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Hudson v. Babilonia

United States District Court, D. Connecticut

June 14, 2016

Charles Hudson & Aleeshia Bailey Hudson, Plaintiffs,
v.
Aisha Babilonia, SLM Corporation, Sallie Mae, Inc. Sallie Mae Bank, & PFS/Progressive Financial Services, Inc., Defendants.

          MEMORANDUM AND ORDER

          MICHAEL P. SHEA, U.S.D.J.

         Plaintiffs Charles Hudson and Aleeshia Bailey Hudson assert claims under various consumer protection laws against Aisha Babilonia, SLM Corporation (now Navient Corporation (“Navient Corp.”)), Sallie Mae Bank, Sallie Mae, Inc. (now Navient Solutions, Inc. (“NSI”)), and PFS/Progressive Financial Services, Inc. (“Progressive”) arising from the theft of Mr. Hudson’s identity, the use of his identity to obtain a student loan, and efforts to collect a delinquency on that loan. Navient Corp., Sallie Mae Bank, and NSI, whom together I refer to as the “Navient Defendants, ” have filed a motion for summary judgment (ECF No. 102), and Progressive has filed a separate motion for summary judgment (ECF No. 95). In both motions, the defendants seek summary judgment on all counts. For the reasons explained below, I grant in part and deny in part both motions.[1]

         I. Facts

         A. Undisputed Facts

         The following facts are undisputed according to the parties’ Local Rule 56(a) statements.[2]Charles Hudson and Aleeshia Bailey Hudson live in Windsor, Connecticut. (Bailey Hudson Dep., Pls.’ Mem. Opp. Ex. 5 at 27.) They do not own or rent property in Brooklyn, New York. (C. Hudson Dep., Pls.’ MSJ Mem. Opp. Ex. 4, at 19.) They carry their own cell phones and do not answer each other’s phone. (Id. at 44.)

         Between April 6 and 10, 2012, Defendant Aisha Babilonia completed an online application for a “Smart Option Student Loan” in the amount of $15, 000 with NSI.[3](Correspondence History, Austin Aff. Ex. A, ECF No. 102-3, at NAV00047-62.) The application listed Mr. Hudson as a cosigner. (See Austin Aff. Ex B., ECF No. 102-3, at 42.) After receiving the application, NSI obtained Mr. Hudson’s credit report on April 6, 2012. (Correspondence History, Pls.’ MSJ Opp. Ex. 1, at NAV000074.) NSI approved and disbursed $15, 000 to Babilonia on June 5, 2012. (Austin Aff. ¶¶ 15, 23.)

         1. NSI Contacts Mr. Hudson Regarding the Babilonia Loan

         In December 2013, the Babilonia loan was delinquent. (Id. at ¶ 25.) In an effort to obtain payment on the loan, NSI again obtained Mr. Hudson’s credit report on January 2, 2014. (Id. at ¶ 26.) An NSI representative named Kenn also called Mr. Hudson on January 8, 2014. (Id. at ¶ 22.) The following conversation ensued:

Mr. Hudson: This is Charles.
Kenn: This is Charles Hudson?
Mr. Hudson: Yes.
Kenn: Hi, sir, my name is Kenn. I was trying to contact you. I’m actually an account manager, I’m calling for Sallie Mae. This call may be recorded for quality assurance purposes.
You’re a cosigner with Aisha, right?
Mr. Hudson: Yeah.
Kenn: Okay. Thank you, sir. I do have a mailing address 1436 Park Place; is that accurate?
Mr. Hudson: Say that again, I’m sorry. . . .
Kenn: I had a mailing address 1436 Park Place? Is that a correct mailing address?
Mr. Hudson: 436 Park Place in what town?
Kenn: 1436 Park Place in Booklyn.
Mr. Hudson: Oh, okay, yeah.
Kenn: And the reason again for the call is that we do have a student loan, unfortunately is it in our high risk unit right now, it’s been behind a few months. To bring that completely current we do currently have a present amount of 1, 473.56. Did you want to bring that current this month?
Mr. Hudson: Okay. Hold on one second.
Kenn: Sure.
Mr. Hudson: I’ve got to take my ear piece off, because I’m on the road. Did you sp[eak] to Al[eeshi]a, [4] because she’s going to take care of that.
Kenn: Well, that’s what I had assumed since she is the principal borrower on the account, but the last time we had contact with her was back in August. She’s kind of let the account here linger into delinquency, and at this point if we can’t get any arrangement on the account, they’re looking at a possible litigation on the account here.
Mr. Hudson: Okay.
Kenn: The last time we spoke to her she said she was unemployed. I don’t know what her status is right now, but that was in August.
Mr. Hudson: Yes, yes, she is. Let me contact her and see if I can get in touch wit her here, because she handled that. Right now I’m on the road.
Kenn: Has she updated the status with you here? Has she spoken to you about this at all?
Mr. Hudson: No, she hasn’t spoken to me about it.

(January 8, 2014 Call Tr., Austin Aff. Ex. I, ECF No. 102-4, at 29-31; see also Austin Aff. Ex. H (audio recording).)

         The same day, Ms. Hudson called NSI, and informed Kenn that her husband had not, in fact, cosigned any student loan. (Bailey Hudson Dep., Navient MSJ Ex. 3, ECF No. 102-7, at 7- 8.) Mr. Hudson called Kenn on January 13, 2014, and confirmed that he had never cosigned a student loan. (January 13, 2014 Call Tr., ECF No. 56-2.) During that call, Mr. Hudson also informed Kenn that 1436 Park Place was not his address, provided Kenn with his Windsor, Connecticut address, and told Kenn that the Connecticut address NSI had in its file was his mother’s address. (Id. at 2-4.) Mr. Hudson also told Kenn that he did not know any Aisha Babilonia, and that when they spoke on January 8, the only reason he suggested that he knew of the loan was that he thought Kenn was referring to his wife, Aleeshia. (Id. at 4.) Kenn then gave Mr. Hudson the following instructions:

What you want to do to proceed further before this month ends, because the account here is going to roll into default. Unfortunately we do not have all of your information, so it is going to affect your credit. What you want to try to do right away is go to the nearest police department and file charges on this, because what I’ll do is I can put it in as fraud, and when the fraud department calls you to ask you if you signed for the loan and tell them no, they’re going to look for a police report. So you want to try to file charges against this person because if you don’t know who this is, then your information is here on the account along with your signatures regarding this loan.

(Id. at 4-5.) Mr. Hudson asked Kenn what phone number was provided with the loan application, and Kenn responded with a phone number that Mr. Hudson stated he did not recognize. (Id. at 5.) Mr. Hudson also asked how NSI found Mr. Hudson’s actual phone number, to which Kenn responded, “this number here [referring to Mr. Hudson’s cell phone number], I actually had to search to find this number, this wasn’t even on the account. That other number [that Mr. Hudson did not recognize] was on the account . . .” (Id. at 5.) Kenn mentioned two other numbers; the first of which Mr. Hudson did not recognize, but the second of which Mr. Hudson stated was his residential landline number. (Id. at 5-6.) Kenn told Mr. Hudson that he would send him paperwork to complete, and stated, “I’m going to document this as fraud, so our fraud department may get in contact with you regarding this information. . . . They’ll get in contact with you, and they’ll let you know what you need to do from there . . .” (Id. at 7.)[5]

         On February 7, 2014, NSI’s fraud investigation department mailed Mr. Hudson a letter instructing him to complete and sign an “Identity Theft Affidavit, ” which was attached. (Feb. 7, 2014 Letter, Austin Aff. Ex. J.) The letter further instructed Mr. Hudson to have the affidavit notarized, and “return it to us along with the required documents, as indicated in the Instructions for Completing the Identity Theft Affidavit.” (Id.) Finally, it stated, “We’ll keep this file active for thirty (30) days from the date of this letter, ” and that “You may want to place a fraud alert on your credit file.” (Id.)

         2. NSI’s Investigation of Mr. Hudson’s Fraud Claim

         NSI did not receive a response letter from Mr. Hudson letter within the 30-day window set out in the February 7, 2014 Letter. (Austin Aff. ¶ 36.) According to NSI’s correspondence history, an NSI representative spoke with Mr. Hudson on the phone on March 7, 2014, and during that conversation, Mr. Hudson informed the representative that he had submitted a police report and provided a case number. (Pls.’ MSJ Opp. Ex. 1, at NAV 238.) The NSI representative’s notes from that call read, “cos [Mr. Hudson] . . . sd [sic] he never heard of the borrower… doesn’t [sic] look like the cos is telling the truth abt [sic] fraud--looks he is trying to get out of his responsibility.” (Id.)

         On April 5, 2014, NSI sent Mr. Hudson another letter stating that the Babilonia loan was “seriously past due and in jeopardy of default.” (April 5, 2014 Letter, Austin Aff. Ex. K.) On April 28, 2014, NSI received a letter from Gregory Osakwe, the Hudsons’ attorney, which stated,

Please be advised that this office represents Charles Hudson. We are in receipt of your letter dated April 10, 2014 [sic] demanding payment from our client . . . . Our client denies that he ever cosigned for this student loan. His identity was used without his knowledge or consent to obtain this loan. . . . We have filed a report with the Windsor, Connecticut Police and the case number is 2014-08190. . . .
Please forward all future correspondences to this office. Do not attempt to contact our client again.

(April 24, 2014 Letter, Austin Aff. Ex. L.) Attached to the letter were two pages from the Identity Theft Affidavit, the first labeled “How the Fraud Occurred, ” in which the following statements were checked: “I did not authorize anyone to use my name or personal information to seek the money, credit, or loans described in this report, ” “I did not sign any applications, loan notes, credit agreements or loan checks in connection with the fraudulent loan(s), ” “I did not receive any benefit or money as a result of the events described in this report, ” “I do NOT know who used my information or identification to get money, credit, or loans without my knowledge or authorization, ” “I am . . . willing to assist in the prosecution of the person(s) who committed this fraud, ” and “I am . . . authorizing the release of this information to law enforcement and other 3rd parties where applicable, for the purpose of assisting them in the investigation and/or prosecution of the person(s) who committed this fraud.” (Id. at 3.) The second page was a “Signature Statement, ” in which Charles Hudson’s signature appears under a statement affirming that the information in the affidavit is true and correct. (Id. at 5.) A notary stamp and attestation appears at the bottom of the page. (Id.) In his affidavit, James M. Austin, Senior Customer Advocate at Navient, asserts that this information was incomplete because it was “missing pages, contained no police report, and lacked pertinent information.” (Austin Aff. ¶ 37.) Austin fails to describe, however, which pages were missing and why Attorney Osakwe’s failure to include that information was material to NSI’s effort to resolve the fraud claim.[6]

         On May 11, 2014, NSI again requested Mr. Hudson’s credit report. (Austin Aff. ¶ 50.) On May 12, an NSI fraud investigator spoke with Attorney Osakwe and informed him that the affidavit was incomplete; Attorney Osakwe requested that NSI send him another Identity Theft Affidavit. (Austin Aff. ¶ 38.) On May 12, 2014, NSI sent Attorney Osakwe and Mr. Hudson the same letter it sent Mr. Hudson on February 7, attaching what appears to be a copy of the identity theft affidavit that Attorney Osakwe sent NSI in April. (May 12, 2014 Letter, Austin Aff. Ex. M.) On July 17, 2014, Attorney Osakwe returned the identity theft affidavit without adding any information. (July 17, 2014 Letter, Austin Aff. Ex. N.) He did, however, attach a copy of an “incident report” from the Windsor Police Department, dated February 25, 2014, which detailed Mr. Hudson’s report of an identity theft. (Id.) Again, Austin asserts that the affidavit submitted by Attorney Osakwe was incomplete, but fails to describe what information is missing and how any missing information was material to its fraud investigation. (Austin Aff. ¶ 40.) Soon after, NSI commenced a fraud investigation. (Id.)

         NSI “followed up” with Attorney Osakwe twice in an attempt to obtain further information pertinent to the fraud investigation, but Attorney Osakwe did not respond except by threatening to sue NSI. (Austin Aff. ¶ 41.)[7] In investigating Mr. Hudson’s fraud claim, NSI contacted the Windsor Police Department to receive an update on the Department’s investigation. (Austin Aff. ¶ 42.)[8] At some point before early October 2014, NSI completed its fraud investigation and concluded that there was insufficient evidence to credit Mr. Hudson’s claim that he had not signed the Babilonia loan. (See Austin Aff. ¶ 44.)[9]

         At her deposition, Ms. Hudson could not remember any calls from NSI that were made to her cell phone during the time NSI serviced the Babilonia loan. (Bailey Hudson Dep. at 78.) Further, neither Plaintiff could state whether NSI made calls to their cell phones using an auto-dialing system or using an artificial or prerecorded voice. (Id. at 166 (“Q: [N]either you, nor [Mr. Hudson] could say that it was Sallie Mae [that made calls with pre-recorded voices]? A: No, I couldn’t. And [Mr. Hudson] couldn’t say that to you, either? A: No.”); C. Hudson Dep. at 192-93 (“Q: Did you ever receive any prerecorded calls? A: No.”).)

         3. Plaintiffs’ Credit Agency Dispute

         On September 26, 2014, Mr. Hudson sent a letter to the three major credit reporting agencies (“CRAs”), in which he disputed the Babilonia loan and requested that it be removed from his report. (Credit Report Dispute Letters, ECF No. 113-10.) NSI received automated consumer dispute verification forms (“ACDVs”) on October 7, 9, and 13, 2014, from the CRAs. (Austin Aff. Ex. O.) NSI’s protocol for responding to ACDVs includes reviewing the ACDV, validating the accuracy of the information provided by NSI to the agency, and if the ACDV includes a claim of identity theft, taking “additional measures to investigate the matter as appropriate.” (Austin Aff. ¶ 47-48.) In accordance with that protocol, NSI reviewed its documents relating to the Babilonia loan and noted that it had obtained no new information since it previously concluded that the loan was not fraudulently obtained. (Austin Aff. ¶ 48.)[10]

         On October 31, 2014, NSI sent Mr. Hudson a letter stating that it had received ACDVs indicating that he was disputing the Babilonia loan, but that NSI had “performed an investigation and concluded that the information [NSI] provided regarding this loan to the consumer reporting agencies is valid.” (October 31, 2014 Letter, Austin Aff. Ex. P.) It instructed Mr. Hudson, “[i]f you still believe that . . . the loan is a result of identity theft, please call our Fraud Department at the number below. Otherwise, you’ll continue to be responsible for repayment of the debt and we may continue to report the information to the consumer reporting agencies.” (Id.)

         4. Progressive’s Efforts to Collect on the Babilonia Loan

         On August 24, 2014, NSI forwarded the Babilonia loan account to Progressive for debt collection. (Gaffney Aff., ECF No. 100, at ¶ 3.) The account file NSI provided to Progressive, however, did not indicate that Mr. Hudson had disputed the loan. (Id. at ¶ 4; Gaffney Aff. Ex. A.) As a result, prior to beginning its collection efforts, Progressive was not aware of any facts suggesting that Mr. Hudson had disputed the loan with NSI. (Gaffney Aff. ¶ 5.)[11] Progressive obtained Mr. Hudson’s credit report on August 25 and 27, 2014. (Id. at ¶ 6; Experian Report, ECF No. 58-8, at 11-12.) It did not obtain Ms. Hudson’s credit report. (Id.) Progressive did not furnish any information to any CRA about Mr. or Ms. Hudson. (Id. at ¶ 7.)

         Progressive made one phone call to Plaintiffs on August 27, 2014, when a Progressive representative named Jennifer Cialkowski called the Hudson’s home landline and spoke to Ms. Hudson. (Pls.’ MSJ Opp. Ex. 7; C. Hudson Dep., ECF No. 101-1, at 243-44 (conceding that he never spoke to Progressive), 247 (confirming the phone number called by Progressive on August 27, 2014, was the Hudsons’ landline), 254 (conceding that he cannot produce any messages received from Progressive); Bailey Hudson Dep., ECF No. 101-2, at 203 (conceding that she cannot dispute that Progressive made only one call to Plaintiffs).) The following conversation ensued:

Cialkowski: Hello. Calls are monitored and recorded. This is Jennifer Cialkowski. Can I speak with Aisha Babilonia or Charles Hudson?
Ms. Hudson: Aisha Babilonia does not live here. Charles Hudson does. I’m his wife. The account that you’re calling about, the attorney has already sent out all of the information to you guys, and I also gave you guys information not to call us. Any correspondence you have, you need to call our attorney. I will give you his number.
Cialkowski: Ok, ma’am. What is the attorney for, so that I know?
Ms. Hudson: Because the information that was used, we have nothing to do with it. It is fraudulent. We went to the police station and filed a police report. All the information and ...

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