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Collins v. Diversified Consultants, Inc.

United States District Court, D. Colorado

March 13, 2017



          R. Brooke Jackson United States District Judge.

         Defendants TransUnion, LLC, Experian Information Solutions, Inc., Equifax Information Services, LLC and Medicredit, Inc., move for summary judgment.[1] The Court referred the motions to Magistrate Judge Nina Y. Wang, who has issued an extensive report and recommendation. The plaintiff has filed an objection to a portion of Judge Wang's recommendation. After de novo review, this Court accepts the magistrate judge's recommendation and rules on the pending motions consistent with that recommendation.


         Michael Collins filed this lawsuit on September 24, 2015. In his original Verified Complaint he named five defendants: Diversified, Medicredit, TransUnion, Experian and Equifax. ECF No. 1. He later amended his complaint, adding Stellar as a sixth defendant. ECF No. 36. He alleges that the defendants either misreported or improperly attempted to collect debts that he disputes, resulting in damage to his creditworthiness. He asserted five claims:

(1) violation of the Fair Credit Reporting Act (“FCRA”) by Trans Union, Experian and Equifax, which are consumer reporting agencies, sometimes referred to in this order as “CRAs” or the “CRA Defendants;”
(2) violation of the FCRA by Diversified, Stellar and Medicredit, as furnishers of credit information;
(3) violation of the Fair Debt Collection Practices Act (“FDCPA”) by Diversified, Stellar and Medicredit;
(4) common law negligence by Diversified, Stellar and Medicredit; and
(5) violation of the Colorado Consumer Protection Act (“CCPA”) by all defendants. See Amended Verified Complaint, ECF No. 36, at 11-16.

         Mr. Collins' claims arise primarily from a $410.14 balance on an account he had in 2014 at Comcast Cable, West Division - Mile High States. There is second debt, $130 at the Boulder Holistic Medical Center, that he has also mentioned, but only the Comcast account is relevant to Mr. Collins' objection to Judge Wang's recommendation.

         On September 11, 2013 Mr. Collins entered into an agreement with Comcast for Cable TV, Internet and Telephone services. ECF No. 36 at ¶27. He alleges that, after he missed a payment, Comcast disconnected the service and sent a representative to his home to either collect the late payment or take possession of the equipment. This took place approximately November 16, 2014. According to Mr. Collins, the representative said that he owed approximately $400, but if he canceled his service he would only owe approximately $200. He alleges that he decided that he would pay the $200 and cancel the service because he was unhappy with the service and its cost. He claims that his sister, with whom he was living at the time, paid Comcast $220. But instead of canceling the service, Comcast restored it, only to disconnect it again soon thereafter. Id. at ¶28. Comcast claimed that he still owed $410.14, and when the debt was not paid, Comcast referred it out for collection.

         On January 14, 2015 Mr. Collins received a call from a debt collector with Diversified who reported that he owed Comcast that amount. Mr. Collins told the collector that he did not owe Comcast anything, and that if Diversified reported the alleged debt to any consumer reporting agency he would sue Diversified. Diversified discontinued collection efforts, reported to consumer reporting agencies (to whom Diversified had apparently earlier reported the debt) that the debt was disputed, and had no further communication with Mr. Collins. ECF No. 147 at 2.

         As discussed in more detail later, the consumer reporting agencies responded by requesting that Diversified reinvestigate and verify the accuracy of the debt. This was done. Nevertheless, Diversified requested that the credit reporting agencies delete Diversified's trade line for the Collins Comcast Account. Id. at 2-3. I granted Diversified's motion for what amounted to partial summary judgment. Id. at 12. That left only the third claim (FDCPA) and part of the Fourth Claim (negligence in debt collection efforts) against Diversified. Those claims remain alive at this time.

         On August 3, 2015 Mr. Collins was denied credit when he applied for a bank loan. He alleges that this happened because Diversified falsely reported that he had a collection account (a claim seemingly at odds with the facts as discussed in my September 12, 2016 order). See Id. at ¶¶21-32. He also alleges that Medicredit's reporting of a collection account was responsible for the denial of his application for the bank loan on August 3, 2015. Id. at 46.[2] As we will see, during discovery Mr. Collins also said that Experian was responsible for the denial of the bank loan.

         At some point Comcast referred the same debt to Stellar, perhaps because Diversified was not working the account. On September 21, 2015 Stellar sent Mr. Collins a dunning letter claiming that he owed Comcast $410.14. He alleges that Stellar improperly reported the debt to consumer reporting agencies, thereby violating the FDCPA. The details of his complaints about Stellar are set forth in his Verified Amended Complaint, ECF No. 36, at ¶¶33-42. Shortly after Magistrate Judge Wang recommended that Stellar's motion for summary judgment be granted, Mr. Collins and Stellar reached a settlement. See ECF No. 178.

         The claims have been narrowed somewhat. I have mentioned the Court's partial summary judgment in which plaintiff's Second and Fourth (in part) Claims against Diversified were dismissed. I also mentioned the settlement with Stellar. In addition, Mr. Collins has voluntarily dismissed or withdrawn the remainder of his Second claim and his Fifth Claim in its entirety.[3] Accordingly, the disputed claims that are the subject of the pending motions and the magistrate judge's recommendation are plaintiff's First Claim (FCRA claims against Trans Union, Equifax and Experian); his Third Claim (FDCPA against Medicredit); and his Fourth Claim (negligence against Medicredit). Magistrate Judge Wang recommends that the Court dismiss the First Claim, dismiss part of what remains of the Third Claim, and dismiss the remainder of the Fourth Claim.


         Following the issuance of a magistrate judge's recommendation on a dispositive matter the district court judge must “determine de novo any part of the magistrate judge's disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). The district judge is permitted to “accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate with instructions.” Id. Any part of the magistrate judge's recommendation to which a proper objection has not been made may be reviewed “under any standard [the district court] deems appropriate.” Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir. 1991).


         Magistrate Judge Wang examined the multiple pending motions, responses and replies in detail and issued an impressive 58-page recommendation. Mr. Collins' objection only addresses the First Claim, i.e., the FCRA claims against the three consumer reporting agencies (Trans Union, Experian and Equifax). Accordingly, the Court has conducted a de novo review of the magistrate judge's recommendations concerning those claims.[4]

         Judge Wang summarized plaintiff's claim against the three CRA Defendants as having four main parts:

Mr. Collins alleged that Defendants Trans Union, Experian, and Equifax, as consumer reporting agencies (“CRAs”) under 15 U.S.C. § 1681a(f), negligently and willfully violated sections 1681e(b), 1681i(a), and 1681g of the FCRA by [1] producing “consumer reports” with inaccurate credit information, [2] failing to maintain reasonable investigation and reinvestigation procedures to ensure the reporting of accurate credit information, [3] failing to properly notify Plaintiff within the prescribed timeframe of the investigation and/or ...

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