108 F. Supp. 3d 537
E.D. Mich.2015Background
- Jeffrey and Susan Groff executed a mortgage in 2006; they filed Chapter 7 bankruptcy in October 2011 and received a discharge on January 31, 2012 that included the mortgage note (they did not reaffirm the note).
- After bankruptcy, the Groffs voluntarily continued making monthly payments to the lender (Wells Fargo) to avoid foreclosure, but did not have a personal obligation to pay post-discharge.
- Wells Fargo reported the mortgage account to credit reporting agencies as closed with a zero balance and showed no post-bankruptcy payment activity.
- Groff discovered the absence of post-bankruptcy payment notations on his credit report in 2014, disputed the omission with CRAs, and Wells Fargo investigated but continued reporting a zero balance and no post-discharge payments.
- Groff sued under 15 U.S.C. § 1681s-2 for negligent and willful violations of the FCRA; discovery closed and Wells Fargo moved for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reporting a mortgage discharged in bankruptcy as closed with zero balance and no post-discharge payments is inaccurate or incomplete under the FCRA | Groff: omission of voluntary post-discharge payments made the trade line incomplete/misleading | Wells Fargo: discharge extinguished personal liability so reporting zero balance and no payments is accurate and not misleading | Court: Reporting was accurate; no FCRA violation |
| Whether voluntary post-discharge payments create a continuing account/relationship that must be reported | Groff: payments show an ongoing relationship that should be reflected on the trade line | Wells Fargo: accepting voluntary payments to protect its in-rem lien does not create a new personal debtor-creditor relationship | Court: No new debtor-creditor relationship existed; reporting need not include voluntary payments |
| Whether reporting post-discharge payments would be required or would violate bankruptcy injunction | Groff: reporting payments is proper to fully reflect the account activity | Wells Fargo: reporting payments could imply collection of discharged debt and risk violating the bankruptcy discharge/injunction | Court: Including such payments could be misleading and risk violating the discharge; reporting zero balance is appropriate |
| Whether plaintiff established a violation of any of § 1681s-2(b)’s five duties (investigate, review, report results, notify other CRAs, modify/delete) | Groff: Wells Fargo’s reporting failed to reflect complete account information post-discharge | Wells Fargo: it satisfied obligations by investigating and continuing to report the accurate post-discharge status | Court: Groff produced no evidence showing breach of any § 1681s-2(b) duty; summary judgment for defendant |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard)
- Cincom Sys., Inc. v. Novelis Corp., 581 F.3d 431 (6th Cir. 2009) (suitable to decide legal questions on summary judgment when facts are undisputed)
- Boggio v. USAA Fed. Savings Bank, 696 F.3d 611 (6th Cir. 2012) (FCRA § 1681s-2(b) creates five duties for furnishers and private right of action for breach)
- Johnson v. Home State Bank, 501 U.S. 78 (bankruptcy discharge extinguishes personal liability though lien may remain in rem)
- In re Joubert, 411 F.3d 452 (3d Cir. 2005) (discharge operates as injunction broadly prohibiting collection of discharged debts)
Order: defendant’s motion for summary judgment granted; complaint dismissed with prejudice.