     Case: 14-10771      Document: 00513050508         Page: 1    Date Filed: 05/20/2015




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                      No. 14-10771                       United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                            May 20, 2015
                                                                           Lyle W. Cayce
JULIANA JETT,                                                                   Clerk
                                                 Plaintiff–Appellant,
versus
AMERICAN HOME MORTGAGE SERVICING, INCORPORATED,
                                                 Defendant–Appellee.




                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:12-CV-2136




Before SMITH, PRADO, and OWEN, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*

       Juliana Jett sued American Home Mortgage Servicing, Incorporated
(“American Home”), for allegedly negligently and willfully failing to update her
credit information in violation of 15 U.S.C. § 1681s-2(b). The district court
entered summary judgment for American Home on both claims. Because there
is a genuine dispute of material fact as to negligence, we vacate as to that claim


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 14-10771       Document: 00513050508         Page: 2     Date Filed: 05/20/2015



                                       No. 14-10771
but affirm on the willfulness claim.

                                              I.
       Jett fell behind on her mortgage payments and filed for bankruptcy.
After she completed her Chapter 13 plan, her Experian Information Solutions,
Incorporated (“Experian”), credit report erroneously showed the mortgage as
discharged in bankruptcy with a $0 balance. She disputed the listing, and
Experian sent an automatic credit dispute verification (“ACDV”) form to Amer-
ican Home. 1 Although American Home attempted to report the loan as current
with $0 past due and a principal balance of approximately $35,000, Jett’s credit
report was not updated despite that four ACDV forms were exchanged over
two-and-one-half years.

       Jett alleges that she was denied refinancing because American Home
had negligently and willfully misreported the status of the mortgage. Specifi-
cally, she maintains that it failed to update the Metro 2® Consumer Infor-
mation Indicator (“CII”) field properly in the ACDV forms. Instead of changing
the CII code to “Q” as instructed by the Consumer Data Industry Association’s
2012 Credit Reporting Guide, American Home left the field blank. A blank CII
field signals that the CRA should keep reporting the original information, so
none of the corrected information was processed by Experian.

       The district court entered summary judgment on the negligence claim
because “Jett ha[d] failed to adduce any evidence concerning [American
Home’s] policies and procedures in responding to [the ACDV] requests” and
her “evidence that [American Home] knew about [Experian’s] policies and



       1 When a credit reporting agency (“CRA”) receives a dispute from a consumer, it sends
an ACDV form to the furnisher of the credit information. The form contains the information
that is being reported, what the consumer disputes, and blank fields for the furnisher to edit
and return.
                                              2
     Case: 14-10771      Document: 00513050508         Page: 3    Date Filed: 05/20/2015



                                      No. 14-10771
procedures [was] insufficient to show that [American Home] had a duty to con-
form to them.” The court entered summary judgment on the willfulness claim
because Jett did not respond to that portion of the motion for summary
judgment.

                                            II.
       If a CRA notifies a furnisher of credit information (a “furnisher”) that a
consumer disputes the reported information, the furnisher must “review all
relevant information provided by the [CRA],” “conduct an investigation,”
“report the results of the investigation,” and “modify . . . delete . . . or . . . per-
manently block the reporting of [inaccurate or incomplete] information.”
§ 1681s-2(b)(1)(A)–(E). The Fair Credit Reporting Act creates a private cause
of action to enforce § 1681s-2(b): “Any person who is negligent in failing to
comply with any requirement imposed under this subchapter with respect to
any consumer is liable” for actual damages and attorney’s fees. 2 Moreover,
“[a]ny person who willfully fails to comply with any requirement imposed
under this subchapter with respect to any consumer is liable to that consumer”
for actual, statutory, and punitive damages and attorney’s fees. § 1681n(a).

       Relying on Chiang v. Verizon New England Inc., 595 F.3d 26, 38–41 (1st
Cir. 2010), American Home urges that summary judgment was proper because
Jett failed to show that its policies and procedures were unreasonable. In
Chiang, summary judgment was affirmed because, inter alia, the plaintiff
“ha[d] presented no evidence that the procedures employed by [the furnisher]
to investigate the reported disputes were unreasonable.” Id. at 38. 3 But unlike


       2See Smith v. Santander Consumer USA, Inc., 703 F.3d 316, 317 (5th Cir. 2012) (per
curiam); Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631, 639 (5th Cir. 2002).
       3 The court also noted that the plaintiff had “failed to show any actual inaccuracies
that [the furnisher] could have found through a reasonable investigation.” Chiang, 595 F.3d
at 38.
                                             3
     Case: 14-10771         Document: 00513050508         Page: 4     Date Filed: 05/20/2015



                                        No. 14-10771
the furnisher in Chiang, American Home knew that Jett’s information was
being reported inaccurately and attempted to correct it. Regardless of the poli-
cies and procedures used to investigate the dispute, the plain language of
§ 1681s-2(b)(1)(C) and § 1681o makes clear that a furnisher is liable if it negli-
gently reports the results of its investigation to the CRA. 4

       There is a genuine issue of material fact as to whether American Home
negligently failed to comply with the reporting requirements. The first ACDV
form told it to “[p]rovide complete ID and verify account information” and
stated that Jett claimed the mortgage was current and should not be shown as
foreclosed. The second form showed that the mortgage was still being reported
inaccurately and instructed American Home to “[p]rovide complete ID and ver-
ify account information.” The third form directed American Home to “[v]erify
all amounts” and contained the annotation “Remove” in the CII field in the
“Consumer Claims” column. In each instance, American Home tried to correct
the information but returned a blank CII field so Experian did not process the
updates. 5 Because there is a genuine dispute of material fact as to American
Home’s negligence, summary judgment is not appropriate. 6




       4 Nothing in 12 C.F.R. § 1022.42 alters our understanding of § 1681s-2(b)(1)(C)–(E).
Although “[e]ach furnisher must establish and implement reasonable written policies and
procedures regarding the accuracy and integrity of the information . . . that it furnishes to a
[CRA],” § 1022.42, it is also required to “provide to the [CRA] any correction . . . that is nec-
essary to make the information provided by the furnisher accurate,” § 1022.43(e)(4).
       5   The fourth form was sent after Jett’s refinancing application was denied.
       6 American Home avers that it was not negligent because the ACDV instructions did
not provide notice that it needed to enter a new code and another CRA was able to report the
status of the mortgage correctly. Those are issues to be resolved at trial. See Cousin v. Trans
Union Corp., 246 F.3d 359, 368 (5th Cir. 2001) (“The adequacy of [a CRA’s] procedures is
judged according to what a reasonably prudent person would do under the circumstances. In
the majority of cases, reasonableness is a question for the jury.” (citation omitted)).
                                               4
     Case: 14-10771       Document: 00513050508         Page: 5    Date Filed: 05/20/2015



                                      No. 14-10771
                                            III.
       For American Home willfully to have violated § 1681s-2(b), it must have
“knowingly and intentionally committed an act in conscious disregard for the
rights of others.” 7 Jett does not point to any such evidence; rather, she claims
that American Home’s motion for summary judgment “did not make any men-
tion of an absence of evidence regarding the issue of willfulness.” But Ameri-
can Home stated that “there are no genuine issues of material fact, and the
summary judgment evidence establishes that [American Home] . . . did not
willfully or negligently violate any provision of 15 U.S.C [§] 1681s-2(b).”
(emphasis added).

       The judgment is VACATED as to the negligence claim, AFFIRMED as
to the willfulness claim, and REMANDED for further proceedings as needed.




       7Id. at 372 (quoting Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir. 1986)) (internal
quotation marks omitted).
                                             5
