Judge: Mark E. Windham, Case: 23STLC07126, Date: 2024-08-01 Tentative Ruling

Case Number: 23STLC07126    Hearing Date: August 1, 2024    Dept: 26

Alan v. Navy Federal Credit Union, et al.

DEMURRER

(CCP § 430.10, et seq.)

TENTATIVE RULING:

Defendant Navy Federal Credit Union’s Demurrer to the Complaint is OVERRULED AS TO THE FIRST CAUSE OF ACTION FOR VIOLATION OF THE ROSENTHAL FAIR DEBT COLLECTION PRACTICES ACT AND SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND AS TO THE SECOND CAUSE OF ACTION FOR VIOLATION OF THE CALIFORNIA CONSUMER CREDIT REPORTING AGENCIES ACT.

ANALYSIS:

On November 7, 2023, Plaintiff Jason Alan (“Plaintiff”) filed the Complaint in this action against Defendant Navy Federal Credit Union (“Defendant”). On May 7, 2024, Plaintiff filed a First Amended Complaint alleging (1) violation of the Rosenthal Fair Debt Collection Practices Act; and (2) violation of the California Consumer Credit Reporting Agencies Act.

On June 4, 2024, Defendant filed a Motion for Protective Order, which is set for hearing on August 6, 2024. Defendant filed the instant Demurrer to the First Amended Complaint on June 7, 2024. Plaintiff filed an opposition on July 16, 2024 and Defendant replied on July 25, 2024.

Discussion

The Demurrer is accompanied by a meet and confer declaration as required by Code of Civil Procedure section 430.41. (Meet and Confer Decl., filed 06/07/24, ¶2.) Defendant contends this is a general demurrer to each cause of action, but initially raises questions of personal and subject matter jurisdiction. (Notice of Demurrer, p. 2.)

Defendant has already made a personal appearance in this action by filing the Motion for Protective Order. (Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 52 [“A general appearance occurs when the defendant takes part in the action or in some manner recognizes the authority of the court to proceed.”].) The challenge on the basis that the Court lacks personal jurisdiction over Defendant, therefore, is without merit.

Nor can Defendant challenge subject matter jurisdiction by way of a special demurrer in a limited jurisdiction court. (Code Civ. Proc., § 92, subd. (c); Workmen's Comp. Appeals Bd. v. Small Claims Court (1973) 35 Cal.App.3d 643, 646.) If Defendant seeks to challenge subject matter jurisdiction, it should bring a properly noticed motion to dismiss or quash on those grounds.

Finally, Defendant generally demurs to the second cause of action for violation of the California Consumer Credit Reporting Agencies Act (“CCRAA”). The CCRAA prohibits a person from “furnish[ing] information on a specific transaction or experience to any consumer credit reporting agency if the person knows or should know the information is incomplete or inaccurate.” (Civ. Code, § 1785.25, subd. (a).) “To establish a CCRAA claim, plaintiff must show that: (1) defendant is a ‘person’ under the CCRAA; (2) defendant reported information to a CRA; (3) the information reported was inaccurate; (4) plaintiff was harmed; and (5) defendant knew or should have known that the reported information was inaccurate.” (Kihagi v. Nationstar Mortg., LLC (C.D. Cal. 2023) 2023 WL 5667570, at *4.) Furthermore, as a statutory cause of action, each element must be alleged with particularity. (City of Los Angeles v. Superior Court (2023) 62 Cal. App. 5th 129, 138.)

The First Amended Complaint alleges that “Defendant has repeatedly failed to conduct legally required investigations into disputes raised by Plaintiff regarding inaccurate and derogatory information reported on his consumer credit reports, in direct violation of the Fair Credit Reporting Act (FCRA) and California Civil Code § 1785.25(a).” (FAC, ¶7.) Also, it alleges that Plaintiff has observed numerous inaccuracies in the information reported on his consumer credit reports, which included erroneous balances and account statuses. (Id. at ¶8.) These inaccuracies allegedly caused substantial harm to Plaintiff's creditworthiness and led to unfair denials of credit. (Id. at ¶9.) The Court agrees that these allegations lack sufficient specificity to state that the information reported by Defendant was inaccurate, that Plaintiff was harmed as a result of those inaccuracies, and Defendant knew or should have known of the inaccuracies. The allegations only refer generally to “numerous inaccuracies” in two credit accounts without further identifying information. Plaintiff allegedly submitted disputes regarding this inaccurate information through the credit reporting agencies but does not include relevant details in the pleading. The First Amended Complaint, therefore, does not allege facts sufficient to state a cause of action for violation of the CCRAA and the Demurrer is sustained as to the second cause of action.

Leave to amend must be allowed where there is a reasonable possibility of successful amendment and the burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) In light of Plaintiff’s opposition to the Demurrer, the Court allows leave to amend to include the necessary information.

Conclusion

Defendant Navy Federal Credit Union’s Demurrer to the Complaint is OVERRULED AS TO THE FIRST CAUSE OF ACTION FOR VIOLATION OF THE ROSENTHAL FAIR DEBT COLLECTION PRACTICES ACT AND SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND AS TO THE SECOND CAUSE OF ACTION FOR VIOLATION OF THE CALIFORNIA CONSUMER CREDIT REPORTING AGENCIES ACT.

Moving party to give notice.