Pittman v. Experian Information Solutions, Inc. et al
ORDER (1) Granting Defendant BSI's Motion for Summary Judgment; (2) Deeming Moot BSI's Motion in Limine; and (3) Dismissing Case. 99 100 . Signed by District Judge Victoria A. Roberts. (LVer)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTICT OF MICHIGAN
Case No. 14-13591
Honorable Victoria A. Roberts
SOLUTIONS, INC., et al.,
ORDER: (1) GRANTING DEFENDANT BSI’S MOTION FOR
SUMMARY JUDGMENT [Doc. 100]; (2) DEEMING MOOT BSI’S
MOTION IN LIMINE [Doc. 99]; AND (3) DISMISSING THE CASE
INTRODUCTION AND BACKGROUND
Howard Pittman (“Pittman”) filed this case against several parties, including
Servis One, Inc. d/b/a BSI Financial Services (“BSI”) and iServe Servicing, Inc.
(“iServe”). The case relates to (1) Pittman’s mortgage loan, which iServe serviced until
June 2012 when it transferred servicing obligations to BSI; (2) a trial modification plan
(“TMP”) from January 2012 to March 2012; and (3) a permanent loan modification,
which was executed in September 2016, but made retroactive to March 2012. BSI is
the sole remaining defendant.
Pittman alleges three claims against BSI: (1) negligent violation of the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.; (2) willful violation of the FCRA; and
(3) breach of contract. Pittman says BSI violated the FCRA by incorrectly reporting to
credit reporting agencies (“CRAs”) that his account was past due between September
2012 and July 2014; he says BSI breached the mortgage agreement by failing to pay
property taxes on his property in 2013 and 2014.
Pittman and iServe previously filed cross motions for summary judgment. iServe
moved for summary judgment on Pittman’s two FCRA claims against it; Pittman moved
for summary judgment on his two claims against iServe as well as on all three claims
In an order dated November 30, 2016, the Court (1) denied Pittman’s entire
motion; (2) granted iServe’s motion and dismissed it from the case; and (3) found, in
relevant part, that:
a) Under the original mortgage agreement, Pittman was required to make
monthly payments of $1980.42;
b) After Pittman failed to make mortgage payments in August and
September 2011, iServe granted him a TMP on his mortgage,
temporarily reducing his monthly payment to $1,357.80 for January,
February and March 2012;
c) The TMP explicitly states that it is not permanent and that Pittman’s
credit may be adversely affected by accepting its terms;
d) Pittman timely made the three trial payments and continued to make
payments for $1,357.80 each month to iServe. However, the TMP was
never made permanent in writing by iServe;
e) After the loan was assigned to BSI, Pittman continued to make the trial
period payments of $1,357.80;
f) Because the TMP was temporary, and because Pittman was on notice
that his credit score could be adversely affected by accepting the TMP,
Pittman cannot show iServe or BSI made an error in reporting his loan
payments as overdue.
[Doc. 96, PgID 2373-74, 2377, 2380 (minor alterations throughout)].
In addition to stating that Pittman’s credit score may be adversely affected by
accepting its terms, the TMP also stated that: (1) “Your existing loan and loan
requirements remain in effect and unchanged during the trial period”; (2) “acceptance
and posting of your new payment during the trial period . . . shall not constitute a cure of
your default under your loan unless such payments are sufficient to completely cure
your entire default under your loan”; and (3) “Once you make all of your trial period
payments on time, we will send you a modification agreement detailing the terms of the
modified loan.” [Doc. 90-1].
BSI did not file a timely dispositive motion. However, the Court granted BSI’s
request to file an untimely motion for summary judgment based on the findings in the
November 30 order. That motion is now before the Court.
Summary Judgment Standard
Summary Judgment is proper 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.” Federal Rule of Civil Procedure 56(a). The moving party has the initial burden to
demonstrate the basis for its motion and identify portions of the record that show an
absence of a genuine issue of fact. Mt. Lebanon Personal Care Home, Inc. v. Hoover
Universal, Inc., 276 F. 3d 845, 848 (6th Cir. 2002). Once that burden is met, the nonmoving party must set forth specific facts that present a “genuine issue for trial.” Id.
The existence of a mere scintilla of evidence to support a plaintiff’s position will not
suffice; there must be evidence on which the jury could reasonably find for the plaintiff.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Parties must support
assertions of fact by “citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or declarations,
stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1).
Pittman’s FCRA Claims Fail
To succeed on an FCRA claim, a consumer must show, among other things, that
the defendant made a reporting error. See Spence v. TRW, Inc., 92 F.3d 380, 382 (6th
Cir. 1996) (affirming the dismissal of a plaintiff’s FCRA claims on summary judgment
because the plaintiff could not prove information provided by CRAs was inaccurate).
The Court previously found that “Pittman cannot show iServe or BSI made an
error in reporting his loan payments as overdue.” For that reason, among others, BSI
says it is entitled to summary judgment on Pittman’s FCRA claims. The Court agrees.
Pittman defaulted on his loan when he failed to make a mortgage payment in
August and September 2011. In addition, the TMP explicitly provided that the
acceptance of trial period payments does not cure previous defaults, and the original
terms of the loan were still in effect and would remain in effect unless and until a
permanent loan modification was executed. Therefore, even when Pittman was making
the trial payments of $1,357.80, the loan was still deficient based on the missed
payments and based on the trial period payment being less than the amount due under
the original terms of the loan (i.e., $1980.42). Because the loan remained overdue, the
TMP expressly notified Pittman that his credit may be adversely affected.
As the Court previously found, Pittman cannot show that BSI made a reporting
error because his loan remained past due. Therefore, under the law of the case
doctrine, Pittman’s FCRA claims fail as a matter of law. See Scott v. Churchill, 377 F.3d
565, 569-70 (6th Cir. 2004) (Under the law of the case doctrine, findings made at one
point in a case “continue to govern the same issues in subsequent stages in the same
Pittman says the Court should find otherwise based on the permanent loan
modification he and BSI executed in September 2016, which is retroactive to March
2012. Pittman fails to identify any authority supporting this argument; for that reason
alone, the argument fails. More importantly, however, it fails on the merits. At the time
BSI reported that Pittman’s loan was past due, it was past due. Therefore its reports
were accurate, and not in violation of the FCRA.
Pittman also points to a March 2013 email from BSI to Pittman’s attorney stating,
“Have [Pittman] . . . continue [making] the trial payment amount. I will try to get the
mod[ified] payment as close as I can to that.” Based on this email, he argues that: (1)
“BSI’s reporting of [his] account as delinquent, without indicating that [he] continued to
pay BSI the trial payment amount during that time period as directed by BSI, renders its
reporting inaccurate under 12 C.F.R. § 1022.41(a)”; and (2) BSI should be equitably
estopped from claiming that his account was delinquent because the email caused him
to believe that the trial payment amount completely satisfied his monthly payment
obligation. Neither argument has merit.
Besides quoting the statute, Pittman fails to provide support for his conclusory
assertion that BSI’s failure to indicate that he continued to make the trial payment
amount renders its reporting inaccurate. Contrary to Pittman’s unsupported argument,
BSI’s failure to indicate that he continued making the trial payment amount did not
violate the FCRA.
The TMP explicitly provides that the acceptance of trial period payments did not
cure Pittman’s default and that the original terms of the loan remained in effect until the
parties executed a permanent loan modification. It is clear from the email that no loan
modification had been executed; the emails between BSI and Pittman’s counsel leading
up to the above-quoted email show that the parties were attempting to finalize the terms
of a permanent loan modification, but had not yet executed an agreement. Therefore,
the loan remained past due based on Pittman’s failure to make payments in August and
September 2011 and his failure to pay the full monthly payment amount under the loan.
Accordingly, BSI’s reports that Pittman’s loan was past due were accurate, and did not
violate the FCRA.
Pittman’s equitable estoppel argument also fails. As a procedural matter,
Pittman’s equitable estoppel argument fails because he supports it with conclusory and
unverified statements, rather than admissible evidence from the record. Under Rule
56(c), Pittman’s conclusory and unsupported assertions cannot establish a genuine
issue of material fact, and they are insufficient to withstand summary judgment. Fed. R.
Civ. P. 56(c)(1). Notwithstanding these procedural deficiencies, Pittman’s equitable
estoppel argument fails as a matter of law.
“Under Michigan law: ‘Equitable estoppel arises where one party has knowingly
concealed or falsely represented a material fact, while inducing another’s reasonable
reliance on that misapprehension, under circumstances where the relying party would
suffer prejudice if the representing or concealing party were subsequently to assume a
contrary position.’” Price v. Annuity Investors Life Ins. Co., 244 Fed. Appx. 654, 658
(6th Cir. 2007) (quoting Adams v. City of Detroit, 232 Mich. App. 701, 708 (1998)). See
also Atkinson v. Atkinson, 160 Mich. App. 601, 607 (1987) (“Equitable estoppel arises
when one causes another, by acts, representations, or silence, intentionally or through
culpable neglect, to believe in the existence of some material fact and to detrimentally
rely on the existence of such fact.”).
Based on the clear language of the TMP and second sentence in the email (i.e.,
“I will try to get the mod[ified] payment as close as I can to [the trial payment amount].”),
BSI’s email could not have reasonably caused Pittman to believe the trial payment
amount satisfied his monthly payment obligation. Because the email clearly indicates
that BSI was still trying to finalize the terms and payment amount for a permanent
modification, such that no modification had been executed, it would be unreasonable for
Pittman to believe the email permanently modified only his monthly payment amount.
This is especially true when considering the TMP provides that: (1) the original terms of
the loan remained in effect unless and until a permanent modification was executed;
and (2) “Once you make all of your trial period payments on time, we will send you a
modification agreement detailing the terms of the modified loan” [Doc. 90-1 (emphasis
added)]. In addition, even if the email did modify his monthly payment obligation, the
Court would not estop BSI from claiming Pittman’s account was delinquent, because his
loan remained past due based on the missed payments in August and September 2011.
Moreover, any reliance was not detrimental to Pittman. The loan was still in
default based on Pittman’s failure to make the August and September 2011 monthly
payments; therefore, BSI reporting that the loan was overdue was accurate without
even considering the fact that Pittman’s payments were lower than the amount due
under the original terms of the loan. In addition, Pittman fails to show that he could
have made the full payment amount. After the TMP ended in March 2012, Pittman
continued making the $1,357.80 trial period payment rather than the $1980.42 amount
due under the loan. Notably, Pittman does not explain why he continued to make the
lower trial payment amount after the TMP ended but before he received BSI’s March
Pittman’s equitable estoppel argument fails; his reliance was neither reasonable
Because no genuine issue of material fact exists, and it is clear that BSI did not
make a reporting error regarding the status of Pittman’s loan, BSI is entitled to judgment
as a matter of law on Pittman’s FCRA claims.
Pittman’s Breach of Contract Claim Fails
Pittman claims BSI breached the mortgage agreement by failing to pay property
taxes on his property in 2013 and 2014. BSI says Pittman’s breach of contract claim
fails as a matter of law because it is undisputed that he was the first to breach. The
Under Michigan law, a party “who commits the first substantial breach of a
contract cannot maintain an action against the other contracting party for failure to
perform.” Chrysler Int’l Corp. v. Cherokee Exp. Co., 134 F.3d 738, 742 (6th Cir. 1998)
(citations and internal quotation marks omitted). Whether a breach is “substantial” is the
determining factor. “The Michigan Supreme Court has explained that a ‘substantial
breach’ is one ‘where the breach has effected such a change in essential operative
elements of the contract that further performance by the other party is thereby rendered
ineffective or impossible, such as the causing of a complete failure of consideration or
the prevention of further performance by the other party.’” Id. (citation omitted).
Here, Pittman breached the agreement first by failing to make monthly payments
in August and September 2011. There can be no dispute that this constitutes a
“substantial” breach, as it deprived BSI/iServe of the complete benefit of the bargain. It
also prevented performance by BSI/iServe because a portion of each payment was
placed in escrow to pay property taxes. Because no genuine issue of fact exists that
Pittman committed the first substantial breach of contract, he cannot maintain an action
against BSI for failure to perform. See id. BSI is entitled to judgment as a matter of law.
BSI’s motion for summary judgment [Doc. 100] is GRANTED; its motion in limine
[Doc. 99] is MOOT; and this case is DISMISSED.
IT IS ORDERED.
S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: May 19, 2017May 19, 2017
The undersigned certifies that a copy of this
document was served on the attorneys of record
by electronic means or U.S. Mail on May 19,
2017May 19, 2017.
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