UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 00-20200
Summary Calendar
MICHAEL WILTING,
Plaintiff - Appellant,
VERSUS
PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY; AMERITECH CORP;
FARMERS INSURANCE COMPANY; MID-CENTURY INSURANCE COMPANY OF TEXAS;
TEXAS FARMERS INSURANCE COMPANY; FARMERS TEXAS COUNTY MUTUAL
INSURANCE COMPANY,
Defendants - Appellees.
Appeal from the United States District Court
for the Southern District of Texas
August 2, 2000
Before JOLLY, SMITH and DUHÉ, Circuit Judges.
PER CURIAM:
Michael Wilting (“Wilting”) appeals the district court's Fed.
R. Civ. P. 12(b)(6) dismissal and grant of summary judgment in
favor of the Defendants. We affirm.
I. BACKGROUND
The parties do not dispute the facts of this case. While
residing in Illinois in 1995, Michael Wilting established his
residential telephone service with Ameritech Corporation
(“Ameritech”). Late in 1997 Wilting moved and a dispute arose as
to the amount of his final Ameritech bill. Wilting filed a
lawsuit, which was later settled, in Texas state court against
Ameritech.
As part of the settlement, Ameritech promised that no
information regarding Wilting's telephone account would be reported
to any credit reporting agency or bureau. In September 1999,
Ameritech obtained a copy of Wilting's credit report, which
revealed that two collection agencies employed by Ameritech had
failed to remove information concerning Wilting's telephone
account. Ameritech contacted the collection agencies and requested
that they remove this information from Wilting's credit report.
In October 1999, Wilting contacted Progressive County Mutual
Insurance Company (“Progressive”) and Farmers Insurance Company
(“Farmers”), and requested quotations for automobile insurance.
Subsequently, each insurer collected information regarding
Wilting's driving record and his credit history. They then both
offered to provide insurance to Wilting.
Wilting then filed a suit seeking injunctive relief and
monetary damages against Ameritech, Farmers, and Progressive
alleging that each defendant unlawfully obtained his credit report.
The district court granted the insurers' motion to dismiss pursuant
to Fed. R. Civ. P. 12(b)(6). The court also granted Ameritech's
motion for summary judgment.
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II. STANDARD OF REVIEW
We review a grant of summary judgment de novo, viewing the
facts and inferences in the light most favorable to the party
opposing the motion. See Hall v. Gillman, Inc., 81 F.3d 35, 36-37
(5th Cir. 1996). We review a Fed. R. Civ. P. 12(b)(6) dismissal de
novo. Such a complaint should not be dismissed unless it appears
beyond doubt that the plaintiff can prove no set of facts in
support of his claim. Conley v. Gibson, 335 U.S. 41, 45-46 (1957).
III. DISCUSSION
A. Claim Against Ameritech
Wilting contends that Ameritech violated the settlement
agreement and the Fair Credit Reporting Act, 15 U.S.C. § 1681 et.
seq., (“the Act”) when it obtained his credit report. The Act
governs the reporting of consumer credit information and outlines
the exclusive permissible uses of credit reports. Under the Act,
a consumer reporting agency may furnish a consumer report to a
person who intends to use the information for a legitimate business
need in connection with a business transaction that is initiated by
the consumer. 15 U.S.C. § 1681b(a)(3)(F)(i).
Wilting initiated a business transaction with Ameritech when
he ordered telephone service. Pursuant to the settlement
agreement, Ameritech clearly had a legitimate business need to
obtain Wilting's credit report and make certain that no adverse
notations appeared on the report.
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Wilting argues that the Act only allows a creditor to obtain
a consumer credit report on “existing accounts” and not for
previous accounts. Appellant's Brief at 28 (exhibiting letter from
Ronald G. Isaac, Attorney, U.S. Federal Trade Commission, to Don
Gowen, Senior Vice President, Security Mutual Financial Services,
Inc. (April 29, 1999)). At the time when Ameritech obtained his
credit report there was no existing business relationship because
Wilting had terminated his telephone service with Ameritech.
We note that neither the Act nor the FTC's commentary on the
Act suggests that a report may only be permissibly obtained during
particular points in the parties' relationship. Moreover, although
Wilting had terminated telephone service at the time in question,
Ameritech obtained the credit report to comply with the settlement
agreement by ensuring that no adverse notations relative to
business dealings between the parties remained on Wilting's credit
report. The settlement agreement related directly to Wilting's
Ameritech account. There was simply no other way for Ameritech to
abide by the agreement and remove any adverse references from
Wilting's account than by checking a credit report. We conclude
that Ameritech permissibly obtained Wilting's credit report
pursuant to the Act.
II. Claim against Progressive and Farmers
Wilting also contends that Progressive and Farmers violated
the Act when they obtained his credit report. The Act permits a
party to obtain a credit report if it will use the information in
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connection with the “underwriting” of insurance. 15 U.S.C. §
1681b(a)(3)(C). Although “underwriting” is not defined in the Act,
the FTC, in its commentary, defines “underwriting” as:
An insurer may obtain a consumer report to decide whether or
not to issue a policy to the consumer, the amount and terms of
coverage, the duration of the policy, the rates or fees
charged, or whether or not to renew or cancel a policy,
because these are all 'underwriting' decisions. FTC
Commentary on the Fair Credit Reporting Act, 16 C.F.R. pt.
600, App.
Wilting argues that neither insurer was engaged in
underwriting because he did not ask the insurers to issue a policy.
He only requested a quotation. We conclude that the insurers did
act as underwriters. In order to “decide whether or not to issue
a policy” the insurers had to obtain a credit report to weigh the
risks presented by the consumer. They could not decide whether to
issue a policy without a credit report and an essential part of
providing a quotation is deciding whether or not to issue a policy.
Therefore, the insurers properly obtained Wilting's credit report
as authorized by the Act.
For these reasons, we affirm.
AFFIRMED.
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