Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00398/USCOURTS-caed-1_06-cv-00398-6/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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1

 UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ROBERT and LORI WOODS,

Plaintiffs,

vs.

PROTECTION ONE ALARM

MONITORING, INC., and ASSET

RESOURCES, INC.,

Defendants.

 /

1:06-CV-00398-SMS

ORDER GRANTING DEFENDANTS’

MOTIONS FOR SUMMARY JUDGMENT

(DOCS. 38 AND 52)

ORDER RE: PROTECTION ONE ALARM

MONITORING’S OBJECTIONS TO

EVIDENCE AND REQUEST TO STRIKE

EVIDENCE IN OPPOSITION TO

MOTION FOR SUMMARY JUDGMENT

(DOC. 62-2)

ORDER RE: PROTECTION ONE ALARM

MONITORING’S REQUEST & AMENDED

REQUEST FOR JUDICIAL NOTICE

(DOCS. 52-7, 62-3)

Plaintiffs are proceeding with a civil action in this

Court. By order dated August 30, 2006, entered upon the parties’

consent, Judge Oliver W. Wanger assigned this action to the

undersigned Magistrate Judge for all proceedings, including the

entry of final judgment, pursuant to 28 U.S.C. § 636(c), Fed. R.

Civ. P. 73(b), and Local Rule 73-301.

I. Introduction

Pending before the Court for determination are two motions

for summary judgment filed by Defendants Protection One Alarm

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Monitoring, Inc. (POAM) and Asset Resources, Inc. (AR),

respectively, along POAM’s objections to evidence and request to

strike evidence filed in opposition to its motion for summary

judgment, and POAM’s request and amended request for judicial

notice. 

Defendant AR filed its motion for summary judgment and

memorandum of points and authorities on March 2, 2007. On April

26, 2007, Plaintiff filed a memorandum with affidavits of

Michael Pekin, Shirley Hable, and Plaintiff Lori Woods and

related exhibits in opposition to Defendant AR’s motion. On May

21, 2007, further briefing and filing of legible and

authenticated copies were ordered concerning exhibits submitted

by AR. AR filed a reply on May 30, 2007, including a memorandum

and numerous declarations and affidavits as well as crossreferences and exhibits.

Defendant POAM filed a motion for summary judgment on April

30, 2007, including a memorandum of points and authorities,

statement of undisputed facts, request for judicial notice, and

declarations of Mary Moorman, Steven Petersen, and Alexander J.

Harwin. Plaintiff filed opposition to this motion on May 10,

2007, including a memorandum and the affidavits of P. Michael

Pekin, Plaintiff Lori Woods, Barbara Williamson, and Shirley

Hable and related exhibits. On June 7, 2007, POAM filed a reply,

including a memorandum, objections to evidence and request to

strike, and an amended request for judicial notice.

The hearing on the motions was held on Friday, June 15,

2007, before the Honorable Sandra J. Snyder, United States

Magistrate Judge. Plaintiffs were represented by Attorney

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Michael Pekin, who was present in court. Attorney Christopher J.

Mundt, representing Defendant Asset Resources, Inc., appeared

telephonically; and Alexander J. Harwin, representing Protection

One Alarm Monitoring, Inc., was present in court. After

argument, the matter was taken under submission.

II. Background

This is a an action originally filed in state court on

August 19, 2003. It was removed from the Superior Court of the

State of California, County of Merced on April 6, 2006, based on

diversity of citizenship. In ruling on both Defendants’ motions

to dismiss on December 21, 2006, this Court dismissed the claims

for breach of contract, violation of the California Consumer

Credit Reporting Agencies Act, and the breach of contract by

commission of the common law tort of libel. Plaintiffs’ action

now consists of a single claim for defamation against the

Defendants POAM and AR.

The gist of the defamation consists of the continued

presence in Equifax credit reports of derogatory information

that was initially mistakenly furnished to Equifax by the

Defendants. When notified by Plaintiffs of the incorrect

information, Defendants investigated and communicated the

mistake to Equifax. Equifax incorrectly informed Defendants that

the matter had been corrected in Equifax’s data bank, when in

reality the derogatory information continued to be in Equifax’s

data bank because of Equifax’s data processing error. 

The record reveals that after this matter was filed in

Merced County Superior Court in August 2003, Plaintiffs

conducted no depositions and very little written discovery. 

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 On March 2, 2007, one day after AR filed their motion for summary judgment, 1

Plaintiffs served a set of special interrogatories on AR, and AR promptly answered.

Interrogatories 15, 16, 17, and 18 are attached to Plaintiffs’ opposition to AR’s

summary judgment motion, and Plaintiffs contend that the answers provided are evasive

and do not reveal whether or how AR or POAM authorized the removal of the derogatory

entry from the Equifax listing. AR answered by referring Plaintiffs to their motion

for summary judgment, which shows how the derogatory was removed. Plaintiffs’ filing

of the interrogatories at the last moment, after years of inaction, brought about

problems for both Plaintiffs and Defendants.

4

During this time, POAM conducted depositions, one in Fargo,

North Dakota, and two in Atlanta, Georgia. Plaintiffs did not

appear personally at any of the depositions but did appear

telephonically for the Atlanta depositions.

At the February 12, 2007, scheduling conference, the Court

ordered Plaintiffs to conduct some type of discovery as to

Defendant AR on or before March 1, 2007. Up to the time of the

scheduling conference, the record reveals that Plaintiffs 

failed to serve AR with discovery requests of any nature. AR

states that Plaintiffs have failed and refused to serve upon

Defendant AR any discovery requests since the date of filing of

this case. (AR Mot., Doc. 38, p. 5-6.)1

III. Summary Judgment

Summary judgment is appropriate when it is demonstrated

that there exists no genuine issue as to any material fact, and

that the moving party is entitled to judgment as a matter of

law. Fed. R. Civ. P. 56(c). Under summary judgment practice,

the moving party 

[A]lways bears the initial responsibility of

informing the district court of the basis

for its motion, and identifying those

portions of "the pleadings, depositions,

answers to interrogatories, and admissions

on file, together with the affidavits, if

any," which it believes demonstrate the

absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). It is the 

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moving party’s burden to establish that there exists no genuine

issue of material fact and that the moving party is entitled to

judgment as a matter of law. British Airways Board v. Boeing

Co., 585 F.2d 946, 951 (9 Cir. 1978). th

Where a party with the ultimate burden of persuasion at

trial as to a matter moves for summary judgment, it must

demonstrate affirmatively by evidence each essential element of

its claim or affirmative defense and must establish that there

is no triable issue of fact as to each essential element such

that a rational trier of fact could render a judgment in its

favor. Southern California Gas Co. v. City of Santa Ana, 336

F.3d 885, 888 (9 Cir. 2003). If a party moves for summary th

judgment with respect to a matter as to which the opposing party

has the ultimate burden of persuasion at trial, then the moving

party must show that the opposing party cannot meet its burden

of proof at trial by establishing that there is no genuine issue

of material fact as to an essential element of the opposing

party’s claim or defense; the moving party must meet the initial

burden of producing evidence or showing an absence of evidence

as well as the ultimate burden of persuasion. Nissan Fire Ltd.

v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9 Cir. 2000). In th

order to carry its burden of production, the moving party must

either produce evidence negating an essential element of the

opposing party's claim or defense or show that the nonmoving

party does not have enough evidence of an essential element to

carry its ultimate burden of persuasion at trial. Id. (citing

High Tech Gays v. Defense Indus. Sec. Clearance Office, 895 F.2d

563, 574 (9th Cir. 1990)). In order to carry its ultimate burden

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of persuasion on the motion, the moving party must persuade the

court that there is no genuine issue of material fact. Id. 

However, “where the nonmoving party will bear the burden of

proof at trial on a dispositive issue, a summary judgment motion

may properly be made in reliance solely on the pleadings,

depositions, answers to interrogatories, and admissions on

file.” Celotex Corp. v. Catrett, 477 U.S. 317, 323. Indeed,

summary judgment should be entered, after adequate time for

discovery and upon motion, against a party who fails to make a

showing sufficient to establish the existence of an element

essential to that party’s case, and on which that party will

bear the burden of proof at trial. Id. “[A] complete failure of

proof concerning an essential element of the nonmoving party’s

case necessarily renders all other facts immaterial.” Id. In

such a circumstance, summary judgment should be granted, “so

long as whatever is before the district court demonstrates that

the standard for entry of summary judgment, as set forth in Rule

56(c), is satisfied.” Id. at 323. 

 If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist. 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986). In attempting to establish the existence of this

factual dispute, the opposing party may not rely upon the

denials of its pleadings, but is required to tender evidence of

specific facts in the form of affidavits or admissible discovery

material in support of its contention that the dispute exists.

Rule 56(e); Matsushita, 475 U.S. at 586 n.11. The opposing party

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must demonstrate that the fact in contention is material, i.e.,

a fact that might affect the outcome of the suit under the

governing law, Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

248 (1986); T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors

Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and that the dispute

is genuine, i.e., the evidence is such that a reasonable jury

could return a verdict for the nonmoving party, Wool v. Tandem

Computers, Inc., 818 F.2d 1433, 1436 (9th Cir. 1987).

In the endeavor to establish the existence of a factual

dispute, the opposing party need not establish a material issue

of fact conclusively in its favor. It is sufficient that "the

claimed factual dispute be shown to require a jury or judge to

resolve the parties' differing versions of the truth at trial." 

T.W. Elec. Serv., 809 F.2d at 630. Thus, the "purpose of summary

judgment is to 'pierce the pleadings and to assess the proof in

order to see whether there is a genuine need for trial.'" 

Matsushita, 475 U.S. at 587 (quoting Fed. R. Civ. P. 56(e)

advisory committee's note on 1963 amendments). The evidence of

the opposing party is to be believed, Anderson, 477 U.S. at 255,

and all reasonable inferences that may be drawn from the facts

placed before the court must be drawn in favor of the opposing

party, Matsushita, 475 U.S. at 587 (citing United States v.

Diebold, Inc., 369 U.S. 654, 655 (1962)(per curiam)). 

Nevertheless, it is the opposing party's obligation to produce a

factual predicate from which an inference may be drawn. Richards

v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal.

1985), aff'd, 810 F.2d 898, 902 (9th Cir. 1987). Although the

Court must not weigh the evidence, the Court must draw

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reasonable inferences; evidence that is too insubstantial or

speculative may be insufficient to establish the existence of a

genuine issue of material fact. Coca-Cola Co. v. Overland, Inc.,

692 F.2d 1250, 1255 (9 Cir. 1982); Dept. of Commerce v. U.S. th

House of Rep., 525 U.S. 316, 334 (1999). To demonstrate a

genuine issue, the opposing party "must do more than simply show

that there is some metaphysical doubt as to the material facts.”

Matsushita, 475 U.S. at 586. A mere scintilla of evidence

supporting the opposing party's position will not suffice; there

must be enough of a showing that the jury could reasonably find

for that party. Anderson, 477 U.S. at 251-52. Where the record

taken as a whole could not lead a rational trier of fact to find

for the nonmoving party, there is no genuine issue for trial.

Id. at 587. 

The showings must consist of admissible evidence,

Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324,

1335 n.9 (9 Cir. 1980), or pleadings, depositions, answers to th

interrogatories, admissions, and affidavits or declarations,

Fed. R. Civ. P. 56(c). Affidavits shall be based on personal

knowledge, set forth such facts as would be admissible in

evidence, and show affirmatively that the affiant is competent

to testify to the matters stated therein. Fed. R. Civ. P. 56(e).

Sworn or certified copies of all papers or parts thereof

referred to in an affidavit shall be attached thereto or served

therewith. Id. Declarations pursuant to 28 U.S.C. § 1746 may be

used with the same force and effect as affidavits. Pollock v.

Pollock, 154 F.3d 601, 611, n.20 (6 Cir. 1998). Personal th

knowledge may be inferred from declarations themselves, such as

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from facts concerning a declarant’s position and participation,

Barthelemy v. Air Line Pilots Ass’n, 897 F.2d 999, 1018 (9 Cir. th

1990); however, a court cannot draw an inference about facts not

specifically put in the record by a party, and a court will not

assume that general averments embrace specific facts needed to

sustain a complaint, Lujan v. National Wildlife Federation, 497

U.S. 871, 887 (1990). Unauthenticated documents cannot be

considered on a motion for summary judgment. Hal Roach Studios,

Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1550 (9 Cir. th

1990). Legal memoranda and oral argument are not evidence and do

not create issues of fact capable of defeating an otherwise

valid motion for summary judgment. British Airways Bd. v. Boeing

Co., 585 F.2d 946, 952 (9 Cir. 1978). th

The Court is not obligated to consider matters that are in

the record but are not specifically brought to its attention;

the parties must designate and refer to specific triable facts.

Even in the absence of a local rule, for evidence to be

considered, the party seeking to rely on it must specify the

fact by indicating what the evidence is or says and must

indicate where it is located in the file. Although the Court has

discretion in appropriate circumstances to consider other

material, it has no duty to search the record for evidence

establishing a material fact. Carmen v. San Francisco United

School Dist., 237 F.3d 1026, 1029 (9 Cir. 2001). th

A party moving for summary judgment is entitled to the

benefit of any relevant presumptions that support the motion

provided that the facts giving rise to the presumption are

undisputed. Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250, 1254

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(9 Cir. 1982). th

IV. POAM’S MOTION FOR SUMMARY JUDGMENT

Defendant POAM argues that Plaintiffs’ state defamation

claim is preempted by federal statute, and that thus Defendant

POAM is entitled to judgment as a matter of law because

Plaintiffs cannot prove elements of their claim as to which they

have the burden of proof.

A. Preemption 

Defendant POAM argues that the Fair Credit Reporting Act

(FCRA) preempts Plaintiffs’ state claim for defamation.

1. Applicable Law

Review of the pertinent provisions of the FCRA reveals that

within the statutory context, this case involves Defendants who

were furnishers of information pursuant to the FCRA. Defendants

are included in the statute’s definition of persons, which

expressly includes any individual or entity. 15 U.S.C.

§1681a(b). Defendants furnished information to Equifax, which

qualifies as a consumer reporting agency (CRA) as defined by §

1681a(f):

The term "consumer reporting agency" means any

person which, for monetary fees, dues, or on a

cooperative nonprofit basis, regularly engages in

whole or in part in the practice of assembling or

evaluating consumer credit information or other

information on consumers for the purpose of furnishing

consumer reports to third parties, and which uses any

means or facility of interstate commerce for the

purpose of preparing or furnishing consumer reports.

A consumer report is defined by a 1681a(d):

(d) Consumer report.

(1) In general.

The term "consumer report" means any written,

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oral, or other communication of any information by a

consumer reporting agency bearing on a consumer's

credit worthiness, credit standing, credit capacity,

character, general reputation, personal

characteristics, or mode of living which is used or

expected to be used or collected in whole or in part

for the purpose of serving as a factor in establishing

the consumer's eligibility for–

(A) credit or insurance to be used primarily for personal,

family, or household purposes;

(B) employment purposes; or

(C) any other purpose authorized under section 1681b

of this title.

The duties of furnishers of information to consumer

reporting agencies (CRA’s) are set out at 15 U.S.C. § 1681s-2.

Furnishers are prohibited from reporting information relating to

a consumer to a CRA if the furnisher knows or has reasonable

cause to believe that the information is inaccurate. § 1681s2(a)(1)(A). “Reasonable cause” means having specific knowledge,

other than solely allegations by the consumer, that would cause

a reasonable person to have substantial doubts about the

accuracy of the information. § 1681s-2(a)(1)(D). Furnishers

shall not furnish information relating to a consumer to any CRA

if the person has been notified by the consumer that specific

information is inaccurate, and the information is, in fact,

inaccurate. § 1681s-2(a)(1)(B). 

Furnishers also have a duty to correct and update

information. The statute provides that a furnisher who regularly

and in the ordinary course of business furnishes information to

CRA’s about the furnisher’s transactions or experiences with any

consumer, and who further has furnished to a CRA information

that the person determines is not complete or accurate, shall

promptly notify the CRA of that determination and provide any

corrections or additional information to correct and complete

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the information, and shall not thereafter furnish the agency

with any information that remains not complete or accurate. §

1681s-2(a)(2). If a consumer disputes the completeness or

accuracy of any information furnished by a furnisher to any CRA,

the furnisher may not furnish the information to any CRA without

notice that the information is disputed by the consumer. §

1681s-2(a)(4).

The ability of the consumer to dispute information directly

with the furnisher is governed by regulations, but the statute

sets forth the procedure to be followed regarding information

disputes:

(D) Submitting a notice of dispute

A consumer who seeks to dispute the accuracy of

information shall provide a dispute notice directly

to such person at the address specified by the person

for such notices that–

(i) identifies the specific information that is being

disputed;

(ii) explains the basis for the dispute; and

(iii) includes all supporting documentation required

by the furnisher to substantiate the basis of the dispute.

(E) Duty of person after receiving notice of dispute

After receiving a notice of dispute from a consumer

pursuant to subparagraph (D), the person that provided

the information in dispute to a consumer reporting

agency shall–

(i) conduct an investigation with respect to the

disputed information;

(ii) review all relevant information provided by the

consumer with the notice;

(iii) complete such person's investigation of the

dispute and report the results of the investigation

to the consumer before the expiration of the period

under section 1681i(a)(1) of this title within which

a consumer reporting agency would be required to complete

its action if the consumer had elected to dispute the

information under that section; and

(iv) if the investigation finds that the information

reported was inaccurate, promptly notify each consumer

reporting agency to which the person furnished the

inaccurate information of that determination and provide

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to the agency any correction to that information that

is necessary to make the information provided by the

person accurate.

15 U.S.C. § 1681s-2(a)(8)(D)-(E).

Title 15 U.S.C. 1681s-2(b) sets out the duties of

furnishers of information upon receipt of notice from a consumer

reporting agency of a dispute as to information. After such

notification, the furnisher of information is required to

investigate within time limits to determine the accuracy or

completeness of the information previously provided to the CRA.

The furnisher must report the results of the investigation to

the CRA and to other nationwide CRA’s to whom the furnisher had

furnished the information, and must modify, delete, or block

reporting of information that is accurate, incomplete, or cannot

be verified.

The basis for the state law defamation action in the

present case is Plaintiffs’ claim that Defendants furnished

inaccurate derogatory information to Equifax. Defendants, who

furnished information to Equifax, a CRA, are furnishers of

information within the scope of the statute. Therefore,

subsection (a) of §1681s-2 applies.

With respect to enforcement of the statutory provisions, §

1681s-2(c) limits liability by providing that except as provided

in § 1681s(c)(1)(B) (which authorizes the states, in addition to

other remedies as provided under state law, to designate an

officer to bring an action to enjoin violations or to sue on

behalf of state residents to recover damages for wilful or

negligent violations of the statute, and which confers upon

federal regulators the right to intervene in such actions and

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remove them for federal court), the provisions recognizing an

injured individual’s right of recovery for negligent or wilful

violations of the statute do not apply to any violation of §

1681s-2(a) (the portion of the statute that concerns the duties

of furnishers of information before notification from a CRA of a

dispute). Title 15 U.S.C. § 1681s-2(d) provides that the

provisions of law described in § 1681s-2(a) shall be enforced

exclusively under § 1681s of the title by federal agencies and

officials and the state officials identified in that section.

See, 15 U.S.C. § 1681s(c).

Further, the FCRA contains two preemption sections

restricting state law claims that apply to persons who furnish

information under the FCRA.

The general preemption section at 15 U.S.C.

§ 1681t(b)(1)(F) states, in pertinent part, as follows:

(b) General exceptions

No requirement or prohibition may be imposed under the

laws of any State --

(1) with respect to any subject matter regulated

under-

. . .

(F) section 1681s-2 of this title relating

to the responsibilities of persons who

furnish information to consumer reporting

agencies...(emphasis added). 

This general provision provides complete preemption of the

state law claims here if it applies.

The original preemption provision is set out at 15 U.S.C.

§ 1681h(e), and it provides in pertinent part:

Except as provided in sections 1681n and 1681o of this

title, no consumer may bring any action or proceeding

in the nature of defamation, invasion of privacy, or

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negligence with respect to the reporting of

information against... any person who furnishes

information to a consumer reporting agency... based on

information disclosed by a user of a consumer report

to or for a consumer against whom the user has taken

adverse action... except as to false information

furnished with malice or willful intent to injure such

consumer.

There is no Ninth Circuit authority attempting to reconcile

the two apparently conflicting preemption statutes, i.e.,

1681t(b)(1)(F) and 1681h(e). Three different approaches have

developed to reconcile these statute sections.

First Approach - Some courts have held that §

1681t(b)(1)(F) completely subsumes § 1681h(e) because it

provides absolute preemption and was added after § 1681h(e). 

Further, when a specific statute carves out an exception to a

general statute, the specific statute will not be controlled or

nullified by the general one, regardless of the priority of the

enactment. Cisneros v. Trans Union, LLC, 293 F.Supp.2d 1167,

ll74, 1177 (D.Hawaii 2003). See also, Trout v. BMW of North

America, 2007 WL 602230 (D.Nev. 2007)(furnishers of information

cannot provide inaccurate information, but if they do, any state

statutory and common law causes of action brought as a result of

this conduct are preempted by the FCRA); Cope v. MBNA America

Bank, N.A., 2006 WL 655742 (D.Or. 2006)(the plain language of §

1681t(b)(1)(F) precludes Plaintiff’s defamation claim because

that claim would constitute a prohibition imposed under the laws

of a State relating to the responsibilities of persons who

furnish information to the CRA’s); Jaramillo v. Experian

Information Solutions, Inc., 155 F.Supp.2d 356, 361 (E.D.Pa.

2001)(the plain language of § 1681t(b)(1)(F) clearly eliminated

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all state causes of action against furnishers of information,

not just ones that stem from statutes that relate specifically

to credit reporting). 

Second Approach - Other district courts have determined

that § 1681t(b)(1)(F) does not preempt common law tort claims,

and such claims may be brought but have reached this conclusion

by two different avenues. 

The first group contends that 1681t(b)(1)(F) applies to

state statutes only, and that § 1681h(e) applies to common law

torts. A discussion of this rationale is set out in McCloud v.

Homeside Lending, 309 F.Supp.2d 1335, 1341 (N.D.Ala. 2004); and

Jeffery v. Trans Union, LLC, 273 F.Supp.2d 725, 726-28 (E.D.Va.

2003)(holding that § 1681h(e), not § 1681t(b)(1)(F), applies to

the defamation action, so if a plaintiff pleads malice or

willful intent to injure, the action for violation of a state

statute is not preempted). 

The second group adheres to the rationale that § 1681h(e),

as the specific preemption clause, trumps the more general

language of § 1681t(b)(1)(F). Therefore, if the consumer

properly alleged malice, that is, gross negligence or willful

intent to injure, on the part of the furnisher of credit

information, the FCRA does not preempt a common law claim for

defamation. See Cisneros v. Trans Union, LLC, 293 F.Supp.2d at

1175 (discussing the various approaches to preemption); Yutesler

v. Sears Roebuck and Co., 263 F.Supp.1209, 1211-12 (D.Minn.

2003); McCloud v. Homeside Lending, 309 F.Supp.2d 1335, 1342

(N.D.Ala. 2004), and cases cited there. 

Under either rationale, plaintiffs who overcome §

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1681h(e)’s malice/willful intent standard may pursue common law

actions against furnishers of information. Those who reject

these interpretations do so because it greatly minimizes the

applicability of § 1681t(b)(1)(F) and fails to interpret the

statute as a whole.

Third Approach - This approach applies a temporal formula

to the FCRA’s preemption sections based on § 1681t(b)(1)(F)‘s

absolute immunity for any matter regulated by § 1681s-2, which

sets out the responsibilities of furnishers of information. 

Under this rationale the furnisher’s conduct must be broken down

into two discrete time periods: (1) The time period between when

the debt was incurred and the time the furnisher receives notice

from the CRA that the conduct is in dispute, and (2) the time

period after notice of the dispute had been received. 

The first time period is applicable if the furnisher

communicates inaccurate information to a CRA before it receives

notice of a dispute from the CRA. At that point, proponents of

this rationale contend that the conduct is not regulated under

§ 1681s-2 and thus is not regulated by § 1681t(b)(1)(F) and is

not preempted. Such claims must be analyzed for preemption under

§1681h(e). 

If inaccurate information is furnished after notice is

received, such conduct falls within § 1681s-2(a)(1)(B), and the

action would be completely preempted by 1681s-2. Title 15 §

1681h(e) governs preemption of state law claims premised on the

furnisher’s behavior before receipt of notice, because at that

point § 1681s-2 is not implicated. Malm v. Household Bank (SB)

NA, 2004 WL 1559370 (D.Minn. 2004). See also Mattice v. Equifax,

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2003 WL 21391679 (D.Minn. 2003); Aklagi v. Nationscredit

Financial, 196 F.Supp.2d 1186, 1194 (D.Kan. 2002). There are no 

Ninth Circuit or district courts in the Ninth Circuit following

this temporal approach. Those courts who reject the temporal

approach find nothing in the preemption statutes drawing a

distinction of two time periods, and find the time period

analysis strained, at best. Further, those rejecting this

approach contend that it ignores the requirements of the more

specific preemption provisions. 

Most of the district courts in the Ninth Circuit have held

that the FCRA preempts state statutory and common law causes of

action which fall within the conduct proscribed under § 1681s-2. 

See Trout v. BMW of North America, 2007 WL 602230 (D.Nev.

2007)(furnishers of information cannot provide inaccurate

information, but if they do, any state statutory and common law

causes of action brought as a result of this conduct are

preempted by the FCRA); Cisneros v. Trans Union, LLC, 293

F.Supp.2d 1167, ll74, 1177 (D.Hawaii 2003)(consumer could not

maintain private cause of action against furnishers of credit

information for failing to provide accurate information;

consumer’s defamation claim that furnishers of credit

information supplied false and inaccurate information with

reckless disregard could only be pursued by governmental

agencies or officials under the FCRA); Davis v. Maryland Bank,

N.A., 2002 WL 32713429 (N.D.Cal. 2002) (defamation claim

preempted under FCRA under 1681t(b)(1)(F), and § 1681h(e)

applies only to conduct not governed by § 1682t(b)(1)(F);

§ l681h(e) applies only to conduct which is not governed by §

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 The FCRA imposes civil liability on any person who willfully or negligently 2

fails to comply with the Act’s requirements with respect to any consumer. 15 U.S.C.

§ 1681n (willful noncompliance), § 1681o (negligent noncompliance).

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1681s-2(1)(a)-(b)); and Roybal v. Equifax, 405 F.Supp.2d 1177,

1179-1180 (E.D.Cal. 2005) (a private right of action against a

furnisher of credit information exists only if the disputatious

consumer in the first instance notifies the CRA, which in turn

must investigate and, upon the claim’s being deemed viable, must

contact the furnisher, whose duty to investigate arises only

upon receiving notice of the viable claim from the CRA directly;

one who has not alleged such facts lacks standing to bring a

private right of action against a furnisher of information).

The court in Nelson v. Chase Manhattan Mortgage Corp., 282

F.3d 1057, 1060 (9th Cir. 2002) addressed how the provisions of

the FCRA applied to those who furnish credit information to

credit reporting agencies. There, the Ninth Circuit stated:

What we have to decide is whether sections 1681n and

1681o permit suit against a furnisher of credit

reporting information that violates the duties imposed

under section 1681s-2....2

...

Most of the provisions of § 1681s-2(a)are for the

protection of consumers. There would be no doubt that

a consumer could sue for their violation under

sections 1681n & o were it not for §§ 1681s-2(c) and

(d). Subsection (c) expressly provides that sections

1681n & o “do not apply to any failure to comply with

subsection (a) of this section, except as provided in

section 1681s(c)(1)(B) of this title.” . . . This

limitation on liability and enforcement is reinforced

by subsection (d) of § 1681s-2, which provides that

subsection (a) “shall be enforced exclusively under

section 1681s of this title by the Federal agencies

and officials and the State officials identified in

that section.” Consequently, private enforcement under

§§ 1681n & o is excluded.

282 F.3d at 1059. After consideration of related provisions, the

court further concluded:

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It can be inferred from the structure of the statute

that Congress did not want furnishers of credit

information exposed to suit by any and every consumer

dissatisfied with the credit information furnished.

Hence, Congress limited the enforcement of the duties

imposed by § 1681s-2(a) to governmental bodies. But

Congress did provide a filtering mechanism in §

1681s-2(b) by making the disputatious consumer notify

a CRA and setting up the CRA to receive notice of the

investigation by the furnisher. See 15 U.S.C. §

1681i(a)(3) (allowing CRA to terminate reinvestigation

of disputed item if CRA “reasonably determines that

the dispute by the consumer is frivolous or

irrelevant”). With this filter in place and

opportunity for the furnisher to save itself from

liability by taking the steps required by §

1681s-2(b), Congress put no limit on private

enforcement under §§ 1681n & o.

282 F.3d at 1060.

In Roybal v. Equifax, 405 F.Supp.2d 1177, 1179 (E.D.Cal.

2005), the court held that consumers could not bring a private

action against a furnisher of credit information unless they

alleged they had first contacted the credit reporting agency and

that the agency had in turn contacted the furnisher of the

information, thereby triggering a duty to investigate. The court

cited and relied upon Nelson. 405 F.Supp.2d at 1179. It held

that a private right of action against a furnisher of credit

information exists only if the consumer notifies the CRA in the

first instance; the furnisher’s duty to investigate does not

arise until the furnisher receives notice of the dispute from

the CRA directly. 405 F.Supp.2d at 1180.

Thus, because bypassing the filter and contacting the

furnisher of credit information directly does not actuate the

furnisher’s obligation to investigate, and does not give rise to

a private right of action. See Nelson, 282 F.3d at 1060; Roybal,

405 F.Supp.2d at 1180. It is this approach which the Court will

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apply in the present case.

2. Analysis

POAM argues that Plaintiffs’ defamation cause of action is

preempted under the FCRA pursuant to § 1681t(b)(1)(F), which

preempts all state claims which regulate the responsibilities of

persons who furnish information to consumer reporting agencies. 

It also argues that under the provisions of § 1681h(e),

Plaintiffs have failed to show malice as required by that

statute. POAM argues that there is no evidence of hatred or ill

will on the part of POAM; therefore, the action is preempted.

Plaintiffs’ response consists of one paragraph wherein they

contend that they have alleged and proved malice, and the

complaint for libel can go forward. Plaintiffs cite Gorman v.

Wolpoff & Abramson, LLP, 370 F.Supp.2d 1005 (N.D.Cal. 2005) in

support of this position. Plaintiffs are correct in stating that

under § 1681h(e), a libel action may be maintained so long as

malice can be proved. However, Gorman also states, that no

private right of action exists to redress violations of 1681s2(a), and therefore the § 1681n and § 1681o claims can survive a

motion to dismiss only if they can be based on willful or

negligent violations of § 1681s-2(b). 370 F.Supp.2d at 1012.

Plaintiffs here claim only that AR and POAM failed to

provide accurate information and allegedly failed to correct and

update the information; Plaintiffs have not alleged or presented

evidence warranting an inference that Defendants received notice

of a dispute from Equifax, or that Defendants’ duties as

furnishers were activated in the manner required by statute in

order for a claim to be stated. Plaintiffs have stated a claim

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under 1681s-2(a), and such claims can only be enforced by

federal and state officials. It is only when Plaintiffs allege

violations of 1681s-2(b) that a private right of action arises.

This interpretation is in line with the reasoning of Nelson

v. Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1060 (9th Cir.

2002), which addresses both § 1681h(e) and § 1681t(b)(1)(F), and

gives a balanced interpretation of the statutes. Under Nelson,

Plaintiffs may bring a defamation action against the two named

furnishers of information under § 1681s-2(a), but only if they

first follow the requirements of § 1681s-2 by proceeding to make

use of the filtering mechanism. The consumer who is dissatisfied

with the credit information furnished must notify the CRA, here

Equifax, thereby setting up the CRA to receive notice of the

dispute. 15 U.S.C. § 1681i(a)(3). Upon notice from the CRA, the

furnisher must conduct an investigation of the dispute. This

gives the furnisher an opportunity to save itself from liability

by taking the steps required by § 1681s-2(b). Once these steps

are taken, the consumer is free to file an action for private

enforcement under §§ 1681n & o. Nelson v. Chase Manhattan

Mortgage Corp., 282 F.3d at 1060. This interpretation is also in

line with Roybal v. Equifax, 405 F.Supp.2d 1177 (E.D.Cal. 2005). 

In agreement, see Cisneros v. Trans Union, LLC, 293

F.Supp.2d 1167, 1174 (D.Hawaii 2003); Gorman v. Wolpoff &

Abramson, LLP, 370 F.Supp.2d 1005, 1012 (N.D.Cal. 2005);

Pirouzian v. SLM Corp., 396 F.Supp.2d 1124, 1127 (S.D.Cal.

2005).

Thus, in order for Plaintiffs to state a defamation claim

against Defendants, both furnishers of information, Plaintiffs

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must have first contacted Equifax who, in turn, would notify the

furnisher of the information. This notice triggers the

furnisher’s duty to investigate and follow the duties set out in

§ 1681s-2(b)(1). 

Plaintiffs do not allege, nor does the record reveal, that

either Plaintiff ever contacted Equifax about the alleged false

information in a credit report. (Harwin Decl. Ex. S, Dep. of

Lisa Willis, supervisor of office of consumer affairs of Equifax

p. 13:12-25, 14:1-20). Plaintiffs here concede that they did not

contact Equifax in an attempt to clear the derogatory credit

information from their account. Indeed, Plaintiffs continue to

allege that, aside from POAM and AR, they had no other avenues

open to them to remove the outstanding collection from the

Equifax credit report from the date of discovery on June 19,

2003. However, Willis testified that there were numerous agents

available at Equifax to take telephone calls from consumers.

(Id. pp. 10-15.) Further, Plaintiffs had information which shows

that they could have prompted an investigation and ultimately

effected removal. (See Pekin Aff. in Opp. to POAM mot. for sum.

judgment, Ex. C-2, Dep. of Lisa Willis pp. 29-31.) This

deposition, taken on July 26, 2005, shows that had Plaintiffs

presented any one or all of the three letters provided by POAM

to Plaintiffs, dated July 19 and 24, 2003, to Equifax, Equifax

would have first determined the authenticity of the letter and

then would have contacted the writer of the letter at POAM. POAM

would then have been required to investigate the account and to

communicate the correct status of the account to AR, who would

then inform Equifax to correct status of the account. (Opp. to

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POAM Mot., Pekin Aff., Ex. C-2, pp. 29-31.) Lisa Willis

correctly described the process required when a consumer

contacts a consumer reporting agency. See, 15 U.S.C. §§ 1681g,

1681h, 1681i; see also 15 U.S.C. § 1681s-2(b) (describing the

duties of furnishers of information once they receive a notice

of dispute from a consumer reporting agency). 

From the date Plaintiffs informed POAM of the collection on

the Equifax report on June 19, 2003, both POAM and AR acted

properly to effect removal of the erroneous collection from the

report. Further, on several occasions they followed up to

confirm that the matter had been corrected. 

Plaintiffs complaint here addresses conduct that clearly

falls within the duties of furnishers of information as

described in § 1681s-2(a). Subsection (b) outlines the duties of

furnishers of information upon notice of dispute from the CRA. 

Thus, the limitation set out in 1681s-2 applies, and

Plaintiffs cannot maintain a private cause of action for

defamation against these furnishers of information for violation

of the duties set out in § 1681s-2(a). These claims can only be

enforced by governmental agencies or officials as set out in

§ 1681s-2(c).

Accordingly, the Court concludes that Plaintiff’s claim for

defamation is preempted by the FCRA. Defendant POAM has

established that it is entitled to judgment as a matter of law.

V. The Defamation Claims 

Although this case is preempted, in an abundance of

caution, the Court will assume that a claim for malicious

defamation exists and will proceed to analyze whether or not

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Defendants have shown entitlement to judgment as a matter of law

on the claims. 

Defendant POAM contends in its memorandum in support of its

motion that the claim fails because statements of Defendant POAM

were not libelous; further, because Cal. Civ. Code § 47(c) bars

a claim between interested persons without malice, Defendant is

entitled to judgment as a matter of law, and Plaintiff is not

entitled to punitive damages, because there is no issue of fact

as to malice. (Memo. p. I.) POAM also argues that the libel

claim of Plaintiff Lori Woods must fails as a matter of law

because the collection reports at issue here were about Robert

Woods only. 

Defendant AR contends that any statements were not false

(Memo. p. 15); after April 30, 2004, there is no evidence that

Defendant AR intentionally published information to Equifax, and

there is no evidence permitting an inference that Defendant AR’s

conduct was malicious (id. p. 16).

The parties agreed at the hearing on this motion that this

case is controlled by the issue of whether or not there is a

disputed issue of material fact with respect to malice

sufficient to overcome the privilege afforded pursuant to

Cal.Civ.Code 47(c). Therefore, the Court will address this issue

first. 

The Court will conclude that Plaintiffs failed to show

publication of false statements after being informed of the

error, and Plaintiffs cannot show malice.

A. The Law of Defamation

In California, defamation may be either by libel or

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slander. Cal. Civ. Code § 44. Libel is a false and unprivileged

publication by writing, printing, picture, effigy, or other

fixed representation to the eye, which exposes any person to

hatred, contempt, ridicule, or obloquy, or which causes him to

be shunned or avoided, or which has a tendency to injure him in

his occupation. Cal. Civ. Code § 45. The elements are (1) an

intentional publication, (2) which is false, (3) defamatory, and

(4) unprivileged, and (5) which has natural tendency to injure

or that causes special damage. Smith v. Maldonado, 72

Cal.App.4th 637, 645 (1999). 

A publication is communication to some third person who

understands the defamatory meaning of the statement and its

application to the person to whom reference is made. Id. 

Where the words or other matters that are the subject of a

defamation action are of ambiguous meaning, or are innocent on

their face and defamatory only in the light of extrinsic

circumstances, the plaintiff must plead and prove that as used,

the words had a particular meaning, or “innuendo,” that makes

them defamatory. Smith v. Maldonado, 72 Cal.App.4th 637, 645-46

(1999). This includes the requirement that in an instance of

ambiguous language, i.e., where the language is susceptible of

either a defamatory or innocent interpretation, the plaintiff

must also allege the extrinsic circumstances which show that the

third person reasonably understood it in its derogatory sense

(the “inducement”). Id. If the words themselves, under any

circumstances, would convey to those who read or hear them a

meaning within the statutory definitions of libel and slander,

there is no need to plead an innuendo; and if the words under no

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circumstances could convey a defamatory meaning, then no

innuendo can make them defamatory. Id. (citing Washer v. Bank of

America, 21 Cal.2d 822, 828 (1943)).

Whether a statement is reasonably susceptible of a

defamatory meaning is a question for the Court. MacLeod v.

Tribune Publishing Co., 52 Cal.2d 536, 546 (1959). A mere

allegation of not paying debts is not defamatory per se. 

Gautier v. General Telephone Company, 234 Cal.App.2d 302, 309

(1965). It may be defamatory where it may be implied that a

plaintiff failed to pay an obligation from dishonest motives or

from a desire to defraud a creditor; further, it may be

sufficient where there is an allegation that the plaintiffs were

engaged in a vocation where credit is an important asset and

necessary for the proper conduct of their business. Id. pp. 309-

10. Further, where there are allegations in the complaint that

it was understood as an allegation that the debtor never

intended to pay and thus was dishonest and not worthy or any

credit, it may likewise be defamatory. Ingraham v. Lyon, 105

Cal. 254, 257 (1894). 

With regard to privileged communications, Cal. Civ. Code

§ 47(c) provides that a communication, without malice, to a

person interested therein, 1) by one who is also interested, or

2) by one who stands in such a relation to the person interested

as to afford a reasonable ground for supposing the motive for

the communication to be innocent, or 3) who is requested by the

person interested to give the information, is privileged. This

privilege is a codification of what is known as the common

interest privilege pursuant to which the defendant bears the

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initial burden of demonstrating that the allegedly defamatory

communication was made upon a privileged occasion, and the

plaintiff then bears the burden of proving that the defendant

made the statement with malice. Lundquist v. Reusser, 7 Cal.4th

1193, 1208 (1994). Where the complaint discloses a case of

qualified privilege, i.e., such as where the statement was made

upon a privileged occasion, no malice is presumed, and in order

to state a cause of action, the pleading must contain

affirmative allegations of malice in fact. Id. pp. 1209-12. A

plaintiff must further present evidence sufficient to establish

that the statement was made with malice. Id. p. 1210. 

Plaintiffs here have conceded that the privilege of § 47(c)

applies and that actual malice must be pleaded and proved to

obtain judgment against the Defendants. (Pltfs.’s reply to mot.

to dismiss and mot. to strike, Doc. 23, 2:20-25.) This

concession appears to be correct. Roemer v. Retail Credit Co.,

3 Cal.App.3d 368, 370 (1970) (applying it to mercantile

agencies); Pavlovsky v. Board of Trade, 171 Cal.App.2d 110, 113-

14 (1959) (applying it to credit reports of mercantile agencies

that collect information and sell it for a profit).

Malice in defamation cases means actual or express malice,

including a state of mind arising from hatred or ill will toward

the plaintiff, or the state of mind demonstrated by a showing

that the defendant lacked reasonable grounds for belief in the

truth of the publication and therefore acted in reckless

disregard of the plaintiff’s rights. Roemer v. Retail Credit

Co., 44 Cal.App.3d 926, 936 (1975); see, Frommoethelydo v. Fire

Ins. Exchange, 42 Cal.3d 208, 217 (1986). Malice may be inferred

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from facts showing a lack of reasonable or probable cause to

believe in the truth of a defamatory statement; the privilege

does not apply where there is a knowing lie or the making of a

damaging assertion without any reasonable backing. Stockton

Newspapers, Inc. v. Superior Court, 206 Cal.App.3d 966, 980

(1988) (disapproved on another ground in Brown v. Kelly

Broadcasting Co., 48 Cal.3d 711, 720 n.18 (1989)).

It is sufficient to allege what might otherwise be a legal

conclusion regarding a subjective state of mind where specific

facts are also alleged that would support the more general

allegation. Perkins v. Superior Court (General Telephone

Directory Company), 117 Cal.App.3d 1 (1981) (allegations of

repeated wrongful, intentional, and retaliatory republication in

a directory of information known to be erroneous sufficed to

allege malice where read not in isolation but in the context of

all the allegations of the complaint). That Plaintiffs had not

been notified of any deficiency and in fact had been told that

no money was owed on the account may be considered. See, Agarwal

v. Johnson, 25 Cal.3d 932, 945 (1979) (disapproved on another

point in White v. Ultramar, Inc., 21 Cal.4th 563 (1999)). 

Further, oppression, fraud, or malice must be proven

pursuant to Cal. Civ. Code § 3294, the pertinent statute

concerning recovery of exemplary or punitive damages, by clear

and convincing evidence. § 3294(a). Repeated publication, or

authorizing repeated publication, of incorrect derogatory

information can constitute a legally adequate basis for malice.

B. Facts

In compliance with Local Rule 56-260(a), Defendant POAM

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filed a statement of undisputed facts which refers to supporting

evidence contained in the file. The Court’s statement of facts

is based upon that statement as well as the record as a whole. 

POAM provides monitoring and related security services to

residential and commercial customers. Plaintiffs Robert and Lori

Woods own property and now reside at 3101 Steinberg Road,

Atwater, California. Before moving to Atwater, Plaintiffs owned

a home at 343 Ward, Los Banos, California (Los Banos home). 

Plaintiffs contracted with POAM to provide services for their

Los Banos home (First Account). The First Account was a two-year

agreement for POAM to provide security services from December 2,

1999 through December 1, 2001. Plaintiffs agreed to pay $98.85

quarterly for the services for the entire two-year period,

totaling $790.80. The quarterly charges for the First Account

included monitoring and the value of the security devices

installed in the home. POAM states that the security devices

installed in homes of their clients are rarely re-installed into

other homes because of the development of new technology and

hardware. POAM arranged for the installation of a control

communicator, yard sign, control pad, sounding device, interior

intrusion detection devices, and three perimeter intrusion

devices. The value of these items of equipment on the First

Account was $724.00. (Moorman Decl. ¶4 & 5; Harwin Decl., Ex.

A.)

On October 24, 2000, Plaintiffs contacted POAM to cancel

services on the First Account as of October 31, 2000. A

forwarding address for Plaintiffs’ new residence in Atwater was

provided. At the time of cancellation, Plaintiffs were not

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current on their quarterly payments. No payment had been made

for service provided from September 6, 2000, through December 5,

2000. Plaintiffs were billed in the amount of $489.92 for the

prior quarter and the remainder of their contract term on

October 27, 2000. This First Account was not carried over into a

new account. (Moorman Decl. ¶¶ 6,7,8.)

The First Account contract terms provided that should a

client move to a new home, a licensed authorized dealer would

install a POAM Essential Security System at the new location

free of charge under their free move certificate. To take

advantage of the free move certificate, the clients must sign a

separate twenty-four-month monitoring contract for the new

location. (Harwin Decl. Exs. A, C; Moorman Decl. ¶ 8.)

On November 10, 2000, Plaintiffs requested that POAM

provide protection services at their new Atwater home (Second

Account). The new protection system was installed in the

Atwater home on November 13, 2000. (Harwin Decl. Ex. C; Moorman

Decl. ¶¶ 8, 9, 10.)

Subsequent to cancellation of the First Account, POAM sent

written communications to Plaintiffs’ new Atwater address

demanding payment of $489.92, which was due and owing on the

First Account. Because POAM received no response to their

attempts to collect payment of the First Account, POAM obtained

the assistance of AR to recover the outstanding balance of

$489.92 and collection costs totaling $607.50. (Moorman Decl.

¶¶ 11, 12; Petersen Decl. ¶¶ 3, 5.)

AR received Plaintiffs’ collection account on May 14, 2001,

and immediately sent Plaintiffs a validation notice, to the

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Atwater address provided by POAM, informing the Plaintiffs of

the past-due balance due to POAM, and providing thirty (30) days

in which to request validation, that is, to dispute the validity

of the debt and/or request proof of the debt. Plaintiffs did not

respond. Further collection efforts were made by AR. On May 15,

2001, AR called the last known telephone number and found it

disconnected. On May 17, 2001, AR sent a second validation 

notice to the Atwater address, the new address of Plaintiffs. 

Plaintiffs failed to respond to both letters, and because

neither was returned as “undeliverable,” it is believed both

letters were delivered to Plaintiffs. Also, on May 21, 2001, AR

searched the internet and telephone directories in an attempt to

locate Plaintiffs’ telephone number and inform them of the

collection account. (Peterson Decl. ¶¶ 4-7.) 

Because Plaintiffs failed to respond to AR’s letters, AR

reported Plaintiff Robert Woods to Equifax for non-payment of

this debt on July 15, 2001. POAM did not request collection be

made against Lori Woods, so AR did not provide her name, her

Social Security number, or other personal information to

Equifax. (Peterson Decl. ¶¶ 7-10.)

In June, 2003, Plaintiffs sought to refinance their Atwater

property, which consists of a manufactured home on seventeen

acres of land (Harwin Decl., Exs. G and H), and they discovered

the existence of the collection on behalf of POAM which had been

reported by AR to Equifax. (Petersen Decl. ¶ 7; Moorman Decl. ¶¶

12-13.)

On June 19, 2003, Lori Woods contacted POAM regarding the

outstanding debt and submission of it for collection. POAM

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 There are two declarations from Steven Petersen. The first was submitted with 3

POAM’s Motion for Summary Judgment, hereafter referred to as Petersen Decl. 1), and

the second submitted with AR’s Reply to Plaintiffs’ Opposition of AR’s Motion for

Summary Judgment, hereafter Petersen Decl. 2)

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immediately submitted a request to the collections department at

AR to remove and close the collection account on the Los Banos

property to reflect that the account was paid-in-full. (Moorman

Decl. ¶¶ 17, 19; AR Reply filed May 20, 2007, Decl. of Steven

Peterson, ¶¶ 8, 9, and Exs. A and B.)3

On June 19, 2003, and again on June 23, 2003, POAM issued

letters to Plaintiffs stating that the matter had been

erroneously referred to collections. (Moorman Decl. ¶ 18; Harwin

Decl. Ex. D.) 

On June 24, 2003, POAM called AR to confirm that the

account was marked paid-in-full. (Petersen Decl. 1, ¶ 16.) 

On September 15, 2003, POAM called AR and requested that

the Woods collection be removed from credit bureau reporting,

and AR immediately notified Equifax to mark the Woods account as

cancelled “C.” (Harwin Dec. Ex. J; Moorman Decl. ¶ 20; Petersen

Decl. 1 ¶ 15.)

This information is also set out in the Declaration 1 of

Steven R. Petersen, President of AR, at ¶¶ 12 through 18, which

states that on June 19, 2003, POAM contacted AR regarding the

Woods account and informed AR that the account was paid in full.

AR confirmed to POAM on June 24, 2003, that the account was

paid-in-full. On September 15, 2003, POAM again contacted AR and

requested that Robert Woods’ account be removed from credit

bureau reporting, and AR immediately notified Equifax to mark

Mr. Woods’ account as cancelled (“C”). (Moorman Decl. ¶ 20;

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Petersen Decl. 1, ¶¶ 12-18; Petersen Decl. 2, ¶¶ 8 - 11; Harwin

Decl. Ex. J.) 

On April 30, 2004, Mary Moorman, the director of

collections for POAM, contacted AR to confirm that the Woods

account was removed from reporting. (Petersen Decl. 1, ¶ 16; AR

Reply, Exs. B and C.) These exhibits show that as of June 16,

2004, the records correctly reflected that the account was

cancelled. When Moorman called AR to confirm that the account

was removed from reporting on April 30, 2004, she requested

proof of the removal. AR then logged on to Equifax’s internal

system on the same date and took a “screen shot” of the Equifax

screen which showed that the Woods’ POAM collection account was

removed and coded “C” for cancelled. (Moorman Decl. ¶ 18; Harwin

Decl. Ex. D.)

 Defendants took further efforts to confirm the status of

the information. On June 17, 2004, AR again logged on to the

Equifax internal system to re-confirm that the Woods account was

removed, and took another “screen shot” which showed the account

as cancelled. (Moorman Decl. ¶¶ 19, 29.)

Despite these efforts to clear Woods’ record of the

derogatory account, the record reveals that the credit reports

for the dates June 11, 2003, July 7, 2004, and November 10, 2004

list the derogatory account. The credit report for Robert Woods

dated March 15, 2005, does not list a derogatory account.

(Harwin Decl. Ex. L.)

This inconsistency is explained through the declaration of

Steven R. Peterson, President of AR, as follows. On or about

November 10, 2004, AR chose to upgrade its computer software,

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and to effect this change, AR contacted Equifax and requested

that all AR debtor files previously reported to Equifax be

removed from reporting (purging of accounts). (Petersen Decl. 1,

¶¶ 19, 20; Petersen Decl. 2, ¶ 12; AR Reply, Prentiss Decl., ¶

4, Ex. D.) Jeff Prentiss, office manager and accountant for AR,

followed up on the purging process with Equifax, contacting

Equifax on November 11, 22, and 23, 2004. He provided

information requested by Equifax which they needed to effect the

purge. Prentiss was informed that the purge process would take

up to 45 days. (Prentiss Decl. ¶¶ 5-7; AR Reply, Exs. D - I.) 

After November 10, 2004, when the purge occurred, AR did

not instruct or authorize Equifax to report any AR accounts.

(Petersen Decl. 1, ¶¶ 19-20; Petersen Decl. 2, ¶ 12.)

The e-mails exchanged between AR and Equifax have been

properly authenticated. (See AR Reply, Affidavit of Scott Houle,

the IT (Information Technology) supervisor for AR, pp. 2-5,

which explains Exs. J1-5, Internet Header Information for Exs. D

- I.) Exhibit K is a business card of Char Raymond of CSC which

shows the e-mail address that employees of Equifax use, which

further authenticates Exs. D - I. The Court has also considered

from AR’s reply the affidavit of Wendy Marcisofsky, an

independent computer software trainer for accounts receivable

and e-mail. Ms. Marcisofsky explains how data is stored by AR in

its computer collection software and avers that no one can make

changes or modifications of e-mails or other computer entries

once it is stored in the system. The only way to effect changes

is to assign a new action code or do a “global edit,” which

would show that another action had been made to effect a change. 

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Thus, Ms. Marcisofsky finds no irregularities or modifications

in the screen shots that would indicate tampering of screen

captures presented here. (AR Reply, Decl. C. Mundt, Ex. C 1-3.) 

On or about January 20, 2005, AR’s office manager, Jeff

Prentiss, contacted Equifax to inquire if AR could begin

reporting new accounts. The phone call was transferred to an

Equifax technician who explained that during the purge, Equifax

had encountered a computer error and as a result of the error,

the accounts of several collection agencies, including AR, were

reported under two numbers, one correct and one incorrect. The

technician explained that Equifax corrected the error by

restoring all of the purged accounts and re-purging the accounts

under both numbers. (AR Reply, Prentiss Decl., ¶ 8; AR Reply

Exs. D - I.) 

On March 21, 2005, Prentiss contacted Equifax via e-mail to

confirm that the Robert Woods account was removed from

reporting. Prentiss referred to the Woods account, stating that

AR had earlier asked that the Woods account be removed, and that

AR had even purged all of its accounts from Equifax, so that the

collection should not appear on the Woods credit report. 

Equifax replied on March 22, 2005, stating that no

collection was showing on the Robert Woods account. (AR Reply,

Prentiss Decl. ¶ 9, Ex. I (e-mail response to Prentiss from

Equifax).) It should be noted that Exhibit I shows the two

numbers Equifax assigned to the Robert Woods account which

caused Equifax to keep reporting the collection even though AR

had ordered that it be removed.

On March 22, 2005, Petersen contacted Mary Moorman of POAM

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and informed her that Equifax accidentally transposed the AR

subscriber number for Robert Woods, which created an additional

credit bureau report for Robert Woods (Petersen Decl. 1, ¶¶ 21,

22; Petersen Decl. 2, ¶¶ 12 - 13; AR Reply, Prentiss Decl. ¶ 9,

Ex. I.) 

AR advised POAM that Equifax was in the process of purging

the erroneous data with regard to Robert Woods. (Moorman Decl.

¶ 23; Petersen Decl. ¶ 22.) 

During the period January 2005 through March 2005, AR

contacted Equifax numerous times to inquire about the Woods

account, and AR was assured that the POAM account was not listed

in the credit bureau. (AR Reply, Prentiss Decl. ¶ 10.) 

Thus, the derogatory account on the Robert Woods reports

after July 7, 2004, and November 10, 2004, up to July 2005, were

the result of the error at Equifax. Although POAM and AR had

confirmations from Equifax that after on or about June 19, 2003,

the derogatory account on the Robert Woods report had been

removed from the Equifax files, the error by Equifax resulted in

the extra erroneous report remaining in Equifax records, and it

was reported without the knowledge or authorization of either

POAM or AR. (AR Reply, Petersen Decl. 2, ¶¶ 13, 14.)

C. Procedural Issues relating to the Motions

Plaintiffs’ primary objection to AR’s motion for summary

judgment is that the motion does not satisfy the requirements of

Fed. R. Civ. P. Rule 56(e), which requires affidavits based on

the personal knowledge of the affiant setting forth facts that

would be admissible at trial.

On May 21, 2007, the Court ordered AR to submit properly

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authenticated and legible documents in support of their motion. 

On May 30, 2007, AR submitted a reply to Plaintiffs’ opposition

to summary judgment; attached were necessary exhibits, and the

declarations and affidavits provided proper authentication of

the documents. However, neither AR’s motion nor the reply

completely complies with Local Rule 56-260, which requires that

the motion be accompanied by a statement of undisputed facts

with citations to the particular portions of any pleading,

affidavit, deposition, interrogatory answer, admission, or other

document relied upon to establish that fact. The moving party is

responsible for filing with the Clerk all evidentiary documents

cited in the moving papers. Local Rule 56-260(a).

Nevertheless, the Court notes that reading the original

motion and the reply together provides the Court with the

equivalent of a statement of undisputed facts. 

Although Plaintiffs complain that AR failed to provide

properly authenticated documents in violation of Fed. R. Civ. P.

56(e), Plaintiffs’ opposition to the summary judgment motions of

both AR and POAM fails to comply in any way with Local Rule 56-

260(b), and Plaintiffs’ authentication is sometimes

questionable. Plaintiffs’ pleadings and the affidavit of Mr.

Pekin in support of the opposition to POAM’s motion refer to

deposition testimony in a particular exhibit. The exhibits and

other attachments are not indexed or in any way identified. The

Court was required to search through the unindexed attachments

for the exhibit, only to find a page of deposition questions and

answers with no identification of the person being deposed. Eg.,

Pekin Affidavit, Doc. 57-2, Ex. A through D, and F. The task of

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indexing and tabbing the attachments and doing the seek-and-find

to identify the documents was time-consuming and should have

been unnecessary when dealing with an experienced attorney. 

Plaintiffs followed none of the requirements set forth in Local

Rule 56-260(b), which provides, “Any party opposing a motion for

summary judgment... shall reproduce the itemized facts in the

Statement of Undisputed Facts and admit those facts that are

undisputed and deny those that are disputed, including with each

denial a citation to the particular portions of any pleading,

affidavit, deposition, interrogatory answer... relied upon in

support of that denial.” Other options are listed in the rule,

none of which Plaintiffs have utilized. The language of the rule

is mandatory–-not discretionary. 

Only POAM’s Motion and supporting documents complied

completely with Local Rule 56-260(a). 

On June 7, 2007, POAM filed a motion to strike, objections

to evidence, and a request to strike evidence submitted in

support of Plaintiffs’ opposition to motion for summary

judgment. POAM seeks to strike the affidavits submitted by Lori

A. Woods, Shirley Hable, and Barbara Williamson. Plaintiffs

could have, but did not, respond to this motion. POAM carefully

sets out the reasons in a detailed line-by-line discussion why

the three affidavits should be stricken. The objections appear

well taken, and in ruling on the motions for summary judgment

before the Court, the Court will give due consideration to the

objections.

Finally, the Court notes that in their opposition to AR’s

motion for summary judgment, Plaintiffs purport to incorporate a

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motion to strike all of the exhibits attached to AR’s motion for

summary judgment. The Court will consider Plaintiffs’

opposition, but the motion to strike AR’s exhibits is improperly

presented, lacks specificity with regard to the documents

involved, and will not be considered. Plaintiffs could have, but

did not, file a proper motion to strike AR’s exhibits because

AR’s motion for summary judgment was filed on March 2, 2007, and

Plaintiffs had sufficient time to do so.

D. Analysis of Malice

The Court begins its analysis by setting out two important

concessions made by Plaintiffs.

Plaintiffs’ opposition to POAM’s motion for summary

judgment, p. 14, reads as follows:

1. Asset Resources reported the Woods to Equifax in

July, 2001. The derogatory information remained on

Equifax’s report until June, 2003 without the Woods’

knowledge. That period is not actionable, not the

subject of a tort because: 1) No known damage had been

caused before June, 2003; and 2) Neither Protection

One nor Asset Resources had been contacted by the

Woods, and neither Defendant knew the derogatory

credit information was false.... 

As previously noted, Plaintiffs also concede that pursuant

to Cal. Civ. Code § 47(c), the communications involved here are

privileged, and that actual malice must be pleaded and proved to

obtain judgment against the Defendants. (Pltfs.’ reply to mot. to

dismiss and mot. to strike of Deft. POAM, Doc. 22, p. 2.)

Plaintiffs contend that they have shown malice because

Defendants lacked reasonable grounds for belief in the truth of

the publication and acted in reckless disregard of the

Plaintiffs’ rights.

Because Plaintiffs concede that only the actions of

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Defendants after June 2003 are actionable, the Court will examine

later communications in determining who was responsible for the

republication of the false credit information contained in the

Woods Equifax credit report.

After Plaintiffs’ discovery of the problem, Plaintiff Lori

Woods contacted POAM; after being contacted, POAM immediately

submitted a request to the collections department at AR to remove

and close the collection account to reflect it as paid-in-full.

On June 18, 2003, AR noted the collection account of Robert Woods

paid-in-full in response to a call from POAM. (AR reply, Mundt

Decl. ¶ 4, Ex. A.) After Plaintiff’s contact on June 19, 2003,

POAM immediately provided Woods with three letters stating that

the account had been turned over for collection in error. (Harwin

Decl. Ex. D.) On June 19, 2003, POAM called AR to confirm that

the Woods account was noted paid-in-full. (Moorman Decl. ¶ 19,

Petersen Decl. 1, ¶ 13.) 

On September 15, 2003, the AR work card for Robert Woods

shows AR received a call from POAM asking that the Woods

collection account be marked cancelled “C,” and removed. POAM

requested confirmation of the change. (AR reply, Mundt Decl. ¶ 4,

Ex. A.) On September 15, 2003, Steven Petersen, president of AR,

confirmed to Mary Moorman, POAM director of collections, via email that the Woods account was removed from the credit bureau.

(Moorman Decl. ¶ 20; Harwin Decl. Ex. J.) 

On April 30, 2004, Mary Moorman of POAM contacted AR for

confirmation and proof that the Woods collection account had been

removed from reporting. (Petersen Decl. 1, ¶ 16.) Steven

Petersen, president of AR, logged on to the Equifax internal

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system to view the Woods account and confirm that the Woods

account had been removed. AR took a screen shot of the screen

showing the Woods account was removed. These shots confirmed that

the account was marked “C” on April 30, 2004. (Harwin Decl. ¶ 1,

Ex. Q; Petersen Decl. 2, Ex. B.) 

On June 17, 2004, AR again logged on to the Equifax internal

system and viewed the Woods account to re-confirm that the

account was properly marked “C.” (AR Reply, Mundt Decl. ¶ 6, Ex.

C.) The June 17, 2004, screen shot shows no derogatory from POAM.

It is clear from the above listing of communications among

POAM, AR and Equifax, that between June 19, 2003 and

September 30, 2003, and after September 30, 2003, there was no

publication of defamatory credit information about Robert Woods

by Defendants. The evidence confirms that the communications

concerning the Robert Woods’ Equifax credit report through

September 30, 2003, were efforts to correct the error reported to

them on June 19, 2003, and they were not responsible for any 

publication or re-publication of erroneous information during the

period June 19, 2003 through September 15, 2003. Additionally, in

an abundance of caution, Defendants confirmed that the account

was corrected by logging onto the Equifax internal system and

viewing the Woods account on April 30, 2004, and June 17, 2004,

to confirm that the account was removed.

Plaintiffs contend that the first correction made by POAM to

AR and reported to Equifax on June 18, 2003, showing the Woods

account had been paid-in-full, was of no help to Plaintiffs. A

“PIF,” or paid-in-full, notation would still depress the credit

score because PIF indicates that the account was not paid until

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it went to collections, and such a notation on a credit report

continues to depress the credit score. Plaintiffs argue that this

notation is precisely what they sought to avoid when they filed

the lawsuit. 

Defendants determined, on their own, that the report of PIF

was incorrect and made the correction without prompting by the

Plaintiffs. On September 9, 2003, Tammy Johnson of AR received a

call from POAM to check on the status of the account. AR

confirmed that the account reflected the collection was PIF. On

September 15, 2003, AR was instructed by POAM to change the Woods

POAM collection from “PIF” to “cancelled.” On the same date

Steven Petersen of AR sent an e-mail to POAM confirming, per the

instructions of POAM, that the Woods collection was removed from

the credit bureau. (Petersen Decl. l, Ex. J.) 

In addition, the AR work card of Robert Woods reveals no

evidence that any further inquiries from financing companies into

the Woods account occurred in the three-month period from June

19, 2003, through September 15, 2003. Only the inquiry by Hadle

Financing on June 11, 2003, is shown. Thus, Plaintiffs have not

shown any harm from this short period of time when the account

reflected the collection paid-in-full rather than cancelled. 

The three-month period of time the account was reported as

paid-in-full is not excessive. While this error in reporting by

POAM is unfortunate, there is no evidence warranting an inference

that it was done with a state of mind arising from hatred or ill

will toward Plaintiffs, or with reckless disregard for the

Plaintiffs’ rights. Defendants were attempting to correct the

error promptly upon notice from Plaintiffs. 

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Plaintiffs argue that once the collection had been entered

on their credit report, there were only two ways that it could be

removed, that is, by payment or by removal. Through the testimony

of Lisa Willis of Equifax, Plaintiffs contend that they have

shown that the only way the March 11, 2005, credit report could

show removal of the collection is by the permission of POAM or

AR. Plaintiffs argue that the three letters POAM provided to them

were useless because even if they had given them to Equifax, no

action could be taken. (Plaintiffs’ opp., aff. of Pekin, Dep. of

Lisa Willis, Ex. 2a, b, c.) 

However, Plaintiffs’ interpretation of the deposition

testimony of Lisa Willis is inaccurate. Her testimony that the

only entity that could correct the incorrect collection would be

the collection agency is accurate. However, Willis’ testimony did

not end there. She stated that had such a letter been presented,

she would first determine the authenticity of the letter by

contacting the writer to confirm it was authentic. She would then

contact the person who signed the letter and advise them to

contact the collection agency to get an update of the account.

She then stated: “But in receiving the letters, that would not –

we wouldn’t just say, oh, this is not from the collection agency

and discard the letters. We would use those to further

investigate the issue.” (Opp. to POAM mot., Pekin aff. ¶ C, Ex.

C-2, p.31:3-6.) This information is repeated several times in the

deposition. (Ex. C-2, p. 30:16-25; Ex. C-5, pp. 64:1-25; 65:3-25;

66:1-5.) 

Pursuant to the FCRA, Willis set out exactly the procedure

required when a CRA receives a complaint from a consumer, or a

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consumer disputes information on a credit report. See 15 U.S.C. §

1681s-2(b). There is no issue of material fact raised with

respect to this readiness on the part of Equifax to undertake an

investigation. As to whether an issue of credibility is present,

it is established that a general challenge is insufficient to

raise an issue of fact regarding credibility; rather, specific

facts must be set forth that raise an issue of fact. Department

of Commerce v. United States House of Representatives, 525 U.S.

316, 330-31; National Union Fire Ins. Co. of Pittsburgh, Pa. v.

Argonaut Ins. Co., 701 F.2d 95, 96-97 (9 Cir. 1983). A mere th

desire to cross-examine witnesses or a hope to undermine their

credibility at trial is not sufficient to avoid summary judgment.

National Union Fire Ins. Co., 701 F.2d at 96-97. Had Plaintiffs

contacted Equifax with the letters in June 2003, Equifax would

have been required to investigate the matter. In view of the

actions taken here by the Defendants, had Plaintiffs contacted

Equifax, the collection would have been cancelled by AR at the

direction of POAM. In fact, POAM did contact AR, and the

collection was removed correctly by September 15, 2003.

The Court finds at this point that POAM and AR have provided

evidence that requires the inference that when they were informed

that the POAM Robert Woods collection was on the Equifax report,

they acted appropriately and promptly to remove it, not republish it. The Defendants have provided credible documentation

that shows that the Robert Woods POAM collection had been removed

from the Equifax credit report of April 15, 2004, and June l7,

2004. (See AR Reply, Prentiss Decl. ¶¶ 10, 11, AR Mot. Sum. Jmt.,

Exs. B, C.) Because of the previously mentioned credit reports,

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Defendants had no reason to inquire further about the account

from Equifax. In addition, none of the mentioned communications

for which these Defendants were responsible published any

derogatory information about the Plaintiffs. Thus, none of these

publications or re-publications will support a finding of malice.

However, the information discussed does not explain why the

Equifax credit reports of June 11, 2003, July 7, 2004, and

November 10, 2004 continued to reflect the derogatory collection,

but the March 11, 2005, does not show it. (Harwin Decl. ¶ 14,

Exs. L1-4.) The credit reports referenced above show that the

Woods derogatory continued to be published after these Defendants

had confirmation that the account had been corrected.

Plaintiffs contend that it was not until March ll, 2005,

that the collection had been cancelled and no longer appeared on

the credit report. (See Decl. Harwin, ¶ 14, Ex. L-4.) They

contend that the Defendants are responsible for the republication of the derogatory information from June 2003 through

July 2005. 

Defendants have provided sufficient evidence to show that

the credit reports from Equifax on April 15, 2004, through June

17, 2004, did not show the POAM collection account. They had no

reason to request credit reports after those dates because they

had twice confirmed that Equifax had removed the POAM collection

from the Woods credit account. If the derogatory information

about Woods continued to be published, it was not through

anything these Defendants were responsible for entering on the

Woods’ Equifax credit report.

Nevertheless, Plaintiffs continue to argue that Defendants,

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particularly AR, must have been responsible for the derogatory

disappearing from the Woods credit report. Plaintiffs allege,

based upon Willis’ answers in her deposition, that only AR could

instruct Equifax to remove the derogatory from the credit report.

Plaintiffs state that they have tried to determine who

instructed Equifax to remove the account from the report of March

2005, and so they propounded to AR Special Interrogatories on

March 1, 2007. Plaintiffs acknowledge the responses were timely

answered. The questions, numbered 15 through 18, propounded by

Plaintiffs asked how, when, and by whom the POAM derogatory was

removed from the Equifax reporting system and also asked for the

identification of each document that shows how the derogatory was

removed. (Pltfs.’ Opp. to AR Mot., Pekin aff. ¶ 1, Ex. 1A.) 

Defendants responded (id., at Ex. 1B) that they were ignorant of

the internal business practices of Equifax; that to the best of

their knowledge, based upon their motion for summary judgment,

the account was removed as early as April 30, 2004, and it was

believed that it was removed immediately on June 18, 2003, when

AR first requested the removal. With respect to identification of

witnesses and documents, AR responded that Plaintiffs should

refer to their motion for summary judgment.

The Court finds these answers to be sufficient and

appropriate. Further, both AR and POAM provided ample evidence of

how the March 11, 2005, Equifax credit report came to show no

POAM collection, and Plaintiffs, rather than recognize the

reasonable inferences to be drawn from the evidence or submit

evidence supporting an inference of participation by Defendants,

argue blindly that Defendants failed to respond to the

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interrogatories. Plaintiffs’ argument that the Defendants had the

evidence exclusively in their possession, and that the Court

should therefore apply res ipsa loquitur, is without basis in

fact or law. 

 Plaintiffs were admittedly dilatory in conducting their

discovery throughout the entire prosecution of this case both in

state as well as federal court. (Decl. of Michael Pekin in supp.

of mot. to file first amended complaint, attached as Ex. P to

POAM Harwin Declaration.) At the scheduling conference on

February 12, 2007, the Court was obliged to order Plaintiffs to

propound some sort of discovery on AR by March 1, 2007. AR filed

its motion for summary judgment on March 2, 2007, so AR, which

filed timely responses to the interrogatories, was well within

its rights to refer Plaintiffs to its motion. Further,

Defendants’ motions for summary judgment set out in detail the

occurrences during November 2004 through January 2005, that

resulted in the Woods collection account reappearing on the

credit report, and how it was subsequently removed.

Without repeating all the facts set out by the parties and

in the Court’s own statement of facts, the Court finds the

evidence provided by AR about how the Woods POAM collection

account appeared on credit reports after June 17, 2004, is

complete, admissible, and does not permit a rational trier to

infer that Defendants were responsible for the reappearance of

the account. Defendants’ proper reaction to the notice of the

erroneous collection on the Woods credit report was confirmed on

April 30, 2004, and June 17, 2004. Defendants were justified in

considering the matter corrected. After AR’s upgrading of its

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The original complaint and amended complaint named only POAM as a 4

defendant. The first amended complaint added AR but still did not add Equifax.

After AR removed the case to this Court, Plaintiffs again requested leave to

amend, but the Court denied the motion because the only purpose was to attempt

to name defense counsel for POAM as an agent of POAM who was personally

responsible for repeated re-publication of the derogatory during defense of

the case. In the order denying the motion to amend, the Court noted that while

there had been informal discussions with the Court and defense counsel about a

proposed second amended complaint (SAC), "those discussions have focused on

the desire and/or perceived need to have Equifax as a party in this case. In

fact, Plaintiffs' counsel has challenged and at times seemingly begged defense

counsel to cross-claim against or implead Equifax if they think Equifax is

necessary in this lawsuit." (Order denying mot. to file SAC, p. 9:23-28.) 

49

computer software beginning in November 2004 and the purging,

restoration, and repurging by Equifax of previously reported AR

accounts during March 2005, a credit report of March 11, 2005, no

longer reported the derogatory account. (See AR Reply, Prentiss

Decl. ¶¶ 4-9, Exs. D, E, F, G, H, I; Harwin Decl. ¶ 11, Ex. L-4.)

It is apparent from all of the above that neither of the

Defendants published false information with regard to the

Plaintiffs from the date they were informed by Lori Woods that

there was an error, June 19, 2003. Any reports from Equifax which

reflected the derogatory information from that date forward are

the fault of Equifax. Plaintiffs have had many opportunities to

include Equifax as a defendant, and they either failed or refused

to do so. If Plaintiffs had properly pursued the prosecution of 4

this case and had made timely discovery motions, they would have

possessed knowledge of the subsequent actions of Defendants that

revealed how Equifax finally removed the derogatory.

In summary, because of federal preemption of the defamation

claim, Defendants are entitled to judgment as a matter of law.

Further a rational trier of fact could not find that Defendants

were responsible for the re-publication of the Woods’ derogatory

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credit information after they were informed of its existence in

June 2003; all of their communications were aimed at correcting

the error, and the republication was the fault of Equifax, which

erroneously created two Woods accounts, and the error was not

discovered until 2005 during the purging of AR’s accounts.

Finally, if the issue of malice is reached, then considering

Plaintiffs’ concessions, Defendants have established that there

is no disputed issue of fact as to malice; a rational trier of

fact could not find from the evidence presented that Defendants’

conduct was malicious by clear and convincing evidence.

Plaintiffs’ failure to submit evidence sufficient to warrant a

reasonable inference of malice causes their claim and their

prayer for punitive damages to fail.

VI. Disposition

Accordingly, it is ORDERED that

1. The motion to strike of Defendant Protection One Alarm

Monitoring, Inc., IS DENIED; and

2. The amended request for judicial notice of Defendant

Protection One Alarm Monitoring, Inc. IS GRANTED, and the

original request for judicial notice IS DENIED as moot; and 

3. The motion of Defendant Assets Resources, Inc. for

summary judgment IS GRANTED as to both Plaintiffs; and

4. The motion of Defendant Protection One Alarm Monitoring,

Inc. for summary judgment IS GRANTED as to both Plaintiffs; and

5. The Plaintiffs’ request for attorneys fees included in

Plaintiffs’ attached Affidavit, at p. 3, for defense of Asset

Resources Motion for Summary Judgment IS DENIED.

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//////////

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IT IS SO ORDERED.

Dated: August 16, 2007 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

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