Credit Scam Victim Nails Home Depot

Home Depot ignored Alan R. Sporn for almost two years, but a $1-million court judgment got the company’s attention.

The Laguna Hills businessman had his Social Security number stolen, which ended up in a dozen requests for Home Depot credit.

The fiasco hurt Sporn’s credit rating, but the home improvement giant that prides itself in customer service brushed off his concerns -- until he filed a lawsuit, won and then tried to collect the money from a company bank account.

Then, Home Depot decided to act. It appealed the case, but this week an appellate court in Santa Ana sided with Sporn.

On Friday, the victor and his lawyer were celebrating with a bit of humor. The pair joked they might just show up at one of the company’s Southern California stores to conduct a yard sale.

“I want to sell everything for a dollar,” quipped Steve Young, Sporn’s attorney. “I imagine the John Deere tractors will be the first to go.”

“I feel vindicated,” Sporn, 52, said of his nearly 3-year effort to get Home Depot to respond. “They’re such a huge corporation and we are just little people.”

In a brief written statement, the Atlanta-based company said that it was “disappointed in the decision ... and respectfully disagrees with the conclusions of the court.”

Sporn’s problems began in early 2002 when he was turned down for a low-interest loan to refinance his Laguna Hills home. Trying to find out why, he learned that Home Depot had submitted inquiries to credit agencies regarding Sporn’s creditworthiness at least a dozen times over the previous year.

Such inquiries -- especially when submitted in large numbers -- lower one’s credit rating.

“I didn’t even have a credit card with Home Depot,” Sporn said in a telephone interview Friday. Except for buying “the occasional garden hose or lightbulb,” he doesn’t even shop there often, he said.

When he asked the company’s financial department why it was pulling his credit reports, he was told that somebody in Virginia was using his Social Security number to apply for credit, Sporn said.

But Home Depot would not tell him who the culprit was. And when he sent the company a certified letter asking it to stop checking his credit rating, he got no response.

Finally, in September 2002, Sporn filed a lawsuit demanding compensation for the financial damages he says he incurred. The company continued to ignore him, he says. He told Home Depot he was seeking a default judgment. Still no response, he says.Nine months later, in July 2003, with nary a word from Home Depot, a Santa Ana judge awarded Sporn about $930,000 in damages.

The judge ruled that Sporn suffered losses when he was forced to pay a higher interest rate on his home loan and because his damaged credit rating hurt his business reputation.

The court also ruled that Sporn was entitled to a 10% annual interest rate and other collection expenses if Home Depot continued to delay payment. Sporn and his attorney estimate the current amount at $1.15 million.

Home Depot didn’t show up for the court hearings, they say.

“After we got the judgment,” said Young, the attorney, “we waited another seven months expecting that they would do something. Frankly, we just wanted their attention so they would clean this up.”

So last February, Sporn and Young contacted the Los Angeles County Sheriff’s Department, which sent deputies to the bank that handles Home Depot’s payroll accounts -- a Wells Fargo branch in Los Angeles -- with a court order.

They didn’t get any money, but they did get Home Depot’s attention. “They started a paper flurry that you wouldn’t believe,” Young said.

In its appeal, the company accused Sporn of being underhanded. Home Depot said in its filings that Sporn “obtained by stealth” the “excessive” default judgment, which the company discovered only when Sporn “began enforcement efforts after laying in the weeds for many months.”

In its ruling -- published Wednesday -- the 4th District Court of Appeal disagreed.

The court scolded the company for seeking “to escape the results of its own carelessness.”

“An obvious gap appears in the evidence,” acting presiding judge William F. Rylaarsdam wrote.

“There is no statement that the [court papers sent to Home Depot] were lost, stolen, forwarded to the wrong person, or eaten by the dog.”

Richard S. Ruben, an Orange County-based attorney for Home Depot, declined to comment on the case, saying that he had not had a chance to read the appellate court’s ruling.

The company said it was reviewing its options to appeal the decision.

But Sporn and Young said they were overjoyed.

“A corporation,” Young said, “doesn’t have skin and blood -- the only way you get their attention is with the sting of the dollar.”

*

Times staff writer Dan Weikel contributed to this report.