Alisha Kingery v. Quicken Loans

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1661
ALISHA KINGERY, f/k/a Alisha Wilkes, on behalf of herself
and those similarly situated,
Plaintiff - Appellant,
v.
QUICKEN LOANS, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph R. Goodwin,
District Judge. (2:12-cv-01353)
Argued: September 15, 2015 Decided: November 12, 2015
Before DUNCAN and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: Deepak Gupta, GUPTA BECK PLLC, Washington, D.C., for
Appellant. John Curtis Lynch, TROUTMAN SANDERS LLP, Virginia
Beach, Virginia, for Appellee. ON BRIEF: John W. Barrett,
Jonathan R. Marshall, BAILEY & GLASSER, LLP, Charleston, West
Virginia; Leonard A. Bennett, Matthew J. Erausquin, Susan M.
Rotkis, CONSUMER LITIGATION ASSOCIATES, Newport News, Virginia;
Jonathan E. Taylor, GUPTA BECK PLLC, Washington, D.C.; Ian
Lyngklip, CONSUMER LAW CENTER, PLC, Southfield, Michigan; John
Charles Bazaz, Fairfax, Virginia, for Appellant. Jason Manning,
Megan Burns, TROUTMAN SANDERS LLP, Virginia Beach, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Alisha Kingery (Kingery) appeals the district court’s grant
of summary judgment in favor of Quicken Loans, Inc. (Quicken)
with respect to her claim alleging Quicken failed to comply with
the credit-score disclosure requirements set forth in 15 U.S.C.
§ 1681g(g)(1)(A), which are triggered when a mortgage lender
“uses a consumer credit score . . . in connection with an
application initiated or sought by a consumer for a closed end
loan or the establishment of an open end loan for a consumer
purpose that is secured by 1 to 4 units of residential real
property . . . .” Id. § 1681g(g)(1). The district court
granted summary judgment in favor of Quicken based upon its
holding that the summary judgment record, when viewed in the
light most favorable to Kingery and drawing all reasonable
inferences in her favor, failed to establish that Quicken
“use[d]” her credit score “in connection with” her inquiry about
refinancing her current home mortgage loan, and therefore,
Quicken never triggered § 1681g(g)(1)(A)’s credit-score
disclosure requirements. Id. For the following reasons, we
affirm.
I
3
Desiring to refinance her current home mortgage loan, on
April 29, 2010, Kingery, formerly known as Alisha Wilkes, sent a
loan inquiry to the website MortgageLoans.com. 1
MortgageLoans.com subsequently sent Kingery an email identifying
Quicken as one of four potential lenders. 2 The email informed
Kingery that Quicken would be contacting her within the next
twenty-four hours. Within that timeframe, Quicken employee
Matthew Muskan (Muskan) contacted Kingery to ask her permission
to pull her credit reports. Kingery voluntarily granted Muskan
permission.
Muskan electronically pulled Kingery’s tri-merge credit
report from First American CREDCO on May 3, 2010. 3 Within
fifteen seconds, Kingery’s tri-merge credit report appeared on
Muskan’s computer screen at Quicken. Her three credit scores in
descending order, which appeared in the middle of the first page
of Kingery’s tri-merge credit report, were 669, 614, and 566.
1Because this appeal challenges the grant of summary
judgment, the facts are presented based upon viewing the
admissible evidence in the record in the light most favorable to
Kingery as the nonmoving party and drawing all reasonable
inferences in her favor. Pueschel v. Peters, 577 F.3d 558, 563
(4th Cir. 2009).
2
This appeal only concerns Quicken and not the other three
potential lenders.
3A tri-merge credit report consists of the raw data from
the three major credit repositories merged into a single credit
report.
4
Of relevance on appeal, beginning on the bottom of the first
page and continuing onto the top of the second page, Kingery’s
tri-merge credit report showed that foreclosure proceedings had
started against her on March 19, 2010, with respect to a
$404,903 GMAC real estate mortgage that was almost two years in
arrears ($58,109 total in arrears based on a monthly payment of
$2,621).
During Muskan’s deposition in this case three years later,
he testified that he had no recollection of Kingery’s loan
inquiry, also known among Quicken employees as a loan lead.
However, relying on internal Quicken computer records regarding
Kingery’s loan inquiry, the authenticity of which Kingery does
not dispute, Muskan testified that he “clearly denied the loan
for foreclosure.” (J.A. 707). According to Muskan, the only
way the code of denied for foreclosure was entered into
Quicken’s computer system was if “[he] would have to -- manually
. . . click and deny her out for foreclosure.” Id.Within a week of Quicken denying Kingery’s loan inquiry,
Quicken internally transferred it to a consultant within its
twelve-month credit repair program known as Fresh Start.
According to Quicken’s answer to one of Kingery’s interrogatory
requests, “[t]he Fresh Start Program is a credit repair team
that works with loan leads to attempt to develop them into loan
applications where the lead is preliminarily denied in
5
Quicken[’s] internal lead inquiry system.” (J.A. 654). After
the Fresh Start consultant made unsuccessful efforts to
transform Kingery’s loan inquiry into a loan application, on May
24, 2010, Kingery’s loan inquiry was coded in Quicken’s loan
origination computer system as a final denial.
The loan denial letter that Quicken sent Kingery, dated May
24, 2010, states the following as the reason for denying her
loan inquiry: “Credit History: Current/previous slow payments,
judgments, liens or B[ankruptcy].” (J.A. 104). On the same
day, Quicken sent Kingery a document entitled “CREDIT SCORE
NOTICE,” which listed her credit scores with Equifax BEACON,
Experian, and TransUnion and stated the key factors affecting
such scores. The document also gave the full statutory notice
provision set forth in 15 U.S.C. § 1681g(g)(1)(D), which
provides, inter alia: “In connection with your application for
a home loan, the lender must disclose to you the score that a
consumer reporting agency distributed to users and the lender
used in connection with your home loan, and the key factors
affecting your credit scores.” 15 U.S.C. § 1681g(g)(1)(D).
The same letter also offered Kingery the opportunity to pay
a fee to participate in Fresh Start. According to the letter,
Quicken “designed [Fresh Start] to help [Kingery] improve [her]
credit and [her] ability to qualify for credit-based financing.”
(J.A. 104).
6
Turning to the evening of the same day on which Muskan
entered the computer code into Quicken’s computer system to deny
Kingery’s loan inquiry because she was in foreclosure
proceedings, a Quicken computer program considered the potential
for Kingery’s loan inquiry to participate in a second layer of
internal Quicken loan review known as Second Voice. However,
because multiple bankers had already attempted to contact
Kingery, the computer program’s algorithm automatically excluded
Kingery’s loan inquiry from participation in Second Voice.
Therefore, none of Kingery’s credit scores were used in
connection with Second Voice. Had Kingery’s loan inquiry not
been automatically excluded from Second Voice based upon a
computer program algorithm, it subsequently would have been
excluded on the basis that her middle credit score of 614 fell
below the 620 credit score cut-off for participation in Second
Voice.
The operative complaint in this case is the second amended
complaint in which Kingery alleges Quicken violated 15 U.S.C. §
1681g(g), which provides, in relevant part:
Any person who makes or arranges loans and who uses a
consumer credit score . . . in connection with an
application initiated or sought by a consumer for a
closed end loan or the establishment of an open end
loan for a consumer purpose that is secured by 1 to 4
units of residential real property . . . shall provide
the following to the consumer as soon as reasonably
practicable: . . . [a copy of the consumer’s credit
scores, the key factors that adversely affected such
7
scores, and a copy of the statutory notice entitled
NOTICE TO THE HOME LOAN APPLICANT].
Id. § 1681g(g)(1)(A). Notably, § 1681g(g)(1)(A) is triggered by
a mortgage lender’s use of a credit score in connection with a
consumer’s application for a mortgage but not its use of any
other information contained in the balance of a consumer’s
credit report. Section 1681g(g)(1)(A)’s credit-score disclosure
requirements are part of the Fair Credit Reporting Act (FCRA),
15 U.S.C. §§ 1681-1681x, which Act provides a private right of
action against a mortgage lender who willfully or negligently
fails to comply with § 1681g(g)(1)(A)’s credit-score disclosure
requirements. Id. § 1681n (civil liability for willful
noncompliance); § 1681o (civil liability for negligent
noncompliance).
The crux of Kingery’s theory of liability is that although
Quicken sent her the credit-score disclosures required by §
1681g(g)(1)(A) on May 24, 2010, it did not send them as soon
reasonably practicable after Quicken used her credit scores on
May 3, 2010, in connection with her loan inquiry. Notably,
Kingery’s theory of FCRA liability assumes that Quicken actually
used her credit scores in connection with her loan inquiry as
contemplated by § 1681g(g)(1). Quicken took the position below
and continues to take the same position on appeal that it never
used Kingery’s credit scores in connection with her loan inquiry
8
as contemplated by § 1681g(g)(1), and therefore, it never
triggered § 1681g(g)(1)(A)’s credit-score disclosure
requirements with respect to Kingery. And by way of explanation
as to why Quicken sent Kingery credit-score disclosure
documentation on May 24, 2010, Quicken points to the following
portion of the affidavit of its Deputy Corporate Counsel Amy
Bishop: “Because it would be too burdensome to make a
determination of ‘use’ of a client’s credit score on a case by
case basis, Quicken Loans chose to be over-compliant by sending
credit score disclosure notices even when the consumer’s credit
score is not ‘used’ in any manner ‘in connection with an
application.’” (J.A. 443).
Following the close of discovery, Quicken moved for summary
judgment in its favor, which Kingery opposed. The district
court ultimately granted summary judgment in favor of Quicken on
the ground that Kingery failed to proffer sufficient evidence
for a reasonable jury to find that Quicken had used her credit
scores in connection with her loan inquiry under the ordinary
plain meaning of the term “use.” In reaching this ruling, the
district court “conclude[d] that ‘use’ occurs under § 1681g(g)
when the lender employs the consumer’s score to achieve a
purpose or objective, such as employing the score to make a
decision with respect to a loan application.” (J.A. 865-66).
In so concluding, the district court relied upon the Supreme
9
Court’s ordinary plain meaning analysis set forth in Smith v.
United States, 508 U.S. 223 (1993), of the term “uses,” as that
term is found in 18 U.S.C. § 924(c)(1).
Section 924(c) mandates the imposition of specified
criminal penalties if the defendant, “during and in relation to
any crime of violence or drug trafficking crime . . . , uses
. . . a firearm . . . .” 18 U.S.C. § 924(c)(1). Because the
term “uses,” as found in § 924(c)(1), is not statutorily
defined, the Smith Court gave the term its ordinary and natural
meaning, namely “to employ or to derive service from.” Smith,
508 U.S. at 229 (citation and internal quotation marks omitted).
Based upon this analysis, the Smith Court held that a criminal
who trades his firearm for drugs uses it during and in relation
to a drug trafficking crime within the meaning of § 924(c)(1),
because trading a firearm for drugs falls squarely within the
ordinary and natural meaning of the term use. Id. at 241.
In the present case, the district court found on the
summary judgment record, viewed in the light most favorable to
Kingery, that: (1) Quicken did not use, that is did not employ
or derive service from, any of Kingery’s three credit scores in
connection with denying her loan inquiry; rather, Quicken only
obtained, sorted, and stored Kingery’s three credit scores,
which conduct does not fall within the ordinary meaning of the
term “use”; and (2) Quicken denied Kingery’s loan inquiry for
10
the sole reason that her tri-merge credit report showed she was
already in mortgage foreclosure proceedings on the very loan she
sought to refinance. Because the district court concluded that
Quicken did not trigger § 1681g(g)(1)(A)’s credit-score
disclosure requirements with respect to Kingery’s loan inquiry,
the district court did not reach the timing issue.
This timely appeal followed.
II
A
We review the grant of summary judgment de novo. Pueschel,
577 F.3d at 563. Summary judgment is appropriate “if the movant
shows 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). In considering the merits of the motion,
we, like the district court, view the admissible evidence in the
summary judgment record in the light most favorable to Kingery
as the nonmoving party and draw all reasonable inferences in her
favor. Pueschel, 577 F.3d at 563.
B
Before addressing Kingery’s precise arguments on appeal,
for the sake of clarity, we take a moment to set forth the
arguments she does not make on appeal. Kingery does not argue
that Quicken lacked her permission to pull her credit scores
11
and/or her credit report information from the three major credit
reporting agencies. Likewise, she does not argue that Quicken’s
subsequent action in pulling her tri-merge credit report
violated FCRA in any manner. Moreover, Kingery concedes that
the ordinary meaning of the term “use” connotes more than merely
obtaining, possessing, or storing. Thus, Kingery concedes that
Quicken’s conduct in obtaining, possessing, and storing her
credit scores in connection with her loan inquiry did not
trigger § 1681g(g)(1)(A)’s credit-score disclosure requirements.
Finally, with the exception of § 1681g(g)(1)(A)’s timeliness
component, Kingery does not argue that the information Quicken
sent her dated May 24, 2010 (three weeks after she submitted her
loan inquiry to Quicken) failed to satisfy § 1681g(g)(1)(A)’s
credit-score disclosure requirements.
C
Having just clarified the arguments Kingery does not make
on appeal, we now turn to those she does make on appeal. In
broad terms, Kingery argues that Quicken triggered §
1681g(g)(1)(A)’s credit-score disclosure requirements in at
least one of four ways. She then follows up by arguing that the
credit-score disclosure documents she received from Quicken
approximately three weeks after she made her Quicken loan
inquiry were untimely in that Quicken did not send them to her
as soon as reasonably practicable.
12
Because we agree with the district court that Quicken did
not “use[]” Kingery’s credit scores “in connection with” her
loan inquiry as necessary to trigger § 1681g(g)(1)(A)’s
credit-score disclosure requirements, we also do not reach the
timing issue presented by Kingery’s claim. We now turn to
address the four independent ways that Kingery argues Quicken
triggered § 1681g(g)(1)(A)’s credit-score disclosure
requirements with respect to her loan inquiry. In so doing, we
give the term “uses” as found in § 1681g(g)(1) its ordinary
meaning of “to employ or to derive service from,” because such
term is not statutorily defined, Smith, 508 U.S. at 229(citation and internal quotation marks omitted), and such
definition makes sense in the context of § 1681g(g)(1)’s broadly
sweeping “in connection with” language, see id. (“Language, of
course, cannot be interpreted apart from context.”). See Smith,
508 U.S. at 228-30 (giving the term “uses” as found in 18
U.S.C. § 924(c)(1) its ordinary meaning of to employ or to
derive service from because the term is not statutorily defined
and the ordinary definition makes sense in the context of
§ 924(c)(1)’s sweeping “during and in relation to” a drug
trafficking offense language).
1
Kingery argues that Quicken used her credit scores in
connection with her loan inquiry as contemplated in §
13
1681g(g)(1) by integrating them into its computer system and
projecting them onto Muskan’s computer screen. The district
court correctly rejected this argument. The record demonstrates
only that once Quicken obtained Kingery’s credit scores with her
permission, it converted them into a different computer file
format, sorted them into data fields using a computer program,
and delivered them to Muskan via his computer screen. Because
none of these actions in the mere handling of Kingery’s credit
scores constitute the employing of or the deriving service from
such scores, none triggered § 1681g(g)(1)(A)’s credit-score
disclosure requirements.
2
Kingery next argues that, viewing the record evidence in
the light most favorable to her and drawing all reasonable
inferences in her favor, a rational jury could infer that Muskan
considered her credit scores in deciding to deny her loan
inquiry, and thus triggered § 1681g(g)(1)(A)’s credit-score
disclosure requirements. In support of this argument, Kingery
points to no affirmative evidence that Muskan considered her
credit scores in denying her loan inquiry. Instead, she points
to the fact that Muskan has no independent recollection of her
loan inquiry.
Kingery’s argument is without merit. There is no evidence
in the record from which a rational jury could infer that Muskan
14
consulted Kingery’s credit scores and actually took them into
account in denying her loan inquiry. The only evidence in the
record on this point shows that Muskan denied Kingery’s loan
inquiry for the sole reason that Kingery was in mortgage
foreclosure proceedings on the very loan she sought to
refinance. Such evidence is: (1) a printout of the computer
record made at the time Muskan denied Kingery’s loan inquiry
showing the fact that Kingery was in foreclosure proceedings as
the reason he denied such loan inquiry; and (2) Muskan’s
deposition testimony, based upon his review of such computer
printout record, that he necessarily denied her loan inquiry
because she was in foreclosure proceedings. In the face of this
uncontroverted evidence and the fact that Kingery does not
dispute that her pending mortgage foreclosure proceedings would
have been a sufficient ground upon which to deny her loan
inquiry regardless of her credit scores, the jury would have to
engage in impermissible speculation in order to make the finding
Kingery suggests.
To bolster her argument, Kingery also contends that, at the
summary judgment stage, Muskan’s testimony should be ignored
because Muskan, as an employee of Quicken, is not a
disinterested witness and therefore, under Reeves v. Sanderson
Plumbing Products, Inc., 530 U.S. 133 (2000), the jury is not
required to believe his testimony. In making this argument,
15
Kingery relies upon the following quote from Reeves: “[T]he
court should give credence to the evidence favoring the
nonmovant as well as that evidence supporting the moving party
that is uncontradicted and unimpeached, at least to the extent
that that evidence comes from disinterested witnesses.” Id. at
151 (internal quotation marks omitted). Kingery interprets this
quote broadly so as to require a district court considering a
motion for summary judgment to ignore the uncontroverted
testimony of all employees of a company moving for summary
judgment.
We have wisely rejected this broad reading of Reeves,
albeit in an unpublished opinion. See Luh v. J.M. Huber Corp.,
211 F. App’x 143, 146 (4th Cir. 2006). In so rejecting, we
began by pointing out that “Reeves states the noncontroversial
position that witness testimony that the jury is not required to
believe cannot be used to sustain a summary judgment decision,
since the jury is not required to believe their testimony.” Id.We then looked to the Supreme Court’s holding in Chesapeake &
Ohio Ry. Co. v. Martin, 283 U.S. 209 (1931), that the testimony
of an employee of the defendant must be taken as true when such
testimony discloses no lack of candor, the employee witness went
unimpeached, his credibility was not questioned, and the
accuracy of his testimony is not controverted by evidence,
although if it were inaccurate, it readily could be shown to be
16
so. Chesapeake & Ohio Ry. Co., 283 U.S. at 216. Other circuits
have also rejected the broad reading of Reeves pressed by
Kingery. LaFrenier v. Kinirey, 550 F.3d 166, 168 (1st Cir.
2008); Stratienko v. Cordis Corp., 429 F.3d 592, 597-98 (6th
Cir. 2005). Applying the holding of Chesapeake & Ohio Ry. Co.
here, the status of Muskan as an employee of Quicken is
insufficient by itself to create a jury question on his veracity
as long as his testimony disclosed no lack of candor, he was not
impeached, his credibility was not questioned, and the accuracy
of his testimony was not controverted by evidence, although if
it were inaccurate it readily could have been shown to be so.
Based upon this test, we have no reason to ignore Muskan’s
testimony in deciding the merits of Quicken’s motion for summary
judgment.
Because the jury would be required to engage in
impermissible speculation to find that Muskan had factored in
Kingery’s credit scores in his decision to deny her mortgage
loan inquiry, Kingery cannot stave off Quicken’s motion for
summary judgment on this basis. See Dash v. Mayweather, 731
F.3d 303, 311 (4th Cir. 2013) (to defeat summary judgment,
“nonmoving party must rely on more than conclusory allegations,
mere speculation, the building of one inference upon another, or
the mere existence of a scintilla of evidence”).
17
3
We next address Kingery’s argument that because the minimum
credit score for participation in Second Voice is 620, a
reasonable jury could infer that Quicken used her middle credit
score of 614 in connection with denying her loan inquiry. In
making this argument, Kingery candidly recognizes the record
contains the sworn declaration of Kevin Lang (Lang), Quicken’s
Director of Software Engineering, in which Lang declares that
Quicken never used Kingery’s credit scores in determining she
failed to qualify for participation in Second Voice. Notably,
Lang explained in his declaration that Quicken’s computer
program, which reviews the eligibility of previously denied loan
inquiries for participation in Second Voice, automatically
excluded, based on a computer algorithm, Kingery’s loan inquiry
from participation in Second Voice because multiple bankers had
already attempted to contact her. Therefore, he declared, none
of Kingery’s credit scores were used in connection with Second
Voice.
Again, relying on Reeves, Kingery argues the statements in
Lang’s sworn declaration cannot be credited at the summary
judgment stage because Lang is a Quicken employee. For the same
reasons Kingery’s argument based on Reeves failed with respect
to Muskan, it fails with respect to Lang. The relevant
authority makes clear that the status of Lang as an employee of
18
Quicken is insufficient by itself to create a jury question on
his veracity as long as his sworn statements disclose no lack of
candor, he is unimpeached, his credibility has not been
questioned, and the accuracy of his testimony is not
controverted by evidence, although if it were inaccurate it
readily could be shown to be so. Chesapeake & Ohio Ry. Co., 283
U.S. at 216. Based upon this test, we have no reason to ignore
the statements in Lang’s sworn declaration in deciding the
merits of Quicken’s motion for summary judgment. And
considering those uncontroverted statements, no reasonable jury
could infer that Quicken precluded her loan inquiry from
participation in Second Voice because of her middle credit score
of 614.
4
Lastly, we consider Kingery’s argument pertaining to Fresh
Start. Kingery argues that Quicken used her credit score of 614
to determine that she was eligible for Fresh Start, thereby
triggering § 1681g(g)(1)(A)’s credit-score disclosure
requirements. The sole evidence she points to in support of
this argument is a statement in Quicken’s internal training
manual, dated November 16, 2012, which states that target
clients for Fresh Start have a credit score under 620.
Kingery’s Fresh Start argument fares no better than her
prior three arguments. The reason is the same——lack of
19
sufficient evidence for a reasonable jury to find that Quicken
used her credit score in connection with her loan inquiry. The
only evidence in the record regarding why Quicken denied
Kingery’s loan inquiry is that it was denied because the very
mortgage she sought to refinance was in foreclosure. Thus, the
only reasonable inference to be made under this circumstance is
that Quicken referred Kingery’s loan inquiry to Fresh Start
because of the foreclosure. On the flip side, under this
circumstance, a reasonable jury would have to engage in
impermissible speculation to find by a preponderance of the
evidence that Quicken actually used Kingery’s credit scores of
614 or 566 in referring her loan inquiry to Fresh Start based
solely on a statement in Quicken’s training manual dated one and
one half years after Quicken referred Kingery’s loan inquiry to
Fresh Start. See Dash, 731 F.3d at 311 (mere speculation
insufficient to defeat summary judgment). This is what we call
a scintilla of evidence, and it is insufficient to stave off
Quicken’s motion for summary judgment. Id. (mere scintilla of
evidence insufficient to defeat summary judgment). In sum,
Kingery gets nowhere on her Fresh Start argument. 4
4
We note that Quicken argues that Kingery failed below to
make her argument pertaining to Fresh Start in opposition to its
motion for summary judgment, and therefore, Kingery waived her
right to press it on appeal. Kingery responds that she made the
argument below, and even if she did not, under Yee v. City of
(Continued)
20
III
In conclusion, because Kingery failed to proffer sufficient
evidence, when viewed in the light most favorable to her and
drawing all reasonable inferences in her favor, to create a
genuine issue of material fact that Quicken used at least one of
her three credit scores in connection with her loan inquiry
seeking to refinance her foreclosure-burdened mortgage as the
term “use[d]” is found in § 1681g(g)(1), we affirm the district
court’s grant of Quicken’s motion for summary judgment.
AFFIRMED
Escondido, 503 U.S. 519, 534 (1992), she has the right to press
the argument on appeal. See id. (“Once a federal claim is
properly presented, a party can make any argument in support of
that claim; parties are not limited to the precise arguments
they made below.”). Having reviewed the record, we agree with
Quicken that Kingery failed below to make her argument
pertaining to Fresh Start that she now makes on appeal. Indeed,
such failure explains why the district court did not address it.
Nevertheless, because we reject the argument on the merits, we
decline to reach the waiver issue.
21