Yohay v. City of Alexandria Employees Credit Union, Inc.
| Decision Date | 26 August 1987 |
| Docket Number | 86-1204 and 86-1205,86-1080,Nos. 86-1075,s. 86-1075 |
| Parties | 23 Fed. R. Evid. Serv. 1147 Stephen C. YOHAY, Plaintiff-Appellee, v. CITY OF ALEXANDRIA EMPLOYEES CREDIT UNION, INC., Defendant & Third Party Plaintiff-Appellee (Two Cases). The CREDIT BUREAU, INC. a/k/a The Credit Bureau Incorporated of Georgia, Defendant, v. Patricia RYAN, Third Party Defendant-Appellant (Two Cases). Stephen C. YOHAY, Plaintiff-Appellee, v. CITY OF ALEXANDRIA EMPLOYEES CREDIT UNION, INC., Defendant & Third Party Plaintiff-Appellant (Two Cases). The CREDIT BUREAU, INC. a/k/a The Credit Bureau Incorporated of Georgia, Defendant, v. Patricia RYAN, Third Party Defendant-Appellee (Two Cases). |
| Court | U.S. Court of Appeals — Fourth Circuit |
Bernard J. DiMuro (Hirschkop & Associates, P.C., Alexandria, Va., on brief), for third party defendant-appellant Ryan and third party defendant-appellee Ryan.
F. Joseph Nealon (Miles & Stockbridge, Washington, D.C., on brief), for defendant & third party plaintiff-appellant Credit Union and defendant & third party plaintiff-appellee Credit Union.
Jeffrey Rosenfeld (Falcone & Rosenfeld, Ltd., Fairfax, Va., on brief), for plaintiff-appellee Yohay.
Before WINTER, Chief Judge, SPROUSE, Circuit Judge, and KAUFMAN, Senior United States District Judge for the District of Maryland, sitting by designation.
On July 26, 1983, Patricia Ryan (Ryan), an attorney on retainer with the City of Alexandria Employees Credit Union (Credit Union) in connection with the collection of delinquent accounts and other matters, either used, or caused an employee of the Credit Union to use, the Credit Union's computer to obtain information from the Credit Bureau of Georgia, Inc. (CBI), with whom the Credit Union had a contract and a computer tie, concerning Ryan's ex-husband, Stephen Yohay (Yohay). At the time of the incident in question, Ryan and Yohay were engaged in a state court custody trial concerning their son. Prior to the incident in question, Yohay's second wife had brought an assault charge against Ryan of which Ryan had been acquitted. Furthermore, according to Ryan, Yohay had accused Ryan of charging gasoline to one of Yohay's credit cards. Ryan had remarried Arlen Justice (Justice), Secretary-Treasurer of the Credit Union and Deputy Chief of Police for the City of Alexandria, who had introduced Ryan to the Credit Union's Board of Directors before Ryan was placed on a retainer by the Credit Union.
At the trial of the within cases, Ryan testified that she had sought information from CBI regarding Yohay's credit in order to compare the numbers of Yohay's credit card accounts with their earlier established joint credit card accounts to ensure that Yohay was no longer using those previously established joint credit arrangements. Also during the trial, Andrea Martin, the Credit Union's assistant manager, testified that Donna Hatton, an employee of the Credit Union, had told her (Martin) that she (Hatton) had obtained the credit report on Yohay from CBI at the request of George Filopovich, the Credit Union's manager and a friend of Justice.
The Credit Union had a contract with CBI permitting the Credit Union to obtain credit information from CBI for appropriate purposes. The trial testimony revealed that the Credit Union had posted no rules or guidelines concerning the running of credit checks and that seemingly anyone, who could obtain physical access to the computer on the Credit Union's premises, could access CBI's files for any reason.
Yohay first became aware that CBI had furnished credit information to the Credit Union when Yohay obtained from CBI a copy of his credit records in March, 1984. Those records revealed that a credit check of Yohay had been run by the Credit Union on July 26, 1983. Since Yohay had had no relationship with the Credit Union, Yohay wrote a letter to the Credit Union inquiring as to the reason for the credit check. The president of the Credit Union, in responding to such inquiry, informed Yohay that the Credit Union had run the check at the request of Ryan.
Yohay filed the within action against the Credit Union pursuant to the Fair Credit Reporting Act (FCRA), 15 U.S.C. Sec. 1681 et seq., seeking punitive damages, costs, and attorneys' fees, but not seeking compensatory damages. 1 The Credit Union filed a third-party complaint against Ryan for indemnification.
Prior to or during the jury trial, the district court ruled as a matter of law or as a matter of undisputed fact, as follows: (1) that "on or about July 26, 1983, Patricia Ryan, using the facilities of the defendant, City of Alexandria Employees Credit Union, obtained a consumer report regarding Stephen Yohay from CBI, a consumer reporting agency, for a purpose not permitted by the Fair Credit Reporting Act"; 2 (2) that Ryan had acted as an employee and an agent for the Credit Union within the scope of her employment and agency in obtaining the information about Yohay from CBI; 3 (3) that punitive damages could be awarded to Yohay by the jury against the Credit Union if the jury found that the Credit Union's failure to comply with the Act had been "willful," that is, if the Act had been violated "voluntarily and intentionally, and In effect, the only factual questions presented to the jury by the district court were (1) whether the Credit Union had acted willfully and, if so, (2) the amount of punitive damages to be awarded to Yohay against the Credit Union. The jury awarded Yohay $10,000 for punitive damages. The trial court subsequently granted, in part, Yohay's petition for attorney's fees and costs against the Credit Union. The trial court also ordered that Ryan indemnify the Credit Union for (1) the award of punitive damages to Yohay; (2) the award of attorney's fees and costs to Yohay; and (3) the attorney's fees incurred by the Credit Union in defending itself against Yohay's claim.
not because of negligence, mistake, accident or other innocent reason"; 4 (4) that to award punitive damages under the Act, the jury "need not find that the Credit Union acted with malice or bad intention"; 5 and (5) that the Credit Union was entitled as a matter of law to indemnification from Ryan for any damages awarded in these cases by the jury to Yohay against the Credit Union. 6
In the within appeals, the Credit Union and Ryan assert numerous errors by the court below. For reasons which will be discussed herein, we conclude that each of those challenges is without merit.
Over the objection of counsel for the Credit Union, the district court permitted Andrea Martin, the assistant manager of the Credit Union, to testify that Donna Hatton, an employee of the Credit Union, had told Martin that she (Hatton) had obtained the credit information respecting Yohay from CBI at the request of George Filopovich. The statement which Martin testified was made by Hatton to Martin was a statement "concerning a matter within the scope of ... [Hatton's] employment, made during the existence of the relationship," and therefore is not hearsay. Fed.R.Evid. 801(d)(2)(D). Part of the said statement which was made by Hatton to Martin included a statement made by Filopovich to Hatton. That statement by Filopovich also concerned a matter within the scope of the employment of Filopovich. The fact that Martin testified that Hatton had told Martin what Filopovich had said provides no basis for exclusion. Cf. Federal Rule of Evidence 805 which negates exclusion "if each part of the combined statements conforms with an exception to the hearsay rule." Accordingly, the district court did not err in admitting the testimony of Martin concerning those statements.
In enacting the Fair Credit Reporting Act (FCRA), Congress stated:
It is the purpose of this [Act] to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this [Act].
15 U.S.C. Sec. 1681(b).
The Act also provides:
A consumer reporting agency may furnish a consumer report under the following circumstances and no other: (1) In response to the order of a court having jurisdiction to issue such an order. (2) In accordance with the written instructions of the consumer to whom it relates. (3) To a person which it has reason to believe--(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or (B) intends to use the information for employment purposes; or (C) intends to use the information in connection with the underwriting of insurance involving the consumer; or (D) intends to use the information in connection with a 15 U.S.C. Sec. 1681b.
determination of the consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or (E) otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer.
The Act includes two sections which expressly create civil liability, 15 U.S.C. Sec. 1681n and 15 U.S.C. Sec. 1681o. Section 1681n provides as follows:
Any consumer reporting agency or user of information which willfully fails to comply with any requirement imposed under this [Act] with respect to any consumer is liable to that consumer in an amount equal to the sum of--(1) any actual damages sustained by the consumer as a result of the failure; (2) such amount of punitive damages as the court may allow; and (3) in the case of...
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