Alan R. Kidd v. Trans Union and Collegiate Funding Services, No. 01-3505 (D. NJ)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

ALAN R. KIDD, CIVIL ACTION NO.: 01-3585 (WJM)
Plaintiff,

V.

TRANS UNION and COLLEGIATE

FUNDING SERVICES,

Defendants.

OPINION

Lisa Rodriguez, Esq.

TRUJILLO RODRIGUEZ & RICHARDS, LLC
3 Kings Highway East
Haddonfield, NJ 08033

David Mour, Esq.
BORG WITZ & GOLDSMITH, PLC
401 West Main Street, Suite 1100
Louisville, KY 40202

Attorneys for Plaintiff

Anthony J. Sylvester, Esq.
RIKER, DANZIG, SCHERER, HYLAND & PERRETTI LLP
Headquarters Plaza
One Speedwell Avenue
Morristown, New Jersey 07962-198 1
Attorneys for Defendant Collegiate Funding Services, LLC

Mark E. Kogan, Esq.
SATZBERG, TRICHON, KOGAN & WERTHEIMER, P.C.
1818 Market Street
30th Floor
Philadelphia, Pennsylvania 19103
Attorneys for Defendant Trans Union, LLC

1

MARTINI, District Judge:

I. Introduction

Presently before the Court is a motion for summary judgment filed by Defendants Trans Union, LLC and Collegiate Funding Services, LLC seeking to dismiss the complaint filed by Plaintiff, Allan R. Kidd, pursuant to Federal Rule of Civil Procedure 56(c). For the reasons fully stated in this Opinion, Defendants' motion for summary judgment is granted.

II. Factual Background

The facts of this case are for the most part undisputed. Defendant Collegiate Funding Services, LLC ("CFS") is a nationwide provider of education financing, specializing in federal student loan consolidation. (CFSb 3).' As permitted by the Federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., CFS obtains from credit reporting agencies "pre-screened" lists of individuals who meet certain credit selection criteria for the purpose of extending firm offers of credit to the individuals included on the list. 15 U.S.C. § 1681 et seq. After reviewing the lists provided by the credit reporting agencies, CFS places telephone calls to the selected individuals for the express purpose of describing available credit packages and extending "firm offers of credit." (CFSb 3)¹. According to CFS, if the individual contacted indicates that he or she is not interested in the products offered by CFS, the telephone call is terminated and no further action is taken with respect to that person. (Id.) On the other hand, if the individual expresses an interest in CFS' products, an application is usually sent to that person. (Id.) According to CFS, no applications or other information is sent to the individual contacted unless specifically requested. (II)

Defendant Trans Union, LLC ("Trans Union") is a consumer reporting agency as defined by the FCRA. (TUb l~3).² In June or July 1999, CFS requested from Trans Union "pre-screened" lists of individuals who met certain credit selection criteria for the purpose of extending firm offers of credit; Plaintiff was included in this list. (CFSb 3). The information was transmitted on a CD-ROM that Trans Union sold to CFS. The CDROM is not a complete copy of an individual's credit report, but rather it contains only the person's name, address, telephone number, estimated total loan balance and Social Security Number. (PbTU 7~9).³ CFS obtained this information only for the purpose of making a firm offer of credit to the Plaintiff. (CFSb 11). There is a factual dispute over when exactly CFS received from Trans Union the CD-ROM containing the pre-screened list of individuals. Plaintiff claims the information was received on July 28, 1999, whereas CFS claims the information was received on July 23, 1999. (PbCFS 10).

In mid-August 1999, CFS contacted Plaintiff in order to offer a loan refinance package that could lower the interest rate and monthly payments of the Plaintiffs student loans. (CFSb 3). During the phone call, CFS informed the Plaintiff that it had received certain information ab out him, including his Social Security Number. (TUb 4). Concerned about the release of his personal information, Plaintiff feigned interest in the refinancing package offered by CFS and provided CFS with additional information in order to complete the loan application (e.g., the names and address of others who knew Plaintiff, the name and address of a relative not living with Plaintiff, and Plaintiffs driver's license number) (CFSf 3)⁴. Plaintiff intentionally provided inaccurate information to CFS for completion of the loan application including the names of persons who did not exist or were deceased€”in order to induce CFS to send the application to him. (Id.) Solely as a result of Plaintiffs specific request, CFS thereafter forwarded an application to Plaintiff that contained information obtained from Plaintiff. (Id. at 4).

Once he received the CFS application, Plaintiff embarked on a series of telephone calls which ultimately confirmed that Trans Union had sold the pre-screen list to CFS. (TUb 4). Thereafter, Plaintiff placed several calls to Trans Union and reached Don Richman, a Trans Union employee in Chicago, Illinois. (Id.) After two or three calls during a two-week period, Mr. Richman apparently confirmed to Plaintiff that despite Trans Union's procedures, Plaintiffs Social Security Number had been inadvertently furnished to CFS. (Id.) After additional communications with Trans Union representatives, Plaintiff embarked on a letter writing and telephone call campaign demanding $1.5 million to "settle" and to keep the matter out of the press. (Id. at 5). From February 2000 until July 2001, Plaintiff sent about fifteen such letters to Trans Union. He also made countless telephone calls to Trans Union and its counsel demanding settlement. (ii) Although Plaintiff faxed a draft copy of the complaint in this matter to Trans Union's counsel on July 11, 2001, the instant action was not filed until July 30, 2001. (Id.)

There is a disagreement as to when the Plaintiff actually learned that his Social Security Number was transferred to CFS. As stated below, this dispute, while possibly "material," is not "genuine" to the present case for summary judgment purposes. Accordingly, Defendants assert that the Plaintiffs claims are time-barred, and consequently seek summary judgment.

III. Discussion

Summary judgment may be granted only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The nonmoving party receives the benefit of all reasonable doubts and any inferences drawn from the underlying facts. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corn., 475 U.S. 574, 587 (1986).

Fed. R. Civ. P. 56(e) also requires that if a nonmoving party bears the burden of proof at trial as to a dispositive issue, that party is required to go beyond the pleadings and designate specific facts showing there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324. For an issue of fact to be genuine, the nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts. Matsushita, 475 U.S. at 586. Issues of material facts are genuine only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby. Inc., 477 U.s. 242, 248 (1986). A nonrnoving party may not rely on allegations without factual support. See Schoch v. First Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990); see also Herbert v. Newton Mem'l Hosp., 933 F. Supp. 1222, 1229 (D.N.J. 1996) (citing Celotex Corp., 477 U.S. at 322-23).

"Moreover, a party cannot rely on self-serving conclusions, unsupported by specific facts in the record." Herbert, 933 F. Supp. at 1229 (citations omitted). "A nonmoving party must po int to concrete evidence in the record which supports each essential element of his [or her] case." Id. If the party fails to provide such evidence, then he or she is not entitled to a trial and the moving party is entitled to summary judgment as a matter of law. Id.

In support of Defendants' motion for summary judgment, Defendants argue that Plaintiffs claim is time-barred. In contrast, Plaintiff contends that the exception to the statute of limitations contained within 15 U.S.C. § 1681p applies in this case because Defendant Trans Union misrepresented information material to his case. Thus, Plaintiff argues that the statute of limitations did not start running until February of 2000, the date he discovered that his Social Security Number had been transferred to CFS, when Trans Union forwarded him a copy of his consumer report. (PbTU 11-15).

Pursuant to 15 U.S.C. § l681b(c), a consumer reporting agency may furnish a credit report relating to any consumer that is not initiated by the consumer only if the transaction consists of a firm offer of credit. 15 U.S.C. § l68lb(c)(l)(B)(i). A person may receive such information which only contains the names and addresses of the consumer, "an identifier that is not unique to the consumer and that is used by the person solely for the purpose of verifying the identification of the consumer" and any other information relating to the consumer that does not identify the experience of the consumer with respect to any particular creditor. (Id.) Further, an action to enforce a violation of the FCRA must be brought

within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under this subchapter to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this subchapter, the action may be brought at any time within two years after discovery by the individual of the misrepresentation. [15 U.S.C. § l68lp.]

Plaintiff submits that he filed his complaint against Defendants within the statute of limitations period.

In TRW Inc.. v. Adelaide Andrews, the plaintiff argued that the FCRA's statute of limitations did not start running until she discovered the disclosures. In TRW Inc., plaintiff argued that the entire statute was similar to a "general federal rule" under which a statute of limitations starts running when a party knows or has reason to know of an injury. 534 U.S. 19, 26 (2001). The Supreme Court held that the FCRA has a two-year statute of limitations which describes an explicit rule and an exception to tolling. In general, the time limit for bringing such an action is "two years from the date on which the liability arises." TRW Inc. 534 U.S. at 28. Only if there is a willful misrepresentation of any information given to the plaintiff, then the exception is triggered. The misrepresentation must be material, and then the plaintiff has two years from the date the plaintiff discovers the misrepresentation to sue. TRW Inc., 534 U.S. at 26.

In the present case, the Plaintiff had two years from the date from which the liability arose€”the date on which his Social Security Number was transferred from Trans Union to CFS€”to file a complaint. See TWR Inc., 534 U.S. at 28 (holding the two-year statute of limitations runs from the date on which the liability arose unless there is a willful misrepresentation of material information by a defendant). It is an undisputed fact that the Plaintiff filed his suit on July 30, 2001. (PbCFS 9).⁵ While there is a debate over whether the transfer of Plaintiffs Social Security Number occurred on either July 23, 1999 or July 28, 1999, this fact, although genuine, is not material to the ultimate resolution of this matter. (TUb 7). Assuming, arguendo, the date of the transfer was July 28, 1999 (the latest possible da te), Plaintiff still filed his claim two days after the statute of limitations period expired. Therefore, unless there is a willful, material misrepresentation by the Defendants, then Plaintiffs case is time-barred and summary judgment must be granted in favor of Defendants.

With respect to CFS, there was no willful misrepresentation made on its behalf and therefore the exception to the statute of limitations is not triggered. Consequently, the claim against CFS is time-barred because Plaintiff failed to file suit within the two-year statute of limitations.

Regarding Trans Union, there is no evidence of a willful misrepresentation made by Trans Union that would trigger the exception to the statute of limitations. First, Plaintiff contends that he knew that his Social Security Number was furnished in the credit report as a result of the initial phone call from CFS in August, 1999. (PbCFS 3). Since Plaintiff was informed that his Social Security Number was transferred during that call, and because Plaintiff used that information to initiate his case against Trans Union and CFS, Plaintiff cannot now contend, as he does, that he did not know his Social Security Number was furnished by Trans Union until February, 2000.

Second, Plaintiff makes much of Trans Unions' failure to classify the transaction in the proper section on its consumer report. In its consumer disclosures, Trans Union organizes the record of who it furnishes consumer reports to depending upon the type of information that is furnished to the inquirer. (PbTU 12). That is, inquiries by persons who receive an individual's consumer report are identified in the "Regular Inquiry Section"; inquiries by persons who receive only pre-screen information are identified in the "Promotional Inquiry Section"; and inquiries by persons who receive information from a consumer report to monitor existing accounts are identified in the "Account Review Inquiry Section." (Id.)

In an effort to show that his claim against Trans Union is not time€”barred, Plaintiff submits that Trans Union misrepresented information material to his case because the transaction between Trans Union and CFS was listed in the "Promotional Inquiry Section" of his consumer report. (PbTU 11-16). Plaintiff submits that this information, because it contained his Social Security Number, should properly have been listed in the "Regular Inquiry Section." According to Plaintiff, this alone constitutes the material misrepresentation that meets the statute's limitations exception.

In Houghton v. Insurance Crime Prevention Institute, the consumer argued that he had two years from when he discovered the FCRA violation to sue. 795 F.2d 322, 323-324 (3d Cir. 1986). The Third Circuit Court of Appeals held that the tolling of an FCRA action is only permissible when there is a material and willful misrepresentation by the defendant of information required to be disclosed under the mandates of the FCRA. Id. at 325. In Houghton, there was no provision of the FCRA that required the defendant to disclose any information to the consumer, that the exception to the statute of limitations did not apply, and the case was dismissed because plaintiffs claims were time-barred. Id.

In this matter, Trans Union was not required to disclose any information that it failed to do, nor did Trans Union conceal any information crucial to Plaintiffs case. Trans Union cannot reclassify the inquiry from "Promotional" to "Regular" because such inquiries are classified by whether or not they are consumer initiated. It would be a misrepresentation on the part of Trans Union if they reclassified the transaction. Therefore, the decision to not reclassify the transaction is permissible. While it is clear that Trans Union breached its internal operating procedures by placing the transaction in the "Promotional Inquiry Section" as opposed to the "Regular Inquiry Section," this does not constitute a material misrepresentation under the FCRA. (PbTU 12).

Based on the facts presented to the Court, while Trans Union was negligent in reporting the Social Security Number, and "technically" violated the FCRA, its conduct did not amount to a willful misrepresentation of any of the Plaintiffs information either to CFS or to Plaintiff Therefore, Plaintiff cannot take advantage of the exception to the two-year statute of limitations contained in the FCRA, and consequently, the claim against Trans Union is time-barred.

IV. Conclusion

For the foregoing reasons, the Court finds that summary judgment is granted in favor of Defendants Collegiate Funding Services and Trans Union because Plaintiff failed to file his claim within the two-year statute of limitations contained in the Fair Credit Reporting Act.

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1. The designation "CFSb" refers to the brief of Defendant Collegiate Funding Services.

2. The designation "TUb" refers to Defendant Trans Union's brief.

3. The designation PbTU" refers to Plaintiffs opposition brief to Defendant Trans Union.

4. The designation "CFSf' refers to the statement of material facts for Defendant Collegiate Funding Services.

5. The designation "PbCFS" refers to Plaintiffs brief in opposition to Defendant CFS's motion for summary judgment.

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

ALAN R. KIDD,
CIVIL ACTION NO.: 01-3585 (WJM)

TRANS UNION and COLLEGIATE FUNDING SERVICES,

Plaintiff,

V.

ORDER

Defendants.

THIS MATTER having been opened to the Court upon the application of counsel for Defendants Collegiate Funding Services, LLC and Trans Union, LLC, for an Order granting summary judgment and dismissing Plaintiffs Complaint in its entirety, and the Court having considered all of the parties' submissions, and good cause having been shown;

IT IS on this __________ day of August, 2003,

ORDERED that the motion of Defendants for an Order granting summary judgment as to the entirety of Plaintiffs Complaint be and hereby is GRANTED; and it is further

ORDERED that Plaintiffs Complaint against Defendants Collegiate Funding Services, LLC and Trans Union, LLC be and hereby is DISMISSED with prejudice.

WILLIAM J. MARTINI, U.S.D.J.