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Pembroke v. JPMorgan Chase Bank N.A.

United States District Court, D. Colorado

May 10, 2018




         This matter comes before the Court on a motion for summary judgment filed by Defendant Select Portfolio Servicing, Inc. (“SPS”) (Doc. # 130). SPS moves for summary judgment on all remaining claims against it. (Id.) Mr. Pembroke filed his Response (Doc. # 141) and SPS thereafter filed its reply. (Doc. # 147.) For the following reasons, this Court grants SPS's motion for summary judgment.

         I. BACKGROUND

         This lawsuit stems from Mr. Pembroke's allegations that SPS and JP Morgan Chase Bank, N.A. (Chase Bank)[1] inaccurately reported financial information to various credit reporting agencies (CRAs) and then failed to correct the deficiencies after Mr. Pembroke disputed the report. (Doc. # 95.) Mr. Pembroke specifically claims that SPS improperly reported him as personally liable for a debt that he maintains is enforceable only against the John J. Pembroke Trust and the Linda D. Pembroke Living Trust (“Pembroke Trusts”). (Doc. # 95 at ¶¶ 10, 15.)

         The debt originated from a refinance loan Mr. Pembroke negotiated with a bank in 2006. (Doc. # 130-2 at 63, 80.)[2] As part of that loan transaction Mr. Pembroke executed and delivered the promissory note (“Note”), and the Pembroke Trusts executed a deed of trust as collateral for repayment of the Note. (Id. at 63, 64, 80.) The original lender became insolvent in 2008 and the debt instruments were transferred to different financial entities. In 2011, payments on the Note ceased and U.S. Bank National Association, as Trustee for the Loan Trust (“Loan Trust”) began foreclosure proceedings. (Id. at 82-83.) In 2014, the Pembroke Trusts brought an action against the Loan Trust seeking to enjoin the foreclosure action on the basis that the original lender never allowed the Pembroke Trusts to exercise their right of first refusal to buy the Note. (Id. at 80-81.)

         At some point during the trial in the state court, the issue arose as to whether Mr. Pembroke, who was not a party to the case, was personally liable under the Note. (Doc. ## 141-1 at 102-03; 164-166.) Mr. Pembroke asserted that he was not personally liable for two reasons. First he argued that the Note provided to the court was fabricated. Second, Mr. Pembroke argued that he was not personally liable on the Note because he signed the Note on behalf of the trust rather than in his individual capacity. (Doc. # 141-1 at 106.)

         After trial on May 18, 2015, the Court denied the request for an injunction, denied Plaintiffs' request for specific performance, and granted Defendant's application for judicial foreclosure. (Doc. # 130-2 at 77-79.) The state court expressly found that the holder of the original Note was a holder in due course, that the Note was not fabricated or falsified as asserted by Mr. Pembroke, and that the original Note contained Mr. Pembroke's original initials and signature in his individual capacity. (Id. at 77.) Nonetheless, realizing that it had no jurisdiction over Mr. Pembroke, the state court restricted its ruling to the foreclosure, noting that “Mr. Pembroke is not a party to this case, and this judgment and decree of foreclosure does not decide whether Mr. Pembroke is personally liable under the promissory note.” Id. at 76.

         The Pembroke Trusts appealed to the Colorado Court of Appeals which affirmed that “the trial court didn't err in ruling that the Loan Trust is a holder in due course.” (Id. at 79-93.)

         In early 2016, Mr. Pembroke requested copies of his credit report and found that his credit report reflected the Note as a personal liability. (Doc. # 95 at ¶¶ 15, 16.) Using the CRA's online dispute request system and via letters sent to the CRAs and the furnishers of the information, including SPS, Mr. Pembroke disputed the information in his credit report. He asserted that the state court proceedings demonstrated he was not personally liable on the Note and demanded that the credit reports should be changed accordingly. (Id. at ¶¶ 16 and 18.) When the information was not changed, Mr. Pembroke brought this lawsuit against the CRAs, SPS, and Chase Bank claiming a violation of the Federal Credit Reporting Act (“FCRA”), negligence, defamation, and the intentional infliction of emotional distress. (Doc. # 95 at 12-15.) SPS filed the instant motion for summary judgment asserting that the state court's finding that Mr. Pembroke personally executed the Note is fatal to Mr. Pembroke's entire case. (Doc. # 130 at 1.)


         Summary judgment is appropriate where “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). A fact is “material” if it is essential to the disposition of the claim under the relevant substantive law. Turnkey Sols. Corp. v. Hewlett Packard Enter. Co., No. 15-cv-01541-CMA-CBS, 2017 WL 3425140, at *2 (D. Colo. Aug. 9, 2017). A dispute is “genuine” if the evidence could lead a reasonable jury to return a verdict in favor of either party. Medina v. David, No. 14-cv-03037-CBS, 2016 WL 122970, at *2 (D. Colo. Jan. 8, 2016). In making its decision, a court views the evidence presented in the light most favorable to the non-moving party. Id.

         III. ANALYSIS

         In its motion for summary judgment, SPS makes four arguments:

1. Mr. Pembroke's FCRA claim fails as a matter of law because the reported ...

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