WILLIAMS v. EQUIFAX INFORMATION SERVICES, LLC et al

Filing 39

OPINION FILED. Signed by Judge Renee Marie Bumb on 8/23/16. (js)

NOT FOR PUBLICATION
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
GLENN M. WILLIAMS,
Plaintiff,

Civil No. 14-8115 (RMB/JS)

v.
EXPERIAN INFORMATION SOLUTIONS,
INC.,
Defendant.
LORISSA WILLIAMS,
Plaintiff,

Civil No. 14-8116 (RMB/JS)
OPINION

v.
EXPERIAN INFORMATION SOLUTIONS,
INC.,
Defendant.

BUMB, United States District Judge:
THIS MATTER comes before the Court upon the filing of a
response to this Court’s June 21, 2016 Order to Show Cause
concerning sanctions.

(June 21, 2016 Order (“OTSC Order”) [Civ.

No. 14-8115 Dkt. No. 37; Civ. No. 14-8116 Dkt. No. 33]; June 28,
2016 Response (“OTSC Resp.”) [Civ. No. 14-8115 Dkt. No. 38].)
For the following reasons, the Court declines to issue sanctions
and DISCHARGES the June 21, 2016 Order to Show Cause.

I.

BACKGROUND
On December 30, 2014, counsel for the plaintiffs in the

above captioned matters, Glenn and Lorissa Williams (the
“Plaintiffs”), filed in this Court two complaints alleging,
inter alia, violations of the Fair Credit Reporting Act
(“FCRA”).

On September 1, 2015, Defendant Experian Information

Solutions (the “Defendant” or “Experian”) moved for summary
judgment.

(Mot. for Summary Judgment [Civ. No. 14-8115, Dkt.

No. 20; Civ. No. 14-8116, Dkt. No. 29].)

Thereafter, this Court

held oral argument on the motions in both cases on May 19, 2016.
Upon oral argument and review of the record, this Court
became concerned that the case had been pursued without any
meaningful factual investigation by the Plaintiffs’ counsel.
(June 21, 2016 Opinion 16 [Civ. No. 14-8115, Dkt. No. 36; Civ.
No. 14-8116, Dkt. No. 43] (“Op.”).)

This skepticism arose from

Plaintiffs’ theory of the case, which revolved around Defendant
Experian’s inability to discover and correct supposed
inaccuracies on Plaintiffs’ credit reports resulting from an
unidentified individual (or individuals) pursuing bankruptcies
by impersonating Plaintiffs, including appearing on their behalf
before the United States Bankruptcy Court for the District of
New Jersey.

(Op. 16-22.)

Despite a reinvestigation of the

disputed credit report items by Defendant Experian, which
confirmed Plaintiffs’ correct identifying information was
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attached to the bankruptcy petitions, Plaintiffs’ principal
argument was that Defendant Experian should have identified the
fraud because one Plaintiff’s name, Glenn, was misspelled “Glen”
in some (but not all) filings associated with his bankruptcies.
(Id. at 16.)

During discovery, Plaintiffs’ counsel does not

appear to have sought any further information on these
bankruptcies, nor sought to depose any potential witness.
at 18-19.)

(Id.

In support of the opposition to summary judgment,

Plaintiffs provided no exhibits nor sworn statements underlying
the serious arguments against Experian and some anonymous
fraudster.
At oral argument, the Court challenged Plaintiffs’ counsel
with regard to the investigation he undertook of his
impersonator-based theory of the case.

As Mr. Vullings remarked

at that time, “In a very quick conversation with my client . . .
I found out very quickly they were dealing with someone who was
doing some sort of credit repair for them.

Umm, in essence,

what we’ve come to find out – again a very quick search – umm
that this person they were dealing with was filing fraudulent
bankruptcies . . . .”

(Id. at 17 & n.11.)

This answer, along

with the remaining commentary offered by Mr. Vullings at oral
argument, did not assuage the Court’s concern that a meaningful
investigation had transpired prior to the lodging (and multipleyear litigation) of the causes of action in this case.
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As the

Court noted, it appeared Plaintiffs (through counsel) pursued
their claims:


Without conducting any identifiable discovery
whatsoever;



Without providing any sworn statement by either
Plaintiff disclaiming the bankruptcies or outlining
the fraud;



Without deposing either Plaintiff to outline this
fraud;



Without deposing any Experian employee about its
attempt to identify this fraud;



Without providing a single document in support of
Plaintiffs’ opposition to summary judgment;



Without inquiring into or seeking to explain with
evidence Plaintiffs’ failure to file any police
charges concerning this alleged fraud; and



Without inquiring into or seeking to explain with
evidence Plaintiffs’ failure to identify the existence
of the fraud to the bankruptcy court after numerous
bankruptcy court documents were served on Plaintiffs’
address.

(Id. 18-19.)
As a result of the threadbare evidentiary support for the
claims and the above-listed deficiencies, this Court granted
summary judgment on all claims in both cases and issued an order
to show cause why Plaintiffs’ counsel, Mr. Vullings, should not
be sanctioned for failing to comply with Federal Rule of Civil
Procedure 11(b).1

(OTSC Order 2.)

Specifically, Federal Rule of Civil Procedure 11(b)(3) dictates
that: “By presenting to the court a pleading, written motion, or
1

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II.

STANDARD OF REVIEW
Federal Rule of Civil Procedure 11 is intended to redress

abusive litigation practices, and recognizes that a person
signing and submitting a document to the court has a
‘nondelegable responsibility to the court.’”

See Nanavanti v.

Cape Regional Medical Center, Civ. No. 12-3469 (RMB/KMW), 2013
WL 4787221, at *4 (D.N.J. Sep. 6, 2013) (quoting Fed. R. Civ.
P., advisory committee’s note); see generally Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 393 (1990).

Pursuant to that

Rule, and provided the court finds an attorney violated Rule
11(b) after notice and a reasonable opportunity to respond, the
court has the authority to impose “an appropriate sanction on
any attorney . . .that violated [Rule 11(b).]”
11(c).

Fed. R. Civ. P.

As the Third Circuit has ruled, “The rule requires a

reasonable inquiry into . . . the facts . . . supporting a
particular pleading.”

Schering Corp. v. Vitarine

Pharmaceuticals, Inc., 889 F.3d 490, 496 (3d Cir. 1989).

other paper — whether by signing, filing, submitting, or later
advocating it — an attorney or unrepresented party certifies
that to the best of the person’s knowledge, information, and
belief, formed after an inquiry reasonable under the
circumstances: . . . the factual contentions have evidentiary
support or, if specifically so identified, will likely have
evidentiary support after a reasonable opportunity for further
investigation or discovery . . . .” Fed. R. Civ. P. 11(b)(3)
(emphasis added).
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Courts apply “an objective standard of ‘reasonableness
under the circumstances’” in order to evaluate an attorney’s
conduct.

In re Cendant Corp. Deriv. Action Litig., 96 F.Supp.2d

403, 405 (D.N.J. 2000) (quoting Ford Motor Co. v. Summit Motor
Prods. Inc., 930 F.2d 277, 289 (3d Cir. 1991)).
“[R]easonableness [under the circumstances is] defined as an
objective knowledge or belief at the time of filing of a
challenged paper that the claim was well-grounded in law and
fact.”

Gordon v. United Continental Holding, Inc., 73 F. Supp.

3d 472, 481 (D.N.J. Sep. 3, 2014) (quoting Ford Motor Co. v.
Summit Motor Prods., Inc., 930 F.2d 277, 289 (3d Cir. 1991))
(alterations in original).

This review is focused on “the

circumstances that existed at the time counsel filed the
challenged paper” and “[t]he wisdom of hindsight is to be
avoided.”

Schering, 889 F.2d at 496.

Typically, sanctions are

imposed only “in the exceptional circumstances where a claim or
motion is patently unmeritorious or frivolous.”

Catillo v.

Zucker, Goldberg & Ackerman, Civ. A. No. 2:14-cv-6956
(WHW)(CLW), 2015 WL 5722625, at *1 (D.N.J. Sep. 29, 2015)
(quoting Ario v. Underwriting Members of Syndicate 53, 618 F.3d
277, 297 (3d Cir. 2010)).

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III. DISCUSSION
A. Mr. Vulling’s Response to the Order to Show Cause
On June 28, 2016, Mr. Vullings filed a comprehensive
response to the Court’s order to show cause.
OTSC Resp.)

(See generally

Mr. Vullings’ response, which outlines his

investigation into the case, as well as his investigation into a
now-identified Mr. Andrew Bartok, the alleged perpetrator of
Plaintiffs’ identity theft, demonstrates that he engaged in a
reasonable inquiry into the factual basis of the arguments he
set forth at and prior to summary judgment.

Included in this

response were a sworn declaration by Mr. Vullings, Plaintiffs’
alleged bankruptcy petitions, Plaintiffs’ redacted social
security cards, the indictment of a Mr. Bartok, and a news
release from the United States Postal Inspection Service
concerning Mr. Bartok.
Beginning with his sworn statement, Mr. Vullings sets forth
the factual investigation by which he “performed substantial due
diligence to determine that a cause of action did indeed exist
and warrant a good faith argument” based upon those facts.
(Dec. of Brent F. Vullings, Esq. in Support of OTSC Resp.
(“Vullings Dec.”) [Dkt. No. 38-1] ¶ 7.)

Mr. Vullings also

responded to the Court’s concern that he proceeded on the
impostor-theory of this case after only a quick conversation,
arguing that the Court “misconstrued” his statement.
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Specifically, Mr. Vullings states that he “had numerous
conversations with the Plaintiffs prior to filing the instant
complaints” and during those conversations, Plaintiffs “advised
[Mr. Vullings] that they had several bankruptcies on their
credit reports which they had never filed.”

(Id. at ¶¶ 8-10.)

Mr. Vullings states that he was also advised that Plaintiffs
“had ‘worked with’ a man named ‘Andrew Bartok,’ whom they had
paid monthly for his services in an attempt to avoid foreclosure
and whom they had provided their dates of birth, social security
numbers, and address.”

(Id. at ¶ 16.)

After providing Plaintiffs with copies of bankruptcy
petitions in their names, which Plaintiffs disavowed as their
own, Plaintiffs “advised [Mr. Vullings] that the signatures on
the filings were not theirs, and further advised [him] that they
had never seen or consented to the filings.

Mr. Williams

further advised [Mr. Vullings] that his first name was
misspelled on one of the petitions.”

(Id. at ¶ 19.)

In

response to Plaintiffs’ disavowal of the bankruptcy petitions,
Mr. Vullings asked for (and received) copies of Plaintiffs’
social security cards containing their signatures, in order to
compare them to the petitions.

(Id. at ¶ 20.)

found the signatures did not appear to match.

Mr. Vullings
(Id.)

Mr. Vullings also states that in investigating the claims
he brought against Experian, he conducted independent research
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into Mr. Bartok.

(Id. at ¶ 22.)

Mr. Vullings located an

indictment of Mr. Bartok which indicates that, after the time
Plaintiffs would have worked with him, he was charged with
“defraud[ing] . . . clients . . . by use of the United States
Bankruptcy Courts.”

(Id. at ¶ 22.)

Specifically, according to

his indictment in the United States District Court for the
Southern District of New York, Mr. Bartok is alleged to have
operated a business called Revelations Consulting LLC through
which he would delay foreclosures for clients by filing
fraudulent bankruptcy petitions and other false documents in his
clients’ names “and instructed the clients not to attend
bankruptcy court proceedings.”

(Vullings Dec. Ex. E, ¶ 11

(“Bartok Indictment”) [Dkt. No. 38-9].)

As the Bartok

Indictment continues,
In doing so, [Mr. Bartok] and his co-conspirators
sought to obtain as much money as possible, for as
long as possible, from Revelations’ clients. When the
fraudulent bankruptcy petitions filed by [Mr. Bartok]
and his co-conspirators ultimately were dismissed by
the bankruptcy courts, Revelations ceased contact with
its clients, who faced imminent eviction from their
homes, and who already had paid significant sums of
money to Revelations.
(Id.)
Mr. Vullings, in furtherance of his research into Mr.
Bartok, also identified a news release from the United States
Postal Inspection Service following up on the Bartok Indictment.

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(Vullings Dec. Ex. F (“USPIS Press Release”) [Dkt. No. 38-10].)
That news release, issued on October 10, 2013, states that,
Following an investigation by the U.S. Postal
Inspection Service, Andrew Bartok, dba Revelations
Consulting LLC, was sentenced today to 22 years in
federal prison and ordered to pay in excess of $2
million in restitution for mail fraud, conspiracy to
commit mail and wire fraud, conspiracy to commit
bankruptcy fraud, obstruction of justice, and
bankruptcy fraud . . .
Bartok and his cohorts filed documents containing
false information with federal bankruptcy courts in
New York and New Jersey to delay the foreclosure of
clients’ homes. They perpetrated a fraud against the
bankruptcy courts as well as their victims, to whom
they sold false hope.
(Id.)

Based on the Bartok Indictment and the USPIS Press

Release, it appears as though Mr. Bartok was carrying out his
scheme to defraud during the time period Plaintiffs in the
instant action are purported to have filed their bankruptcies.
B. Sanctions
In concluding its summary judgment opinion and laying out
its concern regarding pre-suit investigation, the Court
presciently noted:
To be clear, the problem with Plaintiffs’ contentions
that two supposed unnamed individuals are filing
bankruptcies on their behalf – including the use of
Plaintiffs’ correct identifying information, the
paying of filing fees on their behalf, the attendance
of credit counseling on their behalf, and live
appearances in Bankruptcy Court - is not that they are
bizarre. Federal Courts are often presented with
strange or seemingly incredible factual predicates,
and some of those predicates are ultimately supported
by the factual record.
10

(Op. at 18.)

Those words ring true at present, as it appears

the allegations were not spun out of whole cloth.

Rather, Mr.

Vullings has now demonstrated that he did in fact undertake a
reasonable investigation under the circumstances and set forth
arguments consistent with his investigation.
Without belaboring the recitation of the strong showing Mr.
Vullings has put forth in response to this Court’s order to show
cause, Mr. Vullings has shown he investigated the facts from his
clients and then independently verified the nature of their
claims through other means.

As Mr. Vullings correctly argues,

he met his duty to independently investigate his claims prior to
filing.

See Bensalem Township v. Int’l Surplus Lines Ins. Co.,

38 F.3d 1303, 1314 (3d Cir. 1994) (noting that Rule 11 “imposes
an affirmative duty on the parties to conduct a reasonable
inquiry into the applicable law and facts prior to file.”)

An

attorney in Mr. Vullings’ shoes, confronted with the information
Plaintiffs provided to him, and having independently verified it
with the Bartok Indictment and USPIS Press release, could
reasonably have believed that Plaintiffs had fallen prey to Mr.
Bartok and did not genuinely file the bankruptcies.

As such,

this Court will not impose sanctions based on the factual
investigation Mr. Vullings conducted.

Regardless of whether Mr.

Bartok actually did count Plaintiffs among his victims,
certainly Mr. Vullings proceeding on that theory is not “the
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exceptional circumstances where a claim . . . [is] patently
unmeritorious or frivolous.”

Catillo, 2015 WL 5722625, at *1.

Indeed, he has shown convincingly to the Court that he conducted
a factual investigation reasonable under the circumstances,
thereby meeting his obligations under Federal Rule of Civil
Procedure 11 and associated rules of professional
responsibility.
Despite that determination, the Court feels compelled to
note that none of the factual record regarding Mr. Vullings’
allegations was before the Court at summary judgment.
Mot. for Summary Judgment [Dkt. No. 22].)

(Opp. to

In fact, Plaintiffs’

opposition at summary judgment made use of no exhibits
whatsoever.

Mr. Vullings did not refer to Mr. Bartok by name or

with any specificity regarding his fraud, nor did he reference
the indictment or press release he now relies upon.

It is

baffling why a lawyer, in possession of the astounding facts Mr.
Vullings had in his back pocket, might decide to present no such
facts in combatting summary judgment.

Such strategy would seem

to work an exemplary disservice to the ends the claims
themselves purport to reach.

Nevertheless, that issue is not

one relevant to the inquiry this Court set forth to conduct—
whether Mr. Vullings’ investigation of the underlying facts was
reasonable.

That inquiry has been conducted and answered in the

affirmative.
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Additionally, as a postscript, this Court feels compelled
to point out that it hopes Experian will reevaluate whether it
can continue to report these bankruptcies as legitimately
belonging to Plaintiffs.

The sum and substance of Mr. Vullings’

response seems — in this Court’s mind, anyway — to mandate, at
the minimum, a further investigation.

Certainly the case as it

stood at summary judgment, with no affirmative showing from
Plaintiff and no genuinely disputed facts, required summary
judgment be granted in Experian’s favor.

It would be a

mischaracterization to say that the showing Mr. Vullings has put
forth in response to the Court’s order to show cause has not
altered the landscape of information available to Experian.

It

is this Court’s desire that, in light of those revelations,
Experian will attempt to get to the bottom of this.
IV.

CONCLUSION
Based on his strong response to this Court’s order to show

cause, Mr. Vullings has assuaged this Court’s concern that he
failed to investigate his claims.

As such, the June 21, 2016

Order to Show Cause is DISCHARGED and the Court does not issue
sanctions.

An appropriate order follows.

DATED: August 23, 2016

s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
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