Alston v. Embrace Home Loans, Inc. et al

MOTION for Summary Judgment Defendant, Physicians Life Insurance Company's Motion for Summary Judgment

D. Md.March 10, 2017

1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) YVONNE ALSTON, * Plaintiff, * v. * Case No. 17-CV-00033-TDC EMBRACE HOME LOANS, et al., * Defendants. * * * * * * * * * * * * * * DEFENDANT, PHYSICIANS LIFE INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT Defendant, Physicians Life Insurance Company (“Physicians Life”), by its attorneys of record, hereby moves pursuant to Fed.R.Civ.P. 56, for entry of an order granting summary judgment in favor of Physicians Life and against the Plaintiff, Yvonne Alston for the reason that there is no genuine dispute as to any material fact, and Physicians Life is entitled to judgment in its favor as a matter of law.1 In support of this Motion, Physicians Life submits the accompanying Memorandum of Law and Appendix of Exhibits.2 WHEREFORE, Defendant, Physicians Life Insurance Company prays that this Court grant it summary judgment and dismiss all Plaintiff’s claims pending against it, with prejudice. 1 Physicians Life has joined in the Defendants’ Omnibus Motion to Dismiss and Memorandum of Law in Support thereof. Physicians Life adopts and incorporates herein the reasons dismissal is proper as stated in those filings. Alternatively, the Court may look beyond the pleadings and grant Physicians Life summary judgment as set forth in Physicians Life’s individual Motion and Memorandum of Law. 2 In accordance with § II(B)(2) of the Case Management Order [ECF No. 12] Physicians Life will defer filing its exhibits with the Court at this time, and will ensure that all motion-related exhibits are filed in a Joint Record with the Court within seven (7) days of the filing of the final brief. Physicians Life is providing the opposing party with a copy of its Appendix of Exhibits contemporaneously with this filing per § II(B)(2)(d) of the Case Management Order. Case 8:17-cv-00033-TDC Document 108 Filed 03/10/17 Page 1 of 5 2 DATED this 10th day of March, 2017. Respectfully submitted, PHYSICIANS LIFE INSURANCE COMPANY, Defendant /s/ Eric R. Harlan Eric R. Harlan (Bar No. 23492) SHAPIRO SHER GUINOT & SANDLER, P.A. 250 West Pratt Street, Suite 2000 Baltimore, MD 21201 (410)385-0202 (410)539-7611 (fax) erh@shapirosher.com and Michaela A. Smith (NE Bar No. 22737) (pro hac vice) MCGRATH, NORTH, MULLIN & KRATZ, PC, LLO First National Tower, Suite 3700 1601 Dodge Street Omaha, NE 68102 (402)341-3070 (402)341-0216 (fax) msmith@mcgrathnorth.com ATTORNEYS FOR DEFENDANT, PHYSICIANS LIFE INSURANCE COMPANY Case 8:17-cv-00033-TDC Document 108 Filed 03/10/17 Page 2 of 5 3 CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of Defendant Physicians Life Insurance Company’s Motion for Summary Judgment and Supporting Memorandum have been filed electronically on the 10th day of March, 2017. Notice of this filing will be sent to the following parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s electronic filing. Cory J. Rooney, Esquire ROONEY LAW 319 S. 17th St., Suite 522 P.O. Box 382 Omaha, NE 68102 (Attorney for Defendant First National Bank of Omaha) John D. Sadler, Esquire BALLARD SPAHR LLP 1909 K Street, NW, 12th Floor Washington, DC 20006-1157 (Attorneys for Defendants Discover Financial Services, Discover Bank, CNU Online CASHNETUSA and CNU Online Holdings, LLC) Scott H. Marder, Esquire Phillip Chong, Esquire DUANE MORRIS LLP 111 South Calvert Street, Suite 2000 Baltimore, MD 21202 (Attorneys for Defendant U.S. Bank National Association d/b/a Elan Financial Services) Robert A. Gaumont, Esquire GORDON FEINBLATT LLC The Garrett Building 233 East Redwood Street Baltimore, MD 21202 (Attorney for Defendants Embrace Home Loans, Inc. and CrossCountry Mortgage) Nathan D. Adler, Esquire NEUBERGER, QUINN, GIELEN, RUBIN & GIBBER, P.A. One South Street, 27th Floor Baltimore, MD 21202 (Attorney for Defendant Prosper Marketplace, Inc.) Charles S. Hirsch, Esquire BALLARD SPAHR LLP 300 East Lombard Street, 18th Floor Baltimore, MD 21202 (Attorney for Defendant Primary Residential Mortgage) Brian L. Moffet, Esquire Zachary S. Schultz, Esquire MILES & STOCKBRIDGE P.C. 100 Light Street Baltimore, MD 21202 (Attorneys for Defendant IDS Property Casualty Insurance Company, improperly named as “Ameriprise Auto and Home”) Ezra S. Gollogly, Esquire Steven A. Book, Esquire KRAMON & GRAHAM, P.A. One South Street, Suite 2600 Baltimore, MD 21202 (Attorneys for Defendant OneMain Financial Group, LLC) Case 8:17-cv-00033-TDC Document 108 Filed 03/10/17 Page 3 of 5 4 Michaela A. Smith, Esquire MCGRATH, NORTH, MULLIN & KRATZ, PC, LLO First National Tower, Suite 3700 1601 Dodge Street Omaha, NE 68102 (Attorney for Defendant Physicians Life Insurance Company) Emily Kathryn Devan, Esquire REED SMITH, LLP 1201 Market Street, 15th Floor Wilmington, DE 19801 (Attorney for Defendant GECRB/Synchrony Bank) Bradford S. Bernstein, Esquire Rosalyn Tang, Esquire MILES & STOCKBRIDGE P.C. 11 North Washington Street, Suite 700 Rockville, MD 20850 (Counsel for Defendant Sun Trust Bank) John David Collins, Esquire Thomas J. Butler, Esquire Joshua Robert Hess, Esquire MAYNARD COOPER & GALE, P.C. 1901 6th Avenue North, Suite 2400 Birmingham, AL 35203 (Attorneys for Defendant IDS Property Casualty Insurance Company, improperly named as “Ameriprise Auto and Home”) John L. Kazmierczak, Esquire REED SMITH, LLP 20 Stanwix Street, Suite 1200 Pittsburgh, PA 15222 (Counsel for Defendant GECRB/Synchrony Bank) Daniel A. Glass, Esquire ECKERT SEAMANS CHERIN AND MELLOTT LLC 1717 Pennsylvania Ave., NW, Suite 1200 Washington, DC 20006 (Counsel for Citizens Bank NA) Daniel Fanaselle, Esquire BALLARD SPAHR LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103 (Attorneys for Defendants Discover Financial Services, Discover Bank, CNU Online CASHNETUSA and CNU Online Holdings, LLC) The undersigned further certifies that a true copy of the foregoing was served on the following parties via First Class, U.S. Mail, postage prepaid, on the 10th day of March, 2017, properly addressed as follows: Pro Se Plaintiff Yvonne Alston 10012 Cedarhollow Lane Largo, MD 20774 Case 8:17-cv-00033-TDC Document 108 Filed 03/10/17 Page 4 of 5 5 /s/ Eric R. Harlan Eric R. Harlan (Bar No. 23492) SHAPIRO SHER GUINOT & SANDLER, P.A. 250 West Pratt Street, Suite 2000 Baltimore, MD 21201 (410)385-0202 (410)539-7611 (fax) erh@shapirosher.com Michaela A. Smith (NE Bar No. 22737) (pro hac vice) MCGRATH, NORTH, MULLIN & KRATZ, PC, LLO First National Tower, Suite 3700 1601 Dodge Street Omaha, NE 68102 (402)341-3070 (402)341-0216 (fax) msmith@mcgrathnorth.com ATTORNEYS FOR DEFENDANT, PHYSICIANS LIFE INSURANCE COMPANY Case 8:17-cv-00033-TDC Document 108 Filed 03/10/17 Page 5 of 5 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (Northern Division) YVONNE ALSTON, * Plaintiff, * v. * Case No. 17-CV-00033-TDC EMBRACE HOME LOANS, et al., * Defendants. * * * * * * * * * * * * * * MEMORANDUM IN SUPPORT OF DEFENDANT, PHYSICIANS LIFE INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT Defendant, Physicians Life Insurance Company (“Physicians Life”) by its undersigned counsel, submits the following Memorandum of Law in support of its Motion for Summary Judgment as to all claims alleged by Plaintiff, Yvonne Alston (“Alston”) against Physicians Life. I. Introduction. Alston and various of her family members are serial litigants of Fair Credit Reporting Act (“FCRA”) claims in federal and state court. The instant Complaint attempts to allege claims against Physicians Life under the FCRA. Physicians Life is mentioned in only three allegations of the Complaint, all of which are conclusory and void of facts.1 Complaint ¶¶ 17, 24, 38. Specifically, Count I alleges that Physicians Life is an entity offering insurance and annuity products, and that it allegedly “illegally procured” Alston’s credit report without making a firm offer of insurance to Alston. Complaint ¶¶ 17, 24, 38. There are no allegations concerning Physicians Life in Count II of 1 Physicians Life has joined in the Defendants’ Omnibus Motion to Dismiss and Memorandum of Law in Support of the Motion to Dismiss Alston’s Complaint for failure to state a claim, and Physicians Life adopts and incorporates herein the reasons dismissal is proper as stated in those filings. An additional, alternative basis for dismissal of Physicians Life from this action is set forth herein. Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 1 of 8 2 the Complaint,2 however that claim is predicated on allegations that when Defendants allegedly were notified of Alston’s dispute, Defendants failed to “verify they obtained her credit to make a firm offer.” Complaint ¶¶ 32, 51, 54. With this Memorandum of Law, Physicians Life submits undisputable evidence that Physicians Life did in fact make Alston a firm offer of insurance. Because Alston’s claims are wholly predicated on the wrongful assertion that Physicians Life failed to make her a firm offer of insurance, summary judgment in favor of Physicians Life is warranted. II. Statement of Material Facts. 1. Physicians Life is in the business of providing life insurance and annuities to consumers. Complaint ¶17; App’x Ex. 1, Declaration of Walter Duda (“Duda Decl.”) at ¶5 (J.R. 1). 2. The FCRA allows for the furnishing of a consumer credit report in connection with a firm offer of insurance that is not initiated by the consumer. Complaint ¶42; 15 U.S.C. § 1681a(l), § 1681b, § 1681b(C)(1)(B)(i). 3. According to Alston, accessing her credit report for a promotional inquiry is “false and deceptive” only if the Defendant did not actually make a “firm offer” of credit or insurance to her. Complaint ¶38. 4. According to Alston’s allegations, she obtained her Trans Union credit report within one year of November 21, 2016, the date Alston’s Complaint was filed. Complaint ¶22. 5. At times, Physicians Life markets life insurance products through mailers offering firm offers of insurance to consumers. App’x Ex. 1, Duda Decl. at ¶8 (J.R. 2). 6. Attached as Exhibit 1-A is a true and accurate copy of the Physicians Life firm offer of insurance that was sent via United States Mail in January, 2016 to Yvonne Alston at 10012 2 Paragraph 51 of the Complaint alleges: “Defendants D&S violated the FCRA, 15 U.S.C. 1681 s- 2(b)(1)(A)-(E) . . . “ but no similar allegation is made concerning Physicians Life. Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 2 of 8 3 Cedarhollow Lane in United States Postal Zip Code 20774. App’x Ex. 1, Duda Decl. at ¶11-17 (J.R. 2-3); App’x Exs. 1-A, 1-B, 1-C (J.R. 4-18); App’x Ex. 3, Parish Decl. (J.R. 38-39). 7. Physicians Life offered Alston a life insurance policy offering benefits in an amount up to $10,000, as set forth in Exhibit 1-A (J.R. 4-8); App’x Ex. 1, Duda Decl. at ¶12 (J.R. 2). 8. Alston was selected to receive Physicians Life’s offer set forth in Exhibit 1-A because she met initial criteria from her TransUnion credit report. App’x Ex. 1-A (J.R. 4-8); App’x Ex. 1, Duda Decl. at ¶13 (J.R. 2). 9. Attached as Appendix Exhibit 2-A is a true and accurate copy of an email dated January 26, 2017, from counsel for Physicians Life, Michaela A. Smith, to Alston relating to Physicians Life’s Notice of Intention to File a Motion to Dismiss, or in the alternative, a Motion for Summary Judgment. App’x Ex. 2, Declaration of Michaela A. Smith (“Smith Decl.”) at ¶4. (J.R. 19- 20); App’x Ex. 2-A (J.R. 21). 10. In an email dated January 27, 2017, Alston effectively conceded that some credit inquiries on her credit report at issue in this litigation were in fact accompanied by a firm offer. App’x Ex. 2-B (J.R. 22-23). 11. On February 7, 2017, prior to the filing of its Motion for Summary Judgment, Physicians Life provided Alston the firm offer of insurance that Physicians Life had sent to her and requested that she dismiss her claims against Physicians Life. App’x Ex. 2-C (J.R. 24-36). 12. Ms. Alston has refused to dismiss her claims against Physician Life, responding with only this: “I will not be able to determine the legitimacy of that correspondence until after I have had the opportunity to conduct discovery.” App’x Ex. 2-D (J.R. 37). III. Summary Judgment Legal Standard. “Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 3 of 8 4 speedy and inexpensive determination of every action.’” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1) (italics added). The rationale for summary judgment is particularly poignant in a case such as this, which has been brought by a serial litigator of FCRA claims which are “based at best on no real or very de minimus injuries in fact, but which have been filed essentially for the purpose of winning statutory damages or, what is more likely, in the hope of extracting settlements from defendants.” Troy Alston v. Experian Information Solutions, Inc., et al., 2016 WL 4555056*7 (D. Md. August 31, 2016). This Court has acknowledged that Fair Credit Reporting Act claims may properly be disposed of by way of summary judgment. See e.g. Alston v. Equifax Information Services, LLC, Civil Action 13-1230 (Sept. 20, 2016). Pursuant to Federal Rule 56(a), the court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” “A material fact is one that might affect the outcome of the suit under the governing law.” Spriggs v. Diamond Auto Glass, 242 F.3d 179 (4th Cir. 2001) quoting Anderson v. Liberty Lobby, Inc., 477 US 242, 248 (1986). A party who bears the burden of proof must factually support each element of her claim, therefore, “a complete failure of proof concerning an essential element . . . necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323. “[A] mere scintilla of evidence is not enough to create a fact issue.” Barwick v. Coltext Corp., 736 F.2d 946, 958-59 (4th Cir. 1984) quoting Seago v. North Carolina Theatres, Inc. 42 F.R.D. 627, 632 (E.D.N.C. 1966). IV. Legal Argument. This Court should dismiss all Alston’s claims against Physicians Life, because Alston’s claims are predicated on the wrongful assumption that Physicians Life did not send a firm offer of insurance to Alston. Specifically, Alston alleges that Physicians Life “illegally procured” her TransUnion credit report because it failed to offer her a “firm offer” of insurance. Complaint ¶¶ 17, Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 4 of 8 5 24, 38. According to Alston’s own allegations, if Physicians Life accessed Alston’s credit report for a promotional inquiry which resulted in Physicians Life making a firm offer of Credit to Alston, that would not be false or deceptive under the FCRA. Complaint ¶38. A. The FCRA allows for the furnishing of a consumer credit report in connection with a firm offer of insurance that is not initiated by the consumer. The FCRA allows for the furnishing of a consumer credit report in connection with a firm offer of insurance that is not initiated by the consumer. Complaint ¶42; 15 U.S.C. § 1681a(l), § 1681b, § 1681b(C)(1)(B)(i). Put another way, a firm offer of credit or insurance as defined in 15 U.S.C. 1681a(l) is a statutorily authorized “permissible purpose” for which a credit report may be accessed or used. 15 U.S.C. §§ 1681a(l), 1681b. The FCRA defines a “firm offer of credit or insurance” as follows: The term ‘firm offer of credit or insurance’ means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following: (1) The consumer being determined, based on information in the consumer’s application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established - (A) before selection of the consumer for the offer; and (B) for the purpose of determining whether to extend credit or insurance pursuant to the offer. (2) Verification - (A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer’s application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or (B) of the information in the consumer’s application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability. (3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was - Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 5 of 8 6 (A) established before selection of the consumer for the offer of credit or insurance; and (B) disclosed to the consumer in the offer of credit or insurance. 15 U.S.C. § 1681a(l). In enacting these provisions, Congress sought to balance consumers’ interest in privacy with consumers’ interest in receiving valuable offers of credit and/or insurance. See TransUnion Corp. v. F.T.C., 267 F.3d 1138, 1143 (D.C. Cir. 2001). “For an offer to be firm, the [insurer] must be ready and willing to extend the promised line of [insurance]. However, the offer can be conditioned on the fact that the consumer actually met and ‘continues to meet[,] the specific criteria used to select the consumer for the offer in the first place.” Harris v. Database Management & Marketing, Inc., 609 F.Supp.2d 509, 513 (D. Md. 2009). B. Physicians Life Fully Complied with the FCRA by Sending Alston a Firm Offer of Insurance. Physicians Life is in the business of providing life insurance and annuities to consumers. Complaint ¶17; App’x Ex. 1, Duda Decl. at ¶5 (J.R. 1). At times, Physicians Life markets life insurance products through mailers offering firm offer of insurance to consumers. App’x Ex. 1, Duda Decl. at ¶8 (J.R. 2). According to Alston, she obtained her Trans Union credit report within one year of November 21, 2016, the date Alston’s Complaint was filed. Complaint ¶22. Attached as Exhibit 1-A is a true and accurate copy of the Physicians Life firm offer of insurance that was sent via United States Mail in January, 2016 to Yvonne Alston at 10012 Cedarhollow Lane in United States Postal Zip Code 20774. App’x Ex. 1, Duda Decl. at ¶11-17 (J.R. 2-3); App’x Exs. 1-A, 1-B, 1-C (J.R. 4- 18); App’x Ex. 3, Parish Decl. (J.R. 38-39). In the firm offer of insurance, Physicians Life offered Alston a life insurance policy with benefits in an amount up to $10,000. App’x Ex. 1-A(J.R. 4-8); App’x Ex. 1, Duda Decl. at ¶12 (J.R. 2). Alston was selected to receive Physicians Life’s offer because she met initial criteria from her TransUnion credit report. App’x Ex. 1-A (J.R. 4-8); App’x Ex. 1, Duda Decl. at ¶13 (J.R. 2). Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 6 of 8 7 There is no dispute that a firm offer is a permissible purpose under the FCRA. In fact, according to Alston, accessing her credit report for a promotional inquiry is “false and deceptive” only if the Defendant did not actually make a “firm offer” of credit or insurance to her. Complaint ¶38. Importantly, Alston does not deny that some credit inquiries that appeared on her credit report were accompanied by firm offers, stating only that “most” credit inquiries were not accompanied by a firm offer. App’x Ex. 2-B (J.R. 22). Physicians Life did send Alston a firm offer of insurance in full compliance with the FCRA. App’x Ex. 1-A (J.R. 4-8); 15 U.S.C. § 1681a(l). Alston’s naked allegations that Physicians Life did not make her a firm offer, which are based on “information and belief,” are directly and completely refuted by App’x Ex. 1-A. App’x Ex. 1-A (J.R. 4-8). Alston’s claim in Count II of the Complaint is likewise contingent on the verifiably unfounded allegation that Physicians Life did not send Alston a firm offer of insurance. Alston avers that defendants should have investigated whether they “actually sent Plaintiff a firm offer” and Alston goes on to allege that had defendants conducted such an investigation, they would have found that they did not make a firm offer to her and would have deleted the inquiries on Alston’s credit report. Complaint ¶54. Again, these allegations are predicated on speculation without any factual basis whatsoever. Even taking Alston’s allegations in the best possible light and assuming arguendo that Physicians Life received notification of Alston’s dispute on her credit report, Physicians Life did send a firm offer to Alston as reflected in App’x Ex. 1-A, so her allegations in Count II are meritless and inapplicable as to Physicians Life. App’x Ex. 1-A (J.R. 4-8). It is well-established that if a mailer constitutes a “firm offer” under the FCRA, there is no statutory violation as a matter of law. Farrow v. Capital One Auto Finance, Inc., 2007 WL 4707634, *2-4 (D. Md. 2007) (no violation of the FCRA where there was a firm offer made to Plaintiff); See also Harris v. Database Management & Marketing, Inc., 609 F.Supp.2d 509 (D. Md. 2009) (summary judgment granted in favor of defendant because defendant established a permissible purpose under Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 7 of 8 8 the FCRA); Yvonne Alston v. Central Credit Services, Inc., 2013 WL 4543364 (D. Md. 2013) (granting summary judgment to defendant on FCRA claim) citing Korotki v. Attorney Servs. Corp., 931 F. Supp. 1269, 1279 (D. Md. 1996). In this case, the evidence establishes that Physicians Life made a firm offer of insurance to Alston in accordance with the FCRA. The verified evidence submitted by Physicians Life in support of this Motion conclusively proves the legitimacy of that firm offer of insurance. There is no discovery that could possibly materially affect the outcome of this case. Physicians Life is therefore entitled to summary judgment as a matter of law. CONCLUSION Defendant, Physicians Life Insurance Company respectfully requests that this Court grant summary judgment in its favor and dismiss Plaintiff’s Complaint against Physicians Life Insurance Company, in its entirety, with prejudice. DATED this 10th day of March, 2017. Respectfully submitted, PHYSICIANS LIFE INSURANCE COMPANY, Defendant /s/ Eric R. Harlan Eric R. Harlan (Bar No. 23492) SHAPIRO SHER GUINOT & SANDLER, P.A. 250 West Pratt Street, Suite 2000 Baltimore, MD 21201 (410)385-0202 (410)539-7611 (fax) erh@shapirosher.com Michaela A. Smith (NE Bar No. 22737) (pro hac vice) MCGRATH, NORTH, MULLIN & KRATZ, PC, LLO First National Tower, Suite 3700 1601 Dodge Street Omaha, NE 68102 (402)341-3070 (402)341-0216 (fax) msmith@mcgrathnorth.com Case 8:17-cv-00033-TDC Document 108-1 Filed 03/10/17 Page 8 of 8