Billups v. PHH Mortg. Corp.

Decision Date27 April 2021
Docket Number19 C 7873
PartiesANDREA BILLUPS, Plaintiff, v. PHH MORTGAGE CORPORATION, as successor by merger to OCWEN LOAN SERVICING, LLC, Defendant.
CourtU.S. District Court — Northern District of Illinois

CHARLES P. KOCORAS, District Judge:

In this case, Plaintiff Andrea Billups, acting pro se, alleges that PHH Mortgage Corporation, as successor by merger to Ocwen Loan Servicing, LLC, ("Ocwen"), obtained her credit report in violation of the Fair Credit Reporting Act ("FCRA"), sent misleading communications in violation of the Fair Debt Collection Practices Act ("FDCPA"), and committed the common law tort of intrusion upon seclusion after Billups' mortgage loan was discharged through bankruptcy in 2011. According to Billups, Ocwen had no reason to pull her credit when the Chapter 7 bankruptcy extinguished her personal liability on the mortgage loan. In response, Ocwen asks the Court to dismiss Billups' FCRA claim largely because Ocwen "had a permissible purpose to access Billups's credit report." ECF No. 67 at 4 (emphasis added). But whether Ocwen actually "had a permissible purpose" is a fact question, not a pleading technicality meant to inadvertently trip up pro se plaintiffs. While Ocwen's arguments may prove meritorious at summary judgment, the Court will not prematurely enter a judgment when we must construe allegations in the light most favorable to Billups. At the same time, Ocwen is correct that Billups has failed to plead an FDCPA or intrusion upon seclusion claim. So we grant-in-part and deny-in-part Ocwen's Motion.


This FCRA, FDCPA, and intrusion upon seclusion case chiefly concerns Ocwen's conduct during a lengthy foreclosure action against Billups in the Circuit Court of Cook County throughout 2017 and 2018, which the Illinois Appellate Court affirmed. See Deutsche Bank Nat'l Tr. Co. as Tr. for Popular ABS, Inc. Series 2007-A v. Billups, 2020 IL App (1st) 191934-U, ¶ 13, appeal denied sub nom. Deutsche Bank Nat'l Tr. Co. v. Billups, 163 N.E.3d 717 (Ill. 2021).

In her operative Second Amended Complaint, Billups alleges that Ocwen, a debt collector under 15 U.S.C. § 1692a(6), "illegally obtain[ed] her credit report on a debt that was discharged through bankruptcy in September, 2011, and for a period beginning in 2013, up and through December 1, 2017." Compl., ¶¶ 7, 10, 35.1 As a result, Billups learned on December 1, 2017 that Ocwen invaded her privacy by obtaining her credit report in one of four of her cases currently pending in the Northern District. See id. at ¶36 (referencing Billups v. Deutsche Bank National Tr. as Tr. for the Benefit of the Certificate Holders of Popular ABS, Inc. Mortgage Pass-through Certificates Series 2007-A, et al., No. 1:15-cv-03165 (N.D. Ill.) (Ellis, J.) (voluntarily dismissed without prejudice)).2 Billups further alleges that the report was "unlawfully obtained and disseminated." Id. at ¶ 37. According to Billups, there was "no Court Order or Grand Jury subpoena" authorizing Ocwen to obtain her credit report. Id. at ¶ 69. Because of these actions, Billups "was unable to acquire credit necessary to purchase a property and other requests for credit" were denied "as a result of a hard pull" that "reduced her credit score" and caused "denials of numerous requests for credit." Id. at ¶ 70.

Against this backdrop, Billups alleges that Ocwen: violated the FCRA, 15 U.S.C. § 1681 et. seq. (Counts I and II); violated the FDCPA, 15 U.S.C. § 1692 et. seq. (Counts III and IV); and committed the common law tort of inclusion upon seclusion (Counts V and VI). Ocwen now moves to dismiss under Federal Rule of Civil Procedure 12(b)(6).


As a pro se litigant, we construe Billups' pleadings liberally, but this does not mean that Billups does not have to follow the rules of civil procedure. See Egwuenu v. Charles Schwab & Co., 834 F. App'x 245, 246 (7th Cir. 2021); see also Trinh v. Weltman, Weinberg & Reis Co., L.P.A., 2012 WL 5824799, at *2 (N.D. Ind. 2012) (discussingthis standard in a similar FCRA case). In resolving this Motion specifically, the Court assumes the truth of the operative complaint's well-pleaded factual allegations, but not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016). The Court also considers "documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts in Billup's brief opposing dismissal, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013) (cleaned up). The facts are set forth as favorably to Billups as those materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In discussing the facts at the pleading stage, the court does not vouch for their accuracy, but still construes them in the light most favorable to Billups. See Goldberg v. United States, 881 F.3d 529, 531 (7th Cir. 2018).


Against this broad legal backdrop, the Court now assesses and rules on the FCRA, FDCPA, and common law claims in turn.

1. Fair Credit Reporting Act Claim

Congress enacted the FCRA "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007); see also 15 U.S.C. § 1681(b). To achieve this goal, the FCRA imposes civil liability on a person that willfully or negligently obtains a credit report for an unauthorized purpose. A plaintiff may recover actual damages fornegligent violations, 15 U.S.C. § 1681 o(a)(1), and actual or statutory and punitive damages for willful ones, id. § 1681n(a)(1)-(2); Safeco, 551 U.S. at 53.

Merely accessing a credit report without consent does not alone cause an entity to incur FCRA liability. See Stergiopoulos v. First Midwest Bancorp, Inc., 427 F.3d 1043, 1046 (7th Cir.2005). Rather, it is the "purpose behind the inquiry that is determinative." Perez v. Portfolio Recovery Assocs., LLC, 2012 WL 5373448, at *2 (D.P.R. 2012) (emphasis in the original). The Act provides that a "person shall not use or obtain a consumer report for any purpose unless . . . the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section." See 15 U.S.C. § 1681b(f)(1). "So the purpose is key." Rogers v. Wells Fargo Bank, N.A., 2020 WL 1081721, at *3 (N.D. Ill. 2020) (Seeger, J.). "Section 1681b(a) authorizes credit agencies to furnish credit reports for certain specifically enumerated purposes - and only those purposes." Id. (emphasis added). "To state a claim under section 1681b, a complaint must allege that (1) there was a consumer report; (2) the defendant used or obtained it; and (3) the defendant did so without a permissible statutory purpose." Id. at *4.

The Complaint plainly alleges the first two elements and the real heart of this case is about whether Ocwen had a "permissible purpose" to access Billups' credit report, which would be a "complete defense" to this claim. Betz v. Jefferson Cap. Sys., LLC, 68 F. Supp. 3d 130, 133 (D.D.C. 2014). Preparation for litigation can be a "permissible purpose." Allen v. Kirkland & Ellis, 1992 WL 206285, at *2 (N.D. Ill. 1992)("Preparation for litigation regarding a business debt qualifies as a permissible purpose under the broad language of § 1681b(3)(E)."); accord Minter v. AAA Cook Cty. Consolidation, Inc., 2004 WL 1630781, at *4 (N.D. Ill. 2004). Collecting a debt can also be a permissible purpose. Stewart v. Credit Control, LLC, 2020 WL 2307441, at *2 (N.D. Ill. 2020) (collecting cases and citing Miller v. Wolpoff & Abramson, LLP, 309 Fed. App'x 40, 43 (7th Cir. 2009) (nonprecedential disposition)). So too can collecting a mortgage debt be a permissible purpose. Pignato v. PHH Mortg. Corp., 2020 WL 7382307, at *16 (N.D. Ga. 2020) ("As Plaintiff's loan servicer, it was permissible for Defendant to obtain Plaintiff's credit report to use that information in connection with the collection or review of his mortgage, pursuant to 15 U.S.C. § 1681b(a)(3)(a)."); Best v. Bank of Am., 2015 WL 5124463, at *7 (E.D.N.Y. 2015) (similar). In line with these permissible purposes, Ocwen tries to depict what happened to Billups as permissible. But, at least in this context, this is a fact question better decided in a different procedural posture—certainly not on a motion to dismiss where we must construe the facts liberally in Billups' favor.

Undeniably, Ocwen is correct that Billups must still "aver sufficient facts to establish to a plausible degree that Defendant obtained the credit reports for an impermissible purpose, and that their conduct was either willful or negligent." Perez, 2012 WL 5373448, at *2 (emphasis added); accord Robinson v. Cap. One Bank (USA), N.A., 2020 WL 5819664, at *10 n.6 (D. Kan. Sept. 30, 2020) (collecting cases). Ocwen is also correct that Billups' Complaint is largely bereft of rich, textured factualnarratives. But Billups is not required to make her pleadings artful to get through the courthouse doors—especially because she is a pro se litigant. At bottom, deciding the "permissible purpose" question is dangerously close to a factual finding, which the Court cannot make on a motion to dismiss.

The key fact that gets Billups past Ocwen's Motion is the alleged mortgage debt was discharged in bankruptcy in 2011, which Billups alleges is the "core case." Compl., ECF No. 61 at ¶ 1; ¶ 35 (alleging that Ocwen obtained her credit report on a debt that "was discharged through bankruptcy in September 2011."). Billups' response brief is even more forceful on this point. See ECF No. 69 at 5-6; 8 ("there could not have been attempt to enforce a mortgage through ongoing mortgage litigation as Defendants would lead this court to believe [,] because the Mortgage was discharged through Chapter 7...

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