was an attorney representing the Aklagis, and that "[a]mong other serious concerns, we believe that the ... loan involves illegal identity theft." The letter gave no address or contact information for the Aklagis, but instead directed that "any communication concerning [the Aklagis] and any matters directly or indirectly related to said loan should be directed to our office."
The Aklagis received a credit report on Mrs. Aklagi from CSC Credit Services, dated January 10, 2000, reflecting that EquiCredit had begun to foreclose on the loan.
On March 11, 2000, Debbie Milligan in EquiCredit's consumer affairs department sent an affidavit of forgery package to Valentina Aklagi. The letter requested that "[i]n order for us to complete the fraud claim, please compose an Affidavit of Fact stating everything you know about this account." Enclosed with the letter was an affidavit of forgery that Milligan also requested Mrs. Aklagi complete and have notarized and returned. The letter also requested that Mrs. Aklagi "include a copy of [her] driver's license with signature and six samples of [her] signature on a separate sheet of paper." The letter indicated that once EquiCredit received those documents, it would research the issue and respond to Mrs. Aklagi.
Milligan sent the letter to Mrs. Aklagi at the address of the subject real estate in Virginia, despite the fact that EquiCredit had been advised that the Aklagis did not live there and did not purchase the property. EquiCredit contends the Virginia address is the only address for Mrs. Aklagi that it had in its "system," presumably meaning its computer system. Mrs. Aklagi's correct Overland Park address would have been in EquiCredit's files by virtue of the Equifax credit report that EquiCredit obtained when it originally processed the loan. However, EquiCredit was unable to locate its loan file. Even though Milligan sent the letter to Mrs. Aklagi at the address in Virginia, Milligan also sent a copy of the letter to Romious, which was consistent with Romious's directive that EquiCredit should send correspondence regarding the Aklagis directly to him. Romious received Milligan's letter. But, neither Romious nor the Aklagis responded to Milligan's letter.
On April 12, 2000, CSC Credit Services issued another credit report for Mrs. Aklagi that reflected a serious delinquency on the EquiCredit account.
On April 18, 2000, Milligan mailed a second letter that was nearly identical to her March 11, 2000-letter. Again, Milligan sent the letter to Mrs. Aklagi at the address in Virginia and sent a copy to Romious. Again, EquiCredit received no response.
Jim Dodd, counsel for EquiCredit, sent a letter directly to Romious on May 8, 2000. The letter referred to Romious's December 9, 1999-letter that claimed the loan was obtained by fraud, and stated that "[w]e have attempted to investigate the claim, however your clients have not cooperated and have not responded to our requests for a forgery affidavit." The letter warned that EquiCredit would proceed with foreclosure if it did not receive a response by May 22, 2000. Once again, neither Romious nor the Aklagis responded.
Dodd called Romious on May 22, 2000 and left a message. But, Romious never returned the call. Susan Dailey of EquiCredit's fraud department also called Romious and left a message, but again Romious did not return her call.
EquiCredit was aware that the Federal Bureau of Investigation was investigating the fraud. However, EquiCredit did not attempt to contact the FBI to determine the status of its efforts.
During the summer of 2000, the Aklagis sent letters to CBC Credit Services, CSC Credit Services, TRW/Experian, and Trans Union Credit Agency, informing these credit reporting agencies that the EquiCredit account was fraudulent. However, there is no evidence that any credit reporting agency at any time notified EquiCredit that EquiCredit needed to investigate the matter.4
On August 7, 2000, the Aklagis were denied credit from Bank of America, the owner of EquiCredit. The Aklagis were once again informed that they would not be able to obtain a loan unless the EquiCredit mortgage foreclosure was removed from their credit report. Plaintiffs also allege they lost profits due to their inability to purchase three properties because of problems with their credit report.
Based on these facts, the Aklagis assert against EquiCredit a claim under FCRA and a state law...
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Table of Cases
...299 Akers v. Prime Succession of Tenn., Inc., 387 S.W. 3d 495 (Tenn. 2012), 1122 Aklagi v. Nationscredit Financial Servs. Corp., 196 F. Supp. 2d 1186 (D. Kan. 2002), 209 Alaface v. National Inv. Co., 892 P.2d 1375 (Ariz. Ct. App. 1994), 744 Alaska Interstate Construction v. Pacific Diversif......