HUTCHINS v. MOUNTAIN RUN SOLUTIONS, LLC et al

Filing 19

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 11/17/21. 11/17/21 ENTERED AND COPIES E-MAILED.(jaa, )

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
K. TERRELL HUTCHINS
v.
MOUNTAIN RUN SOLUTIONS, LLC
et al.

:
:
:
:
:

CIVIL ACTION

NO. 20-5853

MEMORANDUM
Bartle, J.

November 17, 2021

Plaintiff K. Terrell Hutchins brings this action
against defendant Mountain Run Solutions, LLC, a debt collector,
for compensatory and punitive damages and declaratory relief
under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681,
et seq., and the Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C. §§ 1692, et seq.1

Specifically, plaintiff alleges that

Mountain Run has failed to comply with the FCRA by not properly
investigating a disputed debt incorrectly attributed to
plaintiff in violation of Mountain Run’s duties under 15 U.S.C.
§ 1681s-2(b) and that Mountain Run has violated the FDCPA by
communicating false credit information as prohibited by
15 U.S.C. § 1692e(8).

1.
Plaintiff also brought suit against defendant Experian
Information Solutions, Inc., a consumer reporting agency.
Experian was dismissed from this action with prejudice on
October 20, 2021 pursuant to a settlement.

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 2 of 12

Plaintiff filed suit on November 20, 2020 and
personally served Mountain Run with the summons and complaint on
December 1, 2020.

Plaintiff also served Mountain Run via

certified mail on January 8, 2021.

Mountain Run failed to enter

an appearance or answer the complaint.

The Clerk of Court

entered default against Mountain Run on January 27, 2021.
Before the court is the motion of plaintiff for entry
of default judgment with respect to damages pursuant to Rule
55(b) of the Federal Rules of Civil Procedure.

The court held a

hearing on the issue of damages at which plaintiff, his father,
and his girlfriend testified.

The court now makes the following

findings of fact and conclusions of law.
I
Plaintiff is a young attorney with a New York law
firm.

Originally from Philadelphia, he worked hard to put

himself through college at Pennsylvania State University and
then law school at St. John’s School of Law.

He has been in a

serious relationship with his long-time girlfriend, Jina Prince,
an elementary school teacher in Maryland, for a number of years.
They look forward to settling down and starting a family one
day.

Plaintiff’s position at a law firm with a salary of

$180,000 for the first time provides him with significant income
and an opportunity to build up a good credit history.

2

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 3 of 12

In May 2020, upon inspection of his credit report from
Experian, plaintiff became aware of a $4,019 debt listed by
Mountain Run for a home alarm system.
attributed to plaintiff.

The debt was incorrectly

The debt was incurred by plaintiff’s

father, Kelly T. Hutchins, who has the same name as plaintiff,
although plaintiff goes by K. Terrell Hutchins.

His father, who

is thirty years older than plaintiff, has a different date of
birth, a different social security number, and a different home
address from plaintiff at the time.

His father lives in

Philadelphia while plaintiff was residing in New York.
Plaintiff sent letters dated May 15, 2020, July 6, 2020, and
September 2, 2020 to Experian requesting that it notify Mountain
Run that a dispute on the debt exists and that it ask Mountain
Run to investigate the dispute.

Plaintiff also orally contacted

Mountain Run to correct the inaccurate information.
Experian transmitted plaintiff’s disputes to Mountain
Run via its Automated Consumer Dispute Verification (“ACDV”)
system on three separate occasions.

On June 12, 2020, Experian

described the reason for the dispute as “Not his/hers.

Provide

complete ID” and informed Mountain Run that plaintiff claimed
the debt and the underlying contract for that debt were entered
into by his father who shares the same name and that plaintiff
never signed a contract related to this account or authorized a
payment that was the basis for the reported debt.
3

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 4 of 12

On June 16, 2020, Experian again notified Mountain Run
of the dispute on the debt and described the dispute as “Not
his/hers.

Provide complete ID.”

In its September 14, 2020

notification to Mountain Run, Experian described the dispute as
“Belongs to another individual with same/similar name.
complete ID.”

Provide

Mountain Run responded to each notification

either the same day or within a few days and each time gave the
response that “Account information accurate as of date
reported.”
In June 2020, plaintiff sought financing to make his
first big financial purchase, his dream car, a used Range Rover.
However, plaintiff was denied credit.

He was informed that

there was a red flag on his account because of the outstanding
debt in issue.

On June 20, 2020 plaintiff was notified by his

financial institution, Police and Fire Federal Credit Union
(“PFFCU”), that it would not grant a loan to plaintiff for the
same reason.

PFFCU had previously extended him credit.

This

notice from PFFCU occurred after Mountain Run had twice been
notified that plaintiff disputed the debt and that Mountain Run
should verify the identification.
At the hearing on damages, plaintiff testified to the
humiliation and embarrassment he felt when he was told at the
car dealership that financing had been denied because of bad
credit and again by his own financial institution with whom he
4

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 5 of 12

had consistently made timely student loan payments.

Plaintiff

was humiliated after he worked hard and saved up money as a new
attorney to purchase his dream car and had built a rapport with
the salesman only to be told his credit was denied.

Plaintiff

was distressed by this inaccurate portrayal of who he is to the
salesman and creditors.
Plaintiff made written and oral efforts to contact
Experian and Mountain Run.

Mountain Run, however, failed to

take any steps to resolve the dispute.

This left plaintiff with

feelings of hopelessness and despair as the problem dragged on
after he had done all he could to build a stable financial
situation for himself and to resolve the inaccurate debt on his
report.
Once Mountain Run verified the debt as plaintiff’s for
the third time, he became anxious that, despite his best
efforts, this would never be resolved and that it would continue
to impact him as he tried to move forward as a young adult
making important financial decisions.

Plaintiff wants to buy a

car and a house so that he and Ms. Prince, a schoolteacher, can
get married and start a family in which he, as an attorney,
would be the primary earner.

However, plaintiff feels as if

that part of his life is on hold since he is unable to build up
credit for these major life transitions.

5

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 6 of 12

As a result, plaintiff feels trapped and experiences
this stress in his body through sweating, tightness in his neck,
and headaches.

He has lost sleep over this problem and takes

Aleeve or Tylenol to help with the physical pain.
Plaintiff’s father, Kelly Hutchins, witnessed
plaintiff start to change by becoming stressed and experiencing
headaches and back aches when plaintiff began to challenge this
debt.

Plaintiff’s girlfriend, Ms. Prince, saw plaintiff

experience many sleepless nights as he stressed over this debt
and spent much of his free time on the weekends making calls and
writing letters to rectify the matter instead of spending their
rare free time together.

She stated that it has been difficult

for them to move forward because credit is so important as an
adult.
II
Congress passed the FCRA to “promote efficiency in the
nation’s banking system and to protect consumer privacy.”
Cortez v. Trans Union, LLC, 617 F.3d 688, 706 (3d Cir. 2010).
The FCRA prohibits a person2 from furnishing information to a
consumer reporting agency if that person knows the information
is inaccurate and also requires that the person conduct an

2.
A “person” as defined in the FCRA includes, in part, “any
individual, partnership, [or] corporation.” 15 U.S.C.
§ 1681a(b).
6

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 7 of 12

investigation into disputed information and correct if it is
inaccurate.

15 U.S.C. § 1681s-2.

It also provides for civil

liability for noncompliance due to negligence, 15 U.S.C.
§ 1681o, and willfulness, 15 U.S.C. § 1681n.

Punitive damages,

in addition to actual damages, are permitted in an action under
the FCRA if a person “willfully fails to comply with any
requirement” imposed by the Act.

15 U.S.C. § 1681n(a).

Similarly, the FDCPA was enacted to “protect consumers
against debt collection abuses.”

15 U.S.C. § 1692(e).

A debt

collector is prohibited under the FDCPA from communicating to
anyone “credit information which is known or which should be
known to be false, including the failure to communicate that a
disputed debt is disputed.”

15 U.S.C. § 1692e(8).

By failing to answer or appear, Mountain Run has
conceded plaintiff’s allegations in his complaint, including
those in Count I that aver that Mountain Run willfully and/or
negligently violated the FCRA by failing to investigate
plaintiff’s dispute of the debt for $4,019 and by reporting
false credit information about plaintiff after proper notice of
this inaccuracy.

Mountain Run knew of plaintiff’s dispute and

was alerted on multiple occasions by Experian of the need to
investigate the matter further but failed to investigate or
correct the disputed debt.

Plaintiff seeks actual and punitive

damages.
7

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 8 of 12

Mountain Run has also conceded plaintiff’s allegations
in Count III that it violated the FDCPA by communicating
information it knows to be false after plaintiff disputed the
debt and attempted to prove that the debt was attributed to the
wrong person.3

On this count, plaintiff seeks actual damages.

The court therefore turns to the issue of damages.
Our Court of Appeals has explained that “damages for violations
of the FCRA allow recovery for humiliation and embarrassment or
mental distress even if the plaintiff has suffered no
out-of-pocket losses.”

Cortez, 617 F.3d at 719.

In addition,

“[t]ime spent trying to resolve problems with the credit
reporting agency may also be taken into account.”

Id.

Medical

testimony or evidence of a specific injury is not necessary to
recover damages.

Id. at 720.

Rather, the court explained that

“stress and anxiety caused by the defendant’s conduct . . . . is
precisely the kind of injury that Congress must have known would
result from violations of the FCRA.”

Id.

Plaintiff seeks $180,000 total in compensatory damages
under the FCRA and FDCPA.

Plaintiff suffered humiliation and

embarrassment when he was denied financing from multiple
institutions to purchase a car.

He has experienced anxiety,

distress, and overall hopelessness that this inaccurate debt on

3.
Count II relates to Experian and has therefore been
dismissed as part of the settlement with that defendant.
8

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 9 of 12

his credit report will persist despite multiple attempts to have
it corrected.

Plaintiff has attempted to resolve this issue for

over a year and a half while wasting much time and incurring
much stress and anxiety in the process.
This bad debt has prevented him from buying a car or a
house in order to eventually start a family.

Good credit,

particularly at plaintiff’s stage of life, is essential in
establishing a stable financial position and reputation.

This

debt has also damaged his reputation.
Plaintiff’s anxiety and stress have caused headaches,
tightness, sweating, and sleeplessness.

Plaintiff’s father and

girlfriend have both witnessed the toll the stress and
frustration have taken on plaintiff.
Stress on the consumer as a result of false reporting
of debt is exactly the kind of injury the FCRA was passed to
address.

See Cortez, 617 F.3d at 719.

The court finds that

plaintiff has established that he is entitled to compensatory
damages in the total amount of $180,000 under the FCRA and
FDCPA.
Plaintiff also seeks punitive damages against Mountain
Run under the FCRA.

While compensatory damages are intended to

redress the concrete loss plaintiff suffered, “punitive damages
serve a broader function; they are aimed at deterrence and
retribution.”

State Farm Mut. Auto. Ins. Co. v. Campbell, 538
9

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 10 of 12

U.S. 408, 416 (2003).

The FCRA allows for “such amount of

punitive damages as the court may allow” in instances of willful
noncompliance.

15 U.S.C. § 1681n.

Willful violations occur

when there are “knowing violations of the statute” as well as
“reckless disregard” for the statute’s terms.

Seamans v. Temple

Univ., 744 F.3d 853, 868 (3d Cir. 2014).
Mountain Run acted willfully by refusing to
investigate and remove the debt incorrectly associated with
plaintiff.

Plaintiff on numerous occasions provided Mountain

Run with sufficient information to demonstrate that he was not
the party responsible for the debt.

Mountain Run either

intentionally ignored this information or it acted with reckless
disregard to its duties under the FCRA to not provide
information it knew to be incorrect and to remedy disputed
information.

See 15 U.S.C. § 1618s-2.

Mountain Run’s willful

noncompliance allows for punitive damages here.

Moreover,

punitive damages will serve as a deterrence to Mountain Run’s
conduct in persistently ignoring evidence from a consumer that
the credit information is incorrect and failing to investigate
and correct that disputed information.
While there is no exact formula for an appropriate
punitive damages award, the Supreme Court has found that “few
awards exceeding a single-digit ratio between punitive and
compensatory damages, to a significant degree, will satisfy due
10

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 11 of 12

process.”

Campbell, 538 U.S. at 425.

Our Court of Appeals

affirmed the granting of $50,000 in compensatory damages in 2010
and $100,000 in punitive damages under the FCRA and found that
$100,000 “does not even begin to approach the outer limit of
punitive damages ‘aimed at deterrence and retribution’ allowed
by the Constitution.”

Cortez, 617 F.3d at 723 (quoting

Campbell, 538 U.S. at 416).

It explained that “[a]n award that

is twice the compensatory damages award falls well within the
Supreme Court’s standard for ordinary cases of a single-digit
ratio.”

Id. at 723-24.
The Supreme Court has laid out three guideposts for

evaluating punitive damages:

“(1) the degree of

reprehensibility of the defendant’s misconduct; (2) the
disparity between the actual or potential harm suffered by the
plaintiff and the punitive damages award; and (3) the difference
between the punitive damages award by the jury and the civil
penalties authorized or imposed in comparable cases.”

Campbell,

538 U.S. at 418.
When determining the reprehensibility of the
defendant’s misconduct as relates to the first guidepost, a
court should consider the following:
the harm caused was physical as opposed to
economic; the tortious conduct evinced an
indifference to or a reckless disregard of
the health or safety of others; the target
of the conduct had financial vulnerability;
11

Case 2:20-cv-05853-HB Document 19 Filed 11/17/21 Page 12 of 12

the conduct involved repeated actions or was
an isolated incident; and the harm was the
result of intentional malice, trickery, or
deceit, or mere accident.
Id. at 419.
Mountain Run’s misconduct was undoubtedly
reprehensible.

As noted above, it has taken a serious physical

toll on plaintiff and has endangered his credit in an age where
credit standing is all-important.
The second guidepost looks to the disparity between
the actual harm suffered and the punitive damages award.

A

one-to-one ratio of compensatory and punitive damages is
appropriate and does not violate any due process concerns.

It

is well within the single-digit ratio guidelines provided for by
the Supreme Court.
As for the third guidepost which examines the
difference between a jury punitive damages award and penalties
in similar cases, our Court of Appeals has explained that this
guidepost is “not useful in the analysis of punitive damages
here as there is no ‘truly comparable’ civil penalty to a FCRA
punitive damages award.”

Cortez, 617 F.3d at 724.

Accordingly, this court finds that plaintiff is
entitled to an additional $180,000 in punitive damages.

12