Morris v. Equifax Info. Servs., LLC
| Decision Date | 23 April 2020 |
| Docket Number | Case No.: 2:18-cv-01829-JAD-EJY |
| Parties | Robert W. Morris and LaRhonda Morris, Plaintiffs v. Equifax Information Services, LLC; Experian Information Solutions, Inc.; Ditech Financial, LLC; and Carrington Mortgage Services, LLC, Defendants |
| Court | U.S. District Court — District of Nevada |
Order Granting in Part Motion for Summary Judgment, Granting in Part Motion for Partial Summary Judgment, and Denying without Prejudice Motion to Seal
Robert and LaRhonda Morris sue loan servicer Carrington Mortgage Services, LLC, alleging that Carrington violated its duty under the Fair Credit Reporting Act (FCRA)1 to reasonably investigate their dispute of the accuracy of information that it furnished about their mortgage loan to consumer reporting agencies.2 The Morrises amended their complaint once as a matter of right and allege a single claim against Carrington under 15 U.S.C. § 1681s-2(b).3 Carrington moves for summary judgment on the Morrises' amended claim, arguing that it fails at the liability and damage elements.4 The Morrises move for summary judgment on their amended claim, too, but only as to liability,5 and they seek to seal four exhibits that they provide in support of their summary-judgment motion.6
I find that Carrington furnished incomplete and inaccurate information about the Morrises' loan to the consumer reporting agency but that if Carrington is held liable, it is responsible only for the damages that occurred after its FCRA duties arose. Genuine factual disputes preclude summary on all other issues raised by the parties. I therefore grant in part Carrington's motion for summary judgment and grant in part the Morrises' motion for partial summary judgment. I deny the Morrises' motion to seal without prejudice to Carrington's ability to move for that same relief with a properly supported motion. I direct that the seal be maintained on the documents pending a determination on that anticipated motion. Finally, I refer this case to the magistrate judge for a mandatory settlement conference.
The following facts are not in dispute. The Morrises voluntarily filed a joint petition under Chapter 13 of the Bankruptcy Code on December 17, 2010.7 At the time of their petition, the Morrises owned and resided at 2008 Spruce Brook Drive in Henderson, Nevada.8 To finance their purchase of that property, the Morrises took out a loan that was secured by a first-priority deed of trust on the property.9 The Morrises were in default on the loan when they filed their bankruptcy petition.10 The loan was initially serviced by BAC Home Loans Servicing, LP, which filed a proof of claim for the loan in the bankruptcy case totaling $363,657.82.11 Later,but still during the bankruptcy case, the loan's servicing rights were assigned to Ditech Financial, LLC.12
The bankruptcy court confirmed the Morrises' (second) Chapter 13 plan on July 14, 2011.13 The confirmed plan includes a provision for "Secured claims satisfied by the surrender of collateral."14 The provision states that, "[a]s to real property secured claims, the entry of the confirmation order shall constitute an order modifying the automatic stay to allow the holder of a CLASS 5 secured claim to exercise its remedies under applicable non-bankruptcy law."15 A table appears below that statement and provides, under a column titled "Creditor's Name/Collateral Description[,]" "BAC Home Loans Clam #12 (1st Mtg)[,]" "[h]ome and lot[,]" and the "2008 Spruce Brook Drive" property's full address. Under the next column, titled "Surrender in Full Satisfaction of Debt[,]" the plan provides "NO[.]"16 Nothing is listed under the last column, which is titled "If No, Estimated Deficiency[.]"17
On December 5, 2013, the bankruptcy court found that the Morrises had "fulfilled all requirements under" their confirmed Chapter 13 plan and ordered that, under 11 U.S.C. § 1328(a), they are "discharged from all debts provided for by the Plan or disallowed under 11U.S.C. section 502, except any debt" that falls within the categories of debts enumerated in the order.18 Nearly four years after the discharge order, Ditech transferred the servicing rights on the loan to Carrington.19 Seven months later, when the Morrises applied to obtain a loan from Mann Mortgage, LLC, they discovered that Carrington had furnished information about the loan to consumer reporting agencies, including that four payments were 90 or more days past due, the past-due amount totaled $67,326, and that $451,290 was the total balance owed on the loan.20 Carrington also furnished information stating "foreclosure" under the heading titled "payment" and notes "Foreclosure proceedings started; Foreclosure started; Conventional Mortgage; Foreclosure initiated" in the comment section.21 Carrington did not furnish any information about the Morrises' bankruptcy case, including the discharge.22
A. Legal standard
The principal purpose of the summary-judgment procedure is to isolate and dispose of factually unsupported claims or defenses.23 The moving party bears the initial responsibility of presenting the basis for its motion and identifying the portions of the record or affidavits that demonstrate the absence of a genuine issue of material fact.24 If the moving party satisfies itsburden with a properly supported motion, the burden then shifts to the opposing party to present specific facts that show a genuine issue for trial.25 "When simultaneous cross-motions for summary judgment on the same claim are before the court, the court must consider the appropriate evidentiary material identified and submitted in support of"—and against—"both motions before ruling on each of them."26
B. Furnisher liability under the FCRA
To prevail on a claim under 15 U.S.C. § 1681s-2(b), a plaintiff must establish that (1) a consumer report on him contains incomplete or inaccurate information, (2) he disputed that information with a consumer reporting agency, (3) the consumer reporting agency notified the information's furnisher about his dispute, and (4) the furnisher failed to comply with its obligations to investigate, report, and correct inaccuracies under § 1681s-2(b).27
The parties do not dispute that the second and third elements are met here. Rather, Carrington argues that it is entitled to summary judgment because the information that it furnished about the loan was accurate for the FCRA's purposes, it reasonably investigated the Morrises' dispute, and the Morrises cannot demonstrate that they were actually injured by or suffered damages because of Carrington's conduct. The Morrises argue that they are entitled to partial summary judgment because the information that Carrington furnished was inaccurate and it did not reasonably investigate their dispute. I begin with the parties' arguments about liability and conclude with Carrington's arguments about injury and damages.
Information is "incomplete or inaccurate" within the meaning of the FCRA if it is either "patently incorrect" or "misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions."28 Carrington furnished information that several of the loan's payments were 90 or more days past due, the past-due amount totaled $67,326, and the balance owed totaled $451,290.29 It also furnished information that foreclosure proceedings had commenced. The Morrises claim that it was inaccurate for Carrington to furnish anything about the loan other than it had been "discharged in bankruptcy with a $0 balance due."30 They reason that the information that Carrington furnished was inaccurate because their Chapter 13 discharge operates as a permanent injunction against the collection of debts to the extent of their personal liability and furnishing information about past-due amounts and a balance owed gives the false impression that they still are personally liable for the loan.31
Carrington argues that the disputed information was accurate because "there is no legal obligation to report a discharge on a credit report" and the "debt remained due and owing, even if no longer part of the bankruptcy."32 To support its position, Carrington relies on the decisions of three district courts.33 But the first case, Basconcello v. Experian Information Solutions, Inc., isdistinguishable because it concerns the accuracy of information reported during the pendency of a bankruptcy case not, like here, the accuracy of information that was furnished years after a bankruptcy discharge.34 Carrington's reliance on Jugoz v. Experian Information Solutions, Inc. is misplaced for the same reason.35 And Abeyta v. Bank of America is similarly distinguishable because the plaintiff in that case did not allege that Bank of America had falsely furnished information that her debts "were still due and owing not only in July 2010, i.e., before they were discharged, but also at the time of the report, i.e., after they were discharged."36
Changing tack, Carrington argues that the disputed information was accurate because the loan was not discharged in bankruptcy.37 38 Here, the bankruptcy court's order discharged the Morrises from "all debts provided for by the plan . . . ."39 The discharge order and 11 U.S.C. § 1328 enumerate several categories of debts that are excepted from discharge. Carrington doesnot argue that the loan falls into any of those categories. Carrington agrees that the Chapter 13 plan calls for the Morrises to surrender the property,40 so its beef isn't that the plan didn't provide for the loan. Rather, Carrington...
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