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Banneck v. HSBC Bank USA, N.A.

United States District Court, N.D. California

June 20, 2016

HSBC BANK USA, N.A., et al., Defendants.


          HA WOOD S. GILLIAM, JR., United States District Judge

         Before the Court is the motion for partial summary judgment or, in the alternative, for summary adjudication filed by Defendant Experian Information Solutions, Inc. ("Experian"). Dkt. No. 46 ("Mot."). Experian contends that discovery has produced no evidence to support Plaintiff James Banneck's ("Banneck") claim that Experian inaccurately reported credit information about him or that willfully reported any inaccuracies. Banneck has filed an opposition, Dkt. No. 51 ("Opp."), and Experian has filed a reply, Dkt. No. 55 ("Reply").

         For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Experian's motion for partial summary judgment. Summary judgment is proper as to all claims alleging that Experian inaccurately reported Banneck's short sale as a foreclosure, as well as to the issue of willfulness. Summary judgment is not proper, however, as to all claims alleging that Experian inaccurately reported the date of the short sale.

         I. BACKGROUND

         A. Factual Allegations

         This is an action under the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA"), and the California Consumer Credit Reporting Agencies Act, Cal. Civ. Code § 1785.1, et seq. ("CCRAA"), both of which proscribe certain credit reporting conduct. Dkt. No. 1 ("Compl.") ¶ 1.

         Banneck took out a mortgage with Defendant HSBC Bank USA, N.A. ("HSBC"). Id. ¶ 7. He completed a "short sale" after which nothing further was owed on the loan. Id. ¶¶ 8-9. Banneck alleges that HSBC, however, erroneously reported the short sale as a foreclosure to Experian. Id. ¶ 10. Experian then produced consumer credit reports that contained the false information about a foreclosure. Id. ¶ 13. Banneck disputed the credit report with HSBC and Experian in writing, id. ¶ 11, but he alleges that they failed to conduct reasonable investigations into the dispute, id. ¶ 12.

         Afterwards, and separately, HSBC and Experian began to incorrectly report that: (1) Banneck's short sale would continue on his credit record until November 2014; (2) Banneck had 120-day late payments on the account; and (3) the debt was transferred to another lender. Id. ¶ 15.

         As a result of HSBC and Experian's credit reporting, Banneck's creditworthiness was damaged. Id. ¶ 16. This conduct and damage also caused Banneck emotional distress. Id. ¶ 17.

         B. Procedural History

         Based on these factual allegations, Banneck asserts that Experian failed to establish or follow reasonable procedures to assure maximum possible accuracy in the preparation of his credit report and credit files that it published and maintains, in violation of 15 U.S.C. § 1681e(b) and California Civil Code § 1785.14(b). Id. ¶¶ 19, 27(a). Banneck also asserts that Experian failed to delete inaccurate information in his credit file after receiving actual notice of those inaccuracies, to conduct a lawful reinvestigation, to forward all relevant information to HSBC, and to maintain reasonable procedures by which to filter and verify disputed information in his credit file, all in violation of 15 U.S.C. § 1681i and California Civil Code § 1785.16. Id. ¶¶ 20, 27(b).

         Banneck alleges that Experian's actions were negligent, if not willful and knowing. Id. ¶¶ 28, 30. To the extent that this conduct was only negligent, he seeks actual damages and attorneys' fees and costs under 15 U.S.C § 1681o and California Civil Code § 1785.31(a)(1). Id. ¶¶ 24, 30. To the extent that the conduct was willful within the meaning of the FCRA and CCRAA, he seeks punitive damages under 15 U.S.C. § 1681n and California Civil Code § 1785.31(a)(2). Id.

         Experian and HSBC answered the complaint. Dkt. Nos. 10 & 22. Experian now moves for partial summary judgment or, alternatively, summary adjudication. Experian contends there is no evidence showing that Experian inaccurately reported Banneck's short sale. Mot. at 13-16. Specifically, Experian points to evidence that, while a reporting error occurred, the error did not occur in Experian's credit reporting, but in non-party Fannie Mae's subsequent underwriting. Id. at 7-9. In any case, Experian contends that even if it violated the FCRA and the CCRAA, there is no evidence that those violations were willful within the meaning of the statutes.

         Banneck argues that even if Experian did not inaccurately report Banneck's short sale as a foreclosure, it was Experian's misleading use of shorthand to identify the short sale that caused Fannie Mae's error. Id. at 5-8. Furthermore, Banneck posits that it is undisputed that Experian misreported the date of the short sale, which separately constitutes an actionable claim. Id. at 5-6. Finally, Banneck contends that willfulness is a question for the jury. Id. at 8-9.[1]


         Before turning to the merits of the motion, the Court addresses Experian's request for judicial notice of various orders and filings in other FCRA cases. Dkt. No. 46-2 ("RJN"). Generally, a court may take judicial notice of documents "not subject to reasonable dispute." Fed.R.Evid. 201(b). Proceedings, including orders and filings, in other courts, including state courts, are the proper subject of judicial notice only when directly related to the case. Tigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011) (internal citations omitted).

         The Court denies Experian's request. The materials for which it seeks judicial notice are not directly related to this case, but merely discuss similar factual and legal claims. See Id. To the extent that Experian seeks to admit findings contained these materials for the truth of the matters they assert, judicial notice is not appropriate. See Lasar v. Ford Motor Co., 399 F.3d 1101, 1117 n.14 (9th Cir. 2005) (declining judicial notice of findings made in a state court proceeding "because [defendants were] offering the factual findings contained in the order for the purpose of proving the truth of the factual findings contained therein"); Wyatt v. Terhune, 315 F.3d 1108, 1114 n.5 (9th Cir. 2003) ("Factual findings in one case ordinarily are not admissible for their truth in another case through judicial notice."). To the extent Experian seeks to cite materials that support its arguments, judicial notice is unnecessary: the Court can, and will, consider the reasoning of those materials for whatever persuasive value they may have.


         Summary judgment is appropriate if, viewing the evidence and drawing all reasonable inferences in the light most favorable to the nonmoving party, there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 321 (1986). The district court "does not assess credibility or weigh the evidence, but simply determines whether there is a genuine factual issue for trial." House v. Bell, 547 U.S. 518, 559-60 (2006). A fact is "material" if it "might affect the outcome of the suit under the governing law, " Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and a dispute as to a material fact is "genuine" if there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party, id. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id.

         The moving party bears the initial burden of identifying those portions of the pleadings, discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Where the moving party will bear the burden of proof on an issue at trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than for herself. Id. at 325. But on an issue for which the nonmoving party will bear the burden of proof at trial, the moving party need only point out "that there is an absence of evidence to support the nonmoving party's case." Id. If the moving party meets its initial burden, the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, "specific facts showing that there is a genuine issue for trial." Id. To show a genuine dispute in response, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Where there is no genuine dispute of material fact as to only a single claim or defense or as to part of a claim or defense, district courts may enter partial summary judgment. Fed.R.Civ.P. 56(a).


         Before resolving the merits of Experian's motion for partial summary judgment, the Court discusses the evidence presented. The facts set forth ...

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