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Houghton v. New Jersey Manufacturers Insurance Co.

argued: June 2, 1986.

HOUGHTON, DONNA M.
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, APPELLANT



Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 84-4899)

Author: Aldisert

Before ALDISERT, Chief Judge, and GARTH and SLOVITER, Circuit Judges.

ALDISERT, Chief Judge.

This appeal requires us to decide whether the recipient of an investigative report prepared for the defense of a personal injury claim may be held liable for violating the notice and disclosure provisions of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. relating to "investigating consumer reports" when it did not request such a report and the report, on its face, did not appear to be an investigative consumer report as defined in the statute. The district court determined that the recipient violated the FCRA's notice and disclosure requirements, and awarded damages. We conclude that the district court erred, and will therefore reverse.

I.

On November 19, 1977, Donna M. Houghton was involved in an automobile collision with Bernice P. Rosenfeld, an insured of defendant, New Jersey Manufacturers Insurance Company (NJMI). On March 16, 1979, plaintiff filed suit against Rosenfeld for injuries resulting from the collision, including a claim for lost earnings.

On May 14, 1979, NJMI requested that Equifax Services, Inc., conduct an investigation of Houghton and prepare a written report. On a preprinted form provided by Equifax, NJMI specifically requested that the investigation include: (1) "Activities since date of accident"; (2) "Cover fully past health history (Illness, injuries, hospitalization, etc.)"; and (3) "General Financial Information (Income, property, etc.). "App. at 163a. Neither Equifax nor NJMI notified Houghton that NJMI had requested the report.

On May 22, 1979, Equifax submitted to NJMI a three-page report. App. at 164a. The report included information based on interviews with four of Houghton's neighbors, a previous report regarding an insurance claim made by Houghton's mother-in-law, Montgomery County Court records, a search for previous reports on Houghton, and an examination of existing "credit files." The report stated: "We did check available credit files through a confidential source, and we are unable to come up with any financial irregularities." App. at 164a. A copy was forwarded to NJMI's counsel and in November, 1979, NJMI settled the case with Houghton.

Some four years later, on October 21, 1983, Houghton first learned of the existence of the 1979 Equifax report, and requested several times that NJMI disclose its substance to her, which NJMI repeatedly refused to do. A year later she filed this action against NJMI alleging inter alia that NJMI had violated the FCRA.*fn1 On cross motions for summary judgment, the district court ruled that the Equifax report was an investigative consumer report as defined by the FCRA, app. at 407a-14a, and that NJMI's failure to notify Houghton of its request and its subsequent refusal to disclose the report therefore violated FCRA §§ 1681d(a) and 1681d(b). Id. at 414a-17a.*fn2 After a bench trial on damages, the court awarded Houghton $7,000.00 in compensatory and punitive damages, $7,770.00 in attorney's fees, and $1,284.66 in costs. Id. at 423a, 427a. NJMI now appeals.

II.

Before us NJMI challenges the district court's holding that the Equifax report requested by NJMI was an investigative consumer report within the meaning of FCRA § 1681a(d). NJMI also challenges the determination that it violated the FCRA by not providing Houghton notice and disclosure as required by the FCRA. Because the liability was determined by summary judgment, we apply the same standard as the district court; we must determine whether "no genuine issue as to a material fact remained for trial, and that the moving party [was] entitled to judgment as a matter of law." Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977). Review of the district court's resolution of questions of law is plenary. See id. at 574. We are satisfied that, distilled to its essence, this appeal presents questions of statutory construction.

III.

NJMI first contests the district court's determination that NJMI violated the FCRA by not notifying Houghton that it had requested an investigative consumer report on her. It next argues that the district court erred in concluding that NJMI's failure to disclose the report to Houghton upon her request violated the FCRA.

Determining that the report Equifax submitted to NJMI was an "investigative consumer report," the court said that NJMI was liable for not notifying or disclosing the report to Houghton. We disagree. Because NJMI did not request an investigative consumer report from Equifax, and because the report, on its face, did not appear to be an investigative consumer report as defined in the statute, we have decided ...


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