Court Opinion

ID: 7375386
Source: CourtListenerOpinion
Date Created: 2022-07-28 23:16:32.218891+00
Date Added: 2024-06-11T16:21:11.544488
License: Public Domain

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                                             UNPUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                               No. 21-1324

        PAUL MANOS; MARGARET M. MANOS,

                             Plaintiffs - Appellants,

                      v.

        FREEDOM MORTGAGE CORPORATION,

                             Defendant - Appellee.

        Appeal from the United States District Court for the Western District of North Carolina, at
        Charlotte. Graham C. Mullen, Senior District Judge. (3:19-cv-00578-GCM)

        Submitted: March 15, 2022                                         Decided: March 24, 2022

        Before MOTZ, HARRIS, and RICHARDSON, Circuit Judges.

        Affirmed by unpublished per curiam opinion.

        ON BRIEF: M. Shane Perry, COLLUM & PERRY, Mooresville, North Carolina, for
        Appellants. John J. Berry, Pittsburgh, Pennsylvania, David A. Zulandt, DINSMORE &
        SHOHL LLP, Cleveland, Ohio, for Appellee.

        Unpublished opinions are not binding precedent in this circuit.
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        PER CURIAM:

               Paul and Margaret Manos (“Plaintiffs”) filed a complaint against Freedom

        Mortgage Corporation (“Freedom”) pursuant to the Fair Credit Reporting Act (“FCRA”),

        15 U.S.C. §§ 1681 to 1681x, the North Carolina Unfair and Deceptive Trade Practices Act

        (“NCUDTPA”), N.C. Gen. Stat. § 75-1.1 (LexisNexis 2021), and the North Carolina Debt

        Collection Act (“NCDCA”), N.C. Gen. Stat. §§ 75-50 to 75-56 (LexisNexis 2021). The

        district court granted Freedom’s motion for summary judgment. On appeal, Plaintiffs

        argue that there existed genuine disputes of material fact that should have precluded

        summary judgment.

               We review de novo the district court’s order granting summary judgment. Calloway

        v. Lokey, 948 F.3d 194, 201 (4th Cir. 2020). “A district court ‘shall grant summary

        judgment if the movant shows that there is no genuine dispute as to any material fact and

        the movant is entitled to judgment as a matter of law.’” Jacobs v. N.C. Admin. Off. of the

        Cts., 780 F.3d 562, 568 (4th Cir. 2015) (quoting Fed. R. Civ. P. 56(a)). A genuine dispute

        exists “if a reasonable jury could return a verdict for the nonmoving party.” Id. (internal

        quotation marks omitted). In determining whether a genuine issue of material fact exists,

        this court “view[s] the facts and all justifiable inferences arising therefrom in the light most

        favorable to . . . the nonmoving party.” Id. at 565 n.1 (internal quotation marks omitted).

        However, “the nonmoving party must rely on more than conclusory allegations, mere

        speculation, the building of one inference upon another, or the mere existence of a scintilla

        of evidence.” Humphreys & Partners Architects, L.P. v. Lessard Design, Inc., 790 F.3d

        532, 540 (4th Cir. 2015) (internal quotation marks omitted).

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               Plaintiffs first argue that Freedom violated the FCRA by reporting misleading

        information and that Freedom’s investigations were not reasonable and in compliance with

        the FCRA. The FCRA prohibits those who furnish information to credit reporting agencies

        from providing information they know to be false and requires them to correct information

        discovered to be false. 15 U.S.C. § 1681s-2(a)(1), (2). A credit report is inaccurate if it

        reports misleading information. Saunders v. Branch Banking and Tr. Co., 526 F.3d 142,

        148 (4th Cir. 2008). The FCRA also requires that a creditor conduct a reasonable

        investigation after receiving notice of a dispute. 15 U.S.C. § 1681s-2(b)(1)(A); Johnson v.

        MBNA Am. Bank, N.A., 357 F.3d 426, 431 (4th Cir. 2004). Whether an investigation was

        reasonable “is based on an evaluation of information within the furnisher’s possession,

        such as correspondence between the consumer and the furnisher, the data identified by the

        reporting agency as disputed, and the furnisher’s other records relating to the disputed

        account.” Daugherty v. Ocwen Loan Servicing, LLC, 701 F. App’x 246, 253 (4th Cir.

        2017) (No. 16-2243).

               In this case, Freedom did not omit any pertinent information that would render its

        report misleading, nor did it include information that was false. Rather, Freedom correctly

        reported the undisputed fact that Plaintiffs’ March 2018 mortgage payment was received

        more than 30 days late. Although Plaintiffs assert that Freedom’s report was misleading

        for failing to disclose that Plaintiffs made a good faith effort to pay on time, Plaintiffs’

        evidence is insufficient to create a disputed issue of material fact regarding whether they

        made a good faith effort to pay on time. As for Freedom’s investigation, the record reveals

        that each time Plaintiffs disputed Freedom’s report, Freedom conducted an investigation

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        that included review of Plaintiffs’ accounts—including the payment history, servicing

        notes, recordings, web logs, and cash management records—and determined that

        Plaintiffs’ March 2018 payment was submitted more than 30 days late. Plaintiffs have not

        produced any evidence showing that Freedom’s investigation was unreasonable. As such,

        we conclude that the district court did not err in granting summary judgment with respect

        to this claim.

               Turning to Plaintiffs’ NCUDTPA claim, the NCUDTPA states that “unfair or

        deceptive acts or practices in or affecting commerce are declared unlawful.” N.C. Gen.

        Stat. § 75-1.1(a). “In order to establish a prima facie claim for unfair trade practices, a

        plaintiff must show: (1) the defendant committed an unfair or deceptive act or practice, (2)

        the action in question was in or affecting commerce, and (3) the act proximately caused

        injury to the plaintiff.” Bumpers v. Cmty. Bank of N. Va., 747 S.E.2d 220, 226 (N.C. 2013)

        (alteration and internal quotation marks omitted).

               Plaintiffs argue that Freedom’s failure to disclose its policy of requiring payment to

        be postdated if made after 11:00 p.m. was deceptive and in violation of the NCUDTPA,

        and they dispute the district court’s determination that the NCDCA supplants the

        NCUDTPA because their claim under the NCUDTPA does not specifically pertain to debt

        collection.      We conclude that, regardless of whether the NCDCA supplanted the

        NCUDTPA, the court correctly determined that Plaintiffs failed to establish a NCUDTPA

        claim. “[W]hether an act or practice is an unfair or deceptive practice that violates N.C.

        Gen. Stat. § 75-1.1 [is] a question of law for the court.” In re Fifth Third Bank, N.A., 719

        S.E.2d 171, 176 (N.C. Ct. App. 2011) (alterations and internal quotation marks omitted).

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        “A practice is unfair . . . when it offends established public policy as well as when the

        practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to

        consumers.” Id. (internal quotation marks omitted). Failing to disclose information has

        been considered deceptive when it rises to the level of a misrepresentation. Kron Med.

        Corp. v. Collier Cobb & Assoc., Inc., 420 S.E.2d 192, 196 (N.C. Ct. App. 1992).

               Plaintiffs failed to produce any evidence that Freedom’s alleged nondisclosure of

        its postdating policy was unfair or deceptive. Freedom had a banner on its website

        notifying customers that payments made after 11:00 p.m. would be posted the following

        day and had a system in place to notify customers attempting to make online payments

        after 11:00 p.m. of how to properly submit their payment.             Moreover, Plaintiffs

        successfully submitted a payment after 11:00 p.m. in February 2018 following Freedom’s

        procedure. Given the undisputed evidence of constructive and actual disclosure, we find

        that the district court did not err in granting summary judgment with respect to Plaintiffs’

        NCUDTPA claim.

               Finally, Plaintiffs argue that the district court erred in granting summary judgment

        with respect to their NCDCA claim under N.C. Gen. Stat. § 75-55(2) because it improperly

        weighed the evidence and did not view the evidence in the light most favorable to them.

        To state a claim under the NCDCA, “[f]irst, the obligation owed must be a ‘debt’; second,

        the one owing the obligation must be a ‘consumer’; and third, the one trying to collect the

        obligation must be a ‘debt collector.’” Green Tree Servicing LLC v. Locklear, 763 S.E.2d

        523, 527 (N.C. Ct. App. 2014) (internal quotation marks omitted). Then, the three

        requirements of a NCUDTPA claim must be met. Reid v. Ayers, 531 S.E.2d 231, 235 (N.C.

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        Ct. App. 2000). Section 75-55(2) specifically prohibits a debt collector from collecting a

        late fee by unconscionable means.

               Freedom’s records showed that an error message was displayed after Plaintiffs

        attempted to submit their payment after 11:00 p.m., that no confirmation number was sent

        after the attempted payment, and that Freedom attempted to call Plaintiffs numerous times.

        Moreover, Plaintiffs admitted that they received two letters from Freedom notifying them

        of the overdue payment, but they did not open the letters. Thus, the district court correctly

        determined that no jury could find that Plaintiffs properly submitted their March 2018

        payment, or that Freedom failed to provide notice to Plaintiffs that their payment was not

        properly submitted. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)

        (“[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving

        party for a jury to return a verdict for that party.”).

               Accordingly, we affirm the district court’s judgment. We dispense with oral

        argument because the facts and legal contentions are adequately presented in the materials

        before this court and argument would not aid the decisional process.

                                                                                        AFFIRMED

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