Deanna Scarbo v. Wisdom Financial

• Court: Court of Appeals for the Third Circuit
• Decided: November 9, 2022
• Docket: 22-1398
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ___________

No. 22-1398 __________

DEANNA SCARBO,

Appellant

v.

WISDOM FINANCIAL, doing business as East Coast Funding Group Inc; TRANSUNION; EXPERIAN; EQUIFAX; CREDIT ONE BANK; LVNV FUDING LLC, doing business as Resurgent Capital Services; MAJOR FINANCIAL CORPORATION; CAPITAL BANK NA; US DEPT. OF EDUCATION, doing business as GLEL ____________________________________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 2-20-cv-05355) District Judge: Honorable Timothy J. Savage ____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a) November 8, 2022

Before: AMBRO, KRAUSE, and SCIRICA, Circuit Judges

(Opinion filed: November 9, 2022) ___________

OPINION* ___________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. PER CURIAM

Appellant Deanna Scarbo, proceeding pro se, appeals an order of the United States

District Court for the Eastern District of Pennsylvania granting summary judgment in

favor of Defendants LVNV Funding LLC (“LVNV”) and Great Lakes Educational Loan

Services (“Great Lakes”). For the following reasons, we will affirm.

I.

In October 2020, Scarbo filed a civil complaint alleging violations of the Fair

Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., against numerous consumer

reporting agencies (“CRAs”) and furnishers of credit information.1 Scarbo’s operative

amended complaint alleged that, despite various disputes she had submitted to CRAs, her

credit reports contained “false, inaccurate and/or incomplete reporting,” resulting in the

denial of various loans. D.Ct. ECF No. 35 at 3. Specifically, Scarbo alleged that “LVNV

“reported inaccurate, incomplete, and inconsistent account information before and after

Plaintiff’s disputes to CRA,” and that Great Lakes “reported inaccurate, incomplete, and

misleading account information before and after Plaintiff’s disputes to CRA.” Id. at 4.

Scarbo sought damages “in an amount in excess of $400,000” and other relief. Id. at 5.

At the completion of discovery, LVNV and Great Lakes filed separate motions for

summary judgment. Each asserted that they reasonably investigated Scarbo’s disputes

and that the information they provided to the CRAs was accurate. Finding that Scarbo

had failed to carry her burden of establishing that either LVNV or Great Lakes had

1 Scarbo entered into settlement agreements with all other defendants in this action. 2 provided inaccurate or misleading material information to the CRAs, the District Court

granted summary judgment in favor of the Appellees. Scarbo appeals.

II.

We have jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over a

grant of summary judgment, applying the same standard that the District Court applies.

Barna v. Bd. of Sch. Dirs. of Panther Valley Sch. Dist., 877 F.3d 136, 141 (3d Cir. 2017).

Summary judgment is appropriate “if the movant shows that 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). The nonmoving party “‘may not rest upon the mere allegations or denials

of his pleadings’ but, instead, ‘must set forth specific facts showing that there is a

genuine issue for trial. Bare assertions, conclusory allegations, or suspicions will not

suffice.’” Jutrowski v. Twp. Of Riverdale, 904 F.3d 280, 288-89 (3d Cir. 2018) (quoting

D.E. V. Central Dauphin Sch. Dist., 765 F.3d 260, 269-69 (3d Cir. 2014)). We may

affirm on any basis supported by the record. See Murray v. Bledsoe, 650 F.3d 246, 247

(3d Cir. 2011) (per curiam).

The FCRA “was crafted to protect consumers from the transmission of inaccurate

information about them, and to establish credit reporting practices that utilize accurate,

relevant, and current information in a confidential and responsible manner.” Cortez v.

Trans Union, LLC, 617 F.3d 688, 06 (3d Cir. 2010) (internal quotations and citation

omitted). While many of the provisions of the FCRA may only be enforced by federal

and state officials, see Seamans v. Temple Univ., 744 F.3d 853, 864 (3d Cir. 2014), a

private cause of action against furnishers of information to CRAs is available for

3 violations of 15 U.S.C. § 1681s-2(b), which requires a furnisher to investigate disputes

received from a CRA, and report back the results of the investigation. We have held that

an investigation into a consumer’s complaint must be “reasonable.” SimmsParris v.

Countrywide Fin. Corp., 652 F.3d 355, 359 (3d Cir. 2011) (“It is only when the furnisher

fails to undertake a reasonable investigation … that it may become liable to a private

litigant”). “[A] reasonable procedure is one that a reasonably prudent person would

undertake under the circumstances.” Seamans, 744 F.3d at 864. However, “where a

given notice contains only scant or vague allegations of inaccuracy, a more limited

investigation may be warranted.” Id. at 865; see also Bibbs v. Trans Union LLC, 43

F.4th 331, 339 (3d Cir. 2022) (“[A]bsent any indication that the information is inaccurate,

the statute does not mandate further investigation.” (internal quotations and citation

omitted)). Whether an investigation is reasonable “is normally a question for trial unless

the reasonableness or unreasonableness of the procedures is beyond question.” Cortez,

617 F.3d at 709 (internal citation and quotations omitted).

In April 2019, Scarbo obtained a credit card from Credit One with a credit limit of

$300. By July, she had exceeded her credit limit and the account was past due. D.Ct.

ECF No. 102-3 at 20. Scarbo’s delinquent account was acquired by LVNV, who

reported the outstanding debt of $625 to CRAs in May 2020. In July 2020, Scarbo sent

letters to Experian and Trans Union disputing the LVNV account listing as inaccurate

and incomplete because the account number was incomplete and unidentifiable, the

account status was not listed, the date opened and original balance were inaccurate, the

payment history was incomplete, and the monthly payment, past due amount, and highest

4 balance were not listed. D.Ct. ECF No. 102-4 at 2. Scarbo provided no further specifics,

or any other documentation in support of her dispute.

LVNV was notified of the disputes by Trans Union and Experian. Trans Union

advised, “Claims paid the original creditor before collection status or paid before charge-

off. Verify Account Status, Payment Rating, Current Balance, Amount Past Due and

Payment History Profile” and “verify account number.” D.Ct. ECF No. 102-3 at 5, 34.

Experian indicated that “[c]onsumer states inaccurate information. Provide or confirm ID

and account information.” Id. at 102-3 at 4, 28. Despite the vague allegations and lack

of documentation to support the allegation that the original creditor (Credit One) was

paid, LVNV noted both disputes in their system and conducted an investigation in

accordance with their FCRA dispute policies and procedures. Investigation revealed that

the account status, payment history, current balance, amount past due, and account

number were accurate, but did note discrepancies in the spelling of Scarbo’s name and

street address, which were corrected. Id. at 4-6. It was not until after filing her lawsuit

that Scarbo alleged Credit One should have applied benefits from a credit protection

program to reduce her balance before charging it off. Scarbo asserted that LVNV should

have been aware of the credit protection program and was therefore liable for Credit

One’s alleged failure to apply the program’s benefits. Scarbo did not provide that

information as part of her disputes filed with the CRAs. Further, Scarbo produced no

evidence that she ever applied for or was entitled to any credit protection benefits.2

2 When questioned during her deposition on the credit protection program, Scarbo testified that she could not recall if she ever informed Credit One of a qualifying event 5 Scarbo lodged a similarly vague dispute against Great Lakes, the servicer of

multiple student loans Scarbo obtained through the United States Department of

Education. Great Lakes consistently reported Scarbo’s account as being in good

standing, in deferred status, and never late. On July 3, 2020, Scarbo sent a letter to

Experian disputing the accuracy of the account listing for Great Lakes, alleging it was

inaccurate and/or incomplete because the account number was incomplete or

unidentifiable, the original creditor was not listed or identifiable, the account status and

original balance were inaccurate, the payment history was incomplete, the terms were

inaccurate, and the monthly payment amount, past due amount, and highest balance were

not listed. D.Ct. ECF No. 105-8 at 2. A similar letter was sent to Trans Union, minus the

allegations regarding account status, monthly payment amounts, and past due amounts.

D.Ct. ECF No. 105-9 at 2. Again, Scarbo provided no further information or

documentation to support the allegations.

After being notified of the disputes by Experian and Trans Union, see D.Ct. ECF

Nos. 105-4, 105-5, Great Lakes reviewed its records and verified the accuracy of the

information reported by Experian and Trans Union, including the original balance of

Scarbo’s account and the then-current balance of her account, and provided both with

Scarbo’s full account number. It was only during her deposition that Scarbo provided

more specific information regarding allegedly inaccurate and/or incomplete reporting by

Great Lakes, including, inter alia, her belief that the original balance was incorrectly

that might have triggered the benefits of the program, or if she had ever asked Credit One about the application of benefits. D.Ct. ECF No. 102-2 at 17-18. 6 reported because it grouped the original balance of her many student loans together,

rather than just reporting the amount of her first such loan, despite her never requesting

the loans be ungrouped. See D.Ct. ECF No. 105-3 at 7-12. These more specific

allegations were not asserted at the time she filed her original disputes.

We conclude that the District Court properly granted summary judgment in favor

of LVNV and Great Lakes on Scarbo’s claims under the FCRA. Scarbo failed to

introduce any direct or circumstantial evidence that either LVNV or Great Lakes did not

conduct reasonable investigations with respect to the disputed information. See Chiang

v. Verizon N. Eng. Inc., 595 F.3d 26, 37 (1st Cir. 2010) (“The burden of showing the

investigation was unreasonable is on the plaintiff.”). Scarbo’s complaints about the

accounts, which were forwarded by the CRAs to LVNV and Great Lakes, were vague at

best and failed to specifically identify the alleged errors or otherwise explain or support

why information was believed to be inaccurate or incomplete. See Seamans, 744 F.3d at

865 (stating that “where a given notice contains only scant or vague allegations of

inaccuracy, a more limited investigation may be warranted.”). To the extent that Scarbo

claims that the investigations were unreasonable because a reasonable investigation

would have revealed the inaccuracies alleged, her conclusory assertion is insufficient to

defeat summary judgment. See Halsey v. Pfeiffer, 750 F.3d 273, 287 (3d Cir. 2014)

(“[A]n inference based upon a speculation or conjecture does not create a material factual

dispute sufficient to defeat summary judgment.” (quoting Robertson v. Allied Signal,

Inc., 914 F.2d 360, 382 n. 12 (3d Cir. 1990)). The discrepancies noted by Scarbo

7 regarding account opening dates and updates to addresses are not material to and have no

other bearing on the reasonableness of the investigations.3

III.

For these reasons, we will affirm the judgment of the District Court

3 We likewise agree with the District Court’s conclusion that Scarbo failed to establish that the information furnished was either factually inaccurate, misleading, or material. 8