Bolich v. Nelnet Servicing, LLC
| Docket Number | 8:21-cv-886-CEH-AEP |
| Decision Date | 12 July 2023 |
| Parties | MARK BOLICH, JR., Plaintiff, v. NELNET SERVICING, LLC and NELNET DIVERSIFIED SOLUTIONS, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on Defendants Nelnet Servicing LLC and Nelnet Diversified Solutions, LLC's Motion for Summary Judgment (Doc. 79), Plaintiff Mark Bolich, Jr.'s Response in Opposition (Doc. 101), and Defendants' Reply (Doc. 104). In this Fair Credit Reporting Act (“FCRA”) action, Plaintiff alleges that Defendants conducted an unreasonable investigation into his credit reporting dispute, which alleged that they furnished inaccurate or incomplete information regarding his student loan payment history to credit reporting agencies. Defendants seek summary judgment as to the sole remaining count of the Amended Complaint, Count V.
Upon review and consideration, and being fully advised in the premises, the Court will grant the motion for summary judgment because no reasonable factfinder could conclude that Defendants' reporting was inaccurate. As a result Defendants are entitled to judgment as a matter of law.
Plaintiff Mark Bolich took out student loans in approximately 2006. Doc. 97 at 1. By 2018, five of the loans were serviced by Defendant Nelnet Servicing, LLC (“Nelnet”), while one loan was serviced by its parent company, Defendant Nelnet Diversified Solutions, LLC, d/b/a Great Lakes Educational Loan Services, Inc. (“Great Lakes”). Id. at 3.
Nelnet and Great Lakes are furnishers of information to credit reporting agencies (“CRAs”). Id. at 2. They maintain automated processes for transmitting borrowers' payment information to CRAs monthly. Id. The monthly report captures “a snapshot of the account as of the last day of the month.” Doc. 82 at 19. Defendants' corporate representative testified that their policy is to report accounts as delinquent only when they are 90 days or more past due. Id. at 26; Doc. 80-1 at 3.
Plaintiff did not make any payments on the five Nelnet loans between June and August 2018. Doc. 97 at 3. On August 31, 2018, Nelnet reported to the CRAs that the accounts were 90 days or more past due. Id. Nelnet did not report the accounts as delinquent for June or July. Id. at 4. In September 2018, Plaintiff requested, and Nelnet granted, a hardship forbearance for the payments that had been due from June through August. Id. at 3; Doc. 80-1 at 47-51. The forbearance brought the accounts current as of the date it was processed, meaning that the past-due amount was cleared, and Plaintiff was only responsible for making monthly payments going forward. Doc. 97 at 3; Doc. 82 at 41-42. The forbearance agreement did not include any representations or promises with respect to credit reporting for the delinquent or forbearance periods. Doc. 80-1 at 30. After the forbearance took effect, Nelnet's records listed the accounts as being in forbearance status from June 2 to September 1, 2018. Doc. 80-1 at 47-51. However, Nelnet continued furnishing information to the CRAs that the accounts' status for the month of August 2018 was 90 days past due. Doc. 97 at 3.
Defendants' corporate representative testified that their company policy is to continue reporting a delinquency irrespective of a subsequent forbearance; they will not retroactively change a past due report for an account that was in repayment status at the time of the delinquency. Doc. 82 at 31-33. Defendants have the technical capability of retroactively changing a past due report or adding a note that indicates a payment was not required for a given month. See id. at 30-40. However, their representative testified that the written policies providing for that type of change apply only in limited circumstances, such as an in-school deferment or a natural disaster forbearance. Id. at 32, 33, 35, 37-38.
With respect to the Great Lakes loan, Plaintiff did not timely make all required payments between February 2018 and December 2019. Doc. 97 at 4. His account was not in forbearance at any time during this period. Id. Great Lakes reported Plaintiff's account as zero days past due in April 2019, 90 days past due in May, 120 days past due in June, 90 days past due in July, 120 days past due in August, and zero days past due in September. Id. Defendants' corporate representative testified that Plaintiff made a payment in July 2019 that cured part of the arrearage and brought the past-due balance back to 90 days instead of 120. Doc. 81 at 6, 90. He made another payment in September 2019 that brought the past-due balance below 90 days, and then it remained below that threshold. Id. Plaintiff paid off all his student loans in full in August 2020. Id.
In 2021, Plaintiff initiated a dispute with the CRAs regarding Defendants' reporting of the Nelnet and Great Lakes loans as past due in August 2018 and May through August 2019, respectively. Doc. 97 at 2-3. After performing an investigation, Defendants maintained that their reporting was accurate and declined to make any changes. Id. at 3.
Plaintiff initiated the instant FCRA action on April 14, 2021. Doc. 1. Initially, he alleged FCRA violations by all three CRAs and another furnisher, in addition to Defendants, but those claims subsequently settled. See id.; Docs. 61, 63, 64, 85. The only remaining claim of the Amended Complaint is Count V, which is brought against Nelnet and Great Lakes. In this count, Plaintiff alleges that the Defendants willfully or negligently furnished incorrect or incomplete information to the CRAs, and failed to conduct a reasonable investigation of his disputes. Doc. 42 ¶ 103. He alleges that they inaccurately reported that the accounts were late during the disputed months despite knowing that all six loans were in forbearance at the time. Id. ¶ 105. Plaintiff also alleges that Great Lakes “falsely and inaccurately reported an illogical delinquency progression” of 90-120-90-120 days past due between May and August 2019. Doc. 42 ¶¶ 106, 108. The Defendants now move for summary judgment as to Count V. Doc. 79.
Summary judgment is appropriate only when the court is satisfied that “there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law” after reviewing the “pleadings, the discovery and disclosure materials on file, and any affidavits[.]” Fed.R.Civ.P. 56(c)(2). In determining whether a genuine issue of material fact exists, the Court must consider all the evidence in the light most favorable to the nonmoving party. Shotz v. City of Plantation, Fla., 344 F.3d 1161, 1164 (11th Cir. 2003). Issues of fact are “genuine only if a reasonable jury, considering the evidence presented, could find for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). A fact is “material” if it may affect the outcome of the suit under governing law. Id.
The moving party bears the initial burden of stating the basis for its motion and identifying those portions of the record demonstrating the absence of genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986); Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir. 2004). That burden can be discharged if the moving party can show the court that there is “an absence of evidence to support the nonmoving party's case.” Celotex, 477 U.S. at 325. “Only when that burden has been met does the burden shift to the non-moving party.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
“[I]n order to survive summary judgment, the nonmoving party must set forth specific facts showing there is a genuine issue for trial.” Johnson v. New Destiny Christian Ctr. Church, Inc., 826 Fed.Appx. 766, 770 (11th Cir. 2020) (citing Anderson, 477 U.S. at 249-50). “[U]nsupported ‘conclusory allegations' do not suffice.” Middlebrooks v. Sacor Fin., Inc., 775 Fed.Appx. 594, 596 (11th Cir. 2019). Likewise, “[a] ‘mere existence of a scintilla of evidence' cannot suffice to create a genuine issue of material fact.” Johnson, 826 Fed.Appx. at 770 (quoting Anderson, 477 U.S. at 252).
Defendants argue that they are entitled to summary judgment because Plaintiff has failed to establish that the information they furnished to the CRAs was inaccurate, which is a threshold requirement for a claim that a furnisher's investigation into a dispute was unreasonable. Doc. 79. In opposition, Plaintiff argues that genuine issues of fact exist as to whether the reporting was inaccurate, incomplete, or misleading, and whether Defendants' investigation was reasonable. Doc. 101.
The FCRA imposes certain obligations on credit reporting agencies (“CRAs”) and furnishers of information to them. Felts v. Wells Fargo Bank, N.A., 893 F.3d 1305, 1312 (11th Cir. 2018). Furnishers are required to report accurate information to CRAs. 15 U.S.C. § 1681s-2(a). They must also conduct a reasonable investigation of any dispute that is lodged by a consumer regarding the information they furnish. Id. § 1681s-2(b). Although a private right of action exists only with respect to the reasonableness of their investigation, id., the plaintiff must also take on the accuracy requirement:
[A] plaintiff asserting a claim against a furnisher for failure to conduct a reasonable investigation cannot prevail on the claim without demonstrating that had the furnisher conducted a reasonable investigation, the result would have been different; i.e., that the furnisher would have discovered that the information it reported was inaccurate or incomplete, triggering the furnisher's obligation to correct the information....
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