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Childs v. Resident Collect, Inc.

United States District Court, N.D. Texas, Dallas Division

September 11, 2017

THOMAS S. CHILDS, Plaintiff,
v.
RESIDENT COLLECT, INC. d/b/a RESIDENT COLLECT; ALLIED COLLECTION SERVICES; RESIDENT CHECK, INC. d/b/a RESIDENT CHECK; ENCLAVE AT VALLEY RANCH; INVESTORS MANAGEMENT TRUST REAL ESTATE GROUP, INC., d/b/a IMT RESIDENTIAL, Defendants.

          MEMORANDUM OPINION AND ORDER

          Sam A. Lindsay United States District Judge.

         Before the court are Defendants' Motion for Summary Judgment (Doc. 92), filed September 30, 2016; Defendants' Motion for Rule 37 Sanctions (Doc. 94), filed October 11, 2016; and Defendants' Motion for Sanctions for Failure to Comply with Court Order (Doc. 109), filed December 2, 2016. After considering the motions, briefs, admissible summary judgment evidence, record, and applicable law, the court grants Defendants' Motion for Summary Judgment (Doc. 92) and dismisses with prejudice Plaintiff's claims under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. Further, with respect to Defendants' motions for sanctions, which were referred to the magistrate judge, the court vacates the orders of reference (Docs. 106, 112); and grants Defendants' Motion for Rule 37 Sanctions (Doc. 94) and Motion for Sanctions for Failure to Comply with Court Order (Doc. 109), to the extent herein set forth.

         I. Factual and Procedural Background

         Plaintiff Thomas S. Childs (“Plaintiff” or “Childs”), who is proceeding pro se, brought this action on February 6, 2015, against Defendants Resident Collect, Inc. d/b/a Resident Collect (“RCI”); Allied Collection Services (“Allied”); Resident Check, Inc. d/b/a/ Resident Check (“Resident Check”); Enclave at Valley Ranch (“Enclave”); and Investors Management Trust Real Estate Group d/b/a IMT Residential (“IMT”) (collectively, “Defendants”). In his Amended Complaint, the live pleading, Plaintiff asserts three causes of action against Defendants for alleged violations of §§ 1681s-2(b)(1), 1681e(b), and 1681i(a)(1) of the FCRA.

         In 2009, Childs was leasing and residing in an apartment at Enclave. Plaintiff's FCRA claims pertain to a final statement of charges assessed against Childs in September 2009 by Enclave after he gave notice on July 28, 2009 of his intent to vacate his apartment, and subsequently vacated the apartment on August 31, 2009.[1] Enclave assessed a final balance of $1, 914.62 against Childs, which consisted of a $533.87 insufficient notice fee; a reletting charge of $551.65; a concession-charge-back in the amount of $763 ($649 for February 2009 rent plus $19 per month in rent reductions from March 2009 to August 2009); and cleaning and water utility charges totaling $66.10. See Defs.' Summ. J. Mot. 4-5; Defs.' Summ. J. App. 11; Pl.'s Summ. J. Ex. B. The parties dispute whether Childs was required, under a January 26, 2009 apartment lease entered into by him and Enclave, to give thirty or sixty days' notice of his intent to vacate his apartment.

         After Childs failed to pay the amount due assessed under the final statement prepared by Enclave, the debt was turned over for collection to Allied, a division of RCI, and a $50 administrative fee was added on November 4, 2009.[2] A record of Plaintiff's account with Enclave and the collection efforts with respect to the account were maintained by RCI. On December 3, 2009, when Childs contacted Enclave managers Misty May (“May”) and Shannon Toone (“Toone”) about the “collection [that] ended up on [his] credit report, ” he was told by May and Toone that his account had been turned over to a collection agency and all communications and correspondence by him moving forward would need to be with the collection agency.

         Between December 2009 and January 2013, Plaintiff contacted Enclave and Allied a number of times to dispute the debt, request documents and proof of the validity of the debt, and request that his credit report be corrected to remove the reference to the outstanding debt. On May 13, 2010, May agreed to reduce Plaintiff's outstanding account balance to $624.90 ($599.90 plus a $25 administrative fee), even though Enclave believed the charges were valid. Plaintiff disputes the validity of the debt and contends that Defendants only agreed to reduce the amount of the debt after he asked several times for a copy of the “unit ledger” for his apartment. Defendants contend that the decision was made as an attempt to resolve quickly the dispute with Plaintiff and avoid further harassment by him. After Plaintiff's balance was reduced to $624.90, Plaintiff continued to dispute the reduced debt and filed a complaint with the Better Business Bureau against Enclave and Allied on June 1, 2010.

         On September 10, 2010, IMT regional manager Shawna King (“King”) attempted to reach a final settlement of the dispute with Plaintiff and agreed to forgive the $533.87 charge for insufficient notice, which further reduced the amount owed by Childs to $51.10 for a water bill, wall stains, and replacement of light bulbs. Defendants' records indicate that, on September 13, 2010, after receiving instructions from IMT, Allied adjusted the balance owed on Plaintiff's account to $76.10 ($51.10 plus a $25 administrative fee), and, on September 23, 2010, Allied modified Plaintiff's credit report with TransUnion and Experian, but it is unclear whether the modification that was made pertained to the adjustment in Plaintiff's debt to $76.10. The parties dispute whether, as part of the agreement between King and Plaintiff, Plaintiff was supposed to make the $51.10 payment before or after his credit reports were updated to reflect satisfaction of the balanced owed. There is no admissible summary judgment evidence that Plaintiff ever paid the $51.10. Plaintiff continued to dispute the remaining balance in writing and by telephoning Allied, and Plaintiff's credit reports continued to include a debt amount for Resident Collect, Inc. of $625 until February 6, 2013, when his credit report showed a reduced debt amount of $76.[3]

         Plaintiff filed his Original Complaint in this case in February 2015 against Defendants, alleging violations of the FCRA. Plaintiff also filed similar lawsuits against Resident Check and Enclave in the Northern and Western Districts of Texas, which were consolidated by former United States Chief District Judge Jorge A. Solis (“Judge Solis”) with this case. Plaintiff filed his Amended Complaint (“Complaint”) in this case on February 24, 2016.

         In his Complaint, Plaintiff contends that the debt amounts reported by Defendants to credit reporting agencies[4] are invalid and incorrect; that Defendants knew he did not owe the amounts reported; that Defendants failed to conduct a reasonable investigation and reinvestigation as required by the FCRA into the accuracy of the information reported after Plaintiff disputed the debt and failed to accurately update the information reported regarding the outstanding debt. Plaintiff contends that, as a result of Defendants' conduct, he suffered damages, including:

economic loss due to denial of financing or higher credit terms for furniture, clothes, household items, and vehicles, loss of opportunity to obtain credit, inability to secure rental housing, damage to reputation, and expenditure of considerable time and out-of-pocket expenses. Plaintiff also suffered physical and emotional distress including worry, fear, distress, frustration, humiliation, embarrassment, mental distress, loss of sleep, nervousness, shame, fright, grief, and injury to reputation, family, and sense of well-being.

         Pl.'s Am. Compl. 6. Plaintiff, therefore, contends that he is entitled to recover actual damages, attorney's fees, and costs. In addition, Plaintiff asserts that he is entitled to statutory and punitive damages for Defendants' allegedly willful or negligent refusal to follow reasonable procedures to assure the accuracy of information reported or conduct in engaging in a pattern of refusing to follow reasonable procedures in investigating and reinvestigating his disputes as required by the FCRA.

         The case was reassigned to the undersigned on April 27, 2016, after Judge Solis retired. On September 30, 2016, Defendants moved for summary judgment on the following grounds: (1) Plaintiff's claims are barred by applicable statute of limitations; (2) Defendants cannot be liable under the FCRA because none of them is a CRA, and Resident Check, Enclave, and IMT do not qualify as “furnishers” of information under the FCRA; (3) the amounts charged to Plaintiff were valid under the Lease and were properly reported; and (4) RCI and Allied, the only Defendants that furnished information regarding Plaintiff's account to consumer CRAs, satisfied their duties under the FCRA to reasonably investigate Plaintiff's disputes and reported and verified all disputes. In October and December 2016, Defendants moved for sanctions against Plaintiff pursuant to Federal Rule of Civil Procedure 37.

         II. Defendants' Summary Judgment Motion

         A. Summary Judgment Standard

         Summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine dispute of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). On the other hand, “if the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (emphasis in original). “[When] the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine [dispute] for trial.'” Matsushita, 475 U.S. at 587. (citation omitted). Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994).

         The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his or her claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to “sift through the record in search of evidence” to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992). “Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues that are “irrelevant and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

         B. Analysis

         Defendants moved for summary judgment on all three of Plaintiff's claims for alleged violations of the FCRA.

         1. Statute of Limitations

         Defendants contend that all of Plaintiff's FCRA claims are barred by the two-year statute of limitation set forth in 15 U.S.C. § 1681p. Defendants contend that Plaintiff's claims under the FCRA are barred because:

20. Based on Plaintiff's exhibits, Plaintiff knew of the information being reported as early as Nov. 21, 2009. Doc. 47 at 13. Based on Defendant's records, Plaintiff knew of the information being reported on his credit report as early as April 20, 2010. Exhibit A at Def. Apps. 14. Plaintiff made a demand on Defendant IMT and Enclave on May 12, 2010 addressing his “damages-to-date.” Exhibit A at Def. Apps. 25.
21. The limitations period “commences either from the time of injury to the consumer or from the date of the consumer's discovery of the error, whichever is later.” Hyde v. Hibernia Nat['l] Bank in Jefferson Par., 861 F.2d 446, 449 (5th Cir. 1988). Plaintiff commenced this present action on February 6, 2015. Doc. 2. Plaintiff knew of the information reported on Plaintiff's credit report and was complaining of damages several years before he commenced this action.
22. Plaintiff's amended complaint alleges damages done to him more than two years before he commenced this action. See generally Doc. 47. Plaintiff disputed his credit report more than two years before commencing this action. Doc. 47 at 13. Under the standard enumerated in Hyde, the limitations period for Plaintiff's FCRA action commenced more than two years before February 6, 2015, when he commenced this action. Plaintiff's action is barred by the statute of limitations, and summary judgment for the Defendants should be granted on all claims.

         Defs.' Summ. J. Mot. 11 (footnote omitted). Defendants also note that February 6, 2015, was the filing date of the first of three cases by Plaintiff against Defendants that were ultimately consolidated into one action.

         Plaintiff disagrees that his claims are barred by the FCRA's statute of limitations set forth in § 1681p and contends as follows:

44. Plaintiff knew that his credit reports had contained inaccuracies, but did not make any reference to FCRA or that the Defendants had violated the FCRA. Similar to Andrews v. Equifax Info. Servs. LLC, 700 F.Supp.2d 1276 (W.D. Wash. 2010), none of the events from early on clearly indicate that the Plaintiff knew of Defendants' violations of FCRA, nor that these issues were due to Defendants' failure to use reasonable procedures or to reinvestigate later on. Consequently, the only damages Plaintiff made a demand for had been the reimbursement of steep deposits in order to lease a new apartment, which in fact, did not relate to the FCRA. Defendants had reported various alleged debt amounts between 2010 to 2013, purposely re-aged the alleged debt account in 2013 to prolong the negative impact on Plaintiff's credit files, produced at least two (2) background screening reports on Plaintiff with credit assessment and recommendations as a credit reporting agency that prevented Plaintiff from leasing apartments, and more importantly, failed to provide documentation regarding any one of Plaintiff's disputes. The court has held that “FCRA provides damages when a bank or credit reporting agency fails to take certain steps once notice of a consumer dispute is received.” Broccuto v. Experian Information Solutions, Inc., 2008 WL 1969222 (E.D. Va., May 06, 2008) (NO. CIV.A. 3:07CV782HEH). “It is the failure to act . . . which creates the cause of action.” A new limitations period started each time the Defendant failed to act; therefore, the Plaintiff's claims are valid. Furthermore, every time a potential credit grantor pulled Plaintiff's credit report and either declined credit or charged a higher rate of interest because of Defendants' alleged debt, the statute of limitations is renewed. Plaintiff had been declined credit, declined for leasing opportunities, declined for credit limit increases, denied or charged additional deposits to lease apartments, and charged higher rates of interest through 2014 because of Defendants' alleged debt. Each of these events had renewed the statue of limitations. Exhibit O. Finally, Plaintiff could not have known about the Defendants' violations of the FCRA as a credit reporting agency until after the President of both businesses and Director of Information Services proved the Defendants are a CRA via affidavit during case consolidation and with separate testimony. (DC-16-07746 at 43:50). This discovery tacks onto the limitations period.

         Pl.'s Summ. J. Resp. 23-24.

         Section 1681p of the FCRA provides:

An action to enforce any liability created under this subchapter may be brought . . . not later ...

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