Gallaher et al v. US Bank Natl Assn et al
ORDER granting 52 Motion for Summary Judgment as to all claims for the reasons set forth in the Memorandum of Decision attached. The Clerk is directed to close this file. Consistent therewith, the Court denies as moot 76 Motion for Extension of Time to File Joint Trial Memorandum. Signed by Judge Vanessa L. Bryant on 5/15/2017. (Hudson, C)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JEFFREY GALLAHER AND ROSA
US BANK NATIONAL ASSOCIATION, :
WELLS FARGO BANK, AND
AMERICAN SERVICING COMPANY, :
CIVIL ACTION NO.
May 15, 2017
MEMORANDUM OF DECISION GRANTING DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT [Dkt. No. 52]
Plaintiffs Jeffrey and Rosa Gallaher (the “Gallahers” or “Plaintiffs”),
proceeding pro se, bring this action arising out of a mortgage dispute with Wells
Fargo Bank and American Servicing Company (“ASC”).1 (“Defendants”). After
the Court’s Memorandum of Decision on Defendants’ Motion for Summary
Judgment, Plaintiff’s remaining claims are that Defendants (i) violated the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq., by either failing to
properly investigate Plaintiffs’ disputes or intentionally choosing not to delete
information found to be inaccurate and erroneous while reporting as Plaintiffs’
creditor and (ii) committed invasion of privacy under Connecticut law invasion of
privacy by intentionally and maliciously accessing Plaintiffs’ credit report. [Dkt.
35 at 34.] For the reasons that follow, the Defendants’ Motion for Summary
Judgment is GRANTED.
The parties agree that ASC is a division of Wells Fargo that services loans for
other investors under the ASC name. [Dkt. No. 17 at ¶ 5; Dkt. No. 19 at 4, n. 2].
On June 9, 2006, Jeffery and Rosa Gallaher applied to Landmark
Mortgage, LLC for a refinance loan of $580,000.00. [Dkt. 55-2 (Loan Application).]
In the loan application, Plaintiffs acknowledged that “any owner of the Loan, its
servicers, successors and assigns, may verify or reverify any information
contained in the application or obtain any information or data relating to the
Loan, for any legitimate purpose through any source, including a source named
in this application or a consumer reporting agency.” Id. at WF000408.
On June 23, 2006, Plaintiffs re-applied for a refinance loan to Landmark
Mortgage, LLC for $579,500.00. [Dkt. 55-4.] The June 23, 2006 application
included the same acknowledgement language as the June 9, 2006 application.
Id. at WF000004.
Also on June 23, 2006, Plaintiffs executed a balloon note in favor of BNC
Mortgage, Inc. in the principal amount of $579,500.00. [Dkt. 55-5.] That same day,
to secure the balloon note, Plaintiffs granted an open-end mortgage deed to
Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for BNC
Mortgage, Inc. [Dkt. 55-6.] The deed concerned Plaintiffs’ property at 28
Westover Road, Stamford, Connecticut 06902. Id. at WF000013.
On October 1, 2006, Wells Fargo Bank, N.A. (“Wells Fargo”), Lehman
Brothers Holdings, Inc. (“Lehman Brothers”), Aurora Loan Services LLC
(“Aurora”), and U.S. Bank National Association (“U.S. Bank”) signed a
Securitization Subservicing Agreement. [Dkt. 64.] Wells Fargo was identified as
Servicer, Lehman Brothers as Seller, Aurora as Master Servicer, and U.S. Bank as
trustee. Id. at WF001360. In the Securitization Subservicing Agreement, Wells
Fargo was appointed Servicer for certain mortgage loans held in trust by U.S.
Bank which were previously serviced by Option One Mortgage Corporation. Id. at
10-11, 13. These mortgage loans included “[a]ny Mortgage Loan registered with
MERS on the MERS system.” Id. at 6.
As Servicer for all mortgage loans registered with MERS, Wells Fargo was
required to “accurately and fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information . . . on its borrower credit files to [a number of specified] credit
repositories . . . on a monthly basis.” Id. at 33.
The Securitization Subservicing Agreement filed with the Court is largely
redacted, including a section identified in the table of contents as provisions
relating to the successor to the servicer. Id. at iii. Defendants assert Option One
Mortgage Corporation provided Wells Fargo with copies of Plaintiffs’ loan
applications, note, mortgage, and credit reports “as part of the servicing
transfer.” [Dkt. 54 at 3.] Although no unredacted provision in the Securitization
Subservicing Agreement calls for such a transfer of documents, such a provision
can be reasonably inferred to exist because the successor loan servicer would
not be capable of servicing the loan if it did not have the loan documents. [Dkt.
On September 28, 2006, America’s Servicing Company (“ASC”) sent
Plaintiffs a letter indicating Plaintiffs’ mortgage loan had been transferred to ASC
for servicing. [Dkt. 55-9 at WF000036.] The sworn affidavit of Brandon McNeal,
Vice President of Loan Documentation for Wells Fargo, indicates “ASC is d/b/a
Wells Fargo Bank, N.A., which services loans for other investors under the
America’s Servicing Company name.” [Dkt. 55 at ¶ 2.] As Plaintiffs’ mortgage
loan servicer, Defendants sent Plaintiffs monthly mortgage statements (e.g. Dkt.
55-10), processed Plaintiffs’ monthly mortgage payments (Dkt. 55-11), and kept
records of Plaintiffs’ mortgage loan activity (e.g. Dkt. 55-12).
On May 27, 2009, Plaintiffs called Defendants and requested a modification
of their mortgage loan. [Dkt. 55-12 at 3.] On September 4, 2009, Defendants
obtained Plaintiffs’ credit report. [Dkt. 55-13.] Defendants cited information
attributed to the Credit Bureau when evaluating Plaintiffs’ loan modification
request on September 16, 2009. [Dkt. 55-14 at 2-3.] Defendants assert they
obtained Plaintiffs’ credit report in order to evaluate Plaintiffs’ eligibility for the
loan modification requested on May 27, 2009. [Dkt. 55 at 6.]
On February 19, 2010, Plaintiffs contacted Defendants a second time
seeking a loan modification due to a loss of income when Ms. Gallaher lost her
job. [Dkt. 55-16 at 4.] Defendants obtained Plaintiffs’ credit report that day (Dkt.
55-15) and referenced it when evaluating Plaintiffs’ loan modification eligibility
(Dkt. 55-16 at 3).
On April 15, 2010, Plaintiffs wrote letters to ASC requesting mortgage loan
modifications. [Dkt. 55-18.] On April 21, 2010, Plaintiffs completed a Hardship
Affidavit as part of an application to modify their loan under the federal
government’s Home Affordable Modification Program. [Dkt. 55-17.] The Hardship
Affidavit included an acknowledgment signed by Plaintiffs stating “I/we
understand the Servicer will pull a current credit report on all borrowers obligated
on the Note . . . to evaluate my/our eligibility for a loan modification or other
workout.” Id. at WF000420. On May 6, 2010, ASC obtained Plaintiffs’ credit
report. [Dkt. 55-19.]
On October 12, 2010, Plaintiffs submitted a Request for Modification and
Affidavit (“RMA”) to modify their mortgage loan through the Making Home
Affordable Program. [Dkt. 55-21.] The RMA identifies ASC as the loan servicer.
Id. at WF000057. Plaintiffs signed an acknowledgement in the RMA stating “I
understand the Servicer will pull a current credit report on all borrowers obligated
on the Note” and “collect and record personal information, including . . . credit
score, income, payment history, government monitoring information, and
information about account balances and activity. I understand and consent to the
disclosure of my personal information . . . by Servicer to (a) the U.S. Department
of the Treasury; (b) Fannie Mae and Freddie Mac . . . ; (c) any investor, insurer,
guarantor or servicer that owns, insures, guarantees or services my . . . mortgage
loan(s); (d) companies that perform support services in conjunction with Making
Home Affordable; and (e) any HUD-certified housing counselor.” Id. at WF000059.
Plaintiffs submitted subsequent RMAs identifying ASC as the loan servicer and
acknowledging that the servicer would pull Plaintiffs’ credit report, collect and
record personal information and deliver it to the same entities identified in the
October 12, 2010 RMA. Those subsequent RMAs are dated May 29, 2011 (Dkt. 5523), September 29, 2011 (Dkt. 55-25), April 18, 2012 (Dkt. 55-27), November 15,
2012 (Dkt. 55-29), and March 13, 2013 (Dkt. 55-31, relying on November 2012 ASC
letter as not yet expired). Plaintiffs submitted additional hardship letters to ASC
requesting loan modifications concurrent with each RMA. [Dkt. 55-22 (October
12, 2010 ASC letter); 55-24 (June 4, 2011 ASC letter); 55-26 (September 29, 2011
ASC letter); 55-28 (April 18, 2012 ASC letter); 55-30 (November 12, 2012 ASC
On February 27, 2013, Wells Fargo pulled Plaintiffs’ credit report. [Dkt. 5532.] An excerpt from Wells Fargo’s LMT Process Notes dated April 8, 2013 states
Plaintiffs’ loan modification was denied because Plaintiffs were “unable to
achieve target payment.” [Dkt. 55-33 at 2.] The “decision [to deny Plaintiffs’ loan
request was] made using CBR dated 02/27/2013.” Id. at 3.
On January 25, 2014, Wells Fargo received an Automated Credit Dispute
Verification (“ACDV”) from TransUnion pertaining to Plaintiffs’ Mortgage Loan.
[Dkt. 56-2 (ACDV Report); 56-3 (Record that Wells Fargo received ACDV).] The
dispute “concerned the accuracy of the Gallahers’ Mortgage Loan balance being
reported” and in response Wells Fargo “changed the balance information to
reflect that the amount past due was $255,320.00 instead of the lower $250,525.00
figure received from TransUnion.” [Dkt. 56 (Affidavit of Brian Drummond, Vice
President of Credit Reporting and Credit Disputes, Wells Fargo Bank) at ¶ 8; 56-2
(ACDV Report).] Wells Fargo again pulled Plaintiffs’ credit report on February 6,
2014. [Dkt. 55-34.]
Brian Drummond, Vice President of Credit Reporting and Credit Disputes
for Wells Fargo Bank, N.A. asserts there is “no indication in Wells Fargo’s
business records that it ever received a dispute from any credit reporting agency
concerning the name of the furnisher who was reporting the information on the
Gallahers’ credit report (i.e., that the Gallahers’ Mortgage Loan debt should be
reported under a different name than Wells Fargo was reporting it under).” [Dkt.
56 at ¶ 9 (Affidavit of Brian Drummond).] In their Objections and Responses to
Defendant’s First Set of Requests for Production, Plaintiffs asserted there is no
documentation of their “complaints or disputes . . . submitted to credit reporting
agencies” because “Plaintiffs’ disputes were lodged over the phone with live CRA
representatives.” [Dkt. 57-1 at ¶ 9.]
Plaintiffs stated in their Objections and Responses to Defendants’ First Set
of Requests for Production that, as of October 26, 2016, they did not possess
documents concerning their allegation that they “have suffered significant
economic harm and overall family instability as a result of defendant’s erroneous
credit reporting and their failure to verify and or validate the alleged debt.” [Dkt.
57-1 at ¶ 12.] In the same document, Plaintiffs asserted they possessed no
“documents concerning [their] allegation that creditors . . . denied Plaintiffs credit
based on deteriorated credit scores and credit worthiness.” Id. at ¶ 13. Plaintiffs
further asserted they possessed no “documents concerning [their] alleged
damages.” Id. at ¶ 14. At his deposition, Jeffery Gallaher asserted he has
suffered “general discord with the family in regards to, in regards to just dealing
with a lot of the court stuff, in regards to having to move, having to relocate,
things of that nature.” [Dkt. 57-2 at 103.] Mr. Gallaher also stated he is owed
$3,000 per month for each month Defendants reported inaccuracies on Plaintiffs’
credit report. [Id. at 99.]
Plaintiffs do not dispute that the Superior Court entered a final judgment of
foreclosure on Plaintiffs’ home in favor of U.S. Bank Mortgage Pass-Through
[Dkt. 57-2 at 94 (Deposition of Jeffery Gallaher) (acknowledging final judgment of
foreclosure); Dkt. 1, Ex. A at 16 (identifying U.S. Bank Mortgage Pass-Through as
plaintiff in the foreclosure proceeding)], on whose behalf Wells Fargo was acting
as loan servicer.
“A party may move for summary judgment, identifying each claim or
defense—or the part of each claim or defense—on which summary judgment is
sought. The court shall grant summary judgment if 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. The court should state on the record the reasons for
granting or denying the motion.” Fed. R. Civ. P. 56(a).
In order to prevail, the moving party must sustain the burden of proving
that no factual issues exist. Vivenzio v. City of Syracuse, 611 F.3d 98, 106 (2d Cir.
2010). “In determining whether that burden has been met, the court is required to
resolve all ambiguities and credit all factual inferences that could be drawn in
favor of the party against whom summary judgment is sought. Id. (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).; Matsushita Electric
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
“If there is any evidence in the record that could reasonably support a
jury’s verdict for the nonmoving party, summary judgment must be denied.” Am.
Home Assurance Co. v. Hapag Lloyd Container Linie, GmbH, 446 F.3d 313, 315-16
(2d Cir. 2006) (quotation omitted). In addition, “the court should not weigh
evidence or assess the credibility of witnesses” on a motion for summary
judgment, as “these determinations are within the sole province of the jury.”
Hayes v. New York City Dep’t of Corr., 84 F.3d 614, 619 (2d Cir. 1996).
“A party opposing summary judgment ‘cannot defeat the motion by relying
on the allegations in [her] pleading, or on conclusory statements, or on mere
assertions that affidavits supporting the motion are not credible.’ At the
summary judgment stage of the proceeding, [p]laintiffs are required to present
admissible evidence in support of their allegations; allegations alone, without
evidence to back them up, are not sufficient.” Welch-Rubin v. Sandals Corp., No.
3:03-cv-481, 2004 WL 2472280, at *1 (D. Conn. Oct. 20, 2004) (quoting Gottlieb v.
County of Orange, 84 F.3d 511, 518 (2d Cir. 1996)). “Summary judgment cannot
be defeated by the presentation . . . of but a ‘scintilla of evidence’ supporting [a]
claim.” Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 726 (2d Cir.
2010) (quoting Anderson, 477 U.S. at 251).
A court must make the threshold determination of whether there is the
need for a trial—whether, in other words, there are any genuine factual issues
that properly can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party. Anderson, 477 U.S. at 250.
Judges are not required “to submit a question to a jury merely because some
evidence has been introduced by the party having the burden of proof, unless the
evidence be of such a character that it would warrant the jury in finding a verdict
in favor of that party. Formerly it was held that if there was what is called a
scintilla of evidence in support of a case the judge was bound to leave it to the
jury, but recent decisions of high authority have established a more reasonable
rule, that in every case, before the evidence is left to the jury, there is a
preliminary question for the judge, not whether there is literally no evidence, but
whether there is any upon which a jury could properly proceed to find a verdict
for the party producing it, upon whom the onus of proof is imposed.” Anderson,
477 U.S. at 251. Indeed, summary judgment should be granted where the
evidence is such that it “would require a directed verdict for the moving party.”
Sartor v. Arkansas Gas Corp., 321 U.S. 620, 624 (1944).
“A party asserting that a fact . . . is genuinely disputed must support the
assertion by . . . citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations, admissions, interrogatory answers, or other materials.”
Fed. R. Civ. P. 56(c)(1). Cited documents must consist of either “(1) the affidavit
of a witness competent to testify as to the facts at trial and/or (2) evidence that
would be admissible at trial.” Local R. Civ. P. 56(a)(3); see also Fed. R. Civ. P.
56(c)(4). A party may also support their assertion by “showing that the materials
cited do not establish the absence . . . of a genuine dispute.” Id.
The Court need not consider any materials that the parties have failed to
cite, but may in its discretion consider other materials in the record. Fed. R. Civ.
P. 56(c)(3). If a party fails to properly support an assertion of fact, or fails to
properly address another party’s assertion of fact, the Court may grant summary
judgment on the basis of the undisputed facts. D. Conn. L. Rule 56(a)(3) (stating
that “failure to provide specific citations to evidence in the record as required by
this Local Rule may result in the Court deeming certain facts that are supported
by the evidence admitted in accordance with [Local] Rule 56(a)(1) or in the Court
imposing sanctions, including . . . an order granting the motion if the undisputed
facts show that the movant is entitled to judgment as a matter of law”).2
As Plaintiffs are proceeding pro se, their submissions, “however inartfully
pleaded, must be held to less stringent standards than formal pleadings drafted
by lawyers.” Erickson v. Pardus, 511 U.S. 89, 94 (2007); see also Ahlers v.
Rabinowitz, 684 F.3d 53, 60 (2d Cir. 2012).
Plaintiffs’ FCRA Claim
Defendants challenge Plaintiffs’ FCRA claims for failure to establish that
Defendants received notice of a consumer dispute, failure to allege Defendants
acted willfully, and lack of standing. The Court discusses each argument in turn
While Rule 56(e) also permits the Court to give a party the “opportunity to
properly support or address the fact,” such a course of action is not warranted.
Defendants complied with Local Rule 56(b)’s mandate to provide pro se plaintiffs
with notice of the procedures required to oppose a motion for summary
judgment. [See Dkt. 56]. Plaintiffs therefore were aware of these requirements
before filing her opposition, and has not suggested that she will produce a brief
that comports with Rule 56 if given the opportunity to do so.
i. Notice: Whether Wells Fargo received notice of a dispute from
a credit reporting agency of the alleged inaccuracy/whether
such notice was required
Defendants first assert no credit reporting agency notified them of any
dispute alleging that either Defendants improperly furnished Plaintiffs’ credit
information in its own name or improperly accessed Plaintiffs’ credit report. [Dkt.
53 at 17, 20.] Defendants assert that the only notice they received from a credit
reporting agency concerning the Plaintiffs was dated January 15, 2014 and
challenged the accuracy of Plaintiffs' reported mortgage loan balance. Id.
Defendants argue that without notice from a credit reporting agency, Defendants
had no duty to investigate information it furnished regarding, or its access to,
Plaintiffs' credit report. [Dkt. 53 at 20.] As Defendants accurately note, Plaintiffs
are estopped from disputing the mortgage debt itself. [See Dkt. 35 (Order on
Motion to Dismiss) at 29.]
Plaintiffs respond that they submitted three separate disputes with three
major credit reporting agencies, and that FRCA Section 1681 imposed a duty on
those agencies to forward a credit dispute verification (“CDV”) form to the loan
furnisher (Wells Fargo), which triggered Defendants’ duty to investigate. [Dkt. 73
at 1-2.] Plaintiffs assert this procedure refutes Defendants’ assertion that they
did not receive notice from credit reporting agencies of Plaintiffs’ dispute. Id. at
2. Plaintiffs offer no evidence that they filed disputes regarding Wells Fargo
representing itself as Plaintiffs’ loan servicer or accessing Plaintiffs’ credit
The FCRA seeks to ensure “that consumer reporting agencies adopt
reasonable procedures for meeting the needs of commerce for consumer credit,
personnel, insurance, and other information in a manner which is fair and
equitable to the consumer, with regard to the confidentiality, accuracy, relevancy,
and proper utilization of such information.” 15 U.S.C. § 1681(b); see also Kinel v.
Sherman Acquisition II LP, No. 05 Civ. 3456 (RCC) (THK), 2006 WL 5157678, at *13
(S.D.N.Y. Feb. 28, 2006) (explaining the FCRA imposes obligations on entities
which furnish credit information to reporting agencies). Under the FCRA, an
entity which furnishes credit information to reporting agencies (a “furnisher”)
must report accurate information and has an ongoing duty to correct and update
inaccurate information. 15 U.S.C. § 1681s-2(a).3
If a consumer notifies a credit reporting agency of an error on their credit
report both the credit reporting agency and the furnisher of the disputed
information “have a duty to reasonably investigate and verify that the information
is accurate.” Longman v. Wachovia Bank, N.A., 702 F.3d 148, 151 (2d Cir. 2012).
“[I]f the completeness or accuracy of any item of information contained in a
consumer’s file at a consumer reporting agency is disputed by the consumer and
the consumer notifies the agency . . . the agency shall, free of charge, conduct a
reasonable reinvestigation.” 15 U.S.C. § 1681i(a)(1)(A). “[T]he agency shall
provide notification of the dispute to any person who provided any item of
information in dispute.” 15 U.S.C. § 1681i(a)(2)(A). Furnishers of information
have prescribed duties triggered by the receipt “of notice pursuant to section
1681i(a)(2) of this title  of a dispute with regard to the completeness or
Only “federal and state authorities” may bring claims for violations of section
1681s-2(a). See Longman v. Wachovia Bank, N.A., 702 F.3d 148, 151 (2d Cir.
2012); see also 15 U.S.C. § 1681s-2(d).
accuracy of any information provided by a person to a consumer reporting
agency.” 15 U.S.C. § 1681s-2(b)(1).
If a consumer files a dispute directly with a furnisher, the furnisher only
has a duty to investigate if the dispute pertains to:
(1) The consumer’s liability for a credit account or other debt . . .
such as . . . whether there is or has been identity theft or fraud
against the consumer . . . ;
(2) The terms of a credit account or other debt with the furnisher,
such as . . . the type of account, principal balance, [or] scheduled
payment amount . . . ;
(3) The consumer’s performance or other conduct concerning an
account . . . , such as . . . the current payment status, high
balance, date a payment was made, [or] amount of a payment
made . . . ;
(4) Any other information contained in a consumer report regarding
an account or other relationship with the furnisher that bears on
the consumer’s creditworthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode
16 C.F.R. § 660.4. The FCRA provides no contingency for liability where a
consumer has not notified the credit reporting agency or furnisher of a dispute.
See 15 U.S.C. § 1681s-2(b) (“Duties of furnishers of information upon notice of
dispute”) (emphasis added).
Plaintiffs have offered no evidence that they submitted disputes to credit
reporting agencies or directly to Defendants. Defendants have offered a sworn
affidavit of their Vice President Vice President of Credit Reporting and Credit
Disputes that “[t]here is no indication in Wells Fargo’s business records that it
ever received a dispute from any credit reporting agency concerning the name of
the furnisher who was reporting the information on the Gallahers’ credit report.”
[Dkt. 56 (Affidavit of Brian Drummond, Vice President of Credit Reporting and
Credit Disputes, Wells Fargo Bank) at ¶ 9.] Plaintiffs’ mere allegations are
insufficient to defeat summary judgment. Welch-Rubin, 2004 WL 2472280, at *1.
The Court has been presented with no admissible evidence “upon which a jury
could properly proceed to find a verdict for the party producing it, upon whom the
onus of proof is imposed.” Anderson, 477 U.S. at 251. Accordingly, judgment is
entered in behalf of the Defendant on these claims.
ii. Legitimate Purpose for Reporting Credit Information
Even if Plaintiffs had notified Defendants of their dispute, Defendants
assert there is no evidence that Defendants willfully or negligently violated the
FCRA, and accordingly cannot be held liable in a private right of action. [Dkt. 53
at 18 (citing Galper v. JP Morgan Chase Bank, N.A., 802 F.3d 437, 445 n.6 (2d Cir.
2015).] Plaintiffs do not respond to this argument.
In relevant part, the FCRA states a consumer reporting agency may furnish
a consumer report only under certain circumstances, including “[i]n accordance
with the written instructions of the consumer to who it relates” or “[t]o a person
which it has reason to believe – (A) intends to use the information in connection
with a cr4edit transaction involving the consumer on whom the information is to
be furnished and involving the extension of credit to, or review or collection of an
account of, the consumer; or . . . (E) intends to use the information, as a potential
investor or servicer, or current insurer, in connection with a valuation of, or an
assessment of the credit or prepayment risks associated with, an existing credit
obligation.” 15 U.S.C. § 1681b(a)(3).
When a credit agency notifies a furnisher of a consumer dispute, the
furnisher must: (i) conduct an investigation, (ii) review all relevant information
provided by the consumer reporting agency, (iii) report the results of the
investigation to the consumer reporting agency; and (iv) if the investigation finds
that the information is incomplete or inaccurate, to report those results to all
other consumer reporting agencies to which the person furnished the
information. 15 U.S.C. § 1681-2(b)(1). “While the Second Circuit has not yet
defined the specific contours of a furnisher’s investigatory responsibility under
this statute, courts both within and outside the Circuit have ‘assum[ed] a
reasonableness standard for judging the adequacy of the required
investigation.’” Dickman v. Verizon Commc’ns, Inc., 876 F. Supp. 2d 166, 172
(E.D.N.Y. 2012) (quoting Okocha v. HSBC Bank USA, N.A., 700 F. Supp. 2d 369,
374 (S.D.N.Y. 2010)).
If a furnisher “willfully fails to comply with any requirement under this
subchapter with respect to any consumer is liable to that consumer in an amount
equal to the sum of (1)(A) Any actual damages sustained by the consumer as a
result of the failure or damages of not less than $100 and not more than $1,000;
or. . . (2) such amount of punitive damages as the court may allow; and (3) in the
case of any successful action to enforce any liability under this section, the costs
of the action together with reasonable attorney’s fees as determined by the
court.” actual damages or statutory damages of $100 to $1,000 per violation,
costs of the action and attorney’s fees, and possibly punitive damages.” 15
U.S.C. § 1681n(a). In addition, “[a]ny person who is negligent in failing to comply
with any requirement imposed under this subchapter with respect to any
consumer is liable to that consumer in an amount equal to the sum of – (1) any
actual damages sustained by the consumer as a result of the failure; and (2) in
the case of any successful action to enforce any liability under this section, the
costs of the action together with reasonable attorney’s fees as determined by the
court.” 15 U.S.C. § 1681o(a).
As to Plaintiffs’ argument that Defendants inaccurately stated in Plaintiffs’
credit report that Plaintiffs owed the Defendants the balance of their $579,500.00
mortgage, Defendants assert the information was not inaccurate. In support,
Defendants cite the Securitization Subservicing Agreement, which names Wells
Fargo as servicer of the mortgage, and the 2014 Credit Reporting Resource Guide
published by the Consumer Data Industry Association, which states it is the
industry standard to state the “name of the processing company sending the
data; i.e., data furnisher or processor” in the “Header” to a consumer report,
which “must be the first record provided and include information necessary to
identify the reporter.” [Dkt. 56-1 at 4.1 – 4.3.]
As to Plaintiffs’ argument that Defendants impermissibly obtained
Plaintiffs’ credit report, Defendants argue there are two reasons their actions
were lawful. [Dkt. 53 at 23.] First, Defendants assert they obtained Plaintiffs’
credit report “in accordance with the written instructions of the consumer to
whom it relates.” 15 U.S.C. § 1681b(a)(2). Defendants reason that Plaintiffs
repeatedly requested hardship assistance, loan modification, or other assistance
via telephonic or written communication. [Dkt. 55-12 at 3 (May 27, 2009
telephonic request); Dkt. 55-18 (April 15, 2010 written request); Dkt. 55-22
(October 12, 2010 written request); Dkt. 55-24 (June 4, 2011 written request); Dkt.
55-26 (September 29, 2011 written request); Dkt. 55-28 (April 18, 2012 written
request); Dkt. 55-30 (November 12, 2012 written request).] Concurrent with
Plaintiffs’ requests, Plaintiffs’ Hardship Affidavit and multiple Requests for
Modification and Affidavits (“RMA”) included language Defendants argue all
constituted written instructions under Section 1681b(a)(2). [Dkt. 55-17 (April 21,
2010 Hardship Affidavit); Dkt. 55-21 (October 12, 2010 RMA); Dkt. 55-23 (May 29,
2011 RMA); Dkt. 55-25 (September 29, 2011 RMA); Dkt. 55-27 (April 18, 2012 RMA);
Dkt. 55-29 (November 15, 2012 RMA); Dkt. 55-31 (March 13, 2013 RMA).] The
Hardship Affidavit clearly states Plaintiffs “understand the Servicer will pull a
current credit report on all borrowers obligated on the note [and will] use this
information to evaluate my/our eligibility for a loan modification or other
workout.” Dkt. 55-17 at WF000420. The RMA certifications each stated “I
understand the Servicer will pull a current credit report on all borrowers obligated
on the Note [and] will use the information in this document to evaluate my
eligibility for a loan modification.” See, e.g., Dkt. 55-21 at WF000059.
In addition to acting according to Plaintiffs’ written instructions,
Defendants assert they lawfully accessed Plaintiffs’ credit report because they
had “reason to believe” the credit report was intended4 to be used “in connection
with a credit transaction involving the consumer on whom the information is to
be furnished and involving the consumer on whom the information is to be
The intent at issue is that of the party obtaining the credit report, in this case the
Defendants. Bentley, 156 F. Supp. 3d 274, 297 (D. Conn. 2015) (“In assessing the
‘reason to know’ aspect of this authorized purpose, the Court’s focus is on the
intent of the party obtaining the credit report”).
furnished and involving the extension of credit to, or review or collection of an
account of, the consumer,” or intended to be used “in connection with a
valuation of, or an assessment of the credit or prepayment risks associated with,
an existing credit obligation.” 15 U.S.C. § 1681b(a)(3)(A), (E). Defendants further
assert each subsequent time they obtained Plaintiffs’ credit report (on May 6,
2010, February 27, 2013, and February 6, 2014), Defendants did so with the intent
to use the information to evaluate Plaintiffs’ eligibility for loan modification. Id. at
25. Plaintiffs do not respond to Defendants’ arguments. The Court’s own review
of the record indicates Plaintiffs last requested a loan modification or hardship
assistance on March 13, 2013. [Dkt. 55-31.] Defendants last accessed Plaintiffs’
credit report on February 6, 2014. [Dkt. 55-34.] Defendants do not offer evidence
indicating why they accessed Plaintiffs’ credit report at that time, however, the
temporal proximity of Plaintiffs' dispute regarding their mortgage loan balance to
the date of access suggests a legitimate reason. Record evidence indicates
Defendants did so twelve days after receiving an Automated Credit Dispute
Verification from TransUnion pertaining to Plaintiffs’ Mortgage Loan. [Dkt. 56-2
(ACDV Report); 56-3 (Record that Wells Fargo received ACDV).] In response to
Plaintiffs' complaint, Wells Fargo apparently investigated, discovered the
reported loan balance was erroneously low, and corrected the error by increasing
the balance from $250,525.00 to $255,320.00. [Dkt. 56 (Affidavit of Brian
Drummond, Vice President of Credit Reporting and Credit Disputes, Wells Fargo
Bank) at ¶ 8; 56-2 (ACDV Report).]
Plaintiffs’ multiple requests for loan modification included language stating
their understanding that Defendants would access their credit reports to assess
their loan eligibility; Plaintiffs offer no evidence their RMAs and Hardship
Affidavit should not be interpreted as written instructions to evaluate and process
their loan modification requests under 15 U.S.C. § 1681b(a)(2). Nor do Plaintiffs
offer any evidence suggesting their multiple loan modification requests should
not have authorized Defendants to access their credit report with the permissible
intent to evaluate their request under 15 U.S.C. § 1681b(a)(3)(A), (E). Even if
Plaintiffs had offered such evidence, pulling a credit report in response to an
application to assess the applicant’s suitability for a loan “fits squarely within the
permissible purposes for obtaining a credit report set forth in section 1681b(a).”
Bentley, 156 F. Supp. 3d at 297.
Plaintiffs’ claim that Defendants falsely claimed they held Plaintiffs’
mortgage loan on Plaintiffs’ credit report in violation of the FCRA similarly lacks
support. Plaintiffs offer no evidence suggesting the illegitimacy of the
Securitization Subservicing Agreement naming Wells Fargo their loan servicer, or
calling into question the Consumer Data Industry Association’s instruction for
loan servicers to identify themselves on credit reporting documents. With no
evidence to support their allegations, there is no genuine issue of material fact
for trial. Anderson, 477 U.S. at 250.
Finally, Plaintiffs do not assert Defendants either willfully or negligently
failed to perform their duties as furnishers accurate of information to a credit
reporting agency. Had they done so, these claims would fail. The record
indicates that Wells Fargo responded promptly to the single complaint it received
and that the error it corrected as a result had been in the Plaintiffs' favor. For the
reasons stated below, the Court grants summary judgment for Defendants on
Plaintiffs' credit access and disclosure claims.
iii. Standing under the FCRA
Even if Plaintiffs’ FCRA claims could survive on the merits, they would be
barred for lack of standing. To prove Article III standing, plaintiffs must allege (1)
a personal “injury-in-fact”; (2) a “causal connection between the injury and the
conduct complaint of”; and (3) that it is “likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992) (international quotations and citations
omitted). To establish the first element, a plaintiff must establish he or she
suffered “an invasion of a legally protected interest” that is “concrete and
particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at
560. An injury is particularized if it “affect[s] the plaintiff in a personal and
individual way,” and concrete if it is “real, and not abstract.” Spokeo, 136 S. Ct.
The Supreme Court has held that alleging a violation of the FCRA’s
procedural requirements or an inaccuracy in a credit report is insufficient, by
itself, to show concrete harm and establish standing. Spokeo, 136 S. Ct. at 1550.
Because there are procedural violations that may cause no risk of harm, like
disseminating accurate information without the required notice to users, the
plaintiff must establish that the particular violation alleged “entail[s] a degree of
risk sufficient to meet the concreteness requirement” of standing. Id. The same
is true of credit reporting inaccuracies that may prove harmless, such as an
incorrect zip code. Because an FCRA violation may result in no harm, and no
“material risk of harm,” a plaintiff must assert more than a bare violation to
establish a concrete injury for standing. Id.
In addition, to establish an injury as “actual or imminent,” it is insufficient
to assert an “increased risk” of future harm. Ross v. AXA Equitable Life Ins. Co.,
15-2665-cv, 2017 WL 730266, at *3 (2d Cir. Feb. 23, 2017) (summary order) (finding
insufficient plaintiff’s argument that an insurer’s misleading representation in
violation of New York insurance law caused an increased risk that insurers would
be unable to pay plaintiff’s claims in the event of a future economic downturn).
Defendants assert Plaintiffs have not alleged a concrete and particularized
injury because Plaintiffs have asserted only that Defendants inaccurately
reported their debt, but not that the inaccuracy caused any harm. [Dkt. 53 at 14.]
Plaintiffs allege they have been denied credit “based on deteriorated credit
scores and credit worthiness,” and assert “general discord with the family in
regards to, . . . having to move, having to relocate,” but do not articulate how
those injuries resulted from Defendants’ alleged FCRA violations rather than
Plaintiffs’ mortgage foreclosure. [Dkt. 57-1 (Plaintiffs’ Responses to Requests for
Production of Documents) at ¶¶ 12 – 14; Dkt. 57-2 (J. Gallaher Deposition
Transcript) at 103.] Plaintiffs’ injuries appear more likely to flow from the
unfortunate and understandable distress of the mortgagee's decision to enforce
the mortgage loan through foreclosure rather than from any reporting of
Plaintiffs' inability to make the full and timely mortgage payments which they
were contractually bound to make under the mortgage loan documents. In fact,
Plaintiffs stated in response to Defendants’ written discovery that they possessed
no evidence of injury caused by any inaccurate or unauthorized reporting by
Defendants. [Dkt. 57-1 at ¶¶ 12 - 14.] This is not surprising, as the Defendants’
only error was both negligible and in Plaintiffs' favor.
Accordingly, because Plaintiffs have failed to establish a question of
material fact regarding whether Defendants violated the FCRA or caused
Plaintiffs any injury by accessing Plaintiffs’ credit report and naming Defendants
as the entity to whom Plaintiffs mortgage should be paid, Defendants’ motion for
summary judgment as to Plaintiffs’ FCRA claims is GRANTED.
Plaintiffs’ Invasion of Privacy Claim
Plaintiffs also allege Defendants accessed Plaintiffs’ credit report willfully,
maliciously, and without legal right in violation of Connecticut’s protection
against unlawful invasion of privacy. Defendants assert the invasion of privacy
claim is precluded because Defendants accessed Plaintiffs’ credit report for a
legitimate purpose, the claim is preempted by the FCRA, and any claim based on
accessing Plaintiffs’ credit report before December 16, 2011 is time-barred. The
Court addresses each argument in turn below.
i. Lawful Purpose: Whether Wells Fargo obtained Plaintiffs’ credit
reports for authorized and lawful purposes
Plaintiffs’ claim that Defendants illegally obtained their credit report falls
under one of four categories of invasion of privacy torts in Connecticut: an
“unreasonable intrusion upon the seclusion of another.” Foncello v. Amorossi,
284 Conn. 225, 234 (2007) (explaining Connecticut’s four types of invasion of
privacy). To establish an intrusion upon seclusion, Plaintiffs must show that
Defendants “intentionally intrud[ed], physically or otherwise, upon the solitude or
seclusion of [Plaintiffs] or [their] private affairs or concerns,” and that
Defendants’ intrusion “would be highly offensive to a reasonable person.”
Palkimas v. Bella, 2012 WL 1048868, at *6 (D. Conn. Mar. 28, 2012).
Defendants assert they acted reasonably when they legally accessed
Plaintiffs’ credit report because they were Plaintiffs’ mortgage loan servicers.
[Dtk. 53 at 29.] In support, Defendants note this Court’s finding in its Order on
Defendants’ Motion to Dismiss that the Connecticut Superior Court already
determined U.S. Bank held the mortgage note in question. [Dkt. 35 at 21.]
Defendants also offer the Securitization Subservicing Agreement between Wells
Fargo, Lehman Brothers, Aurora Loan Services, LLC, and U.S. Bank National
Association which granted Wells Fargo, as servicer of Plaintiffs’ mortgage loan,
the right and responsibility to furnish information to credit reporting agencies.
[Dkt. 64 at 33.]
Plaintiffs reply that Defendants have shown no evidence of a legal
contractual relationship between Defendants and the “actual lender of [the]
mortgage loan account.” [Dkt. 71 at 3.] Plaintiffs offer no evidence calling into
question the legitimacy of the Securitization Subservicing Agreement or
otherwise suggesting Wells Fargo did not act reasonably as Plaintiffs’ mortgage
loan servicer when accessing Plaintiffs’ credit report. Rather, Plaintiffs attempt to
cast doubt on the legitimacy of the Agreement by asserting perceived
inconsistencies in the record, including that the Securitization Subservicing
Agreement names Lehman Brothers as the Seller of Plaintiffs’ mortgage loan,
which conflicts with records that Plaintiffs executed a note and mortgage to
secure the note to BNC, not Lehman Brothers. [Dkt. 71 at 6-7.] Plaintiffs assert if
Lehman Brothers held Plaintiffs’ mortgage note, then BNC’s sale, transfer, or
assignment of Plaintiffs’ mortgage loan to Wells Fargo was invalid, because BNC
could not sell, transfer, or assign something they did not hold. Id. at 4. Plaintiffs
have offered no evidence in support of their allegation. There is no material
question of fact as to the legitimacy of the Securitization Subservicing Agreement
and no reasonable juror could conclude Defendants’ accessing Plaintiffs’ credit
report as their legal mortgage loan servicer was “highly offensive.” Plaintiffs'
state law privacy claim is unavailing and judgment is hereby entered in favor of
Defendants on this claim.
ii. Preemption: Whether the invasion of privacy claim is
preempted by the FCRA
Even if Plaintiffs had offered evidence suggesting Defendants unlawfully
accessed their credit report in violation of their right to privacy, Defendants
assert there is no evidence they did so with malice or willful intent to injure
Plaintiffs, and accordingly Plaintiffs’ invasion of privacy claim is preempted by
As discussed in the Court’s Order on Defendants’ Motion to Dismiss, the
operative preemption language in the FCRA states:
Except as provided in sections 1681n and 1681o of this title, no
consumer may bring any action or proceeding in the nature . . . invasion
of privacy . . . with respect to the reporting of information against any
consumer reporting agency, any user of information, or any person who
furnishes information to a consumer reporting agency based on
information disclosed pursuant to section 1681g, 1681h, or 1681m of
this title, or based on information disclosed by a user of a consumer
report to or for a consumer against whom the user has taken adverse
action, based in whole or in part on the report except as to false
information furnished with malice or willful intent to injure such
15 U.S.C. § 1681h(e). For the reasons discussed in the Court’s earlier ruling [Dkt.
35 at 30-32], courts in this district and throughout the Circuit have interpreted
Section 1681h(e) as preempting “state law claims based on action of a furnisher
of information after the furnisher has received notice of inaccuracies.” Ryder v.
Washington Mut. Bank, FA, 371 F. Supp. 2d 152, 154 (D. Conn. 2005) (quoting
Kane v. Guaranty Residential Lending, Inc., No. 04-CV-4847 (ERK), 2005 WL
1153623, at *8 (E.D.N.Y. May 16, 2005)); see also Ahmed v. Bank of Am., No. 09-cv2550 (DLI) (RLM), 2010 WL 3824168, at **3-4 (E.D.N.Y. Sept. 24, 2010). Where the
contested action took place before notice of any inaccuracies was received, as is
the case here (where, as discussed above, notice was never given), a state claim
for invasion of privacy is preempted unless the plaintiff can establish “malice or
willful intent to injure.” 15 U.S.C. § 1681h(e).
Defendants argue there is no evidence upon which a reasonable fact-finder
could conclude that Defendants acted with malice or willful intent to injure
Plaintiffs when they obtained Plaintiffs’ credit report or furnished it to credit
reporting agencies. [Dkt. 53 at 31.] As Defendants assert, Plaintiffs have offered
no evidence suggesting malice or willful intent to injure. Nor have Plaintiffs
offered the evidence of bad faith contemplated in the Court’s Decision on
Defendant’s Motion to Dismiss, that Defendants altered the substance of
Plaintiffs’ credit report by adding inaccurate information. [Dkt. 35 at 30.] As
discussed above in this Decision, Plaintiffs have failed to offer evidence that
Wells Fargo inaccurately represented that it was owed the balance of Plaintiffs’
mortgage loan. [Dkt. 35 at 30.] There is no question of fact upon which a jury
could determine that Wells Fargo acted maliciously or with willful intent to injure
Plaintiffs; Plaintiffs’ invasion of privacy claim is preempted by FCRA Section
1681h(e). Judgment is entered in favor of the Defendant on Plaintiffs' invasion of
Statute of Limitations
Finally, even if Plaintiffs’ invasion of privacy claim could survive on the
merits and were not preempted, Defendants assert claims based on actions
preceding December 16, 2011 are time-barred. Plaintiffs respond that on July 23,
2013, a Connecticut court ordered mediation on Plaintiffs’ foreclosure to cease
and on November 6, 2013, the Connecticut court granted a Motion for Strict
Foreclosure of Plaintiffs’ mortgage loan. [Dkt. 73 at 2.] At that time, Plaintiffs
contend there were also no current RMAs or loan applications on file and there
was accordingly no permissible purpose under 15 USC § 1681s-2 or 15 USC §
1681b for Defendants to access or use Plaintiffs’ credit reports. Id. at 2-3.
Plaintiffs conclude that when Defendants accessed and used Plaintiffs’ credit
report on February 6, 2014, their actions were unlawful. Id. at 2.
Plaintiffs’ invasion of privacy claim is subject to a three-year statute of
limitations. Conn. Gen. Stat. § 52-577; see also Bhatia v. Conn. Dep’t of Children
& Families, 317 F. App’x 51, 52 (2d Cir. 2009) (applying the three-year statute of
limitations imposed by Section 52-577 to an invasion of privacy claim). As
Plaintiffs filed their lawsuit on December 16, 2014, Plaintiffs’ claims of invasion of
privacy predating December 16, 2011 are time-barred. Any invasion of privacy
claim asserted based on Defendants’ access to or use of Plaintiffs’ credit report
on September 4, 2009, February 19, 2010, and May 6, 2010 must be dismissed.
Plaintiffs’ argument does not alter the time-barred nature of allegations
predating December 16, 2011, without regard to whether they were in fact
committed without Plaintiffs’ consent. To the extent Plaintiffs’ argument could be
construed as an argument supporting the merits of their invasion of privacy claim
as to Defendants’ accessing Plaintiffs’ credit report on February 6, 2014, the
argument also falls short. Twelve days before Defendants last accessed
Plaintiffs’ credit report, on January 25, 2014, TransUnion submitted to Defendants
an Automated Credit Dispute Verification (“ACDV”) pertaining to Plaintiffs’
Mortgage Loan. [Dkt. 56-2 (ACDV Report); 56-3 (Record that Wells Fargo received
ACDV).] The ACDV identifies Jeffery A. Gallaher in a section titled “Request
Data,” suggesting Mr. Gallaher initiated the request for review. Id. The dispute
regarded the “accuracy of the Gallahers’ Mortgage Loan balance being reported.”
[Dkt. 56 (Affidavit of Brian Drummond, Vice President of Credit Reporting and
Credit Disputes, Wells Fargo Bank) at ¶ 8.] Not only would Defendants have
acted reasonably by accessing Plaintiffs’ credit report when investigating the
dispute, but the evidence suggests Plaintiffs themselves initiated the request.
Plaintiffs cannot now establish that investigation was improper.
For the foregoing reasons, the Defendants’ Motion for Summary Judgment
is GRANTED as to all claims. The Clerk is directed to close this file.
IT IS SO ORDERED, ADJUDGED AND DECREED, this 15th day of May 2017,
Vanessa L. Bryant,
United States District Judge
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