Lawrence v. Paramount Residential Mortg. Grp.

MARCKIA LAWRENCE, Plaintiff, v. PARAMOUNT RESIDENTIAL MORTGAGE GROUP, INC., Defendant.

No. 3:19-cv-02103-JR

United States District Court, D. Oregon

May 4, 2021

FINDINGS AND RECOMMENDATION

JOLIE A. RUSSO, UNITED STATES MAGISTRATE JUDGE

Defendant Paramount Residential Mortgage Group, Inc. (“Paramount”) moves for summary judgment on plaintiff Marckia Lawrence's claims pursuant to Fed.R.Civ.P. 56(a). Plaintiff opposes Paramount's motion under Fed.R.Civ.P. 56(d) or, alternatively, seeks summary judgment under Fed.R.Civ.P. 56(f).^[1] For the reasons set forth below, Paramount's motion should be granted plaintiff's motion should be denied, and this case should be dismissed.

BACKGROUND

In November 2015, plaintiff obtained a loan from Paramount in the amount of $245, 373 to purchase a primary residence in Portland, Oregon. The loan was secured by a promissory note and deed of trust.

In December 2016, plaintiff filed for Chapter 13 bankruptcy.^[2] Plaintiff identified her debt to Paramount in her bankruptcy petition. Def.'s Req. Judicial Notice Ex. 3 (doc. 14). In March 2017, the bankruptcy court entered an order confirming plaintiff's bankruptcy plan pursuant to which plaintiff is responsible for paying the trustee a monthly sum, as well as for directly providing Paramount with regularly scheduled mortgage payments. Def.'s Req. Judicial Notice Exs. 2, 4 (doc. 14). In May 2017, Paramount filed a Proof of Claim. At that time plaintiff owed approximately $240, 000 on her mortgage loan and was $1, 827.95 in arrears. Def.'s Req. Judicial Notice Ex. 1 (doc. 14).

In May 2018, plaintiff ordered a three-bureau credit report from Experian, Equifax, and TransUnion to ensure creditors were reporting her credit properly. The May credit reports each describe the Paramount account as “closed” and “involved in a Chapter 13” proceeding. Lawrence Decl. Ex. B (doc. 39-1). Equifax's report reflected plaintiff was “[m]aking regular payments” and therefore described the monthly payment history from 2014 through 2018 as “OK.” Id. at 1. Experian recounted plaintiff's monthly payment history during 2016 as “OK, ” except for December 2016, in which it reported “FP” or “failed to pay.” Id. at 2. Experian did not denote any monthly payment history following December 2016. Id. TransUnion did not report any payment history. Id. at 3.

In June 2018, plaintiff sent letters of dispute to Experian, Equifax and TransUnion regarding Paramount's trade line, which stated in relevant part:

I have filed a chapter 13 bankruptcy. This account is not a closed account, and the status needs to be opened as I am current and still making payments of this account. The payment history for this account is entirely incomplete and needs to be updated showing that I have always made on time payments . . . Additionally, the adverse reporting that has occurred post discharge needs to be removed.

Lawrence Decl. ¶ 6 & Ex. C (doc. 39-1). To demonstrate that her Paramount account was “in good standing, ” plaintiff's dispute letters were accompanied by proof of six months of recent mortgage payments. Lawrence Decl. ¶ 7 & Exs. C-D (doc. 39-1).

In August 2018 and November 2019, plaintiff ordered a second and third set of credit reports, which allegedly contained the same “delinquent and/or adverse trade lines” as the June report. First Am. Compl. ¶¶ 64-71 (doc. 30). In particular, the November reports of Equifax and Experian continued to designate the Paramount account status as “closed.” Lawrence Decl. Ex. E (doc. 39-1). Equifax's “Payment History” section was blank, but its “Comments” section stated “[p]ays account as agreed.” Id. at 1. Experian's report explained plaintiff's “[d]ebt [was] included in or discharged through bankruptcy chapter 13” and did not depict any payment history other than an “FP” in December 2016. Id. at 2. TransUnion did not include any trade line regarding the Paramount account. Lawrence Decl. ¶ 8 n.1 (doc. 39-1).

In December 2019, plaintiff commenced this lawsuit under the Fair Credit Reporting Act (“FCRA”) based on the May/August 2018 and November 2019 credit reports, alleging that the description of her Paramount account as “closed” after she filed for bankruptcy and failure to report her ongoing mortgage payments was “incomplete, misleading, and technically inaccurate.” Compl. ¶¶ 57-76 (doc. 1). In April 2020, Paramount moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). In November 2020, the Court granted Paramount's motion.

The Court explained that, under the FRCA, credit reporting agencies have “no obligation to report post-bankruptcy payments where the plaintiff's mortgage was provided for in her Chapter 13 plan.” Lawrence v. Paramount Residential Mortg. Grp., Inc., 2020 WL 6689371, *2-3 (D. Or. July 20), adopted by 2020 WL 6685706 (D. Or. Nov. 10, 2020) (collecting cases). This is because “bankruptcy discharges personal financial liability on instruments named in a petition including on a promissory note and on the underlying deed of trust, ” such that “in the eyes of the law, any future action to collect on the debt would be against the property.” Id. (citations and internal quotations and brackets omitted). In sum, because plaintiff's “mortgage debt was included in the bankruptcy plan” and there were no “facts intimating that plaintiff's debt with Paramount was not discharged through bankruptcy or that her payments were not voluntary[, ] the complaint fail[ed] to plausibly allege that Paramount's reporting was incomplete or inaccurate.” Id. at *3.

Plaintiff subsequently lodged her First Amended Complaint clarifying that her bankruptcy remained ongoing and her debts had not yet been discharged, and asserting claims for failure to conduct a reasonable investigation and negligent noncompliance under 15 U.S.C. § 1681s-2(b) and 15 U.S.C. § 1681o, respectively. First Am. Compl. ¶¶ 4, 81, 86 (doc. 30).

On February 25, 2021, Paramount filed the present motion for summary judgement. On March 25, 2021, plaintiff responded to Paramount's motion, raising myriad arguments in opposition, some of which were based on a filing in her bankruptcy case made the same day. Briefing was completed regarding these issues on April 15, 2021.

STANDARD OF REVIEW

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file, if any, show “that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of the dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324.

Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 631.

DISCUSSION

Paramount argues that it is entitled to summary judgment because plaintiff's claims fail as a matter of law since the “FCRA does not impose an affirmative duty to report information” in this context. Def.'s Mot. Summ. J 9-10 (doc. 35). According to Paramount, plaintiff cannot defeat summary judgment based on the First Amended Complaint alone or recent factual developments in her bankruptcy case.

Conversely, plaintiff contends that Paramount's motion “should be denied as discovery has not been conducted in this case, ” such that she has not “had a reasonable opportunity to present all available facts.” Pl.'s Resp. to Mot. Summ. J. 2, 7-8 (doc. 39). Additionally, plaintiff asserts that summary judgment is inappropriate because this case is “replete with genuine issues of material fact, ” and she will never receive a discharge of the subject loan based on her March 25, 2021, bankruptcy filing. Id. at 4, 9-10.

I. Preliminary Issues

Two preliminary issues must be resolved before reaching the substantive merits of Paramount's motion: plaintiff's request for relief under Fed.R.Civ.P. 56(d) and the legal impact of her prepetition arrearage and March 25, 2021, bankruptcy filing on these proceedings.

A. Rule 56(d)

Under Fed.R.Civ.P. 56(d), “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition ” the court may deny the summary judgment motion or defer consideration thereof to allow time to obtain discovery. Fed.R.Civ.P. 56(d). Accordingly, a party seeking relief under Rule 56(d) must show: “(1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment.” Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008). The party seeking relief must also “explain why those facts would preclude summary judgment” and “show that it diligently pursued its previous discovery opportunities.” Fed. Trade Comm'n v. Adept Mgmt., Inc., 2017 WL 2563221, *2 (D. Or. June 13, 2017) (citations and internal...