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Letren v. Trans Union, LLC

United States District Court, D. Maryland

September 15, 2017

NEIL F. LETREN, on behalf of himself and all others similarly situated, Plaintiff,
TRANS UNION, LLC, Defendant.


          Paula Xinis, United States District Judge.

         Pending in this Fair Credit Reporting Act (“FCRA”) action is Defendant's motions for sanctions pursuant to Federal Rule of Civil Procedure 11 (ECF No. 87) and for sanctions pursuant to 28 U.S.C. § 1927, 15 U.S.C. § 1681, and the inherent powers of the Court (ECF No. 88).[1] The issues are fully briefed, and the Court held a hearing on May 16, 2017, a telephonically-recorded status conference on June 12, 2017, and a second hearing on July 27, 2017. ECF Nos. 95, 107, 111. For the reasons stated below, Defendant's motion for sanctions under Federal Rule of Civil Procedure 11 and the inherent powers of the Court is granted. Any available relief under § 1927 and § 1681 would duplicate the relief granted under Rule 11 and accordingly is denied as moot.[2]

         I. BACKGROUND

         This civil action stems from a mortgage loan reported by J.P. Morgan Chase Bank, N.A. (“Chase”) to Plaintiff's Trans Union credit report.

         A. Pre-Filing History

         According to the Amended Complaint, Plaintiff “obtained several mortgage loans in 2007, including mortgage loans being reported to his credit reports by [JPMorgan] Chase [Bank, N.A.]. . . .” (the “Chase Account”). ECF No. 22 at 5; see also ECF No. 22 at 5 (alleging the Trans Union credit report erroneously noted “the discharged Chase mortgage account as due and owing”); ECF No. 22 at 6 (“Both the PNC and Chase accounts were opened in 2007 and would have been included in the March 2010 Bankruptcy.”).

         In September of 2008, Plaintiff's property was foreclosed upon. ECF No. 78-16 at 2; see also ECF No. 78-1 at 40 (listing four foreclosure proceedings). On September 29, 2008, Plaintiff's Trans Union consumer disclosure was updated to reflect the Chase Account as “foreclosure collateral sold.” ECF No. 78-4 at 2 (September 8, 2014 Trans Union Consumer Disclosure).

         On December 1, 2009, Plaintiff filed for Chapter 7 Bankruptcy. ECF No. 68 at 1; see also In re: Letren, Case No. 09-33378, (Bankr. D. Md. Dec. 1, 2009) (“Plaintiff's Bankruptcy Petition”). Plaintiff's bankruptcy petition included a Schedule F of accounts to be discharged in the bankruptcy and listed five accounts, including three mortgage deficiencies from American Home Mortgage Acceptance, Aurora Loan Services, and National City Mortgage. ECF No. 78-1 at 30; ECF No. 78-10 at 2. The Chase Account was not listed on the Schedule F. ECF No. 78-10 at 2.

         In September of 2013, Plaintiff obtained his Trans Union credit file. ECF No. 78-16 at 3. The report showed that the Chase Account had a balance of $0.00 as of October 6, 2008 with former terms of $4, 222 due monthly and the status of the account was “CBL: Chapter 7 Bankruptcy.” ECF No. 78-15 at 9-11; see also ECF No. 78-16 at 3. Plaintiff proceeded to dispute the accuracy of the report with Trans Union, first claiming on September 16, 2013 that “the [Chase] Account should be deleted because Chase could not adequately demonstrate that it was the legal holder of the note.” ECF No. 68 at 2; see also ECF No. 78-15 at 8; ECF No. 78-16 at 3. Then, in a series of written disputes with Trans Union over the next eleven months, Plaintiff shifted his allegation of the error-claiming on October 23, 2013 that the Chase Account was discharged in 2009 bankruptcy; on February 19, 2014 that the Chase Account was a “duplicate of his Homeward Mortgage Account”; and finally, on February 19, 2014, that the Chase Account should be reported as discharged in bankruptcy and not past due. In April 2015, the Chase Account was automatically removed from Plaintiff's credit file because the account had been closed for seven years. ECF No. 78-15 at 4.

         On July 17, 2015, Letren, and co-plaintiff Candice Alston filed an amended class action complaint through counsel Kevin Chapple (“Chapple”) against Experian. See Letren v. Experian Information Solutions, Inc., No. 8:14-cv-03957-TDC (D. Md.). The allegations against Experian Information Solutions, Inc. rely in part on the misreporting of Letren's Chase Account- claiming that the Chase Account, among other mortgage accounts, was erroneously reported as due and owing and not in bankruptcy. The Amended Complaint also contends the Chase Account was a duplicate of an account reported by Homeward Residential. See Letren v. Experian Information Solutions, Inc., ECF No. 15 at 5 n.3. As to the purported error in Ms. Alston's consumer report, she explicitly maintained that she did not have a mortgage account with Wells Fargo and that Wells Fargo did not own or service the account. Id. at 2.

         B. The Instant Civil Action

         Almost three months later, on October 6, 2015, Plaintiff Neil F. Letren (“Plaintiff” or “Letren”), proceeding pro se, filed a class action complaint against three consumer reporting agency (“CRA's”)-Experian Information Solutions, Inc., Equifax Information Services, LLC, and Trans Union for alleged violations of the FCRA. ECF No. 2.[3]

         The Complaint asserts that Trans Union falsely reported the Chase Account as due and owing when the Chase Account was discharged in bankruptcy. The Complaint provides no allegations of a duplicate account-specifically, no allegations involving Homeward Residential, or a third mortgage loan company, AHMA.

         Chapple then entered his appearance in the instant action for Letren on November 16, 2015. ECF No. 12. Several weeks later, Chapple filed on behalf of Plaintiff an amended class action complaint (the “Amended Complaint”). ECF No. 22. The Amended Complaint maintained both class and individual claims, alleging that Defendant Trans Union violated 15 U.S.C. § 1681e(b) (Count I and II) and 15 U.S.C. § 1681i(a) (Count III and IV) of the FCRA. ECF No. 22. Prior to filing the Amended Complaint, Chapple did no due diligence on whether class claims were viable. Nor did Chapple timely pursue written discovery on the class allegations. Further, Chapple did nothing to prepare Letren as to the responsibilities of a named plaintiff in a class case, nor is there any evidence that Chapple has any experience as class counsel.

         With regard to Plaintiff's individual claims, the Amended Complaint specifically alleged that the Chase Account not only existed as of 2007, but was discharged in his 2009 bankruptcy. The Amended Complaint unambiguously faults Trans Union for inaccurately reporting the Chase Account as due and owing instead of discharged in bankruptcy. See ECF No. 22 at 5, 8. The Amended Complaint further complained that Trans Union failed to perform a reasonable investigation into Letren's disputes and instead continued to report the Chase Account inaccurately. ECF No. 22 at 6. Importantly, at no place in the original Complaint, the Amended Complaint, or for several months thereafter in discovery did Plaintiff deny the Chase Account's existence. Rather, his main contention was that had Trans Union done its due diligence in reviewing Letren's bankruptcy petition, it should have reported the Chase Account as discharged rather than due and owing. See generally ECF No. 22 at 4.

         From the beginning of this case, Trans Union vigorously disputed the veracity of Plaintiff's claims. Repeatedly, Trans Union pressed Plaintiff, through counsel, for any documentary evidence demonstrating that the Chase Account had been discharged in bankruptcy. Trans Union was either met with silence or marginally comprehensible excuses. See generally ECF Nos. 88-2 to 88-8. At no point did Letren or his attorney, Chapple, produce any documentary proof supporting Plaintiff's allegations.

         Given Letren's failure to provide any evidentiary support for his claims, Trans Union once again, on January 28, 2016, emphasized that Plaintiff's position is specious and that he should dismiss his case rather than face a motion for sanctions. See ECF No. 88-6. Met once again with silence, on March 1, 2016, Trans Union formally notified Letren in writing that pursuant to Rule 11, it would seek sanctions should Letren refuse to dismiss his case within twenty-one days from receipt of the letter. ECF No. 88-7 at 2. Letren once again refused to dismiss his case.

         Then in June of 2016, Letren changed his story in his deposition. Letren testified that he never had a Chase Account and the real error was Trans Union reporting the account at all. ECF No. 78-8 at 23, 37. Letren and Chapple maintained this new position despite Trans Union having proof that Chase had repeatedly verified the existence of the mortgage account and that it had been closed prior to Letren filing for bankruptcy. See ECF No. 78-15 at 2-38.

         After a failed settlement conference where Trans Union again hoped to impress upon Letren the need to dismiss his action, Trans Union moved for summary judgment, arguing inter alia that Trans Union had accurately reported the Chase Account as due and owing. See generally ECF No. 66. Defendant further moved for summary judgment as to the class allegations because Plaintiff had done nothing to advance those claims. Id. Plaintiff not only filed a formal opposition, but separately cross-moved for summary judgment. In both pleadings, Plaintiff persisted in his new argument ...

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