• Virginia Court Denies Plaintiff’s Punitive Damage Claim under the FCRA
  • October 15, 2010 | Author: Paul W. Sheldon
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Moreno v. DHI Mortgage Company GP, Inc., 2010 U.S. Dist. LEXIS 89443 (E.D. Va. Aug 27, 2010)

    Facts: Plaintiff filed suit against Defendant DHI Mortgage Company GP, Inc. (“DHI”), alleging a violation of the FCRA under § 1681m(a) regarding DHI’s failure to provide Plaintiff with the required notice after DHI denied her credit application for the purchase of a townhouse. Plaintiff moved for summary judgment on this claim and it was granted. The remaining issue for the Court, in part, was the assessment of statutory and punitive damages under the FCRA. Pursuant to such claim, the court awarded statutory damages of $750 and denied Plaintiff’s request for punitive damages.   

    • Furnisher Duties.  15 U.S.C. § 1681m(a) states in pertinent part that a business taking an adverse action against a consumer must provide notice to that consumer that includes (1) the name, address, and telephone number of the agency that furnished the credit report; (2) a statement that such agency did not make the decision to take the adverse action and therefore cannot provide the consumer with the reasons such action was taken; and (3) notice of the consumer's right to obtain a free credit report from the agency and to dispute the accuracy of any information on the report. DHI failed to provide Plaintiff with this notice after it had denied her credit application for the purchase of a townhouse.
    • Damages. To assess damages under the FCRA, a court must first determine whether the violation was willful. If it was not, the Plaintiff is only entitled to actual damages under 15 U.S.C. § 1681o.  Under 15 U.S.C. § 1681n, if the violation was willful, the plaintiff is entitled to the greater of her actual damages or the statutory damages, which are capped at $1,000.00, and such punitive damages as the court finds are warranted by the facts. 
    • Damages. For a willful violation of the FCRA, an award of the greater of either the actual or the statutory damages is appropriate. Statutory damages range from $100 to $1,000. Because Plaintiff suffered no actual damages, the Court found that there was sufficient evidence to justify a statutory damage assessment of $750.
    • Punitive Damages. In assessing punitive damages, a court should consider three factors in assessing punitive damages: (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages and the civil penalties authorized or imposed in comparable cases.
    • Punitive Damages. In determining the degree of reprehensibility, courts consider whether: (1) the harm caused was physical as opposed to economic; (2) the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; (3) the target of the conduct had financial vulnerability; (4) the conduct involved repeated actions or was an isolated incident; and (5) the harm was the result of intentional malice, trickery, or deceit, or mere accident. Note: Plaintiff admitted that neither of the first two factors were present in this case. The court concluded that the evidence submitted for the remaining factors were so low that punitive damages were not appropriate.