Jackling v. HSBC Bank, N.A. (USA) et al
Filing
74
ORDER GRANTING in part and DENYING in part 62 Motion for Summary Judgment. As set forth more fully in the Order, summary judgment is GRANTED and judgment is ENTERED in favor of Defendants on Plaintiff's first, second, third, fourth, seventh, eighth, and ninth claims. Summary judgment is GRANTED in part and DENIED in part as to Plaintiff's fifth and sixth claims. Signed by Hon. Frank P. Geraci, Jr. on 1/10/2019. (GMS)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
WILLIAM T. JACKLING,
Plaintiff,
Case # 15-CV-6148-FPG
v.
DECISION AND ORDER
HSBC BANK USA, N.A. and
HSBC MORTGAGE CORPORATION (USA),
Defendants.
INTRODUCTION
William T. Jackling brings this action against HSBC Bank USA, N.A. and HSBC Mortgage
Corporation (USA) (collectively “HSBC”) asserting six claims for violation of the Fair Credit
Reporting Act (“FCRA”), a seventh claim for breach of contract, an eighth claim for violation of
the Truth in Lending Act (“TILA”), and a ninth claim under the Home Affordable Modification
Program (“HAMP”). He primarily claims that HSBC inaccurately reported several of his monthly
mortgage payments as delinquent, causing him to suffer the denial of credit and emotional
damages. HSBC moves for summary judgment as to all of Jackling’s claims. As set forth below,
summary judgment is GRANTED in part and DENIED in part.
BACKGROUND
Since 2007, William and Martha Jackling had a mortgage loan with HSBC. In 2010, the
Jacklings applied for a loan modification due to financial hardship.
The 2010 Forbearance Agreement
In response to their modification application, in April 2010, HSBC offered the Jacklings a
Forbearance Agreement under which HSBC would accept partial payments starting in June 2010.
1
The Forbearance Agreement contained a “Credit Reporting” provision stating that HSBC
would report the Jacklings’ loan as delinquent for so long as the loan was not current under the
original loan documents, even if the Jacklings timely made the partial payments in accordance
with the Forbearance Agreement. ECF Nos. 62-10, ¶ 21; 62-15 at 4. The Forbearance Agreement
also provided that HSCB would hold the partial payments in a suspense account until they totaled
an amount sufficient to pay the oldest delinquent monthly payment in full. ECF Nos. 62-10, ¶ 21;
62-15 at 3. The Jacklings signed the Forbearance Agreement on May 5, 2010 and sent it to HSBC.
ECF Nos. 62-15; 69, ¶11.
But the Jacklings also signed a second copy of the Forbearance Agreement in which they
crossed out the language in the “Credit Reporting” provision allowing HSBC to report the loan as
delinquent. ECF No. 62-16 at 4 (the “Altered Forbearance Agreement”). Jackling claims that he
sent the Altered Forbearance Agreement to HSBC along with the original, unaltered copy
(hereinafter the “Original Forbearance Agreement”).
ECF No. 69, ¶11.
Relying on an
unintelligible mark on HSBC’s signature line, ECF No. 62-16 at 5, Jackling claims that HSBC
signed and agreed to the Altered Forbearance Agreement.1
Pursuant to the Forbearance Agreement, between June and December 2010, the Jacklings
made six partial payments and three full payments. ECF Nos. 62-29 at 5-6; 69, ¶ 15. HSBC held
the partial payments in the suspense account and applied them in arrears once enough funds were
received for a full monthly payment. ECF Nos. 62-10, ¶ 37; 62-29 at 5-6. The full payments were
also applied in arrears to the next oldest delinquent monthly payment, so that by December 2010,
the Jacklings were only current through November 2010. Id. Thus, although the Jacklings timely
It is undisputed that HSBC never signed the Original Forbearance Agreement. But since HSBC’s alleged promise
not to report the 2010 forbearance payments as delinquent only arises from the Altered Forbearance Agreement,
regardless of whether HSBC signed the Original Forbearance Agreement, HSBC was entitled to report the payments
as delinquent if it did not enter into the Altered Forbearance Agreement. This issue is discussed further below.
1
2
made their payments under the Forbearance Agreement, the payments were untimely under the
original loan documents, and as permitted by the Original Forbearance Agreement, HSBC
considered the payments to be delinquent. ECF Nos. 62-10, ¶ 22-25; 62-15 at 3-4.
The 2011 Loan Modification
In January 2011, HSBC approved the Jacklings’ request for a loan modification. Pursuant
to the resulting Loan Modification Agreement, the unpaid interest for the months of December
2010, January 2011, and February 20112 were capitalized and added to the principal balance of the
Jacklings’ loan, and the Jacklings were to begin making modified payments on March 1, 2011.
ECF Nos. 62-10, ¶ 62; 62-26 at 2-3; 62-28 at 3, 6, 7, 10; 62-29 at 7.
The Jacklings timely made their full March, April, and May payments under the Loan
Modification Agreement, ECF Nos. 69-5 at 14; 62-26 at 7-8, but for reasons unclear on the record,
HSBC held these payments in a suspense account and did not apply them to their respective due
dates until May 2011. ECF No. 62-29 at 8. The Jacklings’ payments for the first five months of
2011 were reported as “unknown” or “late.” ECF Nos. 37, ¶ 25; 69, ¶ 22; 69-12 at 3.
The Jacklings’ History of Complaints to HSBC About Adverse Credit Reporting
At various points in 2010 and/or 2011, Jackling contacted HSBC to complain that it was
improperly reporting several of his 2010 and 2011 payments as delinquent to credit reporting
agencies (“CRAs”). ECF No. 69, ¶ 23. According to Jackling, HSBC should not have reported
the 2010 partial forbearance payments as delinquent because it agreed not to by signing the Altered
Forbearance Agreement, ECF Nos. 37, ¶¶ 15-20; 69, ¶ 9-19, and it should not have reported the
2011 modification payments as delinquent because the Jacklings timely and fully made them under
the Loan Modification Agreement. ECF Nos. 37, ¶¶ 21-23; 69, ¶ 20-21.
2
The modification documents suggest that interest for November 2010 was also capitalized. ECF No. 62-26 at 2. It
is unclear why, since Jackling seems to have made a payment that was applied to November 2010, but in any case,
Jackling signed the Loan Modification Agreement, so he cannot now argue that the capitalization term was incorrect.
3
On September 8, 2011, HSBC sent the Jacklings a letter advising them that it had removed
any delinquencies as to their March and April 2011 payments, and that their account was now
reporting as current and in good standing. ECF No. 69-13 at 2. But HSBC did not correct the
reporting, and on December 6, 2011, he sent HSBC a letter again asking it to report no late
payments. ECF Nos. 69, ¶¶ 23-24; 69-14 at 2.
The record is silent as to whether there were any credit reporting issues during 2012-2013,
but in February 2014, the Jacklings contacted HSBC again and in response, on April 22, 2014, the
servicer3 of the Jacklings’ loan sent the Jacklings a letter telling them that “no delinquencies have
been reported to the credit bureaus.” ECF Nos. 69, ¶ 23; 69-5 at 2.
The TransUnion Credit Report at Issue in this Case
Despite HSBC’s and the servicer’s assurances that the Jacklings’ account was current and
in good standing and that no delinquencies had been reported, a TransUnion credit report dated
July 13, 2014 reflected numerous delinquencies and payments of “unknown” status, including the
March and April 2011 payments for which HSBC had told the Jacklings any delinquency reports
were removed:
•
•
•
•
•
•
•
•
•
•
08/2010 30 days late
09/2010 30 days late
10/2010 60 days late
11/2010 90 days late
12/2010 60 days late
01/2011 X – unknown
02/2011 X – unknown
03/2011 X – unknown
04/2011 X – unknown
05/2011 30 days late
ECF Nos. 37, ¶ 25; 69, ¶ 22; 69-12 at 3.
3
HSBC transferred servicing of the loan to PHH Mortgage Corporation in May 2013. ECF No. 71-2, ¶¶ 4-13.
4
The Jacklings’ Disputes as to TransUnion’s Credit Report
Jackling asserts that he initiated a dispute of the July 13, 2014 credit report with
TransUnion in July 2014, but there is no documentary evidence of this dispute in the record. HSBC
contends that TransUnion did not notify it of the dispute, ECF No. 62-9; 62-10, ¶¶ 49-57, and the
Jackling seems to concede this. ECF No. 69, ¶ 25.
Jackling initiated a second dispute with TransUnion in December 2014. ECF Nos. 37, ¶¶
24-27; 69, ¶ 25. HSBC did receive notice of this dispute from TransUnion. ECF Nos. 62-10, ¶
53; 62-9 at 4. CRAs like TransUnion notify furnishers of information like HSBC of disputes
through an electronic transmission format called an Automated Consumer Dispute Verification
(“ACDV”). HSBC received an ACDV from TransUnion on December 12, 2014 and responded
on December 16, 2014. ECF Nos. 62-10, ¶ 50; 62-9 at 4. The ACDV record reflects that HSBC
modified the Jacklings’ account information, but it is not clear how. ECF No. 62-9 at 4.
Jackling initiated a third dispute with TransUnion in January 2015. ECF Nos. 37, ¶ 28.
HSBC received a second ACDV from TransUnion on January 28, 2015 and responded on January
29, 2015. ECF Nos. 62-10, ¶ 54; 62-9 at 5. Again, the ACDV record reflects that HSBC modified
the Jacklings’ account information, but again, it is not clear how. ECF No. 62-9 at 5.
Jackling’s Complaint in this Court
Jackling filed his Complaint in this Court on March 16, 2015. ECF No. 1. The operative
Third Amended Complaint asserts the following claims:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Willful violation of the FCRA based on the July 2014 dispute
Willful violation of the FCRA based on the December 2014 dispute
Willful violation of the FCRA based on the January 2015 dispute
Negligent violation of the FCRA based on the July 2014 dispute
Negligent violation of the FCRA based on the December 2014 dispute
Negligent violation of the FCRA based on the January 2015 dispute
Breach of contract
TILA violation
HAMP claim
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ECF No. 37. The FCRA claims, though separated into six claims, are all based on the reporting
of the 2010 forbearance payments and 2011 modification payments as reflected in the July 2014
TransUnion credit report.
HSBC now moves for summary judgment on all of Jackling’s claims. ECF No. 62.
DISCUSSION
Summary Judgment Standard
Summary judgment is warranted “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.” Fed. R. Civ. P.
56(a). Where, as here, the nonmovant would bear the burden of proof at trial,
the movant may show prima facie entitlement to summary judgment in one of two
ways: (1) the movant may point to evidence that negates its opponent’s claims or
(2) the movant may identify those portions of its opponent’s evidence that
demonstrate the absence of a genuine issue of material fact, a tactic that requires
identifying evidentiary insufficiency and not simply denying the opponent’s
pleadings. If the movant makes this showing in either manner, the burden shifts to
the nonmovant to point to record evidence creating a genuine issue of material fact.
Like the movant, the nonmovant cannot rest on allegations in the pleadings and
must point to specific evidence in the record to carry its burden on summary
judgment.
Salahuddin v. Goord, 467 F.3d 263, 272 (2d Cir. 2006) (internal citations omitted). A mere
scintilla of evidence in support of the nonmovant’s position is insufficient; there must be evidence
on which the jury could reasonably find for the nonmovant. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986).
The Court must resolve all genuinely disputed facts in favor of the nonmovant, and if the
Court then determines that no rational jury could find in favor of the nonmovant, summary
judgment in favor of the movant is appropriate. Scott v. Harris, 550 U.S. 372, 380 (2007).
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Claims 1-6: Willful (Claims 1-3) and Negligent (Claims 4-6) Violation of the FCRA
Jackling’s first six claims assert that HSBC willfully or negligently violated section 1681s–
2(b) of the FCRA, which “imposes a duty upon furnishers of credit information [like HSBC] to
investigate credit disputes” after receiving notice from a CRA. Anthony v. GE Capital Retail Bank,
321 F. Supp. 3d 469, 477 (S.D.N.Y. 2017). “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 assumed a reasonableness standard for judging the adequacy of the
required investigation.” Dickman v. Verizon Comms., Inc., 876 F. Supp. 2d 166, 172 (E.D.N.Y.
2012).
Most courts agree that consumers have a private right of action for a furnisher’s violation
of section 1681s–2(b). See Comunale v. Home Depot, U.S.A., Inc., 328 F. Supp. 3d 70, 80
(W.D.N.Y. 2018). To state a claim, a consumer must show that (1) a furnisher received notice of
a credit dispute from a CRA (as opposed to from the consumer alone) and (2) the furnisher
negligently or willfully failed to conduct a reasonable investigation. Frederick v. Capital One
Bank (USA), N.A., No. 14-CV-5460 (AJN), 2018 WL 1583289, at *6-7 (S.D.N.Y. Mar. 27, 2018).
A. Whether HSBC Received Notice from a CRA
Here, Jackling’s first and fourth claims are based on his July 2014 dispute, but Jackling
seems to concede that HSBC did not receive notice of this dispute from TransUnion. ECF No. 69,
¶ 25. Since notice of the dispute must come from the CRA, HSBC’s motion for summary judgment
is GRANTED as to Jackling’s first and fourth claims. Frederick, 2018 WL 1583289, at *6.
Jackling’s second, third, fifth, and sixth claims are based on his December 2014 and
January 2015 disputes, and HSBC admittedly received notice of these disputes from TransUnion.
ECF Nos. 62-10, ¶¶ 53-54, 62-9 at 4-5. The Court thus addresses the reasonableness of HSBC’s
investigation of these two disputes.
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B. Whether HSBC Conducted a Reasonable Investigation
Jackling’s December 2014 and January 2015 disputes both challenged HSBC’s reporting
of the 2010 forbearance payments and the 2011 modification payments. The Court will address
these two groups of payments in turn.
1. The 2010 Forbearance Payments
Jackling claims that a reasonable investigation would have revealed that HSBC promised
not to report his 2010 forbearance payments as delinquent by executing the Altered Forbearance
Agreement containing his handwritten changes to the “Credit Reporting” provision. ECF No. 6925, ¶ 7. His contention that HSBC executed the Altered Forbearance Agreement is based on the
presence of an unintelligible mark on HSBC’s signature line and Jackling’s belief that a woman
named Rose Viana signed it on behalf of HSBC. ECF Nos. 69 at 3, 13.
HSBC responds that no amount of investigation would have revealed this “promise”
because HSBC never executed the Altered Forbearance Agreement. ECF No. 62-31 at 9; 71-2, ¶¶
9-13; 71-3 at 13.
Jackling argues that whether Rose Viana signed the Altered Forbearance Agreement is a
genuine issue of material fact that precludes summary judgment. The Court disagrees. Even
assuming Rose Viana did sign the Altered Forbearance Agreement, HSBC’s evidence shows that
she had no authority to do so, and that she was not even an employee of HSBC, but rather worked
for the servicer to which the Jacklings’ loan was transferred in 2013. ECF Nos. 62-10, ¶¶ 17-18,
71-2, ¶¶ 4-13. Jackling presents no evidence to the contrary.
Further, in contrast to his Declaration statement on summary judgment that Rose Viana
signed the Altered Forbearance Agreement, Jackling’s prior deposition testimony was that he did
not know who put the unintelligible mark on the Altered Forbearance Agreement. ECF Nos. 71-
8
1 at 7-8, 71-3 at 16. Jackling cannot “create an issue of fact by submitting an affidavit in opposition
to a summary judgment motion that, by omission or addition, contradicts [his] previous deposition
testimony.” Hayes v. N.Y. City Dep’t of Corrs., 84 F.3d 614, 619 (2d Cir. 1996).
Because Jackling has not shown a genuine issue of material fact as to whether HSBC
executed the Altered Forbearance Agreement and thus promised not to report his 2010 forbearance
payments as delinquent, there is likewise no genuine issue of material fact as to whether a
reasonable investigation would have revealed that HSBC reported inaccurate information.
Jackling thus cannot prevail on his FCRA claim as to the 2010 forbearance payments. See Felts
v. Wells Fargo Bank, Nat’l Ass’n, 893 F.3d 1305, 1313 (11th Cir. 2018) (holding that, regardless
of the nature of the investigation, a plaintiff asserting an FCRA claim cannot prevail without
demonstrating that a reasonable investigation would have revealed that the furnisher had reported
inaccurate information; otherwise, the plaintiff would be unable to demonstrate any injury);
Frederick, 2018 WL 1583289, at *7 (“[W]hile it may be self-evident, if Plaintiff cannot show that
any of the information was inaccurate, there is no harm.”); Podell v. Citicorp Diners Club, Inc.,
914 F. Supp. 1025, 1036 (S.D.N.Y. 1996) (to prevail on an FCRA claim, a plaintiff “must prove
that inaccurate information in a credit report caused him harm”).
Accordingly, summary judgment is GRANTED in favor of HSBC as to the 2010
forbearance payments.
2. The 2011 Modification Payments
Jackling also claims that HSBC failed to reasonably investigate to ascertain the accuracy
of its reporting of the 2011 modification payments as “unknown” or “late.”
“Whether a defendant’s investigation is reasonable is a factual question normally reserved
for trial, but summary judgment is proper if the reasonableness of the defendant’s procedures is
9
beyond question and if the plaintiff has failed to adduce evidence that would tend to prove that the
investigation was unreasonable.” Hudson v. Babilonia, 192 F. Supp. 3d 274, 301 (D. Conn. 2016).
Here, HSBC fails to show that its investigation was reasonable “beyond question” and Jackling
presents evidence of unreasonableness.
First, HSBC does not indicate whether it reviewed the Loan Modification Agreement as
part of its investigation. The Loan Modification Agreement governed the Jacklings’ payment
obligations in 2011. Without knowing whether HSBC reviewed this central document, the Court
cannot conclude that HSBC’s investigation was reasonable “beyond question.”
Second, HSBC does not specify what information it did review. HSBC’s corporate
representative, Denise Dickman, only vaguely explains that HSBC’s investigator
compared the information being reported by the CRA against HSBC’s own records
and, where appropriate, modified the information provided by the CRA to
accurately reflect HSBC’s own records. In each instance, HSBC conducted an
investigation with respect to the disputed information, reviewed the information
provided by the CRA, modified the information being furnished at the CRA to
match HSBC’s internal records, and reported its response to the CRAs as required
by the FRCA. Thereafter, Trans Union reported the modified account information
verified by HSBC.
ECF No. 62-10, ¶¶ 58-60.
Dickman repeatedly references “information” without actually
identifying what information HSBC reviewed and compared. Additionally, HSBC acknowledges
that its investigation revealed “differences in the payment pattern being reported by TransUnion
and HSBC’s records concerning the actual payment pattern for the account,” ECF No. 62-31 at
15-16; 62-1, ¶ 61, but HSBC does not clarify what those differences were or whether they related
to the payments Jackling disputed. The Court cannot evaluate the reasonableness of HSBC’s
investigation without knowing what information HSBC reviewed. See Jenkins v. AmeriCredit Fin.
Servs., Inc., No. 14CV5687SJFAKT, 2017 WL 1325369, at *7 (E.D.N.Y. Feb. 14, 2017) (finding
that questions of fact existed as to reasonableness of investigation where defendant failed to “detail
10
the exact nature and scope” of the investigation); Jensen v. Peoples Gas Light & Coke Co., No. 04
C 2945, 2005 WL 2007123, at *4 (N.D. Ill. Aug. 16, 2005) (“Any determination of the
reasonableness of [the furnisher’s] investigation in light of the information it possessed requires
knowledge of what information it did in fact possess.”).
Third, HSBC’s evidence is unclear as to how it modified the Jacklings’ account in response
to the ACDVs. Dickman’s Declaration states only that “[t]he account information modification
details are set forth in the . . . ACDV[s].” ECF No. 62-10, ¶ 53, 57. But the ACDVs are not selfexplanatory. Instead, they “contain many codes and abbreviations,” making it “unclear what
specific action [HSBC] took after receiving” them. Trikas v. Universal Card Services Corp., 351
F. Supp. 2d 37, 44 (E.D.N.Y. 2005) (acknowledging lack of clarity of ACDVs). HSBC’s evidence
is thus insufficient to warrant summary judgment. See Robbins v. CitiMortgage, Inc., No. 16-CV04732-LHK, 2017 WL 6513662, at *11 (N.D. Cal. Dec. 20, 2017) (finding that the defendantbank’s evidence was insufficient to warrant summary judgment where the ACDVs
“demonstrate[d] that an investigation took place, but they reveal[ed] almost nothing about what
happened during the investigation”).
Jackling also comes forward with his own evidence suggesting that HSBC’s investigation
was not reasonable. He submits HSBC’s September 8, 2011 letter confirming that it removed the
delinquencies related to the March and April 2011 payments to ensure that the Jackling’s account
was reporting as current and in good standing. ECF No. 69-13 at 2. He also submits a July 2017
credit report showing that the March and April 2011 payments were finally corrected to reflect a
status of “ok.” ECF No. 69, ¶ 26; 69-16 at 5. This evidence suggests that that HSBC agreed with
Jackling that the reporting should be corrected—calling into question HSBC’s failure to fix the
reporting upon receiving the ACDVs in December 2014 and January 2015.
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Thus, HSBC is not entitled to summary judgment on the reasonableness of its investigation
of the 2011 modification payments. The Court turns to whether there is a genuine issue of material
fact as to Jackling’s claims that HSBC’s reporting and investigation caused him to suffer damages.
C. Damages
To prevail on an FCRA claim, a plaintiff must prove either (1) that the defendant’s
negligent violation caused him actual damages, in which case the plaintiff is entitled to recover
those actual damages, or (2) that the defendant’s violation was willful, in which case the plaintiff
is entitled to recover actual damages, if any, or statutory damages, as well as punitive damages.
See Ritchie v. N. Leasing Sys., Inc., 14 F. Supp. 3d 229, 234, 240 (S.D.N.Y. 2014).
1. Actual Damages (Claims 5 and 6)4
Actual damages can include both economic damages stemming from the denial of credit
and emotional damages. See Frederick, 2018 WL 1583289, at *11; Caltabiano v. BSB Bank &
Tr. Co., 387 F. Supp. 2d 135, 141 (E.D.N.Y. 2005). Emotional damages may be freestanding and
need not arise from the denial of credit, but they often do. Wenning v. On-Site Manager, Inc., No.
14 CIV. 9693 (PAE), 2016 WL 3538379, at *19 (S.D.N.Y. June 22, 2016). “[T]o recover actual
damages, a plaintiff must establish a ‘causal relationship between the violation of the statute and
the loss of credit or other harm.’” Frederick, 2018 WL 1583289, at *11 (quoting Burns v. Bank
of Am., 655 F. Supp. 2d 240, 250 (S.D.N.Y. 2008)).
Here, Jackling claims that he suffered both economic and emotional damages, both
stemming from the denial of credit.
HSBC argues that Jackling cannot present sufficient
admissible evidence of either types damages and cannot link any damages to HSBC’s reporting.
4
Claim 4 also sought actual damages, but summary judgment has already been granted as to that claim.
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a.
Economic Damages
Jackling claims that he was denied credit on at least four occasions between 2014 and 2015:
1.
2.
3.
4.
Denial of an auto loan from Dorschel Toyota;
Denial of an auto loan from Affordable Auto;
Denial of a credit increase from Synchrony Bank;
Denial of an auto loan from Cortese Ford.
ECF No. 69, ¶ 27 (a)-(d).
The Affordable Auto and Synchrony Bank denials are supported only by Jackling’s bare
Declaration statements, which do not even say that the denials were based on TransUnion’s credit
report, let alone any inaccurate information reported by HSBC. This evidence is insufficient to
survive summary judgment. See McMillan v. Experian, 170 F. Supp. 2d 278, 281 (D. Conn. 2001)
(striking affidavit which failed to identify any basis for affiant’s knowledge of why credit was
denied); Howell v. Equifax Info. Servs., LLC, No. 1:14-CV-148 SNLJ, 2017 WL 76892, at *5 (E.D.
Mo. Jan. 9, 2017) (granting summary judgment for defendant where plaintiff failed to present a
denial letter or affidavit of car dealership employee and instead relied on only his own testimony
and hearsay evidence). Summary judgment is thus GRANTED in favor of HSBC as to the
Affordable Auto and Synchrony Bank denials.
The Dorschel Toyota and Cortese Ford denials are supported by four credit denial letters.
HSBC argues that the credit denial letters are not authenticated and thus constitute inadmissible
hearsay evidence which cannot be used to survive summary judgment. See Gorman v. Experian
Info. Sols., Inc., No. 07 CV 1846 (RPP), 2008 WL 4934047, at *6 (S.D.N.Y. Nov. 19, 2008)
(noting that credit denial letters were inadmissible hearsay documents).
While the letters are admittedly unauthenticated, the Court has the discretion to consider
them on summary judgment and exercises that discretion here, as there is no suggestion that they
are actually inauthentic. See Am. Ref-Fuel Co. of Niagara, LP v. Gensimore Trucking, Inc., No.
13
02-CV-814C F, 2007 WL 2743449, at *3 (W.D.N.Y. Sept. 18, 2007) (explaining that the court has
the discretion to consider unauthenticated evidence where it is apparent that the party may be able
to authenticate the documents at trial); Perpall v. Pavetek Corp., No. 12-CV-0336 (PKC), 2017
WL 1155764, *9 (E.D.N.Y. 2017) (“At the summary judgment stage, we do not focus on the
admissibility of the evidence’s form. We instead focus on the admissibility of its contents.”);
Perkins v. United States, No. 16-CV-495V, 2018 WL 3548597, at *8 (W.D.N.Y. July 24, 2018)
(explaining that Rule 56(c)(1) allows a party to object to summary judgment evidence on the basis
that it “cannot be” presented in a form that “would be” admissible in evidence, suggesting that
inadmissible materials may be considered on summary judgment as long as they “can be cleaned
up at trial to remove any evidentiary infirmities”).
HSBC further argues that the credit denial letters fail to establish a causal link to any
inaccurate information reported by HSBC because they do not specifically mention HSBC or the
information it reported. In support, HSBC relies on Gorman. But Gorman does not say that a
credit denial letter must specifically mention the defendant-furnisher or the precise information it
reported. Gorman held that the plaintiff failed to establish a causal link between the denial of
credit and the defendant-CRA, Experian, because none of the credit denial letters in evidence relied
on an Experian credit report in denying credit. Id. at *6-7. Cf. Swontek v. Cont’l Cent. Credit Inc.,
No. CV-16-03602-PHX-DJH, 2018 U.S. Dist. LEXIS 166735, at *13 (D. Ariz. Sep. 27, 2018)
(rejecting defendant’s argument that credit denial letters were insufficient evidence because they
did not specifically list the erroneously reported account as the culprit).
In cases finding no causal link between the credit denials and the inaccurate information,
there has been no evidence at all to establish such a link. For example, in Jenkins, 2017 WL
1325369, at *8, there was no evidence that any party relied on the erroneous credit report in
14
denying plaintiff a loan. Similarly, in Casella v. Equifax Credit Info. Servs., 56 F.3d 469, 473 (2d
Cir. 1995), there was no evidence that the erroneous credit report had been provided to any third
parties. Here, in contrast, three of the four credit denial letters reference TransUnion’s credit
report. ECF No. 69-17 at 2, 69-20 at 2, 69-21 at 2.
HSBC also argues that Jackling failed to depose any of the prospective creditors to discern
exactly why they denied him credit. But at least one court has held that credit denial letters, without
additional testimony from the creditors, were sufficient to survive summary judgment. See Philbin
v. Trans Union Corp., 101 F.3d 957, 968 (3d Cir. 1996) (holding that “[t]he district court erred by
assuming that [plaintiff] could satisfy his burden only by introducing direct evidence that
consideration of the inaccurate entry was crucial to the decision to deny credit. While [plaintiff’s]
case might have been stronger had he deposed or taken affidavits of those responsible for the
decision, such evidence is not essential to make out a prima facie case pursuant to § 1681e(b).”).
Admittedly, the credit denial letters do list numerous reasons, making the extent to which
the denials were based on inaccurate information from HSBC unclear. However, Jackling is not
required to “eliminate the possibility that ‘correct adverse entries or any other factors’ also entered
into the decision to deny credit.” Frost v. Experian & TRW, Inc., No. 98 CIV. 2106 JGK JCP,
1999 WL 287373, at *8 (S.D.N.Y. May 6, 1999); see also Fahey v. Experian Info. Sols., Inc., 571
F. Supp. 2d 1082, 1089 (E.D. Mo. 2008) (“[T]here is no precedent supporting the conclusion that
plaintiff bears the burden of proving that Experian’s report was the sole cause of his inability to
secure financing.”); Enwonwu v. Trans Union, LLC, 364 F. Supp. 2d 1361, 1366 (N.D. Ga. 2005)
(“Forcing a plaintiff affirmatively to rule out other explanations for the credit denial ignores the
fact that decisions to deny credit will frequently have more than one cause. For example, in some
instances the inaccurate entry and another factor may each, considered separately, be insufficient
15
to have caused the denial of credit but when taken together are sufficient. Each may then be
considered a substantial factor in bringing about the denial of credit and therefore a cause of
plaintiff's injury.”).
Accordingly, as to the Dorschel Toyota and Cortese Ford denials, Jackling has presented
sufficient evidence of economic damages to survive summary judgment, and summary judgment
is DENIED to HSBC on those credit denials.
b.
Emotional Damages
Turning next to the emotional damages, Jackling claims that he suffered emotional distress,
nervousness, sleeplessness, and other mental, emotional, and physical suffering. ECF No. 37, ¶¶
34, 45, 51, 57, 62, 67, 72. He asserts that because he could not get credit, he was anxious, could
not sleep at night, sometimes ate too much to alleviate stress, and gave up hobbies. ECF No. 69,
¶ 30. He also claims that being denied credit caused him humiliation, embarrassment, and sadness.
ECF No. 69, ¶ 27(a), (c), (d).
HSBC argues that these claims cannot survive summary judgment because they are not
corroborated or supported by specific, concrete evidence.
Courts disagree as to whether corroboration is necessary for an emotional damages claim
to survive summary judgment. See Wenning, 2016 WL 3538379, at *20 (noting split in authority
and citing cases holding that, on the one hand, “conclusory,” “unsupported,” and “subjective”
testimony is legally insufficient, and that, on the other hand, there is no statutory basis requiring
corroboration).
Even absent a categorical requirement, however, corroboration is still a factor in evaluating
whether an emotional damages claim is demonstrable enough to reach a jury. Id. at *22. Other
factors include “whether plaintiff’s testimony is conclusory or detailed; whether plaintiff's asserted
16
distress was short-lived or long-lasting; and whether the emotional distress is linked to a credit
denial or similarly adverse event.” Id. at *20. Courts also look to “outward manifestation of
emotional distress,” particularly as observed by others, Howell, 2017 WL 76892, at *4, and
whether the plaintiff sought medical treatment for the emotional distress. See Okocha v. HSBC
Bank USA, N.A., No. 08 CIV.8650(MHP), 2010 WL 5122614, at *6 (S.D.N.Y. Dec. 14, 2010).
Here, Jackling’s emotional damages evidence is conclusory. He claims that he experienced
anxiousness, sleeplessness, embarrassment, etc., without detailed testimony as to “outward
manifestations” of his distress. He submits a Declaration from his doctor, Jules Zysman, but that
Declaration does not indicate that Jackling sought mental health care for emotional distress due to
denial of credit. Rather, the Declaration discloses that Jackling had been a patient of Dr. Zysman’s
for almost 40 years, and that Jackling (who was in his late 70s) was suffering from various medical
issues such as hypertension, diabetes, and depression. ECF No. 69-23. Dr. Zysman attests that
some of Jackling’s depression was due to the death of his wife, and that financial pressure
exacerbated Jackling’s conditions. Id., see Frederick, 2018 WL 1583289, at *12 (holding that
doctor’s note did “not establish a causal connection and merely state[ed] that Plaintiff was under
the care of a physician); Caltabiano, 387 F. Supp. 2d at 142 (holding that the plaintiff failed to
establish actual damages where he did not “provide[ ] any psychiatric or medical records to support
that he has suffered emotional damages as a result of the Defendants’ actions”).
Jackling’s evidence shows that he was under great financial pressure for years due to his
wife’s illness, and that he spent nearly all of his savings caring for her in the last few years of her
life. ECF No. 69, ¶ 28. But the evidence does not sufficiently link his emotional distress to any
inaccurate information furnished by HSBC and is not sufficiently detailed to send to a jury.
Accordingly, summary judgment is GRANTED to HSBC as to emotional damages.
17
2. Willfulness (Claims 2 and 3)5
“To establish that a violation of the FCRA was willful, the ‘plaintiff must show that a
defendant knowingly and intentionally committed an act in conscious disregard for the rights of
others, but need not show malice or evil motive.’” Jenkins, 2017 WL 1325369, at *7 (quoting
Northrop v. Hoffman of Simsbury, Inc., 12 F. App’x 44, 50 (2d Cir. 2001)).
Courts in this Circuit have held that a defendant acts willfully under the FCRA
where the defendant “intentionally misled consumers or concealed information
from them.” . . . In contrast, “the mere failure to correct a plaintiff’s inaccurate
credit information, even after notification of the inaccuracy does not constitute a
willful failure to comply with the FCRA.”
Id. (quoting George v. Equifax Mortg. Servs., No. 06-CV-971, 2010 WL 3937308, at *2 (E.D.N.Y.
Oct. 5, 2010)) (emphasis in original).
Here, Jackling cannot show that HSBC willfully violated the FCRA.
First, the ACDV forms reflect that HSBC promptly investigated the disputes and responded
to TransUnion within a few days. ECF No. 62-9 at 4-5. Prompt investigation cuts against a finding
of willfulness. See id.
Second, Jackling’s own evidence shows that HSBC responded to his communications
throughout the years and ultimately (albeit belatedly) corrected its reporting. ECF No. 69, ¶ 26,
69-16 at 5. HSBC’s responsiveness also cuts against a finding of willfulness. See Trikas, 351 F.
Supp. 2d at 44-45 (holding that a furnisher did not act willfully where it “sent several letters to
Plaintiff to address his concerns” and “initiated its investigation almost immediately” after
receiving notices of dispute from CRAs).
Third, there is no evidence that HSBC “intentionally mislead or concealed information”
from Jackling. George, 2010 WL 3937308, at *2.
5
Claim 1 also alleged a willful violation, but summary judgment has already been entered as to that claim.
18
Finally, Jackling’s Response in Opposition to HSBC’s Motion for Summary Judgment
makes no argument that HSBC willfully violated the FCRA, and his willfulness claims in his
Complaint did not allege any additional facts beyond those contained in his negligence claims.
Accordingly, summary judgment is GRANTED in HSBC’s favor as to Jackling’s second and third
claims for willful violation of the FCRA.
To sum up the FCRA claims, summary judgment is GRANTED in favor of HSBC as to
Jackling’s first and fourth claims because HSBC did not receive notice of the July 2014 dispute at
issue in those claims from a CRA.
Summary judgment is GRANTED in favor of HSBC as to Jackling’s second and third
claims because he has not shown that HSBC willfully failed to conduct a reasonable investigation
following receipt of the December 2014 and January 2015 ACDVs.
As to Jackling’s fifth and sixth claims, summary judgment is GRANTED in favor of HSBC
as to the 2010 forbearance payments, and as to the issue of emotional damages. Summary
judgment is DENIED as to the limited issues of whether HSBC reasonably investigated the 2011
modification payments, and whether Jackling suffered economic damages in the form of credit
denials from Dorshcel Toyota and Cortese Ford due to HSBC’s reporting and investigation of
those payments following receipt of the December 2014 and January 2015 ACDVs.
Claim 7: Breach of Contract
Jackling asserts that HSBC breached the Jacklings’ original loan documents by failing to
credit him for a $4,780.17 payment he allegedly made on December 23, 2010. ECF No. 37 at 7477. However, as HSBC explains, and the payment history shows, Jackling did not make such a
payment. ECF No. 62-10, ¶¶ 61-67. Rather, HSBC advanced $4,780.17 to pay property taxes.
Id. Jackling separately paid the property taxes himself, and HSBC consequently received a refund.
Id. HSBC then zeroed-out the advance balance it had created after advancing the $4,780.17. Id.
19
Jackling also claims that HSBC breached the Loan Modification Agreement by improperly
capitalizing $2,682.96 in unpaid interest. ECF No. 37, ¶ 78. However, the capitalization of the
$2,682.96 was a term of the Loan Modification Agreement that Jackling signed, ECF No. 62-10,
¶ 62, and thus cannot be a breach.
In any case, Jackling makes no arguments as to his breach of contract claim in his Response
in Opposition to HSBC’s Motion for Summary Judgment. Accordingly, summary judgment is
GRANTED in favor of HSBC as to Jackling’s seventh claim.
Claim 8: Violation of TILA
Jackling claims that HSBC violated 15 U.S.C. § 1638(f) of TILA by failing to send him
his monthly mortgage statements between August 2014 and March 2016, during the pendency of
this lawsuit. ECF No. 37, ¶¶ 80-85. He argues that he is entitled to actual or statutory damages.
ECF No. 69-25, ¶¶ 17-18.
HSBC admits that it did not send him statements during those months but argues that it is
entitled to summary judgment as a matter of law because TILA does not allow for statutory
damages for violations of § 1638(f) and because Jackling cannot show detrimental reliance to
entitle him to actual damages. Indeed, Jackling was able to pay his mortgage for each of the
months that he did not receive the statements. ECF No. 62-31 at 27. Because Jackling presents
no allegations, arguments, or evidence as to actual damages, nor any legal authority entitling him
to statutory damages, summary judgment is GRANTED in favor of HSBC as to Jackling’s eighth
claim. See Marais v. Reimer Law Co., No. 2:17-CV-922, 2018 WL 1911251, at *2 (S.D. Ohio
Apr. 23, 2018) (“Defendants are correct that statutory damages are not available for claims brought
for violations of TILA under 15 U.S.C. 1638(f).”).
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Claim 9: Relief under HAMP
Jackling claims that he is entitled to certain relief under HAMP, such as a reduction in his
principal, but cites no specific provisions of HAMP supposedly entitling him to such relief. ECF
No. 37, ¶¶ 86-88. HSBC attests that it did not participate in HAMP and so any HAMP claims are
not applicable to it. ECF Nos. 62-1, ¶¶ 76-68, 62-10, ¶ 68. Jackling does not dispute this
contention in his response to HSBC’s Statement of Undisputed Material Facts. ECF No. 69-24, ¶
39. Accordingly, summary judgment is GRANTED in favor of HSBC as to Jackling’s ninth claim.
CONCLUSION
For the foregoing reasons, HSBC’s Motion for Summary Judgment (ECF No. 62) is
GRANTED and judgment is ENTERED in favor of HSBC on Jackling’s first, second, third, fourth,
seventh, eighth, and ninth claims.
As to Jackling’s fifth and sixth claims, summary judgment is GRANTED in favor of HSBC
as to the 2010 forbearance payments, and as to the issue of emotional damages. Summary
judgment is DENIED as to the limited issues of whether HSBC reasonably investigated the 2011
modification payments following receipt of the December 2014 and January 2015 ACDVs, and
whether Jackling suffered economic damages in the form of credit denials from Dorshcel Toyota
and Cortese Ford due to HSBC’s reporting and investigation of those payments.
IT IS SO ORDERED.
Dated: January 10, 2019
Rochester, New York
______________________________________
HON. FRANK P. GERACI, JR.
Chief Judge
United States District Court
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