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FCRA, FDCPA Plaintiff Left With Diarrhea, One Claim Standing

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By William Peacock, Esq. on March 29, 2013 9:07 AM

Younger generations are going to look back at these mortgage foreclosure cases with nothing but utter confusion. It seems in every case, a mortgage is passed around more than a certain illicit substance at Snoop Lion concert.

In this case, Glen Llewellyn was a bit miffed after a series of mortgage holders and services reported naughty things to the credit agencies regarding his defaulted/not-defaulted loan. (He refinanced while the loan was being sold to someone else, the money got lost for a bit ... it happens).

In the end, he apparently didn't default, and once everything was sorted out, the negative information reported to the credit agencies had to be rescinded. This took four months. The plaintiff sued as a result, claiming violations of § 1681s-2(b) of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act.

FCRA Proof Requires Proof

He claimed that the negative information on his credit report destroyed his score and ability to obtain further financing to keep his real estate business running. He had a few hearsay statements from his accountant, his broker, and others.

The defendants showed up with two credit reports - one before, and one after. The difference was three points.

Proof beats inadmissible hearsay, everyday. Plus, an inability to obtain financing in a historically bad economy (caused by real estate financing) doesn't really prove anything.

Descriptions of Diarrhea Sufficient for Emotional Damages

The plaintiff's affidavits describe the torturous emotional distress he endured - from depression and sleeplessness to rapidly deteriorating health and the reemergence of his Crohn's disease. He also experienced "severe abdominal pain with stomach and intestinal cramping, along with bloating, constipation, diarrhea, and reoccurring nausea" as well as "drenching night sweats, panic attacks, anxiety, severe kidney pains, horrible joint pains at [his] wrists, neck, hips, jaw, spine, and knees, and low grade fevers and chills."

(Been there. It was malaria, not a bad credit score.)

Still, a plaintiff's sufficiently detailed sworn affidavit of symptoms resulting from emotional distress should suffice to survive summary judgment. Had he simply alleged conclusory statements, like "I feel bad and sad," summary judgment would have been appropriate. Instead, we're left with the unfortunate proposition that when it comes to alleging emotional distress, there is no just thing as TMI (too much information).

SOL on SOL

After dismissing claims against some defendants who weren't actually debt collectors (they were the note holders or servicers of the debt pre-default), the court dismissed the remaining FDCPA claims due to a statute of limitations violation. In attempting to close the gap to fit within the one-year limitation, the plaintiff tried alleging that the defendant was required to notify the credit agencies about the disputed status of the debts. That failure would fall within a year. However, the FTC's Commentary on the FDCPA forecloses that argument.

What's the end result? Diarrhea and a FCRA emotional distress claim.

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