Opinion
23A-CT-2458
07-22-2024
Angela Buell, Appellant v. Ford Motor Credit Company LLC, Appellee
ATTORNEY FOR APPELLANT Duran L. Keller Keller Law Lafayette, Indiana Ian LyngklipLyngklip & Associates Oak Park, Michigan ATTORNEYS FOR APPELLEE Kevin C. Schiferl Maggie L Smith Adam S. Ira Frost Brown Todd LLP Indianapolis, Indiana
Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.
Appeal from the Dekalb Superior Court The Honorable Adam C. Squiller, Judge Trial Court Cause No. 17D01-2103-CT-12
ATTORNEY FOR APPELLANT Duran L. Keller Keller Law Lafayette, Indiana Ian LyngklipLyngklip & Associates Oak Park, Michigan
ATTORNEYS FOR APPELLEE Kevin C. Schiferl Maggie L Smith Adam S. Ira Frost Brown Todd LLP Indianapolis, Indiana
MEMORANDUM DECISION
BAILEY, JUDGE.
Case Summary
[¶1] Angela Buell sued Ford Motor Credit Company, LLC ("Ford") for alleged violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 16811681x. She appeals the trial court's grant of summary judgment to Ford and denial of her cross motion for summary judgment.
[¶2] We affirm in part, reverse in part, and remand for additional proceedings.
Issues
[¶3] Buell raises three issues which we consolidate and restate as follows:
I. Whether the trial court erred when it granted partial summary judgment to Ford on the ground that Ford's prior dismissal, with prejudice, of its collection action against Buell did not extinguish the underlying debt.
II. Whether partial summary judgment should be entered for Buell and against Ford on the issue of whether Ford violated the FRCA by failing to accurately report Buell's debt to consumer reporting agencies ("CRAs").
Facts and Procedural History
[¶4] The following are undisputed material facts designated by the parties in their cross motions for summary judgment.
[¶5] In July 2016, Buell and her then-husband, Matthew McLimans, entered into a contract to purchase a vehicle, and they secured the financing for the vehicle through Ford. The contract was assigned to Ford, and it provided that Buell and McLimans were both responsible for repayment of the loan through Ford. Buell and McLimans subsequently divorced. In May 2017, McLimans filed for bankruptcy, and Ford "charged off" the $13,468.75 balance owing on the vehicle loan due to "[b]ankruptcy." Appellee's App. at 24. Nevertheless, in November 2018, Ford sued Buell to collect an alleged past-due amount of "$14,033.49" on the vehicle loan. Appellant's App. v. III at 27. On May 23, 2019, Ford moved to dismiss its collection action against Buell "with prejudice[,]" and the trial court granted that motion in an order dated June 4, 2019. Appellant's App. v. II at 49.
[¶6] Sometime thereafter, Buell discovered that her credit report from various CRAs still showed that she had a delinquent debt of approximately $14,000 owing to Ford for the vehicle loan. From August 2019 through June 2021, Buell sent the CRAs multiple written disputes concerning Ford's reporting of the alleged debt. Specifically, Buell asserted that she did not owe any debt to Ford and pointed to the dismissal, with prejudice, of Ford's prior collection suit against Buell.
[¶7] The CRAs subsequently requested that Ford verify the accuracy of Buell's disputes by responding to Automated Credit Dispute Verification forms ("ACDVs"). The ACDVs sent to Ford by the CRAs noted, under "Dispute Information," that "Consumer states inaccurate information" or some similar notification and requested confirmation of the debt from Ford. See, e.g., Appellant's App. v. III at 48. For each such request, Ford responded to the CRAs that Buell's loan account with Ford had an "[u]npaid balance reported as a loss (charge off)." Appellee's App. at 14. In its ACDV responses to two CRAs, Ford stated, "Disputed information accurate. Updated account information unrelated to the dispute." E.g., Appellant's App. v. III at 48. At other times, Ford's responses to the CRAs' notifications of the dispute were: (1) "Updated disputed account information. Additional account information was also updated," id. at 78, and (2) "Consumer's dispute not specific. Consumer information verified. Account information verified," id. at 116.
The CRAs who made such requests were Experian, TransUnion, and Equifax.
For example, TransUnion's ACDV stated under "Disputed Information": "Not his/hers. Provide or confirm complete ID." Appellant's App. v. III at 60.
[¶8] Ford's ACDV responses also reported varying amounts that were allegedly "past due" on Buell's loan account, without explanation regarding the increases or decreases in the amount "past due." See, e.g., Appellant's App. v. III at 49 (September 3, 2019, ACDV reporting $14,301 "past due"); id. at 173 (April 20, 2021, ACDV reporting $14,495 "past due"); id. at 199 (May 2, 2022, ACDV reporting $13,662 "past due").
[¶9] On March 22, 2021, Buell sued Ford for its alleged FCRA violations.Specifically, Buell alleged that Ford negligently and/or willfully violated the FCRA by its (1) failure to investigate Buell's disputes; (2) inaccurate and incomplete reporting to the CRAs of an alleged delinquent debt; and (3) failure to correct the incorrect reporting. Buell sought actual, statutory, and punitive damages, along with attorneys fees.
Buell filed a separate lawsuit in federal court against the CRAs for their alleged FCRA violations.
[¶10] The parties made cross-motions for summary judgment. In an order dated October 17, 2023, the trial court granted summary judgment for Ford and denied summary judgment for Buell. In so ruling, the trial court stated that "[t]he dispositive issue in both requests for summary judgment is whether the voluntary dismissal [of Ford's prior action on the debt] extinguishes the debt." Appealed Order at 1. The court answered that question in the negative, finding "the debt is still valid and owing (albeit no longer judicially enforceable)." Id. at 2. Noting that Ford could make collection efforts on the debt by means other than litigation, the court determined that Ford's reporting of the debt to the CRAs was not inaccurate under the FCRA. The trial court did not address Buell's claim that Ford's reporting was incomplete or inaccurate due to the fluctuation in reported damages. This appeal ensued.
Neither party moved for summary judgment on the claim of Ford's alleged failure to investigate Buell's dispute, and Buell does not raise that claim on appeal.
Discussion and Decision
Standard of Review
[¶11] Both parties moved for summary judgment. We review a grant or denial of a motion for summary judgment under the same standard used by the trial court; that is,
[t]he moving party bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Summary judgment is improper if the movant fails to carry its burden, but if it succeeds, then the nonmoving party must come forward with evidence establishing the existence of a genuine issue of material fact. In determining whether summary judgment is proper, the reviewing court considers only the evidentiary matter the parties have specifically designated to the trial court. See Ind. Trial R. 56(C), (H). We construe all factual inferences in the non-moving party's favor and resolve all doubts as to the existence of a material issue against the moving party. The fact that the parties have filed cross-motions for summary judgment does not alter our standard for review, as we consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law.Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012) (case quotations and citations omitted). In reviewing a summary judgment, we "consciously err on the side of letting marginal cases proceed to trial on the merits, rather than risk shortcircuiting meritorious claims." Hughley v. State, 15 N.E.3d 1000, 1004 (Ind. 2014).
Effect of Dismissal with Prejudice
[¶12] In its motion for summary judgment, Ford asserted that the dismissal, with prejudice, of its previous collection lawsuit against Buell did not, as a matter of law, extinguish the underlying debt and, therefore, Ford accurately reported to the CRAs that Buell still owed the debt. In her cross-motion for summary judgment, Buell contended that Indiana law treats a dismissal with prejudice as a decision on the merits with preclusive effect and, therefore, Buell no longer owed the debt to Ford. The trial court found that, while a dismissal with prejudice is a decision on the merits with preclusive effect, it does not extinguish the underlying debt, which the lender may still attempt to collect through means other than litigation; therefore, Ford did not inaccurately report to the CRAs the existence of the debt. We agree with the trial court's finding on this issue, though we note that the finding does not dispose of the case entirely, as Buell made additional claims for relief not addressed by the trial court.
[¶13] A plaintiff may dismiss its own lawsuit with or without prejudice, and it may do so with or without a court order, depending upon the circumstances. See Ind. Trial Rule 41(A). "It is well-settled that a dismissal with prejudice is a dismissal on the merits and is conclusive of the rights of the parties and res judicata as to the questions which might have been litigated." Moss v. Horizon Bank, N.A., 120 N.E.3d 560, 564 (Ind.Ct.App. 2019). However, as our Supreme Court has recently pointed out, "[w]hile "a dismissal with prejudice is similar to a judgment on the merits in that it precludes relitigation of the merits,' it is 'not a judgment in all respects, since it does not resolve issues of law and fact.'" River Ridge Dev. Auth. v. Outfront Media, LLC, 146 N.E.3d 906, 914 (Ind. 2020) (quoting Bell v. Commonwealth Land Title Ins. Co., 494 N.E.2d 997, 1001 (Ind.Ct.App. 1986), trans. denied).
[¶14] Thus, in River Ridge, for example, the defendants could not recover attorney fees as the "prevailing party" where the plaintiff had voluntarily dismissed its claim with prejudice; the dismissal was not a "favorable judgment [for defendants] on the merits" that would make them a prevailing party. Id. Similarly, where a statute of limitations has run on a claim to a debt, the debt is stale and becomes uncollectible by legal action but is not extinguished. See Cassell v. Lowry, 72 N.E. 193, 196 (Ind. 1904) (A statute of limitations "is a bar to the remedy only and does not extinguish or even impair the obligation of the debtor."); see also, e.g., Donaldson v. LVNV Funding, LLC, 97 F.Supp.3d 1033, 1038 (S.D. Ind. 2015) (noting the law in Indiana is that "a debt that has become uncollectible is not extinguished; the money is still owed and the [Fair Dept Collection Practices Act] only regulates the remedies available to the debt collector.") So, where the statute of limitations has run, a debt collector may, for example,
send a factual letter to a debtor about the existence of a stale debt and the amount owed, but it may not threaten legal action to collect on it. In other words, a factual statement that the debt exists and its amount is not a mischaracterization of the legal status of a debt.Donaldson, 97 F.Supp.3d at 1038 (citation omitted).
[¶15] Here, the undisputed designated evidence establishes that Ford informed the CRAs that Buell had an outstanding debt in the amount of approximately $14,000. That statement, alone, was not incorrect as the dismissal, with prejudice, of the collection action against Buell for the debt did not extinguish the debt, but only made it uncollectible through legal action. The trial court did not err when it granted partial summary judgment to Ford on the issue of whether the dismissal with prejudice extinguished the debt.
Accuracy of Ford's Reporting
[¶16] In her summary judgment motion, Buell raised additional reporting claims under the FCRA that the trial court erroneously failed to address. Specifically, Buell alleged in both her Complaint and in her Response to Ford's motion for summary judgment and her own Cross-Motion that Ford: (1) violated the FCRA by failing to report to the CRAs that Ford's collection action for the debt had been dismissed with prejudice and therefore could not be collected through legal action; (2) violated the FCRA by failing to report to the CRAs that Buell disputed the debt; and (3) violated the FCRA by failing to report the accurate amount of the alleged debt. See Complaint, Appellant's App. v. II at 79-85; Buell's Response to Ford's Motion for Summary Judgment and Cross-Motion for Summary Judgment, Appellant's App. v. III at 2, 5; Buell Exhibits 8, 11, 14, 17, 21, 24, 29, 32, 34 (Ford's ACDV responses), Id. at 48-200.
Thus, Ford is incorrect when it claims that Buell did not raise the accuracy of the amount of the debt until her motion to correct error.
[¶17] The FCRA imposes certain duties upon those who furnish information (i.e., "furnishers") about consumers to CRAs. 15 U.S.A. § 1681s-2. A furnisher may not furnish such information if the furnisher "knows or has reasonable cause to believe that the information is inaccurate." 15 U.S.A. § 1681s-2(a)(1)(A). If the furnisher determines that it has provided information that is "not complete or accurate," the furnisher must promptly notify the CRA of that determination and provide the CRA with any corrections or additional information "that is necessary to make the information provided by the [furnisher] to the [CRA] complete and accurate, and shall not thereafter furnish to the [CRA] any of the information that remains not complete or accurate." 15 U.S.A. § 1681s-2(a)(2)(B).
[¶18] Furnishers must also establish reasonable policies and procedures concerning the accuracy and integrity of furnished information. 12 C.F.R. § 1022.42. "Accuracy" means the information must "(1) Reflect[] the terms of and liability for the account or other relationship; (2) Reflect[] the consumer's performance and other conduct with respect to the account or other relationship; and (3) Identif[y] the appropriate consumer." 12 C.F.R. § 1022.41(a). "Integrity" means the furnished information must include information about the account "the absence of which would likely be materially misleading in evaluating a consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living..." 12 C.F.R. § 1022.41(d).
[¶19] When CRAs notify a furnisher of a consumer's dispute of the accuracy and/or completeness of the information provided by the furnisher, the furnisher must: (1) conduct an investigation and review all relevant information provided by the CRA, including information given to the CRA by the consumer, see 15 U.S.C. § 1681s-2(b)(1)(A) and (B); (2) report the results of the investigation to the CRA that referred the dispute and, if the investigation establishes that the information was, in fact, incomplete or inaccurate, report the results to all CRAs to which the furnisher provided information, see 15 U.S.C. § 1681s-2(b)(1)(C) and (D); and (3) promptly modify or delete the inaccurate and/or incomplete information, see 15 U.S.C. § 1681s-2(b)(1)(E). See also Appendix M to Part 1022 of Title 12 of the Code of Federal Regulations.
[¶20] The Seventh Circuit Court of Appeals has recently addressed the standard for incompleteness or inaccuracy under 15 U.S.C. § 1681s-2(b). Incompleteness or inaccuracy under that subsection
requires a showing that the information the data furnisher provided was (1) patently incorrect, or (2) materially misleading, including by omission. By materially misleading, we mean misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.Frazier v. Dovenmuehle Mortg., Inc., 72 F.4th 769, 776 (7th Cir. 2023) (quotations, citation, and footnote omitted). The completeness and accuracy of the furnished information "is evaluated objectively based on the content of the furnisher's ACDV response." Id. at 777.
Contrary to Ford's argument, 15 U.S.C. § 1681s-2(b) creates a private right of action against a furnisher who a consumer alleges provided inaccurate or incomplete information to a CRA after being informed of a dispute. Id.; see also, e.g., Pitman v. Experian Information Solutions, Inc., 901 F.3d 619, 639 (6th Cir. 2018) (internal quotation and citation omitted) ("FCRA expressly creates a private right of action against a furnisher who fails to satisfy one of five duties identified in § 1681s-2(b).").
[¶21] Here, Ford's ACDV responses were, at best, unclear and, at worst, misleading. For example, it is not at all clear what Ford meant-or what the CRAs believed Ford meant-by the words "Disputed information accurate. Updated account information unrelated to the dispute." Appellant's App. v. III at 48. In addition, the undisputed material facts show that Ford's ACDV responses regarding Buell's dispute were inaccurate and/or incomplete because they did not provide an explanation for the fluctuating amount of the debt, and they did not notify the CRAs that Ford was no longer able to legally enforce the debt against Buell due to the dismissal, with prejudice, of its prior collection lawsuit against her.
However, Ford is not liable for failing to notify the CRAs of Buell's dispute; that duty only arises when the consumer makes a dispute directly to the furnisher. See 15 U.S.C. § 1681s-2(a)(3). Here, Buell reported the dispute not directly to Ford but directly to the CRAs, who then reported the dispute to Ford, thus triggering Ford's duties under 15 U.S.C. § 1681s-2(b)-which do not include a duty re-report the dispute to the CRA.
[¶22] However, as the federal district court noted in Buell's FCRA lawsuit against the CRAs, we cannot say, without some evidence, what effect, if any, that incomplete and inaccurate information might have had on Buell's credit. See Buell v. Experion Information Solutions, Inc., No. 1:22-CV-14-HAB, 2024 WL 1461212, *2-3 (N.D. Ind. April 3, 2024); see also Frazier, 72 F.4th at 776 (noting a consumer must show that the inaccurate information provided by the furnisher was "misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions"). That is, without evidence, we cannot "know whether a lender would make a different decision about [Buell's] creditworthiness based on the existence, or not, of the Dismissal Order" or fluctuating debt balances. Buell, 2024 WL 1461212 at 3. Although it may seem to be a matter of common sense that the vague, incomplete, and/or contradictory information in the ACDV responses likely had some effect on Buell's credit, we cannot base summary judgment on speculation. Rather, we must "resolve all doubts as to the existence of a material issue against the moving party," Reed, 980 N.E.2d at 285, and we must "consciously err on the side of letting marginal cases proceed to trial," lest we short-circuit meritorious claims, Hughley, 15 N.E.3d at 1004.
[¶23] Because there exist genuine issues of material fact, partial summary judgment is not appropriate for either party regarding Buell's inaccurate reporting claim.
Given this holding, we do not address the issue of damages, as Ford asks us to do.
Conclusion
[¶24] The trial court did not err in granting partial summary judgment to Ford on the issue of whether the dismissal, with prejudice, of Ford's collection lawsuit extinguished Buell's debt; as a matter of law, it did not. However, the trial court erred when it failed to address the other issue Buell raised in her summary judgment motion; i.e., whether Ford is liable for providing inaccurate, incorrect, and/or misleading information to the CRAs. Because there exist genuine issues of material fact on the latter claim, neither party is entitled to partial summary judgment on that claim.
[¶25] Affirmed in part, reversed in part, and remanded for further proceedings.
Altice, C.J., and Mathias, J., concur.