Longman v. Wachovia Bank, N.A., CIVIL ACTION NO. 3:09-CV-01669 (JCH)

• Decision Date: 16 September 2011
• Docket Number: CIVIL ACTION NO. 3:09-CV-01669 (JCH)
• Court: U.S. District Court — District of Connecticut
• Parties: STUART L. LONGMAN, Plaintiff, v. WACHOVIA BANK, N.A. Defendant.

STUART L. LONGMAN, Plaintiff,

v.WACHOVIA BANK, N.A. Defendant.

CIVIL ACTION NO. 3:09-CV-01669 (JCH)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

Dated: September 16, 2011

RULING RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Doc. No. 36)

I. INTRODUCTION

Plaintiff, Stuart L. Longman, brings this suit against Wachovia Bank ("Wachovia")¹ , claiming that Wachovia willfully violated the Fair Credit Reporting Act ("FRCA") by reporting information it knew to be false to various consumer credit reporting agencies with regard to Longman's account. In addition, Longman claims that the information Wachovia reported to the credit reporting agencies was defamatory, constituting both libel and slander.

Wachovia filed a Motion for Summary Judgment on all counts, arguing that Longman does not have standing to assert a private right of action under the FCRA and that his common law defamation claim is preempted under the FCRA. For the following reasons, the court grants summary judgment.

II. FACTUAL BACKGROUND

Longman was a lot developer with several building projects in Florida. Def.'s Local Rule 56(a)(1) Stmt. ¶ 1 (hereafter "L.R. 56(a)(1) Stmt."); Pl.'s Local Rule 56(a)(2) Stmt. ¶ 1 (hereafter "L.R. 56(a)(2) Stmt."). Longman was also a manager of W.W. Land Company, LLC, a company owned by Lurie Investments, LLC. L.R. 56(a)(2) Stmt. ¶¶ 1-2. Lurie Investments, LLC was owned by The Longman Family Trust. L.R. 56(a)(2) Stmt. ¶ 3. Longman was the administrator of The Longman Family Trust and his wife and children were beneficiaries. L.R. 56(a)(1) Stmt. ¶ 4;² Longman Deposition at 23-24 (hereafter "Longman Depo.").

On April 24, 2006, Longman entered into a Lot Purchase Agreement with W.W. Land Company, LLC to purchase an undeveloped and unoccupied portion of a lot he was developing through W.W. Land Company, LLC. L.R. 56(a)(2) Stmt. ¶¶ 5-6; Longman Depo at 40-41. The purchase price for the lot was $250,000.00. L.R. 56(a)(2) Stmt. ¶ 7.

To finance his purchase of the land, Longman entered into a three-year balloon lot loan Note with Wachovia on June 15, 2006. L.R. 56(a)(2) Stmt. ¶ 8. The Note had a principal amount of $231,220.99, with a Mortgage securing the property. Id. According to the terms, simple interest was to accrue under the Note on the outstanding principal balance at a fixed annual rate of 7.64%. L.R. 56(a)(2) Stmt. ¶ 9. Longman agreed to make interest only payments in thirty-six monthly installments. L.R. 56(a)(2) Stmt. ¶ 10.

Longman's final payment in the thirty-seventh month was a balloon obligation for the entire principal amount of $231,220.99. L.R. 56(a)(1) Stmt. ¶ 11;³ Bizar Aff., Ex. C at ¶ 3. Longman understood he would have to pay the remaining balance of the Note when the loan matured. See 56(a)(1) Stmt. ¶ 12;⁴ Longman Depo. at 16-18.

On February 16, 2009, Longman notified Wachovia that he was unable to continue making the monthly mortgage payments, and requested that Wachovia reduce the interest rate and lengthen the amortization schedule in order to reduce his monthly payments. See L.R. 56(a)(2) Stmt. ¶ 13. On March 13, 2009, Wachovia sent Longman a letter, reminding him that his loan was scheduled to mature on July 15, 2009 and that any remaining balance, plus unpaid interest, would be due at that time. See L.R. 56(a)(2) Stmt. ¶ 14. On March 29, 2009, Longman again notified Wachovia that he was unable to pay the loan and requested that Wachovia reduce the interest rate and lengthen the amortization schedule. L.R. 56(a)(2) Stmt. ¶ 15.

Longman also attempted to obtain an agreement with Wachovia for a short sale of the property. See L.R. 56(a)(2) Stmt. ¶ 16. Wachovia denied Longman's short sale loan applications through letters transmitted on April 27, 2009, May 11, 2009, July 6, 2009, July 16, 2009, and July 27, 2009. See id. During this time, Longman maintained contact with Wachovia employees in a continued effort to modify his loan or obtain approval for a short sale. Longman Aff. ¶ 17. According to Longman, various Wachovia loan servicing employees advised him to continue making monthly interest payments and not to worry about the principal until after a short sale was finalized. Id. at ¶ 21-22.

Longman did not pay the balloon (principal) obligation when it came due. L.R. 56(a)(2) Stmt. ¶ 16. After the June 15, 2009 maturation date passed, Wachovia began reporting to consumer reporting agencies that Longman was late on making payments due to his failure to pay the balloon obligation. Longman Aff. at ¶ 24. On September 9, 2009, Wachovia notified Longman of its intention to foreclose on the property. L.R. 56(a)(2) Stmt. ¶ 17. Longman does not dispute the balance owed on the loan. L.R. 56(a)(1) Stmt. ¶ 26;⁵ Longman Depo. at 27.

On September 29, 2009, Longman again requested a short sale, which Wachovia approved on November 6, 2009. L.R. 56(a)(2) Stmt. ¶¶ 18, 22. Longman chose not to accept Wachovia's short sale offer because he did not agree with the terms. L.R. 56(a)(2) Stmt. ¶ 25.

Although Longman failed to pay the balloon obligation when the loan matured, he continued to make monthly payments of $1,436, which Wachovia credited to the balance owed each month. See L.R. 56(a)(1) Stmt. ¶ 31;⁶ Bizar Aff., Ex. M. Wachovia received notice from Experian and TransUnion on November 18, 2009, and from Equifax on November 19, 2009, that Longman had disputed Wachovia's reporting to the various credit reporting agencies. L.R. 56(a)(2) Stmt. ¶ 28. After reviewing its records and Longman's bank statement as submitted in support of his dispute, Wachovia determined on November 19, 2009 that it had accurately reported the late status of Longman's account. L.R. 56(a)(1) Stmt. ¶ 30;⁷ Everett Deposition (hereafter "Everett Depo.") at 73; Bizar Aff., Ex. L at 2-10.

Longman filed additional disputes with the credit reporting agencies, which Wachovia received from Equifax and TransUnion on December 1, 2009, from TransUnion on December 31, 2009, and from Experian on February 2, 2010. L.R. 56(a)(2) Stmt. ¶34. In response to each dispute, Wachovia again verified its reporting to the agencies. L.R. 56(a)(2) Stmt. ¶ 35.

III. STANDARD OF REVIEW

A motion for summary judgment "may properly be granted . . . only where there is no genuine issue of material fact to be tried, and the facts as to which there is no such issue warrant judgment for the moving party as a matter of law." In re Dana Corp., 574 F.3d 129, 151 (2d Cir. 2009). Thus, the role of a district court in considering such a motion "is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists." Id. In making this determination, the trial court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268, 274 (2d Cir. 2009).

"[T]he moving party bears the burden of showing that he or she is entitled to summary judgment." United Transp. Union v. Nat'l R.R. Passenger Corp., 588 F.3d 805, 809 (2d Cir. 2009). Once the moving party has satisfied that burden, in order to defeat the motion, "the party opposing summary judgment . . . must set forth 'specific facts' demonstrating that there is 'a genuine issue for trial.'" Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (quoting Fed. R. Civ. P. 56(e)). "A dispute about a 'genuine issue' exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. County of Nassau,524 F.3d 160, 163 (2d Cir.2008) (quoting Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir. 2007)); see also Havey v. Homebound Mortg., Inc., 547 F.3d 158, 163 (2d Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)) (stating that a non-moving party must point to more than a mere "scintilla" of evidence in order to defeat a motion for summary judgment).

IV. DISCUSSION

A. FCRA Claims

Longman asserts that Wachovia both knowingly reported false information regarding his account to the consumer credit reporting agencies and failed to correct false information. In addition, Longman asserts that Wachovia failed to perform a reasonable investigation into the dispute after Longman notified Wachovia of the alleged inaccuracies. See Compl. at ¶¶ 10-12.

1. Private Right of Action under § 1681s-2(a)

Section 1681s-2 of Title 15 of the United States Code sets forth the responsibilities of those who furnish information to credit reporting agencies. Section 1681s-2(a) establishes eight duties of furnishers of information, including the duties to provide accurate information and to correct inaccurate information. See 15 U.S.C. §§ 1861s-2(a)(1)(A), 1681s-2(a)(2)(B) (2010).

The FCRA provides a private right of action for both negligent and willful noncompliance. See 15 U.S.C. §§ 1681n, 1681o. This provision is limited, however, in 15 U.S.C. § 1681s-2(c), which provides that sections 1681n and 1681o do not apply to any violation of section 1681s-2(a). See 15 U.S.C. § 1681s-2(c). Instead, federal agencies, federal officials, and specified state officials have exclusive authority toenforce section 1681s-2(a). See 15 U.S.C. § 1681s-2(d). Consequently, Congress has not provided a private right of action to challenge a violation of the duties required of a furnisher under 15 U.S.C. § 1681s-2(a). See Chiang v. Verizon New England, Inc., 595 F.3d 26, 35 (1st Cir. 2010); MacPherson v. JP Morgan Chase Bank, 2010 WL 3081278 at *4 (D. Conn. 2010) ("[T]here is no private right of action for [a violation of section 1681s-2(a)], and individuals aggrieved by a violation . . . must rely on state or federal officials to sue on their behalf.").

Longman argues that section 1681s-2(c) does not specifically state that no private right of action exists. See Mem. Opp. Mot. Summ. J. at 7.⁸ The language of section 1681s-2(d), however, does specifically state that violations of section 1681s-2(a) "shall be enforced exclusively" by...