Bankruptcy: Pare v. KLLM

[David A. Szwak]

Pare v. KLLM, Inc.,
Not Reported in F.Supp., 1994 WL 382617, E.D.La., Jul 18, 1994

Plaintiff, Michael A. Paré, is a professional truck driver who worked for a trucking company known as KLLM, Inc. from October, 1989 to September, 1992. He has brought this suit under the Fair Credit Reporting Act, 15 U.S.C.A. §§ 1681 et. seq., and Louisiana Civil Code article 2315, against two defendants: KLLM, Inc., and D.A.C., a driving record reporting company.

Plaintiff states in his complaint that he was harmed because KLLM furnished inaccurate information about his driving record to D.A.C., and D.A.C. distributed that information in his driving record in a misleading fashion. Plaintiff alleges that the problem began with a driving report produced by D.A.C. that incorrectly listed five (5) as the number of "accidents" he had been involved in while he was employed by KLLM, Inc. [FN1] Plaintiff concedes that when he brought this error to KLLM's attention the number was changed to two (2), but he maintains that, although this is closer to the truth, it is still misleading.

The problem, plaintiff contends, lies in the way DAC defines the word "accident." D.A.C.'s reports state that an "accident" is any incident in which "equipment was involved in an accident or damaged while assigned to the driver regardless of fault." Plaintiff alleges that this definition violates the Fair Credit Reporting Act, 15 U.S.C.A. § 1681e(b), because it does not meet that provision's requirement that credit reporting agencies use "reasonable procedures to ensure maximum possible accuracy" in their reports. This is because (1) D.A.C.'s definition of an "accident" is contrary to the layman's understanding of the term as it is used in a vehicular setting and (2) "accident" is used by D.A.C. to cover such a wide range of events that it does not appear that D.A.C. has made reasonable attempts to convey maximally accurate information.

Plaintiff argues persuasively in his opposition memorandum that D.A.C. did not meet this standard by showing that D.A.C.'s method of documenting incidents involving damage to the vehicle is misleading. He uses the example of two incidents--one involving an intoxicated truck driver who has a head-on collision and kills a family of four and another involving a sober driver who stops at a restaurant for five minutes and returns to his rig to find a new dent in it. On a D.A.C. report, plaintiff asserts, both incidents would be listed simply as accidents.

Arguably, merely reporting these incidents by including them in a tally of "accidents," even with D.A.C.'s accompanying definition, in a report is ambiguous, incomplete and misleading to the reader. This situation is analogous to a situation that Congress considered when drafting the Fair Credit Reporting Act, which led it to determine that section 1681e(b)'s requirement includes the duty to differentiate between distinguishable items, even within a report entry category. For example, with respect to bankruptcies, the House decided that a credit reporting agency that reported all bankruptcies under a single qualification would violate section 1681e(b), even if its reports clearly stated that it so categorized bankruptcies. See H.R.Rep. No. 1587, 91 Cong., 2d Sess. 29 (1970); Discussed in Koropoulos, 734 F.2d at 43-44. This reasoning has been extended beyond the context of the bankruptcy example the House used to reach an understanding on the meaning of section 1681e(b)' s standard. See, e.g. Koropoulos, 734 at 44 (analogy between categorization of bankruptcies and of loans).
*3 Plaintiff effectively demonstrates that whether D.A.C.'s method of categorizing such incidents and defining the word "accident" as it does are reasonable procedures to ensure maximum accuracy is a genuine issue of material fact that is in controversy. This is especially true in light of the indication of Congressional purpose which is provided in the aforementioned Conference Report. Therefore, it would be improper to grant summary judgment as to plaintiff's federal claim under section 1681.
Plaintiff's state law claim, however, does not present the same situation. D.A.C. correctly states that 15 U.S.C.A. § 1681h(e) forbids plaintiffs from bringing state law claims for defamation, invasion of privacy or negligence against credit reporting services, unless malicious or willful intent to cause injury can be shown. See 15 U.S.C.A. § 1681h(e); see also Parker v. Laurance Eustis Mortgage Co., 615 So.2d 1102, 1103 (La.App. 4 Cir.1993) ( "plaintiff's failure to allege that defendant had acted with malice or willful intent to injure him was a fatal omission.").