Ross v. Washington Mut. Bank

• Decision Date: 02 July 2008
• Docket Number: No. 5:06-CV-468-D.,5:06-CV-468-D.
• Citation: 566 F.Supp.2d 468
• Parties: Charlene ROSS, Plaintiff, v. WASHINGTON MUTUAL BANK, Defendant.
• Court: U.S. District Court — Eastern District of North Carolina

Page 468

566 F.Supp.2d 468

Charlene ROSS, Plaintiff, v. WASHINGTON MUTUAL BANK, Defendant.

No. 5:06-CV-468-D.

United States District Court, E.D. North Carolina, Western Division.

July 2, 2008.

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Christopher W. Livingston, Christopher W. Livingston, Esq., White Oak, NC, for Plaintiff.

Thomas G. Hooper, Nelson Mullins Riley & Scarborough, LLP, Charlotte, NC, for Defendant.

ORDER

JAMES C. DEVER, III, District Judge.

On August 22, 2006, plaintiff Charlene Ross ("Ross") filed this action in Wake County District Court against defendant Washington Mutual Bank ("WaMu") concerning a negative trade line that WaMu had placed on one or more of Ross' consumer credit reports. Ross alleges common law defamation and violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., and the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen.Stat. §§ 75-1.1 et seq. On November 8, 2006, WaMu removed the action to this court. On November 16, 2007, WaMu filed a motion for summary judgment. Thereafter, Ross responded, and WaMu replied. As explained below, defendant's motion for summary judgment is granted.

I.

The court reviews the facts in the light most favorable to Ross, the non-moving party. See, e.g., United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) (per curiam). At all times relevant, WaMu held as assignee a promissory note and deed of trust that James Williams ("Williams") executed on or about May 8, 1996, in favor of Marsh Associates, Inc. Compl. ¶ 6; Def.'s Mot. for Summ. J. Ex. P, Nicassio Aff. ¶ 4 [hereinafter "Nicassio Aff."]. The promissory note encumbered real property located at 4501 Munsee Street in Charlotte, North Carolina. Compl. ¶ 7; Nicassio Aff. ¶ 4. On or about August 16, 1996, Williams quitclaimed his interest in the mortgaged property to Ross, and the two married the following month. Compl. ¶¶ 9-10. In April 2001 Ross obtained a domestic violence protective order evicting Williams from the property. See id. ¶ 11; Def.'s Mot. for Summ. J. Ex. . R, Ross Dep. 46:6-47:3, June 22 & 27, 2005 [hereinafter "First Ross Dep."]. In May 2001, Ross obtained another domestic order naming Ross as the property's sole owner. See First Ross Dep. 47:6-20; Nicassio Aff. Ex. 4. Williams, however, remained responsible for the mortgage. See Compl. ¶ 14. Shortly thereafter, Ross contacted WaMu to discuss the mortgage. In July 2001, Ross spoke with a WaMu representative to confirm that she would get credit for any mortgage payments she made going forward. First Ross Dep. 75:15-76:4, 89:1-3, 158:1-4. Ross also requested monthly mortgage statements and an IRS 1098 form which would entitle her to a tax deduction for mortgage interest she paid. See id. at 83:17-84:6, 89:4-90:14. To that end, Ross sent WaMu copies of her social security card, the May 2001 domestic order, and the August 1996 quitclaim deed. Nicassio Aff. ¶ 6. As a result of these events, WaMu mistakenly changed the mortgage to Ross' name and sent a letter to the U.S. Department of Housing and Urban Development ("HUD") on July 27, 2001, noting the change. Def.'s Mot. for Summ. J. Ex. S, Ross Dep. 140:19-141:21, July 11-12, 2007 [hereinafter "Second Ross Dep."] & Ex. 28.

Neither Ross nor Williams made mortgage payments for June through September 2001, and the loan went into default. Nicassio Aff. ¶ 8. On September 11, 2001, plaintiff discovered that WaMu had placed a negative trade line on one or more of her consumer credit reports based on the mistaken belief that she was responsible for the defaulted mortgage. Compl. ¶ 16; Second Ross Dep. 63:5-13. Plaintiff, contacted WaMu, and WaMu indicated that it had "no details as to why [Williams'] name was changed." Second Ross Dep. 63:14-18; Pl.'s Opp'n to Mot. for Summ. J. Ex. 3, WAMU-107 (phone records) [hereinafter "WAMU-___"]. Plaintiff contacted the consumer reporting agencies ("CRAs") to dispute the reporting, but the CRAs confirmed the validity of the mortgage based on the negative trade line placed by WaMu. Second Ross Dep. 63:19-64:18; Nicassio Aff. ¶ 10.

In October 2001, WaMu referred the mortgage to foreclosure. Nicassio Aff. ¶ 8. However, in February 2002, Ross agreed to reinstate the mortgage, and made eight months of past-due mortgage payments. Id.

On or about September 27, 2002, Ross contacted WaMu to report that the loan still appeared on her credit reports. WaMu investigated the issue, admitted that it was mistakenly reporting the loan to the CRAs, and suspended credit-reporting for the loan through October 2003. See Nicassio Aff. ¶ 11; WAMU-102 (phone records). WaMu confirmed these actions in a letter to Ross. See WAMU-123. In June 2003, Ross and Williams again ceased making payments on the loan. Nicassio Aff. ¶ 14.

On August 4, 2003, Ross notified WaMu that one of the CRAs still reported that she had a loan with WaMu. See id. ¶ 12. WaMu conducted another investigation and asked the CRA to delete the loan information from Ross' credit profile. Id. On August 7, 2003, Ross reiterated to WaMu that she was not responsible for the loan. See WAMU-095 (consolidated notes log). WaMu noted in its records, "[w]e reported this on her credit report which we cannot as she does not have note liability. We corrected the credit reports and she will no longer be reported as having a loan w/ WAMU." Id. Nonetheless, one CRA continued to report the loan on Ross' consumer credit report. Second Ross Dep. 80:2-11 & Ex. 17. Ultimately, the CRA removed the loan from Ross' credit report, and the loan has not appeared on Ross' credit reports since December 31, 2003. See First Ross Dep. 120:14-2; Second Ross Dep. 135:3-38:3.

As a result of the negative trade line, Ross was denied credit on at least four occasions. See Compl. ¶ 30; Def.'s Mot. for Summ. J: Ex. Q, Resp. to Interrogs. 5-6 [hereinafter "Pl.'s Resp. to Interrogs."]. Ross believes that she missed the "business opportunity of a lifetime"—opening and operating an assisted-living facility— that would have netted her over $3,000,000 in profits each year. See Compl. ¶ 30; Second Ross Dep. 245:17-246:5. To put this allegation in context, it is important to note what else was going on in Ross' life.

Between 2001 and 2003, Ross worked as a high-school teacher in the Charlotte-Mecklenburg School system ("CMS"). In late 2003, Ross filed two charges of employment discrimination with the Equal Employment Opportunity Commission ("EEOC") alleging that CMS employees illegally discriminated against her in violation of Title VII. Second Ross Dep. 34:25-48:10 & Exs. 7, 9 (EEOC charges filed on Oct. 24, 2003 and Dec. 4, 2003). The EEOC rejected Ross' charges. Id. at 47:5-16, 48:11-49:1 & Exs. 8, 10 (EEOC notice of rights letters dated Sept. 29, 2004). As a result of her difficulties at CMS, which included an alleged threat from a student gang member's family, Ross sought treatment from psychiatrist Dr. Zofia Bochacki for post-traumatic stress disorder ("PTSD") and depression. Def.'s Mot. for Summ. J. Ex. V, Dr. Bochacki Dep. 10:6-13, 53:7-22, 55:15-21, 68:15-18 [hereinafter "Dr. Bochacki Dep."]. Ross also developed carpal tunnel syndrome. Second Ross Dep. 14:6-11. Because of her injuries, Ross filed workers' compensation claims against CMS alleging PTSD and carpal tunnel syndrome, and the parties entered a compromise settlement agreement and release for $35,000. Id. at 27:14-28:25 & Ex. 5 (compromise settlement agreement and release dated Aug. 23, 2005). Ross has not worked since November 2003. Id. at 13:10-19.

Also between 2001 and 2003, WaMu placed collection calls to plaintiff at her home and at the school where she worked. See Pl.'s Opp'n to Mot. for Summ. J. 7-9 [hereinafter "Pl.'s Mem."]; First Ross Dep. 201:20-211:7, 223:21-230:22. At the height of the phone calls, Ross received numerous calls daily from the early morning to late evening. First Ross Dep. 203:8-12

In February 2004, WaMu commenced foreclosure proceedings on the defaulted mortgage. See Def.'s Mot. for Summ. J. Ex. A (notice of foreclosure hearing). In March and April 2004, the substitute trustee posted and published notices. See Def.'s Mot. for Summ. J. Ex. C (order permitting foreclosure). WaMu also notified the insurer of the property to request cancellation of a hazard insurance policy that it held on the property. Second Ross Dep. 141:22-142:15 & Ex. 29.

On May 21, 2004, Ross filed suit against WaMu in Mecklenburg County Superior Court seeking to enjoin the foreclosure and alleging UDTPA claims against WaMu. See Def.'s Mot. for Summ. J. Ex. K (complaint filed May 21, 2004) [hereinafter "May 2004 Complaint"]. The Mecklenburg County Superior Court denied Ross' motion for a preliminary injunction, and Ross did not appeal. See Def.'s Mot. for Summ. J. Ex. L. In May 2004, the trustee sold the Munsee Street property. See Def.'s Mot. for Summ. J. Ex. G. On August 25, 2005, during a discovery-sanctions hearing on Ross' alleged failure to respond to WaMu's requests for production, Ross voluntarily dismissed her lawsuit against WaMu without prejudice. See Def.'s Mot. for Summ. J. Exs. M, N, & 0.

On August 22, 2006, Ross filed this lawsuit in Wake County District Court alleging common law defamation and violations of the FCRA and UDPTA. Plaintiff seeks actual, statutory, and punitive damages to compensate for her wrongfully damaged credit scores, emotional distress, poor health, lost income, and lost business opportunities. Compl. ¶¶ 30, 36-38. On November 8, 2006, WaMu removed the action to this court. After discovery closed, WaMu moved for summary judgment.

II.

Summary judgment may be granted when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Fed. R.Civ.P. 56(c). The party seeking summary judgment initially must demonstrate the absence of...