Levine v. JP Morgan Chase & Co et al

Filing 38

ORDER signed by Judge Rudolph T. Randa on 7/8/2014 GRANTING 26 Defendant's Motion for Summary Judgment. Any motion for attorney's fees by defendant to be filed within 30 days of the date of this Order. If no motion is filed, judgment will be entered at expiration of 30 day time period. (cc: all counsel) (cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
MICHAEL G. LEVINE,
Plaintiff,

-vs-

Case No. 13-C-498

JPMORGAN CHASE & CO.,
Defendant.

DECISION AND ORDER
Michael Levine claims that JPMorgan Chase & Co. (―Chase‖) failed to conduct a
reasonable investigation into alleged credit report inaccuracies in violation of the Fair
Credit Reporting Act, 15 U.S.C. § 1681. Chase moves for summary judgment. For the
reasons that follow, this motion is granted.
I.

Background
Levine is a real estate lawyer who maintains an office at 111 East Wisconsin

Avenue in downtown Milwaukee, a building commonly known as the Chase Bank
building. One of Levine‘s companies is an S-Corporation called Next Generation Real
Estate. On or about July 10, 2009, Levine and Next Generation entered into a Credit Sale
Agreement to finance the purchase of a 2007 Mercedes Benz E350. Levine signed the
agreement in his personal capacity and also on behalf of Next Generation. Pursuant to the
agreement, Levine and Next Generation were required, jointly and severally, to make 54
monthly payments of $538.01. These payments were due on the 24th of each month,
starting September 24, 2009.

The Credit Sale Agreement was assigned to Chase. Chase sent monthly account
statements and payment reminders to Levine at his business address as a courtesy. Such
reminders are not required by the agreement. The first monthly statement was included in
Chase‘s ―welcome packet.‖ Among other things, the welcome packet explained how to
read the monthly statement and how to make payments. It also stated in a boxed-in
section: ―Notice of Furnishing Negative Information to Credit Bureaus: We may
report information about your account to credit bureaus.

Late payments, missed

payments, or other defaults on your account may be reflected in your credit report.‖ This
warning was repeated on all subsequent monthly statements.
Levine claims that he never received the welcome packet. Moreover, Levine
claims that he did not receive monthly billing statements for September or October 2012,
and that he didn‘t receive the November statement until December 6 via mail. Levine also
claims that he enrolled in online banking in or around July 2012, but Chase has no record
of such a request. Levine did not make the September and October payments until
November 8, 2012. Chase representatives placed three collection calls — on October 20,
October 29, and November 3 — after his account was past due but before reporting the
delinquencies. Levine has no record or recollection of receiving such calls. Levine claims
that he was completely unaware of the missing payments until he saw a copy of his credit
report and discovered the missing payments.
At the end of each month, Chase automatically submits borrowers‘ payment status

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for that month to the credit bureaus. If a borrower failed to make a payment, the report
reflects that fact. Chase understands its obligation to accurately report credit information
to credit bureaus and understands that it cannot, for instance, report to the credit bureaus
that a payment was timely made when, in fact, it was delinquent. Consistent with this
policy and practice, Chase reported Levine‘s failure to make his September and October
2012 payments to the credit bureaus. These missed payments resulted in Chase reporting
to the credit bureaus, under its standard procedure, that Levine‘s account was delinquent
by more than 30 days (a code ―71‖ on the Credit Bureau Report). Subsequent reports
reflected one delinquent payment of more than thirty (30) days past due as of December 1,
2012, and two as of January 1, 2013.
In November 2012, someone at U.S. Bank told Levine that his credit score was
too low to refinance a commercial real estate project. The real estate project had no
current debt. Rather, Levine wanted to borrow against the properties and use the cash to
pay down other lines of credit. Levine claims that the only blemishes on his credit report
were the missed payments on the Credit Sale Agreement. Therefore, Levine blames
Chase for his lower-than-expected credit score.
On November 8 and 9, 2012, Levine complained to the Chase call center that his
credit history should be changed as a ―courtesy.‖ Levine explained that he did not receive
billing statements for September or October and that he relied upon the statements to
make his monthly payments. Chase responded via letter dated November 16, 2012, which

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stated that ―payments are reported by Chase Auto Finance to the Credit Reporting
Agencies as they are actually received.‖ Because Levine actually missed payments in
September and October, and Levine‘s complaint could not be verified, Chase could not
change its reporting information.
On December 6, 2012, Levine again complained to Chase directly about his
delinquent payments and asked Chase to waive the payment delinquencies in an attempt to
fix his credit score. This generated a second declination letter which stated that Levine‘s
dispute was ―resolved.‖ Levine continued to call Chase in an attempt to dispute the
delinquent payments and his credit score. After investigating further, Chase confirmed
that Levine‘s September and October payments were late, and Chase could not waive the
delinquency because Chase did not err when it sent accurate payment information to the
credit bureaus. On January 8, 2013, Chase closed its investigation regarding Levine‘s
dispute.
In addition to the disputes Levine brought to Chase directly, he also filed a total of
six (6) indirect complaints with the credit bureaus.

In doing so, the credit bureaus

generated automated computer dispute verification requests, also known as ―ACDVs,‖
requesting that Chase verify its reports to the Bureaus. In response to these indirect
complaints, Chase assigned each complaint to a Chase employee in the credit department,
known as a processor, who verified the reported information and, where appropriate, made
modifications to Levine‘s reported account status. The account was coded to reflect that it

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was ―in dispute‖ by the consumer.
Specifically, on December 7, 2012, Chase modified the information reported to
the credit bureaus on Levine‘s account to reflect a compliance condition code of ―CCC
updated to XH‖ – which means the account was ―in dispute‖ but resolved by the credit
furnisher. A third party reading of Levine‘s credit report after Chase made modifications
in response to Levine‘s indirect dispute complaints would note that the account was coded
delinquent as of October 31, 2012 (because the September 1 payment was more than thirty
(30) days past due). As of November 30, 2012, the account had been brought current but
the September delinquent payment appeared in the payment history. As of December 31,
2012, two delinquent payments were reflected in the account history, but the account had
been coded ―XH‖ as ―in dispute‖ by the customer and resolved by the credit furnisher.
These modifications to the information Chase reported to the bureaus on Levine‘s account
were reinvestigated, verified and confirmed by Chase‘s credit bureau team lead.
II.

Analysis
Summary judgment should be granted 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). The plain language of the rule ―mandates the entry of
summary judgment, after adequate time for discovery and upon motion, against a party
who fails to make a showing sufficient to establish the existence of an element essential to
that party's case, and on which that party will bear the burden of proof at trial.‖ Celotex

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Corp. v. Catrett, 477 U.S. 317, 322 (1986). The Court must accept as true the evidence of
the nonmovant and draw all justifiable inferences in his favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). Summary judgment is appropriate only if, on the record
as a whole, a rational trier of fact could not find for the non-moving party. Rogers v. City
of Chi., 320 F.3d 748, 752 (7th Cir. 2003).
When a consumer reporting agency provides notice of a dispute, the furnisher
(i.e., Chase) must (1) conduct an investigation with regard to the disputed information; (2)
review all relevant information provided to it by the consumer reporting agency; (3) report
the results of the investigation to the agency; and (4) if the information is found to be
inaccurate or incomplete, report the results to all consumer reporting agencies to which it
originally provided the erroneous information.

15 U.S.C. § 1681s-2(b).

The

reasonableness of this type of investigation is a ―factual question normally reserved for
trial; however, summary judgment is proper if the reasonableness of the defendant‘s
procedures is beyond question.‖ Westra v. Credit Control of Pinellas, 409 F.3d 825, 827
(7th Cir. 2005).
As an initial matter, Levine‘s opposition to Chase‘s motion for summary judgment
amounts to his unsupported assertion that Chase‘s procedures were unreasonable. Levine
must do more. For example, the First Circuit granted a furnisher‘s motion for summary
judgment on a § 1681s-2(b) claim because the plaintiff ―presented no evidence that the
procedures employed . . . to investigate the reported disputes were unreasonable.‖ Chiang

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v. Verizon New England, Inc., 595 F.3d 26, 38 (1st Cir. 2010). By contrast, the ―only
evidence‖ on that point was an ―employee‘s uncontested affidavit detailing the
procedures‖ which were, ―on their face, not unreasonable.‖ Id. So it is here. Levine
didn‘t even depose the credit specialists who investigated his complaint.

Chase‘s

procedures, which it followed in the instant case, are reasonable on their face. ECF No.
28, Declaration of Crystal Urista, Chase‘s CB Indirect Dispute Procedures, Ex. C.
More than that, in evaluating Levine‘s claim, it is important to note that Chase is
required to report delinquencies. § 1681s-2(a)(5). Levine cannot and does not dispute
that his account was delinquent. Levine insists that the delinquencies weren‘t his fault
because he relied upon Chase‘s ―custom and practice‖ of sending monthly statements as a
reminder that prompted him to make his monthly payment. In this context, it is difficult to
fathom how Chase‘s investigation could be considered unreasonable. The ―pertinent
question‖ is whether the furnisher‘s procedures were ―reasonable in light of what it
learned about the nature of the dispute from the CRA‘s notice of dispute.‖ Gorman v.
Wolpoff & Abramson, LLP, 584 F.3d 1147, 1157 (9th Cir. 2009). Chase‘s investigation
simply confirmed that Levine failed to make timely payments that were due and owing.
Edeh v. Midland Credit Mgmt., Inc., 748 F. Supp. 2d 1030 (D. Minn. 2010) (if a furnisher
―conducts an investigation, that investigation results in verification of the completeness
and accuracy of the challenged information, and the challenged information is, in fact,
complete and accurate, then . . . § 1681s-2(b) has [not] been violated‖) (citing Chiang, 595

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F.3d at 37-38) (emphasis in original).
Beyond inaccuracy, a furnisher‘s duty to issue a corrective report is triggered if
the investigation ―finds that the information is incomplete or inaccurate.‖

§ 1681s-

2(b)(1)(D) (emphasis added). ―In so mandating, Congress clearly intended furnishers to
review reports not only for inaccuracies in the information reported but also for omissions
that render the reported information misleading. Courts have held that a credit report is
not accurate under FCRA if it provides information in such a manner as to create a
materially misleading impression.‖ Saunders v. Branch Banking & Trust Co. of Virg., 526
F.3d 142, 148 (4th Cir. 2008). Thus, a credit entry can be ―incomplete or inaccurate‖
under the FCRA ―because it is patently incorrect, or because it is misleading in such a way
and to such an extent that it can be expected to adversely affect credit decisions.‖
Gorman, 584 F.3d at 1164 (quoting Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890,
895 (5th Cir. 1998)).
What Levine really seems to want is an admission that Chase is at fault for his
missing payments.

Such an admission, in and of itself, would create a materially

misleading impression. On the other hand, Chase‘s report about Levine‘s delinquencies
was not patently incorrect, nor was it materially misleading. As one court observed, ―it
cannot be the case that a furnisher violates the FCRA every time it investigates a debt,
foreclosure, or similar information but fails to report that the debt or foreclosure is
disputed by the consumer.‖ Mason v. Chase Home Finance, LLC, No. 11-04144 (SRC),

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2014 WL 37219, at *5 (D.N.J. Jan. 6, 2014). Levine‘s payments were due monthly, and
he made those payments repeatedly over the life of the loan.

Levine‘s duty to make a

payment was not somehow excused if he did not receive a statement for that month.
Levine‘s dispute over the debt is completely meritless, and a furnisher ―does not report
‗incomplete or inaccurate‘ information within the meaning of § 1681s-2(b) simply by
failing to report a meritless dispute, . . .‖ Gorman at 1163. This is because ―reporting an
actual debt without noting that it is disputed is unlikely to be material misleading. It is the
failure to report a bona fide dispute, a dispute that could materially alter how the reported
debt is understood, that gives rise to a furnisher‘s liability under § 1681s-2(b).‖ Id.
(emphasis added). Chase‘s report is not rendered ―incomplete or inaccurate‖ by virtue of
Levine‘s disingenuous dispute.
Even if Chase‘s investigation was somehow considered unreasonable, Levine
failed to create an issue of fact as to whether this alleged violation actually harmed him.
―Without a causal relation between the violation of the statute and the loss of credit, or
some other harm, a plaintiff cannot obtain an award of ‗actual damages.‘‖ Crabill v.
Trans Union, L.L.C., 259 F.3d 662, 664 (7th Cir. 2001). Levine has no idea how his credit
score was calculated, and he offered exactly zero evidence in that regard. Also, the only
evidence in the record regarding the alleged impact of Levine‘s lower credit score is U.S.
Bank‘s November 8, 2012 denial of his re-financing application. At that point, Chase‘s
duty to investigate under § 1681s-2(b) had yet to be triggered. Chase‘s later investigation,

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such as it was, could not have caused this harm.1 Aside from this temporal limitation, ―it
is difficult to see how a plaintiff could prevail on a claim for damages based on an
unreasonable investigation of disputed data without a showing that the disputed
information was, in fact, inaccurate.‖ Chiang at 38.
Finally, Chase notes that it will be moving for attorney fees under §1681n(c),
which provides for such an award upon a finding that an ―unsuccessful pleading, motion,
or other paper filed in connection with an action under this section was filed in bad faith
or for purposes of harassment, . . .‖ The Court stretched pretty far to find a plausible
claim in Levine‘s various pleadings, but as it turns out, Levine has no case. Indeed, the
summary judgment record strongly suggests that Levine‘s animosity towards Chase
blinded him to the reality that he has no one to blame but himself for his delinquent car
payments.

The Court will refrain from entering judgment until Chase‘s motion for

attorney fees, if filed, is resolved. Passananti v. Cook Cnty., 689 F.3d 655, 661 (7th Cir.
2012) (―district courts have ample discretion to manage their cases and to delay entry of
judgment if there are sound reasons to do so‖).
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
1.

Chase‘s motion for summary judgment [ECF No. 26] is GRANTED; and

1

Levine also failed to mitigate his damages because, so far as the Court is aware, Levine did
not renew his U.S. Bank application or pursue financing at other lending institutions once the
payment delinquencies were disputed on his credit report.

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2.

Chase‘s motion for attorneys‘ fees should be filed within thirty (30) days

of the date of this Order. If no such motion is filed, the Court will enter judgment at the
expiration of this time period.
Dated at Milwaukee, Wisconsin, this 8th day of July, 2014.
BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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