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Abernathy v. Continental Service Group, Inc.

United States District Court, D. Nevada

June 9, 2018




         In 2016, plaintiff Christopher Abernathy hired Credit Research of Nevada (CRN) to help him with some credit issues. On Abernathy's behalf, CRN disputed several of his accounts as reported on his credit report by defendant Experian Information Solutions, Inc. (Experian), including a debt assigned to Continental Service Group, Inc. (ConServe).

         Unhappy with the results of multiple disputes, Abernathy sued Experian and ConServe for violating the Federal Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and Nevada Deceptive Trade Practices Act (DTPA). Both defendants move for summary judgment and I grant both motions.

         I. BACKGROUND

         Abernathy owed the College of Southern Nevada (CSN) $1, 158.50 for unpaid tuition, which CSN assigned to ConServe to collect. ECF No. 41-28 at 45-46. Abernathy paid this debt in full directly to CSN on August 26, 2016. Id. at 46.

         Meanwhile, in July 2016, Abernathy hired CRN to help him address credit issues. ECF No. 29-2 at 68-69, 71. CRN sent a dispute letter to Experian on August 12, 2016 disputing all the negative accounts on Abernathy's credit report. ECF No. 29-1 at 15-16. With respect to the ConServe account, the letter stated that the account was “not familiar.” Id. at 15. No supporting documentation was attached to the letter. Experian sent an automatic consumer dispute verification (ACDV) form to ConServe with the dispute reason listed as “001- Not his/hers. Provide complete ID.” Id. at 22.

         After receiving the ACDV, ConServe requested documents validating the debt from CSN. ECF No. 31-1 at 36. ConServe received an itemized account statement and screenshot from the college's record system showing the account was valid and the debt was paid in full. Id. at 37-38. ConServe's ACDV response confirmed the validity of the account and reported the account was a valid, paid collection account. Id. at 22, 38; ECF No. 29-1 at 22. Thereafter, Experian updated its reporting to show the ConServe account, identified as a “Collection” account, with status of “Paid, Closed” and no balance as of September 2016, the “Date of Status.” ECF No. 29-1 at 29; ECF No. 29-2 at 117. The comment section noted that the account was “disputed by consumer.” ECF No. 29-1 at 29. In the payment history section, only the month of September 2016 is listed, with a “C” notation meaning “Collection.” Id. Also in response to this dispute, ConServe sent Abernathy a letter confirming the debt had been paid and including supporting documentation from CRN. ECF No. 31-2 at 17-23.[1]

         On September 14, CRN sent Experian another letter disputing Abernathy's negative accounts and stating the ConServe account “was paid and [he] would like it removed.” ECF No. 29-1 at 97. The letter did not include any supporting documentation. Experian responded by sending a copy of Abernathy's report showing the account reported as paid and closed. ECF No. 29-2 at 8.

         On October 5, CRN submitted an online dispute on behalf of Abernathy asking Experian to confirm the negative notation in September on the ConServe account. That day, Experian sent a second ACDV to ConServe. Id. at 27. The dispute reason stated: “112 - Claims inaccurate information. Did not provide specific dispute. Provide complete ID and verify account information. PLEASE CONFIRM THE NEGATIVE NOTATION IN SEPTEMBER IS CORRECT. I BELIEVE THIS ACCOUNT IS MARKED IN THE WRONG MONTH.” Id.

         ConServe verified the account information and updated Abernathy's address. ECF No. 31-1 at 40. It responded to the ACDV on October 6, reporting the account should be marked as a paid collection account with zero balance as of that day. Id.; ECF No. 29-2 at 27. That same day, Experian sent Abernathy a new version of his report in response to his dispute. Id. at 31. The report showed the ConServe account as a collection account that was paid and closed, with a status date of October 2016 and the payment history showing a “C” notation in October 2016. Id.

         On November 2, CRN sent a third dispute letter to Experian. ECF No. 41-22. The letter again stated the ConServe account had been paid and requested its removal. Id. In response, Experian sent Abernathy a copy of his credit report, which showed the account was closed and paid. ECF No. 29-2 at 46. On December 16, 2016, ConServe sent Abernathy a letter confirming it had sent him documentation validating the debt. ECF No. 31-2 at 31.

         II. 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. Experian's Motion for Summary Judgment

         Abernathy brings two claims against Experian. The first is for negligently and willfully violating the FCRA. The second is for violating the DTPA. Experian moves for summary judgment on both claims.

         1. FCRA

         Abernathy alleges Experian violated sections 1681e(b) and 1681i(a) of the FCRA by failing to maintain reasonable procedures to ensure accuracy in its credit reports and failing to conduct a sufficient reinvestigation of the ConServe account. Experian argues it followed reasonable procedures and its investigation was adequate. It also contends Abernathy has no evidence of actual damages to support his negligence claim, and cannot show Experian acted willfully to support his claim for statutory damages. Abernathy responds that Experian's reports inaccurately showed his account as a paid collection account and included a notation of collection in September or October, when the debt was paid in August. He contends Experian's reliance on ACDVs was unreasonable and a willful violation of the FCRA.

         i. Negligent Noncompliance

         For negligent violations, the FCRA permits recovery of “any actual damages sustained by the consumer as a result of the failure.” 15 U.S.C. § 1681o. “The FCRA does not presume actual damages for a negligent . . . failure to comply with any of its requirements.” Johnson v. Wells Fargo Home Mortg., Inc., 558 F.Supp.2d 1114, 1122 (D. Nev. 2008). The plaintiff “bears the burden of proving that his damages were, in fact, caused by” the defendant's violation. Id.

         Experian argues Abernathy's claim for negligent FCRA violations must fail because he has produced no evidence of any cognizable actual damages. It contends Abernathy admitted in his deposition that he had no damages and never provided evidence of damages in written discovery. Abernathy responds that his deposition testimony should be excluded because he was asked sarcastic, leading questions and the testimony is either irrelevant or prejudicial, and that his statements ...

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