Opinion
3:19-cv-02103-JR
05-04-2021
MARCKIA LAWRENCE, Plaintiff, v. PARAMOUNT RESIDENTIAL MORTGAGE GROUP, INC., Defendant.
FINDINGS AND RECOMMENDATION
JOLIE A. RUSSO, UNITED STATES MAGISTRATE JUDGE
Defendant Paramount Residential Mortgage Group, Inc. (“Paramount”) moves for summary judgment on plaintiff Marckia Lawrence's claims pursuant to Fed.R.Civ.P. 56(a). Plaintiff opposes Paramount's motion under Fed.R.Civ.P. 56(d) or, alternatively, seeks summary judgment under Fed.R.Civ.P. 56(f) . For the reasons set forth below, Paramount's motion should be granted, plaintiff's motion should be denied, and this case should be dismissed.
Via her response brief, plaintiff requests summary judgment in her favor in light of the “undisputed” facts. Pl.'s Resp. to Mot. Summ. J. 23 (doc. 39); but see LR 7-1(b) (“[m]otions may not be combined with any response, reply, or other pleading”).
BACKGROUND
In November 2015, plaintiff obtained a loan from Paramount in the amount of $245,373 to purchase a primary residence in Portland, Oregon. The loan was secured by a promissory note and deed of trust.
In December 2016, plaintiff filed for Chapter 13 bankruptcy. Plaintiff identified her debt to Paramount in her bankruptcy petition. Def.'s Req. Judicial Notice Ex. 3 (doc. 14). In March 2017, the bankruptcy court entered an order confirming plaintiff's bankruptcy plan, pursuant to which plaintiff is responsible for paying the trustee a monthly sum, as well as for directly providing Paramount with regularly scheduled mortgage payments. Def.'s Req. Judicial Notice Exs. 2, 4 (doc. 14). In May 2017, Paramount filed a Proof of Claim. At that time, plaintiff owed approximately $240,000 on her mortgage loan and was $1,827.95 in arrears. Def.'s Req. Judicial Notice Ex. 1 (doc. 14).
Chapter 13 bankruptcy allows debtors with regular income to “repay creditors in part, or in whole, over the course of a three-to-five-year period.” In re Blendheim, 803 F.3d 477, 485 (9th Cir. 2015). If the debtor makes the requisite payments under the confirmed plan, the bankruptcy court will grant a discharge of the debts listed therein, which “releases debtors from personal liability.” Id. at 486-87. If, in contrast, the debtor fails to make the required payments, she may either “convert [the] case to a [bankruptcy] under a different chapter” or dismiss the action. Id.
In May 2018, plaintiff ordered a three-bureau credit report from Experian, Equifax, and TransUnion to ensure creditors were reporting her credit properly. The May credit reports each describe the Paramount account as “closed” and “involved in a Chapter 13” proceeding. Lawrence Decl. Ex. B (doc. 39-1). Equifax's report reflected plaintiff was “[m]aking regular payments” and therefore described the monthly payment history from 2014 through 2018 as “OK.” Id. at 1. Experian recounted plaintiff's monthly payment history during 2016 as “OK, ” except for December 2016, in which it reported “FP” or “failed to pay.” Id. at 2. Experian did not denote any monthly payment history following December 2016. Id. TransUnion did not report any payment history. Id. at 3.
In June 2018, plaintiff sent letters of dispute to Experian, Equifax, and TransUnion regarding Paramount's trade line, which stated in relevant part:
I have filed a chapter 13 bankruptcy. This account is not a closed account, and the status needs to be opened as I am current and still making payments of this account. The payment history for this account is entirely incomplete and needs to be updated showing that I have always made on time payments . . . Additionally, the adverse reporting that has occurred post discharge needs to be removed.
Lawrence Decl. ¶ 6 & Ex. C (doc. 39-1). To demonstrate that her Paramount account was “in good standing, ” plaintiff's dispute letters were accompanied by proof of six months of recent mortgage payments. Lawrence Decl. ¶ 7 & Exs. C-D (doc. 39-1).
In August 2018 and November 2019, plaintiff ordered a second and third set of credit reports, which allegedly contained the same “delinquent and/or adverse trade lines” as the June report. First Am. Compl. ¶¶ 64-71 (doc. 30). In particular, the November reports of Equifax and Experian continued to designate the Paramount account status as “closed.” Lawrence Decl. Ex. E (doc. 39-1). Equifax's “Payment History” section was blank, but its “Comments” section stated “[p]ays account as agreed.” Id. at 1. Experian's report explained plaintiff's “[d]ebt [was] included in or discharged through bankruptcy chapter 13” and did not depict any payment history other than an “FP” in December 2016. Id. at 2. TransUnion did not include any trade line regarding the Paramount account. Lawrence Decl. ¶ 8 n.1 (doc. 39-1).
In December 2019, plaintiff commenced this lawsuit under the Fair Credit Reporting Act (“FCRA”) based on the May/August 2018 and November 2019 credit reports, alleging that the description of her Paramount account as “closed” after she filed for bankruptcy and failure to report her ongoing mortgage payments was “incomplete, misleading, and technically inaccurate.” Compl. ¶¶ 57-76 (doc. 1). In April 2020, Paramount moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). In November 2020, the Court granted Paramount's motion.
The Court explained that, under the FRCA, credit reporting agencies have “no obligation to report post-bankruptcy payments where the plaintiff's mortgage was provided for in her Chapter 13 plan.” Lawrence v. Paramount Residential Mortg. Grp., Inc., 2020 WL 6689371, *2-3 (D. Or. July 20), adopted by 2020 WL 6685706 (D. Or. Nov. 10, 2020) (collecting cases). This is because “bankruptcy discharges personal financial liability on instruments named in a petition including on a promissory note and on the underlying deed of trust, ” such that “in the eyes of the law, any future action to collect on the debt would be against the property.” Id. (citations and internal quotations and brackets omitted). In sum, because plaintiff's “mortgage debt was included in the bankruptcy plan” and there were no “facts intimating that plaintiff's debt with Paramount was not discharged through bankruptcy or that her payments were not voluntary[, ] the complaint fail[ed] to plausibly allege that Paramount's reporting was incomplete or inaccurate.” Id. at *3.
Plaintiff subsequently lodged her First Amended Complaint clarifying that her bankruptcy remained ongoing and her debts had not yet been discharged, and asserting claims for failure to conduct a reasonable investigation and negligent noncompliance under 15 U.S.C. § 1681s-2(b) and 15 U.S.C. § 1681o, respectively. First Am. Compl. ¶¶ 4, 81, 86 (doc. 30).
On February 25, 2021, Paramount filed the present motion for summary judgement. On March 25, 2021, plaintiff responded to Paramount's motion, raising myriad arguments in opposition, some of which were based on a filing in her bankruptcy case made the same day. Briefing was completed regarding these issues on April 15, 2021.
STANDARD OF REVIEW
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file, if any, show “that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of the dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324.
Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 631.
DISCUSSION
Paramount argues that it is entitled to summary judgment because plaintiff's claims fail as a matter of law since the “FCRA does not impose an affirmative duty to report information” in this context. Def.'s Mot. Summ. J. 9-10 (doc. 35). According to Paramount, plaintiff cannot defeat summary judgment based on the First Amended Complaint alone or recent factual developments in her bankruptcy case.
Conversely, plaintiff contends that Paramount's motion “should be denied as discovery has not been conducted in this case, ” such that she has not “had a reasonable opportunity to present all available facts.” Pl.'s Resp. to Mot. Summ. J. 2, 7-8 (doc. 39). Additionally, plaintiff asserts that summary judgment is inappropriate because this case is “replete with genuine issues of material fact, ” and she will never receive a discharge of the subject loan based on her March 25, 2021, bankruptcy filing. Id. at 4, 9-10.
I. Preliminary Issues
Two preliminary issues must be resolved before reaching the substantive merits of Paramount's motion: plaintiff's request for relief under Fed.R.Civ.P. 56(d) and the legal impact of her prepetition arrearage and March 25, 2021, bankruptcy filing on these proceedings.
A. Rule 56(d)
Under Fed.R.Civ.P. 56(d), “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, ” the court may deny the summary judgment motion or defer consideration thereof to allow time to obtain discovery. Fed.R.Civ.P. 56(d) . Accordingly, a party seeking relief under Rule 56(d) must show: “(1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment.” Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008). The party seeking relief must also “explain why those facts would preclude summary judgment” and “show that it diligently pursued its previous discovery opportunities.” Fed. Trade Comm'n v. Adept Mgmt., Inc., 2017 WL 2563221, *2 (D. Or. June 13, 2017) (citations and internal quotations, brackets, and ellipses omitted).
Plaintiff has not satisfied the requirements of Rule 56(d). Namely, she does not provide an affidavit or declaration in support of her request or pinpoint any facts, let alone specific facts, that are essential to opposing Paramount's motion. Instead, plaintiff merely notes in her opposition that she “has yet to conduct discovery” and “would like to issue [requests for admissions or production] regarding all reporting on Plaintiff's account prior to and after receipt of the dispute letters, the written policies and procedures concerning investigations upon receipt of a dispute, the written policies and procedures regarding the accuracy and integrity of the information related to Plaintiff's account, as well as depos[e] anyone with knowledge of Defendant's reporting practices and procedures.” Pl.'s Resp. to Mot. Summ. J. 8 (doc. 39). At most, plaintiff broadly links this discovery to the purported disputed issues of material fact she identifies based on her pleadings or inconsistencies in Paramount's declaration evidence. Id. at 9-10.
As such, plaintiff does not provide any meaningful explanation regarding her own diligence or how the requested discovery could preclude summary judgment. In the absence of such evidence, the sought after discovery appears only generically relevant. Indeed, given that the majority of Paramount's motion is premised on legal, as opposed to factual, issues, it is difficult to see how much of the proposed discovery would create a disputed issue for trial. See E.I. Du Pont de NeMours & Co. v. Heraeus Precious Metals N. Am. Conshohocken LLC, 2013 WL 2659533, *1 (D. Or. June 7, 2013) (court “does not abuse its discretion in denying a request for additional discovery under Rule 56(d) if the party's request is vague and the discovery sought does not relate to the legal issues presented on summary judgment”) (citation and internal quotations and brackets omitted). In any event, as addressed herein, the disputed issues cited by plaintiff do not warrant relief pursuant to Rule 56(d). Plaintiff's request to defer consideration of or deny Paramount's motion is denied.
B. Arrearage in a Chapter 13 Bankruptcy
Paramount's May 2017 Proof of Claim reflected that plaintiff's loan was $1,827.95 in arrears. Def.'s Req. Judicial Notice Ex. 1 (doc. 14). Based on these arrears, plaintiff contends that, pursuant to In re Kent, 2016 WL 9488860 (Bankr. D. Or. Jan. 22, 2016), she “will not be discharged in regard to her in personam liability on the mortgage at the conclusion of her bankruptcy, ” such that Paramount had “no reasonable belief that the account should be charged off.” Pl.'s Resp. Summ. J. 4, 13 (doc. 39).
Plaintiff misreads Kent. This case merely stands for the proposition that a mortgage “may” be excepted from discharge under the Bankruptcy Code if the underlying plan, in relevant part, “provide[s] for the curing of any default within a reasonable time.” Kent, 2016 WL 9488860 at *3 (quoting 11 U.S.C. § 1322(b)(5)). The Kent court read § 1322(b)(5) as permissive, such that personal liability remained only if the underlying plan expressly contained a provision to cure the prepetition arrears. Id. at *4-5. In other words, a bankruptcy plan for direct payment of a secured claim does not invoke the discharge exception unless it makes specific reference to § 1322(b)(5). Cf. In re Sicroff, 401 F.3d 1101, 1104 (9th Cir. 2005) (“exceptions to discharge should be confined to those plainly expressed, and should be strictly construed in order to serve the Bankruptcy Act's purpose of giving debtors a fresh start”).
Here, plaintiff does not argue, nor can she, that the bankruptcy plan in existence at the time of her complaint (or, for that matter, these proceedings) required the curing of any arrearage. Rather, the confirmed plan simply calls for direct monthly mortgage payments to Paramount. Def.'s Req. Judicial Notice Ex. 4 (doc. 14). Thus, as in Kent, the relevant plan does “not provide [for a claim] under § 1322(b)(5), ” such that Paramount had no basis to conclude that personal liability in regard to plaintiff's mortgage would persist post-discharge at the time it allegedly reported inaccurate or misleading information. Kent, 2016 WL 9488860 at *5; see also Reichardt v. TransUnion LLC, 2019 WL 1359119, *3-4 (D. Ariz. Mar. 26, 2019) (granting summary judgment in favor of the defendant under analogous circumstances); Steinmetz v. Am. Honda Fin., 447 F.Supp.3d 994, 1005 (D. Nev. 2020) (rejecting the plaintiff's contention that her debt was not discharged and she remained personally liable where the “debts were included in her Chapter 13 bankruptcy plan”).
The fact that plaintiff filed a proposed amendment to her confirmed bankruptcy plan on March 25, 2021 (i.e., one month after Paramount moved for summary judgment and on the same day as her response brief) to include, amongst other things, prepetition arrearage does not change the Court's analysis. Lawrence Decl. ¶ 4 & Ex. A (doc. 39-1). Nothing before the Court suggests that the proposed amendment has been adopted and the operative pleading does not include allegations related thereto, both of which are determinative in this context. See Lawrence Decl. Ex. A, at 1 (doc. 39-1) (proposed amendment indicating that the plan confirmed March 2017 “remains in full force and effect unless the amended plan became the plan”); Navajo Nation v. U.S. Forest Serv., 535 F.3d 1058, 1080 (9th Cir. 2008) (where “the complaint does not include the necessary factual allegations to state a claim, raising such claim in a summary judgment motion is insufficient to present the claim to the district court”); see also McClellan v. I-Flow Corp., 2009 WL 3448871, *1 (D. Or. Oct. 22, 2009) (declining to consider the plaintiffs' “claims [on summary judgment] that are not yet pled”). Critically, liability cannot be sustained based on credit reporting that occurred in 2018 where the event that purportedly renders that reporting inaccurate or misleading did not take place until 2021.
II. Summary Judgment Analysis
The primary purpose of the FCRA is to “protect consumers against inaccurate and incomplete credit reporting.” Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1060 (9th Cir. 2002). Credit reporting agencies (“CRA”) receive data from parties that furnish information, labeled in the FCRA as “furnishers.” After a consumer's objection, the FCRA requires furnishers to investigate and verify that they are reporting complete and accurate information. Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1164 (9th Cir. 2009).
In order to prove an FCRA violation, the plaintiff must set forth facts demonstrating that: (1) the furnisher provided incomplete or inaccurate information to a CRA; (2) the plaintiff notified the CRA of the inaccuracy and the CRA then notified the furnisher; (3) the furnisher failed to conduct a reasonable investigation into the dispute and/or provide a corrected report to the CRA; and (4) the furnisher's actions caused the plaintiff actual damage. Lawrence, 2020 WL 6689371 at *2 (citation omitted). Concerning the first element, a credit report is incomplete or inaccurate if it is patently incorrect or “misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Gorman, 584 F.3d at 1163 (citations and internal quotations omitted). To establish willfulness, the plaintiff must present facts intimating that the furnisher's actions were knowing or reckless. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57-58 (2007).
Paramount has presented evidence concerning its treatment and processing of plaintiff's loan in support of its motion. This evidence establishes that third-party servicer Cenlar FSB handled the reporting of plaintiff's loan. Ferragame Decl. ¶¶ 1-4 (doc. 35-1). Cenlar's duties as servicer include, but are not limited to, handling issues that arise on a loan, collecting payments due on a loan, and pursuing any delinquencies or foreclosure on behalf of the owner/holder of the Loan. Id. at ¶ 2. Based on an internal review, Cenlar states under penalty of perjury that it has never reported plaintiff's mortgage account as closed or charged off. Id. at ¶¶ 5-6. In fact, Cenlar ceased all monthly reporting for plaintiff's loan in December 2016, the month she declared bankruptcy. Id. at ¶¶ 6, 8.
Finally, Cenlar's servicing notes reflect only one credit reporting related dispute between May and December 2018, which exclusively concerned Experian. Id. at ¶ 7. Cenlar investigated the dispute and sent a response back to Experian - known as an “ACDV Response” - on July 28, 2018. Cenlar Decl. Exs. 1-2 (doc. 35-1). This response stated that plaintiff's loan should reflect the reporting code of “0” for the period of February through December 2016 - i.e., that the account was still active and not delinquent. Cenlar Decl. ¶ 8 & Exs. 1-2 (doc. 35-1). The ACDV Response further provided a CII reporting code of “D” for the period of January 2017 through June 2018. Cenlar Ex. 2 (doc. 35-1).
Plaintiff did not file an evidentiary objection in regard to this declaration, nor has she furnished any argument or evidence intimating that the information contained therein is erroneous. Instead, plaintiff contends that summary judgment is not warranted because Paramount: (1) “reported her account as closed and reported a ‘FP' or charge off;” (2) “did not report the [monthly mortgage] payments it accepted;” and (3) “report[ed] [the] code of ‘D' for the period of January 2017 through June 2018.” Pl.'s Resp. to Mot. Summ. J. 9-10 (doc. 39).
In a footnote, plaintiff notes that the Cenlar declaration is “very limited in scope, only regarding disputes received between May 2018 and December 2018” and “contradictory in multiple places.” Pl.'s Resp. to Mot. for Summ. J. 3 n.2 (doc. 39); but see Estate of Saunders v. Comm'r, 745 F.3d 953, 962 n.8 (9th Cir. 2014) (“[a]rguments raised only in footnotes . . . are generally deemed waived” and need not be considered). An independent review of the Cenlar declaration does not suggest any material inconsistency or credibility issues. In particular, the fact that Cenlar investigated the dispute plaintiff lodged with Experian in July 2018 and issued a ACDV Response does not conflict with its statement that it stopped all regular monthly reporting associated with the loan in December 2016. Likewise, the fact that the ACDV Response reflected plaintiff's loan as current up until her bankruptcy does not mean that Paramount's statement of arrears was inaccurate. In fact, consistent with Cenlar's ACDV Response, Paramount's Proof of Claim does not reflect any outstanding principal or interest payments, only the accrual of prepetition fees and a projected escrow shortage. Def.'s Req. Judicial Notice Ex. 1, at 4 (doc. 14). The scope of the Cenlar declaration temporally tracks plaintiff's explicit allegations concerning the only disputed trade lines - i.e., those from May 2018.
Initially, plaintiff's reliance on Paramount's use of the “D” code during this period is misplaced. Plaintiff asserts that this code corresponds to “no data, ” although without any citation in support. Id. at 19. However, the CII “D” code is used to delineate that a debt is included in a pending bankruptcy. See, e.g., Sanders v. Experian Info. Sols. Inc., 2017 WL 1425918, * (N.D. Cal. Apr. 21, 2017); see also Rara v. Experian Info. Sols., Inc., 2017 WL 1047020, *7 (N.D. Cal. Mar. 20, 2017) (“failure to report [a] CII D indicator, or to otherwise note that a bankruptcy petition has been filed, [could render] reporting ‘inaccurate' under FCRA”). It is further undisputed that plaintiff filed for bankruptcy in December 2016, and that Cenlar investigated her dispute and issued an ACDV Response in July 2018. As a result, it is unclear how this aspect of Paramount's reporting lends credence to plaintiff's FRCA claims.
In any event, the material facts that plaintiff relies on each inhere to the first element - i.e., whether Paramount's reporting was inaccurate. As such, she failed to meet her burden of proof in regard to two essential elements of her claims - i.e., that she filed an objection with either Equifax or TransUnion that Paramount received, and that Paramount failed to conduct a reasonable investigation and/or provide corrected information to Experian. See Celotex, 477 U.S. at 322 (summary judgment should be entered against “a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden on proof at trial”); see also Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1116 (9th Cir. 2003) (“conclusory allegations, unsupported by facts, are insufficient to survive a motion for summary judgment”).
Regarding the fourth element, plaintiff states in her declaration that, at some unspecified time and by some unspecified lender, she was “denied the opportunity to refinance the Loan . . . because [the CRAs] were not reporting my monthly payments.” Lawrence Decl. ¶¶ 10-12 (doc. 39-1). Yet the Equifax credit reports do reflect plaintiff's post-petition monthly mortgage payments and all three CRAs indicate that her Paramount debt is part of a Chapter 13 bankruptcy. Lawrence Decl. Exs. B & E (doc. 39-1); see also In re McGarvey, 613 B.R. 285, 310 (E.D. Cal. 2020) (“[p]laintiffs' bankruptcies themselves cause them to have lower credit scores with or without the alleged misstatements”).
Concerning the second element, it is well-established that proof of “a formal notice of consumer dispute from a consumer reporting agency” is required to prove a furnisher's FCRA violation. Arikat v. JP Morgan Chase & Co., 430 F.Supp.2d 1013, 1023-25 (N.D. Cal. 2006) (citations and internal quotations omitted); see also Gorman, 584 F.3d at 1154 (furnisher's duties under § 1681s-2(b) or § 1681o “arise only after the furnisher receives notice of dispute from a CRA”); Hughes v. IQ Data Int'l, Inc., 2016 WL 7406993, *2 (N.D. Cal. Dec. 22, 2016) (granting summary judgment in favor of a furnisher who produced evidence that it was not notified by the CRA of the consumer's dispute).
Moreover, as the Court previously explained, FCRA liability does not lie in relation to the failure to report ongoing payments on a mortgage debt included in a bankruptcy plan. Lawrence, 2020 WL 6689371 at *2-3; see also Steinmetz, 447 F.Supp.3d at 1004-06 (under the FCRA, it is not inaccurate for a CRA to withhold information about payments made to accounts that were discharged in bankruptcy or report a zero balance); Reichardt, 2019 WL 1359119 at *3 (“[a] credit reporting agency need not continue to report a mortgage account when the debtor's personal liability on the mortgage account was discharged through bankruptcy, regardless of whether the debtor continues to make payments on the mortgage”) (collecting cases).
And, as addressed in Section I(B), Paramount had no legal or factual basis to believe during the relevant timeframe that plaintiff's loan would not be discharged. Kent, 2016 WL 9488860 at *4-5; see also Davis v. Carrington Mortg. Servs., LLC, 454 F.Supp.3d 996, 1004-05 (D. Nev. 2020) (no FCRA liability where the plaintiff alleged her mortgage was “excepted from discharge” given that the debt was included in her Chapter 13 bankruptcy plan, which did “not specify which of her debts were discharged and which were not”); Messano v. Experian Info. Sols., Inc., 251 F.Supp.3d 1309, 1315 (N.D. Cal. 2017) (“imposing a duty on CRAs to ascertain the ‘true' nature or amount of a post-confirmation but pre-discharge debt, and to resolve potentially complex legal disputes about what is or is not owed under the bankruptcy plan, goes well beyond what the FCRA requires”).
While neither party cites to any directly on-point precedent concerning the failure to divulge ongoing mortgage payments prior to a formal discharge, plaintiff's counsel has sued lenders on the basis that it was misleading to report a delinquency during the pendency of a bankruptcy, arguing that they should instead report “no data.” Mortimer v. Bank of Am., N.A., 2013 WL 1501452, *10-13 (N.D. Cal. Apr. 10, 2013). The weight of authority makes clear that credit reporting “that does not reflect the terms in the debtor's Chapter 13 plan after confirmation, but before discharge, ” is not inaccurate. See, e.g., Conrad v. Experian Info. Sols., Inc., 2017 WL 1739167, *5 (N.D. Cal. May 4, 2017); McGarvey, 613 B.R. at 303-06 . Although arising under different factual circumstances, these cases persuasively urge that it is not misleading for a furnisher or CRA to provide information that does not fully encapsulate a debtor's loan payment obligations or history during a pendency of a bankruptcy. Importantly, the disputed credit reports in this case each disclosed the nature of the Paramount account (i.e., a residential mortgage) and that it was included in plaintiff's Chapter 13 bankruptcy. Lawrence Decl. Exs. B & E (doc. 39-1).
Even assuming plaintiff presented evidence that her loan account was reported as “charged off” - or coded as “CO” - Paramount would still be entitled to summary judgment. Nissou-Rabban v. Capital One Bank (USA), N.A., 2016 WL 4508241, *1 (S.D. Cal. June 6, 2016). This is because the creditor may elect to “charge off” a debt when it decides to treat the debt “as a loss or expense because payment is unlikely.” Steinmetz, 447 F.Supp.3d at 1006 ; see also Murphy v. Equifax Info., 2013 WL 6562860, *3 n.2 (E.D. N.Y. Dec. 13, 2013) (“[a] ‘charge-off' is an accounting designation for a loan that is deemed uncollectible because it is so far past due, ” but this designation does not prevent further collection attempts). Thus, courts within the Ninth Circuit have routinely held that reporting a mortgage loan as “charged off” during the pendency of a bankruptcy is neither inaccurate nor misleading under the FCRA. See, e.g., Nissou-Rabban, 2016 WL 4508241 at *4; Steinmetz, 447 F.Supp.3d at 1007.
Concerning the “FP” designation or “closed” account status, there is no evidence that Paramount actually reported either to any CRA. Ferragame Decl. ¶¶ 5-6 (doc. 35-1); see also Aviles v. Equifax Info. Servs., LLC, 521 F.Supp.2d 519, 523-25 (E.D. Vir. 2007) (granting summary judgment in favor of the furnisher “in the absence of any evidence that [it] reported, let alone initiated, the incorrect report”). The fact that the credit reports obtained from Equifax and TransUnion do not contain the “FP” designation suggests that, consistent with the evidence from Cenlar, this information did not emanate from Paramount. Lawrence Decl. Exs. B & E (doc. 39-1).
Although not dispositive, the Court notes that it is questionable whether the manner in which this code was employed was inaccurate or misleading. In conjunction with the “FP” designation, which was only used in the month plaintiff filed for bankruptcy, Experian's report reflected no balance and that Paramount's “[d]ebt [was] included in or discharged through bankruptcy chapter 13.” Lawrence Decl. Ex. E, at 2 (doc. 39-1); cf. Mortimer, 2013 WL 57856 at *7 (as long as a furnisher or CRA reports that an account was discharged in bankruptcy and has a zero balance, “it is accurate to report, after discharge, that a debtor was delinquent during the pendency of bankruptcy because at that time the debt existed”). Similarly, showing an account as “closed” once a debt apparently is subject to discharge via bankruptcy does not seem misguided where that bankruptcy is acknowledged, and a zero balance is reported. See Schueller v. Wells Fargo & Co., 559 Fed.Appx. 733, 737 (10th Cir. 2014) (it is not “materially misleading” to report a loan discharged through bankruptcy as “closed” with a zero balance and no payments made; continued payments represented the plaintiff's voluntary effort to avoid foreclosure).
In sum, plaintiff has not cited to, and the Court is not aware of, any authority holding, either directly or by analogy, that the FCRA imposes liability for: (1) failing to disclose ongoing mortgage payments on an account subject to discharge; or (2) reporting “no data” or a CII “D” code on such an account once a bankruptcy has been initiated. Absent any argument or evidence that would distinguish plaintiff's case from the myriad other cases cited in the Court's prior order or Paramount's motion, coupled with the unambiguous terms of the confirmed plan that existed at the time of the disputed May 2018 trade lines, the Court cannot conclude that Paramount was the furnisher of incomplete or inaccurate information.
RECOMMENDATION
For the reasons stated herein, Paramount's motion for summary judgement (doc. 35) should be granted, plaintiff's Rule 56(d)/Rule 56(f) motion (doc. 39) should be denied, and judgment should be prepared dismissing this case. The parties' requests for oral argument are denied as unnecessary.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.