United States District Court, N.D. Texas, Dallas Division
THOMAS S. CHILDS, Plaintiff,
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
Lindsay United States District Judge.
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
Factual and Procedural Background
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
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. 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.
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. 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.
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,
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
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.
Complaint, Plaintiff contends that the debt amounts reported
by Defendants to credit reporting agencies 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
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.
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.
Defendants' Summary Judgment Motion
Summary Judgment Standard
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.
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).
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.
moved for summary judgment on all three of Plaintiff's
claims for alleged violations of the FCRA.
Statute of Limitations
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.
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.
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.
disagrees that his claims are barred by the FCRA's
statute of limitations set forth in § 1681p and contends
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.
Summ. J. Resp. 23-24.
1681p of the FCRA provides:
An action to enforce any liability created under this
subchapter may be brought . . . not later ...