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Alston v. Equifax Information Services, LLC

United States District Court, D. Maryland

September 20, 2016

CANDACE E. ALSTON, Plaintiff,
v.
EQUIFAX INFORMATION SERVICES, LLC, Defendant.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE

         Plaintiff Candace E. Alston has filed suit against Defendant Equifax Information Services, LLC ("Equifax") based on its reporting on Alston's Equifax credit report of a Wells Fargo mortgage account and a Discover credit card account, and based on Equifax's reinvestigation into those accounts in response to Alston's disputes. Pending before the Court are Alston's Motion for Partial Summary Judgment and Equifax's Cross-Motion for Summary Judgment. Having reviewed the briefs and submitted materials, the Court finds no hearing necessary. See D. Md. Local R. 105.6. For the reasons set forth below, Alston's Motion for Partial Summary Judgment is DENIED, and Equifax's Cross-Motion for Summary Judgment is GRANTED.

         BACKGROUND

         I. The Wells Fargo Mortgage

         A. Mortgage Servicing and Payments

         On November 12, 2010, Alston obtained a mortgage loan from Monarch Bank ("Monarch") in the amount of $102, 212.00 for a property located at 7929 Mandan Road, Unit 304, in Greenbelt, Maryland. On November 16, 2010, the resulting Deed of Trust, made out to Monarch, was recorded in the Prince George's County Circuit Court Land Records. In a document dated November 12, 2010, the date she signed the original loan documents, Alston unilaterally executed a rider to the Deed of Trust ("Rider"). The Rider included the following provision:

Any offset or claim which Borrower has now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

         Alston Rider, Prince George's County Land Records, Book 32280 at 502.[1] On December 29, 2010, Alston had a copy of the original Deed of Trust and her unilateral Rider recorded in the county land records, annotating the original Deed with the note "re-record to add deed of trust rider." Id. at 487.

         On December 16, 2010, Monarch sold Alston's mortgage to Wells Fargo. In a letter dated December 17, 2010, Monarch informed Alston that the first payment on her mortgage was due on January 1, 2011, that her loan was being transferred to Wells Fargo, that she should begin remitting payments to Wells Fargo beginning on February 1, 2011, and that any payments due before that date should be remitted to Monarch. In a letter dated December 27, 2010, Wells Fargo informed Alston that her mortgage had been transferred from Monarch, that the transfer would become effective on February 1, 2011, and that beginning on that date, she should remit her mortgage payments to Wells Fargo. At some point "well before" January 20, 2011, Monarch shipped the original promissory note underlying the mortgage to Wells Fargo. Equifax Mot. Summ. J. ("Equifax Mot.") Ex. 4H at 19-20, ECF No. 114-14. Although Alston's mortgage had been sold to Wells Fargo, the promissory note ("Note") was mistakenly endorsed to Bank of America. By July 2011, that error was corrected, and the Note was endorsed to Wells Fargo.

         In December 2010, Alston began to send her $811.53 monthly loan payments to Monarch, the first of which was due in January 2011. Each of the payments that she sent was annotated with the land records book and page number corresponding to the Deed of Trust and unilateral Rider that Alston had executed. Early checks expressly indicated that cashing the check constituted acceptance of the terms of the Rider. Later versions contained only the land records book and page number. Monarch returned those checks to Alston, informing her that they would not accept any such conditional payments. As a result, Alston had a past due balance with Monarch for the January 2011 payment. Although Wells Fargo took over servicing of Alston's mortgage on February 1, 2011, Monarch continued to send Alston billing statements through April 2011 because of her overdue January 2011 balance.

         On August 4, 2011, Alston submitted to Monarch a cashier's check for $6, 492.24, representing eight monthly payments of $811.53. The check was made payable to "Monarch Mortgage, Deed of Trust Book 32280, pp. 487-504, " the land deed entry that included Alston's unilateral Rider. Alston Mot. Summ. J. ("Alston Mot.") Ex. 14 at 5, ECF No. 112-16. Alston also annotated the payment coupon with "Deed of Trust Book 32280, pp. 487-504." Id. Rather than returning the cashier's check to Alston, Monarch endorsed it and forwarded it to Wells Fargo. Wells Fargo refused to accept the check.

         Meanwhile, Alston was disputing Wells Fargo's ownership of her mortgage. Beginning on January 20, 2011, Alston sent a series of letters to Wells Fargo demanding evidence that Wells Fargo was entitled to enforce the promissory note relating to her mortgage. Wells Fargo repeatedly responded with assurances that it was the valid servicer of her loan, and on multiple occasions it sent her copies of the Note and Deed of Trust, including, in July 2011, a copy of the Note that had a proper endorsement to Wells Fargo.

         On September 7, 2011, Wells Fargo demanded that Monarch repurchase the loan, asserting that the sale of the loan to Wells Fargo violated various representations, including a representation that the loan did not involve fraud. Wells Fargo explained to Monarch that Alston had refused to submit any unconditional payments on the loan, continued to challenge Wells Fargo's right to service the loan, and had executed a deed and rider that "attempt[ed] to change the loan terms." Equifax Mot. Ex. 4J at 2-3, ECF No. 116-16. Monarch conceded that it was "becoming increasing [ly] clear that the borrower may have obtained the loan with the intention of not repaying it" and agreed to the repurchase. Id. at 2. The loan was officially transferred back to Monarch on October 28, 2011, along with Alston's August 2011 cashier's check., .

         During this period, Wells Fargo reported Alston's mortgage as delinquent. Specifically, Wells Fargo reported that each monthly payment from April 2011 to October 2011 was past due, with the exception of the August 2011 payment. In August 2011, after Alston's cashier's check had been forwarded to Wells Fargo from Monarch, Wells Fargo reported the account as current.

         From February 2011 to October 2011, when Wells Fargo was the servicer of Alston's loan, Alston sent no payments to Wells Fargo. All payments Alston sent to Monarch during this period were conditioned on acceptance of the terms of her unilateral Rider.

         B. Disputes with Equifax

         On June 30, 2011, Alston ordered her credit report from Equifax, a consumer reporting agency ("CRA"), and discovered that it was reporting that she had a delinquent mortgage account with Wells Fargo. On July 17, 2011, Alston filed an online dispute about the account in which she asserted that "Wells Fargo does not own or service my account." Alston Mot. Ex. 17, ECF No. 112-19; see Id. Ex. 13, ECF No. 112-15 (list of disputes). In response, Equifax sent an "Automated Consumer Dispute Verification" ("ACDV") to Wells Fargo in which it stated that Alston was asserting that "Wells Fargo does not own or service my account" and requested that Wells Fargo verify the account information. Alston Mot. Ex. 17. Wells Fargo verified that Alston had a mortgage account with it and indicated that Equifax should modify its report to reflect that she became delinquent on that account beginning in February 2011 and that she was currently 150 days past due. On August 11, 2011, Equifax mailed Alston the results of its investigation, then continued to report the Wells Fargo account as delinquent.

         In a letter dated August 22, 2011, Alston informed Equifax that she did not agree with the results of its reinvestigation and asked Equifax to send her a description of the procedure it used to reinvestigate the accuracy of the Wells Fargo account. She included in that correspondence a copy of the Note, payable to Monarch; a July 18, 2011 mortgage statement from Monarch indicating that she owed a balance of $6, 492.24 on her mortgage; a mortgage payment coupon for Monarch annotated with "Deed of Trust Book 32280, pp. 487-504;" and a copy of the August 4, 2011 cashier's check, with the same annotation, payable to Monarch Mortgage in the amount of $6, 492.24. Alston Mot. Ex. 14 at 5, ECF No. 112-16. Equifax received that letter on August 26, 2011. In response, Equifax sent an ACDV to Wells Fargo reporting that Alston was asserting that "Wells Fargo is neither the owner nor the servicer" of her mortgage. Alston Mot. Ex. 18, ECF No. 112-20. Wells Fargo responded by verifying the account and indicating that Equifax should modify its reporting to indicate that, under Alston's "Account Status, " the account had been "180 days or more past the due date, " but that under "Payment Rating, " Alston was then current on the account. Id. Equifax asserts that it mailed the results of this reinvestigation to Alston on September 20, 2011; Alston claims that she never received any responsive correspondence from Equifax.

         In a letter dated November 9, 2011, Equifax responded to Alston's request for a description of its reinvestigation procedures. That letter stated that "we first review and consider any relevant information" submitted in connection with the dispute. Alston Mot. Ex. 24, ECF No. 112-26. Equifax then "[o]ften" forwards the dispute to the furnisher of the information "for review and investigation." Id. If the disputed item is a public record, Equifax instead locates "the most recent filing associated with the disputed information" using procedures "prescribed by the source of the information." Id. Equifax noted that it might use a vendor to track down any such public records. Once Equifax has updated information, whether from a furnisher or from public records, it makes deletions or changes to a credit report, as appropriate.

         In a letter dated November 21, 2011, Alston disputed Equifax's reporting of the Wells Fargo account for the third time. She noted that Equifax had not provided her the information about its reinvestigation procedures that she had requested in her August letter. She asserted that as a result of Equifax's allegedly erroneous reporting, she was having difficulty getting a car loan, and that the Wells Fargo account was "the only negative account on my credit report." Alston Mot. Ex. 15 at 1, ECF No. 112-17. She again asked that Equifax send her a description of its reinvestigation process. Included with the letter were a "Statement Regarding August Payment" in which Alston explained that she was tendering her payments to Monarch Bank, rather than to Wells Fargo, because Wells Fargo had failed to "produce sufficient documentation to legally enforce the note, " as well as the billing statement and cashier's check paperwork she had included with her August 2011 letter. Id.

         In response, on November 29, 2011, Equifax sent a third ACDV to Wells Fargo, this one noting that Alston "states that in the month of Aug[ust, ] Monarch received a cashier cheque of 6492 dollar[s] for Wells Fargo and still the account reports a balance owed of 7303 dollar[s] or more." Alston Mot. Ex. 19, ECF No. 112-21. Equifax also noted that Alston had provided a copy of a cashier's check numbered 7000816204 and dated August 4, 2011. Wells Fargo responded by instructing Equifax to modify its report to reflect that Alston's account had been transferred and that her Payment Rating should reflect that she was 180 or more days past due on the account. In a letter dated December 21, 2011, Equifax informed Alston of the results of its reinvestigation, notifying her that it had updated its report to reflect that her Wells Fargo mortgage account had been transferred or sold and that as of October 2011, it was 180 days past due.

         On February 24, 2012, Alston again pulled her Equifax credit report and saw that Equifax was reporting her Wells Fargo account as 150 days past due in July 2011, current in August 2011, and 180 days past due in September and October 2011, and that the account was transferred or sold in November 2011. In a letter dated February 28, 2012, Alston lodged a fourth dispute with Equifax about its reporting of the Wells Fargo mortgage. In that letter, she noted that while her Wells Fargo account was being reported as delinquent, her Monarch mortgage account was "currently" being reported as "PAYS AS AGREED." Alston Mot. Ex. 16 at 1, ECF No. 112-18. She asserted that Equifax was also erroneously reporting an overlap in the Wells Fargo and Monarch accounts. She enclosed with the letter the Monarch mortgage payment coupons for December 2010, January 2011, March through October 2011, December 2011, and January 2012. Each coupon had certain payment information, either the amount due, the payment due date, or both, redacted from its face. Alston again included the original promissory note, made out to Monarch, a copy of her 2011 Mortgage Interest Statement from Monarch, and a loan amortization schedule from Monarch.

         On March 7, 2012, Equifax sent an ACDV to Wells Fargo stating that Alston asserted that the account information was "inaccurate" and asking Wells Fargo to "verify complete ID and account information."[2] Wells Fargo sent back the same report that it had sent in response to Alston's November 2011 dispute, indicating that Alston's account had been transferred or sold, and that she had been 180 or more days delinquent. In a letter dated March 27, 2012, Equifax sent Alston the results of its reinvestigation, in which it indicated that it had "verified that this item belongs to you." Alston Mot. Ex. 28 at 1, ECF No. 112-30.

         In a letter dated April 2, 2012, Alston took issue with the reinvestigation results and asked Equifax to provide her with "an actual description of how the March 2, 2012 dispute was processed, " rather than the generic description of its reinvestigation procedures provided in Equifax's November 9, 2011 letter. Alston Mot. Ex. 22, ECF No. 112-24. Specifically, she asked Equifax to inform her whether (1) it had read the documents she included with her dispute, (2) it had forwarded those documents to Wells Fargo, and (3) it had taken "independent investigative steps" or whether it had "just rel[ied] on Wells Fargo." Id. Equifax received Alston's letter on April 6, 2012 and, in response, undertook another reinvestigation of the Wells Fargo account. On April 25, 2012, Wells ...


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