ANTHONY J. TRENGA, District Judge.
This matter is before the Court on Defendant's Motion for Summary Judgment [Doc. Nos. 32, 47, 48] and Plaintiff's Motion for Dismissal of Count IV of Complaint [Doc. No. 74] (the "Motions"). A hearing on the Motions was held on June 26, 2015, following which, the Court took the Motions under advisement. Upon consideration of the Motions, the memoranda filed in support thereof and in opposition thereto and the argument presented by counsel at the hearing, the Court concludes that there are no genuine issues of material fact and the Defendant is entitled to summary judgment as a matter of law. Defendant's Motion for Summary Judgment is therefore GRANTED and Plaintiff's Motion for Dismissal of Count IV is DENIED as moot.
Defendant Pinnacle Credit Services, LLC ("Pinnacle" or "Defendant") is in the business of buying delinquent debts at a steep discount [Doc. No. 1-1 ¶¶ 4, 6] ("Compl."). This dispute revolves around Defendant's handling of a delinquent credit card account in Plaintiffs name. The Complaint alleges multiple violations by Defendant of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. (Counts I and II), and the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. (Counts III and IV), as well as common law defamation (Count V), as a result of what information Defendant
In March 2007, Plaintiff Keith Saylor ("Plaintiff" or "Saylor") opened a Home Depot branded Citibank business credit card account in his own name and used the account to make purchases for his carpentry business ("the account"). Saylor Dep. 16:6-19, May 4, 2015, Doc. No. 32-3. Plaintiff did not use the account for personal, family, or household purposes. Saylor Dep. 18:11-15. The last payment received by Citibank was in May 2008. Castle Decl. ¶ 11, Doc. No. 33-1. After Saylor became delinquent on his payments, Citibank charged off the account in December 2008 and sold the charged off account to Fourscore Resource Capital LLC ("Fourscore") in February 2010. Castle Decl. ¶ 11, Ex. A ¶ 7. At that time, the unpaid balance on the account was approximately $28,700. Castle Decl., Ex. A ¶ 5. In June 2010, Fourscore transferred the account to Pinnacle.
In October 2013, Saylor mailed credit dispute letters to TransUnion, Equifax, and Experian (collectively, the "credit reporting agencies" or "CRAs"), disputing, as Pinnacle reported, that with accruing interest the account had a past due balance in excess of $37,000 owed to Pinnacle. Saylor Dep. 39:13-18. In response to this dispute, Pinnacle reported on the credit reporting dispute verification it received from the CRAs that it did not report the account as "charged off," as Plaintiff claimed, because the amount had been charged off in December 2008 by Citibank, not Pinnacle. Castle Decl. ¶¶ 12, 16; Castle Dep. 132:2-5, May 11, 2015, Doc. No. 58-1. Pinnacle further reported that the account was listed as a "collection account" because the account was past due and had been referred to a third party debt collection agency. Castle Decl. ¶ 16; Castle Dep. 132:6-16. In November 2013, Pinnacle received notices from the CRAs that Plaintiff was disputing the account. Vita Decl. ¶¶ 10, 14, 18, Doc. No. 47-1. Pinnacle also received copies of Mr. Saylor's five page letters to Equifax and Trans Union to which he attached his credit reports and identification. Vita Decl. ¶¶ 12, 16.
Pinnacle has written policies and procedures that govern its reinvestigation of consumer disputes once it receives notice of a dispute from a CRA. Vita Decl. ¶¶ 7,
Summary judgment is appropriate only if the record 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(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Evans v. Techs. Apps. & Serv. Co., 80 F.3d 954, 958-59 (4th Cir.1996). The party seeking summary judgment has the initial burden to show the absence of a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). To defeat a properly supported motion for summary judgment, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 ("[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.") (emphasis in original). Whether a fact is considered "material" is determined by the substantive law, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. The facts shall be viewed, and all reasonable inferences drawn, in the light most favorable to the non-moving party. Id. at 255, 106 S.Ct. 2505; see also Lettieri v. Equant Inc., 478 F.3d 640, 642 (4th Cir.2007).
"To establish a violation of the FDCPA, three requirements must be satisfied: (1) the plaintiff who has been the target of collection activity must be a `consumer' as defined in § 1692a(3); (2) the defendant collecting the debt must be a `debt collector' as defined in § 1692a(6);
Here, the parties agree that the account at issue was not a personal account to which the FDCPA would apply. Plaintiff stated, under oath at his deposition, that he made purchases at Home Depot in connection with his carpentry business and that he did not recall purchasing anything for personal use. Saylor Dep. 18:11-15. Plaintiff has therefore failed to establish an element of his FDCPA claims, and the Court will grant judgment in Defendant's favor on Counts I and 11.
In support of its FCRA claims, Plaintiff argues that Defendant violated the FCRA by engaging in the following conduct: (1) reporting that the account had an out-standing balance after the statute of limitations had run for enforcement of the debt; (2) failing to report that the account was "charged off"; (3) reporting that the account was a "collection account"; and (4) reporting a business account on a report that pertained to consumer debt. Defendant argues that it is entitled to summary judgment on Counts III and IV because (1) all information it provided to CRAs about Saylor's debt was accurate, as a matter of law; and (2) Pinnacle conducted a reasonable investigation of Plaintiffs dispute challenging the amount of debt so that even if Pinnacle's reporting was inaccurate, Plaintiff is not entitled to damages because he cannot show that Pinnacle willfully failed to conduct a reasonable investigation.
First, Plaintiff argues Pinnacle violated the FCPA by reporting an account on which the applicable five year statute of limitations had run. See Va.Code § 8.01-246 (providing a five year statute of limitations period for written contracts). This claim is without merit as a matter of law. First, under applicable Virginia law "[t]he running of the statute of limitations merely bars the creditor's remedy but does not extinguish the debt." Fid. & Cas. Co. of New York v. Lackland, 175 Va. 178, 8 S.E.2d 306, 307 (1940). For this reason, and as the parties acknowledged at the summary judgment hearing, the running of the statute of limitations is merely an affirmative defense to any lawsuit.
With respect to Plaintiffs claims that Pinnacle violated the FCPA when it reported the account as a "collection" account and failed to report that the account was charged-off by Citibank, the Court
Finally, Plaintiff claims that Defendant violated the FCPA when it reported information on Saylor that exceeded that properly reportable in a "consumer report," specifically a nonreportable business debt account, not a reportable consumer debt. The FCRA broadly defines the term "consumer report" to mean "any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for credit." (15 U.S.C. § 1681a(d)(1)(A)). It is undisputed that Saylor became delinquent on an account that was opened in his name personally and on which he was personally responsible. For these reasons, his delinquency on that business account may be reasonably seen as having a "bearing on an individual's credit worthiness" and was properly reported. The record also contains undisputed evidence that as a matter of industry wide practice, based on the requirements of the FCPA, when a consumer is personally liable for a business account, the consumer's information, rather than the business name, will be added to the consumer credit databases. See Canter Decl., Ex. E, Doc. No. 59-3. For these reasons, the Court concludes that there are no genuine issues of material fact with respect to the propriety of Defendant's reporting concerning the account and that Plaintiff has failed as a matter of law to establish any violation of the FCPA.
In order to recover damages under the FCPA, Plaintiff must show that any inaccuracy in Defendant's reporting with respect to the account was the result of a willful failure to conduct a reasonable investigation. See § 1681n.
Here, the record fails to establish willfulness as a matter of law. It is undisputed that Defendant conducted an investigation into Plaintiffs credit reporting dispute pursuant to Defendant's established policies
Because there were no false statements in what Pinnacle reported to the CRAs, Plaintiff has also failed to state a claim for defamation, which requires the publication of a false statement. Nor is the evidence sufficient to establish that Plaintiff would be entitled to compensatory or punitive damages with respect to any false statement. There is no evidence of any actual damages and in order to recover punitive damages in a defamation case, the plaintiff must prove actual malice by "clear and convincing evidence that [the defendant] either knew the statements he made were false at the time he made them, or that he made them with a reckless disregard for their truth." Ingles v. Dively, 246 Va. 244, 253, 435 S.E.2d 641, 646 (1993) (emphasis added). In short, to recover punitive damages, Plaintiff must meet a higher standard than that for willfulness. For the reasons stated above, the record before the Court is insufficient to establish willfulness and it is therefore insufficient a fortiori to establish that Defendant acted with malice.
For the above reasons, the Defendant's Motion for Summary Judgment is GRANTED as to all counts and the action will be dismissed.
The Court will issue an appropriate Order.
