Gissler v. Equifax Information Services LLC et al
ORDER Granted in part and Denied in part 67 Pennsylvania Higher Education Assistance Agency's Motion for Summary Judgment by Judge Philip A. Brimmer on 09/28/2017. (sphil, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 16-cv-01673-PAB-MJW
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY,
This matter is before the Court on Pennsylvania Higher Education Assistance
Agency’s Motion for Summary Judgment [Docket No. 67]. The Court has jurisdiction
pursuant to 28 U.S.C. § 1331.
Plaintiff Garret Gissler claims that he was harmed by defendant Pennsylvania
Higher Education Assistance Agency’s credit reporting. Plaintiff brings claims under the
Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and the Colorado Uniform
Credit Code, Colo. Rev. Stat. § 5-5-109(2) (“Colorado Credit Code”).
Defendant is the loan servicing company for plaintiff’s student loans.
Defendant’s Statement of Undisputed Material Facts (“DSUMF”) 3; Docket No. 67 at 2,
¶ 3.2 Plaintiff failed to make payments on his student loans from November 2012 to
The following facts are undisputed unless otherwise indicated.
Several credit bureaus were previously defendants in this action, but they have
been dismissed. See Docket Nos. 56, 62, 63, 76.
April 2013. DSUMF 4; Docket No. 67 at 3, ¶ 4. Defendant did not report the loan as
delinquent in November or December 2012 because the Department of Education,
which owned the loan, had directed defendant to not report delinquencies to the credit
reporting agencies until a consumer is 60 or more days late. DSUMF 9; Docket No. 67
at 4, ¶ 9. However, given the passage of 60 days, defendant reported that plaintiff’s
January to April 2013 payments were late. DSUMF 4; Docket No. 67 at 3, ¶ 8; see,
e.g., Docket No. 67-13 at 9, ¶ 46 (“[Defendant’s] transmission on January 31, 2013
reported to the credit bureaus that Plaintiff was ‘60 DAYS’ delinquent on the Student
Loan.”). On May 2, 2013, plaintiff requested a forbearance that would cover the late
payments from November 2012 to April 2013. DSUMF 5; Docket No. 67 at 3, ¶ 5. On
May 3, 2013, defendant approved plaintiff’s request. Id. As part of the forbearance,
defendant agreed to remove the delinquencies on plaintiff’s loan and eliminate the late
fees. DSUMF 6; Docket No. 67 at 3, ¶ 6. At the tim e plaintiff asked for a forbearance,
plaintiff did not ask that credit reporting regarding his missed payments be changed and
defendant did not say it would do so. DSUMF 7; Docket No. 67 at 3, ¶ 7.
Approximately three years later, plaintiff filed disputes with credit reporting
agencies. DSUMF 14; Docket No. 67 at 4, ¶ 14. These disputes took the form of
letters that stated:
The following information needs to be verified and deleted from my credit
report as soon as possible:
1) Late payments up to 150 days from January 2013 to April 2013
This account was granted forbearance for the above time period. Please
see the documents enclosed with this letter.
DSUMF 17; Docket No. 67 at 5, ¶ 17; see Docket No. 67-20 at 2. The credit reporting
agencies referred these disputes to defendant for investigation. DSUMF 32; Docket
No. 67 at 8-9, ¶ 32.
At the beginning of the investigation, defendant temporarily marked plaintiff’s
account with the Compliance Condition Code “XB,” which indicates that the account
information has been disputed and an investigation is pending. DSUMF 21; Docket No.
67 at 6, ¶ 21. Defendant investigated the disputes, confirmed that plaintiff did not make
loan payments from November 2012 to April 2013, and confirmed that plaintiff had
been granted a forbearance covering the delinquent months, but defendant did not
change its reporting regarding the missed payments. DSUMF 35-36; Docket No. 67 at
9-10, ¶¶ 35-36. Defendant’s decision not to change its reporting was based on
defendant’s conclusion that the reporting was accurate and on defendant’s unwritten
policy that, for Department of Education loans, defendant will not change its credit
reporting as a result of a forbearance granted after payments have already been
missed. DSUMF 10; Docket No. 67 at 4, ¶ 10; DSUMF 36; Docket No. 67 at 10, ¶ 36.
This policy was directed by the Department of Education and applies to all Department
of Education loans. DSUMF 11, Docket No. 67 at 4, ¶ 11. 3 Defendant has a different
Although plaintiff generally disputes DSUMF 10, 11, and 36, plaintiff does not
dispute the portion of DSUMF 10 stating the Department of Education has a policy that,
for its loans, it will not change prior credit reporting even if a forbearance is later granted
that retroactively covers the delinquent months. See Docket No. 75 at 3, ¶¶ 10, 11.
Similarly, plaintiff does not dispute those portions of DSUMF 10 and 36 that defendant
acted pursuant to this policy when it did not change its credit reporting for January to
April 2013. See Docket No. 75 at 3, ¶ 10, and 5, ¶ 36. Plaintif f does deny that
defendant “has a policy to not change credit reporting after a forbearance,” Docket No.
75 at 3, ¶ 10, but bases its denial on def endant having a different policy for loans
owned by Chase and Bank of America. Id. In fact, plaintiff admits that, “for Dept. of
policy for loans owned by Chase and Bank of America. Docket No. 75-2 at 6, 48:9-19.
For such loans, defendant does change the credit reporting when it grants a retroactive
forbearance. Id.; see also Docket No. 78 at 6 (“[Defendant’s] credit reporting policy for
retroactive forbearances is dependent on the owner of the loan.”).
When a credit reporting agency refers a dispute it has received to defendant for
investigation, defendant ascertains the substance of the dispute and reviews any
documents supplied by the agency. DSUMF 20; Docket No. 67 at 6, ¶ 20. Defendant
compares the dispute with the account records, including the payment, forbearance,
and credit reporting history. Id. At the beginning of the investigation on a referred
complaint, defendant marks the account as in dispute by using the Compliance
Condition Code (“CCC”) of “XB,” which means “Account information disputed by
consumer under the Fair Credit Reporting Act.” Docket No. 67 at 10, ¶ 39; id. at 16.
Defendant followed this procedure when investigating plaintiff’s complaint. DSUMF 34;
Docket No. 67 at 9, ¶34. W hen defendant completed its investigation, defendant
changed the CCC to code “XH,” meaning “Account previously in dispute – investigation
completed, reported by data furnisher.” DSUMF 40; Docket No. 67 at 11, ¶ 40, 16.
Defendant claims it did not change the CCC to “XC,” meaning “Completed investigation
of FCRA dispute – consumer disagrees,” because plaintiff never notified defendant that
he disagreed with the investigation results. Docket No. 67 at 11.
On January 27, 2017, defendant filed its motion for summary judgment. Docket
No. 67, ¶ 41.
Education loans, [defendant] will not change the credit reporting after a forbearance.”
II. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 when
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); see Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed f act is “material” if
under the relevant substantive law it is essential to proper disposition of the claim.
Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes
over material facts can create a genuine issue for trial and preclude summary
judgment. Faustin v. City & Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An
issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a
verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.
However, “[w]hen, as in this case, the moving party does not bear the ultimate
burden of persuasion at trial, it may satisfy its burden at the summary judgment stage
by identifying a lack of evidence for the nonmovant on an essential element of the
nonmovant’s claim.” Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th
Cir. 2001) (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998))
(internal quotation marks omitted). “Once the moving party meets this burden, the
burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a
material matter.” Concrete Works of Colo., Inc. v. City & Cty. of Denver, 36 F.3d 1513,
1518 (10th Cir. 1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The
nonmoving party may not rest solely on the allegations in the pleadings, but instead
must designate “specific facts showing that there is a genuine issue for trial.” Celotex,
477 U.S. at 324; see Fed. R. Civ. P. 56(e). “To avoid summary judgment, the
nonmovant must establish, at a minimum, an inference of the presence of each
element essential to the case.” Bausman, 252 F.3d at 1115 (citing Hulsey v. Kmart,
Inc., 43 F.3d 555, 557 (10th Cir.1994)). “In applying this standard, we view all facts and
any reasonable inferences that might be drawn from them in the light most favorable to
the nonmoving party.” Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th
A. Fair Credit Reporting Act Claim
The FCRA requires certain actions of credit reporting agencies and furnishers of
information to such agencies. Relevant here, 15 U.S.C. § 1681s-2(b)(1) requires a
furnisher of credit information to conduct an investigation after receiving notice from a
credit reporting agency that a customer disputes the accuracy of information that the
furnisher of credit information provided to a credit reporting agency. Specifically, after
receiving notice of a dispute from a credit reporting agency, a furnisher of information
must “(1) investigate the disputed information; (2) review all relevant information
provided by the [credit reporting agency]; (3) report the results of the investigation to the
[credit reporting agency]; (4) report the results of the investigation to all other [credit
reporting agencies] if the investigation reveals that the information is incomplete or
inaccurate; and (5) modify, delete, or permanently block the reporting of the disputed
information if it is determined to be inaccurate, incomplete, or unverifiable.” Pinson v.
Equifax Credit Info. Servs., Inc., 316 F. App’x 744, 750 (10th Cir. 2009) (unpublished)
(citing 15 U.S.C. § 1681s-2(b)). A consumer may bring a private cause of action
against a furnisher of information for its failure to fulfill the duty to conduct a reasonable
investigation. Cousineau v. Unifund CCR Partners, No. 10-cv-03109-CMA-KLM, 2012
WL 3135687, at *3 (D. Colo. July 31, 2012). “Summary judgment is proper when ‘the
reasonableness of the defendant’s procedures is beyond question.’” Id. (quoting
Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir. 2005)).
1. Existence of a Cause of Action
Defendant argues that plaintiff has no private right of action under 15 U.S.C.
§ 1681s-2(a) to challenge defendant’s policy regarding reporting missed loan payments
for persons granted forbearances. Docket No. 67 at 12-13. The Court does not read
the amended complaint to bring a claim under § 1681s-2(a). Plaintiff challenges the
reasonableness of defendant’s investigation of his complaints to the credit reporting
agencies under 15 U.S.C. § 1681s-2(b), Docket No. 48 at 2, ¶ 14, w hich creates a
private right of action in these circumstances.
2. Investigation of the Dispute
Defendant argues that its investigation was reasonable because its procedures
for conducting the investigation are “detailed and complete” and include consideration
of account records and notetaking by the investigator. Docket No. 67 at 15. Defendant
claims that, because its investigation was thorough and applied its policies to “confirm
that the credit reporting at issue accurately reflected the status of the loan as set forth in
[defendant’s] records,” the investigation was reasonable. Id. In particular, after it
completed its investigation, defendant changed the CCC from the “XB” code, meaning
“Account information disputed by consumer under the Fair Credit Reporting Act,” to the
“XH” code, which indicates: “Account previously in dispute – investigation completed,
reported by data furnisher.” Id.; see also Docket No. 67-39 at 3.
In arguing that summary judgment is inappropriate, plaintiff does not challenge
the reasonableness of defendant’s investigative procedures. Moreover, plaintiff does
not challenge the fact that he did not make loan payments between November 2012
and April 2013. He concedes that defendant’s credit reporting concerning the
payments missed from January 2013 to April 2013 was “technically accurate,” Docket
No. 75 at 8, but claims that all of the reporting after the forbearance was inaccurate. Id.
In other words, plaintiff does not complain about the process used in the investigation
or the fact that the investigation determined that plaintiff did not make certain loan
payments. Rather, plaintiff believes that the legal effect of defendant granting a
forbearance was to make it inaccurate for defendant to report the missed payments
after the forbearance. Id. at 10.4
Plaintiff argues that Trans Union’s investigation, which reached a different
result, and the decision of credit reporting agencies, who were formerly defendants in
this case, to change their reporting after the lawsuit was filed is somehow probative.
Docket No. 75 at 8-9. It is unclear why these later actions by separate entities following
distinct procedures would create a genuine issue of material fact as to whether
defendant’s investigation was unreasonable. An investigation can be reasonable even
if it returns inaccurate results. See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d
1147, 1161 (9th Cir. 2009) (“We emphasize that the requirement that furnishers
investigate consumer disputes is procedural. An investigation is not necessarily
unreasonable because it results in a substantive conclusion unfavorable to the
consumer, even if that conclusion turns out to be inaccurate.”). Moreover, actions that
co-defendants took as part of settling with plaintiff are irrelevant to the reasonableness
of defendant’s investigation.
In support of his theory regarding the legal effect of a forbearance, plaintiff
argues that it is “inaccurate to report throughout 2016 that Gissler was late during Jan.
2013 - May 2013 because Defendant agreed that those payments were no longer
outstanding, and were suspended to a later date in time, i.e. re-capitalized back onto
[sic] the loan . . . .” Id. at 8 (emphasis in original). Plaintiff then concludes “as a matter
of law, once [defendant] agreed that the January - May 2013 payments were
suspended until a later time in the future, Plaintiff was no longer late, and it was
inaccurate for [defendant] to continue to report the payments as late.” Id. at 10.
Defendant cites no case law support for his theory about the legal effect of a
forbearance. The fact that defendant was willing to forgive late fees does not mean
that plaintiff’s payments were not late. And the fact that defendant was willing to roll the
payments and interest into the principal balance does not mean that plaintiff’s payments
were not late. Instead, those actions simply meant that defendant agreed to forego
certain of its rights in order to get plaintiff back on track.
The explanation of the forbearance that defendant provided to plaintiff is as
Forbearance: If you do not qualify for a deferment, you may be able to
temporarily stop making payments as long as you intend to repay your
loans. This option is called forbearance. During a period of forbearance,
interest for which you are responsible continues to accrue on all loan
types while you are temporarily permitted to stop making payments or to
make reduced payments. You must request the forbearance and provide
any required documentation. Any interest that you do not pay during the
forbearance will be capitalized (added to the principal balance of your
loans). Capitalization of interest increases the total cost of your loans.
Docket No. 67-11 at 5.
Nothing in this explanation supports plaintiff’s theory. The explanation does not say
that defendant will change its previous credit reporting regarding payments that were
missed, that defendant will not in the future report the fact of earlier missed payments,
or that forbearance results in the expungement of the fact of missed payments. Plaintiff
provides no law, regulation, practice, or custom that suggests defendant had a legal
obligation, after granting plaintiff a forbearance, not to continue reporting the historical
fact that plaintiff did not make certain loan payments.
Plaintiff also argues that defendant’s investigation was unreasonable because
defendant had inconsistent policies regarding credit reporting for retroactive
forbearances. Specifically, plaintiff claims that “if [defendant] does it the way that
Plaintiff claims in some cases (for Chase and Bank of America), but not in other cases
(Dept. of Education Loans), then this at a minimum creates a factual dispute as to
which version is actually accurate.” Docket No. 75 at 10. However, in order for plaintiff
to claim that defendant’s policy for Department of Education loans is “inaccurate,” he
must first demonstrate that the legal effect of granting a forbearance is contrary to the
Department of Education’s policy for its loan. As noted above, plaintiff has not done
this. As a result, the fact that Chase and Bank of America have a different policy that
defendant follows is not relevant to defendant’s decision to follow the Department of
Education’s policy regarding plaintiff’s DOE loan or to the reasonableness of
The court in Pundt v. Select Portfolio Servicing, Inc., 2012 WL 2312074, at *1
(N.D. Iowa June 18, 2012), addressed a similar situation in which a homeowner was
granted a forbearance after missing several payments. A furnisher reported these
missed payments to credit reporting agencies. The homeowner did not claim that the
furnisher’s investigation was insufficiently rigorous; rather, he argued that, because he
had been granted a forbearance and thereafter made his payments on time, the
furnisher was required to change its negative credit reporting. Id. at *2. The court
granted summary judgment to the furnisher, finding that “plaintiff has not come forward
with a disputed issue of material fact as to the reasonableness of defendant’s
investigation into a claimed factual inaccuracy, which is his burden under the FCRA.”
Id. at *2. Here, too, there are no disputed m aterial facts about the reasonableness of
Plaintiff complained to the credit reporting agencies that the following information
on its reports was inaccurate: “Late payments up to 150 days from January 2013 to
April 2013.” Plaintiff, however, admits that this information is accurate. His theory that
forbearances have the legal effect of re-writing the past is unsupported. Hence, there is
no reason to conclude that defendant’s credit reports were “inaccurate or incomplete or
cannot be verified after [defendant’s] reinvestigation,” 15 U.S.C. § 1681s-2(b)(1)(E).
3. Reporting of the Account’s Dispute Status
The Court finds that a genuine dispute of material fact exists in relation to
plaintiff’s reporting of the loan’s dispute status. Defendant acknowledges that a
furnisher can be held liable for failing to report that an account is in dispute. Docket No.
67 at 16 (citing Collins v. BAC Home Loans Servicing LP, 912 F. Supp. 2d 997, 1011
(D. Colo. 2012)). While defendant claims that plaintiff “never contacted [defendant] to
advise [defendant] that he disagreed with the investigation results,” DSUMF 38, Docket
No. 67 at 10, ¶ 38, defendant cites no support for the proposition that it could assume
plaintiff agreed with its investigation. Instead, defendant asserts that, because “FCRA
does not delineate any duty for a furnisher to assume that the consumer disagrees,”
Docket No. 78 at 7, “it is reasonable for [defendant] to use the ‘XH’ code.” Id. Whether
or not it was reasonable for defendant to use the “XH” code is a question for the jury.5
As the Tenth Circuit has noted, “FCRA’s requirement that furnishers of information
correct ‘incomplete or inaccurate’ information, 15 U.S.C. §1681s-2(b)(1)(D), extends not
only to false information, which ‘is clearly inaccurate,’ but to information provided ‘in
such a manner as to create a materially misleading impression’ as well.” Llewellyn v.
Allstate Home Loans, Inc., 711 F.3d 1173, 1186 (10th Cir. 2013) (citing Boggio v. USAA
Fed. Sav. Bank, 696 F.3d 611, 617 (6th Cir. 2012)); see also Saunders v. Branch
Banking & Trust Co. of Va., 526 F.3d 142, 148 (4th Cir. 2008) (“Congress clearly
intended furnishers to review reports not only for inaccuracies in the information
reported but also for omissions that render the reported information misleading.”)
Defendant’s use of the “XH” code, without noting plaintiff’s continuing dispute of the
accuracy of the reporting, could create a materially misleading impression to a credit
reporting agency or a lender.
Therefore, the Court will grant summary judgment to defendant on plaintiff’s
claim under 15 U.S.C. § 1681s-2(b) regarding defendant continuing to report that
Defendant claims that a “consumer could hypothetically submit a dispute on
every late credit account for the sole purpose of avoiding the inclusion of those
accounts in his or her credit score in perpetuity.” Docket No. 78 at 8. The jury will be
able to consider this argument in determining the reasonableness of defendant’s use of
the “XH” code.
plaintiff had missed loan payments, but deny summary judgment regarding the
reporting of the account’s dispute status.
B. Colorado Credit Code Claim
Defendant argues that plaintiff’s state law claim pursuant to Colo. Rev. Stat. § 55-109(2) is preempted by 15 U.S.C. § 1681h(e), which bars claims based on reporting
information to credit reporting agencies “except as to false information furnished with
malice or willful intent to injure [a] consumer.” In order to avoid preemption, plaintiff
must present substantial evidence that defendant acted with malice or intent to injure
plaintiff when it reported the debt as late or reported the debt w ithout reporting that it is
disputed. Greenwood Tr. Co. v. Conley, 938 P.2d 1141, 1150 (Colo. 1997) (“Hence,
the disputed factual issue presented is whether Discover acted with malice or willful
intent to injure when it reported the debt without reporting that the debt was disputed.”).
“Cases interpreting the term ‘malice’ in § 1681h(e) have borrowed the definition used in
other federal caselaw dealing with defamation: knowledge that a statement is false or
reckless disregard for whether a statement is false or not.” Id. at 1149 (citing Thornton
v. Equifax, Inc., 619 F.2d 700, 705 (8th Cir. 1980)).
Plaintiff cannot base his Colorado Credit Code claim on defendant’s reporting of
late payments since plaintiff has failed to show that the late payment information was
false. However, a reasonable jury could conclude that defendant’s use of the “XH”
code, without indicating that plaintiff disputed the conclusion of that investigation, shows
reckless disregard for whether defendant knew that plaintiff did not dispute the results
of the investigation. Conley, 938 P.2d at 1150 (finding no preemption where the
“evidence suggest[ed] that Discover actually knew about Shaw’s dispute but
nonetheless reported the debt to Equifax without disclosing the dispute.”). Thus, the
Court will grant summary judgment on plaintiff’s Colorado Credit Code claim insofar as
it is based on defendant reporting the debt as late, but finds that disputed issues of
material fact preclude summary judgment on plaintiff’s Colorado Credit Code claim
insofar as it is based on defendant’s reporting of the account’s dispute status.
C. Actual Damages
Defendant argues that plaintiff cannot show actual damages because he has not
identified any credit opportunities that were lost after defendant completed its
investigation in March 2016, because he had other negative information on his credit
report that may have contributed to any damages, and because plaintiff intends to rely
on his own testimony regarding emotional distress for which he did not seek medical
treatment. Docket No. 67 at 19-20. As to lost credit opportunities, plaintif f claims that
Stevinson Toyota pulled his credit report on June 15, 2016 when he applied for an auto
loan, which caused him embarrassment. Docket No. 75 at 16. Plaintiff also states that
he was denied a loan with SoFi because of “delinquent past or present obligations with
Plaintiff argues that “reporting a consumer as late would substantially lower their
[sic] credit score, which is a type of damage.” Id. at 17. See Fregoso v. Wells Fargo
Dealer Servs., Inc., 2012 WL 4903291, at *7 (C.D. Cal. Oct. 16, 2012) (holding a
defendant’s failure to report an entry was disputed was sufficient evidence of causation
where it was undisputed that the report had a negative impact on the plaintiff’s credit
score, notwithstanding the existence of other derogatory entries). However, plaintiff
fails to offer any evidence of actual damages caused solely by use of the “XH” code.
Plaintiff argues that, “if an account is disputed, the credit bureaus do not count the trade
line against the consumer’s score.” Id. at 13 (citing Saunders, 529 F.3d at 150). But
the court in Saunders was simply referring to evidence presented in that case, which
plaintiff has not presented here. As noted in Llewellyn, given defendant’s motion
seeking summary judgment on the issue of actual damages causation, the plaintiff has
“the affirmative duty of coming forward with evidence supporting his claim that
[defendant’s] alleged inaccurate report caused him harm.” 711 F.3d at 1181 (quoting
Cahlin v. GMAC, 936 F.2d 1151, 1161 (11th Cir. 1991). Plaintif f has not shown any
harm specific to defendant’s use of the “XH” code. Thus, the Court will grant summary
judgment to defendant on plaintiff’s claim for actual damages.
For the foregoing reasons, it is
ORDERED that Pennsylvania Higher Education Assistance Agency’s Motion for
Summary Judgment [Docket No. 67] is GRANTED in part and DENIED in part as set
forth in this order.
DATED September 28, 2017.
BY THE COURT:
s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge
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