Podell v. Citicorp Diners Club, Inc.

• Decision Date: 05 May 1997
• Docket Number: No. 314,D,314
• Citation: 112 F.3d 98
• Parties: Gary A. PODELL, Plaintiff-Appellant, v. CITICORP DINERS CLUB, INC., Citicorp Credit Services, Inc., Nissan Motor Acceptance Corporation, Salon Furniture Co., and Equifax, Inc., Defendants, TRW Inc. and Trans Union Corporation, Defendants-Appellees. ocket 96-7246.
• Court: U.S. Court of Appeals — Second Circuit

Page 98

112 F.3d 98

37 Fed.R.Serv.3d 1088

Gary A. PODELL, Plaintiff-Appellant, v. CITICORP DINERS CLUB, INC., Citicorp Credit Services, Inc. Nissan Motor Acceptance Corporation, Salon Furniture Co., and Equifax, Inc., Defendants TRW Inc. and Trans Union Corporation, Defendants-Appellees.

No. 314, Docket 96-7246.

United States Court of Appeals Second Circuit.

Argued Sept. 26, 1996.

Decided May 5, 1997.

Gabriel J. Fischbarg, New York City, for Plaintiff-Appellant.

Mark E. Kogan, Marion, Satzberg, Trichon & Kogan, P.C., Philadelphia, PA, for Defendant-Appellee Trans Union Corporation.

Heidi A. Wendel, Jones, Day, Reavis & Pogue, New York City, for Defendant-Appellee TRW Inc.

Before: WALKER, McLAUGHLIN, and JACOBS, Circuit Judges.

JACOBS, Circuit Judge:

Plaintiff Gary A. Podell seeks damages under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681u, and under New York law, for harms resulting from inaccurate reports bearing on his creditworthiness. Of the seven defendants originally named in the complaint, the only two remaining are the credit reporting agencies TRW Inc. ("TRW") and Trans Union Corporation ("Trans Union"). ¹ Podell claims that TRW and Trans Union failed to conduct proper investigations of disputed credit entries, prevented him from explaining in his credit reports that he contested certain accounts, and continued to list past-due accounts on his reports even after being notified that the underlying debt entries were false.

The United States District Court for the Southern District of New York (Haight, J.) granted summary judgment in favor of TRW and Trans Union, holding that: (1) Podell failed to raise a genuine issue of material fact concerning the defendants' compliance with FCRA, and that as a result he also could not prove any of his state law claims; and (2) in the alternative, no damages were recoverable under FCRA, because Podell's alleged losses arose solely from the use of his credit report for business or commercial (as opposed to consumer) purposes. See Podell v. Citicorp We affirm the grant of summary judgment dismissing all of Podell's claims under the district court's first holding, and do not reach the district court's alternative holding.

Diners Club, Inc., 914 F.Supp. 1025, 1035-37 (S.D.N.Y.1996).

BACKGROUND

Credit reporting agencies such as TRW and Trans Union gather credit information about consumers from, inter alia, subscribing commercial, retail, and financial entities, and distribute that information in the form of credit reports to other subscriber customers. See generally id. at 1027. Without Podell's knowledge or authorization, a person or persons unknown secured credit in Podell's name from various retail and financial creditors, and made purchases on that illegally obtained credit without paying the resulting debts. Complaint p 8. The problem came to light in late June 1991, when Podell became aware that the debts had been reported to TRW; in April 1992, he discovered that the debts had been reported to Trans Union as well. Id. pp 8, 9, 13.

Podell contends that TRW and Trans Union failed to take appropriate corrective action when they were advised of the inaccuracy of the credit reports, and that as a result he lost important business opportunities, was prevented from making purchases, and suffered physical and emotional distress. Id. pp 18-19. Podell alleges willful noncompliance with FCRA pursuant to 15 U.S.C. § 1681n; negligent noncompliance with FCRA pursuant to 15 U.S.C. § 1681o; and six state law causes of action: (i) violation of section 349 of the New York General Business Law; (ii) negligent infliction of emotional distress; (iii) intentional infliction of emotional distress; (iv) prima facie tort; (v) common law negligence; and (vi) defamation. Complaint pp 20-50. Podell seeks more than $50,000 in actual damages; $500,000 in punitive damages; costs and attorneys fees; and an order mandating removal of "all current inaccurate information" from his credit reports. See id.

TRW. On June 27, 1991, Podell learned that TRW was reporting an unpaid debt owed by him to Salon Furniture Company ("Salon"). ² Podell wrote to TRW on July 2, 1991, requesting that the disputed account be cleared up as quickly as possible. TRW failed to remove the inaccurate Salon entry from his credit profile and continued to note the account in its responses to third party inquiries until March 1994. Complaint p 11.

Trans Union. In or about April 1992, Podell learned that Trans Union was reporting debts owed by him to Salon as well as to Citicorp Diners Club, Inc. ("Diners Club"). Soon thereafter, Podell notified Salon and Diners Club "that he was not the individual who accumulated the alleged debt[s] respectively owed to [them]." Id. pp 13, 14, 16. Podell alleges, upon information and belief, that Salon and Diners Club subsequently notified Trans Union to remove the false reports from his credit file. Id. pp 15, 16. But, according to Podell, Trans Union continued to report the non-existent debts until after he sent a letter to Trans Union, dated December 3, 1993, requesting that Trans Union investigate and remove the disputed debts. Podell, 914 F.Supp. at 1029-30.

DISCUSSION

This Court reviews a grant of summary judgment under the same principles that guide the district court: "[w]e examine the record de novo, and we are required to view the evidence in the light most favorable to the party opposing summary judgment." Rodriguez v. City of New York, 72 F.3d 1051, 1061 (2d Cir.1995). Under this standard, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that Podell alleges that TRW violated FCRA § 1681i by failing to conduct a proper investigation of accounts that he disputed in his credit report, and by failing to give him the opportunity to place in his report a statement showing that he disputed the debts. Podell alleges that Trans Union violated FCRA § 1681e by failing to investigate and correct his credit report when Trans Union received notice from his creditors that the debt entries were false, and by waiting until it received notice from him personally before taking corrective action. We agree with the district court that there is no genuine issue of material fact that bars entry of summary judgment in the defendants' favor.

there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The litigant opposing summary judgment " 'may not rest upon mere conclusory allegations or denials,' " but must bring forward "some affirmative indication that his version of relevant events is not fanciful." Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)).

A. The Claim Against TRW

Podell contends that TRW violated § 1681i by failing to follow proper procedures in investigating the supposed indebtedness to Salon. Section 1681i(a) provides in relevant part that when a consumer disputes the completeness or accuracy of an item on his credit report, and "directly convey[s]" that dispute to the credit reporting agency, the agency "shall within a reasonable period of time reinvestigate and record the current status of that information," and, if the "information is found to be inaccurate or can no longer be verified, ... promptly delete such information." 15 U.S.C. § 1681i(a). The credit reporting agency's "reinvestigation" typically entails sending a Consumer Dispute Verification form ("CDV") to subscribers (usually creditors) that have reported a disputed account. As the district court explained, "[t]he CDV asks subscribers to check whether the information they have about a consumer matches the information on TRW's credit report. If a subscriber fails to respond to a CDV or indicates that TRW's account information is incorrect, TRW deletes the disputed information." Podell, 914 F.Supp. at 1028. If reinvestigation does not resolve an account dispute, consumers may file with their credit report "a brief statement setting forth the nature of the dispute," 15 U.S.C. § 1681i(b), which must be included "in any subsequent consumer report containing the information in question" along with a notation that the matter is disputed by the consumer. 15 U.S.C. § 1681i(c).

After reinvestigating a disputed account, TRW sends to the consumer who filed the dispute an updated credit report that includes notice of the consumer's right to file the "brief statement" of dispute. Podell, 914 F.Supp. at 1028. The updated report serves as a confirmation of the reinvestigation process: if reinvestigation discloses an inaccuracy, the report reflects that the inaccurate entry has been deleted; if reinvestigation confirms that the debt is valid, the updated report retains the entry, but in addition advises the consumer of his right to file the statement pursuant to §§ 1681i(b) and (c). Id.

Podell "categorically denies that he ever received a [written] confirmation of TRW's reinvestigation" of the Salon account, "which TRW was required to provide under the FCRA (15 U.S.C. § 1681i)"; and he alleges that "TRW failed to give [him] the right to have TRW include in his credit file 'a brief statement setting forth the nature of the dispute' pursuant to 15 U.S.C. § [§ ] 1681i(b) and (c)." Appellant's Brief at 7. ³ The nub of Podell's argument is that because he never received an updated credit report from TRW confirming the validity of the Salon debt, he never received notice of--and never could exercise--his statutory right to place a statement in his credit file explaining (to his potential creditors) that he disputed the Salon The district court found, on the evidence before it, that Podell failed to carry his burden under § 1681i of proving that TRW "acted negligently," and therefore that no genuine...