Mirocha v. TRW, INC.

• Decision Date: 02 October 1992
• Docket Number: No. NA 91-68-C.,NA 91-68-C.
• Parties: Keith MIROCHA and Phyllis Mirocha, Plaintiffs, v. TRW INC., Trans Union Corporation, ITT Consumer Financial Corporation, and Aetna Finance Company d/b/a ITT Finance, Defendants.
• Court: U.S. District Court — Southern District of Indiana

805 F. Supp. 663

Keith MIROCHA and Phyllis Mirocha, Plaintiffs, v. TRW INC., Trans Union Corporation, ITT Consumer Financial Corporation, and Aetna Finance Company d/b/a ITT Finance, Defendants.

No. NA 91-68-C.

United States District Court, S.D. Indiana, New Albany Division.

October 2, 1992.

COPYRIGHT MATERIAL OMITTED

Roya A. Ghazi, Daniels & Associates, Louisville, Ky., for plaintiffs.

James E. Bourne, Wyatt Tarrant Combs & Orbison, New Albany, Ind., William W. Lawrence, Lawrence & Lawrence, Keith McKinney, Sr., Rays & Weeks, Louisville, Ky., Christopher E. Baker, Rubin & Levin, P.C., Indianapolis, Ind., Carol A. Tiese, Jones, Day, Reavis & Pogue, Chicago, Ill., for defendants.

BARKER, District Judge.

This motion comes before the Court on the eve trial. Defendants move for summary judgment on all counts of Plaintiffs' Complaint, which alleges violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., in addition to several pendent state law claims which sound in tort. For the reasons set forth below, the Court grants summary judgment in ITT's favor on Counts I-VI of the Complaint, and in favor of all Defendants on Counts XI and XII, and on Count VII to the extent that it alleges interference with Plaintiffs' former employment. ITT's motions to strike and to "deem matters admitted" are denied.

BACKGROUND

In September, 1989, Keith and Phyllis Mirocha, husband and wife (collectively "Plaintiffs"), purchased a home in Jeffersonville, Indiana, which they financed with a one-year mortgage. In April, 1990, Plaintiffs decided to sell their home, pay off the existing mortgage, and purchase a new home. Financing for the second home was to be provided through a loan from Inland Mortgage Company ("Inland"). In May, 1990, Plaintiffs signed a purchase agreement for their new home through Remax Realtors; a condition of this agreement was that Plaintiffs would either sell their former house or refinance it on or before September 21, 1990.

In order to process Plaintiffs' mortgage application, Inland sought credit information concerning the Plaintiffs from Defendant TRW, Inc. ("TRW"). In addition to its own credit reports, TRW accessed Plaintiffs' credit history through Defendant Trans Union Credit Services ("Trans Union"). On May 21, 1990, TRW notified Inland that Plaintiffs' credit record as reported by Trans Union showed a delinquent account for ITT Financial Services ("ITT"), although that account was listed under the name Phyllis R. Farmer ("Farmer") with the same social security number as Plaintiff Phyllis K. Mirocha ("Mrs. Mirocha"), formerly Phyllis K. Farmer by a previous marriage. See Complaint, at ¶¶ 23, 24. TRW proceeded to create a joint mortgage report for Plaintiffs which excluded the ITT listing but which did include other allegedly erroneous credit information belonging to Farmer. On May 22, 1990, Inland contacted ITT and advised them of inconsistencies in the credit reports for Farmer and Mrs. Mirocha. The same day, ITT allegedly contacted her employer, Bales Motor Company ("Bales") in Jeffersonville, Indiana, to verify employment and other information.

On May 23, 1990, a collection officer from ITT visited Mrs. Mirocha at her home and advised her that the accounts listed for Farmer included her social security number, date of birth, and address. Mrs. Mirocha informed the ITT representative that her maiden name had been Farmer but that she did not have any accounts with ITT. Plaintiffs' explanation for the similarity of the accounts is that TRW and Trans Union "changed the Phyllis R. Farmer information to include information about Phyllis K. Mirocha, thereby creating the inaccurate and improper impression that the credit history of Phyllis R. Farmer was attributed to the Plaintiff, Phyllis K. Mirocha." Complaint, at ¶ 30.

Subsequent to her meeting with the ITT representative, Mrs. Mirocha was told by a representative of TRW that the accounts in dispute would be deleted from the mortgage application credit report because they should not have been part of her file. On May 29, 1990, Plaintiffs visited Trans Union's offices and were shown the same incorrect credit information in their file. Trans Union advised Plaintiffs to follow Federal Trade Commission (FTC) guidelines for correcting the disputed accounts. Trans Union allegedly informed Plaintiffs that the problem would be corrected within sixty (60) days. See Complaint, at ¶ 32. Plaintiffs then filed a request with Trans Union to expunge Phyllis R. Farmer's file from Mrs. Mirocha's file. On July 23, 1990, Plaintiffs received a letter from Trans Union stating that the erroneous file had been deleted but that creditors had not been notified of this fact. See Complaint, at ¶ 35. On November 6, 1990, Plaintiffs allege that they obtained an updated version of their credit report and learned to their dismay that the Mrs. Mirocha's credit information had been deleted from their file but that the information relating to Phyllis R. Farmer still remained in the report. See Complaint, at ¶ 36.

Plaintiffs' contend that due to the faulty credit report they were unable to obtain mortgages for their new and former homes, and have had their car repossessed. See Complaint, at ¶¶ 37, 39. They also maintain that they lost their jobs once their respective employers learned that their credit rating was poor and that they had unpaid debts. See Complaint, at ¶ 38.

In their complaint, Plaintiffs allege that the Defendants violated provisions of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., see Complaint counts 1-5, and the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., see Complaint count 6, in addition to committing a variety of allegedly tortious acts under the laws of Indiana, see Complaint counts 7, 7sic, 10, 11, 12 (no count 9 was included). In its barest terms, Plaintiffs' argument is that the Defendants either negligently or willfully allowed Farmer's credit history to be reported under Mrs. Mirocha's social security number, conveyed that erroneous information in a joint mortgage report concerning Plaintiffs, and finally, failed to correct Plaintiffs' credit records once they had been notified of the mistake. As compensation for their alleged injuries, Plaintiffs pray for both actual and punitive damages against the defendants.

DISCUSSION

Defendants move the court to grant summary judgment on all counts of Plaintiffs' Complaint. Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.Proc. 56(c). While the burden rests squarely on the party moving for summary judgment to show "that there is an absence of evidence to support the nonmoving party's case", Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986), the nonmoving party responding to a properly made and supported summary judgment motion still must set forth facts showing that there is a genuine issue of material fact and that a reasonable jury could return a verdict in its favor. See Wolf v. City of Fitchburg, 870 F.2d 1327, 1329 (7th Cir.1989); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Denials contained in the pleadings or bald allegations that an issue of fact exists is insufficient to raise a factual issue. See Shacket v. Philko Aviation, Inc., 681 F.2d 506, 513 n. 8 (7th Cir. 1982), rev'd on other grounds, 462 U.S. 406, 103 S.Ct. 2476, 76 L.Ed.2d 678 (1983). "The moving party is `entitled to a judgment as a matter of law' if the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). If doubts remain, however, as to the existence of a material fact, then those doubts should be resolved in favor of the nonmoving party and summary judgment denied. See Wolf, 870 F.2d at 1330.

1. The Fair Credit Reporting Act

Counts 1-5 of Plaintiffs' Complaint allege violations of §§ 1681e(a) & (b),¹ and 1681i(a) & (c)² of the Fair Credit Reporting Act ("FCRA"). By their own terms, these provisions only apply to "consumer reporting agencies."³ Both TRW and Trans Union concede that they are consumer reporting agencies within the meaning of the FCRA, see TRW Inc.'s Statement of Material Facts as to which No Genuine Dispute Exists, at ¶¶ 2, 3, while ITT denies the same. See ITT's Proposed Findings of Fact and Conclusions of Law, at ¶¶ 2-3; ITT Exhibit B. Because ITT contends that it is not a consumer reporting agency, and therefore is not subject to the provisions of the FCRA cited by Plaintiffs, the Court will address the claims against ITT separately for purposes of the first five counts of the Complaint.

a. FCRA Claims Against TRW and Trans Union

The focus of the first five counts of Plaintiffs' Complaint are challenges to the reasonableness of the Defendants' compliance procedures under the FCRA. Section 1681e(b) states that consumer reporting agencies must "follow reasonable procedures to assure maximum possible accuracy" of consumer reports. 15 U.S.C. § 1681e(b). Plaintiffs have described the frustrations they encountered in attempting to rectify the errors in their joint credit report, and the bases for their belief that the procedures that the defendants, including ITT, employed were unreasonable. See Complaint, at ¶¶ 27-36; see also Plaintiff's Memorandum of Law in Opposition to Defendant's sic Motion for Summary Judgment.

In response, TRW and Trans Union make no attempt to demonstrate that Plaintiffs have no...