Miller v. Westlake Servs. LLC

637 F.Supp.3d 836

Melissa MILLER v. WESTLAKE SERVICES LLC

Case No. 8:21-cv-00692-JLS-KES

United States District Court, C.D. California

Filed October 28, 2022

Craig Carley Marchiando, Leonard A. Bennett, Pro Hac Vice, Consumer Litigation Associates PC, Newport News, VA, Matthew Michael Loker, Loker Law APC, Arroyo Grande, CA, Octavio Gomez, Pro Hac Vice, The Consumer Lawyers PLLC, Tampa, FL, for Melissa Miller.

Steven Reed Berardino, Taylor Marie McGrew, Molino Firm, Professional Law Corporation, Los Angeles, CA, for Westlake Services LLC.

PROCEEDINGS: (IN CHAMBERS) ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 50)

JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE

Before the Court is a Motion for Partial Summary Judgment filed by Plaintiff Melissa Miller. (Mot., Doc. 50, Mem., Doc. 53). Defendant Westlake Services, LLC opposed (Opp., Doc. 55), and Plaintiff replied (Reply, Doc. 60). Having considered the parties' briefs and held oral argument, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion for the reasons stated below.

I. BACKGROUND¹

Defendant purchases vehicle-sale contracts from dealerships. (Defendant's Response to Plaintiff's Separate Statement of Undisputed Material Facts ("Def.'s Response") ¶ 1, Doc. 56.) A dealership presents a particular loan to five or six companies like Defendant, who then "fight over" who will purchase it. (Id. ¶ 2.)

On July 1, 2019, someone used Plaintiff's personal identifying information to apply for financing to purchase a 2015 Ford Fusion. (Id. ¶ 3.) Plaintiff claims that she was a victim of identity theft: she did not purchase the vehicle, did not direct anyone to do so, and did not provide her personal information to anyone so that they could purchase a vehicle. (Id. ¶ 16.) Plaintiff also claims that she has never owned a Ford Fusion and did not apply for credit to finance the purchase of a Ford Fusion. (Id. ¶¶ 8, 17.) The applicant used Plaintiff's maiden name, Melissa Hamilton, her Social Security Number, employment information, and a copy of her driver's license to fill out the credit application. (Id. ¶ 4.) The address on the application, 6817 Atlantic Avenue, Long Beach, did not match the address on the driver's license and is the address of a shopping center—not a residential address. (Id. ¶ 5.) Plaintiff also claims that the email addresses listed on the application were not her email addresses. (Id. ¶ 19.) Other information on the credit application form and associated employment verification form was accurate, however: Plaintiff's job title, her employer's address, and her phone number were accurate. (Id. ¶¶ 3-3, 8.) Defendant received a credit report purportedly about Plaintiff from Experian with the same incorrect address and several entries flagging potential fraud, including: (1) "SSN used 12 times since 4-1-19"; (2) "(01) Inquiry/On-file current address conflict"; (3) "(09) More than 3 inquiries in the last 30 days"; (4) "(10) Inquiry address: ALERT"; and (5) "(17) On-file address: Non-residential." (Id. ¶¶ 12-14.)

Plaintiff claims that she never made any payments on the account and that she never received any correspondence or communications about the account from Defendant. (Id. ¶¶ 8, 17.) Plaintiff also claims that she first learned of the account in her name while reviewing her credit reports in the fall of 2019 (Id. ¶¶ 22-23.) Defendant had reported to credit reporting agencies ("CRAs") that the account belonged to Plaintiff and had a delinquent payment history. (Id. ¶ 24.) Defendant also later reported the account as a charge-off. (Id. ¶ 25.)

On December 4, 2019, Plaintiff placed a phone call to Defendant to explain that the account was not hers and was the product of identity theft. (Id. ¶ 26.) During that phone call, Defendant's representative told Plaintiff that her identity theft claims would be escalated to Defendant's legal department once Plaintiff submitted an affidavit of identity theft. (Id.; Bergiman Decl. Ex. LL at 2:6-18, 3:3-17, 5:17-20, Doc. 55-3.) On December 13, 2019, one of Defendant's employees called Plaintiff regarding missed payments on the account. (Def.'s Response ¶ 26.) During that phone call, the employee told Plaintiff that, to escalate her identity theft claim, she would have to "send [Defendant] something in writing, a police report." (Bergiman Decl. Ex. MM at 3:25-4:1, Doc. 55-3.) Plaintiff responded that her lawyer would reach out to Defendant and stated: "When I called you guys to let you guys know, you told me I had to do a police report and all these things, like it was my fault." (Id. at 4:2-5:6.) The employee told Plaintiff that collection activity on the account would continue until Plaintiff provided the requested documentation—i.e., a police report or affidavit of identify theft—supporting her claim of identity theft or her lawyer's contact information. (Id. at 6:13-9:3.) Plaintiff responded: "I am not sending it to you. My lawyer will send it to you." (Id. at 9:5-6.) Defendant claims that it did not hear from Plaintiff's attorneys until this lawsuit was filed. (Opp. at 10-11; Bergiman Decl. ¶ 27, Doc. 55-3.)

Aside from the two phone conversations, Plaintiff has testified that she sent Defendant an affidavit of identity theft, though Defendant denies having received it. (Def.'s Response ¶ 27; Marchiando Reply Decl. Ex. 2 (Miller Dep. Tr.) at 81:8-24, Doc. 62-2.) Plaintiff also filed three reports with the Huntington Beach Police Department and another report with the Federal Trade Commission. (Def.'s Response ¶ 27.) Defendant claims that it never received copies of any of those reports. (Bergiman Decl. ¶ 17.) Plaintiff also claims that a detective from the Huntington Beach Police Department called Defendant and explained that Plaintiff was the victim of identity theft. (Def.'s Response ¶ 28.) Defendant disputes that the caller was a detective from the Huntington Beach Police Department, noting that: (1) the detective did not identify himself; (2) did not call with Plaintiff on the line; and (3) placed the call from a number not associated with the Huntington Beach Police Department. (Opp. at 7; Bergiman Decl. ¶ 19 & Ex. NN, Doc. 55-3.) Defendant's internal notes do not indicate any doubt that the caller was a detective, however: an entry dated January 16, 2020 identifies the caller as "DETECTIVE FROM HUNTINGTON BEACH" and notes "HE WOULD LIKE US TO DOCUMENT ON THE ACCT WAS FRAUDULET PURCHASED [sic] AND A VICTIM OF IDENTITY THEFT." (Marchiando Decl. Ex. 26 (Account Notes) at WFS000013, Doc. 51-26.)

In January and February 2020, Plaintiff sent credit reporting dispute letters to the three major CRAs—Equifax, Experian, and TransUnion—and the CRAs forwarded the letters to Defendant. (Def.'s Response ¶ 29; Opp. at 11.) Each letter states that Plaintiff did not open the account that Defendant was attributing to her, and later letters informed Defendant of the three reports she filed with the Huntington Beach Police Department, the report identification numbers, and the identification number of the report she filed with the Federal Trade Commission. (Def.'s Response ¶ 30.) The letters also contain copies of Plaintiff's Social Security Card, driver's license, and a letter confirming her mailing address, and other statements of additional identifying information. (Id. ¶ 31.) In a later credit dispute letter, Plaintiff included cover pages of the police reports and contact information for Huntington Beach police officers Defendant could speak to about the reports. (Id. ¶ 32.) Several of Plaintiff's disputes were coded "103: claims true identity fraud/account fraudulently opened." (Id. ¶ 42.)

Defendant receives credit reporting disputes through communications known as Automated Consumer Dispute Verifications ("ACDVs"), which the CRAs transmit through an electronic system called e-OSCAR. (Id. ¶ 34.) Defendant employs credit dispute analysts, who use a system called Sonnet to view ACDVs. (Id. ¶ 35.) The ACDVs that Defendant received regarding Plaintiff's disputes included as attachments the dispute letters that Plaintiff sent the CRAs. (Id. ¶ 39.) Credit dispute analysts reviewing ACDVs have access to detailed notes on accounts, and those notes address, among other things, communications between Defendant and consumer accountholders. (Id. ¶ 36.) The notes for the account Defendant attributed to Plaintiff included notations for the calls during which Plaintiff claimed the account resulted from identity theft and the purported call from the Huntington Beach Police Department detective. (Id. ¶ 37.) Karen Campos and Jose Mata, the analysts who reviewed Plaintiff's disputes here, testified that they did not consult Defendant's internal notes on Plaintiff's account when they reviewed and responded to the ACDVs. (Marchiando Decl. Ex. 27 (Mata Dep. Tr.) at 92:1-14, Doc. 51-27; Marchiando Reply Decl. Ex. 6 (Campos Dep. Tr.) at 75:19-25, 76:13-17, Doc. 62-6.)

According to Plaintiff, Defendant's credit dispute analysts' investigations of disputes like Plaintiff's are minimal. (Mem. at 5.) Defendant concedes that credit dispute analysts "conduct cursory reviews" of ACDVs, but adds that the analysts escalate disputes to Defendant's legal department upon receipt of supporting documentation, such as an affidavit of identity theft, a police report, or a sworn statement from the disputing consumer. (Bergiman Decl. ¶¶ 20, 22.) Credit dispute analysts do not contact disputing consumers, police, or the Federal Trade Commission, though Defendant's legal department may do so if a dispute is escalated. (Id. ¶ 23.)

Defendant's credit dispute analysts are significantly restricted in what they do as part of an investigation. Credit dispute analysts do not review prior disputes from a consumer when reviewing an ACDV. (Def.'s Response ¶ 56.) Further, these analysts generally do not review account notes in Defendant's system or contact consumers. (Id. ¶¶ 57-58.) Nor do they obtain separate...