Zavala v. Trans Union, LLC
2:20-cv-02276-TLN-DB
| E.D. Cal. | Sep 29, 2023Background
- Zavala alleges he paid off his M&T mortgage on August 14, 2018, but TransUnion and Equifax continued to report the account as "120 Days Past Due."
- Zavala sent dispute letters to the CRAs asserting the account was paid and not past due; the CRAs sent automated dispute verifications to M&T, which verified the past-due status.
- Zavala sued under the Fair Credit Reporting Act (15 U.S.C. §§ 1681e(b), 1681i), alleging negligent and willful reporting and reinvestigation failures; he filed a First Amended Complaint.
- Defendants moved for judgment on the pleadings under Rule 12(c), arguing the reporting was accurate as a matter of law because the reports showed the account was closed with a $0 balance.
- The court reviewed the reports and attachments to the FAC and concluded the account was shown as closed with a $0 balance, so the "past due" status was a historical notation and not materially misleading.
- Because Zavala failed to allege a legally cognizable inaccuracy, the court granted judgment for defendants without leave to amend and entered judgment in their favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reporting an account as "120 Days Past Due" while also showing it as closed with a $0 balance is inaccurate or materially misleading under the FCRA | Zavala: such reporting can be inaccurate/misleading (cites cases like Soler, Macik) and the reports contain other discrepancies (missing Aug 2018 payment in payment history grid; inconsistent days past due; scheduled payment noted) | Defendants: the reports plainly show the account is closed and $0; "past due" is a historical status and not misleading as a matter of law | Court: reporting not inaccurate or misleading as a matter of law when report shows closed/$0 balance; grants judgment for defendants |
Key Cases Cited
- Bibbs v. Trans Union LLC, 43 F.4th 331 (3d Cir. 2022) (holding past-due reporting on paid and closed account is not misleading as a matter of law)
- Frazier v. Dovenmuehle Mortg., Inc., 72 F.4th 769 (7th Cir. 2023) (same)
- Gross v. CitiMortgage, Inc., 33 F.4th 1246 (9th Cir. 2022) (if no inaccuracy, reasonableness of reinvestigation is not reached)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) (adopts "patently incorrect or materially misleading" standard for accuracy)
- Erickson v. First Advantage Background Servs. Corp., 981 F.3d 1246 (11th Cir. 2020) (an implausible or speculative reading by some user does not render a report objectively misleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must permit plausible inference of liability)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading plausibility standard)