Admissibility of Credit Reports

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Admissibility of Credit Reports

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Admissibility of Credit Reports


Capital Funding v. Chase Manhattan Bank USA,
191 Fed.Appx. 92, 2006 WL 1911019, C.A.3 (Pa.), July 11, 2006 (No. 04-4355.)

Background: Buyer of portfolio of charged-off credit card accounts sued seller for breach of contract, alleging that accounts in portfolio were not as represented in credit card purchase agreement. The United States District Court for the Eastern District of Pennsylvania, Legrome D. Davis, J., granted summary judgment to seller. Buyer appealed.

Holdings: The Court of Appeals, McKee, Circuit Judge, held that:
(1) denial of buyer's motion to compel production of account histories for sample accounts was not an abuse of discretion;
(2) disallowing deposition of credit reporting agency employee was not an abuse of discretion;
(3) seller's failure to disclose affidavit of credit reporting agency employee did not warrant its exclusion;
(4) district court was entitled to evaluate methods and information that buyer's proposed expert relied on in forming his opinion;
(5) unauthenticated credit reports were inadmissible;
(6) term “delinquency,” as used in purchase agreement, referred to the delinquency that led to charge-off; and
(7) there was no evidence from which damages could be calculated to a reasonable certainty.


Appeal from the United States District Court for the Eastern District of Pennsylvania, (Civ. No. 01-6093), District Judge: Hon. Legrome D. Davis.
Patricia S. Biswanger, Cozen & O'Connor, Philadelphia, PA, for Appellant.
Paul D. Weller, Jennifer B. Jordan, Morgan, Lewis & Bockius, Philadelphia, PA, for Appellee.

Before McKEE, SMITH and VAN ANTWERPEN, Circuit Judges.


McKEE, Circuit Judge.
**1 Capital Funding appeals several rulings the District Court made in granting summary judgment to Chase Manhattan Bank. For the reasons stated below, we will affirm.

*94 We will consider each of Capital Funding's claims of error separately. Because we write primarily for the parties, it is not necessary to reiterate the facts or background of this case except insofar as may be helpful to our brief discussion.

I. Motion to Compel

Capital Funding purchased a portfolio of charged-off credit card accounts from Chase Manhattan Bank pursuant to a Credit Card Purchase Agreement. (J.A. 028.) Capital Funding subsequently sued Chase, contending that accounts in the portfolio were not as represented in the Agreement.

[1] On appeal, Capital Funding challenges the District Court's order rejecting Capital Funding's January 15, 2004, motion to compel the production of five years of account histories for 150 sample accounts selected by the court. (Order, Feb. 3, 2004 at J.A. 117a.) We review the challenged discovery ruling for an abuse of discretion. See Camiolo v. State Farm Fire & Cas. Co., 334 F.3d 345, 354 (3d Cir.2003).

After a lengthy and bitter dispute as to the number and dates of account histories that would be provided, the District Court issued an order by which it selected 150 FN1 accounts at random and directed Chase to provide “billing statements for the selected accounts for the five previous years.” (Order, July 22, 2003 at J.A. 083.) Chase interpreted the phrase to mean five years prior to the order, and accordingly provided Capital Funding with account histories dating to July 1998. Capital Funding, however, interpreted “the five previous years” to mean the five years prior to December 1999, the charge-off date in the purchase agreement.

FN1. Capital Funding chose this number, agreeing in a conference call that 150 sample accounts would be “sufficient and acceptable.” (Appellant's Br. 13.)

Capital Funding wrote to the court on September 9, 2003, and again on September 17, 2003, asking for a confirmation of its interpretation of the order. (See Mot. for Reconsideration and Clarification 7, Oct. 3, 2003.) The proposed order attached to the second letter directed Chase to produce complete account histories for each of the 150 accounts.FN2 In response, the District Court issued a scheduling order that did not mention the dates of account histories to be produced, and thus implicitly denied Capital Funding's requests. (Order, Sept. 23, 2003.) Capital Funding filed a Motion for Reconsideration and Clarification, asking the court to clarify the September order “to specifically reflect the five year period of time for which ... histories must be produced by [Chase].” (Mot. for Reconsideration and Clarification 4.) The District Court denied the motion, stating that the September 22, 2003 order was “abundantly clear on its face and in no need of clarification” and noting that “[Capital Funding] merely appears to disagree with the Court's rulings, which alone is not a proper basis for granting Plaintiff's Motion.” (Mem.Order.2, Jan. 5, 2004.) Undeterred, Capital Funding filed a motion to compel the production of the 150 account histories going back to December 1994. (Mot. to Compel, Jan. 15, 2004 at 104a.) The court denied that motion. (J.A. 117a.)

FN2. Capital Funding did not provide this document with the appendix and the electronically available docket entry Chase claims contains this document, see Appellee's Br. 53, actually contains an unrelated and likely incorrect attachment. Appellant does not dispute Chase's characterization of the order, however.

**2 On appeal, Capital Funding argues that the account histories were necessary to *95 show that Chase sold Capital Funding accounts that had experienced delinquencies other than the delinquency that lead to the charge-off. Chase, however, conceded that the accounts included such prior delinquencies, eliminating the need for discovery on this issue.

Capital Funding further argues that the histories were required to prove that accounts were charged off earlier than Chase represented in the Agreement. However, Capital Funding received histories for 150 accounts dating back to July 1998, 17 months prior to the charge-off date in the Agreement. These histories would have reflected any early charge-off, yet Capital Funding did not use them to show that Chase charged off accounts earlier than it represented.

The District Court thus evaluated and denied numerous motions Capital Funding had filed to obtain the same information it sought in the motion to compel. Not only did the District Court not abuse its discretion in denying the motion to compel, it showed commendable patience in continuing to field repetitive requests for the same documents despite numerous refusals to order additional account histories. We can find nothing in this record to suggest that the District Court's failure to grant a motion to compel, which the court clearly concluded was untimely, burdensome, and repetitive, could constitute an abuse of discretion under the circumstances here.

II. Motion to Depose

[2] Capital Funding claims that the District Court abused its discretion in disallowing the deposition of TransUnion employee Sharon Sarna-Paulikaitis while allowing Chase to rely upon her affidavit. However, Chase argues (without contradiction from Capital Funding in the latter's Reply Brief) that Capital Funding is only telling part of the story. Capital Funding subpoenaed TransUnion on September 12, 2003, “the day discovery closed.” (Appellee's Br. 56.) Capital Funding did nothing to enforce that subpoena when TransUnion objected. Thereafter, TransUnion provided Chase with an affidavit, “which Chase promptly provided to [Capital Funding].” (Appellee's Br. 56.) That affidavit stated, in pertinent part, that “TransUnion currently does not have a field representing a charge off date.” (TransUnion Aff. ¶ 9 at J.A. 109.) TransUnion's credit reports are squarely implicated by Capital Funding's breach of contract suit and its allegations about the extent of the prior delinquencies and credit history of the accounts purchased from Chase. Capital Funding's expert on this issue, Louise Epstein, relied on the TransUnion reports to argue that the accounts had been charged-off prior to December 1999. Capital Funding does not deny that it “issued (and then abandoned)” (Appellee's Br. 57) a subpoena to TransUnion before discovery closed. Chase immediately disclosed the TransUnion affidavit to Capital Funding, and there is no suggestion of bad faith. Given that background, the argument that the District Court somehow abused its discretion in denying Capital Funding's belated motion to compel the deposition of a TransUnion representative is frivolous.

**3 [3] Capital Funding also attempts to challenge to the District Court's ruling on the TransUnion affidavit under Fed.R.Civ.P. 26(a)(2)(b). Capital Funding raises this argument for the first time on appeal. As a “general rule,” absent exceptional circumstances, we do not review issues raised for the first time on appeal. See Gardiner v. Virgin Islands Water & Power Auth., 145 F.3d 635, 646-47 (3d Cir.1998). We can find no exceptional circumstances here, and we therefore need not address this claim.

*96 [4] Capital Funding argues that even if the affidavit is not deemed expert testimony, it is still inadmissible under Fed.R.Civ.P. 37(c)(1). That Rule prohibits using evidence at trial that has not been disclosed pursuant to Fed.R.Civ.P. 26, unless the failure to disclose is harmless. However, “the exclusion of critical evidence is an ‘extreme’ sanction, not normally ... imposed absent a showing of willful deception or ‘flagrant disregard’ of a court order by the proponent of the evidence.” In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 791-92 (3d Cir.1994) (quoting Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894 (3d Cir.1977)). We see nothing here that would suggest that Chase's behavior rose to this level, and Capital Funding does not point us to anything that would. Similarly, Capital Funding cannot establish that it was prejudiced by the nondisclosure. Capital Funding was well aware of the possible importance of testimony from TransUnion and had ample opportunity to depose appropriate employees or officers of that company. In fact, as noted above, it served a timely subpoena for a deposition on TransUnion and then did nothing to follow up.

III. Exclusion of Expert Testimony

Capital Funding appeals the exclusion of the testimony of its proposed experts, Louise Epstein and Glenn Newman. We also review that claim for an abuse of discretion. In re Paoli R.R. Yard PCB Litig., 35 F.3d at 749. In its thorough and comprehensive opinion, the District Court explained why it was excluding this evidence, and we need only briefly address Capital Funding's claim that the District Court abused its discretion in doing so.

[5] Capital Funding contends that it was improper for the District Court to evaluate the methods and information Newman relied on in forming his opinion. According to Capital Funding, any such concerns were only relevant to issues of credibility or probative weight and should therefore have been resolved by a jury. That argument ignores the District Court's “gatekeeping” obligation in evaluating expert testimony. See Kumho Tire v. Carmichael, 526 U.S. 137, 141, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). The District Court possesses “the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination.” Id. at 142, 119 S.Ct. 1167 (emphasis in original). The District Court's concerns here amply support the exercise of its discretion in the performance of its gatekeeper function.

IV. Summary Judgement

1. Eligibility of Accounts

**4 [6] Capital Funding relied exclusively on unauthenticated TransUnion credit reports in attempting to show that accounts in the Portfolio were charged off prior to December 1999, in violation of the Agreement. As the District Court explained in excluding the reports, Fed.R.Evid. 901(a) requires documents to be authenticated in order for them to be admissible at trial, and only evidence admissible at trial may be considered in ruling on a motion for summary judgement. See Philbin v. Trans Union Corp., 101 F.3d 957, 961 n. 1 (3d Cir.1996).

[7] Capital Funding argues that because Anthony Carabello could have authenticated the credit reports at trial, the District Court should have considered them. However, Carabello's affidavit was not offered with Capital Funding's Opposition for Summary Judgement. Rather, it was only tendered with the Motion for Reconsideration. Yet, it clearly was not “newly discovered evidence,” and it was therefore properly excluded from consideration. See *97 Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985). Moreover, the District Court realized that Capital Funding failed to show that Carabello could authenticate the credit reports. Finally, in its affidavit, TransUnion clearly states that it “does not currently have a field representing charge off date.” (J.A. 108-09.) Thus, as the District Court pointed out, “even if the credit reports had been admissible, they do not state what Capital Funding suggests.” FN3 (J.A. 021.)

FN3. Capital Funding further argues that because it was denied the additional account histories, it was deprived of the evidence it could have used to show an earlier charge-off date. As noted above, Capital Funding received seventeen months of histories for 150 accounts, but did not use a single one of these histories. Accordingly, we do not think the the District Court abused its discretion in concluding that additional histories would not have changed the outcome.

2. Defining “Delinquency”

[8] Capital Funding defines “delinquency” under the Agreement as “any delinquency, whether it was the one that led to the charge-off or not.” Chase defines it as “the delinquency that led to the charge-off.” The term is not defined in the Agreement. Accordingly, “the rules of contract construction require that the term be given the meaning commonly understood in the credit card industry, as established by the record.” FleetBoston Fin. Corp. Fleet Nat'l Bank v. Advanta Corp., 2003 WL 240885, 2003 Del. Ch. LEXIS 8, * 71 (Del. Ch.2003). See also Restatement (Second) of Contracts § 222. Here, Epstein, Capital Funding's own industry expert, explained in a deposition that the term “delinquency” refers to the delinquency that lead to charge-off. (J.A. 646-47.) Capital Funding offered no evidence that others in the industry use that term to refer to something other than the delinquency that lead to the charge off in this context. Moreover, Capital Funding did not challenge Chase's assertion that neither Chase nor any other bank in the industry sells portfolios of accounts with a history of only one delinquency.

3. Damages

[9] The District Court was also correct in concluding that Capital Funding failed to present “evidence from which damages may be calculated to a reasonable certainty.” Ware v. Rodale Press, Inc., 322 F.3d 218, 225-26 (3d Cir.2003). In its motion opposing summary judgment, Capital Funding relied entirely on the affidavit of Glenn Newman. The District Court determined that his testimony was unreliable, and excluded it. On appeal, Capital Funding relies on the Carabello affidavit that was submitted with its motion for reconsideration. However, as we have already noted, Carabello's testimony was not offered until after the District Court granted summary judgment and it was not considered. Ironically, Capital Funding had insisted that Carabello was not competent to testify about damages, and had objected to Chase questioning him about damages during his deposition. (J.A. 559.)

V. Conclusion

**5 For the reasons listed above, the District Court's grant of summary judgment against Capital Funding and in favor of Chase will be affirmed.
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404
Mid South Tower
Shreveport, Louisiana 71101
Fax 318-221-6555

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Post Posted: Fri May 04, 2007 3:21 am Post subject: Reply with quote


Semper v. JBC Legal Group,
Not Reported in F.Supp.2d, 2005 WL 2172377, W.D.Wash., September 06, 2005 (No. C04-2240L.)


*1 This matter comes before the Court on “Plaintiff's Motion for Summary Judgment Resolving All Claims” (Dkt.# 33) and “JBC's Motion to Dismiss and For Summary Judgment Resolving All Claims” (Dkt.# 29). Plaintiff has asserted that defendants violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and various Washington statutes, and that defendants invaded her privacy by placing her in a false light. Plaintiff demands an award of maximum statutory damages, a determination of actual and punitive damages, an award of attorney's fees and costs, and such other proceedings as are just and proper.

Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine issue of material fact which would preclude the entry of judgment as a matter of law.FN1 The party seeking summary dismissal of the case “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact .” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp., 477 U.S. at 324. “The mere existence of a scintilla of evidence in support of the non-moving party's position is not sufficient,” however, and factual disputes whose resolution would not affect the outcome of the suit are irrelevant to the consideration of a motion for summary judgment. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir.2001); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In other words, “summary judgment should be granted where the nonmoving party fails to offer evidence from which a reasonable jury could return a verdict in its favor.” Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir.1995).

FN1. Although defendants request that certain claims be dismissed on the pleadings pursuant to Fed.R.Civ.P. 12(b)(6), the parties have submitted evidence outside the record that the Court has not excluded. Because all parties have had an opportunity to present evidence related to the matters raised in the motions, they shall be considered under Fed.R.Civ.P. 56.

Taking the evidence presented in the light most favorable to the non-moving party, the Court finds as follows:

1. Plaintiff misapprehends the effect of the rule that pro se litigants are held to a less stringent pleadings standard than litigants who are represented by counsel. Although the rule requires that the allegations of a pro se complaint be liberally construed when determining whether a viable claim has been asserted and that strict compliance with procedural/technical rules will not be expected of pro se litigants, it does not alter the summary judgment standard or otherwise give pro se non-prisoner litigants multiple opportunities to present their evidence. “[P]ro se litigants in the ordinary civil case should not be treated more favorably than parties with attorneys of record.” Jacobsen v. Filler, 790 F.2d 1362, 1364 (9th Cir.1986).

*2 2. Defendant JBC Legal Group PC violated § 1692e(2) of the FDCPA and RCW 19.16.250(14) and (1Cool, all of which preclude a debt collector from demanding amounts, fees, or costs that are not authorized by the debt instrument or governing law. In its letter dated September 3, 2004, JBC demanded payment of statutory fees of $234.54 and a return fee of $25.00, in addition to an amount close to, but not exactly, the face value of the dishonored check.FN2 Defendants assert that the demanded fees are authorized by RCW 62A.2-709(1) or RCW 62A.3-515. The Court disagrees. JBC is clearly not a “seller” under RCW 62A.2-709(1) and has not incurred the types of damages, such as the costs of stopping deliveries or of caring for goods after the buyer's breach, identified as “incidental damages” under RCW 62A.2-710. Even if the Court assumes that JBC could have lawfully demand payment of certain reasonable handling fees under RCW 62A.3-515(a), there is no evidence that JBC complied with the mandatory notice requirements of RCW 62A.3-520. Thus, by demanding payment of amounts, costs and fees that were not consistent with the debt instrument or authorized by statute, JBC made false representations regarding the debt owed by the debtor in this case.

FN2. Defendants misstated the amount of the alleged debt by reporting the “Original Amount Owed” as $78 and/or $78.18 (depending on the communication) instead of the $79.18 shown on the dishonored check. Defendants have not attempted to explain this discrepancy which would, of course, make it more difficult for the consumer to identify the source and confirm the accuracy of the collections notice.

To the extent plaintiff objects to the Court's consideration of the check itself, the objection is overruled. Even if the check is hearsay, it can be admitted to explain why defendants placed a collection notice on her credit report in the first place and to show what a review of defendants' files would have revealed regarding the debt. Mr. Boyajian's testimony regarding the check, which simply describes the check and how it came to be held by Outsource Recovery Management, has also been considered.

3. In the second count listed in her motion for summary judgment (Motion, Dkt. # 33 at 3), plaintiff states that defendants' attempt “to collect a debt that is in fact not owing ... was false, misleading and unfair” under § 1692e and/or § 1692f of the FDCPA. Defendants point out that the dishonored check supported the initial report of a claim to the consumer reporting agencies. Plaintiff does not address this argument in her reply. The Court finds that, except as specifically noted herein, the original report of a debt in collection was not a false, deceptive, misleading, unfair, or unconscionable means of collecting on the alleged debt.FN3

FN3. As discussed further below ( see ¶ 20), neither party has provided sufficient information for the Court to determine whether plaintiff or an authorized agent wrote the disputed check back in 1998. Having failed to show that the check was written by another Jehan Semper or that it was otherwise invalid at its inception, plaintiff cannot succeed on her most general claims under § 1692e and § 1692f of the FDCPA.

4. Defendant JBC Legal Group, PC violated § 1692e(3) of the FDCPA, which precludes the “false representation or implication ... that any communication is from an attorney.” The September 3, 2004, letter was written on JBC Legal Group PC letterhead and identifies four attorneys, the bars of which they are members, and the three offices maintained by JBC Legal Group. The signature block of the September 3rd letter states:

JBC Legal Group, PC

Compliance Department

Although the letter was not signed by a lawyer, an unsophisticated consumer would infer that an attorney was involved given the nature of the communication, the use of a law firm's letterhead, and the lack of any indication that the communication was administrative or otherwise generated by a non-lawyer employee of the firm. Mr. Boyajian has acknowledged that the September 3rd letter was prepared by “employees in JBC's Compliance Department.” The implication that the communication was from an attorney is false and violates the statute.

To the extent plaintiff argues that the use of attorney letterhead, in and of itself, constitutes a threat to sue in violation of § 1692e(5) of the FDCPA, the Court disagrees. Plaintiff requested additional information regarding the nature of a disputed claim and defendants answered. There is no implicit or explicit threat that JBC would file suit in its effort to collect on the dishonored check.

*3 5. Defendant JBC Legal Group PC violated § 1692e(Cool of the FDCPA, which precludes the communication “to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.” When plaintiff realized that a collections item was showing up on her credit report, she informed both Equifax and JBC of the dispute and requested additional information from JBC. Based solely on its own determination that plaintiff had failed to establish the merits of her dispute, JBC did not inform Equifax that the claim was, in fact, disputed. The FDCPA sets forth specific procedures and methods that must be used by debt collectors when attempting to collect outstanding debts: the statute does not give debt collectors the authority to determine unilaterally whether a dispute has merit or whether to comply with the requirements of the FDCPA in a given case. JBC's “failure to communicate that a disputed debt is disputed” violated the statute.

JBC also violated § 1692e(Cool when it notified Equifax that plaintiff made a payment on the alleged debt on March 20, 2003. There is no evidence that plaintiff ever made a payment on the alleged debt, the information mirrors that contained in JBC's activity report related to plaintiff's file, and defendants knew or should have known that either the payment report was false or continued efforts to collect $337.72 were unwarranted (had plaintiff in fact paid the $234.54 recorded on JBC's activity report, the alleged outstanding debt would have been reduced to $103.1Cool.

Finally, JBC's initial communication to the credit reporting agency regarding the status of the account that was in collections contained false representations regarding the client for whom JBC was attempting to recover the debt. As of August 14, 2004, JBC provided information to Equifax identifying its client as “ORM Bradlees.” Not only was there no such entity, but there is no evidence that Bradlees was ever a client of JBC. JBC's argument that it was simply trying to give the debtor as much information regarding the provenance of the debt as possible does not alter the fact that its representation regarding its client was false and violated 15 U.S.C. § 1692e(Cool.

6. Defendant JBC Legal Group PC violated RCW 19.16.110 when it acted as a collection agency within the State of Washington without first obtaining a license. Pursuant to RCW 19.16.100(2)(a), a “collection agency” means “any person directly or indirectly engaged in soliciting claims for collection, or collecting or attempting to collect claims owed or due or asserted to be owed or due another person.” In this case, JBC has attempted to collect a claim asserted to be owed to an entity called Outsource Recovery Management. Nonetheless, JBC argues that it is not a “collection agency” because RCW 19.16.100(3)(c) excludes from that term “[a]ny person whose collection activities are carried on in his, her, or its true name and are confined and are directly related to the operation of a business other than that of a collection agency, such as ... lawyers....” When read as a whole and in light of the interpreting case law, Washington's Collection Agency Act applies to entities such as JBC which seek to collect debts that are unrelated to JBC's (or its affiliated company's) non-debt collector business. If, for example, JBC were seeking to recover fees owed to it by a client for legal services rendered, such activities would not make JBC a “collection agency.” See Berry v. Fleury, 111 Wash.App. 1048, 2002 WL 1011541 (Wn.App. May 20, 2002). The same result would probably arise if JBC were collecting debts owed to an affiliated company as long as those debts arose from a business other than the collection of debts. See RCW 19.16.100(3)(f); Trust Fund Servs. v. Aro Glass Co., 89 Wash.2d 758, 761-62, 575 P.2d 716 (1978). The debt JBC sought to collect from plaintiff is not “directly related to the operation of a business other than that of a collection agency”-its affiliate company purchased the alleged debt from a third-party merchant for the sole purpose of collecting on the instrument. Despite the fact that JBC is a law firm, its actions in this case are those of a collection agency subject to regulation under the Collection Agency Act.

*4 7. Plaintiff has not identified any provision of state or federal law that was violated by defendants' alleged coding of her account number.FN4 To the extent defendants used this coding system in its attempt to collect fees and amounts in excess of those permitted by law, the legality of such activity has been considered elsewhere ( see ¶ 2 of this Order).

FN4. Defendants' request to strike those allegations that are based on information and belief, rather than admissible evidence, is GRANTED. The Court has not considered the unsupported allegations contained in paragraphs 15 and 16 of plaintiff's motion (Dkt.# 33) or paragraph 2 of plaintiff's opposition (Dkt.# 4Cool.

8. Although JBC and Outsource Recovery Management (“ORM”) are closely related, they are separate legal entities. Plaintiff has provided no evidence in support of her vague argument that the corporate forms should be disregarded. JBC's identification of ORM as its client and the holder of the debt instrument at issue is neither false nor misleading.FN5

FN5. Mr. Boyajian has personal knowledge regarding (a) the relationship between JBC and ORM and (b) the process through which ORM came into possession of the disputed check. His statements regarding these issues have been considered.

9. Defendants' September 3, 2004, letter satisfied the notice requirements of § 1692g(a) of the FDCPA. The five day period identified in the statute begins to run with the initial communication from the debt collector to the consumer. In this case, the initial communication contained the necessary information regarding the amount of the debt, name of the creditor, etc. No additional notices were required.

10. Defendant JBC violated § 1692g(b) of the FDCPA when it failed to “cease collection of the debt ... until the debt collector obtains verification of the debt....” JBC argues that its provision of all the “information about the debt that it had” satisfies the verification requirement. See Affidavit of Jack Boyajian, Dkt. # 31 at ¶ 10. Defendants' argument fails on both the facts and the law. In the first place, JBC did not provide plaintiff with all the information it had regarding the alleged debt: for reasons unexplained, it chose to withhold the only documentation of the debt, the check itself, from plaintiff until after this suit was filed. Secondly, defendants understate the burden placed on debt collectors once a consumer challenges the information on her credit report. At that point, § 1692g(b) imposes an obligation on the debt collector to cease all debt collection activity while it verifies with the original creditor (or through other reliable means) that the amount being demanded is still due and owing. This requirement is designed to “eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.” S.Rep. No. 95-382 at 4 (1977). Simply repeating the second- or third-hand information in the debt collector's file accomplishes neither goal and is insufficient under the statute. See Mahon v. Credit Bureau of Placer County Inc., 171 F.3d 1197, 1203 (9th Cir.1999) (debt collector properly verified debt by contacting the original creditor, verifying the nature and balance of the outstanding debt, reviewing the efforts the original creditor made to obtain payment, and establishing that the balance remained unpaid); Sambor v. Omnia Credit Servs., Inc., 183 F.Supp.2d 1234, 1233 (D.Hawai'i 2002) (stating by way of example that a debt collector seeking to collect amounts owed to a credit card company would have to cease attempts to collect the debt if a fire destroyed the credit card company's records, thereby precluding verification of the debt); Spears v. Brennan, 745 N.E.2d 862, 878-79 (Ind.App.2001) (a copy of the original debt instrument does not verify that there is an existing unpaid balance and does not satisfy the verification requirement of § 1692g(b)). FN6 In the case at hand, defendants made no effort to verify that the debt represented by the dishonored check was still owing and therefore failed to satisfy the verification requirement of the FDCPA.FN7 Until the debt was verified, all further attempts to collect on the debt, including defendants' September 3rd letter and any subsequent reports to the credit reporting agencies, violated § 1692g(b).

FN6. Even the case on which defendants rely, Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir.1999), shows that verification of the debt involves confirming with the original creditor that the amount being demanded is what is still owed.

FN7. The Court has been unable to locate two cases identified by plaintiff as “Coito v. Unifund Corporation, (9th Cir2004) CV01-00379, Decided January 4, 2004” and “Boatley v. Dicm Corporation, (9th Cir2004) CV03-0762, Decided March 24, 2004.” These cases are not listed on the Ninth Circuit's website and the case numbers are not in the form used by that court. The U.S. Party/Case Index supplied by plaintiff in support of the Boatley cite indicates that the case was decided by the District Court of Arizona (see the initials “azdc” under the heading “Court”). Unfortunately, the case is not reported in the Federal Supplement, is not published on Westlaw, and is unavailable to this Court. Defendants' request to strike plaintiff's references to Boatley is, therefore, GRANTED.

*5 11. Section 1692j(a) of the FDCPA states, “[i]t is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.” The Court has already determined that JBC and ORM are separate legal entities. Because JBC was actually involved in the collection efforts, its generation of the September 3, 2004, letter does not violate § 1692j(a).

12. Defendants seek a summary determination that plaintiff's recovery of statutory damages under the FDCPA is limited to no more than $1000.FN8 The language of § 1692k and existing case law show that the FDCPA limits damages, above and beyond all actual damages, to $1,000 for each proceeding rather than $1,000 for each violation of the statute. Pursuant to 15 U.S.C. § 1692k(a)(2)(A), statutory damages “in the case of any action by an individual” shall not exceed $1,000 (emphasis added). “This statutory language clearly implies that statutory damages are limited for an individual plaintiff to $1,000 for each action or proceeding. There is no language in § 1692k or any where else in the FDCPA which on its face authorizes statutory damages of $1,000 for each violation of the statute.” Barber v. Nat'l Revenue Corp., 932 F.Supp. 1153, 1155 (W.D.Wis.1996). See also Wright v. Fin. Serv. of Norwalk, 22 F.3d 647, 650-51 (6th Cir.1994). Because Congress drafted § 1692k(a)(2)(A) using the $1,000 for each “action” language, plaintiff's statutory damages under the FDCPA will be limited to $1,000.FN9

FN8. Defendants have not sought an interpretation of the FCRA damage provisions.

FN9. This ruling does not impact plaintiff's right to seek actual damages under the FDCPA above and beyond whatever statutory damages are awarded.

13. Section 1681s-2(b) of the Fair Credit Reporting Act (“FCRA”) provides that “[a]fter receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency,” the furnisher of information to a consumer reporting agency shall follow certain procedures established to ensure that accurate information is being provided. Pursuant to § 1681i(a)(2) and interpreting case law, the notice that triggers the debt collector's investigative duties under § 1681s-2(b) must come from the credit reporting agency, not the consumer. Young v. Equifax Credit Information Services, Inc., 294 F.3d 631, 639-40 (5th Cir.2002); Peasley v. Verizon Wireless (VAW) LLC, 364 F.Supp.2d 1198, 1200 (S.D.Cal.2005); Stafford v. Cross Country Bank, 262 F.Supp.2d 776, 784 (W.D.Ky.2003); Whisenant v. First Nat'l Bank & Trust Co., 258 F.Supp.2d 1312, 1316 (N.D.Okla.2003). Defendants have produced JBC's computerized account summary sheet which contains no indication that JBC received or replied to any inquiries from Equifax on the alleged debt. Affidavit of Jack Boyajian, Dkt. # 31 at ¶ 13.FN10 Although plaintiff disputes the accuracy of JBC's computerized records (as well as the veracity of Mr. Boyajian's statements) and has provided evidence that Equifax did, in fact, contact JBC regarding the alleged debt,FN11 there is a genuine issue of fact which cannot be resolved in the context of this motion for summary judgment.

FN10. Mr. Boyajian's testimony that JBC did not, in fact, receive notice of plaintiff's dispute from Equifax is not based on personal knowledge and is therefore inadmissible. Plaintiff's motion to strike this testimony ( see Opposition to Defendants' Motion to Dismiss, Dkt. # 48 at 4) is granted. The Court has, however, considered Mr. Boyajian's statements regarding JBC's normal business practices as it relates to the issuance of an initial notice of debt and the maintenance of JBC's computerized account summaries.

FN11. Defendants' objection to the Equifax credit reports ( see Reply to Motion to Dismiss, Dkt. # 52 at Cool is overruled: to the extent the reports are being offered for the truth of the matter asserted, they may be admissible under Fed. R. Ev. 803(6) as records of regularly conducted activity. Defendants' objection to plaintiff's testimony regarding the meaning of various entries on her credit report ( see Opposition at 15) is also overruled: plaintiff may testify based on her personal experience with her own credit reports.

*6 Defendants argue that even if the Court assumes that Equifax contacted JBC regarding plaintiff's dispute, her § 1681s-2(b) claim fails because the original collection notice was not false and because JBC took the steps identified in the statute. As discussed elsewhere, the credit information provided to Equifax in the first instance was false insofar as it did not accurately reflect the face value of the dishonored check, the fees and costs that could be recovered, or the name of the original creditor. Had JBC simply compared the information it had provided to the credit reporting agencies with the check in its possession, these discrepancies would have come to light and would have required corrective action under § 1681s-2(b)(1)(E).FN12 Notwithstanding the “scant” information provided by the consumer regarding the nature of her dispute ( see Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.2005)), defendants' investigation was not reasonable given that it did not uncover even the most obvious inaccuracies in its reporting.

FN12. The FCRA does not provide any indication as to the level of investigation required under § 1681s-2(b)(1). The investigation requirement for furnishers of information is, however, “analogous to the requirement imposed upon credit reporting agencies under § 1681i(a) to reinvestigate a consumer's dispute regarding information contained in his credit report” and, therefore, furnishers of credit are required to conduct a reasonable investigation. Bruce v. First U.S.A. Bank, Nat'l Ass'n, 103 F.Supp.2d 1135, 1143 (E.D.Mo.2000). In Bruce, the Court employed two factors to determine whether a furnisher of information engaged in adequate investigation of a disputed debt: “(1) whether the consumer has alerted the agency that the initial source of the information may be unreliable or if the agency knows or should know that the source is unreliable, and (2) the cost of verifying the accuracy of the source versus the possible harm of reporting inaccurate information.” Bruce, 103 F. Supp 2d at 1143. Whether such an investigation has been conducted is generally a question of fact for the jury but can be determined as a matter of law if the reasonableness of defendants' investigation is beyond question. See Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.2005).

14. There is no private right of action for violations of § 1681s-2(a) of the FCRA. Pursuant to 15 U.S.C. § 1681s-2(d), subsection (a) “shall be enforced exclusively as provided under section 1681s of this title by the Federal agencies and officials and the State officials identified” therein. Plaintiff's fourteenth and fifteenth counts fail as a matter of law.

15. Plaintiff has not identified any provision of state or federal law that was violated by defendants' alleged failure to maintain written policies and procedures regarding the handling of consumer and credit reporting agency inquiries. The adequacy of a debt collector's policies generally becomes an issue when the debt collector asserts the good faith defense available under § 1692k(c). In this case, defendants argue that their claim handling procedures and reporting activities satisfy the requirements of the applicable state and federal laws: they are not asserting that their conduct was unintentional or the result of a bona fide error. Even if the Court assumes that defendants failed to maintain adequate procedures for purposes of § 1692(k), such a failure is not a basis upon which additional liability can be imposed.

16. Plaintiff has asserted a claim for punitive damages, apparently under § 1681n of FCRA. As noted above, however, plaintiff does not have standing to assert claims under § 1681s-2(a) and there are genuine issues of fact which preclude a finding of liability under § 1681s-2(b). Plaintiff's claim for an award of punitive damages is not yet ripe.

17. Under Washington law, the false light branch of an invasion of privacy claim arises “when someone publicizes a matter that places another in a false light if (a) the false light would be highly offensive to a reasonable person and (b) the actor knew of or recklessly disregarded the falsity of the publication and the false light in which the other would be placed.” Eastwood v. Cascade Broadcasting Co., 106 Wash.2d 466, 470-71, 722 P.2d 1295 (1986). Plaintiff asserts that, following receipt of her dispute letter (if not earlier), defendants knew or recklessly disregarded discovering the falsity of their continuing publication of a bad debt on her credit report. Defendants argue that the negative claim on plaintiff's credit report was not “publicized” because there is no evidence that any of plaintiff's existing or potential creditors reviewed the report during the relevant time frame. Defendants are incorrect on the facts. Plaintiff's credit report indicates that six existing or potential creditors reviewed her report between November 2004 and April 2005. Fourth Affidavit of Jehan Semper, Dkt. # 65 at Ex. J. In addition, plaintiff has provided evidence that one of her existing creditors closed her credit card account in July 2005 in part because of a “DEROGATORY PUBLIC RECORD OR COLLECTION FUND” identified through “a review of information provided by a consumer reporting agency.” Fourth Affidavit of Jehan Semper, Dkt. # 65 at Ex. H.FN13

FN13. Defendants' objection to the late disclosure of the Household Bank letter ( see Defendants' Reply to Motion to Dismiss, Dkt. # 52 at 9) is overruled. The letter was not written until June 15, 2005, ten days after discovery closed and two weeks before defendants filed their dispositive motion. Given the fact that the letter only recently came into existence and plaintiff's status as a pro se litigant, her disclosure of the letter on July 18, 2005, as an exhibit to her opposition memorandum was timely.

*7 Defendants also argue that plaintiff's invasion of privacy/false light claim should be dismissed because, given the limited nature of the disclosure, a report of bad credit “does not compare to the highly offensive communications cited in case law as worthy of compensation under this cause of action.” Reply to Motion to Dismiss, Dkt. # 52 at 11. See Fisher v. Dep't of Health, 125 Wash.App. 869, 879, 106 P.3d 836 (2005). Defendants' publication was accessible to anyone authorized to obtain a credit report on plaintiff (including credit card companies, potential landlords, and other creditors) and it publicly accused plaintiff of the very conduct that would make her appear undesirable to the intended audience. At the very least, there is an issue of fact regarding whether such disclosure would be “highly offensive” to a reasonable person.

18. Plaintiff has sued both JBC Legal Group PC and its president, Jack Boyajian for the violations of federal and state law discussed above. Plaintiff argues that Mr. Boyajian should be held liable under the FDCPA, the FCRA, and state law because he directs the activities of JBC. Although a lawyer and his law firm may be “debt collectors” under the relevant statutes ( see Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995)), Mr. Boyajian did not personally participate in the generation of the September 3, 2004, letter and plaintiff has not provided any evidence other than his position within JBC to support her claim that he is responsible for the reporting and debt collection activities of which she complains. The Court finds that Mr. Boyajian is not a “debt collector” as defined in § 1692a(6) of the FDCPA because he did not personally use or direct the use of the instrumentalities of interstate commerce or the mails to collect a debt from plaintiff.FN14 Nor is Mr. Boyajian a “person” who could be liable under § 1681s-2(b) of FCRA. There is no evidence that Mr. Boyajian, as opposed to JBC, reported that plaintiff's account was in collections: any duty to investigate and correct the original report would belong to JBC. Pursuant to RCW 19.16.100(3)(a), employees of a “collection agency” are not, in and of themselves, “collection agencies” even when they are directly involved in the attempts to obtain payment on a debt. There is no indication in the statute that an officer of a corporation who was not involved in the debt collection activities would be liable for corporate violations of the Collection Agencies Act.

FN14. Plaintiff's argument that Mr. Boyijian admitted that he is a debt collector under the FDCPA is unpersuasive. The admission to which defendants responded in the affirmative uses the ambiguous phrase “Defendant(s) is” and does not clearly admit the proposition that Mr. Boyijian himself is a debt collector.

19. There are genuine issues of fact regarding the extent of plaintiff's emotional and pecuniary damages. Plaintiff's testimony, combined with the documents showing the availability of lucrative employment in New York and the loss of credit, raise a genuine issue of fact regarding the amount of actual damages attributable to JBC's conduct. The extent to which plaintiff will be permitted to testify regarding the Equifax' “alert” service and defendant will be permitted to submit evidence regarding other suits filed by plaintiff will be determined at trial.

*8 20. In her opposition to defendants' motion to dismiss, plaintiff requests a declaration that no debt related to the disputed check is due or owing. Because neither party has contacted Banco Popular and/or Bradlees, it is impossible to determine whether plaintiff or an authorized agent wrote check number 332 to Bradlees or whether the debt reflected on that check has been satisfied. Although both parties have acknowledged that the check can no longer be enforced, its validity at the time it was written cannot be determined on the record presented.

21. To the extent the Court has not specifically ruled on an evidentiary objection raised by the parties, the evidence or issue to which it relates was deemed irrelevant to the above legal analysis (such as whether plaintiff attempted to locate a branch office of Banco Popular). Although such evidence has not been stricken, it did not inform the Court's judgment.

22. Plaintiff's unauthorized sur-reply has not been considered.

For all of the foregoing reasons, plaintiff's and defendants' motions for summary judgment are GRANTED in part. Plaintiff is entitled to judgment as a matter of law on her claims that defendant JBC Legal Group PC violated §§ 1692e(2), 1692e(3), 1692e(Cool, and 1692g(b) of the FDCPA, RCW 19.16.110, and RCW 19.16.250(14) and (1Cool. There are genuine issues of material fact which preclude summary judgment for either party on plaintiff's invasion of privacy/false light claim, her 15 U.S.C. § 1681s-2(b) claim, and on her demand for actual and punitive damages. The undisputed facts of this case show, however, that defendant Jack Boyijian cannot be held liable on any of plaintiff's claims and that JBC has not violated §§ 1692e(5), 1692g(a), or 1692j(a) of the FDCPA or § 1681s-2(a) of the FCRA: defendants are entitled to judgment on those claims.

The Clerk of Court is directed to send a copy of this Order to defendant at the following addresses:

JBC Law Group PC

c/o Karen Nations

10020 Hardy Drive

Overland Park, KS 66212
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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Re: Admissibility of Credit Reports

Postby Administrator » Tue Sep 30, 2014 12:03 am

Biffer v. Capital One Services, Inc.,
Not Reported in F.Supp.2d, 2006 WL 387394, D.Conn., February 15, 2006 (No. 3:04-CV-1069(JCH).)


*1 The plaintiff, James Biffer, initiated this suit against the defendant, Capital One Services, Inc. (“Capital One”), asserting claims for negligence and violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen.Stat. § 42-110a et seq, arising out of Capital One's efforts in collecting a credit card debt allegedly incurred by Biffer. This action was originally filed in Hartford Superior Court and property removed to this court on the basis of diversity jurisdiction, 28 U.S.C. § 1332. Capital One now moves for summary judgment on all of Biffer's claims, arguing, inter alia, that no genuine issue of material fact exists with regards to Biffer's inability to prove the causation elements of his claim. For the following reasons, Capital One's motion is GRANTED in part and DENIED in part. Capital One moves separately to strike Biffer's opposition to summary judgment to the extent it relies on inadmissible hearsay evidence. [Dkt. No. 66]. Capital One's motion to strike is GRANTED.


FN1. For the purposes of the instant motion, the court accepts facts undisputed by the parties as true and resolves disputed facts in favor of the non-moving parties, here the defendants, where there is admissible evidence to support their allegations.

Biffer is a resident of Bloomfield, Connecticut. Capital One is a corporation incorporated and headquartered in Virginia. In 2001, an account for a Capital One Platinum Mastercard was opened in Biffer's name. According to Biffer, the application for the account was submitted by someone else in his name, and it contained inaccurate information, such as an incorrect address, incorrect telephone number, and a forged signature. Pl's Rule 56(a)(2) Statement, Disputed Issues of Material Fact, ¶ 6 [Dkt. No. 65]. According to Capital One, the information supplied on the application was verified before the account was approved. Def's Rule 56(a)(1) Statement, ¶ 3 [Dkt. No. 50].

Between February 2001 and April 2002, charges in the amount of $17,254.15 were posted to the account. Between April 2001 and March 2002, Dianne Conte, a former acquaintance and coworker of Biffer, whom Biffer had previously suspected of stealing from him, made payments in the amount of $3,637.00 on the account. When payment on the account stopped, Capital One “wrote-off” the account and began collection activity.

In the summer of 2002, First USA, a bank with which the Biffer had maintained several credit cards for an extended period of time, cancelled one of his credit cards and raised the interest rate on another card.FN2 Pl's Rule 56(a)(2) Statement, Ex. 1., Biffer Depo., p. 57.

FN2. Biffer's deposition testimony as to the content of First USA's communications with him are inadmissible hearsay, as they are statements, by “out-of-court” declarants, offered to prove the truth of the matter that they assert, and they do not fall within an exception under Fed.R.Evid. 803. Pl's Rule 56(a)(2) Statement, Ex. 1., Biffer Depo., p. 57-59.

In the fall of 2002, Biffer received phone calls from a Massachusetts law firm demanding payment of the debt owed Capital One. Biffer wrote to Capital One in December 2002 and February 2003, stating that he had never had an account with Capital One and that some of the personal information relating to account was inaccurate. Pl's Rule 56(a)(2) Statement, Disputed Issues, ¶ 10, Exs. 5 and 6. In February 2003, Capital One responded by letter to Biffer, requesting that he send to it an affidavit of fraud application and copies of his identification. Id., Ex. 7. Biffer sent the requested materials in late March 2003. Capital One informed Biffer by letter on March 31, 2003, that it had initiated an investigation and would let him know the outcome in 30-45 days. Id., Ex. 9. Capital One requested some additional information from Biffer in April as well.

*2 According to Biffer, he did not hear again from Capital One until it served a complaint on him in November 2003 alleging nonpayment of debt. Id. at ¶ 15. Biffer hired a lawyer to defend Capital One's actions. Id. at ¶ 16. According to Biffer's complaint, Capital One withdrew its action against Biffer in February 2004 after determining that Biffer had never opened a credit account with Capital One. Complaint, ¶ 17 [Dkt. No. 1]. Capital One requested that the credit bureaus delete the adverse information regarding Capital One from Biffer's credit report in June 2004. Def's Rule 56(a)(2) Statement, Tuskey Aff., ¶ 34.

Prior to 2002, Biffer found employment as a nuclear engineering consultant, a profession that requires submission to numerous background checks by the various utilities and nuclear facilities that would hire him. Biffer has been unable to secure a consulting job since 2002. In his Complaint, Biffer contends that the adverse information regarding Capital One on his credit report is responsible for his inability to secure employment as a nuclear engineering consultant. Biffer admits, however, that he has never been informed by any prospective employer in the nuclear industry that the reason he was not hired was because of his credit report. Pl's Rule 56(a)(2) Statement, ¶¶ 11-13, 17. He also admits that none of the inquiries made into his credit report were from companies from which Biffer sought work. Id. at ¶ 19.

Capital One has produced a credit report for Biffer from 2004 that also list adverse account information from Fleet Bank and Bank of America. Def's Rule 56(a)(1) Statement, ¶ 23, Tuskey Aff., Ex. F. Biffer points out that the credit reports obtained by both him and the defendant in 2003 only list Capital One and Fleet as adverse accounts. Pl's Rule 56(a)(2) Statement, ¶ 23, Ex. 4; Def's Rule 56(a)(1) Statement, Tuskey Aff., Ex. E.

Biffer also contends that he was unable to refinance the mortgage on this house at a more favorable rate in 2002 and 2003 because of the information regarding Capital One on his credit report. His deposition indicates that he tried several times to refinance his mortgage during that time period. Pl's Rule 56(a)(2) Statement, Ex. 1, Biffer Depo., p. 39-40. He was able to refinance his home in 2005 after Capital One removed the adverse information from his credit report.FN3

FN3. At his deposition, Biffer stated that, when he tried to refinance his mortgage previously. he was told that he did not qualify because of his credit report. Def's Rule 56(a)(1) Statement, Botti Aff., Ex. 3, p. 133. This statement is inadmissible hearsay that does not fall within an exception under Fed.R.Evid. 803.

Biffer filed this suit in April 2004, asserting that Capital One had been negligent in failing to investigate Biffer's fraud complaint, and that its negligence caused Biffer to lose significant business opportunities and incur legal expenses. Biffer's complaint also asserts a claim under CUTPA. Capital One now moves for summary judgment, arguing that no triable issue of fact exists with regards to Biffer's inability to prove the causation and damages elements of his claims, and thus summary judgment should be granted on all of Biffer's claims.


*3 Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Hermes Int'l v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104, 107 (2d Cir.2000). The moving party bears the burden of showing that no genuine factual dispute exists. Carlton v. Mystic Transp., Inc., 202 F.3d 129, 133 (2d Cir.2000) (citing Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1223 (2d Cir.1994)). “A fact is ‘material’ for these purposes when it might affect the outcome of the suit under the governing law.” Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir.2005)(quotation marks omitted). When reasonable persons applying the proper legal standards could differ in their responses to the questions raised on the basis of the evidence presented, the question is best left to the jury. Sologub v. City of New York, 202 F.3d 175, 178 (2d Cir.2000).

Once the moving party has met its burden, in order to defeat the motion the nonmoving party must “set forth specific facts showing that there is a genuine issue for trial,” Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and present such evidence as would allow a jury to find in his favor, Graham v. Long Island R.R., 230 F.3d 34, 38 (2d Cir.2000). A party may not rely “on mere speculation or conjecture as to the true nature of the facts to overcome a Summary Judgment Motion.” Lipton v. The Nature Company, 71 F.3d 464, 469 (2d Cir.1995) (quoting Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986)). Additionally, a party may not rest on the “mere allegations or denials” contained in his pleadings. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir.1995); see also Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir.1993) (holding that party may not rely on conclusory statements or an argument that the affidavits in support of the Summary Judgment Motion are not credible). Moreover, “the mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Jeffreys, 426 F.3d at 554.


Although Capital One explicitly argues, in its motion for summary judgment, that Biffer cannot produce evidence sufficient to prove the damages elements of his claims, it is clear that the substance of Capital One's arguments are aimed at only at the causation elements of Biffer's claims. In other words, Capital One has not argued that Biffer has not suffered any potentially actionable injuries, in the form of lost business opportunities or wrongly-incurred expenses, but only that Biffer's asserted injuries cannot be attributed causally to Capital One. Moreover, the evidence in the record would support the conclusion that Biffer suffered injuries that may be actionable. Thus, summary judgment on the basis that no genuine issue of material fact exists with regards to Biffer's damages element is inappropriate.

*4 Proximate causation is an element of both Biffer's negligence and CUTPA claims. See Wu v. Fairfield, 204 Conn. 435, 438, 528 A.2d 364 (1987)(“An essential element of any negligence action is the establishment of the defendant's conduct as a proximate caue of the plaintiff's injury.”); Abrahams v. Young and Rubicam, Inc., 240 Conn. 300, 306, 692 A.2d 709 (1997)(“[I]n order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and .... a showing that the prohibited act was the proximate cause of a harm to the plaintiff.”) Proximate cause “establishes a reasonable connection between an act or omission of a defendant and the parm suffered by a plaintiff. Stewart v. Federated Dept. Stores, Inc., 234 Conn. 597, 608, 662 A.2d 753 (1995). Proximate cause has been defined in Connecticut as “an actual cause that is a substantial factor in the resulting harm.” Id. Actual cause, or cause in fact, asks “would the injury have occurred were it not for the actor's conduct.” Doe v. Manheimer, 212 Conn. 748, 757, 563 A.2d 699 (1989), overruled in part on other grounds, Stewart, 234 Conn. at 608, 662 A.2d 753. “The substantial factor test reflects the inquiry fundamental to all proximate cause questions, that is, whether the harm which occurred was of the same general nature as the foreseeable risk created by the defendant's [actions].” Id. at 757.

“The question of proximate causation generally belongs to the trier of fact because causation is essentially a factual issue.” Stewart, 234 Conn. at 611, 662 A.2d 753. “It becomes a conclusion of law only when the mind of a fair and reasonable person could reach only one conclusion; if there is room for a reasonable disagreement the question is one to be determined by the trier as a matter of fact.” Id.

In his pleadings, Biffer suggests four different categories of damages that he wishes to claim on the basis of his complaint: lost consulting opportunities, legal expenses incurred in defending Capital One's legal actions against him, an increased interest rate on his First USA credit card, and his inability to refinance his mortgage in 2002 and 2003 to obtain a more favorable rate. Capital One contends that there is no genuine issue of material fact with respect to Biffer's inability to prove causation for any damages asserted by Biffer.

With respect to Biffer's alleged damages on the basis of his inability to secure consulting work since 2003, summary judgment in favor of the defendant is appropriate as Biffer has not produced any evidence from which a reasonable fact finder could conclude that Capital One's actions were the proximate cause of Biffer's injuries. There is no evidence in the record that the prospective employers who did not hire Biffer considered, or even viewed, his credit report in deciding not to hire him. Biffer's evidence regarding this category of damages consists of his own understanding, based on the “folklore among the contractors,” as to the practices of the employers in question regarding credit checks. See Pl's Rule 56(a)(2) Statement, ¶ 14, 18; Id., Ex. 1, Biffer Depo., p. 137. Biffer's speculation as to the practices of the employers to whom he had applied is not sufficient evidence to create a genuine issue of material fact with regard to his assertion that Capital One's actions or omissions were the cause of his inability to secure consulting work. See Lipton, 71 F.3d at 469. Thus, summary judgment is granted in favor of the defendant on Biffer's claims related to his lost employment opportunities.

*5 Genuine issues of material fact exist, however, with regard to the causation of Biffer's other alleged damages. Drawing all inferences in favor of Biffer, a reasonable fact finder could conclude that Capital One's conduct was the legal cause of the legal expenses allegedly incurred by Biffer in defending Capital One's action against him. Furthermore, although Biffer has not produced admissible evidence linking his inability to refinance his mortgage specifically to the entry concerning Capital One in his credit reports, given the centrality of the credit check in a mortgage evaluation, and given that the adverse entry regarding Capital One was one of only two or three (depending on the credit report) adverse entries on Biffer's credit report, a reasonable fact finder could find that Capital One's alleged conduct, which resulted in the placement of adverse information on Biffer's credit report, was a proximate cause of this alleged injury. Similarly, although Biffer has not produced admissible evidence regarding the reasons underlying First USA's decision to raise the interest rate on Biffer's credit card, given the role that credit history can play in determining credit card interest rates, a reasonable fact finder could potentially conclude that Capital One's alleged actions were a proximate cause of this asserted injury as well. Accordingly, summary judgment is denied on the basis of these asserted sources of damages.


For the foregoing reasons, the defendant's summary judgment motion [Dkt. No. 48] is GRANTED in part and DENIED in part.

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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