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Blumenfeld v. Regions Bank

United States District Court, N.D. Alabama, Middle Division

September 4, 2018

TERRY BLUMENFELD, Plaintiff,
v.
REGIONS BANK, Defendant.

          MEMORANDUM OPINION

          ANNEMARIE CARNEY AXON UNITED STATES DISTRICT JUDGE

         This matter comes before the court on Defendant Regions Bank's motion for summary judgment. (Doc. 29).

         Jo Ann Fryer is the sole mortgagee on a home she owns jointly with her daughter, Plaintiff Terry Blumenfeld. Regions Bank is Ms. Fryer's mortgagor. While at the bank on other business, a Regions Bank employee asked Ms. Fryer- who was there without her daughter-if she was interested in lowering the interest rate on her mortgage, and Ms. Fryer said yes. After speaking further with Ms. Fryer, another Regions Bank employee learned that Ms. Blumenfeld actually made each monthly payment on Ms. Fryer's mortgage. That employee discussed with Ms. Fryer the possibility of Regions Bank financing a new mortgage in Ms. Blumenfeld's name, and, without obtaining Ms. Blumenfeld's consent, pulled Ms. Blumenfeld's consumer report.[1] He printed out the consumer report, went over it with Ms. Fryer, and gave her a copy to give to Ms. Blumenfeld.

         Ms. Blumenfeld filed suit against Regions Bank, asserting six counts. (Doc. 12). The court has already dismissed Count Five and part of Count Six, and in her briefing on Regions Bank's motion for summary judgment, Ms. Blumenfeld withdraws Count Three. (See Doc. 19; Doc. 37 at 5). The remaining counts are (1) violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. (Count One); (2) invasion of privacy, in violation of Alabama law (Count Two); (3) wanton hiring, training, and supervising of incompetent employees and/or agents, in violation of Alabama law (Count Four); and (5) wanton and reckless conduct, in violation of Alabama law (Count Six). (Doc. 12 at 13-21).

         The court GRANTS IN PART and DENIES IN PART Regions Bank's motion for summary judgment. The court DENIES the motion for summary judgment on Count One because a jury could conclude that Regions Bank willfully violated the FCRA by pulling Ms. Blumenfeld's consumer report even though she had not initiated a transaction with the bank. The court GRANTS the motion for summary judgment in favor of Regions Bank on Count Two because Ms. Blumenfeld presented no evidence showing that Regions Bank's action in pulling her consumer report and sharing it with her mother would have caused an ordinary person outrage or mental shame, suffering, or humiliation. The court GRANTS the motion for summary judgment in favor of Regions Bank on Count Four because Ms. Blumenfeld failed to present evidence showing that Regions Bank was aware of any incompetence on the part of its employee. The court DENIES the motion for summary judgment on Count Six because Ms. Blumenfeld has introduced evidence from which a jury could find that Regions Bank violated the FCRA.

         I. BACKGROUND

         In deciding a motion for summary judgment, the court “draw[s] all inferences and review[s] all evidence in the light most favorable to the non-moving party.” Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012) (quotation marks omitted). The parties submitted four depositions in support of and opposition to Regions Bank's motion for summary judgment: one by the plaintiff, Ms. Blumenfeld; one by her mother, Ms. Fryer; one by a mortgage loan officer, Tracy Goodwin; and one by Mr. Goodwin's supervisor, Kristy Smith. (Docs. 30-1 to 30-4).

         Taken in the light most favorable to Ms. Blumenfeld, the evidence shows that, when Ms. Blumenfeld divorced her husband, Ms. Fryer bought the Blumenfelds' marital home to ensure that her daughter could continue to live in it. Thereafter, Ms. Fryer took out a mortgage on the house from Regions Bank. (Doc. 30-2 at 38; Doc. 30-1 at 75-76). Eventually, Ms. Fryer executed a warranty deed conveying an equal interest in the property to her daughter. (Doc. 30-2 at 80).

         In May 2016, Ms. Fryer visited a Regions Bank branch about a new debit card. (Id. at 61). The employee helping her asked if she would be interested in speaking to someone about getting a lower interest rate on her mortgage, to which she said yes. (Id. at 61-62). The employee took her into the office of Mr. Goodwin, a mortgage loan officer. (Id. at 63). Mr. Goodwin pulled Ms. Fryer's consumer report and, after reviewing it, noted that she had two mortgages. (Id. at 64-65). Ms. Fryer told him that she had a mortgage on her house as well as a mortgage on her daughter's house. (Id. at 66). Ms. Fryer explained that although the mortgage was in her name alone, Ms. Blumenfeld made the payments on that mortgage. (Id.). Mr. Goodwin offered to see if they could finance a new mortgage in Ms. Blumenfeld's name. (Id. at 66-67).

         Mr. Goodwin ran Ms. Blumenfeld's consumer report and began printing it. (Doc. 30-2 at 67, 69). At the same time, he told Ms. Fryer to call Ms. Blumenfeld to ask permission for him to pull her consumer report. (Id. at 68). He testified that before Ms. Fryer made the call, he either told her to put Ms. Blumenfeld on speakerphone or asked to speak directly with Ms. Blumenfeld. (Doc. 30-3 at 71). He did that because Regions Bank's Mortgage Production Manual requires the “borrower's expressed consent” before a loan officer can pull a borrower's consumer report, and because he knew that pulling a consumer report without the borrower's permission was against the law. (Id. at 42, 59-60, 91-92). But the call was not on speakerphone and he did not speak directly to Ms. Blumenfeld. (Id. at 71-72). Mr. Goodwin testified that he did not attempt to speak directly with Ms. Blumenfeld because he “had no reason to believe [he] did not have consent.” (Id. at 30-31).

         Instead, Ms. Fryer called her daughter and explained that she was at Regions Bank, trying to get a lower rate on the mortgage, and that Mr. Goodwin needed Ms. Blumenfeld's permission to run her consumer report. (Doc. 30-2 at 69; Doc. 30-1 at 98-99). Ms. Blumenfeld initially gave her permission, but immediately changed her mind and said no. (Doc. 30-2 at 69; Doc. 30-1 at 99). Ms. Fryer told her daughter, “Well, it's too late. He has it.” (Doc. 30-2 at 69; Doc. 30-1 at 100). According to Ms. Fryer, her conversation with Ms. Blumenfeld was “very, very short.” (Doc. 30-2 at 73)

         After Ms. Fryer and Ms. Blumenfeld finished their phone call, Ms. Fryer returned to her conversation with Mr. Goodwin. (Doc. 30-2 at 69-70). She never told him that Ms. Blumenfeld had not consented to him running her consumer report. (Doc. 30-2 at 71). Mr. Goodwin went over Ms. Blumenfeld's consumer report with Ms. Fryer, pointing out several ways in which Ms. Blumenfeld could improve her credit score. (Doc. 30-2 at 73-74). At the end of their meeting, Mr. Goodwin gave Ms. Fryer a copy of Ms. Blumenfeld's consumer report, which she took home and shared with Ms. Blumenfeld. (Id. at 82, 84-85).

         Ms. Blumenfeld testified that she has not experienced any issues with identity theft as a result of Regions Bank accessing or sharing her consumer report, and she is not aware of a decrease in her credit score. (Doc. 30-1 at 145-46). But she testified that she was very angry, embarrassed, and stressed about the disclosure of her consumer report to her mother. (Id. at 115).

         II. DISCUSSION

         Regions Bank moves for summary judgment on all counts raised against it, contending that (1) the FCRA claim fails because it had reason to believe it was authorized to pull Ms. Blumenfeld's consumer report; (2) the FCRA claim fails because Ms. Blumenfeld has not presented any evidence of damages; (3) the FCRA preempts all of Ms. Blumenfeld's state law claims; and (4) Ms. Blumenfeld's state law claims fail as a matter of law. (Doc. 29).

         In deciding a motion for summary judgment, the court must first determine if the parties genuinely dispute any material facts, and if they do not, whether the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A disputed fact is material if the fact “might affect the outcome of the suit under the governing law, ” and a dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). By and large, the parties agree on the material facts, although they disagree about a number of non-material facts. (See Doc. 31 at 5-15; Doc. 37 at 11-24; Doc. 40 at 2-5). Accordingly, the question before the court is whether, based on the facts set out above, Regions Bank is entitled to judgment as a matter of law.

         1. The Fair Credit Reporting Act (Count One)

         Ms. Blumenfeld asserts that Regions Bank willfully violated the FCRA twice: once by pulling her consumer report and once by sharing her consumer report with her mother. (Doc. 12 at 13; Doc. 37 at 29-31). Regions Bank's arguments in support of its motion for summary judgment focus solely on whether it violated the FCRA by pulling her consumer report; it does not address whether it violated the FCRA by sharing Ms. Blumenfeld's report with Ms. Fryer. (See Doc. 30 at 16-25). Accordingly, the court will address only whether summary judgment is appropriate with respect to Ms. Blumenfeld's claim that Regions Bank willfully violated the FCRA by pulling her consumer report.

         The FCRA regulates permissible uses of and access to consumer reports, and creates a private right of action for willful violations of the Act. See 15 U.S.C. §§ 1681b, 1681n, 1681o. A “willful” violation of the FCRA encompasses both knowing and reckless violations. See Safeco Ins. Co of Am. v. Burr, 551 U.S. 47, 56-58 (2007); see also Levine v. World Fin. Network Nat'l Bank, 554 F.3d 1314, 1318 (11th Cir. 2009) (“To prove a willful violation [of the FCRA], a consumer must prove that a consumer reporting agency either knowingly or recklessly violated the requirements of the Act.”).

         The FCRA uses a number of terms to refer to the parties involved in the creation, use of, and access to consumer reports. A “consumer reporting agency” is any party that, “for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.” 15 U.S.C. § 1681a(f). Regions Bank is not a consumer reporting agency; it is a “person” as defined by the FCRA. Id. § 1681a(b). The court will also use the term “user” to describe Regions Bank, because the FCRA uses that term to describe a person requesting a consumer report. See, e.g., id. § 1681b(f). And a “consumer” is an individual-in this case, Ms. Blumenfeld. Id. § 1681a(c).

         Section 1681b(f) of the FCRA sets forth the circumstances under which a user may obtain a consumer report. It permits a user to obtain a consumer report only for those purposes under which an agency is authorized to furnish the report. 15 U.S.C. § 1681b(f)(1). Regions Bank contends that subsection (f) incorporates language from § 1681b(a) permitting an agency to furnish a report if it has “reason to believe” the user intends to use that information in certain ways, so that if it can prove that it had ...


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