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Kausch v. Wilmore

February 24, 2009

COREY M. KAUSCH AND MEGAN KAUSCH, PLAINTIFFS,
v.
SCOTT WILMORE, WILMORE & ASSOCIATES, LEE WIND, WINDSEARCH, INC., JOANNA KARALEKAS, AND DOES 2-10, DEFENDANTS.



The opinion of the court was delivered by: Andrew J. Guilford United States District Judge

ORDER DENYING WINDSEARCH MOTION FOR SUMMARY JUDGMENT

Before the Court is a Motion for Summary Judgment ("Motion") filed by Defendants Lee Wind ("Wind") and Windsearch, Inc. ("Windsearch") (collectively the "Windsearch Defendants"). After considering all papers and arguments submitted, the Court DENIES the Motion.

BACKGROUND

In this case, Plaintiffs Corey and Megan Kausch ("Plaintiffs"), a married couple, assert that a host of defendants have violated their rights under the Fair Credit Reporting Act ("FCRA") and their rights to privacy by impermissibly accessing and distributing their credit report. The parties appear to agree on the essential facts of the case.

In 2006, Corey Kausch was involved in a personal injury lawsuit. One of his opponents in that lawsuit, conducting litigation-related discovery, requested Corey Kausch's credit report. Defendant Scott Wilmore then instructed Defendant Joanna Karalekas ("Karalekas") to obtain Corey Kausch's credit report. (Opp'n 2:13-14.) Karalekas then instructed Laura Williams ("Williams"), an assistant to Henry Foresta ("Foresta"), a private detective and President of Master PI Detectives, Inc. ("Master PI"), to obtain Corey Kausch's credit report. (Opp'n 2:18-19.) Foresta and Karalekas had a pre-existing relationship, and Williams did not ask Karalekas why the credit report was being obtained or for whom Karalekas was requesting it. (Opp'n 2:19-22.) Foresta himself was unaware of the request. (Opp'n 2:23-25.) Williams then contacted the Windsearch Defendants and requested Corey Kausch's credit report. (Opp'n 2:27-28.) The Windsearch Defendants apparently had a pre-existing relationship with Foresta and did not ask Williams why the credit report was being obtained or for whom Williams was requesting it. (Opp'n 3:1-4.) That same month, the Windsearch Defendants obtained Corey Kausch's credit report and provided it to Master PI. (Wind Decl. ¶ 14.)

Based on these facts and others, Plaintiffs state two claims against the Windsearch Defendants: one claim for negligent violation of the FCRA and one claim for violation of their rights to privacy. The Windsearch Defendants now move for summary judgment of both claims.

The Windsearch Defendants' papers also make limited argument that Defendant Wind individually is entitled to summary judgment, but the facts and arguments presented are insufficient to support this position.

LEGAL STANDARD

Summary judgment is appropriate only where the record, read in the light most favorable to the non-moving party, indicates that "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Material facts are those necessary to the proof or defense of a claim, and are determined by reference to substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. In deciding a motion for summary judgment, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255. But the Court need not "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

The burden initially is on the moving party to demonstrate an absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If, and only if, the moving party meets its burden, then the non-moving party must produce enough evidence to rebut the moving party's claim and create a genuine issue of material fact. See id. at 322-23. If the non-moving party meets this burden, then the motion will be denied. Nissan Fire & Marine Ins. Co. v. Fritz Co., Inc., 210 F.3d 1099, 1103 (9th Cir. 2000).

The standard that applies to a motion for summary adjudication is the same standard that applies to a motion for summary judgment. See Fed. R. Civ. P. 56(a), 56(c), 56(d).

ANALYSIS

1. CLAIM FOR NEGLIGENT VIOLATION OF THE FCRA

Plaintiffs' first claim against the Windsearch Defendants is for negligent violation of the FCRA, in violation of 15 U.S.C. § 1681(o). Section 1681(o) of the FCRA imposes liability on "any person" for failure "to comply with any requirement" of the FCRA "with respect to any consumer." See 15 U.S.C. § 1681(o); Hansen v. Morgan, 582 F.2d 1214 (9th Cir. 1978). Plaintiffs contend that the Windsearch Defendants negligently failed to comply with their duties under Section 1681e(e) of the FCRA. Section 1681e(e) requires parties who resell consumer reports to "establish and comply with reasonable procedures designed to ensure that the report (or information) is resold by the person only for a purpose for which the report may be furnished under [Section 1681b]." 15 U.S.C. ยง 1681e(e)(2)(A). Those reasonable procedures must include requiring each person to whom the report is resold, or who provides the report to another person: (i) identifies each end user of the resold report; (ii) ...


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