Michigan Lawyers Avoid Sanctions in Credit Reporting Lawsuit

July 14, 2021, 8:18 PM

A law firm defeated a bid for sanctions for filing its ninth credit-reporting suit against Michigan First Credit Union while “conveniently omitting details” showing the reports were accurate, but a federal court in Michigan called the firm’s conduct troubling.

A monetary penalty against attorneys at Credit Repair Lawyers of America isn’t warranted in Vivian Lawson’s case because they filed the complaint before their other clients in similar suits received adverse rulings, Judge Paul D. Borman said Tuesday for the U.S. District Court for the Eastern District of Michigan.

Borman granted summary judgment in Michigan First’s favor. The account information Lawson complained of in an Equifax credit report, provided by Michigan First, wasn’t “in any sense inaccurate or misleading, and no reader of the report could have been confused about the status of the accounts,” he said.

Lawson alleged a used car dealership assigned her installment contract for an SUV to Michigan First. She was obligated to pay $379.05 per month. After insurance costs were added, she allegedly couldn’t afford the payments and the vehicle was repossessed, and eventually the contract balance was paid in full.

She alleged, however, that her Equifax credit report inaccurately represented the contract account and the two insurance loans. They were shown with monthly payment amounts of $379, $328, and $151, she said.

She didn’t attach a copy of the credit report or indicate that the accounts were shown as closed, with a $0 balance, the court said. Her claims survived a motion to dismiss.

But on summary judgment, with the report in evidence, it was clear that the “monthly payment” amounts were historical, not current, the court said.

A recent Eastern District of Michigan ruling in a similar case filed by the same counsel saw “a reasonable inference that the details may have been omitted for the purpose of bolstering the viability of the claims against early dispositive motion practice, despite being premised on claims that plainly (now) are seen to be without merit,” according to Borman. The court in that case wondered “whether due regard was paid by plaintiff’s counsel to his duty of candor to the Court.”

Borman said the same was true here. “Plaintiff’s counsel’s failure to include in the complaints in each case the very information from the credit reports that dooms the FCRA claims cannot be seen as unintentional or accidental,” he said.

The court “is troubled by Plaintiff’s counsel’s conduct in this case, and others it has filed in this District, and expressly warns Plaintiff’s counsel that continuing to file and pursue similar baseless claims going forward will likely result in sanctions,” he said.

Holzman Law PLLC represented Michigan First.

The case is Lawson v. Mich. First Credit Union, 2021 BL 260798, E.D. Mich., No. 20-cv-10460, 7/13/21.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.