WILEY Y. DANIEL, Chief Judge.
THIS MATTER is before the Court in connection with Bank Of American's [sic] Motion For Summary Judgment [ECF No. 13], filed on March 1, 2012, and Plaintiff's Motion For Leave To Withdraw And To File An Amended Response Concerning BAC Home Loans Servicing LP Motion For Summary Judgment [ECF No. 48], filed on September 25, 2012. Because the plaintiff, Michael A. Collins, proceeds pro se, I referred all motions to Magistrate Judge Tafoya [ECF No. 17]. On October 30, 2012, Magistrate Judge Tafoya issued a Recommendation as to Bank of America's ("BA") motion for summary judgment and Collins's motion for leave to file an amended response to BA's motion for summary judgment [ECF No. 53]. The Recommendation is incorporated herein by reference. See 28 U.S.C. § 636(b)(1), FED. R. CIV. P. 72(b), D.C.COLO.LR. 72.1.
This suit arises from Collins's interactions with several credit reporting agencies ("CRA") in connection with the foreclosure of two investment properties that Collins purchased in 2005, which were funded by loans from Countrywide Home Loans ("Countrywide"). Collins offered the investment properties as collateral for the loans issued by Countrywide. Collins eventually failed to make mortgage payments, and the properties were foreclosed. On July 15, 2008, Collins filed a lawsuit in Colorado state court, pro se, against Countrywide, which was later removed to the United States District Court for the District of Colorado.
On December 29, 2011, Collins filed this suit in Colorado state court, pro se, against Bank of America in connection with negative credit reports which resulted from Countrywide's foreclosure on Collins's investment properties.
Magistrate Judge Tafoya denied Collins's motion for leave to file an amended response and recommends that I grant BA's motion for summary judgment and dismiss all of Collins's claims. ECF No. 53. The following is a summary of Magistrate Judge Tafoya's Recommendation.
Collins alleges that BA had an affirmative duty under the FCRA to report his debt as "disputed" because he spoke with representatives from CRAs such as Equifax, Experian, and Trans Union and challenged his debt. Magistrate Judge Tafoya correctly stated that a "furnisher," one who gives information to a credit reporting agency, has an affirmatively duty to report a debt as "disputed" only when the consumer, in this case, Collins, disputes the debt directly with the furnisher. 15 U.S.C. § 1681s-2(a)(3) ("[i]f the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer") (emphasis added). Here, BA is a furnisher because it gave information to CRAs such as Equifax, Experian, and Trans Union. Collins never contacted BA and disputed his debt. Rather, Collins disputed his BA debt with Equifax, Experian, and Trans Union. Because Collins did not dispute his BA debt directly with BA, Magistrate Judge Tafoya found § 1681s-2(a) does not apply to his claims.
Collins also argues that BA was unreasonable in its investigation of his debt because had BA conducted a proper investigation, it could have discovered that Collins challenged his debt and then
Collins alleges that BA violated the UCCC by failing to report his debt as "disputed." Collins also alleges that BA was per se negligent with respect to UCCC § 5-5-109.
With respect to Collins's allegation that BA failed to report his debt as disputed, Magistrate Judge Tafoya held that FCRA § 1681t(b)(1)(F) preempts that claim. Pursuant to § 1681t(b)(1)(F), no requirements or prohibitions may be imposed under the laws of any state with respect to subject matter related under "section 623 [15 USCS § 1681s-2], relating to the responsibilities of persons who furnish information to consumer reporting agencies..." Magistrate Judge Tafoya stated that "[s]ection 1681t(b)(1)(F) explicitly removes the subject matter of section 1681s-2 from state regulation ..." ECF No. 53, p. 18, ¶ 1. Thus, the FCRA preempts any state law claim regarding BA's alleged failure to report Collins's debt as disputed.
With respect to Collins's per se negligence claim, Magistrate Judge Tafoya held that FCRA § 1681h(e) preempts that claim. Pursuant to § 1681h(e):
Magistrate Judge Tafoya held that because the language of § 1681h(e) explicitly preempts any state law negligence claim, Collins's state law negligence claim cannot stand.
Thus, Magistrate Judge Tafoya found that the FCRA preempts Collins's Colorado state law claims brought under the UCCC.
Collins alleges common law claims of negligence and invasion of privacy. Magistrate Judge Tafoya found that FCRA § 1681h(e), the same FCRA section that preempts Collins's state law per se negligence claim under the UCCC, preempts his negligence and invasion of privacy claims. Section 1681h(e)'s language specifically precludes a consumer from bringing state law negligence and invasion of privacy claims, "except as to false information furnished with malice or willful intent to injure such consumer." 15 U.S.C. § 1681h (emphasis added). While Collins alleges BA's conduct was "willful and wantonly negligent," Magistrate Judge Tafoya held that Collins failed to prove any malice or willfulness on the part of BA. Because Collins failed to prove any malice or willfulness element, Collins's claims fall back into the general common law claims preempted by § 1681h(e). Thus, Magistrate Judge Tafoya concluded that the FCRA preempts Collins's negligence and invasion of privacy claims.
Magistrate Judge Tafoya also concluded that the doctrine of res judicata bars Collins's negligence and invasion of privacy claims. Magistrate Judge Tafoya held that to the extent that Collins's common law negligence and invasion of privacy claims relate to actions that were the basis of the 2008 lawsuit i.e., attempts to collect on Collins's 2005 loan, they are barred as a matter of law by res judicata.
Collins alleges that BA violated COLO. REV.STAT. § 6-1-105 by making false representations when it failed to report Collins's debt as disputed. Magistrate Judge Tafoya found that because Collins's CCPA claim is based on allegations that BA failed to report his debt as disputed, the claim fails under the prohibition found in FCRA § 1681t(b)(1)(F). This is the same FCRA provision that preempts Collins's state law claim under the UCCC as it relates to BA's failure to report his debt as disputed. Pursuant to § 1681t(b)(1)(F), no requirements or prohibitions may be imposed under the laws of any state with respect to subject matter related under "section 623 [15 USCS § 1681s-2], relating to the responsibilities of persons who furnish information to consumer reporting agencies..." Because this claim arises under a state statute, Magistrate Judge Tafoya found that the FCRA preempts any claim under the CCPA.
Magistrate Judge Tafoya also concluded that the doctrine of res judicata bars Collins's CCPA claim to the extent that such claim relates to any attempts to collect on the 2005 loans.
Collins alleges a claim for infliction of emotional and mental distress against BA. In order to prevail on a claim for infliction of emotional distress, a plaintiff must prove that: (1) the defendant's actions were extreme and outrageous; (2) the defendant's conduct was reckless or the defendant had the intent to cause the plaintiff
BA's conduct cannot be characterized as extreme and outrageous. As Magistrate Judge Tafoya noted in her Recommendation, BA reviewed Collins's debt at least six times and confirmed that it foreclosed on Collins's house because he defaulted on the loan. Nothing in the record shows that BA intended to cause Collins severe emotional distress. Thus, Collins cannot satisfy the element of this claim.
Magistrate Judge Tafoya also found that to the extent that Collins bases this claim on BA's collection attempts regarding his 2005 loans with BA, his infliction of emotional and mental distress claim is barred by res judicata.
Magistrate Judge Tafoya advised the parties that written objections were due within 14 days after service of a copy of the Recommendation. ECF No. 53, p. 26, ¶ 6. Despite this advisement, no objections were filed. No objections having been filed, I am vested with discretion to review the Recommendation "under any standard [I]deem[] appropriate." Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir.1991); see also Thomas v. Arn, 474 U.S. 140, 150, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) (stating that "[i]t does not appear that Congress intended to require district court review of a magistrate's factual or legal conclusions, under a de novo or any other standard, when neither party objects to those findings"). Nonetheless, though not required to do so, I review the Recommendation to "satisfy [my]self that there is no clear error on the face of the record."
Having reviewed the Recommendation, I am satisfied that there is no clear error on the face of the record. I find that Magistrate Judge Tafoya's Recommendation is thorough, well-reasoned, and sound. I also find that there are no genuine issues of material fact with respect to Collins's claims against BA. I agree with Magistrate Judge Tafoya that I should grant BA's motion for summary judgment and dismiss all claims against BA. Accordingly, it is
ORDERED that the Recommendation of Magistrate Judge Tafoya [ECF No. 53], filed on October 30, 2012, is
FURTHER ORDERED that Bank of America's Motion for Summary Judgment [ECF No. 13] is
KATHLEEN M. TAFOYA, United States Magistrate Judge.
This case comes before the court on "Bank of American's (sic) Motion for Summary Judgment" (Doc. No. 13, filed March 1, 2012 ["Mot."]), "Plaintiff's Verified Response to BAC Home Loans Servicing LP Motion for Summary Judgment" (Doc. No. 20, filed March 29, 2012 ["Resp."]), and
Given that this is Plaintiffs second lawsuit related to foreclosures on mortgages he undertook in 2005, some background regarding the first lawsuit is necessary to resolve issues in the current lawsuit. The first lawsuit, Collins v. Ace Mortgage Funding, LLC et al. ("2008 Lawsuit"), was brought pro se in state court and removed to federal court on August 12, 2008. (See 08-cv-01709-REB-KLM, Doc. No. 1.) In the 2008 Lawsuit, Plaintiff sued Countrywide Home Loans ("Countrywide") for negligence, breach of contract, breach of implied/express warranties, fraud and fraudulent misrepresentation, as well as violations of Colo.Rev.Stat. § 38-40-105 (unconscionable acts and practices in certain mortgage loan transactions), Colo.Rev.Stat. § 6-1-105 (deceptive trade practices), and breach of fiduciary duty. (See id.)
Plaintiffs claims in the 2008 Lawsuit arose from his purchase of two investment properties located at 17347 East Asbury Circle and 25107 East Park Crescent in Aurora, Colorado in 2005 ("2005 Loans") funded by loans from Countrywide. (See 08-CV-01709-REB-KLM, Recommendation of Magistrate Judge, Doc. No. 104 at 2 ["2008 Rec."].) According to Plaintiff, during the loan application process, a representative from Ace Mortgage Funding ("A.M.F.") (the now-bankrupt mortgage broker Plaintiff also sued in the 2008 Lawsuit) told Plaintiff that he would qualify for the first mortgage loan secured by the Asbury Circle property through Countrywide, and would then be able to refinance that loan within thirty days for an additional $30,000 necessary to repair the property. (Id. at 2-3.) Plaintiff contends that when he told the A.M.F. representative that he would be unable to purchase the Asbury Circle property unless it could be refinanced, the A.M.F. representative promised him that the refinance of the loan had already been approved. (Id. at 3.) Plaintiff ultimately applied for the original loan with Countrywide, and in doing so, signed a loan agreement including a clause that stated, "`Applicable Law' means all controlling applicable federal, state and local statutes." (Resp., Ex. 2 ¶ J.) The loan proceeds were used to purchase the Asbury Circle property, which collateralized the loan. (2008 Rec. at 3.) Separately, Plaintiff completed the loan application process for the Park Crescent property, and the proceeds of that loan were used to purchase that property, which, in turn, collateralized that loan. (Id. at 3-4.)
Within thirty days after the initial loan closed, Plaintiff contacted the A.M.F. representative, who informed him that the refinance loan had been denied because of issues with Plaintiffs credit report. (Id. at 3.) As a result of his inability to refinance, Plaintiff could not make improvements to the property. He claimed that this caused him not to be able to make the payments on the loan. (Id.) As a result of his failure to make his mortgage payments, the Asbury Circle property was foreclosed on April 27, 2006. (Id.) Plaintiff then tried to
On May 19, 2009, Magistrate Judge Kristen L. Mix recommended that Countrywide's motion for summary judgment be granted, and that Plaintiff's motion for judgment on the pleadings be denied. (Id. at 24.) The 2008 Recommendation was adopted by District Judge Robert E. Blackburn on June 23, 2009 over Plaintiffs objections, and the case was ordered administratively closed on August 28, 2009. (See 08-CV-01709-REB-KLM, Doc. Nos. 110, 119.)
Meanwhile, in July 2009, Plaintiff began sending letters to various credit reporting agencies ("CRAs"), disputing the manner in which the two loans appeared on his credit reports. (See Doc. No. 4, Exs. 1-23.) By this time, Defendant Bank of America ("BAC") had taken over from Countrywide. (See id.) As the bases for his disputes, Plaintiff told the CRAs that he did not owe a debt to BAC; that he, rather than BAC had closed the loan accounts; and that he had never been late making his payments. (Id.) As a result of the disputes Plaintiff sent to the CRAs, the CRAs sent inquiries to the lender on the loans, BAC. (Mot., Exs. 2, 6.)
Each time BAC received an inquiry from a CRA in response to Plaintiff's disputes, BAC claims it investigated and confirmed that the information reported was accurate. (See id.) The results of BAC's investigation were then reported to the corresponding CRA. (See id.) Defendant BAC never officially designated Plaintiff's debt as "disputed" when it relayed its findings back to the CRAs, since the CRAs were the recipients of Plaintiff's disputes in the first place.
Plaintiff ultimately filed the instant case pro se on December 29, 2011 in state court, and the case was once again removed by Defendant to federal court on February 13, 2012. (Doc. No. 1.) Plaintiff asserts eight different claims hinging on Defendant's failure to report his account as disputed. (Doc. No. 4 ["Compl."].) The first and second claims allege violations of the federal Fair Credit Reporting Act
In its Motion, Defendant BAC has moved for summary judgment on all claims. Defendant maintains that its actions were in compliance with FCRA, and alternatively, that Plaintiff has no private right of action for the conduct he alleges. (Mot. at 2.) Defendant also maintains that any common law torts and state statutory law claims are barred by preemption, as it applies to Defendant's reports to the CRAs, and by res judicata, as it applies to any conduct that was, or could have been, the subject of the 2008 Lawsuit. (Id. at 9-12.)
Plaintiff is proceeding pro se. The court, therefore, "review[s] his pleadings and other papers liberally and hold[s] them to a less stringent standard than those drafted by attorneys." Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir.2007) (citations omitted); see also Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (holding allegations of a pro se complaint "to less stringent standards than formal pleadings drafted by lawyers"). However, a pro se litigant's "conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based." Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991) (citations omitted). A court may not assume that a plaintiff can prove facts that have not been alleged, or that a defendant has violated laws in ways that a plaintiff has not alleged. Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983); see also Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir.1997) (a court may not "supply additional factual allegations to round out a plaintiff's complaint"); Drake v. City of Fort Collins, 927 F.2d 1156, 1159 (10th Cir.1991) (the court may not "construct arguments or theories for the plaintiff in the absence of any discussion of those issues").
Summary judgment is appropriate 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 moving party bears the initial burden of showing an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter." Concrete Works, Inc. v. City & County of Denver, 36 F.3d 1513, 1518 (10th Cir.1994) (citing Celotex, 477 U.S. at 325, 106 S.Ct. 2548). The nonmoving party may not rest solely on the allegations in the pleadings, but must instead designate "specific facts showing that there is a genuine
When ruling on a motion for summary judgment, a court may consider only admissible evidence. See Johnson v. Weld County, Colo., 594 F.3d 1202, 1209-10 (10th Cir.2010). The factual record and reasonable inferences therefrom are viewed in the light most favorable to the party opposing summary judgment. Concrete Works, 36 F.3d at 1517. Moreover, because Plaintiff is proceeding pro se, the court, "review[s] his pleadings and other papers liberally and hold[s] them to a less stringent standard than those drafted by attorneys." Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir.2007) (citations omitted); see also Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (holding allegations of a pro se complaint "to less stringent standards than formal pleadings drafted by lawyers"). At the summary judgment stage of litigation, a plaintiffs version of the facts must find support in the record. Thomson v. Salt Lake Cnty., 584 F.3d 1304, 1312 (10th Cir.2009). "When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007); Thomson, 584 F.3d at 1312.
Previously, Plaintiff attempted to amend his response after briefing was complete by submitting an "Amended and Supplemental Verified Response," an accompanying motion for leave to amend, and an accompanying motion for leave to exceed this district's usual page limit. (Doc. Nos. 43-45, filed September 19, 2012.) The court denied those motions in a minute order on the basis that they constituted a surreply, which local rule D.C.COLO. LCivR 7.1C does not allow. (See Doc. No. 47, filed September 20, 2012.) Plaintiff now appears to have submitted substantially the same documents in the guise of being allowed to substitute his new pleading for his previous response to Defendant's motion. Surveying the content of the instant motion, the court finds it is primarily rebuttal to Defendant BAC's argument that Plaintiff's claims are barred by res judicata. (See Doc. No. 48 at 8-15.) Plaintiffs submission is clearly a prohibited surreply.
The Tenth Circuit has held that a district court has discretion to permit a written surreply brief on a motion for summary judgment if the reply brief raises "new material," which may consist of new legal arguments or factual evidence. See Green v. New Mexico, 420 F.3d 1189, 1196 (10th Cir.2005). Defendant BAC raised the issue of res judicata in its original Motion, not for the first time in a reply. (See Mot. at 8-9, 11-12.) Therefore, Plaintiff had ample opportunity to respond to that argument. The court concludes that Defendant BAC would be prejudiced if Plaintiff's submissions were accepted because Defendant BAC would be required
Congress adopted FCRA with the understanding that "[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a)(4). To realize this goal, the statute requires that "consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce [...] in a manner which is fair and equitable to the consumer." 15 U.S.C. § 1681(b). Congress recognized that part of the process lies in the hands of "furnishers of information."
15 U.S.C. § 1681s-2(a)(3) (emphasis added). It is undisputed that Plaintiff did not "dispute" his loans directly with Defendant BAC prior to Defendant's furnishing information to CRAs, therefore rending section 1681s-2(a) inapplicable.
Section 1681s-2(b), on the other hand, outlines five specific duties that only arise in the event that a furnisher receives notice from a CRA of "a dispute with regard to the completeness or accuracy of any information provided [...] to a consumer reporting agency." 15 U.S.C. § 1681s-2(b)(1). That is clearly the situation here. When a CRA provides notice of a disputed credit entry it receives to a furnisher, this section mandates that the furnisher conduct an investigation into the dispute by reviewing all relevant information provided to the furnisher by the CRA, and report the results back to the CRA. 15 U.S.C. § 1681s-2(b)(1)(A)-(C). Should the furnisher discover that the information it has been providing to any CRA is incomplete or inaccurate, the furnisher must notify all other CRAs to which it provides information of the error, 15 U.S.C. § 1681s-2(b)(1)(D), and either modify, delete, or
There is no private right of action if a furnisher violates its affirmative duties under section 1681s-2(a), that is, when a consumer brings his dispute directly to the furnisher. Sanders v. Mountain America Federal Credit Union, 689 F.3d 1138, 1147 (10th Cir.2012); Pinson v. Equifax Credit Information Services, 316 Fed.Appx. 744, 751 (10th Cir.2009) (unpublished). See also Llewellyn v. Shearson Financial Network, Inc., 622 F.Supp.2d 1062, 1072 (D.Colo.2009). As the Tenth Circuit has explained, the private cause of action for reporting inaccurate information is limited to claims against a CRA. Sanders, 689 F.3d at 1147.
Nonetheless, because section 1681s-2(b) requires that information provided to CRAs not be inaccurate or incomplete after an investigation has been triggered, the question has arisen whether a duty to report information as "disputed" by the furnisher contained in section 1681s-2(a) is actionable under section 1681s-2(b). Some courts have held that it might be; however, an examination of those cases, relied on by Plaintiff in his Response, reveals that they are inapposite here.
In Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.2009), and Saunders v. Branch Banking & Trust Co. of VA, 526 F.3d 142 (4th Cir.2008), courts addressed the situation where a consumer had been disputing a debt directly with a furnisher, but the furnisher did not report the consumer's debt as having been disputed when he debt was negatively reported to the CRAs. In both cases, the plaintiff-consumer refused to pay an alleged debt to a banking institution, and took extensive steps to protest the validity of the alleged debt with the banking institution directly. When the debts began to appear on each plaintiffs credit reports in a negative fashion, the consumers began dispute processes through a CRA. Again, in each case, the banking institutions conducted their investigations mandated by section 1681s-2(b), and reported the alleged debts back as delinquent or "written off" without notifying the CRAs that the consumers had been disputing the debts directly with the furnisher.
Both the Fourth and Ninth Circuits held that this failure to report the debts as disputed gave rise to a private cause of action under section 1681s-2(b) because the reporting of the debt without the accompanying notation that it is disputed created a misleading impression. These courts held that while the initial failure to report the debt as disputed was not privately enforceable, the obligation to report the debt as disputed became privately enforceable once the section 1681s-2(b) verification process was triggered because the banking institutions were already on notice that the consumer was disputing the debt. The reasoning from the Fourth and Ninth Circuit in these cases does not significantly contribute to the present case because Plaintiff was not in the process of, and never was, formally disputing his debt with Defendant BAC before he began the dispute process through the CRAs. Plaintiff in this case is in an entirely different posture than the plaintiffs in Gorman and Saunders.
Plaintiff's only disputes went through CRAs, and such a process, by itself, does not independently trigger a furnisher's duty to report a debt as disputed merely because the debt has been disputed with the inquiring CRA. Plaintiff seeks to bypass this by arguing that his previous lawsuit provided the notice requirement to Defendant. (See Resp. at 3-4.) However, section 1681s-2(a)(8)(D) sets forth the specific requirements for submitting a notice of dispute. The court does not agree that the filing of a lawsuit meets the standard elaborated therein. More
Plaintiff alternatively maintains in claims one and two that Defendant was unreasonable in its re-investigation of his dispute requests. (Resp. at 9; Compl. ¶¶ 60, 69.) Plaintiffs argument is that each time he submitted a dispute through a CRA, Defendant could have, through a reasonable investigation, discovered that Plaintiff had previously submitted disputes on these same debts, and Defendant had previously failed to report the debts as disputed. Ergo, Defendant was negligently or willfully unreasonable in its investigation because it did not do so. For the reasons below, this argument also fails.
As outlined above, the section 1681s-2(b) duties are those of verification and correction that arise once a furnisher of information has received notice of a dispute from a CRA, and may be privately enforceable. Specifically, the furnisher is required to "conduct an investigation with respect to the disputed information." 15 U.S.C. § 1681s-2(b)(1)(A). Although a reasonableness requirement is not specifically contained in the statute, courts have held such a requirement to be implied. See Cousineau v. Unifund CCR Partners, No. 10-cv-03109-CMA-KLM, 2012 WL 3135687, at *3 (D.Colo. July 31, 2012). See also Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.2005); Johnson v. MBNA America Bank, NA, 357 F.3d 426 n. 2 (4th Cir.2004). Thus, the furnisher must perform its section 1681s-2(b) investigation reasonably to avoid liability to a consumer, but a plaintiff bears the burden of showing that the furnisher's investigation was unreasonable. See Cousineau, 2012 WL 3135687, at *3 (citing Chiang v. Verizon New England Inc., 595 F.3d 26, 27 (1st Cir.2010)).
"Summary judgment is proper when `the reasonableness of the defendant's procedures is beyond question.'" Cousineau, 2012 WL 3135687, at *3 (quoting Westra, 409 F.3d at 827). Consequently, the court looks to the procedures employed, rather than the results of the investigation. See Cousineau, 2012 WL 3135687; see also Gorman, 584 F.3d at 1161 ("the requirement that furnishers investigate consumer disputes is procedural"). The wording of the notice of dispute, as the furnisher receives it from the CRA, constrains the investigation: the furnisher need only respond to the specific dispute, as it is received. Cousineau, 2012 WL 3135687, at *3 n. 5; Westra, 409 F.3d at 827; Mann v. Experian Information Solutions, No. 02 C 7694, 2004 WL 432498, at *3-4 (N.D.Ill. 2004). Thus, a limited investigation may suffice for a limited dispute.
Plaintiff's submissions confirm the limited nature of his dispute. Although he may have had much deeper disagreements with Countrywide and Defendant BAC regarding the 2005 Loans, his disputes through the CRAs were limited to short, conclusory assertions that he was not responsible for the debt. (See Doc. No. 4, Exs. 1-23.) He did not provide any facts or documentation to support his claims.
More to the point, Plaintiff does not now, and did not then, offer any support that would absolve him of his liability on the underlying 2005 Loans. Plaintiff claims he "is not in agreement with the foreclosure no matter how you slice it." (Resp. at 6.) However, his disagreement with how the foreclosure came about, or how Countrywide handled the process regarding his modification request, does not transform the original debt into one that is "disputed." For credit reporting purposes, such a disagreement does not alter the underlying fact that Plaintiff incurred the original debt, did not make payments as required, his own failure to make promised timely payments caused foreclosure against the securing property, leaving no remaining debt balance, all as accurately reported to the CRAs. Such facts are undisputed and confirmed by the Magistrate Judge's findings in the 2008 Lawsuit, Colorado state court documents, and Plaintiff's own admissions. (See 2008 Rec. at 22-23; Mot., Exs. 3-5; Compl. ¶¶ 10-19.) Any genuine dispute Plaintiff had with respect to the 2005 Loans was the subject of the dismissed 2008 Lawsuit. (See 08-cv-01709-REB-KLM, Doc. Nos. 110, 111.) Accordingly, Plaintiff cannot and has not shown that the information Defendant furnished to the CRAs was factually inaccurate. See Chiang, 595 F.3d at 38 (holding that a plaintiff must show that the disputed information is inaccurate under section 1681s-2(b)).
In any event, because Defendant BAC's investigations pursuant to section 1681s-2(b) were reasonable, the court finds that it could incur no liability under section 1681s-2(b). Therefore, summary judgment is properly granted in Defendant's favor on Plaintiffs first and second claims.
In claim three, Plaintiff asserts that Defendant's failure to report his debt as disputed was a violation of Colorado's Uniform Consumer Credit Code ("UCCC"), Colo.Rev.Stat. § 5-5-101 et seq. (Compl. at 10-11.) In claim five, Plaintiff asserts that Defendant was per se negligent specifically with respect to UCCC § 5-5-109. (Id. at 11-12.) Plaintiff argues that by signing a loan agreement with Countrywide that included a clause stating the agreement would be bound by all applicable federal and state law, the UCCC governed both the original mortgage transaction and any subsequent credit reporting once Defendant BAC took over the loan. (Resp. at 10-11, 16.) Defendant maintains that FCRA preempts the UCCC, and that the UCCC was not intended to cover mortgage transactions. (Mot. at 7-8, 10.) For the reasons below, the court agrees with Defendant that the UCCC is preempted.
Congress's authority to enact FCRA comes from the Commerce Clause of the United States Constitution. See U.S. Const. art. I, § 8, cl. 2. The Supremacy Clause of the United States Constitution
In determining whether a state statute is preempted, "[t]he purpose of Congress is the ultimate touchstone." See Retail Clerks Int'l Ass'n v. Schermerhorn, 375 U.S. 96, 103, 84 S.Ct. 219, 11 L.Ed.2d 179 (1963). Federal statutes can preempt state statutes either by an express statement of preemption or by implication. "Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose." Altria Grp. v. Good, 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008); Tarrant Regional Water Dist. v. Herrmann, 656 F.3d 1222, 1241-42 (10th Cir.2011). FCRA contains such language.
Section 1681t(b)(1)(F) explicitly removes the subject matter of section 1681s-2 from state regulation, while section 1681h(e) concerns common law claims. However, in the Tenth Circuit, the exact degree to which FCRA preempts state law is still unsettled. In Stich v. BAC Home Loans Servicing LP, No. 10-cv-01106-CMA-MEH, 2011 WL 1135456 (D.Colo.2011), District Judge Christine M. Arguello discussed the three approaches to FCRA preemption that have arisen in district courts within the Tenth Circuit: a total preemption approach as to all state law; a temporal approach in which the court examines whether the claim arose after the furnisher received notice; and a statutory approach in which section 1681t(b)(1)(F) is applied to state statutory claims and section 1681h(e) is applied to state common law claims. Judge Arguello ultimately found the statutory approach to be most persuasive because it best effectuated the apparent intent of the statute to leave a limited number of common law claims intact while clearly preempting all statutory claims. See id. at *9. See also Greene v. Capital One Bank, No. 2:07-CV-687 TS, 2008 WL 1858882 (D.Utah 2008) (discussing at length the three preemption approaches and adopting the statutory approach). This court agrees with Judge Arguello.
Under the statutory approach, the court applies section 1681t(b)(1)(F) to Plaintiffs third and fifth claims. The conduct set forth in these two claims is explicitly regulated under section 1681s-2(b); therefore, the UCCC claims cannot stand. The court thus finds that summary judgment is properly granted in Defendant BAC's favor as to claims three and five.
In claim four, Plaintiff alleges common law negligence, and in claim seven, common law invasion of privacy. (Compl. at 11, 13.) Plaintiff, however, states contradictory positions as to what conduct applies to which claims. He alleges that the claims "are not based on information disclosed pursuant to the requirements of [FCRA]," (Resp. at 14), and that the claims actually accrue in relation to Defendant's unfair and unconscionable debt collection practices. (Id. at 13-14). Contrarily, however, Plaintiff concludes that he "seeks damages on each individual tort severally for each transmission of the same credit report." (Id. at 15.) Defendant maintains that FCRA preempts such claims, that Plaintiff has not put forth sufficient evidence to support such claims, and that to the extent such conduct was the subject of the 2008 Lawsuit, his claims are barred by res judicata. (Mot. at 8-9, 11-12.) The court finds that the doctrines of preemption and res judicata act as a bar to both possible subsets of conduct.
As previously discussed, FCRA contains express preemption language. Section 1681h(e) concretely addresses state common law actions and provides that
§ 1681h(e) (emphasis added). Following the statutory approach as identified by Judge Arguello and adopted herein, the only state common law claims against a furnisher that survive preemption are those based on malice or a willful intent to injure. See Greene, 2008 WL 1858882, *6; Stich, 2011 WL 1135456, at *9.
Plaintiff nonetheless maintains that "at this stage of the proceedings it is only necessary to plead that [Defendant's] conduct was willful and wantonly negligent. It is not necessary to prove it." (Resp. at 15.) In that sense, he apparently confuses the standard necessary to survive a motion to dismiss with that necessary to survive a motion for summary judgment. As this case is at the summary judgment stage, Plaintiff, as the nonmoving party, may not rest solely on the allegations in the pleadings, but must instead designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. 2548; see also Fed.R.Civ.P. 56(c). Here, he must designate specific facts showing there exists a genuine issue of malice and/or willful intent by BAC to injure Plaintiff in order to sustain his state common law claims.
The court has already concluded that Defendant was under no duty to report Plaintiff's debt as disputed, and that Defendant's investigations into Plaintiffs disputes through the CRA dispute process were reasonable. As the court has already concluded that Defendant was not in violation of FCRA as a matter of law, the malice and/or willfulness element cannot survive. Without this element, Plaintiffs fourth and seventh claims are relegated to the category of common law claims clearly intended to be preempted by section 1681h(e). Therefore, the court finds that summary judgment is properly granted in Defendant's favor as to Plaintiffs fourth and seventh claims, to the extent they concern Defendant's credit reporting conduct.
To the extent Plaintiff alleges his fourth and seventh claims for negligence and invasion of privacy apply to Countrywide's attempts to collect on the 2005 Loans, the court considers the application of the doctrine of res judicata. Though sometimes used to refer to the narrower concept of claim preclusion, res judicata traditionally subsumes both claim preclusion and issue preclusion, which is sometimes called collateral estoppel. See Carter v. City of Emporia, 815 F.2d 617 n. 2 (10th Cir. 1987). The Tenth Circuit has stated:
Frandsen v. Westinghouse Corp., 46 F.3d 975, 978 (10th Cir.1995) (internal citations and quotation marks omitted). "Both doctrines require that the party or parties against whom the earlier decision is asserted had a full and fair opportunity to litigate the claim or issue." SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1520 (10th Cir.1990) (citing Kremer v. Chemical Constr. Corp., 456 U.S. 461, 481 n. 22, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982)).
Under Colorado law, res judicata "bars relitigation not only of all issues actually decided, but of all issues that might have been decided." Pomeroy v. Waitkus, 183 Colo. 344, 517 P.2d 396, 399 (Colo.1973); State Engineer v. Smith Cattle, Inc., 780 P.2d 546, 549 (Colo. 1989). Res judicata operates as a bar to a second action on the same claim as one litigated in a prior proceeding where four elements are met: (1) finality of the first judgment, (2) identity of the subject matter, (3) identity of claims for relief, and (4) identity of or privity between parties to the action.
First, Plaintiff's 2008 Lawsuit was decided on its merits. All claims against Countrywide were either dismissed for failing to state a claim or summary judgment was granted in Countrywide's favor. (See 2008 Rec. at 15-16, 23.) Despite Plaintiffs contentions that "[j]est (sic) because a court dismissed a complaint because of a technicality does not mean that the issues alleged in the suit were invalid," (Resp. at 7), the 2008 Recommendation and its subsequent adoption constituted a judgment on the merits. See, e.g., Federal Deposit Insurance Corp. v. Paul, 735 F.Supp. 375, 380 (D.Utah 1990) ("[a] motion to dismiss for failure to state a claim upon which relief can be granted [is a] dismissal on the merits and is accorded res judicata effect"); C.R.P.C. 41(b)(1) ("a dismissal under this section (b) and any dismissal not provided for in this Rule, other than [for grounds not applicable here], operates as an adjudication upon the merits").
Second, the 2008 Lawsuit involved an identity of parties because the court finds Countrywide and Defendant BAC were in privity. Under Colorado law, "`[p]rivity between a party and a non-party requires both a substantial identity of interests and a working or functional relationship ... in which the interests of the non-party are presented and protected by the party in the litigation.'"
Third, to the degree Plaintiffs claims are based on actions surrounding the foreclosure, such actions were the subject-matter of the 2008 Lawsuit. Magistrate Judge Mix found in the 2008 Recommendation that Plaintiff was in default on the 2005 Loans; that the modified payment schedule Plaintiff entered into authorized Countrywide to foreclose on the property if he defaulted, whether or not he was given a chance to cure; and that Countrywide's failure to discuss options did not forgive Plaintiffs default. (See 2008 Rec. at 22.) Thus, to any degree Plaintiffs fourth and seventh claims in some way stem from Countrywide's collection efforts on the debt, they were clearly encompassed within the prior lawsuit.
Fourth, there is an identity of claims for relief between the 2008 Lawsuit and the extent to which Plaintiff seeks to apply his fourth and seventh claims to Countrywide's collection efforts. "The same claim or cause of action requirement is bounded by the injury for which relief is demanded, and not by the legal theory on which the person asserting the claim relies." Farmers High Line Canal & Reservoir Co. v. City of Westminster, 975 P.2d 189, 199 (Colo.1999). Plaintiff seeks relief here for the same injury that he sought in 2008; claiming that his credit was harmed by Countrywide's conduct during the foreclosure process on the 2005 Loans.
Accordingly, to the extent that Plaintiff's fourth and seventh common law claims are based on actions relating to attempts to collect on the 2005 Loans, they are barred as a matter of law by res judicata.
Plaintiff's sixth claim alleges that Defendant violated the Colorado Consumer Protection Act ("CCPA"), Colo.Rev. Stat. 6-1-101 et seq. (Compl. at 12-13.) Particularly, Plaintiff maintains that Defendant violated Colo.Rev.Stat. § 6-1-105 by making false representations when it failed to report his debt as disputed. (Id. at 12.) The facts underlying the CCPA claim, however, rest on Countrywide's attempts to collect on the 2005 Loans rather than on FCRA reporting. (See id. ¶ 91.) Therefore, the court will treat this as a hybrid claim, subject to analysis under preemption and res judicata.
First, applying the statutory approach to FCRA preemption, Plaintiffs CCPA claim for Defendant's failure to report the 2005 Loans as disputed is barred as arising from a state statute, thus falling within the boundaries of preemption outlined by section 1681t(b)(1)(F). See Greene, 2008 WL 1858882; Stich, 2011 WL 1135456. Second, Plaintiff's CCPA claim is barred by res judicata as it applies to any attempts to collect on the 2005 Loans as encompassed in the 2008 Lawsuit. Therefore, summary judgment is properly granted in Defendant's favor as to Plaintiff's sixth claim.
Plaintiff's eighth, and final, claim is for infliction of emotional and mental distress. (Compl. at 13-14.) It appears that Plaintiff asserts emotional distress claims in relation to both Defendant BAC's reporting of credit information, and Countrywide's attempts to collect on the 2005
Under Colorado law, a claim based on intentional infliction requires (1) extreme and outrageous conduct, (2) that was engaged in recklessly, or with the intent of causing severe emotional distress, and (3) that caused the plaintiff severe emotional distress. Culpepper v. Pearl St. Bldg., Inc., 877 P.2d 877, 882 (Colo.1994). "Outrageous conduct is defined as conduct that is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id. (quoting Destefano v. Grabrian, 763 P.2d 275, 286 (Colo.1988)) (internal quotation marks omitted). To establish a claim for negligent infliction, "a plaintiff must show that the defendant's negligence created an unreasonable risk of physical harm and caused the plaintiff to be put in fear for his or her own safety, that this fear had physical consequences or resulted in long-continued emotional disturbance, and that the plaintiffs fear was the cause of the damages sought." Draper v. DeFrenchi-Gordineer, 282 P.3d 489, 496 (Colo.App.2011). For negligent infliction claims, the plaintiff must also show that he either suffered physical injury or was in the "zone of danger." Culpepper, 877 P.2d at 880 n. 3.
The court has already found that Defendant's credit reporting was not negligent because it was in compliance with FCRA. To the extent that Plaintiffs eighth claim arises from collection attempts regarding the 2005 Loans, for the same reasons set forth above in relation to Plaintiffs fourth, sixth and seventh claims, the court finds this claim is barred as a matter of law by the doctrine of res judicata.
Within fourteen days after service of a copy of the Recommendation, any party may serve and file written objections to the Magistrate Judge's proposed findings and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir.1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. "[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review." United States v. One Parcel of Real Prop. Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir.1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir.1999) (a district court's decision to review a magistrate judge's recommendation de novo despite the lack of an objection does not preclude application of the
October 30, 2012.
