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Dowell v. Wells Fargo Bank, N.A.: CREDIT - no triable issue regarding damages in FCRA negligence claim; no evidence of willfulness

1The Honorable Ronald E. Longstaff, United States District Judge for the
Southern District of Iowa.
United States Court of Appeals
No. 07-1529
Richard Dowell; Julie Dowell, *
Plaintiffs-Appellants, *
* Appeal from the United States
v. * District Court for the Southern
* District of Iowa.
Wells Fargo Bank, NA; *
Trans Union, L.L.C., * [PUBLISHED]
Defendants-Appellees. *
Submitted: December 12, 2007
Filed: February 28, 2008
Before BYE, ARNOLD, and MELLOY, Circuit Judges.
Plaintiff debtors brought claims against a lender and a credit reporting agency
under the federal Fair Credit Reporting Act (“the Act”), 15 U.S.C. § 1681 et seq., the
Iowa Debt Collection Practices Act, Iowa Code § 537.7101 et seq., and Iowa’s
common law of defamation. The district court1 granted summary judgment in favor
of the defendants, and we affirm.
Plaintiff Richard Dowell, a physician, had several private and federal student
loans through Defendant Wells Fargo Bank, N.A. He consolidated only the private
loans with Wells Fargo. Due to confusion on the part of Richard Dowell and his wife,
Plaintiff Julie Dowell, as to which loans remained unconsolidated, Richard Dowell
failed to make the necessary payments on all outstanding loans. Eventually, Wells
Fargo and Richard Dowell reached an agreement and established a new payment plan.
After entering into this agreement, he again failed to make the necessary payments.
Wells Fargo subsequently reported to credit reporting agencies, including
Defendant Trans Union, that some of the loans were written-off. Wells Fargo
transferred those loans to a separate Wells Fargo entity for asset recovery. The asset
recovery entity separately reported the loans to credit bureaus and listed the loans as
problem loans. This resulted in the appearance of a heightened number of outstanding
bad loans. In addition, Wells Fargo changed the account numbers on some of the
loans during the time period relevant to this case, as required to eliminate the use of
social security numbers as account numbers. This change led to a temporary
overstatement of the number of loans from Wells Fargo to the couple.
On numerous occasions, Julie Dowell complained to the defendants about the
reporting of the debts. However, she did not accurately identify the accounts or
account balances when she reported the perceived errors. The defendants,
nevertheless, investigated the matter, provided explanations to Julie Dowell regarding
the reports and her complaints, and took limited corrective action. Further, Trans
Union gave the plaintiffs the opportunity to place comments on the report. The
plaintiffs did not take advantage of this option. Eventually, the plaintiffs brought the
present action, alleging negligent and willful violations of the Act and alleging the
related state law claims.
The district court granted summary judgment on the federal claims based on the
plaintiffs’ failure to create a triable question of fact as to the existence of damages and
based on the conclusion that the defendants could not be held liable for alleged
violations that occurred prior to the receipt of complaints from the plaintiffs. The
district court granted summary judgment on the Iowa Debt Collection Practices Act
claims based on the plaintiffs’ failure to create a triable question of fact as to whether
defendant Wells Fargo conducted any of its allegedly nefarious actions for the purpose
of collecting the underlying debt. The district court granted summary judgment on the
state defamation claims based on federal preemption and based on the doctrine of
qualified privilege as provided in Iowa defamation law.
As to the state law claims, we affirm the well-reasoned judgment of the district
court without further comment for the reasons set forth in that court’s written order.
See 8th Cir. R. 47B. As to the federal claims under the Act, we affirm, relying in part
on the grounds cited by the district court. We agree that the summary judgment
record fails to demonstrate a triable question of fact as to the existence of damages.
This alone is sufficient to defeat the claim alleging a negligent violation of the Act.
We note, however, that the plaintiffs also alleged a willful violation of the Act,
and it is not entirely clear that plaintiffs must prove actual damages as a component
of a claim for a willful violation. As noted by the plaintiffs, the Act provides for
statutory damages as an alternative to actual damages:
(a) In general
Any person who willfully fails to comply with any requirement
imposed under this subchapter with respect to any consumer is
liable to that consumer in an amount equal to the sum of–
(1)(A) any actual damages sustained by the
consumer as a result of the failure or damages of
not less than 0 and not more than ,000;
15 U.S.C. § 1681n(a)(1)(A) (emphasis added). This language clearly provides that an
award of statutory damages is available as an alternative to an award of actual
damages. The plaintiffs argue the district court overlooked this fact and summary
judgment was, therefore, inappropriate. We disagree. It does not necessarily follow
from the cited language that statutory damages are available where a plaintiff fails to
prove actual damages. A reasonable reading of the statute could still require proof of
actual damages but simply substitute statutory rather than actual damages for the
purpose of calculating the damage award.
We need not delve into this issue of statutory construction in the present case,
however, and we decline to do so. Statutory damages are not available in any event
without a showing of willfulness, and our review of the record convinces us that the
plaintiffs failed to present sufficient evidence of willfulness to avoid summary
The judgment of the district court is affirmed.


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Bystanders Witnessed This.
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        a Police Report

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        Not File a Police Report



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