Pulley v. Sterling Bancorp

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PHILIP C. PULLEY, et al., Plaintiffs, v. STERLING BANCORP, et al., Defendants.

Civil Action No. 20-6109

United States District Court, E.D. Pennsylvania

March 29, 2023

MEMORANDUM

JOHN MILTON YOUNGE JUDGE

I. INTRODUCTION

Currently before this Court are Defendant Sterling Bancorp and Sterling National Bank's Motion for Summary Judgment (ECF No. 61) Defendant Equifax Information Services, LLC's (“Equifax”) Motion for Summary Judgment (ECF No 64), Plaintiffs Philip C. Pulley and Devra K. Pulley's Partial Motion for Summary Judgment (ECF No. 65), Defendant Experian Information Solutions, Inc.'s (“Experian”) Motion for Summary Judgment (ECF No. 69), and Defendant Trans Union LLC's (“Trans Union”) Motion for Summary Judgment (ECF No. 70). The Court finds these motions appropriate for resolution without oral argument. Fed.R.Civ.P. 78; L.R. 7.1(f). For the reasons set forth in this Memorandum, Defendants' Motions (ECF Nos. 61, 64, 69-70) will be granted, and Plaintiffs' Motion (ECF No. 65) will be denied.

II. FACTUAL BACKGROUND

Plaintiffs Philip C. Pulley and Devra K. Pulley have filed this civil action against Defendants Sterling Bancorp and Sterling National Bank (hereinafter, the “Sterling Defendants”) and the three major credit reporting agencies-Defendants Trans Union, Equifax, and Experian (hereinafter, the “CRA Defendants”)-for alleged violations of the Fair Credit Reporting Act (the “FCRA”), 15 U.S.C. §§ 1681, et seq. (Amended Complaint (“Am. Compl.), ¶ 1, ECF No. 5.) In June 2000, Plaintiffs and the Sterling Defendants executed a $600,000 adjustable-rate note and mortgage-with monthly payments totaling $5,174.27. (Am. Compl., ¶¶ 11-12, ECF No. 5; Sterling Defs., SUMF, ¶ 9, ECF No. 61-1.) As of April 2020, Plaintiffs were current on their mortgage. (Am. Compl., ¶ 13, ECF No. 5.) In May 2020, as a direct result of the COVID-19 pandemic, Plaintiffs entered into a Forbearance Agreement with the Sterling Defendants- whereby Plaintiffs were excused from making their monthly payments for the months of May, June, and July 2020. (Am. Compl., ¶ 14, ECF No. 5.) However, on August 7, 2020, Plaintiffs filed a dispute with the CRA Defendants (as required by the FCRA) after the Sterling Defendants seemingly reported Plaintiffs' Sterling mortgage (the one subject to the three-month forbearance period) as delinquent and past due to the CRA Defendants. (Am. Compl., ¶¶ 20-21, ECF No. 5.) At the summary judgment stage, only Defendant Trans Union concedes to receiving a formally filed dispute from Plaintiff Philip C. Pulley (but not from Plaintiff Devra K. Pulley); Defendants Experian and Equifax maintain that their records indicate that they never received a disputed claim from Plaintiffs. (Def. Trans Union, SUMF, ¶ 58, ECF No. 70-2; Def. Experian, SUMF, ¶¶ 25-27, ECF No. 69-2; Def. Equifax, SUMF, ¶¶ 77-80, ECF No. 64-2.)

The Sterling Defendants note that their sub-servicer, Dovenmuehle Mortgage, Inc. (hereinafter, “DMI”)-i.e., the entity that handles all the administrative tasks necessary to service a mortgage loan-had reported Plaintiffs' as having missed their May 2020, June 2020, and July 2020 monthly payments, which were covered by the aforementioned Forbearance Agreement. (Sterling Defs. Mem. of Law. in Supp. of Mot. for Summ. J., pp. 7, 9, ECF No. 61-2.) However, the Sterling Defendants and Defendants Trans Union and Experian all agree that the alleged inaccuracy had been rectified by September 3, 2020-which is within the FCRA's requirement that a disputed claim be investigated and potentially resolved within thirty (30) days. However, Defendant Equifax has continued to maintain that it had no obligations or liability in connection with this civil action, as it had never marked Plaintiffs' Sterling mortgage as late or delinquent on Plaintiffs' consumer credit reports. (Def. Equifax, SUMF, ¶ 40, ECF No. 64-2.)

Taken together, the crux of the dispute revolves around whether the Sterling Defendants conducted a reasonable investigation and modification of Plaintiffs' Sterling mortgage details upon receipt of Plaintiff Philip C. Pulley's disputed claim from Defendant Trans Union as required by 15 U.S.C. §§ § 1681s-2(b)(1) and whether the CRA Defendants: (1) implemented reasonable procedures to ensure the maximum possible accuracy of the information submitted by the Sterling Defendants/DMI for inclusion in Plaintiffs' consumer credit reports under 15 U.S.C. § 1681e(b) and (2) whether the CRA Defendants' re-investigation and modification of Plaintiffs' consumer credit reports were reasonable and timely pursuant to 15 U.S.C. § 1681i. Perhaps not too surprising, the Sterling Defendants and the CRA Defendants have each moved for summary judgment-arguing that nothing in the evidential record suggests that they were unreasonable or untimely in their investigations and resolution of the disputed inaccuracy within Plaintiffs' consumer credit reports (or, in Defendant Equifax's case, that no inaccuracy existed to begin with). On the other hand, Plaintiffs are seeking partial summary judgment against the Sterling Defendants-seeking a determination that the Sterling Defendants are liable, as a matter of law, for failing to modify Plaintiffs' consumer credit reports for nearly six (6) months. (Pls. Part. Mot. for Summ. J., pp. 22-25, ECF No. 65-1.)

III. LEGAL STANDARD

Summary judgment is appropriate if the movant shows “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Liberty Mut. Ins. Co. v. Sweeney, 689 F.3d 288, 292 (3d Cir. 2012). To defeat a motion for summary judgment, there must be a factual dispute that is both material and genuine. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 24-49 (1986); Dee v. Borough of Dunmore, 549 F.3d 225, 229 (3d Cir. 2008). A material fact is one that “might affect the outcome of the suit under the governing law[.]” Anderson, 477 U.S. at 248. A dispute over a material fact is “genuine” if, based on the evidence, “a reasonable jury could return a verdict for the nonmoving party.” Id.

The movant bears the initial burden of demonstrating the absence of a genuine dispute of a material fact. Goldenstein v. Repossessors Inc., 815 F.3d 142, 146 (3d Cir. 2016). When the movant is the defendant, they have the burden of demonstrating that the plaintiff “has failed to establish one or more essential elements of her case.” Burton v. Teleflex Inc., 707 F.3d 417, 425 (3d Cir. 2013). If the movant sustains their initial burden, “the burden shifts to the nonmoving party to go beyond the pleadings and come forward with specific facts showing that there is a genuine issue for trial.” Santini v. Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (internal quotation marks omitted) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

At the summary judgment stage, the court's role is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249; Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 253 (3d Cir. 2007). In doing so, the court must construe the facts and inferences in the light most favorable to the nonmoving party. See Horsehead Indus., Inc. v. Paramount Commc'ns, Inc., 258 F.3d 132, 140 (3d Cir. 2001). Nonetheless, the court must be mindful that “[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252.

IV. DISCUSSION

Plaintiffs allege that Defendants “are liable to Plaintiffs for violations of the FCRA and for willfully and negligently failing to comply with the requirements imposed on them by the provisions of the FCRA [referencing 15 U.S.C. §§ § 1681s-2(b)(1), 1681e(b), and 1681i]. (Am. Compl., ¶ 47, ECF No. 5.) As a threshold matter, it is important to note that “furnishers”-like the Sterling Defendants/DMI-are bound by 15 U.S.C. § 1681s-2(b)(1) (i.e., conducting reasonable and timely investigations of disputed information that the furnishers previously submitted to credit reporting agencies). Additionally, consumer reporting agencies-like the CRA Defendants-are primarily bound by 15 U.S.C. § 1681e(b) (i.e., implementing reasonable procedures for maximizing the possible accuracy of the information that furnishers ultimately incorporate into consumer credit reports) and 15 U.S.C. § 1681i (i.e., informing furnishers of disputed information within consumer credit reports and conducting reasonable re-investigations that result in potential modifications to a given consumer credit report). Thus, this Court will review the claims against the Sterling Defendants and CRA Defendants in turn.

a. Sterling Defendants: 15 U.S.C. § 1681s-2(b) (Furnisher Obligations)

As previously discussed, Plaintiffs allege that the Sterling Defendants “violated its duty under the FCRA [15 U.S.C § 1681s-2(b)] to conduct a reasonable and good faith investigation into Plaintiffs' dispute and failing to correct or delete the inaccurate information.” (Am. Compl., ¶¶ 39, 47, ECF No. 5.) For context, the Sterling Defendants' wholly-owned subsidiary, DMI, acts as a sub-servicer and as a “furnisher”-meaning that DMI is “an entity, often a creditor, that furnishes information regarding a consumer to one or more consumer reporting agencies for inclusion in a consumer report.” Harris v. Pennsylvania Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87, 90 (3d Cir. 2017) (referencing 16 C.F.R. § 660.2(c)). Upon receipt of a dispute regarding the completeness or accuracy of any information provided to a consumer reporting agency, a furnisher...