Simonoff at ERA Gatewood was designated as the selling agent. According to the computer listing, a copy of which is provided by the defendants, "references and [a] credit check [were] a must" for any applicant. Affirmation of Joseph A. Deliso, June 14, 1996 ("Deliso Aff.") P 6, Exh. F.
On April 8, 1995, Petrokiewicz contacted Simonoff who agreed to show the Scotts the house that night. After viewing the house, the plaintiffs made an offer of either $ 1,600 or $ 1,850 per month and discussed related issues including a security deposit, restrictions on pets and smoking. Deliso Aff., Exh. B., Deposition of Ronald Scott, March 13, 1996 at 47-48. According to the plaintiffs, at this time Simonoff advised them that the owners "might want to obtain a credit report before renting the house. . . ." Burton Dec., Exh. F., Declaration of Rose Petrokiewicz P 6. In response, the Scotts advised Simonoff "that he was not authorized to obtain their credit reports and he agreed that he would not obtain such information." Id.
The Scotts further claim that the next day, April 9, 1995, Simonoff contacted Visconti at REFG and had him run a "credit check" on them. The plaintiffs emphasize, and REFG admits, that they had "no relationship whatsoever" with Visconti or REFG, never provided any written authorization for the credit check and were never given notice that the check would be performed. Sometime thereafter, the Scotts learned about the credit reports and contacted Simonoff who sent them copies upon their request. Deliso Aff., Exh. B. at 65-66.
The plaintiffs commenced this action by filing their complaint on March 24, 1995 alleging two causes of action for: (1) obtaining consumer reports under "false pretenses" in violation of federal and state law; and (2) failing to provide adequate notice of efforts to obtain consumer reports under state law. REFG filed its answer on July 24, 1995 denying all material allegations contained in the complaint and cross claiming for indemnification against Simonoff and ERA Gatewood. Simonoff and ERA Gatewood filed their answer on August 15, 1995 and alleged a similar cross claim for contribution and or indemnification against REFG.
On January 4, 1996, defendants Simonoff and ERA Gatewood filed a third party complaint against Petrokiewicz and Remax. According to the third party plaintiffs, Petrokiewicz, in her capacity as an agent, had a duty to convey the contents of the computer listing, including the credit check requirement to any perspective purchasers. Further, ERA Gatewood and Simonoff allege that they "were entitled to rely upon the fact that any information provided to the third-party defendants as plaintiffs' agents would be communicated to the plaintiffs." ERA Gatewood-Simonoff Third Party Compl. P 20. As a result, ERA Gatewood and Simonoff claim that when they obtained the credit reports, they were acting with the consent of the plaintiffs' agents, the third party defendants. Accordingly, to the extent that ERA Gatewood and Simonoff are found liable for violating the federal and state Fair Credit Reporting Acts, they are entitled to contribution and or indemnification from the third party defendants.
Similarly, on January 10, 1996, defendant REFG filed its own third party complaint against Petrokiewicz and Remax. According to REFG, when defendant Ira Simonoff requested the credit check on the plaintiffs, Simonoff stated "that he was authorized by the Third-Party Defendants Remax by its real estate sales agent Rose Petrokiewicz to obtain credit reports of the Plaintiffs as a prerequisite to determine their eligibility to rent said rental property." REFG Third Party Compl. P 11. Based on this apparent authority, REFG maintains that if it is found liable to the plaintiffs for damages, it should be entitled to contribution and or indemnification from the third party defendants.
On or about January 26, 1996, the third party defendants filed answers to both third party complaints and submitted cross claims against Simonoff, ERA Gatewood and REFG seeking indemnification. On February 21, 1996, ERA Gatewood and Simonoff filed their answer to these third party cross claims denying all material allegations contained therein.
As stated above, presently before the Court are the plaintiffs' motion for partial summary judgment as to liability and two cross motions for summary judgment, one filed by defendant REFG and the other by defendants ERA Gatewood and Ira Simonoff. ERA Gatewood and Simonoff also move for sanctions against the plaintiffs pursuant to Fed. R. Civ. P. 11 arguing that the claims against them are frivolous. There are no pending motions with respect to the third part actions at this time.
A. Summary judgment standard
A court may grant summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact, Samuels v. Mockry, 77 F.3d 34, 35 (2d Cir. 1996), and the movant is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The Court must however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion. See Quaratino v. Tiffany & Co., 71 F.3d 58, 64 (2d Cir. 1995); Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir. 1990); Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987).
According to the Second Circuit "summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict." United National Ins. Co. v. The Tunnel, Inc., 988 F.2d 351, 355 (2d Cir. 1993). Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists. West-Fair Elec. Contractors v. Aetna Cas. & Surety Co., 78 F.3d 61, 63 (2d Cir. 1996); see also Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (quoting Fed. R. Civ. P. 56(e)). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby,, 477 U.S. at 248; see Vann v. New York City, 72 F.3d 1040 (2d Cir. 1995).
However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment. Kulak v. City of New York, 88 F.3d 63, 70 (2d Cir. 1996). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. Holt v. KMI-Continental, Inc., 95 F.3d 123, 128 (2d Cir. 1996); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991). Finally, the Court is charged with the function of "issue finding", not "issue resolution." Gallo v. Prudential Residential Servs., Ltd, Partnership, 22 F.3d 1219, 1224 (2d Cir. 1994).
It is within this framework that the Court addresses the grounds for the present motion for summary judgment.
B. The Fair Credit Reporting Act
The plaintiffs claim that the defendants are liable under the federal and state Fair Credit Reporting Acts for obtaining credit reports under "false pretenses" and failure to provide adequate notice. See 15 U.S.C. § 1681q; N.Y. Gen. Bus. L. §§ 380-b, 380-o. The Court will address of the allegations under the federal statute first.
1. The federal act
The FCRA was enacted in response to the "need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a)(4). With respect to users of information provided by consumer reporting agencies, section 1681q of the federal act provides:
Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined not more than $ 5,000 or imprisoned not more than one year or both.
15 U.S.C. § 1681q. Civil liability will attach to any consumer reporting agency or user who willfully fails to comply with these provisions under 15 U.S.C. § 1681n which addresses "willful noncompliance." Zamora v. Valley Federal Sav. & Loan Ass'n, 811 F.2d 1368, 1370 (10th Cir. 1987); Kennedy v. Border City Sav. & Loan Ass'n, 747 F.2d 367, 369 (6th Cir. 1984); Graziano v. TRW, Inc., 877 F. Supp. 53, 56 (D. Mass. 1995).
Parenthetically, the Court notes that some courts have also recognized a claim pursuant to 15 U.S.C. § 1681o which provides for a private right of action for negligent noncompliance with the FCRA. See, e.g., Hansen v. Morgan, 582 F.2d 1214, 1219 (9th Cir. 1978); Yohay v. City of Alexandria Employees Credit Union, Inc., 827 F.2d 967, 971-72 (4th Cir. 1987). However, because section 1681q requires that an individual act "knowingly and wilfully" in order to be found guilty of obtaining consumer information under false pretenses, this Court believes that the proper vehicle for civil liability is section 1681n and not section 1681o. See Kennedy, 747 F.2d at 368 n.1; Graziano, 877 F. Supp. at 56 n.5 (collecting cases).
In any event, the standard for determining whether a consumer report is acquired under "false pretenses" is usually defined in terms of the "permissible purposes" for obtaining those reports which are set forth at 15 U.S.C. § 1681b. Hansen, 582 F.2d at 1219; Zamora, 811 F.2d at 1370; Graziano, 877 F. Supp. at 57; Allen v. Calvo, 832 F. Supp. 301, 303 (D. Or. 1993). Section 1681b defines "permissible purposes" as follows:
A consumer reporting agency may furnish a consumer report under the following circumstances and no other: