Later Affidavit Contradicting Earlier Deposition

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Later Affidavit Contradicting Earlier Deposition

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Garrett v. Trans Union, L.L.C.
Slip Copy, 2006 WL 2850499
S.D.Ohio,2006.
September 29, 2006

a. Contradicts Deposition Testimony

Citifinancial asserts that this Court should not consider the portions of Plaintiff's affidavit that directly contradict his deposition testimony. Specifically, Citifinancial references statements 12, 13, 17, 24 and 37 of the affidavit which essentially assert that the at-issue Citifinancial account was included in the September 21, 2001 bankruptcy discharge, and therefore, the account should have been reported as “Included in Bankruptcy.” In contrast, Citifinancial points out that several portions of Plaintiff's deposition testimony make clear that Plaintiff chose to grant a Deed in Lieu of Foreclosure to Citifinancial instead of surrendering the property in the bankruptcy. Based upon prevailing Sixth Circuit precedent, the Court agrees that these contradictory statements should be stricken.

*5 The Sixth Circuit has consistently found that “[a] party cannot create a genuine issue of material fact by filing an affidavit, after a motion for summary judgement has been made, that essentially contradicts his earlier deposition testimony.” Penny v. Untied Parcel Service, 128 F.3d 408, 415 (6th Cir.1997); and Reid v. Sears, Roebuck & Co., 790 F.2d 453, 460 (6th Cir.1986); accord Aereal, S.R.I. v. PCC Airfoils, LLC, 448 F.3d 899 (6th Cir.2006); Lockard v. Generals Motors Corp., 52 F. Appx. 782, 788-89 (6th Cir.2002); Smith v. Consilidated Rail Corp., 1996 WL 366283, at *4 (6th Cir.1996); and Rosinski v. Electronic Data Systems Corp., 1991 WL 105747, at *6 (6th Cir.1991).

Plaintiff argues that there is no contradiction and first cites to a portion of his deposition testimony where Plaintiff states that, to his knowledge, he understood the mortgage was discharged. (Pl.'s Depo. at 56) Plaintiff's reliance, however, is misplaced because Plaintiff corrected and clarified his testimony:

Q: So is your testimony today that the mortgage account was discharged in bankruptcy correct?

A: My understanding would be ··· if I couldn't make arrangements with Citifinancial, if we couldn't come to an agreement, it would be discharged. The agreement that we came to was do a deed in lieu.

( Id. at 57-5Cool. Plaintiff later reinforced his deposition testimony that the mortgage was not included in the bankruptcy:

A: ··· I don't know what their [Citifinancial's] thinking was okay? But I know that they knew what my options were. I could do a deed in lieu and them have something to sell and get money, or I could go bankruptcy and the house would be mine and they got nothing···· If I had to put it in bankruptcy, I could have walked away with the house free and clear and they'd have got nothing. But I didn't want that. I said, look, we can do this. If this is what you want to do, I'm willing to do this.

( Id. at 222-23) (emphasis added).

Next, Plaintiff seeks to rely on the fact that Plaintiff filed his intention to surrender his real estate encumbered by the Citifinancial mortgage. The Court finds that such reliance is misplaced and that Plaintiff has failed to offer any evidence that the property was actually surrendered to the trustee within thirty days which was required under 11 U.S.C. § 521 (2001). To the contrary, Plaintiff's testimony reveals that Plaintiff did not surrender the property, but instead continued to possess the property for another year following the bankruptcy, and then, after discharge, he negotiated a Deed in Lieu of Foreclosure with Citifinancial.

Based upon the foregoing, this Court finds that statements in Plaintiff's affidavit are in direct contradiction to Plaintiff's deposition testimony and also inconsistent with Plaintiff's admission that he continued to live in the property for over a year after the bankruptcy was discharged, until the Deed in Lieu of Foreclosure was finally granted. Accordingly, this Court will not permit Plaintiff to create an issue of fact as to whether the subject mortgage was discharged in bankruptcy or should have been reported as “Included in Bankruptcy.” Thus, the statements in paragraphs 12, 13, 17, 24 and 37 of Plaintiff's Affidavit are stricken.

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Trial court could consider summary judgment affidavit from county personnel administrator, submitted in support of county's motion for summary judgment as to employee's disability discrimination claims, even if affidavit contained improper statements; employee failed to support that averments in affidavit were based on hearsay, and did not object to the affidavit in either his brief opposing summary judgment or in a motion to strike the affidavit. ***Smith further argues that Downing's affidavit contains impermissible hearsay. We note that "evidence offered by affidavit in support of or in opposition to a motion for summary judgment must also be admissible at trial in order for the court to rely on it." Dzambasow v. Abakumov, Cuyahoga App. No. 86021, 2005-Ohio-6719, citing, Felker v. Schwenke (1998), 129 Ohio App.3d 427, 431, 717 N.E.2d 1165. Even if the affidavit contained improper statements, Smith has again failed to support that the averments were, in fact, based on hearsay. Moreover, "if the opposing party fails to object to improperly introduced evidentiary materials, the trial court may, in its sound discretion, consider those materials in ruling on the summary judgment motion." Dzambasow, supra, citing Christe v. GMS Mgt. Co., Inc. (1997), 124 Ohio App.3d 84, 90, 705 N.E.2d 691. Prior to this appeal, Smith had not objected to the affidavit either in his brief opposing summary judgment or in a motion to strike the affidavit. Therefore, we find no error in the trial court's consideration of the document. The fourth assignment of error is overruled.

Smith v. Baord of Cuyahoga County Com'rs
Slip Copy, 2006 WL 562149
Ohio App. 8 Dist.,2006.

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FTC v. Publ'g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir.1997) (holding that conclusory, self-serving statements lacking detailed facts and supporting evidence are insufficient to create a genuine issue of material fact).
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The court is required to disregard the contradictions in his affidavit and an issue of fact cannot be created by a later affidavit/testimony contradicting an earlier sworn statement. McLaughlin v. French Riviera Health Spa, Inc., 747 So.2d 652 [La. App. 5 Cir. 10/26/99] [subsequent affidavit, filed day before summary judgment hearing, which contradicted her prior deposition testimony, could not be relied upon to create triable issue of fact as to whether step fell apart and was defective]; Douglas v. Hillhaven Rest Home, Inc., 709 So.2d 1079, 1083 [La. App. 1st Cir. 4/8/98] [employee's subsequent affidavit, which contradicted her prior deposition testimony, could not be relied upon to create triable issue of fact as to her claim against property owner]; LeBlanc v. Dynamic Offshore Contractors, Inc., 626 So.2d 16 [La. App. 1st Cir.1993], [Court “disallowed a subsequent affidavit in contradiction of prior depositions to create an issue of fact, where no issue existed before, without some explanation or support for the contrary statements. The affidavit is well after the fact of the depositions and is also after the motions for summary judgment were filed by D & W and Hillhaven.”].

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Discharged employee brought employment discrimination action against former employer. On employer's motion for summary judgment and motions to strike, the District Court, Aspen, J., held that: (1) employee's affidavit relating to telephone call which he claimed to have had with another employee in which other employee supposedly stated that he believed there was favoritism toward whites in application of attendance control program was inadmissible hearsay, and (2) affidavit that was not signed in presence of notary public was inadmissible.
Motions granted.

Cornelius v. Hondo Inc.
843 F.Supp. 1243
N.D.Ill.,1994.

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Generally, party may not file affidavit in opposition to motion for summary judgment that contradicts earlier deposition testimony in attempt to create factual issue. Fed.Rules Civ.Proc.Rule 56, 28 U.S.C.A.
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Public employee, with various medical conditions, including asthma and chronic fatigue syndrome, brought action against township, its board of trustees, and police chief, alleging disability discrimination and retaliation under Americans with Disabilities Act (ADA), and parallel state law. On defendants' motions to strike employee's affidavit and for summary judgment, the District Court, Oliver, J., held that: (1) statements in employee's affidavit did not contradict her earlier deposition testimony; (2) employee's testimony of specific diagnoses of her doctors did not fall under exception to hearsay rule; (3) employee's testimony describing her physical condition did not constitute inadmissible lay witness testimony; (4) fact issues existed as to whether employee was disabled, and whether proposed accommodation imposed undue hardship on employer; (5) employer could not be liable for handicap discrimination under Ohio law; and (6) employer could not be liable for retaliation under either ADA or Ohio law.
Motions granted in part, and denied in part.

Holt v. Olmsted Tp. Bd. of Trustees
43 F.Supp.2d 812
N.D.Ohio,1998.

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Hollander v. American Cyanamid Corp., __ F.3d __, Dkt No. 98-7502 (2d Cir., March 29, 1999), slip op. at 2482 ("A court may therefore strike portions of an affidavit that are not based upon the affiant's personal knowledge, contain inadmissible hearsay, or make generalized and conclusory statements.")

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The general rule is that inadmissible hearsay cannot defeat a motion for summary judgment where there is no indication that it is reducible to a form that would be admissible at trial. See *1276 Pritchard v. Southern Co. Services, 92 F.3d 1130, 1135, amended in part on rehearing, 102 F.3d 1118 (11th Cir.1996), cert. denied, 520 U.S. 1274, 117 S.Ct. 2453, 138 L.Ed.2d 211 (1997). An affidavit submitted in connection with a motion for summary judgment may contain hearsay statements that would be admissible at the trial under exceptions to the hearsay rule. H. Sand & Co. v. Airtemp Corp., 934 F.2d 450, 454-55 (2nd Cir.1991).

Summary judgment is to be granted only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the declarations, 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." Fed.R.Civ.P. 56(c); See 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 "bears the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided by trial. Only when that burden has been met does the burden shift to the nonmoving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment." Clark v. Coats & Clark Inc., 929 F.2d 604, 608 (11th Cir.1991); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970).
The movant can meet this burden by presenting evidence showing there is no dispute of material fact, or by showing that the nonmoving party has failed to present evidence in support of some element of her case on which she bears the ultimate burden of proof Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548; see Fed.R.Civ.P. 56(a) and (b). Once the moving party has met her burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by ... affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate 'specific facts showing that there is a genuine issue for trial.' " Celotex, 477 U.S. at 324, 106 S.Ct. 2548. The nonmoving party need not present evidence in a form necessary for admission at trial; however, the movant may not merely rest on the pleadings. Id.
After a motion has been responded to, 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). The substantive law will identify which facts are material and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "[T]he judges's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine *1279 issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

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Caucasian former city employee sought recovery from former employer for, inter alia, reverse race discrimination under Title VII. Following dismissal, 125 F.Supp.2d 870, of other counts of amended complaint, city moved for summary judgment and employee moved to strike numerous paragraphs of city's statement of undisputed facts submitted in support of its motion. The District Court, Levin, United States Magistrate Judge, held that: (1) employee was not entitled to strike factual paragraphs on grounds of relevance, self-serving and conclusory nature of affidavits, or hearsay problems; (2) employee failed to establish prima facie case of reverse race discrimination; and (3) employee's poor performance was legitimate, nondiscriminatory reason for terminating him, and employee failed to show that reason was pretextual.
Plaintiff's motion granted in part and denied in part; defendant's motion granted.
***Affidavit submitted in connection with motion for summary judgment may contain hearsay statements that would be admissible at trial under exceptions to hearsay rule.
Statement in summary judgment affidavit of gender discrimination plaintiff, regarding purported comment by human resources manager to plaintiff that there was "nothing to talk about" as to alleged confrontations between plaintiff and co-worker, was offered for proving truth of matter asserted, and thus would be properly stricken as hearsay, since offering statement for impeachment purposes would not be relevant on motion for summary judgment.
The Rules are clear: "Supporting and opposing affidavits shall be made on personal knowledge." Fed.R.Civ.P. 56(e) (emphasis added). Rule 56(e)'s personal knowledge requirement prevents statements in affidavits that are based, in part, "upon information and *1273 belief"--instead of only knowledge--from raising genuine issues of fact sufficient to defeat summary judgment. See Stewart v. Booker T. Washington Ins., 232 F.3d 844, 851 (11th Cir.2000) ("upon information and belief" insufficient); Fowler v. Southern Bell Tel. and Tel. Co., 343 F.2d 150, 154 (5th Cir.1965) ("knowledge, information and belief" insufficient); Robbins v. Gould, 278 F.2d 116, 118 (5th Cir.1960) ("knowledge and belief" insufficient). [ ] Likewise, an affidavit stating only that the affiant "believes" a certain fact exists is insufficient to defeat summary judgment by creating a genuine issue of fact about the existence of that certain fact. Jameson v. Jameson, 176 F.2d 58, 60 (D.C.Cir.1949) ("Belief, no matter how sincere, is not equivalent to knowledge."); see also Tavery v. United States, 32 F.3d 1423, 1426 n. 4 (10th Cir.1994); Hansen v. Prentice-Hall, Inc., 788 F.2d 892, 894 (2d Cir.1986). Even if the affidavit is otherwise based upon personal knowledge (that is, includes a blanket statement within the first few paragraphs to the effect that the affiant has "personal knowledge of the facts set forth in th[e] affidavit"), a statement that the affiant believes something is not in accordance with the Rule. See Cermetek Inc. v. Butler Avpak, Inc., 573 F.2d 1370, 1377 (9th Cir.1978) (equating "I understand" statement in affidavit to inadmissible "I believe" statements and concluding that statement is inadmissible despite general averment to personal knowledge at beginning of affidavit). The district court's treatment of the "believe" portion of Hedge's statement in his affidavit--that Hedge "observed motion in the red car which I believe was [Davis] raising his hands towards the roof of his car in an attempt to surrender"--as sufficient to create a fact issue about raised hands was error. [ ]
Pace v. Capobianco, 283 F.3d 1275, 1278-1279 (11th Cir.2002) (footnotes omitted). Premised on Pace, the court will examine the remainder of the affidavit to determine whether it is premised on the plaintiff's "beliefs" or "personal knowledge."

Wyant v. Burlington Northern Santa Fe R.R.
210 F.Supp.2d 1263
N.D.Ala.,2002.

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Bruce v. Keybank Nat. Ass'n,
Slip Copy, 2006 WL 3743749, N.D.Ind., December 15, 2006 (No. 2:05-CV-330.)

OPINION AND ORDER


RUDY LOZANO, United States District Court Judge.
*1 This matter is before the Court on: (1) Plaintiff's Motion for Summary Judgment, filed on August 31, 2006 (DE# 83); (2) Defendant's Amended Motion for Summary Judgment (DE# 87), filed on September 28, 2006; and (3) Champion Mortgage's Motion to Strike Plaintiff's “Reply” in Support of Statement of Material Facts (DE# 100), filed on October 20, 2006. For the reasons set forth below, the motions for summary judgment are each GRANTED IN PART and DENIED IN PART. The motion to strike is DENIED AS MOOT.

Plaintiff's Motion for Summary Judgment is GRANTED to the extent it seeks summary judgment on the issue that Defendant failed to extend a “firm offer of credit” in connection with its access of Plaintiffs' “consumer report” in violation of the Fair Credit Reporting Act. In all other respects, however, this motion is DENIED.

Defendant's Amended Motion for Summary Judgment is GRANTED to the extent that it seeks summary judgment on the issue that Defendant did not willfully violate the Fair Credit Reporting Act. In all other respects, however, this motion is DENIED.

Because there is no genuine issue of material fact that would allow a reasonable juror to find that Defendant willfully violated the Fair Credit Reporting Act, this case is DISMISSED WITH PREJUDICE.



BACKGROUND

Plaintiff, Darrell Bruce, initiated this class action suit against Defendant, Keybank National Association d/b/a Champion Mortgage. According to Plaintiff, Defendant unlawfully accessed credit reports of numerous Porter County, Indiana and Lake County, Indiana consumers for the purpose of sending them letters offering a home equity loan. Plaintiff alleges he received such a letter (“Letter”) in May 2005. Plaintiff contends that Defendant obtained his credit report without his permission in order to send the Letter and the Letter does not contain a firm offer of credit. Consequently, Plaintiff claims Defendant violated the Fair Credit Reporting Act (“FCRA”). 15 U.S.C. § 1681 et seq. Plaintiff further contends that he is entitled to statutory damages because Defendant's violation the FCRA was willful. Not surprisingly, Defendant argues that the Letter does constitute a “firm offer of credit” and, in the alternative, even if the Letter does not constitute a “firm offer of credit,” there is no evidence that Defendant wilfully violated the FCRA. The parties have filed cross-motions for summary judgment, which are at issue here.



DISCUSSION

The standards that generally govern summary judgment motions are familiar. Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper only if it is demonstrated that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Nebraska v. Wyoming, 507 U.S. 584, 590 (1993); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In other words, the record must reveal that no reasonable jury could find for the nonmovant. Karazanos v. Navistar Int'l Transp. Corp., 948 F.2d 332, 335 (7th Cir.1991); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). In deciding a motion for summary judgment, a court must view all facts in the light most favorable to the nonmovant. Anderson, 477 U.S. at 255; Nucor Corp. v. Aceros Y Maquilas De Occidente, 28 F.3d 572, 583 (7th Cir.1994).

*2 The burden is upon the movant to identify those portions of “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits,” if any, that the movant believes demonstrate an absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once the movant has met this burden, the nonmovant may not rest upon mere allegations but “must set forth specific facts showing that there is a genuine issue for trial .” Fed.R.Civ.P. 56(e); Becker v. Tenenbaum-Hill Assocs., Inc., 914 F.2d 107, 110 (7th Cir.1990); Schroeder v. Lufthansa German Airlines, 875 F.2d 613, 620 (7th Cir.1989). “Whether a fact is material depends on the substantive law underlying a particular claim and ‘only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment.’ “ Walter v. Fiorenzo, 840 F.2d 427, 434 (7th Cir.1988) (citing Anderson, 477 U.S. at 248).

“[A] party who bears the burden of proof on a particular issue may not rest on its pleading, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact which requires trial.” Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir.1988) (emphasis in original); see also Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1391 (7th Cir.1993). Therefore, if a party fails to establish the existence of an essential element on which the party bears the burden of proof at trial, summary judgment will be appropriate. In this situation, there can be “ ‘no genuine issue as to any material fact’, since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323.

When there are cross-motions for summary judgment, the court should “construe the evidence and all reasonable inferences in favor of the party against whom the motion under consideration is made.” Premcor USA, Inc. v. American Home Assurance Co., 400 F.3d 523, 526-27 (7th Cir.2005).



Facts

Plaintiff resides in Hobart, Indiana. (Pl.Dep. p. 33). In May 2005, Plaintiff received a mailing (“Letter”) from Defendant, informing him that he was “pre-selected” to receive a “home equity line of credit with a minimum amount of $10,000.” (Manno Dep. p. 9; Compl. Ex. A). The letter specified certain terms of the loan including: (1) the maximum loan to value on the line of credit; (2) the variable annual percentage rate (“APR”); and (3) that there were no application fees, PMI or prepayment penalties. (Def. SMF ¶¶ 23-24). The Letter went on to inform Plaintiff that “[ a] ctual rates, fees and terms are based on those offered as of the date of application and are subject to change without notice.” (Compl.Ex.A).

Before Defendant sent Plaintiff the Letter, one of its compliance officers, Cheryl O'Leary, reviewed the form of the Letter and verified that it satisfied the FCRA. (Def. SMF ¶ 12). At that time, the compliance officer believed that, although a “firm offer of credit” must not be a “sham offer,” a written solicitation initiating the firm offer transaction need not contain every material term of the offer to satisfy the FCRA. (Def. SMF ¶ 36). Defendant obtained information from Plaintiff's consumer report, without Plaintiff's authorization, in order to send him the Letter. (Pl. SMF ¶¶ 7-8, 20-21).



The Letter Does Not Constitute A Firm Offer of Credit

*3 When interpreting the applicable FCRA provisions, the language and design of the statute must be kept in mind. Milwaukee Gun Club v. Schulz, 979 F.2d 1252, 1255 (7th 1992). The FCRA is designed to preserve the consumer's privacy in the information maintained by the consumer reporting agencies. 15 U.S.C. § 1681(a)(4). Specifically, FCRA prohibits businesses and other entities from obtaining information from the consumer's credit report if the consumer did not initiate the transaction and if a permissible purpose does not exist. 15 U.S.C. § 1681b . One permissible purpose is obtaining a credit report for the purpose of making a “firm offer of credit.” 15 U.S.C. § 1681b (c)(1)(B)(i).

The FCRA defines a “firm offer of credit” as “any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on a consumer, to meet specific criteria used to select the consumer for the offer.” 15 U.S.C. § 1681a(1).

In determining “whether the offer of credit comports with the statutory definition, a court must consider the entire offer and the effect of all the material conditions that comprise the credit product in question. If, after examining the entire context, the court determines that the ‘offer’ was a guise for solicitation rather than a legitimate credit product, the communication cannot be considered a firm offer of credit.” Perry v. First National Bank, 459 F.3d 816, 824 (7th Cir.2006) (citations omitted). Factors that have been considered in determining whether a solicitation contained a “firm offer of credit, include whether: (1) “it was not clear that credit approval was guaranteed;” (2) “the precise rate of credit and other material terms were not included in the solicitation;” and (3) the maximum amount available for the loan “in relation to the known limitations” of the loan was included in the solicitation. Id.

Before determining whether Defendant's Letter made a “firm offer of credit” the Court must set the parameters of its analysis. Defendant argues that the entire loan transaction between itself and Plaintiff should be evaluated. In contrast, Plaintiff contends that the sole focus should be the initial solicitation sent in the form of the Letter. This issue has recently been thoroughly addressed by in Murray v. Indymac Bank, F.S.B., No. 04 C 7669, 2006 WL 3253643, *2-3 (N.D.Ill. Nov. 7, 2006). There, the district judge found that the four corners of the initial solicitation was the proper focus. Id. Here, too, the proper focus for determining whether Defendant made a “firm offer of credit” is the content of the Letter. See GMAC Mortgage, 434 F.3d at 956 (in determining whether a lender has made a “firm offer of credit,” “a court need only determine whether the four corners of the offer satisfy the statutory definition (as elaborated in Cole), and whether the terms are honored when consumers accept.”).

*4 It is clear from the face of Defendant's Letter that recipients are preapproved for a loan of at least $10,000. The Letter provides that “We've Pre-Selected† you for a home equity line of credit for a minimum amount of $10,000-and we may be able to get you much more.” (Compl., Ex. A). By following the notation (†) affixed to the term “Pre-Selected,” the Letter notifies the consumer that:

You have received this offer based on information in your credit report. We selected you for this offer because it was determined, based on the information available at the time, that you satisfied our pre-existing credit criteria. In the event you respond to this offer, we will confirm our earlier decision by verifying your information. APR and credit terms will be based on verified credit qualifications. This offer may be withdrawn if we determine that you no longer meet the criteria established for this offer or fail to furnish the required collateral.

(Compl., Ex. A).

Thus, so long as the consumer's credit information remains in as good standing as it was when it was initially accessed, the consumer will be qualified to receive a loan from Defendant.

Although the Letter informs consumers they are pre-approved for a home equity loan, the Letter fails to disclose many of other material terms of that loan. Though it is true, as Defendant points out, that there are some terms disclosed by the Letter, (Def. Mem. In Supp., p. 9), most of these terms are disclosed in terms of parameters rather than specifics. For example, the APR of the home equity loan will be based on The Wall Street Journal prime plus 0.00%, which will vary but will never exceed 25% APR. More troubling, though, is that the Letter does not include many material terms such as the length of loan, how the loan is to be repaid, how the interest will be compounded, or any fees associated with the loan. A lack of material terms is not necessarily dispositive; however, it is a factor that weighs against the finding of a “firm offer of credit.” Perry, 459 F.3d at 824 (noting that “the precise rate of credit and other material terms” are a factor to consider in determining whether a credit solicitation constitutes a “firm offer of credit”).

Even if the Letter would have set out all of the then-existing material terms in detail, the Court would still be hard-pressed to find that a “firm offer of credit” existed. This is because the Letter states that “Actual rates, fees and terms are based on those offered as of the date of application and are subject to change without notice.” (Compl.Ex.A). Such language has been held to vitiate any possibility of construing a solicitation as a “firm offer of credit” under this Circuit's precedent. Murray v. Indymac Bank, F.S.B., No. 04 C 7669, 2006 WL 3253643, *4 (N.D.Ill. Nov. 7, 2006); Kudlicki v. Farragut Financial Corp., No. 05 C 2459, 2006 WL 927281, *2 (N.D.Ill. Jan. 20, 2006). Thus, even had the letter set out all of the then existing terms, those terms would not necessarily be applicable when the consumer applied for that loan.

*5 Another factor to consider is the loan limit and how that credit could be used. Perry, 459 F.3d at 824. Here, the minimum loan amount is $10, 000, and could be as much as $125, 000. The possible use of the credit is without limitation. Both of these things, though, may be subject to change, as set forth above.

Ultimately, what is at issue is whether the Letter offered anything of real value to the consumer. See Perry, 459 F.3d at 826 (holding that “the focus of our inquiry is whether the credit solicitation offers value to the customer.”). Under Cole and its progeny, the Letter did not offer anything of real value. The Seventh Circuit has stated that, aside from the amount of credit, the creditor and debtor “both must know of the other terms attached to that credit to determine whether it is advantageous to extend or to accept the offer” because the terms of the offer “may be so onerous as to deprive the offer of any appreciable value.” Cole, 389, F.3d at 728. Such a conclusion remains true even if, as Defendant argues, circumstances outside the four corners of the Letter are relevant to a determination of whether it extended a “firm offer of credit.”



Defendant's Violation Of The FCRA Was Not Willful

A consumer can recover actual, statutory and punitive damages against a defendant for violations of the FCRA. Actual damages are available if the consumer can show that he suffered some sort of actual harm and that the defendant negligently violated a duty imposed by the FCRA. 18 U.S.C. § 1681o. The FCRA allows consumers to recover statutory and punitive damages against a defendant if those consumers can demonstrate that the defendant willfully failed to comply with the FCRA. 15 U.S.C. § 1681n. Here, Plaintiff only seeks statutory damages and contends that Defendant willfully violated the FCRA.

In order for a party to willfully violate the FCRA, the party must “knowingly and intentionally violate [the FCRA], and it ‘must also be conscious that [its] act impinges on the rights of others.’ “ Ruffin-Thompkins v. Experian Information Solutions, Inc., 422 F.3d 603, 610 (7th Cir.2005)(quoting Wantz v. Experian Information Solutions, Inc., 386 F.3d 829, 834 (7th 2004)). “The statute's use of the word ‘willfully’ imports the requirement that the defendant know his or her conduct is unlawful.” Phillips v. Grendahl, 312 F.3d 357, 368 (8th Cir.2002)(cited with approval in Wantz). Under this framework, “the defendants cannot be held civilly liable if they obtained [the consumers'] reports ‘under what is believed to be a proper purpose under the statute but which a court ··· later rule[s] to be impermissible legally····” Id.

Plaintiff points to various facts in the record in an effort to show that Defendant willfully violated the FCRA.FN1 First, Plaintiff complains that Defendant's compliance procedure is deficient because Defendant never had an attorney review the Letter to determine whether it complied with the FCRA. (Pl. SMF ¶ 75). Instead, Plaintiff claims Defendant relied upon a compliance officer, who could not recall whether she reviewed the form of the Letter prior to it being sent out. (Pl. SMF ¶ 59). It is true that Defendant did rely upon a compliance officer; however, contrary to Plaintiff's assertion, that officer did review the form of the Letter and determined that it complied with the FCRA. (O'Leary Dep. p. 68-69; O'Leary Dec. ¶¶ 6-12). Plaintiff also complains that the compliance officer was unaware of the Seventh Circuit's November 2004 decision in Cole prior to sending out the Letter in the spring of 2005. (Pl. SMF ¶ 65). Despite being unaware of the Cole decision by name, it is undisputed that the compliance officer was aware of the contents of that decision and believed that the Letter satisfied the holding in Cole. (O'Leary Dec. ¶¶ 13-14).FN2


FN1.Notably, the parties differ as to what mens rea standard must be used to determine whether a willful FCRA violation exists. This is not entirely unreasonable, as there is a circuit split on the issue. One line of circuits allows a finding of willfulness when the Defendant acts with reckless disregard. See e.g. Reynolds v. Hartford Financial Services Group, Inc., 435 F.3d 1081 (9th Cir.2006). The other line of circuits, which includes the Seventh Circuit, has a more stringent standard and allows a finding of willfulness only when “the defendant knew his conduct was unlawful.” See e.g. Wantz, 386 F.3d at 834. Plaintiff believes that he “is not required to show that Defendant knew its action violated the Fair Credit Reporting Act in order to obtain summary judgment.” (Pl. Reply in Supp. p. 10). This belief is pervasive throughout Plaintiff's argument and obviously follows the reckless disregard line of cases. However, until the split is resolved differently in the Supreme Court, the Court adheres to the “actual knowledge” approach adopted in this Circuit.


FN2. Plaintiff argues that O'Leary's subsequent declaration is inadmissible as being contradictory to her deposition testimony. There is little question that subsequent affidavits or declarations are inadmissible if they directly contradict earlier deposition testimony. Adusumilli v. City of Chicago, 164 F.3d 353 (7th Cir .1998). Here, however, Plaintiff's relied upon statement of material fact cites to page 17 of O'Leary's deposition. During this portion of the deposition O'Leary was merely asked if she was aware of the Cole decision, to which she replied no. This does not directly contradict her subsequent declaration.


*6 Plaintiff also takes issue with the fact that Defendant subscribed to the Consumer Financial Services Law Report, which on December 29, 2004, issued a report that stated, in part, “The 7th U .S. Circuit Court of Appeals held that it is a violation of the FCRA for credit providers to access consumer credit information in connection with a ‘sham’ offer of credit. A ‘sham’ offer of credit is an offer that has no real value to a consumer.” (Pl. SMF ¶¶ 57-5Cool. Plaintiff complains that, while the compliance officer was aware of that report, she nevertheless approved the form of the Letter which contained an interest rate that, while based on the Wall Street Journal prime rate, would be determined after the consumer provided additional information. (Pl. SMF ¶ 72). Despite Plaintiff's complaint, this does nothing to show that Defendant willfully violated the FCRA. Even assuming that the compliance officer was aware of the December 29, 2004, report, there are no facts presented which establish that the compliance officer knew of a requirement that the precise interest rate must be included in a solicitation for it to constitute a “firm offer of credit.” This is not surprising because the inclusion of a precise interest rate is not itself determinative, but merely one factor in determining whether or not a “firm offer of credit” exists. See Perry, 459 F.3d at 824 (noting that “the precise rate of credit” is a factor to consider in determining whether a credit solicitation constitutes a “firm offer of credit”).

Plaintiff next points to Defendant's in-house communications regarding credit-related contents in other mailings. (Pl. SMF ¶¶ 77, 7Cool. Plaintiff argues that these communications show that Defendant was aware of its obligations under the FCRA but, nevertheless, failed to adhere to those obligations. This Court disagrees. Despite Plaintiff's argument, there is nothing linking the in-house E-mails with the Letter at issue. The E-mails do not refer to the Letter nor is there any evidence linking them to the contents of the Letter. (O'Leary Dep. pp. 61-64; P.App. F, KB0333-KB0335). Simply, these E-mails are devoid of any direct or circumstantial evidence that could establish Defendant was willfully not complying with the FCRA regarding the Letter.

Ultimately, there is no smoking gun in this case; that is, there is no direct evidence of Defendant or any of its agents admitting that it knowingly and intentionally violated the FCRA and that it was conscious that its act impinged on the rights of others. Moreover, though, upon review of the record as a whole, the Court concludes that there is no circumstantial evidence that would allow a reasonable juror to find that Defendant willfully violated FCRA.

At the time the letter was sent, recent appellate authority in this Circuit- Cole, 389 F.3d 719-significantly changed the legal landscape of what constituted a “firm offer of credit.” See Cole v. U.S. Capital, Inc., No. 02 C 1858, 2003 WL 21003696 (N.D.Ill. May 1, 2003) (holding that “firm offer of credit” is present in a solicitation so long as the offer presented within that solicitation would ultimately be honored by the consumer), rev'd, Cole, 389 F.3d 719. While the court of appeals in Cole significantly altered the definition of “firm offer of credit,” and what was required to be contained in an initial solicitation, it did not set forth a bright-line test regarding what constitutes a “firm offer of credit.” Instead, it provided some guidance on the issue, which left room for creditors to determine what constitutes a “firm offer of credit.” The compliance officer who reviewed the form of the Letter was familiar with the FCRA as well as the holding in Cole and still approved the Letter, which ran afoul of the FCRA; however, this mistake, in and of itself, does not establish willfulness. See Murray v. HSBC Auto Finance, Inc., No. 05 C 4040, 2006 WL 2861954 *6, (N.D.Ill. Sept. 27, 2006)(“To support a finding of willfulness, this court concludes that more evidence is needed than an assertion that the reviewing attorney was aware of the applicable FCRA standard.”).

*7 At most, Plaintiff has demonstrated that Defendant had less than perfect compliance procedures in place and Defendant failed to properly follow the law of the Circuit as altered by Cole. Whether these misgivings were reasonable or not is immaterial, though, as the reasonableness of Defendant's actions is only implicated if a plaintiff seeks actual damages. 15 U.S.C. § 1681o. Again, to recover statutory damages Defendant must have willfully violated the FCRA. Defendant's failures are insufficient to support a finding of willful noncompliance. Phillips, 312 F.3d at 368(“the defendants cannot be held civilly liable if they obtained [the consumers'] reports ‘under what is believed to be a proper purpose under the statute but which a court ··· later rule[s] to be impermissible legally ···”).

Even taking the facts in a light most favorable to Plaintiff, he has still failed to show that Defendant had actual knowledge that it was violating the FCRA. Consequently, this Court concludes that no reasonable juror could find that Defendant willfully violated the FCRA.

CONCLUSION
For the reasons set forth below, the parties' motions are GRANTED IN PART and DENIED IN PART. Because there is no genuine issue of material fact that would allow a reasonable juror to find the Defendant willfully violated the FCRA, this case is DISMISSED WITH PREJUDICE.

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the court is required to disregard the contradictions in his affidavit and an issue of fact cannot be created by a later affidavit/testimony contradicting an earlier sworn statement. McLaughlin v. French Riviera Health Spa, Inc., 747 So.2d 652 [La. App. 5 Cir. 10/26/99] [subsequent affidavit, filed day before summary judgment hearing, which contradicted her prior deposition testimony, could not be relied upon to create triable issue of fact as to whether step fell apart and was defective]; Douglas v. Hillhaven Rest Home, Inc., 709 So.2d 1079, 1083 [La. App. 1st Cir. 4/8/98] [employee's subsequent affidavit, which contradicted her prior deposition testimony, could not be relied upon to create triable issue of fact as to her claim against property owner]; LeBlanc v. Dynamic Offshore Contractors, Inc., 626 So.2d 16 [La. App. 1st Cir.1993], [Court “disallowed a subsequent affidavit in contradiction of prior depositions to create an issue of fact, where no issue existed before, without some explanation or support for the contrary statements. The affidavit is well after the fact of the depositions and is also after the motions for summary judgment were filed by D & W and Hillhaven.”].
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

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