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Gallaher v. U.S. Bank National Association

United States District Court, D. Connecticut

May 15, 2017



          Vanessa L. Bryant, United States District Judge.

         Plaintiffs Jeffrey and Rosa Gallaher (the “Gallahers” or “Plaintiffs”), proceeding pro se, bring this action arising out of a mortgage dispute with Wells Fargo Bank and American Servicing Company (“ASC”).[1] (“Defendants”). After the Court's Memorandum of Decision on Defendants' Motion for Summary Judgment, Plaintiff's remaining claims are that Defendants (i) violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq., by either failing to properly investigate Plaintiffs' disputes or intentionally choosing not to delete information found to be inaccurate and erroneous while reporting as Plaintiffs' creditor and (ii) committed invasion of privacy under Connecticut law invasion of privacy by intentionally and maliciously accessing Plaintiffs' credit report. [Dkt. 35 at 34.] For the reasons that follow, the Defendants' Motion for Summary Judgment is GRANTED.

         I. Factual Background

         On June 9, 2006, Jeffery and Rosa Gallaher applied to Landmark Mortgage, LLC for a refinance loan of $580, 000.00. [Dkt. 55-2 (Loan Application).] In the loan application, Plaintiffs acknowledged that “any owner of the Loan, its servicers, successors and assigns, may verify or reverify any information contained in the application or obtain any information or data relating to the Loan, for any legitimate purpose through any source, including a source named in this application or a consumer reporting agency.” Id. at ¶ 000408.

         On June 23, 2006, Plaintiffs re-applied for a refinance loan to Landmark Mortgage, LLC for $579, 500.00. [Dkt. 55-4.] The June 23, 2006 application included the same acknowledgement language as the June 9, 2006 application. Id. at ¶ 000004.

         Also on June 23, 2006, Plaintiffs executed a balloon note in favor of BNC Mortgage, Inc. in the principal amount of $579, 500.00. [Dkt. 55-5.] That same day, to secure the balloon note, Plaintiffs granted an open-end mortgage deed to Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for BNC Mortgage, Inc. [Dkt. 55-6.] The deed concerned Plaintiffs' property at 28 Westover Road, Stamford, Connecticut 06902. Id. at ¶ 000013.

         On October 1, 2006, Wells Fargo Bank, N.A. (“Wells Fargo”), Lehman Brothers Holdings, Inc. (“Lehman Brothers”), Aurora Loan Services LLC (“Aurora”), and U.S. Bank National Association (“U.S. Bank”) signed a Securitization Subservicing Agreement. [Dkt. 64.] Wells Fargo was identified as Servicer, Lehman Brothers as Seller, Aurora as Master Servicer, and U.S. Bank as trustee. Id. at ¶ 001360. In the Securitization Subservicing Agreement, Wells Fargo was appointed Servicer for certain mortgage loans held in trust by U.S. Bank which were previously serviced by Option One Mortgage Corporation. Id. at 10-11, 13. These mortgage loans included “[a]ny Mortgage Loan registered with MERS on the MERS system.” Id. at 6.

         As Servicer for all mortgage loans registered with MERS, Wells Fargo was required to “accurately and fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information . . . on its borrower credit files to [a number of specified] credit repositories . . . on a monthly basis.” Id. at 33.

         The Securitization Subservicing Agreement filed with the Court is largely redacted, including a section identified in the table of contents as provisions relating to the successor to the servicer. Id. at iii. Defendants assert Option One Mortgage Corporation provided Wells Fargo with copies of Plaintiffs' loan applications, note, mortgage, and credit reports “as part of the servicing transfer.” [Dkt. 54 at 3.] Although no unredacted provision in the Securitization Subservicing Agreement calls for such a transfer of documents, such a provision can be reasonably inferred to exist because the successor loan servicer would not be capable of servicing the loan if it did not have the loan documents. [Dkt. 64.]

         On September 28, 2006, America's Servicing Company (“ASC”) sent Plaintiffs a letter indicating Plaintiffs' mortgage loan had been transferred to ASC for servicing. [Dkt. 55-9 at ¶ 000036.] The sworn affidavit of Brandon McNeal, Vice President of Loan Documentation for Wells Fargo, indicates “ASC is d/b/a Wells Fargo Bank, N.A., which services loans for other investors under the America's Servicing Company name.” [Dkt. 55 at ¶ 2.] As Plaintiffs' mortgage loan servicer, Defendants sent Plaintiffs monthly mortgage statements (e.g. Dkt. 55-10), processed Plaintiffs' monthly mortgage payments (Dkt. 55-11), and kept records of Plaintiffs' mortgage loan activity (e.g. Dkt. 55-12).

         On May 27, 2009, Plaintiffs called Defendants and requested a modification of their mortgage loan. [Dkt. 55-12 at 3.] On September 4, 2009, Defendants obtained Plaintiffs' credit report. [Dkt. 55-13.] Defendants cited information attributed to the Credit Bureau when evaluating Plaintiffs' loan modification request on September 16, 2009. [Dkt. 55-14 at 2-3.] Defendants assert they obtained Plaintiffs' credit report in order to evaluate Plaintiffs' eligibility for the loan modification requested on May 27, 2009. [Dkt. 55 at 6.]

         On February 19, 2010, Plaintiffs contacted Defendants a second time seeking a loan modification due to a loss of income when Ms. Gallaher lost her job. [Dkt. 55-16 at 4.] Defendants obtained Plaintiffs' credit report that day (Dkt. 55-15) and referenced it when evaluating Plaintiffs' loan modification eligibility (Dkt. 55-16 at 3).

         On April 15, 2010, Plaintiffs wrote letters to ASC requesting mortgage loan modifications. [Dkt. 55-18.] On April 21, 2010, Plaintiffs completed a Hardship Affidavit as part of an application to modify their loan under the federal government's Home Affordable Modification Program. [Dkt. 55-17.] The Hardship Affidavit included an acknowledgment signed by Plaintiffs stating “I/we understand the Servicer will pull a current credit report on all borrowers obligated on the Note . . . to evaluate my/our eligibility for a loan modification or other workout.” Id. at ¶ 000420. On May 6, 2010, ASC obtained Plaintiffs' credit report. [Dkt. 55-19.]

         On October 12, 2010, Plaintiffs submitted a Request for Modification and Affidavit (“RMA”) to modify their mortgage loan through the Making Home Affordable Program. [Dkt. 55-21.] The RMA identifies ASC as the loan servicer. Id. at ¶ 000057. Plaintiffs signed an acknowledgement in the RMA stating “I understand the Servicer will pull a current credit report on all borrowers obligated on the Note” and “collect and record personal information, including . . . credit score, income, payment history, government monitoring information, and information about account balances and activity. I understand and consent to the disclosure of my personal information . . . by Servicer to (a) the U.S. Department of the Treasury; (b) Fannie Mae and Freddie Mac . . .; (c) any investor, insurer, guarantor or servicer that owns, insures, guarantees or services my . . . mortgage loan(s); (d) companies that perform support services in conjunction with Making Home Affordable; and (e) any HUD-certified housing counselor.” Id. at ¶ 000059. Plaintiffs submitted subsequent RMAs identifying ASC as the loan servicer and acknowledging that the servicer would pull Plaintiffs' credit report, collect and record personal information and deliver it to the same entities identified in the October 12, 2010 RMA. Those subsequent RMAs are dated May 29, 2011 (Dkt. 55-23), September 29, 2011 (Dkt. 55-25), April 18, 2012 (Dkt. 55-27), November 15, 2012 (Dkt. 55-29), and March 13, 2013 (Dkt. 55-31, relying on November 2012 ASC letter as not yet expired). Plaintiffs submitted additional hardship letters to ASC requesting loan modifications concurrent with each RMA. [Dkt. 55-22 (October 12, 2010 ASC letter); 55-24 (June 4, 2011 ASC letter); 55-26 (September 29, 2011 ASC letter); 55-28 (April 18, 2012 ASC letter); 55-30 (November 12, 2012 ASC letter).]

         On February 27, 2013, Wells Fargo pulled Plaintiffs' credit report. [Dkt. 55-32.] An excerpt from Wells Fargo's LMT Process Notes dated April 8, 2013 states Plaintiffs' loan modification was denied because Plaintiffs were “unable to achieve target payment.” [Dkt. 55-33 at 2.] The “decision [to deny Plaintiffs' loan request was] made using CBR dated 02/27/2013.” Id. at 3.

         On January 25, 2014, Wells Fargo received an Automated Credit Dispute Verification (“ACDV”) from TransUnion pertaining to Plaintiffs' Mortgage Loan. [Dkt. 56-2 (ACDV Report); 56-3 (Record that Wells Fargo received ACDV).] The dispute “concerned the accuracy of the Gallahers' Mortgage Loan balance being reported” and in response Wells Fargo “changed the balance information to reflect that the amount past due was $255, 320.00 instead of the lower $250, 525.00 figure received from TransUnion.” [Dkt. 56 (Affidavit of Brian Drummond, Vice President of Credit Reporting and Credit Disputes, Wells Fargo Bank) at ¶ 8; 56-2 (ACDV Report).] Wells Fargo again pulled Plaintiffs' credit report on February 6, 2014. [Dkt. 55-34.]

         Brian Drummond, Vice President of Credit Reporting and Credit Disputes for Wells Fargo Bank, N.A. asserts there is “no indication in Wells Fargo's business records that it ever received a dispute from any credit reporting agency concerning the name of the furnisher who was reporting the information on the Gallahers' credit report (i.e., that the Gallahers' Mortgage Loan debt should be reported under a different name than Wells Fargo was reporting it under).” [Dkt. 56 at ¶ 9 (Affidavit of Brian Drummond).] In their Objections and Responses to Defendant's First Set of Requests for Production, Plaintiffs asserted there is no documentation of their “complaints or disputes . . . submitted to credit reporting agencies” because “Plaintiffs' disputes were lodged over the phone with live CRA representatives.” [Dkt. 57-1 at ¶ 9.]

         Plaintiffs stated in their Objections and Responses to Defendants' First Set of Requests for Production that, as of October 26, 2016, they did not possess documents concerning their allegation that they “have suffered significant economic harm and overall family instability as a result of defendant's erroneous credit reporting and their failure to verify and or validate the alleged debt.” [Dkt. 57-1 at ¶ 12.] In the same document, Plaintiffs asserted they possessed no “documents concerning [their] allegation that creditors . . . denied Plaintiffs credit based on deteriorated credit scores and credit worthiness.” Id. at ¶ 13. Plaintiffs further asserted they possessed no “documents concerning [their] alleged damages.” Id. at ¶ 14. At his deposition, Jeffery Gallaher asserted he has suffered “general discord with the family in regards to, in regards to just dealing with a lot of the court stuff, in regards to having to move, having to relocate, things of that nature.” [Dkt. 57-2 at 103.] Mr. Gallaher also stated he is owed $3, 000 per month for each month Defendants reported inaccuracies on Plaintiffs' credit report. [Id. at 99.]

         Plaintiffs do not dispute that the Superior Court entered a final judgment of foreclosure on Plaintiffs' home in favor of U.S. Bank Mortgage Pass-Through [Dkt. 57-2 at 94 (Deposition of Jeffery Gallaher) (acknowledging final judgment of foreclosure); Dkt. 1, Ex. A at 16 (identifying U.S. Bank Mortgage Pass-Through as plaintiff in the foreclosure proceeding)], on whose behalf Wells Fargo was acting as loan servicer.

         II. Legal Standards

         “A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought. 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. The court should state on the record the reasons for granting or denying the motion.” Fed.R.Civ.P. 56(a).

         In order to prevail, the moving party must sustain the burden of proving that no factual issues exist. Vivenzio v. City of Syracuse, 611 F.3d 98, 106 (2d Cir. 2010). “In determining whether that burden has been met, the court is required to resolve all ambiguities and credit all factual inferences that could be drawn in favor of the party against whom summary judgment is sought. Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).; Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

         “If there is any evidence in the record that could reasonably support a jury's verdict for the nonmoving party, summary judgment must be denied.” Am. Home Assurance Co. v. Hapag Lloyd Container Linie, GmbH, 446 F.3d 313, 315-16 (2d Cir. 2006) (quotation omitted). In addition, “the court should not weigh evidence or assess the credibility of witnesses” on a motion for summary judgment, as “these determinations are within the sole province of the jury.” Hayes v. New York City Dep't of Corr., 84 F.3d 614, 619 (2d Cir. 1996).

         “A party opposing summary judgment ‘cannot defeat the motion by relying on the allegations in [her] pleading, or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible.' At the summary judgment stage of the proceeding, [p]laintiffs are required to present admissible evidence in support of their allegations; allegations alone, without evidence to back them up, are not sufficient.” Welch-Rubin v. Sandals Corp., No. 3:03-cv-481, 2004 WL 2472280, at *1 (D. Conn. Oct. 20, 2004) (quoting Gottlieb v. County of Orange, 84 F.3d 511, 518 (2d Cir. 1996)). “Summary judgment cannot be defeated by the presentation . . . of but a ‘scintilla of evidence' supporting [a] claim.” Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 726 (2d Cir. 2010) (quoting Anderson, 477 U.S. at 251).

         A court must make the threshold determination of whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party. Anderson, 477 U.S. at 250. Judges are not required “to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party. Formerly it was held that if there was what is called a scintilla of evidence in support of a case the judge was bound to leave it to the jury, but recent decisions of high authority have established a more reasonable rule, that in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury could properly proceed to find a verdict for the party producing it, upon ...

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