Alston v. Trans Union, LLC

• Court: U.S. District Court — District of Maryland
• Writing for the Court: THEODORE D. CHUANG United States District Judge
• Decision Date: 13 November 2014
• Docket Number: Civil Action No. TDC-14-1180
• Citation: Alston v. Trans Union, LLC, Civil Action No. TDC-14-1180 (D. Md. Nov 13, 2014)
• Parties: CANDACE ALSTON, Plaintiff, v. TRANS UNION, LLC, et al., Defendants.

CANDACE ALSTON, Plaintiff, v. TRANS UNION, LLC, et al., Defendants.

Civil Action No. TDC-14-1180

UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND

November 13, 2014

MEMORANDUM OPINION

This Fair Credit Reporting Act case is before the Court on Plaintiff Candace Alston's Motion for Partial Summary Judgment and her Motion for a Preliminary Injunction. ECF Nos. 23 and 47. Alston has brought suit against Trans Union, LLC and Experian Information Systems, LLC for what she alleges are negligent and willful violations of the FCRA based on the agencies' reporting of delinquencies on a Wells Fargo mortgage account, and on the agencies' investigative procedures in the wake of Alston's challenges to their reporting of that account. The issues before the Court are whether Alston has alleged sufficient undisputed facts to establish that Trans Union and Experian violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., such that she is entitled to judgment as a matter of law, and whether Trans Union and Experian should be enjoined from reporting the Wells Fargo mortgage account as delinquent for September and October 2011. The Court has reviewed the pleadings and supporting documents and heard oral argument on November 3, 2014. For the reasons oudined below, both motions are DENIED.

BACKGROUND

I. The Monarch/Wells Fargo Account

On November 12, 2010, Alston obtained a mortgage from Monarch Bank for $102,212,00. Experian Opp'n, Ex. 7, ECF No. 40-11. The terms of that mortgage required Alston to make monthly payments of $811.53, with payments to begin in January 2011. Mot. Sum. J., Ex. A.1, ECF No. 23-1. On November 16, 2010, the resulting Deed of Trust was recorded in the Prince George's County Circuit Court Land Records in Book 32175, pp. 5-17. Experian Opp'n, Ex. 8, ECF No. 40-12.

Alston immediately disputed the validity and terms of the loan. In documents dated November 12, 2010—the day she signed the original loan documents—Alston unilaterally executed riders to the Deed of Trust and the Note. The rider to the Deed included the following provision:

Any offset or claim which Borrower has now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

Experian Opp'n, Ex. 9 at 3, ECF No. 40-13. The rider to the Note indicated that the revised Note "supercede[d]" sections 1. 2, and 10 of the original Note, and contained a provision allowing Alston to "make all payments under this Note in the form of cash, check, money order, or promissory note." Experian Opp'n, Ex. 10 ¶ 2, ECF No. 40-14.

In a November 15, 2010 letter, Alston informed Monarch that she believed that "[t]he conditions [under] which I executed the Note and Deed of Trust may render both instruments void." Experian Supplement, Ex. 1 at 2, ECF No. 77-1. Specifically, she alleged that she was denied adequate advance opportunity to review the loan documents and also that she was"[d]enied an opportunity to negotiate the terms and conditions" of the loan. Id. She informed Monarch that "[n]ow that [she] ha[d] had sufficient time" to review the Note and Deed, she had created riders to those documents altering their terms to her satisfaction. Id. at 3. On December 20, 2010, Alston sent a second letter to Monarch again contesting the validity of the loan and also explaining the terms of the riders:

The Rider to Deed of Trust is now a part of the Deed of Trust. And the Rider to Note is now a part of the Note. 1 will record the Rider to Deed in Maryland Public Land Records. If you accept the Deed of Trust with the Rider to Deed and the Note with the Rider to Note, then you agree that:

1) Candace Alston will be credited for the Deposit of the Note; and

2) Monarch Bank is entitled to only the interest payments, not principal payments; and

3) Monarch Bank will provide Candace Alston with access to the demand deposit account created by her deposit or Monarch Bank will only receive the interest portion of the mortgage payments.

Experian Supplement, Ex. 2 at 2-3, ECF No. 77-2. On December 29, 2010, Alston recorded the Deed of Trust Rider at Book 32200, pp. 487-504 with the Prince George's County Land Records Division. Id. at 8-9.¹

In early December 2010, Monarch sold Alston's mortgage to Wells Fargo. Experian Opp'n, Ex. 11, ECF No. 40-15. In a letter dated December 7, 2010, Monarch Bank informed Alston of the change in loan servicers. Id In a letter dated December 27, 2010, Wells Fargo informed Alston that it was now servicing the loan. Mot. Sum J., Ex. D, ECF No. 23-5. In a January 20, 2011 letter to Wells Fargo, Alston disputed Wells Fargo's ownership of the loan,asserting that she had "received nothing from Monarch Bank verifying this alleged sale." Experian's Opp'n, Ex. 14 at 2, ECF 40-18. She further asserted that the "loan documents were signed under duress," which, she suggested, "may render the Note and Deed void." Id She concluded that because Wells Fargo's ownership of the "alleged 'loan' [wa]s under dispute," she was entitled to "withh[o]ld [payment] until the dispute is resolved." Id Alston indicated that to establish its valid ownership of the loan. Wells Fargo was required to provide her with, among other things, "a properly endorsed certified copy of the Note as it exists today." Id. at 3.

In a letter dated February 3, 2011, Wells Fargo again advised Alston that it was the servicer of the loan and provided her a copy of the Note and Deed of Trust as originally signed by Monarch and Alston. Mot. Sum. J., Ex. C at 2-5, ECF No. 23-4. In a letter dated March 3, 2011, Alston continued to contest Wells Fargo's status as servicer of the loan and again questioned the validity of the underlying mortgage itself, asserting that "a bona fide dispute exists between myself and Monarch as to the origination of this alleged 'loan.'" Mot. Sum. J., Ex. D, ECF No. 23-5. She also challenged the Note and Deed that Wells Fargo forwarded, explaining that both were "missing their respective Riders." Id.

Meanwhile, beginning in December 2010, Alston sent payments to Monarch for some portion—generally not the full amount—of her $811.53 monthly balance.² Experian Supplement, Ex. 5 at 2, ECF No. 77-5. Alston noted on each of these checks, "Do not deposit/cash before reading both Rider to Note and Deed of Trust Rider. Depositing/cashing this check constitute acceptance of the Amendments." Id. In a letter dated April 15,2011, Monarch returned all of the checks uncashed. Id. Monarch explained that the checks, "as presented toMonarch, are not acceptable," and that it would accept payment only with checks "without notes or annotations." Id. In a subsequent letter, dated June 7, 2011. Monarch reminded Alston that her loan had been sold to Wells Fargo and reiterated that it "c[ould not] accept any check that has annotations that reference the filing of an unauthorized amendment to your Deed of Trust." Id., Ex. 6, ECF No. 77-6.

In a letter dated July 5, 2011, Wells Fargo informed Alston—in response to her continued challenge to Wells Fargo's ownership of the loan—that it had a "valid loan and lien" on the property purchased with the November 2010 mortgage. Mot. Sum. J., Ex. E, ECF No. 23-6. It informed her as well that, as of the date of the letter, her mortgage was "in active foreclosure." Id. On August 4, 2011, Alston submitted a cashier's check for $6,492.24—a total of eight payments of $811.53—to Monarch Bank. Mot. Prelim, Inj. at 2. The check was made out to "Monarch Mortgage, Deed of Trust Book 32200, pp. 487-504," the land deed entry that included the Deed of Trust Rider that Alston had filed on December 29, 2010, Mot. Sum. J., Ex. F, ECF No. 23-7. Alston also annotated the payment coupon with "Deed of Trust Book 32280, pp. 487-504." Id. Monarch endorsed the check to Welts Fargo. Id., Ex. G., ECF No, 23-8.

Wells Fargo refused to accept the check. Mot. Sum. J. Ex H, ECF No. 23-9. On September 6, 2011, A Wells Fargo employee emailed the Institutional Risk Management ("IRM") Repurchase Responses division of Wells Fargo describing the check and asking how she should proceed. Id. The employee noted that the check was made payable to "Monarch Mortgage/Deed of Trust Book 32280 pp. 487-504." Id. IRM instructed the employee not to cash the check. Id. The next month. Wells Fargo transferred the loan back to Monarch. Experian Supplement, Ex. 8 at 2, ECF No. 77-8. In a letter dated October 28, 2011, Wells Fargo informed Alston of the transfer. Id. The cashier's check was then forwarded back to Monarch,and the endorsement from Monarch to Wells Fargo was crossed out with the explanation, "Endorsement voided." Mot. Sum. J. Ex G, ECF No. 23-8; Reply to Experian, Supp. Decl. ¶ 10, ECF No. 42-1.

Alston made no mortgage payments, either to Monarch or Wells Fargo, in September or October 2011. November 3, 2014 Hearing at 4:15 p.m., Alston v. Equifax (TDC-13-1230) and Alston v. Trans Union, et al. (TDC-14-1180). On November 16, 2011, Monarch cashed the August 2011 cashier's check only after crossing out the notation regarding the altered Deed of Trust. Id. at 4:14-4:16 p.m. That same day, Monarch also cashed a check from Alston for $2434.59—or three payments of $811.53—dated November 7, 2011. Id. That check also contained the notation "Deed of Trust Book 32200 pp. 487-504, a notation that Monarch crossed out before cashing the check. Id.; Experian Supplement, Ex. 12 at 4, ECF No. 77-12.

II. The Trans Union and Experian Credit Report Disputes

In July 2011, Alston ordered her credit report from Trans Union and Experian. Mot. Sum J., Exs. I.1, I.2, ECF No. 23-10. Both credit reporting agencies listed her as 120+ days past due on her Wells Fargo mortgage account, with a past due balance of $4,057. Id. Alston filed online disputes with both agencies. Trans Union Opp'n, Ex. A ¶ 13, ECF 37-2; Experian Opp'n, Ex. 5 ¶ 15, ECF 40-9. In her Experian dispute, Alston...