1681e[b]:Public Records Reporting:Zahran

Maximum Possible Accuracy
David A. Szwak

1681e[b]:Public Records Reporting:Zahran

Postby David A. Szwak » Sun Nov 13, 2005 9:20 am

Zahran v. Transunion Corp.,
Not Reported in F.Supp.2d, 2003 WL 1733561, N.D.Ill., Mar 31, 2003

This case is now before the Court upon defendant Trans Union's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, defendant's motion for summary judgment is granted as to all Counts of the complaint.

STATEMENT OF FACTS
Pursuant to Local Rule 56, all facts contained herein are either undisputed and supported by accompanying documents or deemed admitted through a failure to properly respond to the allegation by the opposing party. [FN1]


FN1. In Malec v. Sanford, 191 F.R.D. 581 (N.D.Ill.2000), the Seventh Circuit discussed the proper method of establishing facts through the record--in accordance with the Federal Rules of Civil Procedure, the Local Rules, and the common law. Malec, 191 F.R.D. at 582-84. Many of the individually numbered factual assertions set forth by the plaintiffs do not conform with such requirements. Several paragraphs do not cite supporting documents (e.g. ¶¶ 1-3, 5, 11, 20, 25, 26, 34, 37, 48, 101, 105, 113, 123, 129, 148, 154, 156, 160-62, 174, 178-81, 199, 202, 215-18, 234, 238, 241, 242, 245, and 254). An equal number are irrelevant to the claims of the complaint (e.g. ¶¶ 3, 9, 18, 20, 21, 22, 24, 28, 29, 30, 31, 43, 44, 46, 47, 52, 84, 86, 94, 97-101, 125, 127, 139, 146, 149, 163-70, 172-75, 177, 203-08, 212, 222-25, 230-33, 255, 256, and [sic] 248-49). Other properly cited paragraphs were considered in reaching the determination of the Court.


Trans Union is a consumer reporting agency ("CRA") as that term is defined in the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681a. Plaintiffs Robin and Karen Zahran ("Zahrans"), who live in Oak Brook, Illinois, own approximately one thousand acres of property in Denmark, Wisconsin, including parcels used for farming as well as rental properties. Over the course of several years, the Zahrans have been involved in a number of lawsuits. A variety of tax liens and releases of tax liens have been recorded in their names in Illinois. The Zahrans have also been involved in numerous disputes with various creditors.
Beginning in February, 2000, the Zahrans commenced a series of disputes regarding information contained in their Trans Union credit reports. At that time, their reports included tax liens, civil judgments, a foreclosure judgment, a paid collection account, and accounts showing late payments to various creditors. Trans Union timely investigated each of the Zahrans claims and corrected or voluntarily changed a number of them. Not all of the Zahrans disputed accounts are the subject of this action. Discovery revealed that most of the disputed adverse credit references were accurately reported at all times by Trans Union. The errors in reporting, if any, were attributable to the errors of third parties such as the Court of Brown County.
The following items are the only ones in which some of the account information was not correct, as originally reported by Trans Union:

----------------------------------------------------------------
Civil Judgment, docket Accurate but for judgment ¶¶ 19-22
# 94LM3466 (El-Masry amount: $18,956 listed
Judgment instead of the correct amount
of $11,974
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Civil Judgment, docket This judgment was entered, ¶¶ 23, 24
# 98C1221 (Wegner but the later reports did not
Implement Judgment) show that it had been vacated
on 9/10/1998
----------------------------------------------------------------
Denmark State Bank Accurate as to all terms ¶¶ 28-36
# 1505917915 except for the monthly
payment amount
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The Wegner judgment:
On April 6, 1998, a default judgment against Robin Zahran and in favor of Wegner Implement, Inc., was entered in Small Claims Court in Brown County, Wisconsin. This judgment was reported to Trans Union. Subsequently, the judgment was vacated on September 1, 1998 on the Zahrans' motion. The order vacating the judgment was not reported to Trans Union by the court or the Zahrans. As a result, prior to the Zahrans' dispute of this item in February, 2000, Trans Union did not report that this judgment had been vacated. Though Trans Union, which obtains public record information from third party vendors, requests information on vacated judgments, it did not receive notice of the September 1998 order vacating the Wegner judgment until February 2000. (Trans Union's Statement of Facts, hereinafter "Facts," ¶ 75.)
The El-Masry judgment:
*2 In 1998, Robin Zahran was a defendant and counter-plaintiff in a lawsuit filed by Youseff El-Masry in the Circuit Court of Kane County, Illinois (Case No. 94 LM 3466). A judgment in favor of El-Masry, for $11,974.47, was entered against Robin Zahran on March 23, 1998. Zahran's 1999 appeal of some order was ultimately dismissed for lack of appellate jurisdiction. Robin Zahran never paid the judgment. Though the Zahrans claimed that this judgment should not be reported at all, as it was not final, they are incorrect and the only inaccuracy in reporting was that the judgment amount was incorrectly listed as $18,956. This was changed to reflect the correct amount within a short time. Otherwise, all information related to this item was at all times accurate.
Denmark State Bank:
Denmark State Bank held a series of mortgage notes on a portion of Zahrans' Wisconsin property. At various times Denmark State Bank reported that the loan terms called for monthly payments of $1,100. In fact, during the early years of this loan the Zahrans were required to pay $1,100 per month. At some point, the term of this loan was converted to a single annual payment. Nonetheless, Denmark State Bank or its computer services vendor (Metavante) periodically reinserted $1,100 as an amount in the field reporting monthly payment terms on the computer tapes sent to Trans Union. Denmark State Bank reported the $1,100 monthly payment term concerning the loan to Trans Union in 1997, 1998, 1999, and 2000. Apart from this term, all other information concerning this account was accurate as reported.
Plaintiffs filed this action in the Circuit Court of Cook County on February 9, 2001, and it was removed to the United States District Court for the Northern District of Illinois on March 9, 2001. The Defendant filed the current motion for summary judgment of the complaint in its entirety on April 26, 2002.
****
Plaintiffs argue that all four of the elements as set forth in Philbin, 101 F.3d at 963, were present concerning their dealings with Trans Union. To prevail, Zahrans' must demonstrate that all of the following were present in this case: (1) inaccurate information was included in their credit report; (2) the inaccuracy was due to Trans Union's failure to follow reasonable procedures to assure maximum possible accuracy; (3) they suffered an injury; and (4) their injury was caused by the inclusion of the inaccurate information. See Id. Defendants argue that the information was correct as reported to Trans Union by sources of public record and their reliance on those documents and transmissions was, by law, reasonable. For the reasons that follow, the Court agrees with the defendants.
1. The Accuracy of the Credit Reports Provided by Trans Union
The first element of a claim under the FCRA is the inclusion of inaccurate information on the consumer's credit report. Several factual errors appeared to be present on the Zahrans' credit reports provided by Trans Union. These include Civil Judgment No. 94LM3466 reported for an inaccurate amount, Civil Judgment No. 985C1221 entered in Brown County, but not immediately removed once vacated, and the loan from Denmark State Bank with varying and inaccurately updated terms listed. When viewing the facts in a light most favorable to the non-moving party, the Zahrans, the first element of a claim has been satisfied by demonstrating the existence of factually inaccurate information appearing on their consumer credit reports.
2. The Reasonableness of Trans Union's Procedures to Ensure Reporting Accuracy
The second element of a claim under the FCRA concerns reasonable reporting procedures ensuring maximum accuracy. This may be stated as follows: "Whenever a consumer reporting agency prepares a consumer report, it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681 e(b). The Zahrans' allege that the Trans Union's reports which included any of their disputed items establish a violation of this provision.
Plaintiffs have demonstrated that Trans Union prepared an inaccurate credit report under the first element of the FCRA. See Henson v. CSC Credit Services, 29 F.3d 280, 284 (7th Cir.1994); Cahlin, 936 F.2d at 1156. However, the inaccuracies alleged by the Zahrans do not demonstrate a violation of § 1681e(b), absent a showing that those inaccuracies resulted from Trans Union's failure to maintain and follow reasonable procedures. Spence v. TRW, Inc., 92 F.3d 380, 383 (6th Cir.1996); Bryant v. TRW. Inc., 689 F.2d 72, 78 (6th Cir.1982); and see Cahlin, 936 F.2d at 1151 (11th Cir.1991). The ECRA does not hold a CRA strictly liable for reporting inaccuracies. Cahlin, 936 F.2d at 1156. If the credit reporting agency establishes that it followed reasonable procedures, it will not be liable even if an inaccurate report was generated. Id. Reasonable procedures are defined as measures that a reasonably prudent person would follow under the circumstances. Bryant, 689 F.2d at 78.
*5 The FCRA is not a vehicle for consumers to collaterally attack the underlying basis of accurately reported public records. Williams v. Colonial Bank, 826 F. Supp 415, 418 (M.D.Ala.1993). In determining liability under the FCRA, the court must weigh the potential harm from inaccuracies with the burden of safeguarding procedures against such inaccuracies. Philbin, 101 F.3d at 963. The Seventh Circuit has held that a credit reporting agency is not liable under the FCRA when it reports inaccurate information obtained from a court's judgment docket absent prior notice that the information was incorrect. Henson, 29 F.3d at 285. The court determined that verifying such information would be a burdensome and inefficient procedure for a credit reporting agency to engage in. Id. Additionally, independent verification of information provided by creditors is not needed absent knowledge that the information may be inaccurate. Formusa v. Energy Sharing Resources, Inc., No. 96C50410, 1999 WL 436596, at *3 (N.D. Ill. June 28, 1998). If a defendant does not dispute that the items had been reported and only attacks the propriety of the report, summary judgment may be granted. Williams, 826 F. Supp at 417.
A. Trans Union reported public record information accurately.
As established by certified copies of documents and Plaintiffs own admissions, the tax liens, foreclosures, and civil judgments Trans Union reported accurately reflected duly filed public records concerning the plaintiffs. The foreclosure judgment in favor of Alvin and Dorothy Herlache, before it was vacated in June of 2000, was an accurate record of the Manitowoc County Circuit Court even months after Trans Unions March 2000 decision (not mandated by the FCRA) to delete the item in the face of Zahrans' threats and insistence that the judgment was on appeal. The same is true of the concerning the judgment in the court of Brown County which was not reported by the court as vacated. Additionally, the Zahrans did not supply Trans Union with a copy of the vacated judgment until March 2000, and at that time Trans Union removed the disputed item from the report. Again, the same is true concerning the El-Masry judgment which only had issues concerning sanctions in dispute at the time of reporting. The FCRA does not require all appeals to be finalized prior to reporting. 15 U.S.C. § 1681c(a)(2). Trans Union was not obligated to further investigate the accuracy of public records such as these and their reporting procedures were reasonable under the FCRA.
B. Trans Union reported Zahrans delinquencies with creditors accurately.
Trans Union accurately reported information provided to it by LaChapelle Credit Service, Wisconsin Public Service Corporation, First National Bank of Manitowoc, Nicor, The Money Store, and Illinois Collection Service. Though Mr. Zahrans repeated contacts ultimately caused several of these creditors to change their reports (Facts, ¶¶ 42, 49, 83), the reports were accurate when reported by Trans Union. The Zahrans actually supplied Trans Union with documents supporting the delinquency of several of their accounts, including the one with the Money Store. There was no reason for Trans Union to believe that any information supplied to them on credit reports was inaccurate. Once there was reason to believe that a reported delinquency was inaccurate Trans Union took proper measures to investigate and remove the item.
*6 Another example of an outside creditor reporting information to Trans Union that was later challenged and corrected concerns Denmark State Bank. The bank reported the $1,100 monthly payment as part of its routine monthly reporting to Trans Union from 1997 to April 1999. (Facts, ¶ 36.) During Trans Union's first investigation of the item in March 2000, the bank informed Trans Union that the $1,100 monthly payment was no longer in effect. (Id., ¶ 83.) Accordingly, Trans Union's consumer relations staff removed the payment detail from the account. ( Id., ¶¶ 84, 85.) The bank, however, again began reporting the $1,100 payment amount on its regular electronic transmissions to Trans Union. (Id., ¶ 36.) Hence, new reports showing $1,100 in the monthly payment field appeared as the most current information reported by the bank. (Id., ¶ 106.) When Trans Union investigated this in January 2001, a Denmark loan officer at that time verified that the information was indeed accurate (Id., ¶ 109.)
The terms of the Denmark loan, which was frequently renewed (at least annually), had changed several times over the course of the loan. The loan had called for monthly payments in the past, and Trans Union was aware of nothing to suggest that such payments could not again be required. The procedures of Trans Union concerning this disputed item are typical of the many disputes brought froth by the Zahrans, which show no wrongdoing on the part of Trans Union.
Since Trans Union has demonstrated reasonable procedures concerning its reporting, the Court need not consider whether the Zahrans suffered any injury as a result of the inaccurate, but promptly corrected information.

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