Marshall Gross v. Citimortgage, Inc.
33 F.4th 1246
| 9th Cir. | 2022Background
- Marshall Gross bought a home with an 80/20 mortgage (senior and junior loans); he defaulted and the property sold at trustee sale in June 2013.
- Under Arizona’s Anti-Deficiency Statute, a borrower like Gross is relieved of personal liability for any post-sale deficiency on the junior mortgage.
- CitiMortgage, which owned the junior loan, continued to report an outstanding balance, missed payments, accruing interest, and late fees on Gross’s credit reports after the foreclosure.
- Gross disputed the reporting via TransUnion (Feb 2018) and again (May 2018), explicitly citing the Arizona statute; TransUnion sent Automated Consumer Dispute Verifications to CitiMortgage.
- CitiMortgage’s reinvestigation was handled by a third-party contractor; after disputes it (a) initially increased past-due status and reported a large balance, then (b) later reported a $0 balance and a charge-off. Gross sued under the FCRA; the district court granted summary judgment to CitiMortgage.
- The Ninth Circuit reversed: it held CitiMortgage’s reports were legally inaccurate as to Gross (liability abolished), and whether CitiMortgage’s investigation was reasonable must be resolved by a jury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accuracy of CitiMortgage’s reporting under FCRA given Arizona law | Gross: Arizona statute abolished his personal liability, so reporting a balance/late payments was patently incorrect | CitiMortgage: debt was not necessarily extinguished; reporting was defensible | Held: Reports were inaccurate as a matter of law because Gross’s personal liability was abolished under Arizona law |
| Furnisher’s duty to investigate and reasonableness of reinvestigation | Gross: furnisher must reasonably investigate disputes, including legal-effect issues like anti-deficiency protection | CitiMortgage: its investigation/reliance on internal records was reasonable | Held: Reasonableness is a factual question for the jury; summary judgment inappropriate |
| Causation and actual damages under FCRA | Gross: inaccurate reporting caused lost mortgage approvals, emotional distress, and financial harm | CitiMortgage: other credit entries caused harm; no damages attributable to CitiMortgage | Held: Causation and damages are factual issues for the jury |
| Article III standing / concrete harm | Gross: misleading credit reports caused real-world harms (denials, distress) | CitiMortgage: argued insufficient concrete injury | Held: Court rejects defendant’s standing argument; extent of harm is for the jury |
Key Cases Cited
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (defines "reasonable" investigation and "patently incorrect" reporting)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) (prima facie showing of inaccuracy required before probing reasonableness)
- TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) (standing and dissemination principles for credit-report harms)
- Felts v. Wells Fargo Bank, N.A., 893 F.3d 1305 (11th Cir. 2018) (furnisher-liability requires showing a reasonable investigation would have uncovered inaccuracy)
- Chiang v. Verizon New England Inc., 595 F.3d 26 (1st Cir. 2010) (requires causal link between reinvestigation and failure to correct inaccuracies)
- Baker v. Gardner, 770 P.2d 766 (Ariz. 1988) (Arizona Anti-Deficiency Statute abolishes personal liability after trustee sale)
- Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100 (9th Cir. 2012) (furnisher’s duty to correct false info triggered by notice)
- Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329 (9th Cir. 1995) (actual damages may include emotional distress)