In Boggio v. USAA Federal Sav. Bank, 2011 WL 3876525 (S.D.Ohio 2011), Judge Weber found a credit union’s re-investigation reasonable under FCRA where the Plaintiff claimed that the vehicle purchase contract on which he was a co-buyer was procured without his consent, explaining:
“[D]istrict courts that have considered the issue have consistently recognized that the creditor’s investigation must be a reasonable one.” Johnson v. MBNA America Bank, NA, 357 F.3d 426, 430–31 (4th Cir.2004) (collecting cases); and see, Ferrarelli, 2009 WL 116972 at *5. ¶ The evidence in the present case reflects that USAA’s investigation was reasonable under the circumstances. USAA points out that the evidence of record establishes its verification of the Boggio’s joint account information, its verification of the fact that Frank Boggio’s name was on the bank check for the purchase of the 2007 Honda, and the fact that his apparent signature on the bank check was visually similar to his actual signature on the bank signature card (doc. no. 15–4 at 8–9). The record also establishes USAA’s verification of the existence of Geico Insurance, followed by USAA insurance, for the Honda in Frank Boggio’s name, listing the USAA lien (doc. no. 15–5; 15–6). The evidence of record substantiates USAA’s assertion that it conducted a reasonable investigation of the defaulted car loan that it reported to the credit reporting agencies. See Chiang v. Verizon New England, Inc. ., 595 F.3d 26, 38 (1st Cir.2010) (affirming summary judgment on FCRA claim because plaintiff “failed to raise a genuine issue of material fact that the investigation was unreasonable”). ¶ Although plaintiff contends that only Sarah signed the credit application and purchase agreement for the 2007 Honda and that she was the actual purchaser (doc. no. 17 at 20), these allegations do not create a genuine dispute of material fact regarding the reasonableness of USAA’s investigation for purposes of FCRA. USAA verified that the bank check for the purchase of the 2007 Honda bore the signatures of both Frank and Sarah Boggio. Although Frank Boggio disputed the debt and Sarah’s authority to sign his name, he declined to provide a fraud affidavit for USAA to initiate a fraud investigation. ¶ USAA points out that, as part of its standard procedures, it routinely requests either an affidavit of fraud or a police report in order to initiate a “level two” fraud investigation. However, plaintiff declined to provide the requested documents—until after he filed this lawsuit. When he finally did submit a post-litigation “fraud affidavit,” USAA cleared the default information from his credit report. Moreover, plaintiff (who is employed as a police officer) concedes that it was reasonable for USAA to request some verification of fraud before initiating a fraud investigation. Although he alleges in his complaint that USAA acted “intentionally and willfully,” he acknowledged at deposition that he did not believe “USAA did anything to intentionally put [him] in this situation” (Boggio Dep. at 82). As plaintiff himself appears to recognize, the evidence of record simply does not substantiate any wilful or reckless violation of FCRA by USAA. See, e.g., Akalwadi v. Risk Management Alternatives, Inc., 336 F.Supp.2d 492 (D.Md.2004) (holding that to prevail on FCRA claim, consumer must show that defendant knowingly and intentionally did not investigate the disputed debt in conscious disregard of the consumer’s rights). ¶ USAA points out that “over a year after plaintiff became aware of a credit report which listed him as an obligor for a car loan obtained by his wife in both their names, and after acknowledging the marital obligation in his subsequent divorce decree, plaintiff sought to hold USAA responsible for inaccurate credit reporting after his wife defaulted on the loan obligation” (doc. no. 15 at 1). The separation agreement/dissolution decree expressly listed the Honda loan as a marital debt. Plaintiff acknowledged at deposition that the purchase of the Honda and the loan were disclosed in that document, which recites that plaintiff had an opportunity to review his credit report prior to signing the decree under oath (doc. no. 15, Ex. B). He conceded “I believe at that time, yes, it was showing on my credit report.” (doc. no. 15, Ex. C at 37). Plaintiff’s execution of the divorce decree with full knowledge that the Honda car loan appeared on his credit report amounts to ratification of his signature on the bank check, even though he now contends that Sarah actually signed his name. “An affirmance of an unauthorized transaction can be inferred from a failure to repudiate it.” Restatement (Second) of Agency, Ratification. “[R]atification of an unauthorized act may be express, as by spoken or written words, or implied, resulting from any act, words, or course of conduct on the part of the principal which reasonably tends to show an intention to authorize the act retroactively.” 7 Am.Jur. Proof of Facts 2d 675, § 3 “Ratification of Forged or Unauthorized Signature.” ¶ The “essential prerequisite to a principal’s ratification of an unauthorized act is that at the time of the ratification the principal have knowledge of all material facts.” Capital Dredge and Dock Corp. v. City of Detroit, 800 F.2d 525, 530 (6th Cir.1986) citing Restatement (Third) of Agency, § 4.00. The record reflects that Frank Boggio had knowledge of all the material facts necessary to ratify his signature on the bank check, i.e. he knew Sarah had bought the car and that the car loan was listed on his credit report. When her default affected his credit, he notified USAA of her alleged “forgery,” but refused to verify his claim with a fraud affidavit or police report. Nonetheless, USAA investigated his allegations and reasonably concluded the matter was a “civil issue that and should be handled in Court between Member and his Spouse.” The evidence pointed to by USAA shows that there are no genuine disputes of material fact and that USAA is entitled to summary judgment on plaintiff’s claim for wilful violation of FCRA.