District Court (Minn.) Finds Adverse Action Letter Insufficient to Establish FCRA Damages/Denial of Credit by Potential Creditor

Dao v. Cello Partnership,  2015 WL 7572304, at *3-5 (D.Minn., 2015), Judge Tunheim granted summary judgment to a FCRA defendant because the Plaintiff — from an evidentiary standpoint — could no establish compensable loss.

Dao first argues that he was denied mortgage refinancing with PrimeLending because of Verizon’s failure to investigate and report the fraudulent accounts. Specifically, Dao contends that PrimeLending relied on the Verizon accounts in determining that he was not credit-worthy. According to Dao, had Verizon complied with the FCRA, the accounts would not have appeared on any of his credit reports, and PrimeLending would have accepted his application. To support this argument, Dao cites the Merged Report. In the “Credit History” section, both Verizon accounts are listed as being sent to collection. Dao argues that this report, and the presence of the accounts, creates a genuine issue of material fact as to whether Verizon’s actions or inactions influenced PrimeLending’s decision. The Court, however, finds this argument to be unavailing. PrimeLending’s own Denial Letter, which it sent to Dao only a few days after he submitted his application, unequivocally indicates that it did not rely on the Merged Report. In that letter, PrimeLending wrote that it based its denial decision on Dao’s Equifax credit report, a source that indisputably did not list the Verizon accounts.  Dao asks the Court to disregard PrimeLending’s stated foundation and instead draw the opposite inference that because PrimeLending sent Dao the Merged Report and because it listed the Verizon accounts, a reasonable jury could find that PrimeLending based its decision, at least in part, on the Verizon accounts. The Court declines to draw this inference. Dao has offered no foundational testimony from anyone at PrimeLending regarding how it makes its credit decisions or whether it considered the contents of the Merged Report. Absent such foundational evidence, the Court finds that the mere existence of the report is insufficient to create a genuine issue of material fact.  Dao raises three arguments in an attempt to circumvent what the Denial Letter makes clear. First, Dao asks the Court to infer that similar language found in both the Denial Letter and the Merged Report shows that PrimeLending relied on the latter document in arriving at its denial decision. In the Denial Letter, Dao notes that PrimeLending checked a box listing “[c]ollection action or judgment” as a principal reason for why his application was denied. And, in the Merged Report, only two accounts are listed as having been sent to collection –the Verizon accounts. Thus, according to Dao, even if PrimeLending relied on his Equifax credit report – which did not contain the Verizon accounts – the use of the phrase “collection action” in the Denial Letter indicates that PrimeLending must have also relied on either the Merged Report or a credit report from Experian or Trans Union; these are the only sources from which PrimeLending could have learned about “collection actions” against Dao.  The Court rejects this argument for three reasons. First, the language “[c]ollection action or judgment” mirrors summary language provided by Equifax on the very next page of the Denial Letter: “Derogatory Public Record or Collection Filed.” (Wanning Aff., Ex. F at 13.) Accordingly, the presence of the words “collection action” does not necessarily mean that PrimeLending relied on a source besides Equifax. Second, Dao ignores the other portion of the relevant phrase “[c]ollection action or judgment.” PrimeLending’s decision equally could have been based on a judgment. Indeed, as of August 12, 2013, Equifax was reporting a $149,000 judgment against Dao. (Id., Ex. F at 15.). This judgment also appeared on the Merged Report. (Id., Ex. H at 14.) Third, Dao has provided no evidence that his Experian or TransUnion credit reports even contained the Verizon accounts at the time PrimeLending would have accessed them. Evidence in the record, however, shows that on August 12, 2013 –approximately seven months prior to Dao’s PrimeLending application – TransUnion was not listing the Verizon accounts. (Id., Ex. H at 11-12.) Therefore, even assuming for the sake of argument that PrimeLending considered credit reports from Experian or TransUnion, Dao has offered scant evidence that either one listed the Verizon accounts. In sum, a reasonable jury could not find, on the basis of a single line – “[c]ollection action or judgment” – that PrimeLending reviewed a source containing the Verizon accounts.    Dao next points out that the Merged Report and Credit Score Letter share a common identification number. Dao argues a reasonable jury could infer from this shared number that the Verizon accounts played a role in PrimeLending’s refinancing denial. The Court, however, finds that this argument lacks merit. As explained above, Dao has offered no foundational testimony from anyone at PrimeLending regarding its decision-making process, or whether it considered the contents of the Merged Report in this particular instance. Moreover, the Credit Score Letter does not even list the Verizon accounts; to the contrary, it provides information on Dao’s Equifax credit report. Thus, a mere common identification number raises no genuine issue of material fact.  Dao’s third and final argument is no stronger. Dao asserts that even if PrimeLending did only rely on his Equifax credit report, Equifax, in deriving his credit score, may have utilized information from other credit reporting agencies, thereby indirectly incorporating the Verizon accounts. In other words, Dao suggests that a reasonable jury could conclude that the Verizon accounts caused PrimeLending’s denial, even if PrimeLending did not know it. The Court rejects this argument. Dao has offered no foundational evidence from anyone at Equifax regarding how it calculated his credit score. Dao’s theory is just that – a theory – and does not give rise to a genuine factual dispute.  Overall, the Court finds that there is no genuine issue of material fact as to whether PrimeLending denied Dao’s mortgage refinancing application because of actions or inactions by Verizon. Even drawing all reasonable inferences in favor of Dao, a jury could not find that PrimeLending relied on or even considered the Verizon accounts. Dao has not connected Verizon to his credit denial.