Yelder v. Credit Bureau of Montgomery, L.L.C., CIV. A. 00-A-270-N.

Citation131 F.Supp.2d 1275
Decision Date19 January 2001
Docket NumberNo. CIV. A. 00-A-270-N.,CIV. A. 00-A-270-N.
PartiesBettie YELDER, Plaintiff, v. CREDIT BUREAU OF MONTGOMERY, L.L.C., and Providian Financial Corporation, Defendants.
CourtUnited States District Courts. 11th Circuit. Middle District of Alabama

Arlene M. Richardson, T. Allen French, Richardson & French, Hayneville, AL, for Plaintiffs.

Stephen E. Whitehead, Jeffrey Neal Cotney, Lloyd, Gray & Whitehead, P.C., Birmingham, AL, J. Knox Argo, J. Knox Argo, PC, Montgomery, AL, William H. Brooks, William Harris Morrow, Lightfoot, Franklin & White, L.L.C., Birmingham, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

ALBRITTON, Chief Judge.

I. INTRODUCTION

This matter comes before the court on Motions for Summary Judgment (docs.# 10, 12) filed by Defendants, Credit Bureau of Montgomery, L.L.C., ("CBM") and Providian Financial Corporation ("Providian"). Plaintiff Bettie Yelder ("Yelder") filed the instant suit in state court on January 28, 2000, alleging violations of the federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., and state law claims of negligence, intentional infliction of emotional distress, and wantonness. Defendants removed the action to federal court. The court has federal question jurisdiction as to the FCRA claim pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over all state claims pursuant to 28 U.S.C. § 1367. For the reasons to be discussed, CBM's Motion for Summary Judgement is due to be GRANTED in part and DENIED in part, and Providian's Motion for Summary Judgment is due to be GRANTED.

II. SUMMARY JUDGMENT STANDARD

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." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The party asking for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the `pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323, 106 S.Ct. 2548. The movant can meet this burden by presenting evidence showing there is no dispute of material fact, or by showing, or pointing out to, the district court that the nonmoving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof. Id. at 322-324, 106 S.Ct. 2548.

Once the moving party has met its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [its] own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548. To avoid summary judgment, the nonmoving party "must do more than show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). On the other hand, the evidence of the nonmovant must be believed and all justifiable inferences must be drawn in its favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

After the nonmoving party has responded to the motion for summary judgment, the court must grant summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

III. FACTS

The submissions of the parties establish the following facts, construed in a light most favorable to the nonmovant:

On or about January of 1999, Providian mailed a "pre-approved" VISA credit card offer to Bettie Holt Yelder at 4371 U.S. Highway 80, Lowndesboro, Alabama.1 Providian received the reply card requesting a new VISA card. The reply card contained the following information: a signature bearing the name "Bettie Yelder," her correct social security number, and incorrect work and home phone numbers. Based upon the reply card, Providian opened VISA account number 4479-5514-2351-7951 for Bettie H. Yelder, and mailed the card to the Lowndesboro address. Within thirty days, charges made on this credit card account reached the credit limit of $620.00. By March of 1999, the account was accruing both late and over the limit charges.

Yelder became aware of problems with her credit on or about May 5, 1999, when Security Alert Inc. denied her credit. Consequently, Yelder went to CBM and requested a copy of her credit report. On the credit request form's reason for disclosure section, Yelder marked the box that states "I certify that I believe my file is inaccurate due to fraud." The credit report listed the Providian Visa credit card account number 4479-5514-2351-7951. Yelder in turn contacted Providian and reported to them that she did not apply for the card and that someone must have fraudulently opened the account. Providian immediately changed the credit rating of the account to "lost/stolen" and generated a new number for the cardholder to use as a replacement. The new account number was 4479-4529-0025-1510.

In June of 1999, Providian's fraud department reviewed Yelder's claim of fraud and decided not to hold Yelder responsible for the charges. Providian's fraud department notified Providian's account maintenance department to send requests to the credit reporting agencies instructing them to remove any negative credit information relating to both the original and new account numbers. On June 16, 1999, the account maintenance department sent a request to the credit reporting agencies as to the new account number. The account maintenance department did not send a request to the credit reporting agencies to remove the information concerning the original account number.

Sometime in August, a store refused Yelder's credit card due to her "bad" credit. On or about September 15, 1999, Yelder returned to CBM and requested another credit report. On the credit request form, she once again marked the box "I certify that I believe my file is inaccurate due to fraud." She also noted on the form "Providian Visa." In November 1999, A-Plus Mortgage informed Yelder and her husband that they must repay the $842.00 Providian credit card debt before A-Plus Mortgage would give them a home equity loan. Yelder paid the debt. Yelder also completed a third request for disclosure form and again checked the box that states "I certify that I believe my file is inaccurate due to fraud." Soon after, Yelder brought this suit.

IV. DISCUSSION

In her Complaint, Yelder alleges that the Defendants violated the FCRA (Count I), and asserts state law claims of negligence (Count II), intentional infliction of emotional distress (Count III), and wantonness (Count IV) against the Defendants. The Defendants in their Motions for Summary Judgment seek summary judgment on each of Yelder's claims. The court will address each claim in turn.

A. FCRA

The purpose of the FCRA is to assure consumers that reporting agencies use reasonable procedures for collecting, using, and disseminating information. 15 U.S.C. § 1681(b). Sections 1681n and 1681o provide private rights of action for willful and negligent noncompliance with any duty imposed by the FCRA and allow recovery for actual damages and attorneys' fees and costs, as well as punitive damages in the case of willful noncompliance. Yelder asserts that CBM and Providian violated duties imposed by the FCRA.

1. CBM

Plaintiff alleges that CBM violated § 1681i by failing to reinvestigate and correct erroneous information on her credit report.2 CBM asserts that it did not have a duty to reinvestigate the disputed claim because Yelder did not notify CBM of the disputed claim. Section 1681i(a)(1)(A) requires a consumer to notify a consumer reporting agency directly of the disputed charge in order to invoke the reporting agency's duty to reinvestigate under § 1681i.3 Casella v. Equifax Credit Information Services, 56 F.3d 469, 474 (2d Cir. 1995); Hovater v. Equifax, Inc., 823 F.2d 413, 417 (11th Cir.1987); Parker v. Parker, 124 F.Supp.2d. 1216, 1222-23 (M.D.Ala. 2000). The parties primarily dispute whether Yelder's requests for disclosure of her credit report on three separate occasions constituted sufficient notification of a dispute to invoke CBM's duty to reinvestigate under § 1681i.

Prior to delving into the merits, the court must address the appropriate test to apply in determining what constitutes notification under § 1681i(a)(1)(A). Yelder requests the court to adopt the standard used in evaluating a § 1681e(b) claim.4 Section 1681e(b) requires a consumer reporting agency to "follow reasonable procedures to assure maximum possible accuracy" in the preparation and reporting of credit information.

The court, however, declines to import the reasonableness standard from § 1681e(b). Instead, the court adopts the reasonableness standard federal courts have used in examining what constitutes a proper reinvestigation under § 1681i. As with notification, section 1681i does not elaborate on what constitutes a proper reinvestigation. To determine what constitutes a proper reinvestigation, federal courts have not borrowed § 1681e(b)'s standard, but have used a lower reasonableness standard that does not include the clause "to ensure maximum possible accuracy." Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir.1991) (examining whether or not a consumer reporting agency "could have discovered an error in a particular report through a reasonable investigation."). Federal courts have...

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