Carvalho v. Equifax Information Services, LLC

• Decision Date: 02 December 2008
• Docket Number: Case No. C 08-1317 JF (HRL).
• Citation: 588 F.Supp.2d 1089
• Court: U.S. District Court — Northern District of California
• Parties: Noemia CARVALHO, on behalf of herself and others similarly situated, Plaintiff, v. EQUIFAX INFORMATION SERVICES, LLC; Experian Information Solutions, Inc.; and TransUnion LLC, Defendants.

Page 1089

588 F.Supp.2d 1089

Noemia CARVALHO, on behalf of herself and others similarly situated, Plaintiff, v. EQUIFAX INFORMATION SERVICES, LLC; Experian Information Solutions, Inc.; and TransUnion LLC, Defendants.

Case No. C 08-1317 JF (HRL).

United States District Court, N.D. California, San Jose Division.

December 2, 2008.

Ron Keith Bochner, Law Office of Ron Bochner, Santa Clara, CA, for Plaintiff.

Thomas P. Quinn, Nokes & Quinn, Laguna Beach, CA, Barry Goheen, Lewis P. Perling, King & Spalding LLP, Atlanta, GA, Deanna L. Johnston, Kelli A. Crouch, Suzanne Cate Jones, Jones Day, San Francisco, CA, Stephen Julian Newman, Brian C. Frontino, Darius K.C. Zolnor, Strook & Strook, Los Angeles, CA, for Defendants.

ORDER GRANTING MOTIONS FOR SUMMARY JUDGMENT, DENYING MOTION TO CERTIFY CLASS, AND DENYING MOTION FOR LEAVE TO AMEND

JEREMY FOGEL, District Judge.

Plaintiff Noemia Carvalho ("Plaintiff") alleges that Equifax Credit Information Services, LLC ("Equifax"), Experian Information Solutions, Inc. ("Experian"), and TransUnion LLC ("TransUnion") (collectively, "Defendants") violated her rights under the California Consumer Credit Reporting Agencies Act ("CCRAA"), which requires consumer credit reporting agencies to investigate disputed credit information and to cooperate with a consumer's investigation inquiries. Cal. Civ.Code § 1785.16. Plaintiff alleges that Defendants failed to conduct a reasonable reinvestigation of a disputed debt appearing on her credit report, and failed adequately to apprise her of the reinvestigation procedures used. Plaintiff now seeks to certify two classes of similarly situated California consumers. The first class comprises consumers allegedly injured by credit report reinvestigation procedures that do not comply with § 1785.16 of the CCRAA. The second class comprises consumers who allegedly did not receive an adequate description of those procedures, as required by the statute. Plaintiff seeks injunctive relief and, alleging that Defendants knowingly and intentionally violated the CCRAA, an award of punitive damages. Defendants move for summary judgment on all claims and request that the Court decide their potentially casedispositive motions before addressing Plaintiff's motion for class certification.¹ Plaintiff moves the Court for leave to amend her complaint to add claims for negligent violation of the CCRAA and its counterpart provisions in the federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681i. As set forth in detail below, Plaintiff is unable to identify a factual inaccuracy on her credit report that Defendants could have discovered in conducting any legally-mandated reinvestigation of the disputed debt. Because such a showing is essential to each of Plaintiff's claims, including those that Plaintiff seeks to add by amendment, Defendants' motions for summary judgment will be granted. Plaintiff's motion for class certification will be denied as moot, and her motion for leave to amend the complaint will be denied on the ground that amendment would be futile.

I. FACTUAL BACKGROUND

On October 19, 2001, Plaintiff visited Bayside Hospital ("Bayside") seeking treatment for knee pain. Deposition of Noemia Carvalho, Vol. 1, Johnston Decl., Ex. A ("Pl. Depo. I"), at 35:19-22; Deposition of Noemia Carvalho, Vol. 2, Johnston Decl., Ex. B ("Pl. Depo. II"), at 372:3-11. Upon her arrival, and before receiving any medical care, Plaintiff completed and signed an Agreement with Bayside (the "Agreement") establishing her responsibility for payment for any medical services rendered. The Agreement included the following provision:

Bayside Medical Group, Inc., will bill your insurance as a courtesy to you. If your insurance does not pay the claim within 90 days of the date of service, the balance of your account will be your responsibility.

Pl. Depo. I, Ex. C-3. The Agreement also included the following clause: "Assignment and Release: I hereby authorize my insurance company to pay benefits directly to Bayside Medical Group, Inc. and I am financially responsible for noncovered services." Id. Plaintiff has acknowledged that she understood these statements and signed the Agreement. Pl. Depo. I, at 35:9-18, 40:13-42:7. After doing so, Plaintiff saw a physician who diagnosed her condition and prescribed medication. Pl. Depo. II, at 372:2, 372:13-24. The treatment resulted in a charge of $118. See Pl. Depo. I, 51:1-8 & Ex. C-8. The parties dispute whether at the time of the visit Plaintiff was insured by Blue Cross or Blue Shield (or at all), and whether Bayside billed the correct insurer (or any insurer).² For the present purposes, it is sufficient to note that no insurer had paid Plaintiff's bill within the ninety-day period prescribed by the Agreement. Accordingly, on January 15, 2002, Bayside sent Plaintiff a bill for the services she received. Pl. Depo. I, Ex. C-8. The bill indicated that Plaintiffs insurer had declined coverage and that payment was due to Bayside within fourteen days pursuant to the Agreement.

Plaintiff declined to pay the bill for approximately one year, at which point Bayside sent Plaintiff a final billing notice on March 6, 2003. Pl. Depo. I, Ex. C-10. The notice indicated that if Plaintiff did not make payment in full within seven days, Bayside would transfer the account to a collection agency. Id. Plaintiff did not pay the bill, and Bayside assigned the debt to Credit Consulting Services, Inc. ("CCS") for collection. Id. 58:23-59:23. On August 8, 2003, CCS sent Plaintiff a collection notice stating that if Plaintiff "paid [the debt] in full ... [,] all collection activity [would] be stopped." Frontino Decl., Ex. H. The notice also stated that "[i]t is the policy of [CCS] to report all eligible accounts to Experian, Equifax and TransUnion Credit Reporting Services." Id. On September 15, 2003, CCS sent Plaintiff a letter with the reminder, in all capital letters, "IF PAYMENT IN FULL REACHES THIS OFFICE BY 10-8-03, THEN THIS COLLECTION ACCOUNT WILL NOT BE REPORTED ON YOUR EXPERIAN, EQUIFAX, AND TRANSUNION CREDIT REPORTS. PROTECT YOUR CREDIT, SEND PAYMENT IN FULL." Pl. Depo. I, Ex. C-15. Plaintiff has acknowledged that she received this notice but did not settle the debt. Id. at 92:25-93:20. On October 31, 2003, CCS sent Plaintiff a third warning letter stating: "YOU HAVE FAILED TO SEND U.S. PAYMENT. YOU HAVE IGNORED OUR PREVIOUS DEMANDS. UNLESS YOU RESPOND TO THIS NOTICE IMMEDIATELY, EXPECT THE RESULTS OF YOUR OWN NEGLECT. PAYMENTS MUST BE MADE TO THIS OFFICE WITHOUT FURTHER NOTICE." Pl. Depo. I, Ex. C-18. Plaintiff received this letter but did not pay the bill. Id. at 96:9-18. CCS reported the debt to Defendants, which added it to her credit report. See Complaint, ¶ 7.

Upon learning that the CCS debt appeared on her credit report, Plaintiff submitted four letters to Defendants disputing the validity of the debt. In her first letter of dispute, sent to Defendants on September 10, 2004, Plaintiff asserted that the CCS item on her credit report was inaccurate because Blue Cross should have paid the underlying debt to Bayside. Pl. Depo. I, Ex. 16. The letter was accompanied by sixteen pages of documentation, including (1) a benefits page apparently from Plaintiff's employer identifying "Blue Cross PPO Plan" as her "Medical" plan during her employer's 2001 benefit year, (2) copies of two insurance cards, one identifying "Blue Cross/Blue Shield" and the other "Blue Cross of California" as her insurer, but neither indicating a coverage year, (3) copies of correspondence Plaintiff claimed to have sent to Blue Cross, but without responses from Blue Cross, (4) an Explanation of Benefits page Plaintiff received from Blue Shield of California indicating that Plaintiff was not then covered by Blue Shield of California, (5) copies of correspondence Plaintiff received from CCS and a credit report reflecting the CCS item, and (6) a bill Plaintiff received from Bayside stating, in reference to insurance coverage, "NOT ELIGIBLE AT THE TIME OF S[ERVICE].... PLEASE CALL YOUR INSURANCE." See Bochner Decl. ISO Mot. to Certify Class, Ex. A.

Defendants began their reinvestigations on September 20, 2004. See Johnston Decl., ¶ 25, Ex. E; Fluellen Decl., ¶ 17; Terry Decl., ¶ 9. Defendants determined that none of the documentation submitted by Plaintiff met their documentation standards and did not consider it further.³ Consistent with their standard procedures, Defendants recorded the dispute on a Consumer Dispute Verification ("CDV") form, which typically contains a brief description and code number characterizing the dispute, as well as the consumer's name, address, and social security number, if available. See Terry Decl., ¶ 5.⁴ Defendants each sent a CDV form to the information furnisher, CCS. See Terry Decl., ¶ 9; Johnston Decl., ¶ 25, Ex. E; Fluellen Decl., ¶ 17. CCS sent confirmation to Defendants that the disputed entry was "accurate," and Defendants updated Plaintiffs file accordingly. Terry Decl., ¶ 10; Fluellen Decl., ¶ 17. Defendants also sent Plaintiff a notice summarizing the update to her file and further apprising her of options for resolving the dispute. See Pl. Depo. I, Ex. 23; Fluellen Decl., ¶¶ 17-18; Terry Decl. ¶ 11.

On April 1, 2005, Plaintiff sent a letter to Defendants requesting (1) a description of the procedures used in reinvestigating the disputed item, and (2) inclusion of the following note in Plaintiffs credit report: "I dispute the above Credit Consulting Services Acct. No. * * *4329 on my Credit Report. These bills arose out of the medical treatment I was covered for by Blue Cross of California. For some reason that is unknown to me, they did not pay these medical bills." See Terry Decl., Ex. D. Defendants responded to Plaintiffs request in several ways. Equifax did not initiate a further reinvestigation because it did not appear that Plaintiff had requested one. Fluellen Decl., ¶ 18. Although it is unclear whether Equifax added Plaintif...