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Hearns v. Equifax Information Services LLC

United States District Court, D. South Carolina, Columbia Division

October 5, 2017

Shawn Hearns, Plaintiff,
v.
Equifax Information Services, LLC, Enterprise Recovery Systems, Inc., First Associates Loan Servicing, LLC, and Access Group, Inc., Defendants.

          ORDER AND OPINION

         This matter is before the court pursuant to Defendant Access Group Inc.'s (“Defendant”) Motion for Summary Judgment. (ECF No. 71.) Plaintiff Shawn Hearns (“Plaintiff') opposes Defendant's Motion. (ECF No. 73.) For the reasons set forth below, the court DENIES AS MOOT Plaintiff's Motion to Compel and Sanction (ECF No. 60), and GRANTS Defendant's Motion for Summary Judgment (ECF No. 71).

         I. JURISDICTION

         A defendant is permitted to remove a case to federal court if the court would have original jurisdiction over the matter. 28 U.S.C. § 1441(a) (2012). A federal district court has “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. This matter arises under 15 U.S.C. § 1681, otherwise known as the Fair Credit Reporting Act (“FCRA”).

         II. FACTUAL AND PROCEDURAL BACKGROUND

         Defendant is a furnisher of consumer information as defined by the FCRA. (ECF No. 1-1 at ¶ 52.) Plaintiff sued Defendant for negligent and willful violations of the FCRA in connection with a student loan he used to fund his education at ITT Technical College (“ITT Tech”) in Columbia, South Carolina. (Id. at ¶ ¶ 7-9, 51-58.) Specifically, Plaintiff claims that on or about August 2, 2010, “unknown persons believed to be connected with ITT Tech fraudulently applied for and obtained a private PEAKS student loan in Plaintiff's name.” (Id. at ¶ 9.)

         In August 2010, Defendant received an Application and Loan Agreement for a PEAKS Private Student Loan (“Loan Application”), together with a certification of Plaintiff's enrollment at ITT Tech for the period from September 1, 2010 through June 1, 2011 (“Enrollment Certification”). (ECF Nos. 71-3, 71-4.) In reliance upon these documents, Defendant facilitated disbursement of the loan to ITT Tech in the amount of $21, 567 on or about August 17, 2010. (ECF No. 71-5.) After being subsequently notified that Plaintiff had withdrawn from ITT Tech, Defendant refunded a portion of the loan, leaving a remaining balance of $15, 960 as of September 28, 2010. (Id. at 5.)

         In August 2010, after disbursing the funds to ITT Tech, Defendant notified Plaintiff of the loan via electronic and regular mail. (ECF No. 71-6 at 4.) Thereafter, Defendant provided Plaintiff with monthly loan statements and quarterly interest letters through April 2011, when Defendant stopped servicing the loan. (Id. at 1-3.) In November 2013, Plaintiff first submitted a dispute to Equifax Information Services, LLC (“Equifax”), claiming that the student loan was “not his.” (ECF No. 71-7.) After researching the dispute, Defendant responded to the Automated Consumer Dispute Verification (“ACDV”)[1] on November 5, 2013, verifying that the loan did belong to Plaintiff. (Id.)

         On or about September 23, 2015, Plaintiff submitted a second dispute to all three credit reporting agencies. (ECF No. 1-1 at ¶ 24.) On December 15, 2015, Plaintiff also filed “a police report and an FTC complaint” regarding the allegedly fraudulent loan application. (Id. at ¶ 27.) On or about February 24, 2016, Plaintiff submitted another dispute to Equifax. (Id. at ¶ 29.) Plaintiff claims that the credit reporting agencies forwarded his disputes to Defendant, but that Defendant failed to conduct a “timely or proper” investigation of the disputed information. (Id. at ¶ 53.)

         On April 6, 2017, Plaintiff filed a Motion to Compel and Sanction, asserting that during a deposition, Defendant's counsel “repeatedly instructed Defendant's designated deponent, Melissa Scott, not to answer questions posed to her.” (ECF No. 60 at 1.) On April 20, 2017, Defendant filed a response in opposition to Plaintiff's Motion, asserting that: (1) the questions were outside the scope of the 30(b)(6) Notice; (2) Ms. Scott had no first-hand knowledge of these allegations; and (3) to the extent that Ms. Scott possessed any knowledge at all on these subjects, that knowledge was derived from a privileged meeting with counsel before Plaintiff served either the Document Requests or the 30(b)(6) Notice. (ECF No. 62.) On April 27, 2017, Plaintiff filed a Reply to Defendant's response, largely re-asserting his position in his initial Motion to Compel and Sanction. (ECF No. 63.)

         On July 31, 2017, Defendant filed a Motion for Summary Judgment, asserting that Plaintiff's claims are “fatally flawed” and should be dismissed because: (1) Plaintiff's Complaint is barred by the FCRA's two-year statute of limitations; (2) Plaintiff has failed to establish that any of the challenged information furnished by Defendant is inaccurate; (3) Plaintiff has failed to articulate any “actual damages” or to establish any causal connection between Defendant's conduct and the harm claimed, as is required to state a claim for negligent non-compliance with the FCRA; (4) Plaintiff cannot establish that Defendant failed to satisfy its duty under the FCRA to conduct a reasonable investigation of his disputes; and (5) in the absence of any facts to support the inference that Defendant demonstrated “reckless disregard” for its duties under the statute, Plaintiff's claim for willful violation of the FCRA must also fail. (ECF No. 71-1.)

         On August 14, 2017, Plaintiff filed a response in opposition to Defendant's Motion, asserting that: (1) Plaintiff lacks sufficient discovery to oppose the Motion pending the resolution of a motion to compel presently before the court, such that the court should stay this Motion until the Motion to Compel is resolved; (2) Defendant waived the statute of limitations defense raised in the Motion by failing to plead it in its Answer; and (3) even if Defendant did not waive that defense, Plaintiff's FCRA claims are not time barred because Plaintiff subsequently re-filed this dispute twice within the statutory period. (ECF No. 73.)

         On August 21, 2017, Defendant filed a Reply to Plaintiff's response, asserting that: (1) the information sought in Plaintiff's pending Motion to Compel (ECF No. 60) is not relevant to the issues raised in Defendant's Motion for Summary Judgment; (2) Plaintiff's argument that Defendant has waived its defense under the statute of limitations by failing to raise it in its Answer is “wrong as a matter of black letter law;” and (3) Plaintiff's interpretation of the FCRA statute of limitations, under which Plaintiff claims to have extended the two-year statutory period for filing a FCRA claim after discovering such a claim by filing additional disputes based on the same set of facts, is “likewise contrary to the law and to common sense, and has also been expressly rejected by the courts.” (ECF No. 74.)

         III. LEGAL STANDARD

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “[I]n ruling on a motion for summary judgment, ‘the evidence of the nonmovant[s] is to be believed, and all justifiable inferences are to be drawn in [their] favor.'” Tolan v. Cotton, __U.S.__, 134 S.Ct. 1861, 1863 (2014) (per curiam) (brackets omitted) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving part[ies], ” and a fact is material if it “might affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248.

         The movant bears the initial burden of demonstrating to the court that no genuine issues of material fact exist. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once this threshold showing has been made, the non-moving party cannot survive summary judgment by resting on the allegations in the pleadings. Rather, the non-moving party must provide specific, material facts giving rise to a genuine issue. See id. at 324. Under this standard, the mere scintilla of evidence is insufficient to withstand the summary judgment motion. See Anderson, 477 U.S. at 255 (1986).

         IV. ...


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