Opinion
Civil No. 3:03-CV-2949-H.
September 7, 2004
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff's Motion for Summary Judgment, filed June 2, 2004; Defendant's Response, filed June 22, 2004; Plaintiff's Reply filed June 26, 2004; and Defendant's Motion for Summary Judgment, filed June 14, 2004; Plaintiff's Response, filed July 26, 2004; and Defendant's Reply, filed August 10, 2004.
Plaintiff Terrence Gore ("Gore"), a resident of Texas, sues Experian Information Solutions, Inc. ("Experian"), an Ohio corporation with its principal place of business in California, for inaccurate credit reporting in violation of Texas Business and Commerce Code Sections 20.06 and 20.09 and deceptive trade practices in violation of Texas Business and Commerce Code Sections 17.50 and 20.12. The Court has diversity jurisdiction in this matter pursuant to 28 U.S.C. § 1332.
Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Plaintiff's Motion for Summary Judgment should be DENIED and Defendant's Motion for Summary Judgment should be GRANTED.
I. Background
Plaintiff Gore made purchases from Wickes Furniture, payments for which he subsequently fell behind. (Def.'s App. at 183.) Wickes Furniture then sold Gore's debt to Arrow Financial Services ("Arrow"), a debt collection agency. ( Id. at 183.) Gore fell behind in his payments to Arrow, which then reported his payment history to various credit reporting agencies, including Defendant Experian. ( Id.) Experian included the Arrow account information in Gore's consumer credit disclosure file and credit report. ( Id. at 40, 73.)
Gore disputed Arrow's representations of his payment history. In a settlement agreement between Gore and Arrow dated November 25, 2000, Arrow agreed to "delete any and all credit bureau reports made by Arrow." (Pl.'s App. at 19, 21.) The cover letter to the agreement indicated that Arrow had "done everything on [its] end to direct the [consumer reporting agencies] to remove the information" pertaining to the account. ( Id. at 18.)
On August 2, 2002, Gore asked Experian to investigate the accuracy of fourteen accounts, including the Arrow account. (Def.'s App. at 2.) Experian conducted the investigation, the credit disclosure for which, dated August 31, 2002, indicated that the Arrow account was reviewed, had "No Status," and was "in dispute under Fair Credit Billing Act." ( Id. at 10.) On August 5, 2002, Gore filed a complaint with the Justice of the Peace, Precinct 5, Place 1, Dallas County, Texas (No. JS02-004470) ("Small Claims Court") against Experian for reporting inaccurate information ("2002 case"). ( Id. at 237-38.) The documents filed in the 2002 case fail to reference the Arrow account, the subject of the instant case. ( Id. at 232-46.) Judgment was rendered in Gore's favor on October 2, 2002, for reasons unstated by the Small Claims Court. ( Id. at 241.) On November 12, 2002, Gore signed a release indicating that Experian had fully satisfied its obligations under the Small Claims Court judgment. ( Id. at 239.)
A "No Status" result indicates the existence of an account but does not reveal payment history. ( Id. at 2, 102.)
On June 28, 2003, Experian, after conducting an investigation into Gore's accounts, reported to Gore the existence of the Arrow account in his credit file as "No Status" and "in dispute under Fair Credit Billing Act." ( Id. at 73.) On July 21, 2003, Gore requested Experian to conduct an investigation into seven accounts, including the Arrow account. (Def.'s Br. at 5; Def.'s App. at 86.) Experian's August 15, 2003 response showed the account to remain, have "No Status," and be "in dispute under Fair Credit Billing Act." (Def.'s App. at 88-89.) This information was verified as accurate by Arrow on August 15, 2003. ( Id. at 86.)
The Arrow account was not included in the investigation requests by Gore in May and June of 2003. (Def.'s App. at 64-69, 72; see also Pl.'s App. at 57.)
Although Arrow had the opportunity to direct Experian to delete the account by checking a box on Experian's investigation response form, it did not do so in response to any of Experian's investigations. ( Id.) Instead, Arrow responded to Experian's investigation by indicating that the Arrow account information in Gore's credit disclosure file was accurate as reported. ( Id.)
On August 29, 2003, Gore filed a second complaint in Texas Small Claims Court (No. JS03-005240) against Experian for reporting inaccurate information ("2003 case"). (Pl.'s App. at 4-5; Def.'s App. at 377-79.) The materials submitted to the Small Claims Court in the 2003 case referenced the Arrow account as forming at least part of the basis of Gore's complaint. (Def.'s App. at 377-79.) Default judgment was rendered against Experian and included an injunction preventing Experian from reporting the Arrow account. ( Id. at 374.) The injunction, however, was vacated due to the Small Claims Court's lack of jurisdiction to issue such an injunction. (Def.'s App. at 254.)
Gore filed the instant case for inaccurate reporting of the Arrow account in his consumer credit disclosure file and credit report in violation of Texas Business and Commerce Code Sections 20.06 and 20.09 and deceptive trade practices in violation of Texas Business and Commerce Code Sections 17.50 and 20.12. This Court has proper diversity jurisdiction to hear the claim under 28 U.S.C. § 1332. See Order, July 23, 2004. Gore and Experian each move for summary judgment on their respective claims.
Plaintiff's claims of defamation, negligent or willful misrepresentation, and personal disparagement and injurious falsehood raised in Plaintiff's Amended Complaint are not properly before this Court. The Court denied Plaintiff's Motion for Leave to Amend Complaint on June 7, 2004. The original complaint did not assert these claims and therefore are not before this Court and are not considered herein.
II. Standard
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits, and other summary judgment evidence illustrate that no reasonable trier of fact could find for the non-moving party as to any material fact. FED.R.CIV.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potomac Ins. Co. of Ill., 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. CIV. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; Evans v. City of Houston, 246 F.3d 344, 348 (5th Cir. 2001); see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the non-moving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991). In ruling on the summary judgment motions before the Court, the Court limits its rulings to the issues in dispute by the parties.
After reviewing the cross-motions for summary judgment, the Court concludes the motions and responses to be duplicative and therefore shall not undertake separate analyses for each summary judgment motion.
III. Analysis
Gore brings the instant case under the Texas Business and Commerce Code provisions related to inaccurate credit reporting, failing to correct a credit report or consumer credit disclosure file after a judgment was rendered, and deceptive trade practices. These three basic claims arise from different statutory bases and will be addressed separately.
A. Inaccurate Reporting Claims
Texas Business and Commerce Code Section 20.06 establishes procedures which a consumer reporting agency must follow in response to a consumer's request for investigation into her credit report and credit disclosure file. TEX. BUS. COMM. CODE § 20.06 (2004). Violation of this provision creates liability as determined by Section 20.09, which determines the amount of damages awardable based upon whether the consumer reporting agency's conduct was negligent or willful. Id. § 20.09.
Although Experian argues that the federal Fair Credit Reporting Act, 15 U.S.C. 1681 (2004), preempts the Texas Business and Commerce Code provisions relating to inaccurate credit reporting, this Court finds such a determination unnecessary to the disposition of the instant case.
Section 20.06 provides that inaccurate information contained within a consumer credit disclosure file as revealed by an investigation must be deleted from the file or corrected and that "[t]he consumer reporting agency may not report the inaccurate or unverified information in subsequent reports." Id. § 20.06(d). It also provides that inaccurate information deleted "may not be reinserted in the consumer's file unless the person who furnishes the information to the consumer reporting agency reinvestigates and states in writing or by electronic record to the agency that the information is complete and accurate." Id. § 20.06(e).
In the instant case, Gore claims both that Experian failed to delete the Arrow account information found to be inaccurate in a credit investigation and that Experian did delete such inaccurate information but later reinserted such information into Gore's credit disclosure file or credit report improperly. Experian presents evidence that the results of its investigations into the Arrow account were verified as accurate by Arrow. Gore provides no competent evidence to present a genuine issue of material fact regarding the accuracy of Experian's investigation. Experian's evidence is therefore sufficient to meet its burden to prove the accuracy of information reported. Since the Arrow account was verified as correct, Experian was not obligated by law to modify the account information or to prevent its reemergence in Gore's consumer credit disclosure file at a later point in time.
Once it is proved that Experian's investigations never revealed inaccurate Arrow account information, Experian cannot be found to have violated Section 20.06 for failing to remove inaccurate information or for reinserting previously deleted inaccurate Arrow account information. Additionally, no summary judgment evidence is provided to support a conclusion that the information reinserted was anything other than information verified by Arrow.
Experian has presented undisputed summary judgment evidence that Experian did not violate the inaccurate credit reporting section of the Texas Business and Commerce Code. See id. § 20.06. Therefore, this Court need not determine whether Experian's actions were willful or negligent. As a result, Gore's claims that Experian incorrectly reported and improperly reinserted the Arrow account information into his credit disclosure file or credit report must fail.
B. Failure to Correct after Judgment
Gore also claims that Experian failed to correct inaccurate information within ten days after a court rendered a decision against Experian based on inaccurate information. Gore claims that the two Small Claims Court judgments were based on the inaccurate Arrow account information and therefore Experian should be held liable under Texas Business and Commerce Code Section 20.09(c), which states:
In addition to liability imposed under Subsection (a) [related to willful reporting of inaccurate information], a consumer reporting agency that does not correct a consumer's file and consumer report before the 10th day after the date on which a judgment is entered against the agency because of inaccurate information contained in the consumer's file is also liable for $1,000 a day until the inaccuracy is corrected.
Gore claims that the inaccurate information was present in his consumer credit disclosure file for over 400 days, resulting in penalties well over the jurisdictional limit required by 28 U.S.C. § 1332. For Gore to meet his burden on a Section 20.09(c) claim therefore, Gore must prove both that a judgment "because of inaccurate information" was rendered and that Experian failed to correct such information within ten days of judgment.
Although the 2002 Small Claims Court judgment was based upon inaccurate information, neither the judgment nor any materials filed with the Small Claims Court or presented in evidence to this Court indicates that the inaccurate information forming the subject matter in that case related to the Arrow account. Therefore, it cannot be said that a failure to correct the information subject to the 2002 complaint actually occurred. As a result, Gore failed to meet his burden with respect to the 2002 case.
The 2003 Small Claims Court case, on the other hand, was predicated upon inaccurate information related to the Arrow account. However, Gore has not provided any evidence that the alleged incorrect Arrow account information existed in his consumer credit disclosure file or credit report ten days after the 2003 Small Claims Court default judgment. The only evidence presented to the Court indicates that the Arrow account has not appeared in Gore's credit disclosure file or credit report since August 29, 2003. (Def.'s App. at 3.) As a result, Gore has failed to meet his burden regarding his Section 20.09(c) action for penalties.
While Gore need not provide evidence indicating the exact duration of the existence of the inaccurate reporting after judgment was rendered, Gore must provide evidence, at a minimum, that the inaccurate information was present for the statutory period, or ten days after September 22, 2003, the earliest date from which such a judgment might be calculated.
This Court therefore need not reach the issues of whether such a judgment was entered "because of inaccurate information" pursuant to the requirement of Section 20.09(c) or whether the Small Claims Court had proper jurisdiction to hear the case.
C. Deceptive Trade Practices Act Claim
Gore also raises a claim under the Texas Deceptive Trade Practices Act ("DTPA"). TEX. BUS. COMM. CODE §§ 17.50, 20.12 (2004). DTPA provides a private right of action where:
any of the following constitute a producing cause of economic damages or damages for mental anguish:
(1) the use or employment by any person of a false, misleading, or deceptive act or practice that is:
(A) specifically enumerated in a subdivision of Subsection (b) of Section 17.46 of this subchapter; and
(B) relied on by a consumer to the consumer's detriment; . . . [or]
(3) any unconscionable action or course of action by any person. . . .Id. § 17.50. The Court need not determine whether inaccurate credit reporting is actionable by a consumer under the DTPA because Gore's failure to produce any evidence of damages, detrimental reliance, inaccuracy, or any other circumstances that might support a DTPA claim precludes recovery under the DTPA. Id.
IV. Conclusion
For the reasons stated above, Plaintiff's Motion for Summary Judgment is DENIED, Defendant's Motion for Summary Judgment is GRANTED.
Judgment will be entered accordingly.
SO ORDERED.