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Hannon v. Northeast Credit & Collections

United States District Court, D. Nevada

January 26, 2018

MICHAEL J. HANNON, Plaintiff,
v.
NORTHEAST CREDIT & COLLECTIONS, et al., Defendants.

          ORDER (1) GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; AND (2) DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF NOS. 62/67, 64)

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE.

         After discharging a Chapter 13 bankruptcy, plaintiff Michael Hannon became aware that several of his creditors were reporting allegedly inaccurate information to defendant Experian Information Solutions, Inc. (Experian), a credit reporting agency (CRA). Hannon disputed this information, triggering investigatory duties by Experian and the various information furnishers under the Fair Credit Reporting Act (FCRA). Hannon alleges that Experian violated that statute by continuing to report inaccurate information about him after an unreasonable reinvestigation, causing him to suffer actual damages. In particular, Hannon contends that the reporting of two accounts held by JH Portfolio Debt Equities LLC (JHP) did not reflect their discharge.

         The parties are familiar with the facts, so I will not repeat them here except where necessary to resolve the motions. Experian moves for summary judgment and Hannon moves for partial summary judgment. Because I find that Hannon has not shown a genuine issue of material fact on necessary elements of his FCRA claim, I grant summary judgment for Experian.

         I. ANALYSIS

         Summary judgment is appropriate if the pleadings, discovery responses, and affidavits demonstrate “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenck, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         A. Section 1681i

         Under FCRA, a CRA must “conduct a reasonable reinvestigation” upon receiving a dispute notice from a consumer concerning the accuracy of information in a consumer report. 15 U.S.C. § 1681i(a)(1)(A). To state a claim for liability under the reinvestigation provision, a plaintiff must establish that “1) his credit files contained inaccurate or incomplete information; 2) he directly notified [the CRA] of the inaccuracy; 3) the dispute is not frivolous or irrelevant; 4) [the CRA] failed to respond to the dispute; and 5) [the] failure to reinvestigate caused [the plaintiff] to suffer actual damages.” Taylor v. First Advantage Background Svcs. Corp., 207 F.Supp.3d 1095, 1103 (N.D. Cal. 2016).

         Experian contends that Hannon cannot show that the information it is reporting is inaccurate, because Hannon cannot show that the JHP accounts were included in his discharged bankruptcy. Experian further argues that its reinvestigation was reasonable because it received verification from JHP that its reporting was accurate and requested but never received from Hannon further documentation showing the accounts were included in the bankruptcy discharge. Finally, Experian argues that Hannon cannot establish that its reporting caused him any actual damages.

         Hannon responds that the JHP accounts were discharged in his bankruptcy, so including information about them that did not reflect this discharge is patently inaccurate and materially misleading. He further argues that Experian's reinvestigation was unreasonable because it relied exclusively on the automated consumer dispute verification (ACDV) form sent to JHP, failed to notify JHP of the reason for the dispute, and did not allow for discretionary changes by dispute agents in the face of allegedly inaccurate information confirmed by the furnisher. Finally, he argues that he suffered actual damages in the form of out-of-pocket expenses.

         B. Inaccurate Information

         To state a claim under § 1681i, the consumer must make a prima facie showing of inaccurate reporting. Dennis, 520 F.3d at 1069. An item in a report can be inaccurate “because it is patently incorrect, or because it is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Carvalho v. Equifax Info. Svcs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (quotation omitted). Hannon argues the JHP accounts were discharged in bankruptcy and therefore including past due balances without any notation of discharge was patently inaccurate and materially misleading. Experian responds that Hannon's arguments rely on the contention that the JHP accounts were discharged in bankruptcy, for which Hannon never produced admissible evidence.

         Hannon argues the JHP accounts are listed in the bankruptcy petition as Bank of America credit card accounts. See ECF No. 74-6 at 24. Those accounts are identified as Bank of America credit card accounts numbered 5222 and 094, and with claim balances of $15, 309 and $15, 280. Id. The dispute letter identified the disputed accounts as “JH Portfolio Debt Equiti (MBNA America), Account No: 687 ($15, 280)” and “JH Portfolio Debt Equiti (MBNA America), Account No: 687 ($15, 500).” Id. at 4-5.

         In support of his argument that these Bank of America accounts are the contested JHP accounts, Hannon cites to an Experian webinar, news articles about Bank of America's interest in MBNA, and a proof of claim from Hannon's bankruptcy for a different creditor. See ECF No. 74 at 5 n.13. ...


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