In Hariton v. Chase Auto Finance Corp., 2d, 2010 WL 3075609 (C.D.Cal. 2010), Judge Matz granted summary judgment for an automobile finance company who was sued under FCRA and for negligence in their reporting of their customer’s account.
Whether damages are or are not an element of a FCRA claim depends on whether the noncompliance was willful or negligent. Damages are not an element of a claim for a willful violation. 15 U.S.C. § 1681n (stating that actual or statutory damages may recovered for willful noncompliance with FCRA) (emphasis added); see also Ackerley v. Credit Bureau of Sheridan, Inc., 385 F.Supp. 658, 661 (D.Wyo.1974) (“The plain language of § 1681n … buttresses the view that actual damages is not required in an action to enforce liability….”); 21 JOHN R. KENNEL & ELIZABETH WILLIAMS, CORPUS JURIS SECUNDUM CREDIT REPORTING AGENCIES § 26 (2010) (explaining that FCRA allows an award of the greater of statutory damages or actual damages sustained as a result of a willful violation). Plaintiff alleges in his complaint that Chase’s response to the report of their dispute may have been “intentional or negligent,” TAC ¶ 18.2, and that Chase made a “knowingly false adverse report,” TAC ¶ 19. However, Plaintiff provides no evidence that Chase’s actions were willful. Therefore, at best his cause of action must be based on negligent non-compliance with the FCRA. ¶ Unlike for a willful violation, damages are an element of a claim for a negligent violation of the FCRA. 15 U.S.C. § 1681o (stating that “actual damages sustained … and … the costs of the action together with reasonable attorney’s fees” are recoverable for negligent noncompliance) (emphasis added); see also DAVID STEMLER, FEDERAL FAIR LENDING AND CREDIT PRACTICE MANUAL ¶ 13.04  (2010) (stating that proof of actual injury is required); KENNEL, supra page 12 § 26 (explaining that FCRA allows an award only if there are actual damages sustained as a result of negligent noncompliance). ¶ Plaintiff characterizes his alleged damages as having had to pay a higher interest rate for the car he and IPP purchased on or about June 5, 2007. Only damages for injuries personally incurred, not injuries to business entities, are available under FCRA. First Order at 2. Therefore, Plaintiff is limited to seeking damages for any heightened interest rate he personally was required to pay on the June 2007 car loan because that was the only credit application on behalf of Plaintiff (albeit along with IPP). See Neff Decl ., Ex. P (showing “Imaging Presentation Partners” and “Nicholas Theodore Hariton” as the “Buyer (and Co-Buyer)”) of the relevant car. . . . Nevertheless, because Plaintiff applied for this loan in June 2007-before Defendant received the November 16, 2007 report from Experian that triggered potential liability under 15 U.S.C. § 1681s-2(b)-Plaintiff cannot recover for any heightened interest rate paid on the June loan.
As to the negligence claim, Judge Matz held:
Economic losses, such as lost profits, are “damages … without any claim of personal injury or damages to other property.” Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979, 988 (2005) (quoting Jimenez v. Superior Court, 29 Cal.4th 473, 482 (2002)). Under the economic loss doctrine, recovery of lost profits and other monetary damages is limited to contract claims, and cannot be recovered in tort. Id. Although it is somewhat unclear from the papers submitted by the parties, it appears that they assume that California law applies to the negligence claim, and the Court thus applies California law in regards to this claim. ¶ Plaintiff alleges that he suffered economic losses in the form of lost profits for his business (IPP) as a result of Chase’s negligence in correcting errors on his credit report that it was responsible for causing. Plaintiff argues that he can recover such losses because the economic loss rule does not apply where a fiduciary duty imposed by law rather than contract exists. See Opp’n at 22. However, “as a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” Nymark v. Heart Fed. Savings & Loan Ass’n, 231 Cal.App.3d 1089, 1096 (Ct.App.1991) (emphasis added) (holding that the relationship between a lending institution and its borrower client is not fiduciary in nature because a commercial lender is entitled to pursue its own economic interest in a loan transaction). In Sipe v. Countrywide Bank, 690 F.Supp.2d 1141, 1152-53 (E.D.Cal.2010), the court held that under California law accurate credit reporting did not fall outside a lending institution’s conventional role as a lender, and thus barred a claim for negligence regarding such reporting. (citing Nymark, 231 Cal.App.3d at 1095). See also Walters v. Fidelity Mortgage of California, 2010 WL 1493131 (E.D.Cal. Apr. 14, 2010) (holding that credit reporting is within the conventional roles of a lending institution under California law). ¶ Because this Court finds Nymark is applicable, the Court therefore GRANTS summary judgment as to the negligence claim.