Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-93-06422/USCOURTS-ca10-93-06422-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

ROBERT CLARK and BILLIE CLARK, 

Plaintiffs-Appellants, 

vs. 

STATE FARM FIRE & CASUALTY 

INSURANCE COMPANY, REGIONAL 

CREDIT ASSOCIATION, and 

PAUL WATTS, 

Defendants-Appellees. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) _________________________________ ) 

FILED 

VDited States Court of App~::J 

Tenth Circuit 

MAY 1 0 1995 

PATRICK FISHER 

Clerk 

Case No. 93-6422 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. Civ-92-658-L ) 

Jack Tracy, Purcell, Oklahoma, for Appellants. 

Mary Johnson Tidholm, Hall, Estill, Hardwick, Gable, Golden & 

Nelson, P.C., Oklahoma City, Oklahoma, for Appellees, State Farm 

Fire and casualty Company and Paul Watts. 

Victor F. Albert, McKinney, Stringer & Webster, P.C., Oklahoma 

City, Oklahoma, for Appellee, Regional Credit Association. 

Before EBEL and KELLY, Circuit Judges, and BROWN, Senior District 

Judge.* 

BROWN, Senior District Judge. 

* The Honorable Wesley E. Brown, Senior District Judge, District 

of Kansas, sitting by designation. 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 1 
This case arises from a credit report on Robert Clark issued 

by defendant Regional Credit Association to State Farm Fire and 

Casualty Company on July 25, 1989. On April 6, 1992, Robert and 

Billie Clark filed this action seeking actual and punitive damages, 

alleging that defendants had violated the provisions of the Fair 

Credit Reporting Act, 15 u.s.c. § 1681-1681t (FCRA). Defendants 

filed motions to dismiss the action, asserting that the two-year 

statute of limitations had run on the cause of action under the 

federal act. The district court granted the motions to dismiss, as 

converted to a summary judgment, upon the basis that the statute of 

limitations had run. We agree that the action was time barred and 

affirm the order of the district court. 

The purpose and scope of the Fair Credit Reporting Act were 

reviewed at length by the court in Houghton v. Ins. Crime 

Prevention Institute, 795 F. 2d 322, 323-324 {3rd Cir. 1986). In 

order to insure that credit reporting agencies would act with 

"fairness, impartiality, and a respect for the consumer's right to 

privacy," 15 U.S.C. § 1681{4), Congress provided that a reporting 

agency could furnish reports only in certain specified 

circumstances and in no other. The approved circumstances set out 

in 15 U.S.C. § 1681b are a response to court order, a response in 

accordance with written instructions of the consumer to whom it 

relates, and otherwise only to a person which the agency has reason 

to believe --

(A) intends to use the information in connection with a 

credit transaction involving the consumer on whom the 

information is to be furnished and involving the 

2 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 2 
extension of credit to, or review or collection of an 

account of, the consumer; or 

(B) intends to use the information for employment 

purposes; or 

(C) intends to use the information in connection with the 

underwriting of insurance involving the consumer; or 

(D) intends to use the information in connection with a 

determination of the consumer's eligibility for a license 

or other benefit granted by a governmental 

instrumentality required by law to consider an 

applicant's financial responsibility or status; or 

(E) otherwise has a legitimate business need for the 

information in connection with a business transaction 

involving the consumer. 

15 u.s.c. § 1681b(3) 

The facts giving rise to appellants' claim are without 

dispute, and appear as follows: 

Robert Clark sold a home in Wayne, Oklahoma, to Robert and 

Penny Miller, and State Farm issued a policy of insurance on the 

property to the Millers. The Wayne property was destroyed by fire 

on December 29, 1988, and state Farm claimed that the fire was the 

result of arson involving the Millers and Robert Clark. Robert 

Clark was not insured by State Farm, and neither Clark nor his wife 

gave consent for State Farm to obtain any credit report concerning 

themselves. 1 

state Farm, by its agent defendant Paul watts, obtained a 

credit report on Robert Clark on July 25, 1989, from the Regional 

Credit Association. The report also included information on 

Various lawsuits arose from Clark's sale of the Wayne 

property to the Millers and its subsequent destruction by fire. 

3 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 3 
Clark 1 s wife. The Clarks filed this case on April 6, 1992, two 

years and eight months after the credit report was issued. 

On the motions to dismiss, defendants claimed that the statute 

of limitations had run on the cause of action under the FCRA. 

Title 15 U.S.C.A. § 1681p provides for a two-year limitation period 

in the following manner: 

An action to enforce any liability created under this 

subchapter may be brought in any appropriate United 

States district court without regard to the amount in 

controversy, or in any other court of competent 

jurisdiction, within two years'fr6m 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 defendant 1 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. (Emphasis 

supplied) 

In order to avoid the express two-year limitation period 

provided in this section of the Act, plaintiffs claim they did not 

become aware that the credit report had been issued until 60 days 

after the two-year period had elapsed. 2 

2 Plaintiffs claim that prior to the running of the two-year 

limitation period, Robert Clark filed a lawsuit against State Farm 

and during discovery requested his claims file which contained the 

credit report. When the file was finally produced, the claims 

file, with the credit report, was so illegible and of such poor 

quality, that neither plaintiffs nor their attorney could read the 

documents, and the credit report was not discovered. Clark 

dismissed the case he had filed against State Farm. 

Plaintiffs then assert that 60 days after the two-year period, 

State Farm filed a lawsuit against Robert Clark and subsequently 

produced the claims file which contained a legible copy of the 

credit report. 

4 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 4 
We find that the district court properly ruled that, since the 

Act sets out the limitation period with a specific discovery 

exception, a "general discovery exception" to the statute will not 

be applied because to do so would be contrary to the exception 

expressed in the statute. In so ruling, the court relied upon the 

reasoning found in Houghton v., Ins. Crime Prevention Institute, 

supra, 795 F. 2d 322, at p. 325 (3rd Cir. 1986): 

If we construe the statute (Fair Credit Reporting Act) as 

permitting us to imply a discovery exception to circumstances other than the one which Congress explicitly set 

forth, we would be rendering superfluous the discovery 

exception which Congress did set forth. This we may not 

do. The Supreme Court has stated that where Congress has 

enunciated an exception to a general prohibition 

"additional exceptions are not to be implied in the 

absence of evidence of a contrary legislative intent." 

See Andrus v. Glover Construction Company, 446 U.S. 608, 

616-617 . In this case, the statutory language 

clearly evidences the legislative intent. If the 

discovery rule is to be made generally applicable to FCRA 

cases, it must be done by congressional action .... 

In Rylewicz v. Beaton Services, Ltd., 888 F. 2d 1175 (7th Cir. 

1989) , plaintiffs claimed that defendants requested a consumer 

report about him under false pretenses. Relying on Houghton v. 

Ins. Crime Prevention Institute, supra, the Seventh Circuit found 

that the claim was barred by limitations, ruling that: 

We agree with the Third Circuit that an equitable tolling 

or discovery exception may not be read into the statute. 

Since the Act did not require the information in the 

report to be disclosed to Rylewicz, the only tolling 

provision in §168lp was expressly inapplicable, and that 

statute of limitations must be followed in accordance 

with the congressional directive. (888 F. 2d at 1181). 

Appellants rely on Hyde v. Hibernia National Bank in Jefferson 

Parish, 861 F. 2d 446 (5th Cir. 1988), cert. den., 491 u.s. 910. 

We have reviewed the Hyde opinion and find it not to be persuasive. 

5 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 5 
In Hyde, the court did not address the provision that the "tolling" 

provision does not apply to extend the limitation period unless the 

information contained in the credit report is required to be 

disclosed to the individual covered by the report. 3 

In the case now before us, the evidence failed to show that 

the exception to the two-year limitation period provided by statute 

applies to plaintiffs' claim because plaintiffs failed to establish 

that any defendant "materially and willfully misrepresented any 

information required ... to be disclosed" to the Clarks. 

Section 1681d(a) (1), Title 15 u.s.c., provides in pertinent 

part that: 

(a) A person may not procure or cause to be prepared an 

investigative consumer report on any consumer unless --

( 1) it is clearly and accurately disclosed to the 

consumer that an investigative consumer report including 

information as to his character, general reputation, 

personal characteristics, and mode of living ... may be 

made, and such disclosure (A) is made in a writing 

mailed, or otherwise delivered, to the consumer, not 

later than three days after the date on which the report 

was first requested, and (B) includes a statement 

informing the consumer of his right to request the 

additional disclosures provided for under subsection (b) 

of this section . . . (Emphasis supplied) 

Section 1681a (e) defines the nature of an "investigative 

consumer report" in this manner: 

3 In Hyde, the plaintiff received a copy of his credit report 

which allegedly contained erroneous information in November, 1983, 

but he did not send a written request to have that information 

changed. In 1986, he applied for credit but was turned down, and 

he then wrote disputing the information in his file. In December, 

1986, he again asked for a copy of his credit report, which 

contained exactly the same credit information as it had in 1983. 

suit was filed in July, 1987. 

6 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 6 
(e) The term "investigative consumer report" means a 

consumer report or portion thereof in which information 

on a consumer's character, general reputation, personal 

characteristics, or mode of living is obtained through 

personal interviews with neighbors, friends, or 

associates of the consumer reported on or with others 

with whom he is acquainted or who may have knowledge 

concerning any such items of information. However, such 

information shall not include specific factual 

information on a consumer's credit record obtained 

directly from a creditor of the consumer or from a 

consumer reporting agency when such information was 

obtained directly from a creditor of the consumer or from 

the consumer. 

While plaintiffs allege that defendants requested and received ' . 

an "investigative consumer report" on the Clarks, and were thus 

obliged to disclose that fact to plaintiffs, the district court 

found as a matter of fact that the consumer report in question was 

not an "investigative consumer report." That finding is fully 

supported by Plaintiffs' Exhibit c, p. 096, Appellants' Appendix, 

the credit report in question, for it merely lists Clark's credit 

transactions. 4 

Under these circumstances, the district court correctly found 

that there was no information required to be disclosed under the 

Act which would trigger the discovery exception, and that the twoyear statute of limitations bars plaintiffs' claim in this action. 

4 In reviewing the consumer report, which was a matter 

outside the pleading, the district court converted the motion to 

dismiss to a motion for summary judgment under Rule 56, Federal 

Rules of Civil Procedure. 

The court found "that no reasonable juror could 

consumer report is an investigative consumer report . 

in the consumer report indicates that it is an 

consumer report as defined in the FCRA." 

7 

find that the 

. . . Nothing 

investigative 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 7 
The Clarks also claim that the statute of limitations for 

"negligent" issuance of a credit report does not begin to run until 

injury occurs. This issue is raised for the first time on appeal 

and will not be considered by this court. See Christiansen v. 

Farmers Ins. Exchange, 540 F. 2d 472 {lOth Cir. 1976). 

The judgment is AFFIRMED. 

8 

Appellate Case: 93-6422 Document: 01019290508 Date Filed: 05/10/1995 Page: 8