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co-signers & Bankruptcy - Copy of Nelson v. Chase decision Part 1
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Posted by JR
(64.12.96.205) on October 19, 2002 at 12:22:08:
TNELSON v. CHASE MANHATTAN MORTGAGE CORP, No. 00-15946
NELSON v. CHASE MANHATTAN MORTGAGE CORP, No. 00-15946
TOBY D. NELSON, Plaintiff-Appellant,
v.
CHASE MANHATTAN MORTGAGE CORP., Defendant-Appellee. No. 00-15946; Docket No. CV-99-00290-JBR(RLH) UNITED STATES COURT OF APPEALS, NINTH CIRCUIT (Filed March 1, 2002) (Appeal from the United States District Court for the District of Nevada, Johnnie B. Rawlinson, District Judge, Presiding.) (Argued and Submitted January 16, 2002--San Francisco, California) (Opinion by Judge Noonan. Before: Alfred T. Goodwin, John T. Noonan and Stephen S. Trott, Circuit Judges.) COUNSEL Richard J. Rubin, Santa Fe, New Mexico, and Michael D. Gliner, Las Vegas, Nevada, for the plaintiff-appellant. Gerald D. Waite and Nikki Baker, Kummer Kaempfer Bonner & Renshaw, Las Vegas, Nevada, for the defendant-appellee. John F. Daly, Federal Trade Commission, Washington, D.C., for the amicus in support of the appellant. OPINION NOONAN, Circuit Judge: Toby D. Nelson ("Nelson") appeals the judgment of the district court for the District of Nevada dismissing his suit under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681- 1681u ("the FCRA") for failure to state a cause of action against the defendant Chase Manhattan Mortgage Corporation ("Chase"). Holding that section 1681s-2(b) does create a cause of action for a consumer against a furnisher of credit information, we reverse the judgment of the district court. FACTS According to his complaint and attached exhibits, Nelson on February 2, 1995 became a co-signatory with Anthony Proietti ("Proietti") on a mortgage loan of $119,950 from Chase. On February 15, 1998, Proietti declared bankruptcy. Nelson continued to pay the amounts due on the mortgage in a timely manner. Nelson, however, experienced difficulty in obtaining financing after Proietti's bankruptcy. In September 1998, Nelson asked Experian Information Solutions, Inc. ("Experian") for his credit profile. Experian provided him with a report referring to the account with Chase. Regular payments were shown made up to January 8, 1997, with a balance of $110,011 then showing. The report stated: "As of 2/15/98 this account is included in a discharge through bankruptcy chapter 7, 11 or 12." On December 2, 1998, Nelson wrote Experian requesting it to investigate "disputed matters" in the credit report. Nelson stated that he had never declared bankruptcy and that the bankruptcy noted was that of the co-obligor. He asked for deletion of the bankruptcy reference. He copied this letter to Chase. On January 4, 1998, Chase wrote Nelson stating:"At the time we receive notice of a bankruptcy filing, we are required to note the appropriate account is in bankruptcy, regardless of whether the account is current or past due, to prevent contact with the party[ies] involved in violation of the bankruptcy laws . . . . This status is not a reflection of which of the borrowers actually filed bankruptcy, but merely a statement that the account itself is affected by the bankruptcy filing." Chase went on to say that prudent lenders should follow up on the report and determine whether the consumer in question "had actually filed the bankruptcy action." Chase apologized for "any inconvenience" to Nelson. It promised to inform credit bureaus that "the account has been affected by a bankruptcy filed by one, but not all, of the borrowers." Nelson continued to have difficulties getting credit. On March 5, 1999, Nelson received a report from Equifax showing his credit history with the notation "included in bankruptcy 8/98," opposite the entry for Chase. On March 6, 1999, U.S. Bank of Minneapolis denied his application for a truck loan "due to bankruptcy filing on your credit bureau report." On March 7, 1998, Nelson wrote Equifax, like Experian a credit reporting agency ("CRA"), disputing this report and requesting an investigation.
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