1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 Tobey H. Thatcher, ) 9 ) CV 22-00511-TUC-RCC (MAA) Plaintiff, ) 10 v. ) ) 11 Primary Residential Mortgage Incorporated, ) REPORT AND ) RECOMMENDATION 12 Defendant. ) ) 13 ______________________________________) 14 Pending before the court is a motion for summary judgment filed by the defendant, 15 Primary Residential Mortgage Incorporated (“PRMI”), on September 20, 2024. Doc. 50. 16 The plaintiff, Tobey Thatcher, filed a response on April 12, 2025. Doc. 73. PRMI filed 17 a reply on May 13, 2025. Docs. 78, 79. 18 The case has been referred to the Magistrate Judge for report and recommendation 19 pursuant to the Local Rules of Practice. LRCiv 72.1; Docs. 18, 22. A hearing on the motion 20 was held on July 31, 2025. Doc. 82. 21 The court should grant PRMI summary judgment on Thatcher’s Fair Credit Reporting 22 Act claim. Summary judgment should be denied on Thatcher’s Truth in Lending Act claim and 23 her Arizona Consumer Fraud Act claim. 24 25 Background 26 On January 25, 2019, Thatcher obtained a construction loan from the defendant, PRMI, 27 in the amount of $272,521.00. Defendant’s motion, Doc. 50, pp. 1-2. She intended to purchase 28 1 land in Green Valley, Arizona, and build a residence. Id. The terms of the loan required 2 completion of the residence by July 31, 2019. Doc. 50, p. 2. Failure to do so would be 3 considered a material breach, and PRMI could demand immediate repayment of the loan 4 together with accrued interest, costs, and expenses. Id. 5 Thatcher purchased a parcel of undeveloped real property. Doc. 1, p. 3. PRMI disbursed 6 from the loan $30,333, which supplied the down payment on the property; $3,047.64, which 7 was applied to escrow for taxes and insurance; and $21,000, which went to Thatcher’s builder. 8 Id. 9 In June of 2019, Thatcher’s builder informed her that construction could not be 10 completed until November 30, 2019, and that it had underestimated the cost of bringing utilities 11 to the property by $40,000. Id. Thatcher tried to find another builder, but she was unsuccessful. 12 The home was never built. Doc. 1, ¶ 26. 13 On June 2, 2021, PRMI informed Thatcher that it had accelerated her loan repayment 14 and she owed $272,521.00. Doc. 50, p. 2. PRMI concedes that the stated amount was 15 erroneous; Thatcher had only withdrawn approximately $90,000 from the original loan. Id. On 16 July 21, 2021, PRMI corrected its demand and provided Thatcher with a loan payoff amount 17 of approximately $100,000 including interest. Id. 18 PRMI later proposed that the loan contract be extended to October 31, 2021, to allow 19 Thatcher time to sell the land. Id. Thatcher sold the land on November 5, 2021, and signed a 20 Settlement Statement retiring the loan Id. The American Land Title Association (“ALTA”) 21 Settlement Statement reported that she owed a principal balance of $85,768.89 and interest of 22 $19,585.31. Doc. 50, pp. 2-3. Thatcher asserts that she disputed the amount of interest and 23 asked for clarification. Thatcher’s response, Doc. 73, p. 4. She maintains that PRMI never 24 clearly responded to her questions about the interest calculation. Id. 25 On November 7, 2022, Thatcher filed a Complaint in this court. Complaint, Doc. 1. She 26 claims a cause of action under (1) the Truth in Lending Act, 15 U.S.C. § 1601 et seq.; (2) the 27 28 1 Arizona Consumer Fraud Act, A.R.S. §§ 44-1521 to 44-1534; and (3) the Fair Credit Reporting 2 Act, 15 U.S.C. § 1681 et seq. Doc. 1. 3 On September 20, 2024, PRMI filed the pending motion for summary judgment on all 4 counts. Doc. 50. 5 The court should grant PRMI summary judgment on Thatcher’s Fair Credit Reporting 6 Act claim. The remainder of the motion should be denied. 7 8 Summary Judgment 9 Summary judgment is available only “if the movant shows that there is no genuine 10 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 11 R. Civ. P. 56(a). 12 “The moving party initially bears the burden of proving the absence of a genuine issue 13 of material fact.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). “Where [as 14 here] the non-moving party bears the burden of proof at trial, the moving party need only prove 15 that there is an absence of evidence to support the non-moving party’s case.” Id. “Where the 16 moving party meets that burden, the burden then shifts to the non-moving party to designate 17 specific facts demonstrating the existence of genuine issues for trial.” Id. “[T]he non-moving 18 party must come forth with evidence from which a jury could reasonably render a verdict in the 19 non-moving party’s favor.” Id. 20 “In judging evidence at the summary judgment stage, the court does not make credibility 21 determinations or weigh conflicting evidence.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 22 978, 984 (9th Cir. 2007). “Rather, it draws all inferences in the light most favorable to the non 23 [-] moving party.” Id. 24 25 Discussion: Truth in Lending Act, 15 U.S.C. § 1601 et seq. 26 PRMI argues first that Thatcher cannot support her claim under the Truth in Lending Act 27 (“TILA”). Doc. 50, pp. 4-5. It recognizes that Thatcher disputes the ALTA Settlement 28 1 Statement and that she asserts an interest overcharge in the amount of $6,613.31. Id. PRMI 2 maintains, however, that “she has disclosed no admissible evidence, expert or otherwise, 3 supporting the alleged interest overcharge.” Id. 4 “The Truth in Lending Act is designed to assure a meaningful disclosure of credit terms 5 so that the consumer will be able to compare more readily the various credit terms available to 6 [her] and avoid the uninformed use of credit.” Barrer v. Chase Bank USA, N.A., 566 F.3d 883, 7 887 (9th Cir. 2009) (punctuation modified) (citing 15 U.S.C. § 1601(a)). “Rather than 8 substantively regulate the terms creditors can offer or include in their financial products, the Act 9 primarily requires disclosure.” Id. 10 “Congress delegated expansive authority to the Federal Reserve Board to elaborate and 11 expand the legal framework governing commerce in credit and the Board has exercised its 12 authority by promulgating Regulation Z, set forth at 12 C.F.R. § 226 et seq.” Maxwell v. Union 13 Fid. Mortg., Inc., 2009 WL 426189, at *4 (E.D. Cal. Feb. 19, 2009) (punctuation modified). 14 “Under the TILA, the material terms that must be disclosed by the creditor include the finance 15 charge, the annual percentage rate, the amount financed, an itemization of the amount financed, 16 the total payments, among others.” Id. (citing 15 U.S.C. § 1638(a); 12 C.F.R. § 226.18 ). 17 “Regulation Z requires that these disclosures must properly reflect the terms of the legal 18 obligation between the parties.” Id. (citing 12 C.F.R. § 226.17(c)(1)) (punctuation modified). 19 “The TILA reflects a transition in congressional policy from a philosophy of ‘Let the buyer 20 beware’ to one of ‘Let the seller disclose.’” Id. 21 “Under TILA’s Regulation Z, a lender, assignee, or loan servicer must, in response to 22 a borrower’s request, provide an accurate statement of the total outstanding balance that would 23 be required to pay the consumer’s obligation in full as of a specific date based on the best 24 information available.” McLaughlin v. Wells Fargo Bank, NA, 2015 WL 10889993, at *1 (N.D. 25 Cal. Oct. 29, 2015) (punctuation modified); see 15 U.S.C. § 1639g; see also Rome v. Rocket 26 Mortg., LLC, 2023 WL 7105594, at *12 (E.D. Tex. Sept. 13, 2023) (An allegation that the 27 defendant reported an inaccurate payoff balance gives rise to a TILA claim.). “Our court of 28 1 appeals has stated . . . that courts should construe TILA’s provisions liberally in favor of the 2 consumer.” Id. 3 Thatcher claims, among other things, that PRMI failed to clearly disclose the applicable 4 interest rate and finance charges that resulted in the final interest charge of $19,585.31 in the 5 payoff statement. Doc. 73, pp. 3-4; Doc. 1, ¶ 50. She states that, “I asked for a detailed 6 explanation of the balance due. They just told me to look at the closing documents, but those 7 didn’t help. I didn’t understand how they got to the number they were demanding.” Doc. 73, 8 pp. 4, 15; see also Doc. 73-1, ¶¶ 3, 19-21. She asserts that, “I sent follow-up emails to the loan 9 officer, and later my attorney did too. We asked how the interest was being calculated. We 10 never got a clear answer.” Doc. 73, pp. 4, 15; see also Doc. 73-1, p. 7. 11 Thatcher maintains that the closing documents did not properly explain the payoff 12 interest calculations in spite of PRMI’s assurances. She sought further clarification during 13 discovery, but PRMI seemed unable to explain the calculations. She maintains that PRMI’s 14 counsel, Richard Armstrong, explained as follows: “I believe CSC [the loan servicer] calculated 15 the interest figure. I don’t think we verified it ourselves.” Doc. 73, p. 4. PRMI’s failure to 16 clearly explain the calculation is some evidence that the proper disclosure was never made. 17 In its reply brief, PRMI asserts that the ALTA Settlement Statement did, in fact, properly 18 disclose the total interest and per diem interest charged. Doc. 79-1, p. 2. According to PRMI, 19 the interest accrues at $18.80 per day and the total, through November 5, 2021, comes to 20 $19,585.31. Doc. 79-1, pp. 4-5. PRMI maintains that these figures are correct and Thatcher’s 21 own calculation of the payoff interest amount is faulty. 22 According to PRMI, Thatcher’s initial disclosure statement contains a calculation that 23 uses the interest rate of $18.80 per day and arrives at a total interest of $12,972.00. Id. From 24 this calculation, Thatcher concludes that the Settlement Statement overcharged her by 25 $6,613.31. Id. PRMI argues in its reply brief that Thatcher’s calculation is incorrect and fails 26 to recognize that the loan has been outstanding for 1,016 days through November 5, 2021, the 27 settlement date. Id. PRMI asserts that “Plaintiff has produced no evidence whatsoever of any 28 1 interest overcharge . . . .” Doc. 79-1, p. 5. The court does not entirely follow PRMI’s 2 argument. 3 Multiplying 1,016 days times an interest rate of $18.80 per day gives a total of 4 $19,100.80, which is not quite the $19,585.31 that appears in the Settlement Statement. This 5 is some evidence that the Settlement Statement gives an incorrect interest rate or an incorrect 6 payoff amount. And as the court observed above, when considering a motion for summary 7 judgment, the court “does not make credibility determinations or weigh conflicting evidence.” 8 Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). “Rather, it draws all 9 inferences in the light most favorable to the non [-] moving party.” Id. 10 There remains a genuine issue of material fact as to whether PRMI made the proper 11 disclosures and accurately represented the true payoff amount. 12 PRMI argues in the alternative that the TILA claim is barred by the one-year statute of 13 limitations. Doc. 50, p. 5 (citing 15 U.S.C. § 1640(e)). It asserts that the alleged TILA claim 14 occurred on or before November 5, 2021, when Thatcher signed the ALTA loan Settlement 15 Statement. And because the pending action was filed on November 7, 2022 – one year and two 16 days later – it is time-barred. The court does not agree. 17 “[T]he limitations period in Section 1640(e) runs from the date of consummation of the 18 transaction but . . . the doctrine of equitable tolling may, in the appropriate circumstances, 19 suspend the limitations period until the borrower discovers or had reasonable opportunity to 20 discover the fraud or nondisclosures that form the basis of the TILA action.” King v. State of 21 Cal., 784 F.2d 910, 915 (9th Cir. 1986). In appropriate circumstances, the court may “evaluate 22 specific claims of fraudulent concealment and equitable tolling to determine if the general rule 23 would be unjust or frustrate the purpose of the Act and adjust the limitations period 24 accordingly.” Id. 25 “In determining justifiable application of the equitable tolling doctrine, a court focuses 26 on excusable delay by the plaintiff.” Chon v. Downey Sav. & Loan Assoc., F.A., 2010 WL 27 3294359, at *2 (E.D. Cal. Aug. 20, 2010) (punctuation modified). “To establish excusable 28 1 delay, the plaintiff must show fraudulent conduct by the defendant resulting in concealment of 2 the operative facts, failure of the plaintiff to discover the operative facts that are the basis of 3 [her] cause of action within the limitations period, and due diligence by the plaintiff until 4 discovery of those facts.” Id. 5 In this case, Thatcher presents evidence that she questioned the amount of interest stated 6 in the Settlement Statement. She asked PRMI how the interest was calculated, and PRMI told 7 her to look at the closing documents. A reasonable trier of fact could conclude that the closing 8 documents did not correctly disclose the interest calculation, PRMI knew or should have known 9 this, and PRMI’s incorrect statement to the contrary caused an excusable delay in Thatcher 10 discovering the facts underlying her TILA claim. PRMI is not entitled to summary judgment 11 on this issue. 12 In its reply brief, PRMI directs the court to Thatcher’s deposition statement that “she 13 believed that the interest was correct until her attorney found the alleged overcharge.” Doc. 79- 14 1, p. 2. PRMI argues that this statement contradicts her argument that she was confused about 15 the payoff calculation. The court does not agree. A reasonable trier of fact could conclude that 16 Thatcher initially “believed that the interest was correct” because PRMI told her that the closing 17 documents contained the proper disclosure and she believed PRMI. Only upon further 18 investigation did she discover that PRMI’s assurances were not entirely accurate. Thatcher’s 19 deposition statement does not contradict her argument that she is entitled to equitable tolling. 20 Finally, PRMI argues that Thatcher waived her Truth in Lending Act (“TILA”) claim 21 because she signed the Settlement Statement including its boilerplate release. Doc. 50, p. 5. 22 That statement contained an acknowledgment that “We/I have carefully reviewed the Estimated 23 ALTA Settlement Statement and find it to be a true and accurate statement of all receipts and 24 disbursements to be made on my account or by me in this transaction and further certify that I 25 have received a copy of the Estimated ALTA Settlement Statement . . . We/I authorize Title 26 Security Agency, LLC to cause the funds to be disbursed in accordance with the Final ALTA 27 28 1 Settlement Statement to be provided to me/us at closing .” Id. The court is not convinced that 2 this acknowledgment constitutes a TILA waiver. 3 First, the acknowledgment does not explicitly state that it constitutes a waiver of TILA 4 rights. Courts are disinclined to find a TILA waiver where, as here, the alleged waiver speaks 5 in general terms and fails to specify that TILA rights are being forfeited. See Bakker v. Wells 6 Fargo Home Mortg., 2012 WL 5198220, at *4 (D. Or. June 26, 2012) (“More importantly, 7 Parker emphasized that the release itself did not contain any reference to prospective TILA 8 claims and instead used the boiler plate language of ‘any and all claims.’”), report and 9 recommendation adopted, 2012 WL 5197950 (D. Or. Oct. 19, 2012). 10 In addition, PRMI’s waiver theory appears to contravene the public policy behind the 11 TILA. “It has been held in this and other courts that a statutory right conferred on a private 12 party, but affecting the public interest, may not be waived or released if such waiver or release 13 contravenes the statutory policy.” Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 704, 65 S.Ct. 14 895, 900–901 (1945). “Where a private right is granted in the public interest to effectuate a 15 legislative policy, waiver of a right so charged or colored with the public interest will not be 16 allowed where it would thwart the legislative policy which it was designed to effectuate.” Id. 17 at 704, 901. The TILA was enacted in part to ensure that credit terms are meaningfully 18 disclosed and consumers are protected “against inaccurate and unfair credit billing . . . .” 15 19 U.S.C. § 1601(a). Accepting PRMI’s waiver theory would allow a creditor to disregard the 20 TILA as long as the customer signed the appropriate waiver. That would seem to “thwart the 21 legislative policy which it was designed to effectuate.” Brooklyn Savings Bank v. O’Neil, 324 22 U.S. 697, 704, 65 S.Ct. 895, 901 (1945); see, e.g., Bakker v. Wells Fargo Home Mortg., 2012 23 WL 5198220, at *6 (D. Or. June 26, 2012) (“Defendants’ motion for summary judgment should 24 be DENIED because the waiver of rights under the circumstances presented here thwarts the 25 legislative policy which TILA was designed to effectuate.”), report and recommendation 26 adopted, 2012 WL 5197950 (D. Or. Oct. 19, 2012). 27 28 1 Arizona Consumer Fraud Act, A.R.S. §§ 44-1521 to 44-1534 2 PRMI further argues that it is entitled to summary judgment on Thatcher’s claim under 3 the Arizona Consumer Fraud Act (“ACFA”). Doc. 50, p. 6. 4 “The ACFA prohibits persons from engaging in ‘any deception, deceptive or unfair act 5 or practice, fraud, false pretense, false promise, misrepresentation, or concealment, suppression 6 or omission of any material fact with intent that others rely on such concealment, suppression 7 or omission’ in connection with the sale or advertisement of consumer goods or services.” 8 Cheatham v. ADT Corp., 161 F. Supp. 3d 815, 826 (D. Ariz. 2016) (citing Ariz. Rev. Stat. § 9 44-1522(A)). “A statement is ‘deceptive’ if it has the ‘tendency and capacity to convey 10 misleading impressions to consumers,’ even if ‘interpretations that would not be misleading also 11 are possible.’” Cheatham, 161 F.Supp 3d at 826 (citing Madsen v. W. Am. Mortgage Co., 143 12 Ariz. 614, 694 P.2d 1228, 1232 (Ariz.Ct.App.1985)). “Whether a statement has the tendency 13 to mislead is determined from the perspective of the ‘least sophisticated reader,’ in light of ‘all 14 that is reasonably implied, not just from what is said.’” Id. at 826-827. 15 PRMI argues first that Thatcher’s allegations that PRMI engaged in various 16 misrepresentations do not constitute a proper ACFA claim because she has no evidence that 17 PRMI intended to deceive or defraud her. Doc. 50, p. 7 (citing Aerotec Int’l, Inc. v. Honeywell 18 Int’l, Inc., 4 F. Supp. 3d 1123, 1145 (D. Ariz. 2014), aff’d, 836 F.3d 1171 (9th Cir. 2016)). The 19 court does not agree. 20 Under the ACFA, actions taken by the defendant must be voluntary in the sense that they 21 are undertaken freely, but they need not be accompanied by some sort of nefarious intent. 22 Powers v. Guar. RV, Inc., 229 Ariz. 555, 560, 278 P.3d 333, 338 (Ct. App. 2012). “It is 23 well-settled that a person or entity need not intend to deceive to violate the statute.” Id. 24 “Rather, to maintain a private cause of action under the act, a plaintiff need only prove a false 25 promise or misrepresentation made in connection with the sale or advertisement of merchandise 26 and the hearer’s consequent and proximate injury.” Id. (punctuation modified). PRMI is not 27 28 1 entitled to summary judgment even if Thatcher has no evidence that PRMI intended to deceive 2 or defraud her. Doc. 50, p. 7. 3 PRMI further argues that it is entitled to summary judgment because the alleged 4 misrepresentations did not induce Thatcher to enter into the original loan agreement. Doc. 50, 5 p. 8. They occurred after she defaulted. Id. 6 The alleged misrepresentations, however, occurred before Thatcher signed the ALTA 7 Settlement Statement. If they caused her to sign the Settlement Statement, they still could be 8 misrepresentations made “in connection with the sale or advertisement of consumer goods or 9 services.” See Villegas v. Transamerica Fin. Servs., Inc., 147 Ariz. 100, 102, 708 P.2d 781, 783 10 (Ct. App. 1985) (“While a loan is ordinarily not thought of as a sale, in fact it is the sale of the 11 present use of money on a promise to repay in the future.”); Kammerer v. PennyMac Loan 12 Servs. LLC, 2025 WL 904493, at *4 (D. Ariz. Mar. 25, 2025) (The term “merchandise” could 13 refer to “a new loan” or “a loan modification.”); Solovyow v. JPMorgan Chase Bank NA, 2011 14 WL 13233549, at *6 (D. Ariz. July 6, 2011) (A loan modification qualifies as merchandise 15 pursuant to § 44-1521(5).). 16 PRMI cites Thomas v. Ally Bank, 2017 WL 6616620, at *2 (Ariz. Ct. App. Dec. 28, 17 2017) for the proposition that the Arizona Consumer Fraud Act (“ACFA”) applies to “fraud in 18 connection with a sale or advertisement of merchandise” but not in connection with “modifying 19 the payment schedule of an existing loan.” Doc. 79-1, p. 6. Thomas, however, is unpublished 20 and not precedential and fails to provide any reasoning behind this statement. The court fails 21 to understand why the Arizona Consumer Fraud Act (“ACFA”) would apply to the purchase of 22 a new loan but would not apply to a payment schedule modification that functions in the same 23 way as a new loan. See also George Calcut v. Paramount Residential Mortgage Group, 2025 24 WL 1341672, at *2 (9th Cir. May 8, 2025) (unpublished) (“The Arizona District Court has held 25 at times that, while a loan is merchandise, a loan modification is not . . . . There appears to be 26 no authoritative Arizona state court opinion on the issue.”). Moreover, in this case, Thatcher 27 did not obtain a modification of her payment schedule. She paid off the loan in full in 28 1 accordance with the Settlement Statement. PRMI provides no authority in support of its implicit 2 argument that the ACFA does not apply to a loan payoff agreement. 3 PRMI further argues that Thatcher’s ACFA claims are barred by the one-year statute of 4 limitations. Doc. 50, p. 8. It asserts that “the limitations period begins to run when the 5 consumer discovers or with reasonable diligence should have discovered both the ‘who’ and the 6 ‘what’ of her alleged claim,” which here occurred “by November 5, 2021 – when she sold her 7 property and paid off the construction loan after signing the ALTA settlement statement . . . .” 8 Id. (citing Cheatham v. ADT Corp. 161 F.Supp. 3d 815, 826 (D. Ariz. 2016)). As the court 9 explained above, however, a reasonable trier of fact could conclude that PRMI’s representation 10 that the pay-off interest amount could be calculated from information contained in the 11 Settlement Statement itself was a false statement that could have delayed Thatcher from 12 discovering her claims even though she was acting diligently. And a reasonable person could 13 conclude that this delay was sufficient to excuse the two days by which Thatcher’s filing date 14 exceeded the statute of limitations. 15 Finally, PRMI cites Tedder v. Deutsche Bank Nat. Tr. Co., 863 F. Supp. 2d 1020, 1030 16 (D. Haw. 2012) in support of its argument that “to the extent that Plaintiff’s ACFA claims are 17 based upon PRMI’s alleged TILA violations, such claims are preempted by TILA.” Doc. 50, 18 p. 8. Tedder, however, justified this point of law by citing to Enriquez v. Countrywide Home 19 Loans, FSB, 814 F.Supp.2d 1042, 1063–64 (D.Hawai'i 2011), which cited to Kajitani v. 20 Downey Sav. & Loan Ass’n, F.A., 647 F.Supp.2d 1208, 1220 (D.Hawai’i 2008). Tedder, 863 21 F.Supp.2d at 1030. The court is not convinced that Kajitani is still good law. 22 The Kajitani court stated as follows: “[T]o the extent the Kajitanis’ state law claims rest 23 on TILA violations or concern subject matters explicitly preempted in 12 C.F.R. § 560.2(b), 24 those claims are clearly preempted.” Kajitani, 647 F.Supp.2d at 1220 (emphasis added). 25 Section 560.2(b), however, has been removed from the regulations. Apparently, it was created 26 at a time when Congress favored sweeping field preemption in the Savings and Loan area. 27 Henning v. Wachovia Mortg., FSB, 969 F. Supp. 2d 135, 145-146 (D. Mass. 2013). Since that 28 1 time, Congress has revisited the issue and now favors preemption only when there is a conflict. 2 Id.; see also https://www.federalregister.gov/documents/2017/10/11/2017-21904/removal-of- 3 office-of-thrift-supervision-regulations#page-47084 (“For the reasons set forth in the preamble 4 and pursuant to titles III and X of the Dodd-Frank Act, amend title 12 of the Code of Federal 5 Regulations by removing chapter V.”). PRMI does not explain why the court should still follow 6 Tedder in light of these developments. The court considers instead the preemption statute 7 contained within the TILA. 8 The TILA preemption statute states that TILA “do[es] not annul, alter, or affect the laws 9 of any State relating to the disclosure of information in connection with credit transactions, 10 except to the extent that those laws are inconsistent with the provisions of this subchapter, and 11 then only to the extent of the inconsistency.” 15 U.S.C.A. § 1610 (a)(1) (emphasis added). 12 PRMI does not allege that the Arizona Consumer Fraud Act (“ACFA”) is “inconsistent” 13 with the Truth in Lending Act (“TILA”). Accordingly, the court should deny its argument for 14 preemption. See Jordan v. Paul Fin., LLC, 745 F. Supp. 2d 1084, 1095 (N.D. Cal. 2010) 15 (“TILA preempts state law only to the extent state disclosure requirements are explicitly 16 inconsistent with federal law.”). 17 18 Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. 19 PRMI further argues it is entitled to summary judgment on Thatcher’s claim under the 20 Fair Credit Reporting Act (“FCRA”) arising out of PRMI’s erroneous initial report that 21 Thatcher owed $272,521.00, the full amount of the loan. Doc. 50, pp. 2, 9. The court agrees. 22 “Congress enacted the Fair Credit Reporting Act (‘FCRA’), 15 U.S.C. §§ 1681–1681x, 23 in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, 24 and protect consumer privacy.” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 25 (9th Cir. 2009) (punctuation modified). “As an important means to this end, the Act sought to 26 make consumer reporting agencies exercise their grave responsibilities in assembling and 27 evaluating consumers’ credit, and disseminating information about consumers’ credit with 28 1 fairness, impartiality, and a respect for the consumer’s right to privacy.” Id. (citing 15 U.S.C. 2 § 1681(a)(4)). “In addition, to ensure that credit reports are accurate, the FCRA imposes some 3 duties on the sources that provide credit information to CRAs [Credit Reporting Agencies], 4 called ‘furnishers’ in the statute.” Id. 5 First, there is the duty to provide accurate information. 15 U.S.C. § 1681s-2(a). For 6 example, “[a] person shall not furnish any information relating to a consumer to any consumer 7 reporting agency if the person knows or has reasonable cause to believe that the information is 8 inaccurate.” 15 U.S.C.A. § 1681s-2(a)(1)(A). Subsection (a) duties, however, “are enforceable 9 only by federal or state agencies.” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 10 (9th Cir. 2009) (punctuation modified). Subsection (a), therefore, does not supply a cause of 11 action for Thatcher, but subsection (b) is another matter. 12 Besides the duty to provide accurate information, “Section 1681s–2(b) imposes a second 13 category of duties on furnishers of information.” Id. at 1154. “These obligations are triggered 14 ‘upon notice of dispute’— that is, when a person who furnished information to a CRA [credit 15 reporting agency] receives notice from the CRA that the consumer disputes the information.” 16 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009). And there is a 17 private right of action for these section (b) duties. Id. 18 Subsection 1681s–2(b) provides that, after receiving a notice of dispute, the 19 furnisher shall: 20 (A) conduct an investigation with respect to the disputed information; 21 (B) review all relevant information provided by the CRA [credit reporting agency] pursuant to section 1681i(a)(2); 22 (C) report the results of the investigation to the CRA; 23 (D) if the investigation finds that the information is incomplete or inaccurate, 24 report those results to all other CRAs to which the person furnished the information; and 25 (E) if an item of information disputed by a consumer is found to be inaccurate or 26 incomplete or cannot be verified after any reinvestigation under paragraph (1)[,] (i) modify (ii) delete or (iii) permanently block the reporting of that item of 27 information to the CRAs. 28 1 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (punctuation 2 modified) (citing § 1681s–2(b)(1)). 3 “These duties arise only after the furnisher receives notice of [the] dispute from a CRA; 4 notice of a dispute received directly from the consumer does not trigger furnishers’ duties under 5 subsection (b).” Id. Moreover, the Ninth Circuit has held that a furnisher’s investigation must 6 be “reasonable.” Id. at 1157. 7 Apparently, Thatcher’s Fair Credit Reporting Act (“FCRA”) claim stems from PRMI’s 8 erroneous initial report to the credit agencies that Thatcher owed $272,521, the total amount of 9 the loan. See Doc. 73-18, p. 3 (Notice of Acceleration and Demand for Payment dated May 27, 10 2021). In fact, she had only withdrawn approximately $90,000 of the total, and she only owed 11 this smaller amount (plus interest, etc.). PRMI concedes that it made this error but asserts that 12 by July 21, 2021, the error had been corrected. Doc. 50, p. 2. 13 Thatcher argues in her response brief that PRMI violated the FCRA by conducting an 14 investigation of the alleged error, discovering that an error was made, and then failing to report 15 the results of its investigation to the Credit Reporting Agencies. Doc. 73, p. 10. Thatcher, 16 however, fails to provide evidence supporting her theory. According to Thatcher, in-house 17 counsel Armstrong stated, “I don’t recall if we responded to her complaint about the credit 18 report.” Doc. 73, p. 10. He continued, “It would have gone to origination compliance, not 19 servicing, so I don’t know what follow-up was done.” Doc. 73, p. 10. This is evidence that 20 Armstrong does not know how PRMI responded to Thatcher’s dispute. It might be considered 21 some evidence that PRMI failed to conduct any investigation at all, but Thatcher does not argue 22 that. She asserts that PRMI conducted an investigation, discovered the error, and failed to 23 report the results of its investigation to the Credit Reporting Agencies. Doc. 73, p. 10. 24 Armstrong’s statements do not support her theory. 25 In fact, PRMI sent Thatcher a letter dated July 7, 2021, in which PRMI states as follows: 26 “We have placed a Compliance Condition Code on the account to convey that PRMI has 27 28 1 |] completed the investigation of your dispute and submitted the appropriate corrections to the 2 || credit reporting agencies.” Doc. 73-17, p. 2. It appears that PRMI did investigate her 3 |] complaint, did discover its error, and did report the correction to the Credit Reporting Agencies. 4 || Thatcher concedes that the error was fixed by October of 2024. Thatcher deposition, Doc. 73-8, 5 |] p. 45. Presumably, it was fixed because PRMI told the Credit Reporting Agencies that its 6 || earlier information was erroneous. 7 The court concludes that PRMI is entitled to summary judgment on Thatcher’s Fair 8 || Credit Reporting Act claim that PRMI conducted an investigation into the correct amount that 9 || Thatcher owed, discovered its error, and failed to report the results of its investigation to the 10 || Credit Reporting Agencies. Doc. 73, p. 10. 11 12 RECOMMENDATION 13 The Magistrate Judge recommends that the District Court, after its independent review 14 || of the record, enter an order GRANTING in PART the motion for summary judgment filed by 15 || the defendant, Primary Residential Mortgage Incorporated (“PRMI’’), on September 20, 2024. 16 || Doc. 50. The court should grant PRMI summary judgment on Thatcher’s Fair Credit Reporting 17 || Act claim. The remainder of the motion should be denied. 18 Pursuant to 28 U.S.C. §636 (b), any party may serve and file written objections within 19 || 14 days of being served with a copy of this report and recommendation. If objections are not 20 || timely filed, the party’s right to de novo review may be waived. The Local Rules permit the 21 || filing of a response to an objection. They do not permit the filing of a reply to a response 22 || without the permission of the District Court. 23 DATED this 12 day of August, 2025. 24 ey 25 F ) /\
26 Kee GO OA 07 Honorable Michael A. Ambri United States Magistrate Judge 28 -15-