Jones v. Credit Bureau of Huntington, Inc.

• Decision Date: 13 November 1990
• Docket Number: No. 19479,19479
• Citation: 184 W.Va. 112,399 S.E.2d 694
• Parties: Billy J. JONES and Sandra L. Jones v. The CREDIT BUREAU OF HUNTINGTON, INC.
• Court: West Virginia Supreme Court

Page 694

399 S.E.2d 694

184 W.Va. 112

Billy J. JONES and Sandra L. Jones v. The CREDIT BUREAU OF HUNTINGTON, INC.

No. 19479.

Supreme Court of Appeals of West Virginia.

Nov. 13, 1990.

[184 W.Va. 114] Syllabus by the Court

1. In a case involving the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 to 1681t, federal law will control the substantive rights created by such Act while state law will control the procedural matters of the case.

2. The Fair Credit Reporting Act, 15 U.S.C. §§ 1681 to 1681t, creates a federal statutory action, independent from a common-law action in tort, and the plaintiff need only prove that he or she sustained actual damages resulting from a willful or negligent failure to comply with the Act in order to recover such damages. The specific amount of the actual damages is to be determined by the trier of fact and this amount may include compensation for humiliation, emotional distress, injury to the plaintiff's reputation, and injury to the plaintiff's credit rating.

3. "In determining whether there is sufficient evidence to support a jury verdict the court should: (1) consider the evidence most favorable to the prevailing party; (2) assume that all conflicts in the evidence were resolved by the jury in favor of the prevailing party; (3) assume as proved all facts which the prevailing party's evidence tends to prove; and (4) give to the prevailing party the benefit of all favorable inferences which reasonably may be drawn from the facts proved." Syl. pt. 5, Orr v. Crowder, --- W.Va. ----, 315 S.E.2d 593 (1983), cert. denied, 469 U.S. 981, 105 S.Ct. 384, 83 L.Ed.2d 319 (1984).

4. In an action under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 to 1681t, in addition to recovery of actual damages, punitive damages may also be recovered. In such an action, it is not necessary that punitive damages bear a reasonable relationship to actual damages.

5. In an action under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 to 1681t, in assessing punitive damages, the jury may consider: (1) the remedial purpose of the Act; (2) the harm to the consumer intended to be avoided or corrected by the Act; (3) the manner in which the consumer reporting agency conducted its business; and (4) the consumer reporting agency's income and net worth.

Bruce A. Toney, Flynn, Max, Miller & Toney, Huntington, for Credit Bureau of Huntington.

James W. St. Clair, St. Clair & Levine, Huntington, for Billy J. Jones, Sandra L. Jones.

McHUGH, Justice:

This case is before the Court upon the appeal of the Credit Bureau of Huntington, Inc., the defendant below. The appellees are Billy J. Jones and Sandra L. Jones, the plaintiffs below. The appellant has asked this Court to review the final judgment of the Circuit Court of Cabell County. We affirm that judgment.

I

The appellees own and operate a real estate appraisal business. The appellee, Billy Jones, is qualified as a real estate appraiser and is licensed as a real estate broker in West Virginia and Ohio.

The appellant, Credit Bureau, is a consumer reporting agency. At the time the complaint was filed in this action, William P. Hall, Jr. was president and general manager of the appellant and Kimberly Jo Robertson was a full-time employee of the appellant.

Robertson began working for the appellant in September, 1980. She was trained to report credit items to the appellant for the purpose of compiling a report entitled the "Weekly Public Record Bulletin," which consists of items from public records in six different county clerk's offices.

The "Weekly Public Record Bulletin" is issued to approximately 275 customers of the appellant throughout fifteen counties in West Virginia, Kentucky and Ohio. These customers include businesses, individuals, attorneys, doctors, dentists, banks, and retail department stores. The appellant's customers utilize the information in the "Weekly Public Record Bulletin" to determine the credit worthiness of consumers before extending credit to such consumers.

The appellant's credit reporting services can also be instantly accessed by credit bureaus in all fifty states through a network called the "Transunion System." The "Transunion System" contains over 800,000 consumer files.

In March, 1987, Robertson's duties were expanded to include the reporting of judgment orders filed in county circuit clerk's offices, which would then be published in the "Weekly Public Record Bulletin." This duty involved obtaining the name of the prevailing party, the name of the party against whom the judgment was rendered, the amount of the judgment, and any pertinent information by which to identify the parties.

On September 9, 1987, Robertson inspected the civil order book in the circuit clerk's office in Cabell County, and, as a result of such inspection, reported to the appellant that a judgment order had been rendered in favor of Farmers Federal Savings & Loan Association against the appellees, in the amount of $20,000. This information was published by the appellant in the September 12, 1987 issue of the "Weekly Public Record Bulletin." This issue was then distributed to the appellant's customers, numbering approximately 275.

In reality, there was no such judgment rendered against the appellees. Rather, this information reported by Robertson was obtained from data concerning a deficiency judgment sought by Farmers Federal against the appellees on a foreclosure sale. The amount of the judgment was for $16,068.50, and the original note was for $20,000. A court ruling which denied Farmers Federal's motion for summary judgment was the information reported by Robertson and ultimately published by the appellant.

On September 14, 1987, three clients of the appellees' real estate appraisal business contacted the appellees, requesting information concerning the incorrectly published information in the "Weekly Public Record Bulletin."

The appellee, Billy Jones, notified William P. Hall, Jr., president and general manager of the appellant credit bureau, and the two, along with counsel for the appellee went to the courthouse to verify the accuracy of the information published by the appellant.

After concluding that the published information was, in fact, incorrect, the appellant placed a correction in the next issue of the "Weekly Public Record Bulletin," which was published on September 19, 1987. ¹ The appellees subsequently instituted an action in circuit court under the Fair Credit Reporting Act (FCRA), a federal law, codified in 15 U.S.C. §§ 1681 to 1681t. ² The case was tried by a jury and a verdict was returned in favor of the appellees for compensatory damages in the amount of $4000 and punitive damages in the amount of $42,500.

The appellant's motion to set aside, alter, or amend the damage awards was denied by the circuit court. This appeal ensued.

II

On appeal, the Credit Bureau contends that the circuit court committed error by not setting aside, altering or amending: (1) the jury verdict of $4000 compensatory damages; and (2) the jury verdict of $42,500 punitive damages. We address these assignments in order. ³

III

We first address the appellant's contention that the circuit court committed error by not setting aside the jury verdict of $4000 compensatory damages. Specifically, the appellant maintains that the jury's verdict in this regard is excessive and not supported by the evidence. We disagree.

The appellant cites several precedents of this Court holding that there must be some data established by proof from which the amount of loss suffered may be determined. For example, in Ripley v. C.I. Whitten Transfer Co., 135 W.Va. 419, 63 S.E.2d 626 (1951), this Court, relying upon principles set forth in previous decisions, held:

Actual existence of damages as well as the amount thereof must be disclosed with reasonable certainty. Stone v. Gilbert, 133 W.Va. 365, 56 S.E.2d 201, 205. There must be some data established by proof from which the amount of loss suffered by the plaintiff may be determined. Newman v. Robson & Prichard, 86 W.Va. 681, 684, 104 S.E. 127. 'Where the record contains no substantial testimony in support of the quantum of a verdict, it will be set aside.' Railway Co. v. Allen, 113 W.Va. 691, 169 S.E. 610.

Ripley, 135 W.Va. at 423, 63 S.E.2d at 628.

However, the FCRA is a federal statutory enactment, and it has been held that because the remedies provided by the FCRA are of federal statutory nature, the question of any right to relief in the form of damages is not to be determined by state court decisions. Thornton v. Equifax, Inc., 619 F.2d 700, 705 (8th Cir.), cert. denied, 449 U.S. 835, 101 S.Ct. 108, 66 L.Ed.2d 41 (1980). See also Ackerley v. Credit Bureau of Sheridan, Inc., 385 F.Supp. 658, 661 (D.Wyo.1974).

State courts have recognized the same. "[I]n a Fair Credit Reporting Act case local laws apply only to matters of practice and procedure while substantive rights created by the Act are controlled by federal law and not subject to fifty different rules of interpretation." Credit Bureau of Pulaski County, Inc. v. LaVoie, 627 S.W.2d 49, 52 (Ky.Ct.App.1982). See also Emerson v. J.F. Shea Co., 76 Cal.App.3d 579, 589, 143 Cal.Rptr. 170, 176 (1978).

Accordingly, in a case involving the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 to 1681t, federal law will control the substantive rights created by such Act while state law will control the procedural matters of the case.

Inasmuch as there are no issues concerning procedure in this case, our main focus is on how the federal cases have construed the FCRA as it relates to substantive rights created thereunder. Specifically, the critical issue is whether the awards of damages are supported by the evidence. See supra note 3.

The FCRA was enacted in 1970. The purpose of the FCRA is

to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner...