Karen Bacharach v. Suntrust Mortgage, Inc. , 827 F.3d 432 ( 2016 )

Case: 15-31009 Document: 00513575456 Page: 1 Date Filed: 06/30/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-31009
FILED
June 30, 2016
Summary Calendar
Lyle W. Cayce
Clerk
KAREN BACHARACH,
Plaintiff - Appellant
v.
SUNTRUST MORTGAGE, INCORPORATED,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
Before REAVLEY, SMITH, and HAYNES, Circuit Judges.
PER CURIAM:
Karen Bacharach appeals the district court’s grant of summary
judgment in favor of SunTrust Mortgage, Inc. on her claims under the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681. For the reasons detailed
below, we AFFIRM the district court on all grounds.
I. Background
In 2005, Bacharach opened two mortgage loans with SunTrust. The
present action arises out of Bacharach’s allegations that SunTrust erroneously
reported various delinquencies on those loans to three consumer reporting
agencies (CRAs)—Equifax, Experian, and TransUnion—between March 2012
and June 2013. During that period, Bacharach spent considerable time
communicating with SunTrust and the CRAs to remove the allegedly
Case: 15-31009 Document: 00513575456 Page: 2 Date Filed: 06/30/2016
No. 15-31009
erroneous information from her credit reports. While the parties dispute the
accuracy of the delinquencies, there is no dispute that SunTrust eventually
removed all negative reports for both loans.
Bacharach contends that, due to the allegedly erroneous reports, she
suffered actual damages primarily because her poor credit prevented her from
securing financing to acquire certain property and obtaining a loan to repair
her residence. In addition, Bacharach alleges that she suffered emotional
distress as a result of her frustrations in dealing with SunTrust and the
negative consequences of the purportedly inaccurate reports.
Bacharach filed suit in state court, and SunTrust removed the case to
federal court. She then filed an amended complaint, alleging various causes of
action under both federal and state law; only the disposition of the FCRA
claims is challenged on appeal. After various skirmishes and delays by
Bacharach, the district court ultimately granted summary judgment in favor
of SunTrust, and Bacharach timely appealed.
II. Standard of Review
We review the district court’s summary judgment ruling de novo,
applying the same legal standard as the district court. Lincoln Gen. Ins. Co. v.
Reyna, 401 F.3d 347, 349 (5th Cir. 2005). Summary judgment is appropriate
if the moving party can show 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). Bacharach, as plaintiff, would have the burden of proof at trial
and, therefore, in response to SunTrust’s motion alleging no evidence to
support her claim, Bacharach must point to evidence that would raise a
genuine factual dispute as to a material element of her claim. Nichols v.
Enterasys Networks, Inc., 495 F.3d 185, 188 (5th Cir. 2007) (“Where the non-
moving party fails to establish the existence of an element essential to that
2
Case: 15-31009 Document: 00513575456 Page: 3 Date Filed: 06/30/2016
No. 15-31009
party’s case, and on which that party will bear the burden of proof at trial, no
genuine issue of material fact can exist.” (citation omitted)).
III. Discussion
A. Bacharach’s failed purchase of property at 2841 Magazine Street
Bacharach argues that due to SunTrust’s alleged FCRA violations that
resulted in the reporting of misinformation to various credit agencies, she was
unable to purchase property at 2841 Magazine Street that abuts her personal
residence. The FCRA was implemented “to protect an individual from
inaccurate or arbitrary information about himself in a consumer report.”
Pinner v. Schmidt, 805 F.2d 1258, 1261 (5th Cir. 1986). “Numerous courts
have concluded that the FCRA does not cover reports used or expected to be
used only in connection with commercial business transactions.” 1 Hall v.
Phenix Investigations, Inc., No. 15-10533, 2016 WL 1238602, at *3 (5th Cir.
Mar. 29, 2016) (unpublished) (collecting cases); see also Ippolito v. WNS, Inc.,
864 F.2d 440, 452 (7th Cir. 1988) (“In enacting the FCRA, Congress sought to
regulate the dissemination of information used for consumer purposes, not
business purposes.”); Matthews v. Worthen Bank & Tr. Co., 741 F.2d 217, 219
(8th Cir. 1984) (noting that the “[FCRA] was intended to apply only to reports
which relate to the consumer’s eligibility for personal credit or other
commercial benefits as a consumer, and not to the consumer’s business
transactions” (citation omitted)). Moreover, courts have specifically held that
real estate investment losses due to allegedly inaccurate credit information are
not within the scope of the FCRA. See Podell v. Citicorp Diners Club, Inc., 914
F. Supp. 1025, 1036 (S.D.N.Y. 1996), aff’d, 112 F.3d 98 (2d Cir. 1997).
1 Although the information collected by the CRAs could have been used for both
consumer and commercial purposes, the specific reporting at issue in this transaction was
provided for commercial purposes.
3
Case: 15-31009 Document: 00513575456 Page: 4 Date Filed: 06/30/2016
No. 15-31009
Bacharach’s failed purchase of property at 2841 Magazine Street was an
attempted commercial transaction and is therefore not within the scope of the
FCRA. Bacharach, who testified that she was a real estate investor in the
business of “buying and flipping or buying and fixing up real estate,” also
stated that she intended to purchase the property to “rent it out and get the
rental income.” Indeed, Bacharach seeks as damages the lost rental income
she could have earned had she successfully purchased the property. The
district court did not err in categorizing these real estate investment losses as
a related to a failed “commercial business transaction[ ]” that falls outside the
scope of the FCRA. See Hall, 2016 WL 1238602 at *3.
B. The denial of a loan for personal residence repairs
Bacharach further argues that SunTrust’s alleged FCRA violations
resulted in the denial of an emergency loan for repairs on her personal
residence sustained after Hurricane Isaac. For Bacharach to prevail on this
claim, she must present evidence sufficient to raise a material fact question on
the issue of whether the denial of home repair loans was proximately caused
by SunTrust’s alleged misreporting of Bacharach’s payment history. See
Wagner v. BellSouth Telecomm. Inc., 520 F. App’x 295, 298 (5th Cir. 2013); see
also Crabill v. Trans Union, L.L.C., 259 F.3d 662, 664 (7th Cir. 2001); Matise
v. Trans Union Corp., No. 3:96-CV-3353-D, 1998 WL 872511, at *7 (N.D. Tex.
1998). Bacharach points to no evidence that the denial of home loan repairs
was actually caused by SunTrust’s conduct. In fact, Bacharach’s partial credit
reports reveal that four different financial institutions aside from SunTrust
reported receiving late payments from Bacharach. Thus, Bacharach has failed
to raise a fact issue on an essential element of her claim (causation of
damages).
4
Case: 15-31009 Document: 00513575456 Page: 5 Date Filed: 06/30/2016
No. 15-31009
C. Emotional distress
Bacharach also contends that she is entitled to emotional distress
damages resulting from the stress and anxiety of “fighting SunTrust.” Even if
we were to assume arguendo that Bacharach has pleaded sufficient facts to
support liability under the FCRA as a predicate to emotional distress damages,
she fails to create a material fact issue with respect to the existence of such
damages. The FCRA permits “recovery for humiliation and mental distress
and for injury to one’s reputation and creditworthiness.” Sapia v. Regency
Motors of Metairie, Inc., 276 F.3d 747, 753 (5th Cir. 2002). However, a claim
related to emotional distress requires a “degree of specificity” and “must be
supported by evidence of genuine injury,” such as “the observations of others,”
“corroborating testimony,” or “medical or psychological evidence.” Cousin v.
Trans Union Corp., 246 F.3d 359, 371 (5th Cir. 2001); see also Vadie v. Miss.
State Univ., 218 F.3d 365, 376 (5th Cir. 2000) (noting that to prove emotional
distress, a plaintiff must show a “specific discernable injury to the [plaintiff’s]
emotional state, proven with evidence regarding the nature and extent of the
harm” (citation omitted)).
We have previously held that a plaintiff’s testimony that he or she was
“upset,” “hurt,” “angry,” “paranoid,” or “frustrated” was insufficient to support
an award of actual damages for emotional distress. Cousin, 246 F.3d at 371.
Here, the only evidence of emotional distress that Bacharach points to is her
own vague and conclusory deposition testimony, where she stated that she was
a “complete wreck,” and that, while unable to “recall exactly,” she had seen a
number of medical professionals due to her “anxiety and stress.” This
uncorroborated testimony lacks specificity and fails to show the nature and
extent of the actual emotional harm; it does not satisfy the standards set in our
precedents. As such, this testimony does not raise a material fact issue
5
Case: 15-31009 Document: 00513575456 Page: 6 Date Filed: 06/30/2016
No. 15-31009
sufficient to overcome summary judgment as to the claim of emotional distress.
Id. (vacating jury award for emotional distress in a FCRA case).
AFFIRMED.
6