Early Reinsertion Case: Ferguson v. Ferguson, et al

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David A. Szwak
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Early Reinsertion Case: Ferguson v. Ferguson, et al

Post by David A. Szwak »

Not Reported in F.Supp., 1992 WL 12092482 (E.D.Ark.)

United States District Court,
E.D. Arkansas, Jonesboro Division.
Charles A. FERGUSON and Martha Ferguson Plaintiffs
Charles E. FERGUSON et al. Defendants
No. J-C-92-2.
Nov. 25, 1992.
David Szwak, Bodenheimer, Jones, Szwak, and John Reeks, for Plaintiff.
Donn Mixon, for Credit Bureau of Jonesboro, Inc.


*1 Separate Defendant Credit Bureau of Jonesboro, Inc. ("Credit Bureau") filed a motion for summary judgment to which plaintiffs responded. Credit Bureau filed a reply and plaintiffs filed a response to the reply. After a careful review of these pleadings and the affidavits and exhibits accompanying them, the Court determines that the motion should be denied. [FN1]

FN1. Neither party complied with Rule 29 of the Local Rules of the United States District Courts for the Eastern and Western Districts of Arkansas which requires that motions for summary judgment and responses thereto be accompanied by a separate statement of material facts. Nevertheless, the Court will rule on the motion in spite of the parties' deficiencies.

The relevant facts before the Court indicate that on March 5, 1991, Plaintiff Charles A. Ferguson came into the Credit Bureau and spoke to Ms. Diann Jenkins, supervisor of the credit reporting department. He expressed concern about accounts being opened in his name and without his knowledge and consent. He stated he had received calls from different companies requesting payment. Ms. Jenkins pulled Mr. Ferguson's credit report and he disputed ten different accounts.
Ms. Jenkins began a reinvestigation of Mr. Ferguson's file by calling and writing the ten companies whose accounts he disputed. She was able to determine by April 5, 1991, that six of the accounts were not established by Mr. Ferguson and those accounts were removed from Mr. Ferguson's file. Mr. Ferguson continued to assert that he had not established the other four accounts, and Ms. Jenkins again wrote the four creditors. Only one of the creditors responded on or about April 14, 1991. It sent a copy of the credit application which Ms. Jenkins determined was inaccurate. She then had all four of the remaining disputed accounts removed from Mr. Ferguson's account. (Exh. A to Motion for Summary Judgment.) At Mr. Ferguson's request, his file was 'vaulted' from May 3, 1991, to June 24, 1991, which means that his report was not released to any creditor. (Jenkins Affidavit, Doc. # 124.)
In their complaint, plaintiffs assert the Credit Bureau violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq., ("FCRA") by failing to employ reasonable procedures to timely notify creditors of the fraudulent accounts and to properly investigate and delete the false information from plaintiffs' credit report. They seek both compensatory and punitive damages.
Motion for Summary Judgment
In its motion for summary judgment, the Credit Bureau contends that it complied with 15 U.S.C. § 1681i, the only applicable provision of the FCRA, which states in pertinent part:
(a) Dispute; reinvestigation. If the completeness or accuracy of any item of information contained in his file is disputed by a consumer, and such dispute is directly conveyed to the consumer reporting agency by the consumer, the consumer reporting agency shall within a reasonable period of time reinvestigate and record the current status of that information unless it has reasonable grounds to believe that the dispute by the consumer is frivolous or irrelevant. If after such reinvestigation such information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall promptly delete such information. The presence of contradictory information in the consumer's file does not in and of itself constitute reasonable grounds for believing the dispute is frivolous or irrelevant.
*2 The Credit Bureau states it has not reported any of the ten inaccurate accounts since April 14, 1991. It asserts that it acted within a reasonable time as required by the FCRA as only forty days elapsed between the time plaintiffs brought the disputed accounts to its attention and the time the accounts were deleted from plaintiffs' report.
In response, plaintiffs submit Mr. Ferguson's affidavit and several exhibits which establish that the Credit Bureau issued a credit report on May 6, 1991, which contained five of the ten disputed accounts, and issued a report on September 21, 1991, which still showed one of the disputed accounts. In addition, plaintiffs claim Ms. Jenkins assured them she would try to get credit reports issued by two separate defendants, Trans Union Corp. and TRW, Inc. cleared up as well but failed to do so. (Ferguson Affidavit, Doc. # 121.)
In reply to plaintiffs' response, the Credit Bureau contends that the May 1991 and September 1991 credit reports about which plaintiffs complain were compiled by the Credit Bureau but were not issued to any creditor. Rather, they were compiled on behalf of Mr. Ferguson at his request. In addition, the Credit Bureau states that the September report that still shows one disputed account reflects information contained not in its file but in Separate Defendant Equifax's system, over which the Credit Bureau has no control. [FN2] Further, the disputed account shows no amount due and thus does not harm plaintiffs. Concerning Ms. Jenkins's promise to help clear up plaintiffs' credit history with Trans Union Corporation and TRW, Inc ., the Credit Bureau states neither it nor Ms. Jenkins are responsible for the actions of Trans Union Corporation or TRW, Inc. and Ms. Jenkins was merely trying to assist Mr. Ferguson. [FN3]

FN2. In their complaint, plaintiffs allege the Credit Union is a satellite of Separate Defendant Memphis Consumer Credit Association, which is an affiliate of Separate Defendant Equifax and utilizes the reporting services, databases, and other services provided by Equifax. Both the Memphis Consumer Credit Association and Equifax have settled plaintiffs' claims against them.

FN3. Separate Defendant Trans Union Corporation has settled with

Plaintiffs respond to the Credit Bureau's reply by arguing that in order for a violation of the FCRA to occur, it is not necessary that an erroneous report be disseminated to a creditor or prospective creditor. They contend that a violation occurs when a credit reporting agency fails to use "reasonable procedures to assure maximum possible accuracy," 15 U.S.C. § 1681e(b), and damages arise not only from the dissemination of information to creditors but also from the expense incurred in seeking to have the information corrected as well as the inconvenience, embarrassment, and mental anguish associated with correcting the errors and the fear that such information may at some point be reported. Further, plaintiffs contend the Credit Bureau violated § 1681i because it failed to promptly delete the inaccurate information.
Summary judgment can properly be entered when there are no genuine material facts that can be resolved by a finder of fact; that is, there are no facts which could reasonably be resolved in favor of either party. The Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). The non-moving party may not just rest upon his or her pleadings but must set forth specific facts showing that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Fed.R.Civ.P. 56. A motion for summary judgment must be viewed in a light most favorable to the non-moving party, and that party must be given the benefit of all reasonable inferences to be drawn from the underlying facts. Agristor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987).
*3 While plaintiffs argue that the Credit Bureau violated both § 1681e(b) and § 1681i, their basic complaint is that it failed to promptly delete the disputed information as required by § 1681i. At least one court has held that the "maximum possible accuracy" provision contained in § 1681e(b) does not apply to dispute resolution and reinvestigation provisions of § 1681i. See Swoager v. Credit Bureau of Greater St. Petersburg, 608 F.Supp. 972 (M.D.Fla.1985) (no claim for failure to maintain reasonable procedures to achieve maximum possible accuracy in relation to reinvestigation and dispute resolution procedures). As stated before, § 1681i requires the consumer reporting agency to reinvestigate within a reasonable period of time and to promptly delete unverified information. Section 1681o imposes liability for negligent noncompliance with the requirements of the FCRA. [FN4] Punitive damages may also be awarded in cases of willful noncompliance. 15 U.S.C. § 1681n.

FN4. Section 1618o provides:

Any consumer reporting agency or user of information which is negligent in failing to comply with any requirement imposed under this title [15 U.S.C. §§ 1681 et seq.] with respect to any consumer is liable to that consumer in an amount equal to the sum of -

(1) any actual damages sustained by the consumer as a result of the failure;

(2) in the case of any successful action to enforce liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.

[u88][b88]There is no genuine issue of fact concerning whether the Credit Bureau investigated Mr. Ferguson's complaint within a reasonable time. Genuine issues of fact do remain as to whether the Credit Bureau was negligent in failing to promptly delete the information because the unverified accounts that were supposedly deleted continued to show up on the reports issued to Mr. Ferguson in May and September[/b88][/u88].
In addition, even though there are no allegations that plaintiffs' were denied credit by anyone as a result of reports issued by the Credit Bureau that continued to show the disputed accounts, humiliation and mental distress do constitute recoverable elements of damage under the Act, notwithstanding the absence of out-of-pocket damages. Thompson v. San Antonio Retail Merchants Ass'n, 682 F.2d 509, 513 (5th Cir.1982); Morris v. Credit Bureau of Cincinnati, Inc., 563 F.Supp. 962, 969 (S.D.Ohio 1983). It will be plaintiffs' burden at trial to come forward with evidence supporting their claim that the Credit Bureau's actions caused them harm.
Because the Court finds that a genuine issue of fact remains as to whether the Credit Bureau was negligent in failing to delete the disputed accounts, the motion for summary judgment is denied.
Ferguson v. Ferguson
Not Reported in F.Supp., 1992 WL 12092482 (E.D.Ark.)
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