Toler v. PPH Mortgage et al

Filing 245

MEMORANDUM OPINION denying 144 Motion for Partial Summary Judgment; granting in part and denying in part 147 Motion for Summary Judgment; temporarily denying 149 Motion for Partial Summary Judgment; granting in part and denying in part 152 Motion for Summary Judgment; granting in part and denying in part 154 Motion for Summary Judgment as set forth. Signed by Honorable Robert T. Dawson on November 5, 2014. (lw)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
TERRY D. TOLER, DONNA R. TOLER,
MARKETPLACE DEVELOPMENT CORPORATION
and SUCCESS DYNAMICS, INC. d/b/a
ALL PRO CLASSICS
v.

PLAINTIFFS

CASE NO. 12-6032

PHH MORTGAGE CORPORATION and
EXPERIAN INFORMATION SOLUTIONS, INC.

DEFENDANTS

MEMORANDUM OPINION
Before the Court are Plaintiffs’ Motion for Partial Summary
Judgment (docs. 144-46, 157-63, 192), Experian’s Response (docs.
173-74, 176), PHH’s Response (docs. 180-81), Plaintiffs’ Reply
(docs. 186-91), PHH Mortgage Corporation’s (“PHH”) Motion for
Summary

Judgment

Marketplace

Regarding

Development

Success

Dynamics,

Corporation

Inc.

and

(“corporate

Plaintiffs”)(docs. 147-48), PHH’s Reply (doc. 184), PHH’s Motion
for Partial Summary Judgment Regarding Terry and Donna Toler
(“the Tolers”)(docs. 149-51), PHH’s Reply (doc. 185), Experian
Information Solutions, Inc.’s (“Experian”) Motion for Summary
Judgment as to Corporate Plaintiffs and Business Damages (docs.
152-53), Experian’s Reply (doc. 193), and Experian’s Motion for
Summary Judgment as to the Tolers and All Other Damages (docs.
154-56, 164).

Also before the Court is Plaintiffs’ combined

response to all of Defendants’ Motions (docs. 167-72, 175, 17779).

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I.

Background
Plaintiffs’ Complaint was originally filed in the Circuit

Court of Garland County, Arkansas, on January 31, 2012 by the
Tolers against PHH, Experian and Federal National Mortgage
Association (“Fannie Mae”).1

Defendants removed the action to

this Court on March 1, 2012.

(Doc. 1).

An Amended Complaint

(doc. 72) was filed on April 30, 2013, adding Plaintiffs’
businesses, Success Dynamics, Inc. d/b/a All Pro Classics, and
Marketplace Development Corporation as Plaintiffs and again
naming Fannie Mae as a defendant.2
The Tolers allege claims against Defendants for violations
of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et
seq.,

and

the

corporate

Plaintiffs

allege

claims

against

Defendants under Arkansas law for tortious interference with
business expectancies.
The Tolers’ FCRA claims stem from alleged inaccurate credit
information
Experian,

reported
and

by

Experian’s

their

mortgage

furnishing

of

company,
that

PHH,

to

information,

specifically, that the Tolers were delinquent on their mortgage
payments.
II.

Standard of Review
A motion for summary judgment will be granted when “there

1
2

Fannie Mae was previously dismissed from this action.

Fannie Mae was again dismissed from this action on March 26, 2014. (Doc. 105)

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(Doc. 36)

is no genuine issue as to any material fact and . . . the moving
party is entitled to judgment as a matter of law.”
P. 56(c).

Fed. R. Civ.

A “material” fact is one “that might affect the

outcome of the suit under the governing law . . . .”
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Anderson

A “genuine”

issue of material fact exists when there is sufficient evidence
favoring the party opposing the motion for a jury to return a
verdict

for

that

party.

Anderson,

477

U.S. at

248.

In

determining whether a genuine issue of material fact exists, the
evidence is to be viewed in the light most favorable to the
nonmoving party.

Adickes v. S.H. Kress & Co., 398 U.S. 144, 157

(1970).
If

the

moving

party

meets

the

initial

burden

of

establishing the nonexistence of a genuine issue, the burden
then shifts to the opposing party to produce evidence of the
existence of a genuine issue of fact for trial.
v. Catrett, 477 U.S. 317, 322-23 (1986).

Celotex Corp.

The opposing party

“may not rest upon mere allegation or denials of his pleading,
but must set forth specific facts showing that there is a
genuine issue for trial,” and “must present affirmative evidence
in order to defeat a properly supported motion for summary
judgment.”
56(e)).

Anderson, 477 U.S. at 256-57 (citing Fed. R. Civ. P.

In order to withstand a motion for summary judgment,

plaintiffs must substantiate their allegations with “sufficient
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probative evidence [that] would permit a finding in [their]
favor on more than mere speculation, conjecture, or fantasy.”
Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir. 1992), cert.
denied, 507 U.S. 913 (1993).

A mere scintilla of evidence is

insufficient to avoid summary judgment.

Moody v. St. Charles

County, 23 F.3d 1410, 1412 (8th Cir. 1994).

Rule 56(c) mandates

the entry of summary judgment, after adequate time for discovery
and upon motion, 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
of proof at trial.

Celotex, 477 U.S. at 322.

III. Discussion
In their Motion for Partial Summary Judgment, Separate
Plaintiffs

Terry

and

Donna

Toler

seek

Defendants’ liability under the FCRA.

summary

judgment

on

Having reviewed the

pleadings and the evidence on file; viewing the evidence in the
light most favorable to the non-moving party as required, the
Court finds genuine issues of disputed material facts remain in
connection with the Tolers’ FCRA claims including, but not
limited

to,

whether

PHH

and

Experian

failed

to

conduct

reasonable investigations of the Tolers’ disputes, and whether
Experian failed to follow reasonable procedures to ensure the
accuracy of the Tolers’ credit information it reported, and, if
so, what damages were proximately caused by Defendants’ failures
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to do so.
DENIED.

Accordingly, the Tolers’ motion (doc. 144) should be
Additionally, Experian’s motion (doc. 154) as to the

Tolers’ FCRA claims is DENIED to the extent it seeks a judgment
as a matter of law on the issue of liability pursuant to the
FCRA.
PHH moves for summary judgment on the corporate Plaintiffs’
tortious interference claims contending they are preempted by
the FCRA and, alternatively, that the corporate Plaintiffs
failed to establish a prima facie case of tortious interference
(doc. 147).

The FCRA was enacted, in large part, to protect

consumers by ensuring “fair and accurate credit reporting.”
U.S.C. § 1681(a)(1).

The FCRA’s preemption provisions are as

follows:
No requirement or prohibition may be imposed under the
laws of any State with respect to any subject matter
regulated under section 1681s-2 of this title,
relating to the responsibilities of persons who
furnish information to consumer reporting agencies,
except that this paragraph shall not apply to [certain
inapplicable state statutes.]
15 U.S.C. § 1681t(b)(1)(F).
[N]o consumer may bring any action or proceeding in
the nature of defamation, invasion of privacy, or
negligence
with
respect
to
the
reporting
of
information
against...any
person
who
furnishes
information to a consumer reporting agency...except as
to false information furnished with malice or willful
intent to injure such consumer.
15 U.S.C. § 1681h(e).

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15

PHH contends the corporate Plaintiffs’ tort claims are
preempted and cites Ilodianya v. Capital One Bank USA NA, 853
F.Supp.2d 772 (E.D. Ark. 2012) and Cathcart v. American Exp.,
2012

WL

5258820

proposition.

(E.D.

Mo.

October

23,

2012)

for

this

The Court finds these cases inapposite to the

instant case, as the state claims found to be preempted in those
cases were brought by the consumer whose relief was governed by
the FCRA.

It has been Defendants’ position throughout this

litigation that the corporate Plaintiffs are not “consumers”
under the FCRA and, therefore, are prohibited from bringing FCRA
claims.

While a consumer’s tortious interference claim may well

be preempted under the FCRA absent a showing of malice or
willful intent to injure the consumer, it is unlikely that these
provisions were intended to completely preempt any cause of
action by a potential plaintiff.

Accordingly, the Court finds

that the preemption provisions of the FCRA do not apply to the
corporate Plaintiffs.

Thus, the corporate Plaintiffs’ tortious

interference claims are not preempted by the FCRA, and PHH’s
motion (doc. 147) is DENIED as to its preemption argument.
PHH’s motion (doc. 147) also seeks summary judgment for the
corporate Plaintiffs’ failure to establish a prima facie case of
tortious interference.

The elements of tortious interference

with a business expectancy are: (1) the existence of a valid
contractual relationship or a business expectancy, (2) knowledge
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of the relationship or expectancy on the part of the interfering
party, (3) intentional interference inducing or causing a breach
or

termination

of

the

relationship

or

expectancy,

and

(4)

resultant damage to the party whose relationship or expectancy
has been disrupted.

Ballard Group, Inc. v. BP Lubricants USA,

Inc., 436 S.W.3d 445 (Ark. 2014).

In addition, the defendants’

conduct must be “improper,” and there must be some third party
involved.

Id.

The expectancy that is obstructed must be

precise, and it must be sufficiently concrete in order to
qualify as a business expectancy and survive summary dismissal.
See Skalla v. Canepari, 430 S.W. 3d 72 (Ark. 2013).
The

corporate

Plaintiffs

contend

they

lost

certain

contracts and business expectancies with third parties due to
the Tolers’ inability to obtain personal credit to provide
funding

for

the

corporations.

However,

expectancies are, at best, speculative.

the

contracts

and

Further, aside from

general statements by Mr. Toler about being unable to fund his
corporations, the corporate Plaintiffs have not

shown that

Defendants were aware of such expectancies, much less acted
improperly to interfere with them.
The Court finds that Defendants are entitled to summary
judgment on the corporate Plaintiffs’ tortious interference
claims, in part, as the corporate Plaintiffs have not shown that
their alleged business expectancies were sufficiently precise or

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concrete.

Accordingly, PHH’s motion (doc. 147) is GRANTED as to

the corporate Plaintiffs’ tortious interference claims, and
these claims are DISMISSED WITH PREJUDICE.
Experian moves for summary judgment on all claims for
damages sustained by the corporate Plaintiffs or in connection
with business transactions (doc. 152).

Experian’s motion is

DENIED AS MOOT to the extent it requests the Court to find the
corporate Plaintiffs lack standing to sue under the FCRA and
that the Tolers lack standing to assert claims on behalf of the
corporate Plaintiffs under the FCRA.

The Tolers conceded these

two issues, and the corporate Plaintiffs do not assert claims
pursuant to the FCRA.
PHH and Experian also move for partial summary judgment
against the Tolers’ FCRA claims to the extent they seek business
damages (docs. 149, 154).

The FCRA defines a consumer as an

“individual” and provides for actual damages sustained by the
consumer.

See 15 U.S.C. § 1681, et seq.

The FCRA does not

protect business entities or extend coverage to a consumer’s
business transactions.
170900

(D.

Ariz.

Jan.

Wisdom v. Wells Fargo Bank NA, 2012 WL
20,

2012).

Accordingly,

PHH

and

Experian’s motions (docs. 149, 154) are GRANTED to the extent
that the Tolers are prohibited from seeking business damages as
a matter of law.

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This Court previously advised the parties in this case that
arguments regarding the appropriate measure of damages would be
considered at the trial of this matter (doc. 105), and there are
now numerous motions in limine and motions to exclude evidence
pending.

The Court will consider these motions prior to trial.

PHH’s motion (doc. 149) is DENIED to the extent it seeks
the dismissal of Mr. Toler’s FCRA claim.

Experian admitted that

Mr. Toler’s dispute was incorrectly classified as a repeat
dispute on a joint account, and there is no question that PHH
and Experian were aware that both Mr. and Mrs. Toler were
disputing the reported information, in particularly, Mr. Toler.
IV.

Conclusion
For the forgoing reasons, the Tolers’ motion (doc. 144) is

DENIED.

Experian’s motion (doc. 152) is DENIED as to any FCRA

standing issues, and GRANTED as to any business damages sought
by the Tolers.

Any speculative or impermissible damages sought

by the Tolers remain the subject of pending motions in limine
and will be considered prior to trial.

Experian’s motion (doc.

154) as to the Tolers’ FCRA claims is DENIED to the extent it
seeks summary judgment on the issue of liability and DENIED
without

prejudice

to

Experian’s

right

to

a

ruling

availability of punitive damages closer to trial.

on

the

PHH’s motion

(doc. 147) is GRANTED IN PART and DENIED IN PART, and the
corporate Plaintiffs’ tortious interference claims are DISMISSED
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WITH PREJUDICE.

PHH’s motion (doc. 149) is DENIED as to Mr.

Toler’s claim pursuant to the FCRA, and GRANTED as to any
business

damages

sought

by

the

Tolers.

Any

impermissible

damages sought by the Tolers will be resolved prior to trial.
A jury trial remains scheduled for November 17, 2014.
IT IS SO ORDERED this 5th day of November 2014.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

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