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Melba Gauci v. Citi Mortgage

April 30, 2012


The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge



Before the Court is Defendant credit reporting agencies Experian Information Solutions, Inc.; Equifax Information Services, LLC; and Trans Union LLC's (collectively "CRAs") February 16, 2012 Motion for Summary Judgment. (ECF No. 67.) Plaintiff filed an Opposition on March 26, 2012, to which the CRAs filed the Reply on April 2, 2012. (ECF Nos. 87, 89.) The Court has carefully considered the parties' briefs, the evidence submitted in support of and in opposition to those briefs, and the parties' presentations made at oral argument on April 16, 2012, and April 30, 2012. For the following reasons, the Court GRANTS the CRAs' Motion.


In 2008, Plaintiff Melba Gauci obtained a mortgage loan from Callisto Group, Inc. to finance the purchase of property located at 301 South Weymouth Avenue, Los Angeles, California 90732. (Def.'s Statement of Uncontroverted Facts ("UF") 1.) Plaintiff is a real estate broker and purchased this property as an investment. (Gauci Depo. 14:2--22, 16:19--22, 26:10--14.) As part of the purchase, Plaintiff authorized Callisto to create an impound account, from which property taxes and property insurance would be paid. (UF 3.) Callisto estimated Plaintiff's annual property taxes would be approximately $3,800.00 per year, and on that basis estimated that Plaintiff's total monthly mortgage payment would be $2,211.02.*fn1 (Id.; Opp'n 6.) Once the loan closed, Callisto sold Plaintiff's loan to CitiMortgage, and CitiMortgage became the successor in interest to Callisto's duties and obligations. (UF 2.)

Plaintiff began making her mortgage payments in November 2008. The same month, the County of Los Angeles charged CitiMortgage for the first property tax payment, which was $8,957.04 instead of the originally estimated $3,800.00. (UF 5.) As a result, CitiMortgage raised Plaintiff's impound account payment from $398.00 to $1,285.00 to reflect this increase. (UF 7.) On January 23, 2009, CitiMortgage notified Plaintiff that her mortgage payments would increase from $2,211.02 to $3,098.61*fn2 on March 1, 2009, to reflect the increased escrow payments. (UF 6--7.)

In February 2009, after receiving her March 2009 bill reflecting the increased mortgage payments, Plaintiff called CitiMortgage to dispute the increase in payments. (UF 11--12.) Meanwhile, Plaintiff ignored the change to her bills and continued paying the original, lower monthly payment. (UF 14.) While CitiMortgage maintains that it never told Plaintiff to pay this lower amount (UF 13), Plaintiff contends that she was informed over the phone that she should be paying $2,211.02 instead of $3,098.61. (Gauci Depo. 75:19--24.) Regardless, when Plaintiff paid less than the $3,098.61 payment allegedly due, CitiMortgage would allocate Plaintiff's lower payment to an "unapplied funds" account; once the unapplied funds accumulated to the sufficient amount, CitiMortgage would post a full payment to Plaintiff's impound account. (UF 15.) Proceeding in this fashion, CitiMortgage ultimately deemed Plaintiff a delinquent payer and reported Plaintiff to the CRAs as such. (UF 16; Opp'n 7.)

Plaintiff contends that the County incorrectly assessed the property taxes based on an inflated property value. (Pl.'s Statement of Genuine Disputes 9--10, 16--17.) Notwithstanding her dispute regarding the propriety of the property tax increase, Plaintiff admits that CitiMortgage correctly calculated her new escrow and mortgage payments based on the disputed property tax increase. (Id.) Plaintiff also admits that she must pay CitiMortgage for the property taxes that CitiMortgage paid to the Country. (UF 21.) At the same time, however, Plaintiff insists that she should have paid the initially estimated amount escrow payments. (Pl.'s Statement of Genuine Disputes 9--10, 16--17.)

After CitiMortgage reported to the CRAs that Plaintiff was past due on payments, the CRAs downgraded Plaintiff's credit rating to delinquent, which Plaintiff contends prevented her from obtaining other loans to purchase other properties or refinance her existing loans. (Opp'n 7.) While Plaintiff repeatedly communicated with the CRAs to contest CitiMortgage's report in an effort to clear her records, her credit rating status remained the same, even after the CRAs conducted reinvestigations. (UF 30--39.) According to Plaintiff, while she reported her dispute with CitiMortgage to the CRAs, the CRAs' investigations were "cursory and not responsive to [Plaintiff's] concerns." (Opp'n 7.)

As a result, Plaintiff brought this lawsuit against CitiMortgage and the CRAs in Los Angeles County Superior Court on December 16, 2010. On February 15, 2011, Defendants removed the action to this Court. (ECF No. 1.) Plaintiff alleges that the CRAs violated the Fair Credit Reporting Act ("FCRA") by failing to properly investigate her credit history before lowering her rating and by failing to alter her rating after Plaintiff provided them with additional information. (SAC ¶¶ 26--27.)

The CRAs now move for summary judgment on Plaintiff's FCRA claims. (ECF No. 67.)


Summary judgment is appropriate when, after adequate discovery, the evidence-viewed in the light most favorable to the nonmoving party-demonstrates that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A disputed fact is "material" where the resolution of that fact might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1968). An issue is "genuine" if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. Evidence the Court may consider includes the pleadings, discovery and disclosure materials, and any affidavits on file. Fed. R. Civ.

P. 56(c)(2). Where the moving party's version of events differs from the nonmoving party's version, "courts are required to view the facts and draw reasonable inferences in the light most favorable to the party opposing the summary judgment motion." Scott v. ...

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