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Bumpus v. National Credit Systems, Inc.

United States District Court, N.D. Georgia, Atlanta Division

November 27, 2017

KAYLA BUMPUS, Plaintiff,
v.
NATIONAL CREDIT SYSTEMS, INC., Defendant.

          FINAL REPORT AND RECOMMENDATION

          JANET F. KINO, UNITED STATES MACHSTKATE JUDGE.

         Plaintiff Kayla Bumpus filed the above-styled action against Defendant National Credit Systems, Inc. (“NCS”), on April 14, 2016. [Doc. 1]. Plaintiff Bumpus alleges that Defendant NCS negligently or willfully violated 15 U.S.C. § 1681s-2(b) of the Fair Credit Reporting Act (“FCRA”) by failing to conduct a reasonable investigation of Plaintiff's disputes of information furnished to credit reporting agencies and by failing to correct inaccurate information furnished to credit reporting agencies. [Doc. 1 ¶¶ 23-25]. Plaintiff seeks actual damages, statutory damages, punitive damages, and attorney's fees. [Id.]. On March 17, 2017, Defendant NCS moved for summary judgment pursuant to Federal Rule of Civil Procedure 56 on Plaintiff's FCRA claim based upon the pleadings, statements of material facts, exhibits, and discovery materials submitted to the court. [Doc. 48].

         I. Facts

         When evaluating the merits of a motion for summary judgment, the court must “view the evidence and all factual inferences raised by it in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in favor of the non-moving party.” Comer v. City of Palm Bay, Florida, 265 F.3d 1186, 1192 (11thCir. 2001). However, mere conclusions and unsupported self-serving statements by the party opposing summary judgment are insufficient to avoid summary judgment. See Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005). Therefore, the evidence presented by the parties having been evaluated in accordance with the foregoing principles, the following facts are deemed to be true for the limited purpose of evaluating Defendant's motion [Doc. 48] for summary judgment.

         On or about February 7, 2013, Plaintiff Kayla Bumpus entered into a one-year lease with JAI Property Management (“JAI”) for a home on Maple Valley Court in Union City, Georgia. [Doc. 50-1, Defendant's Statement of Material Facts (“DSMF”) ¶ 1; Doc. 48-6, Ex. D]. The lease included monthly rent in the amount of $850 as well as a security deposit of $850 which, in the event the lease was breached, would be applied to unpaid rent, late fees, or “damage to the apartment beyond ordinary wear and tear.” [DSMF ¶ 2; Doc. 48-6, Ex. D ¶¶ 1, 7; Doc. 53, Plaintiff's Response (“Pla. Resp.”) to DSMF ¶ 2]. The terms of the lease provided that upon early termination of the lease, Plaintiff was required to: a. pay all monies currently due; b. pay all sums due through the end of the notice period of 60 days; c. pay an additional termination fee of $850 (one month's rent); and d. forfeit any security deposit. [DSMF ¶ 3; Doc. 48-6, Ex. D ¶ 6]. Joshua Vance was Plaintiff's co-tenant. [Plaintiff's Statement of Material Facts (“PSMF”) ¶ 6; Plaintiff's Affidavit (“Pla. Aff.”) ¶ 9; Vance Aff. ¶ 5].

         Within a few months after Plaintiff moved in, the apartment was burglarized twice. [PSMF ¶ 1; Pla. Aff. ¶ 4; Doc. 48-5, Plaintiff's Deposition (“Pla. Dep.”) at 20]. Plaintiff also encountered maintenance issues with the air conditioning unit, which broke down on multiple occasions. [PSMF ¶ 2; Pla. Aff. ¶ 5; Pla. Dep. at 20-21]. Plaintiff testified, “This created particular problems for me because my son has asthma, a condition that is aggravated by the heat.” [Pla. Aff. ¶ 5]. Plaintiff testified that because she feared for their safety and her son's health and because she was frustrated with the ongoing maintenance issues at the apartment, she decided to terminate her lease early. [PSMF ¶ 3; Pla. Aff. ¶ 6; Pla. Dep. at 20-21]. On or about June 20, 2013, Plaintiff contacted JAI representative D.J. Mathew by email regarding termination of the lease. [DSMF ¶ 4; Doc. 48-7, Ex. E]. Mr. Mathew wrote Plaintiff the following, in part:

If you guys move out by June 30th, you will not have to pay for July rent because you are not in the property. As I told Josh [Vance], please make sure to do a walkthrough with Sam by the 1st or 2nd of July. . . . You will have 60 days to pay the lease cancellation fee of $850.00, if it is not paid within the 60 days, it will be sent to collections. If you guys do have to stay some days in July, you will have to pay the prorated amount for the days in the property. If you guys stay in the property in July and the rent is not paid, I will have to file for eviction by the 10th.

[Doc. 48-7, Ex. E].

         Plaintiff testified that she sent an email to Mr. Mathew on July 4, 2013, which stated: “We will vacate the property by the 10th of July. Per our previous conversation we will pay the cancellation fee of 850 in 60 days. And the 10 days we stayed here should be paid by the credit of no a/c for half of the month last month.” [Pla. Aff. ¶ 7, Ex. A]. Plaintiff and her co-tenant, Mr. Vance, testified that they moved out of the apartment over the weekend of July 6-7, 2013. [PSMF ¶ 6; Pla. Aff. ¶ 9; Vance Aff. ¶ 5]. Plaintiff and Mr. Vance also testified that they left the apartment clean, in good order, and undamaged except for ordinary wear and tear. [PSMF ¶ 7; Pla. Aff. ¶ 9; Vance Aff. ¶ 5]. According to Plaintiff, although she was supposed to have access to the apartment through July 10, 2013, JAI had the locks changed and, as a result, Plaintiff was unable to access the apartment after July 7. [PSMF ¶ 8; Pla. Aff. ¶ 10].

         Plaintiff testified that JAI did not conduct a final inspection of the apartment after she moved out and did not provide her with a final list of damages to the apartment. [PSMF ¶ 9; Pla. Aff. ¶ 10]. JAI does not know whether a move out inspection was ever conducted on the apartment or whether a final list of damages to the apartment was ever compiled. [PSMF ¶ 10; Doc. 55-3, Mathew Deposition (“Mathew Dep.”) at 22-23, 40-41]. JAI did not return Plaintiff's $850 security deposit. [PSMF ¶ 13; DSMF ¶ 2].

         According to Defendant NCS, Plaintiff left an account balance of $2, 734.70 after her $850 security deposit was applied to the balance. [Doc. 48-8, Ex. F]. The balance included pro-rated July rent of $302, a June 2013 late fee of $52.50, a July 2013 late fee of $30.20, a lease termination fee of $1, 700, and a maintenance fee of $1, 500. [DSMF ¶ 5; Doc. 48-8, Ex. F]. The maintenance fee of $1, 500 allegedly covered the costs for damages, painting, cleaning, and removing trash. [Mathew Dep. at 22; Doc. 48-8, Ex. F]. JAI was unable to confirm the costs for cleaning the apartment or the costs to remedy any alleged damages caused by Plaintiff and her co-tenant. [PSMF ¶ 12; Mathew Dep. at 44-52]. Plaintiff and Mr. Vance testified that in late August or early September 2013, they paid JAI the agreed upon early termination fee of $850 and that the payment was made by two money orders each in the amount of $425. [PSMF ¶ 14; Pla. Aff. ¶ 8; Vance Aff. ¶ 4]. Plaintiff testified that over the next year, she heard nothing from JAI. [PSMF ¶ 15; Pla. Aff. ¶ 11].

         On or about August 25, 2014, JAI placed Plaintiff's account (“the debt”) in the amount of $2, 734.70 with Defendant NCS for collection. [DSMF ¶ 6]. NCS began collection efforts and sent a collection letter to Plaintiff on or about August 28, 2014. [DSMF ¶ 7]. Plaintiff testified that in August of 2014, she was denied a student loan to attend law school because of derogatory information that Defendant NCS had placed on her credit report, claiming that Plaintiff owed JAI over $2, 700. [PSMF ¶ 16; Pla. Aff. ¶¶ 11, 12; Pla. Dep. at 29, 32, 37-38]. Plaintiff promptly exercised her rights under the FCRA, specifically 15 U.S.C. §§ 1681i(a) and 1681s-2(b), by disputing the accuracy of the information that Defendant NCS placed on her credit reports with Equifax, Trans Union, and Experian. [PSMF ¶ 17].

         On or about September 8, 2014, Plaintiff contacted NCS by telephone and disputed the debt. She was asked to provide documentation of her dispute. [DSMF ¶ 14]. Plaintiff testified that on or about November 24, 2014, she emailed NCS' Collections Manager, Mike Cook, a copy of the June and July 2013 email exchange with Mr. Mathew regarding the termination of Plaintiff's lease and the corresponding amounts due. [DSMF ¶ 15; PSMF ¶ 18; Pla. Aff. ¶¶ 7, 14, Ex. A]. Mr. Cook forwarded this email to NCS Service Representative Katie March, who reviewed the emails received from Plaintiff, the lease agreement, the final account statement, and NCS' account notes. [DSMF ¶ 16; Doc. 48-4, Ex. B, March Deposition (“March Dep.”) at 18, 24-26, 31; Doc. 48-11, Ex. I].

         On November 25, 2014, Ms. March contacted Mr. Mathew to confirm the balance due on the account and forwarded a copy of Plaintiff's email regarding the termination fee to Mr. Mathew for his review. [DSMF ¶ 17; March Dep. at 18-20; Doc. 48-12, Ex. J]. Mr. Mathew responded and indicated that the balance should be reduced by $850, from $2, 734.70 to $1, 884.70, in accordance with the June 20, 2013, email exchange. [DSMF ¶ 18; Doc. 48-7, Ex. E; Doc. 48-12, Ex. J]. Subsequently, JAI reduced the amount of Plaintiff's alleged debt by $850, from $2, 734.70 to $1, 884.70. [PSMF ¶ 20; Mathew Dep. at 26-27]. Ms. March adjusted the balance in NCS' account system and sent Plaintiff a letter reflecting the updated balance of $1, 884.70. [DSMF ¶ 19; March Dep. at 21-22]. As noted supra, the majority of the $1, 884.70 alleged debt was attributable to a $1, 500 maintenance fee for cleaning, damages, and maintenance to the apartment. [PSMF ¶ 21].

         On or about December 1, 2014, Defendant NCS received an Automated Consumer Dispute Verification (“ACDV”) from Equifax which contained a dispute code indicating: “013 - Disputes current balance - verify original loan amount, scheduled monthly payment amount, actual payment amount, amount past due, current balance.” [DSMF ¶ 20; Doc. 48-13, Ex. K]. The ACDV listed a second dispute code: “012 - claims paid the original creditor before collection status or charge off. Verify account status, payment rating, current balance.” [DSMF ¶ 21; Doc. 48-13, Ex. K]. On or about December 29, 2014, NCS received an ACDV from Experian which contained a dispute code indicating: “109 - Disputes all amounts. Verify all amounts.” [DSMF ¶ 25; Doc. 48-14, Ex. L]. On or about February 2, 2015, NCS received an ACDV from Experian which contained a dispute code indicating: “112 - Claims inaccurate information; Did not provide specific dispute; Please provide complete ID and verify account information.” [DSMF ¶ 29; Doc. 48-15, Ex. M].

         More than seven months later, on or about September 28, 2015, Defendant NCS received an ACDV from Equifax which contained a dispute code indicating: “013 - Disputes current balance - verify original loan amount, scheduled monthly payment amount, actual payment amount, amount past due, current balance.” [DSMF ¶ 33; Doc. 48-16, Ex. N]. The ACDV listed a second dispute code: “012 - claims paid the original creditor before collection status or charge off; Verify account status, payment rating, current balance.” [DSMF ¶ 34; Doc. 48-16, Ex. N]. On or about October 26, 2015, NCS received an ACDV from Equifax which contained a dispute code indicating: “003 - Consumer not liable for account (i.e. ex-spouse, business). If liable provide complete ID and ECOA code.” [DSMF ¶ 38; Doc. 48-17, Ex. O]. On or about January 19, 2016, NCS received an ACDV from Equifax which contained a dispute code indicating: “003 - Consumer not liable for account (I.E. ex-spouse, business). If liable provide complete ID and ECOA code.” [DSMF ¶ 42; Doc. 48-18, Ex. P].

         Ron Sapp, Defendant NCS' Vice President of Operations, testified that NCS does not use its own personnel to conduct reinvestigations of consumer disputes that it receives from the credit reporting agencies. [PSMF ¶ 25]. For the last ten years and at all times relevant to this dispute, NCS has outsourced its reinvestigations under 15 U.S.C. § 1681s-2(b) to a company in India called Blaise Information Systems (“Blaise”). [PSMF ¶ 26]. After Defendant NCS received the various ACDVs, Blaise allegedly conducted reinvestigations which were guided by the dispute codes. [DSMF ¶¶ 22, 26, 30, 35, 39, 43; Sapp Deposition (“Sapp Dep.”) at 72-75; Doc. 48-9, Ex. G]. Blaise allegedly reviewed the information provided by the credit reporting agencies and the account file, including any updated information found in NCS' account notes. [DSMF ¶¶ 23, 27, 31, 36, 40, 44]. Blaise employees did not communicate with Plaintiff or her co-tenant, Mr. Vance, when conducting the reinvestigations of Plaintiff's disputes. [PSMF ¶¶ 33, 34; Pla. Aff. ¶ 22; Vance Aff. ¶ 7].

         In or around January 2016, Plaintiff applied to the State Bar of Georgia and listed the JAI debt in response to question 15.3: “Have you ever had any type of account or debt turned over to a collection agency or an account that has been charged off?” [PSMF ¶ 37]. Plaintiff informed the bar examiners that the JAI debt was in the “dispute process.” [PSMF ¶ 38]. The bar examiners sent a communication to Plaintiff stating, “It will be necessary for you to provide proof of arrangements, six consecutive months of payments and/or settlement letters according to the Board's policy concerning the item(s) you listed in answer to question 15.3.” [PSMF ¶ 39; Pla. Aff. ¶ 18; Doc. 48-19, Ex. Q]. Plaintiff testified that she was also denied a student loan because of Defendant's reporting of the JAI debt to the credit reporting agencies. [PSMF ¶ 44; Pla. Dep. at 29, 32, 37-38; Pla. Aff. ¶¶ 11, 12, Ex. B].

         In March 2016, Plaintiff applied to lease an apartment at the Camden Vantage Apartments in Atlanta. Plaintiff was required to post a security deposit equal to one month's rent, which was $1, 259. [PSMF ¶ 41; Pla. Aff. ¶ 19]. The security deposit requirement that Camden Vantage imposed on Plaintiff was expressly identified by Camden Vantage as an “adverse action, ” and Camden Vantage provided Plaintiff notice of this adverse action in compliance with the FCRA, specifically 15 U.S.C. § 1681m(a). [PSMF ¶ 42]. In its adverse action notice, Camden Vantage identified the following as factors that resulted in the adverse action: Plaintiff's unsatisfactory credit history; her unsatisfactory rent-to-income ratio; and her unsatisfactory or insufficient credit score. [PSMF ¶ 43; Doc. 48-21, Ex. S].

         On or about March 10, 2016, Plaintiff paid NCS the debt of $942.35 that was allegedly owed to JAI. [PSMF ¶ 40; Pla. Aff. ¶ 18; Sapp Dep. at 85]. As of March 29, 2016, Plaintiff's Equifax credit report showed that a debt of $942 was “unpaid” and owed to JAI. The Equifax report showed that the original amount owed on the debt was $1, 884. [Pla. Aff. ¶ 23, Ex. E, Doc. 55-1 at 24].

         Additional facts will be set forth as necessary during discussion of Plaintiff's FCRA claim.

         II. Summary Judgment Standard

         Federal Rule of Civil Procedure 56 provides, “The court shall grant summary judgment 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) (amended 2010). Rule 56(a) “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 Corp. v. Catrett, 106 S.Ct. 2548, 2552 (1986). The standard for granting summary judgment mirrors the directed verdict standard under Rule 50(a), which requires the court to grant a directed verdict where there can be but one reasonable conclusion. See Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505, 2511 (1986).

         The movant bears the initial burden of asserting the basis of its motion, and that burden is a light one. See Celotex, 106 S.Ct. at 2553. The movant is not required to negate its opponent's claim. See id. Rather, the movant may discharge this burden merely by “‘showing' - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case.” Id. at 2554.

         When evaluating a motion for summary judgment, the court must view the evidence and factual inferences in the light most favorable to the nonmoving party. See Frederick v. Sprint/United Mgmt. Co., 246 F.3d 1305, 1309 (11th Cir. 2001). However, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 106 S.Ct. 1348, 1356 (1986). Instead, “the nonmoving party must present evidence beyond the pleadings showing that a reasonable jury could find in its favor.” Fickling v. United States, 507 F.3d 1302, 1304 (11th Cir. 2007) (citing Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990)).

         The court will apply these standards in ruling on Defendant's motion for summary judgment.

         III. ...


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