Court Opinion

ID: 4910475
Source: CourtListenerOpinion
Date Created: 2021-09-13 18:04:53.695398+00
Date Added: 2024-06-11T08:13:25.358174
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                File Name: 21a0428n.06

                                           No. 20-2060

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

                                       )
 MARK R. KRUEGER,
                                       )                                          FILED
      Plaintiff-Appellant,                                                  Sep 13, 2021
                                       )
                                                                        DEBORAH S. HUNT, Clerk
                                       )
 v.                                    )
                                       )                         ON APPEAL FROM THE U.S.
 EXPERIAN INFORMATION SOLUTIONS, INC.; )
                                                                 DISTRICT COURT FOR THE
 TRANS UNION LLC,                      )                         EASTERN DISTRICT OF
      Defendants,                      )                         MICHIGAN
                                       )
 CENLAR FSB,                           )
                                       )
      Defendant-Appellee.
                                       )

       Before: GIBBONS, KETHLEDGE, and MURPHY, Circuit Judges.

       KETHLEDGE, Circuit Judge. For more than a year, the servicer for Mark Krueger’s

mortgage loan, Cenlar FSB, continued to tell credit-reporting agencies that the loan was past due—

even though Cenlar knew that the loan had been discharged in bankruptcy. Krueger’s credit score

hovered in the low 500s as a result. After unsuccessfully seeking for months to have Cenlar correct

its reports, Krueger brought this suit under the Fair Credit Reporting Act, alleging that Cenlar had

negligently and willfully breached its duties under the Act. The district court granted summary

judgment to Cenlar, holding that Krueger lacked standing to assert his negligence claim and that

he lacked evidence that Cenlar violated the Act willfully. We respectfully disagree and reverse.
No. 20-2060, Krueger v. Experian Information Services, et al.

                                                 I.

       Given that the district court granted summary judgment to Cenlar, we construe the factual

record in the light most favorable to Krueger. Upshaw v. Ford Motor Co., 576 F.3d 576, 584 (6th

Cir. 2009).

       Krueger filed for bankruptcy under Chapter 13 and eventually made all the payments

required under his plan. In January 2018, the bankruptcy court entered an order discharging his

remaining debts, including a mortgage loan on a property at 9405 Pardee Road. The servicer for

the mortgage on that property was Cenlar.

       After the discharge, Krueger looked forward to replacing his older, beat-up car with a new

one. A month after the discharge, however, an online credit-monitoring app told Krueger that one

of his accounts was past due. Krueger pulled his credit reports from Experian, Equifax, and

TransUnion. Those reports said that Krueger owed $29,453 on the Cenlar loan, that $10,875 of

the loan was past due, and that his credit score was 515—much lower than Krueger had expected,

even with his recent bankruptcy.

       Given that credit score, Krueger abandoned his plan to buy a new car and instead disputed

his credit report. The credit-reporting agencies forwarded Krueger’s disputes to Cenlar. At the

time, Cenlar already knew that the bankruptcy court had discharged the mortgage loan; indeed

Cenlar was in the process of stripping the lien from Krueger’s property. In response to the dispute,

Cenlar’s credit analysts likewise noted that the bankruptcy court had discharged the debt—

meaning, as Cenlar’s representative admitted later, that Krueger “did not owe” anything on the

loan and that his account was not past due. Yet when Cenlar purportedly sought to correct the

mistaken report, it said the account had “no status”—which, according to Cenlar, meant that the

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No. 20-2060, Krueger v. Experian Information Services, et al.

account’s status had not changed from the month before. Cenlar also said that the account balance

had increased to $31,783 and that the amount past due had increased to $11,191.

       When Krueger next checked his reports, Experian and TransUnion still said that the Cenlar

loan was past due. Over the following months, Krueger continued to dispute his credit reports,

and Cenlar continued to say the same thing—that the account had “no status” and a past-due

balance. In February 2019, more than a year after the discharge, Cenlar was still reporting that the

loan was past due—now by $12,294.

       Krueger sued Cenlar that month, alleging that it had willfully and negligently violated its

statutory duties as a “furnisher” of credit information. See 15 U.S.C. §§ 1681s-2, 1681n, 1681o.

Cenlar and Krueger cross-moved for summary judgment on those claims. The district court held

that a reasonable jury could not find that Cenlar had violated the Act willfully and that Krueger

lacked standing to bring a claim that Cenlar had violated the Act negligently. The court therefore

granted summary judgment to Cenlar. This appeal followed.

                                                II.

       We review the district court’s grant of summary judgment de novo. See Fortney &

Weygandt, Inc. v. Am. Mfrs. Mut. Ins. Co., 595 F.3d 308, 310 (6th Cir. 2010). Summary judgment

is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a).

                                                A.

       Krueger challenges the district court’s conclusion that he lacked standing. A plaintiff has

standing if he suffered an injury in fact, fairly traceable to the defendant’s alleged misconduct,

which the relief he seeks would likely redress. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–

61 (1992).

                                                -3-
No. 20-2060, Krueger v. Experian Information Services, et al.

       Here, Krueger seeks damages under the Fair Credit Reporting Act, which gives him a cause

of action against a furnisher of credit information (like Cenlar) who willfully or negligently

violated its procedural duties under the Act. See 15 U.S.C. §§ 1681n, 1681o. But not every

violation of the Act causes an injury in fact. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016).

Instead, a plaintiff has standing to seek damages only if he can show that the defendant’s alleged

procedural violation—here, Cenlar’s inaccurate reports about the mortgage loan’s status—caused

him to suffer a concrete harm. See TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2211 (2021).

       Krueger argues that Cenlar’s inaccurate reports inflicted a concrete harm because his low

credit score caused him to abandon his plans to buy a new car. When the bankruptcy court

discharged his debts, Krueger had been driving an older car for years, using his available funds to

pay off his debts. A loan would have allowed him to replace his old car, with the added benefit of

giving him a chance to rebuild his credit. But when Krueger saw his dismal credit score he chose

not to apply for a loan, since a lower credit score meant that lenders would charge him a higher

interest rate. The harm that resulted from Krueger’s forbearance was “not abstract.” Spokeo, 136

S. Ct. at 1548 (internal quotation marks omitted). To the contrary, for about 18 months after

Krueger’s debts were discharged, instead of driving a new Ford F-150, he drove a Ford Fusion that

was not “always in the best of shape.” And the record here supports a finding that this harm was

real, rather than fictive: once the credit-reporting agencies removed the Cenlar account from

Krueger’s report, his credit score increased by almost 100 points and he promptly obtained a car

loan to buy a new F-150.

       Cenlar does argue that, since Krueger himself chose not to apply for a car loan, he cannot

trace this harm to Cenlar’s conduct—as opposed to the bankruptcy or to himself. But a plaintiff’s

role in his injury destroys traceability only when the injury is “so completely due to the plaintiff’s

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No. 20-2060, Krueger v. Experian Information Services, et al.

own fault as to break the causal chain.” Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 866

(6th Cir. 2020) (alterations adopted). Here, when Cenlar reported that the loan was past due,

Krueger’s resulting credit score was only 515. That Krueger chose not to obtain a loan with higher

interest than he could have obtained absent Cenlar’s error does not make him at “fault” for the

harm of driving his old car. Krueger has standing to assert his claims here.

                                                B.

       Krueger argues that his evidence would allow a reasonable jury to find that Cenlar had

willfully and negligently violated the Act. To prevail on those claims, Krueger must show three

things. First, Krueger must make “a threshold showing” that Cenlar provided false or “materially

misleading” information to the credit-reporting agencies. Pittman v. Experian Info. Sols., Inc., 901

F.3d 619, 629–30 (6th Cir. 2018). Krueger plainly made that showing: long after his mortgage

loan was discharged, Cenlar continued to report it as past due. Cenlar responds that its report was

not materially misleading because Cenlar also said that the account had “no status” and because

Experian’s credit report elsewhere noted Krueger’s bankruptcy. The relevant inquiry, however, is

whether Cenlar’s information was misleading, not whether Experian’s report as a whole was. See

id. And Cenlar’s failure to indicate that the debt had been discharged could mislead a person to

believe that Krueger remained liable for the loan. Indeed, Krueger presented evidence that the

credit reporting agencies actually construed Cenlar’s responses that way: when the agencies

removed the Cenlar account from his report, his credit score increased by 100 points. Thus, a

reasonable jury could find that Cenlar furnished false or materially misleading credit information

about Krueger.

       Second, a reasonable jury must be able to find that Cenlar breached its duties under the

Act. See 15 U.S.C. §§ 1681n(a), 1681o(a); Pittman, 901 F.3d at 628. As relevant here, the Act

                                                -5-
No. 20-2060, Krueger v. Experian Information Services, et al.

required Cenlar reasonably to investigate Krueger’s dispute and to correct any inaccurate or

incomplete information that Cenlar had furnished. See 15 U.S.C. § 1681s-2(b)(1)(A), (E); Boggio

v. USAA Fed. Sav. Bank, 696 F.3d 611, 616, 618 (6th Cir. 2012). The record would allow a jury

to find that Cenlar breached that duty. Krueger repeatedly told Cenlar that his loan had been

discharged in bankruptcy and that, as a result, he did not owe anything on the loan. Cenlar’s credit

analysts also saw that the loan had been discharged. And Cenlar’s representative admitted in his

deposition that the discharge meant that Krueger owed nothing on the loan. Yet Cenlar continued

to report that Krueger owed a balance on the loan and that the loan was past due. From that

evidence a jury could plainly find that Cenlar botched its investigation and failed to correct its

mistaken reporting.

       The same evidence supports the third element of Krueger’s claims, namely that Cenlar

acted negligently or willfully. See 15 U.S.C. §§ 1681n(a), 1681o(a). Again, Cenlar knew that

Krueger’s loan had been discharged but for more than a year told the credit-reporting agencies that

the loan was past due. A jury could therefore find that Cenlar was either incompetent or willful in

its failure to correct its reports sooner. Cenlar contends that its actions were not willful because it

had implemented policies that guided its analysts in the resolution of credit disputes. But the mere

existence of those policies hardly disproves as a matter of law that Cenlar acted willfully. See

Boggio, 696 F.3d at 619. Cenlar was not entitled to summary judgment on Krueger’s claims.

                                              *   *     *

       The district court’s judgment is reversed, and Krueger’s case is remanded for further

proceedings consistent with this opinion.

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