THOMAS v. EQUIFAX INFORMATION SERVICES, LLC

Filing 54

MEMORANDUM OPINION AND ORDER, signed by JUDGE LORETTA C. BIGGS on 6/4/21, that Defendant's Motion for Summary Judgment, (ECF No. 30 ), is DENIED. (Butler, Carol)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
DONNETTE DAWN THOMAS,
Plaintiff,
v.
EQUIFAX INFORMATION
SERVICES, LLC,
Defendant.

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1:19CV820

MEMORANDUM OPINION AND ORDER
LORETTA C. BIGGS, District Judge.
Plaintiff, Donnette Thomas (“Thomas”), initiated this action against Defendant
Equifax Information Services, LLC (“Equifax”) alleging negligent and willful violations of the
Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and seeking compensatory,
punitive, actual, and statutory damages. (ECF No. 1 at 1, 8, 10.) Before the Court is
Defendant’s Motion for Summary Judgment. (ECF No. 30.) For the reasons set forth below,
Defendant’s motion will be denied.
I.

BACKGROUND

In early 2018, Plaintiff began the process of purchasing a home and was pre-approved for
a mortgage though Movement Mortgage for 1.6 million dollars ($1,600,000.00). (ECF No. 1
¶¶ 15–16.) Given the pre-approval, in February 2018 Plaintiff made an offer to purchase, had
the home inspected, and paid earnest and due diligence money. (Id. ¶¶ 18–19.) The sellers
accepted Plaintiff’s offer to purchase, and she moved forward with the closing process. (Id.

¶¶ 20–21.) Plaintiff’s projected closing date was May 9, 2018. (Id. ¶ 23.) On that date, Plaintiff
pulled her credit report from Equifax. (Id. ¶ 24.) According to Plaintiff, the report was
incomplete, and noted one (1) open account, five (5) negative accounts, and one (1) collection
account under the name of “Donnette Thomas.” (Id. ¶ 25–27.) Plaintiff alleges that her loan
officer, Kayte Bost, informed her that she would not be able to close on the home by the
closing date because of the derogatory accounts contained on her Equifax report. (Id. ¶ 28.)
Plaintiff contacted Equifax to dispute the allegedly inaccurate information and to have
her report updated. (Id. ¶ 30.) While Plaintiff was on the phone with an Equifax agent
regarding the allegedly inaccurate information, she was informed that her credit file had been
split under two related names. (Id. ¶ 36.) In response to Plaintiff’s inquiry, Equifax then
combined the two credit files that were associated with Plaintiff’s personal identifying
information. (Id.) While the phone conversation was still ongoing, Plaintiff pulled her credit
report for a second time. (Id. ¶ 37.) This time the report reflected eleven (11) open accounts,
five (5) negative accounts, and one (1) collection account as well as a credit score in the mid500s. (Id. ¶ 39.) According to Plaintiff, the negative account information on the report had
previously been disputed and deleted, and it should not have been contained as a part of her
report. (Id. ¶¶ 40–43.) The following day, Plaintiff pulled her Equifax report for a third time
and it displayed two (2) additional negative accounts. (Id. ¶ 44.) Plaintiff alleges that she was
unable to close on the home on the scheduled closing date due to the erroneous information
contained in her Equifax report and the sellers would not extend the closing date. (Id. ¶ 48.)
Because Plaintiff was unable to obtain a mortgage, a third party purchased the home, rented
it to Plaintiff, and gave her an option to purchase the home. (See ECF Nos. 31-1 at 57–58;
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35-5; 35-6.) This transaction resulted in Plaintiff paying over three thousand dollars more a
month in rent than she would have paid had she obtained the mortgage from Movement
Mortgage. (ECF No. 1 ¶¶ 54–56.)
II.

STANDARD OF REVIEW
Summary judgment is appropriate when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “A dispute is genuine if a reasonable jury could return a verdict for the
nonmoving party.” Jacobs v. N.C. Admin. Off. of the Cts., 780 F.3d 562, 568 (4th Cir. 2015)
(internal quotations omitted). “It is axiomatic that in deciding a motion for summary
judgment, a district court is required to view the evidence in the light most favorable to the
nonmovant” and to “draw all reasonable inferences in his favor.” Harris v. Pittman, 927 F.3d
266, 272 (4th Cir. 2019) (citing Jacobs, 780 F.3d at 568). That means that a court “cannot weigh
the evidence or make credibility determinations,” Jacobs, 780 F.3d at 569, and thus must
“usually” adopt “the [nonmovant’s] version of the facts” even if it seems unlikely that the
plaintiff would prevail at trial, Witt v. W. Va. State Police, Troop 2, 633 F.3d 272, 276 (4th Cir.
2011) (quoting Scott v. Harris, 550 U.S. 372, 378 (2007)). That said, “the mere existence of some
alleged factual dispute between the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be no genuine issue of material
fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986).

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III.

DISCUSSION
A. Fair Credit Reporting Act

As earlier stated, Plaintiff seeks relief pursuant to the FCRA. (ECF No. 1 at 1.) The
Act “seeks to ensure ‘fair and accurate credit reporting.’” Spokeo, Inc. v. Robins, 136 S. Ct. 1540,
1545 (2016) (citing 15 U.S.C. § 1681(a)(1)). Further, the FCRA “exclusively regulates reporting
and use of credit information.” Wilson v. Chrysler Cap., No. 19-CV-975, 2019 WL 12107374,
at *2 (M.D.N.C. Nov. 14, 2019) (quoting Smith v. Am. Express, No 1:13–3014, 2014 WL
4388259, at *4 (S.D. W. Va. Sept. 4, 2014) (citing 15 U.S.C. § 1681, et seq.)). The Act also
regulates how credit reporting agencies collect and transmit credit-related information to
ensure that accurate information is reported, Dalton v. Cap. Associated Indus., Inc., 257 F.3d 409,
414–15 (4th Cir. 2001), and allows consumers to challenge information in a consumer’s file
that they believe is inaccurate or incomplete, see 15 U.S.C. § 1681i. To prevail on a claim for
violation of § 1681e(b), a plaintiff must prove that: (1) his consumer report contains inaccurate
information; (2) the credit reporting agency did not follow reasonable procedures to assure
maximum possible accuracy of that consumer report; and (3) the plaintiff suffered damages.
Dalton, 257 F.3d at 415 (citing 15 U.S.C. § 1681e(b)). “A report is inaccurate when it is patently
incorrect or when it is misleading in such a way and to such an extent that it can be expected
to have an adverse effect.” Id. (citation and internal quotation marks omitted).
Here, Plaintiff alleges that Defendant “willfully and recklessly or negligently failed to
follow reasonable procedures to assure maximum possible accuracy of the consumer reports
it prepared and/or published pertaining to Plaintiff, in violation of 15 U.S.C. §1681e(b).”
(ECF No. 1 ¶ 68.) Plaintiff further alleges that, by reinserting information that it had
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previously deleted due to inaccuracy, Defendant violated § 1681i(a)(5)(B)(i). (Id. ¶ 73.)
According to Plaintiff, these actions, among other things, led to the misrepresentation of
Plaintiff’s creditworthiness and therefore Plaintiff was unable to obtain financing for the
purchase of a desired home. (Id. ¶¶ 76, 78.)
Though such actions and harm fall under the purview of the FCRA, Defendant
contends that there is no genuine dispute that Movement Mortgage denied Plaintiff financing
because of additional factors not implicating Equifax. (ECF No. 31 at 1.) According to
Defendant, discovery has “unequivocally established” that Plaintiff was denied financing
because Movement Mortgage was unable to obtain her tax transcripts from the IRS. (Id. at 1,
2.) Therefore, it argues, Plaintiff does not have Article III standing because the evidence in
the record demonstrates that Equifax was not the cause behind Plaintiff being denied
financing. (Id. at 14.) Accordingly, the Court must consider whether Plaintiff has provided
sufficient evidence to create a genuine dispute as to whether Defendant’s actions have a causal
nexus to Plaintiff’s claimed injury.
B. Article III Standing
The jurisdiction of a federal court is limited to cases and controversies under Article
III of the United States Constitution. U.S. Const. art. III, § 2. Standing to sue, therefore,
“ensure[s] that federal courts do not exceed their authority.” Spokeo, 136 S. Ct. at 1547. To
establish constitutional standing at the summary judgment stage, a plaintiff must set forth
specific facts by affidavit or other evidence that she: (1) suffered an injury in fact, (2) that is
fairly traceable to the defendant’s conduct complained of, and (3) that is likely to be redressed
by a favorable judicial decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (citations
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omitted). Plaintiffs bear the burden of establishing these elements. Id. at 561. In the instant
matter, Defendant focuses its argument for summary judgment on the second element:
whether the injury Plaintiff complains of is traceable to its conduct.
Defendant contends that, “without Plaintiff’s tax transcripts, it did not matter what
information did or did not appear in her Equifax credit report—Movement Mortgage would
not close the loan.” (ECF No. 31 at 15.) Despite Defendant’s argument, the FCRA does not
require that a credit agency’s action be the only reason that a plaintiff experiences harm. The
plain language of § 1681n and § 1681o both provide that civil liability may be found where
there is any “actual damages sustained . . . as a result of the [Defendant’s failure to comply]”
with the FCRA. 15 U.S.C. §§ 1681n, 1681o. The Fourth Circuit has not given clear guidance
on the extent to which a Plaintiff must demonstrate a causal nexus. However, district courts
in the Fourth Circuit have found that varying degrees of “some causal nexus” may be
sufficient. See Ali v. Equifax Info. Servs., LLC, No. 5:20-CV-173-FL, 2020 WL 6049908, at *3–
*4 (E.D.N.C. Oct. 13, 2020) (compiling cases that discuss the causal relationship a plaintiff
must show to demonstrate that a defendant can be found liable under 15 U.S.C. §§ 1681n or
1681o).
While Defendant argues that “Plaintiff cannot establish that her harm is traceable to
any inaccurate FCRA-violating information by Equifax,” (ECF No. 31 at 17), a genuine
dispute of material fact exists as to the reason, or reasons, that Plaintiff was denied funding by
Movement Mortgage. Defendant dedicates a portion of its argument to calling into question
the credibility of a letter signed by Plaintiff’s loan officer, Ms. Stephens-Bost, which states that
Movement Mortgage took the Equifax information into account in denying Plaintiff’s
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mortgage. (Id. at 9–10, 16–17.) Defendant argues that “Ms. Stephens-Bost’s specious letter
deserves no consideration.” (ECF No. 32 at 18.) Defendant furthered this position with the
filing a supplemental memorandum of law merely for the purpose of including information
obtained by Lisa Qualls of Movement Mortgage as well as a declaration from her to combat
the evidence pertaining to the letter signed by Ms. Stephens-Bost. (See generally id.) While it
appears that Plaintiff’s claim hinges on the credibility of Ms. Stephen-Bost and the relevant
letter, at the summary judgment stage the Court cannot weigh evidence or make witness
credibility determinations. Jacobs, 780 F.3d at 569.
Plaintiff has provided a letter signed by her loan officer that states that, in the final
stages of closing, Movement Mortgage was “unable to close on [Plaintiff’s] loan” “[d]ue to the
misinformation reported on her Equifax Credit Report.” (ECF No. 35-2.) Further, Plaintiff
has produced 30(b)(6) deposition testimony from Defendant that raises issue of the
reasonableness of its record keeping practices. (See ECF Nos. 35-13, 35-14.) It is not for the
Court at this stage to determine the credibility of Plaintiff’s witnesses or the weight to be given
to the evidence she offers, rather merely to determine whether there is a genuine dispute
between the parties. To that end, the Court finds that there is a genuine dispute as to whether
conduct by Defendant resulted in the harm claimed by Plaintiff and that a reasonable jury
could find that Defendant’s actions led to or contributed to it. Accordingly, the Court will
deny Defendant’s Motion for Summary Judgment.

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ORDER
IT IS THEREFORE ORDERED that Defendant’s Motion for Summary Judgment,
(ECF No. 30), is DENIED.
This, the 4th day of June 2021.
/s/ Loretta C. Biggs
United States District Judge 

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