Judge: Michael E. Whitaker, Case: 24SMCV04652, Date: 2024-12-18 Tentative Ruling

Case Number: 24SMCV04652    Hearing Date: December 18, 2024    Dept: 207

TENTATIVE RULING

MOTION

On September 25, 2024, Plaintiffs Adam Dhanani (“Dhanani”) and Sam Amin Jr. (“Amin”) (together, “Plaintiffs”) filed the verified Complaint in pro per against Defendant JPMorgan Chase Bank, N.A. (erroneously named as “Chase”) (“Defendant” or “Chase”) alleging two causes of action for (1) “Violation of Statutory Duties, in the meaning of violation of § 1785.25(a) of California Civil Code, Title 1.6, Chapter 3.5” and (2) “Violation of Statutory Duties, in the meaning of Violation of California Business and professions Code § 17200 (Unlawful Competition Law), prosecutable under Civil Code 1785.25(c), under the jurisdiction of the Attorney General’s office, prosecutable Civilly under Business and profession code 17200.”

Defendant now demurs to both causes of action on the grounds that they fail to state facts sufficient to constitute a cause of action and are uncertain pursuant to Code of Civil Procedure section 430.10, subdivisions (e) and (f), respectively.

The demurrer is unopposed. 

REQUEST FOR JUDICIAL NOTICE

            Defendant requests judicial notice of the following:

· Exhibit A – A true and correct copy of the docket in Case No. 19VECV00502 obtained by Chase’s counsel from the court’s “Case Access” website on November 6, 2024.

· Exhibit B – A true and correct copy of the complaint filed by Plaintiff Sam Amin, Jr. in Case No. 19VECV00502 on April 9, 2019.

· Exhibit C – A true and correct copy of the docket in Case No. BC607436 obtained by Chase’s counsel from the court’s “Case Access” website on November 7, 2024.

· Exhibit D – A true and copy of the complaint filed by Plaintiff Sam Amin, Jr. in Case No. BC607436 on January 19, 2016.

· Exhibit E – A true and correct copy of the docket in Case No. 23VECV00924 obtained by Chase’s counsel from the court’s “Case Access” website on November 6, 2024.

· Exhibit F – A true and correct copy of the complaint filed by Plaintiff Sam Amin, Jr. in Case No. 23VECV00924 on March 1, 2023.

· Exhibit G – A true and correct copy of the Notice of Ruling issued by Department U of this Court on July 24, 2023 in Case No. 19VECV00502 sustaining Chase’s Demurrer to the UCL Cause of Action in the complaint.

· Exhibit H – A true and correct copy of the Minute Order issued by Department A of this Court on July 13, 2023 in Case No. 23VECV00924 sustaining Discover Bank’s Demurrer to the Second Cause of Action in the complaint without leave to amend.

Judicial notice may be taken of records of any court in this state.  (Evid. Code, § 452, subd. (d)(1).)  Because the requested Exhibits are all court records from this state, the Court may take judicial notice of them.  However, “while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.  Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof.”  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [cleaned up].) 

Accordingly, the Court takes judicial notice of the existence of these exhibits as court records, and the truth of the results reached in Exhibit H, but not the truth of any hearsay allegations contained in the exhibits.

ANALYSIS

1.     DEMURRER

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law.  [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.”  (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.”  (See Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)  

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.”  (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.) conglomeration

A.    UNCERTAINTY

“[D]emurrers for uncertainty are disfavored.”  (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)  A demurrer for uncertainty will be sustained only where the pleading is so bad that the responding party cannot reasonably respond - i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what claims are directed against him or her.  (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.)  Where a demurrer is made upon the ground of uncertainty, the demurrer must distinctly specify exactly how or why the pleading is uncertain, and where such uncertainty appears by reference to page and line numbers.  (See Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 809.) 

Here, the Complaint is not a model of clarity, consisting primarily of legalese, with intermixed references to various statutes and legal principles whose relevance to this action is unclear, including 18 United States Code 1343 (which Plaintiff mischaracterizes as “mail fraud”), the implied covenant of good faith and fair dealing, and “California Penal Code 118.”  (See, e.g., Complaint ¶¶ 8, 12, 31.)  Notwithstanding, the Complaint does appear to have sufficient factual allegations to put Chase on notice as to the basic facts underlying Plaintiffs’ claims.  To wit, Plaintiffs allege the following facts:

·       “California law, under California’s Consumer Credit Reporting Agencies Act (CCRA) has allowed private right of action under California Civil Code 1785.25(a) […]” (Complaint ¶ 4.)

·       “On August 31^st, 2024, the plaintiff noticed that the defendant had furnished an adverse, and inaccurate information to Experian, which is a credit bureau.”  (Complaint ¶ 6.)

·       “Said information was a single collections account, which was repeated 44 times […] falsely claiming that there were 60 collections instead of only ONE.”  (Complaint ¶ 7.)

·       “A Single collection, account could only be reported to the credit bureaus one time.”  (Complaint ¶ 9.)

·       “The defendant had reported 60 collection accounts, which could be only ONE.”  (Complaint ¶ 10.)

·       “The defendant chose to continue violating the plaintiff 59 more times.  Accordingly, 58 counts of extra violations, which is grounds to 58 mail fraud and wire fraud counts, to be prosecuted by the California’s attorney general’s office under CIV1785.25(c).”  (Complaint ¶ 13.)

·       “The plaintiff brought the matter to the attention of the defendant.”  (Complaint ¶ 17.)

·       “The defendant chose to ignore the defendant’s conclusive violations, and continued to enable the defendant to treat the plaintiff with malice, oppression, fraud, and outmost disregard to the interest of the public, […] warranting punitive and exemplary damages under civil code 3294.”  (Complaint ¶ 18.)

·       “The inaccuracies were about the timing of the payments made.  In the meaning of the over the phone payments were delayed in posting to the account.  As a result the furnished information because incomplete and inaccurate.” (Complaint ¶ 19.)

·       “The defendant abused his/her authority to report ‘COLLECTION’, about 60 times.  Accordingly adding extra 59 times which each one was one count of violation of civil code 1785.25(a).”  (Complaint ¶ 20.)

·       “The defendant, in bad faith, kept reporting collection of the same account 60 times.  (This is also should be construed as if not conclusive, but certainly clear and convincing evidence of violation of unlawful competition law (Business and Professions Code 17200, and California Civil Code 3512 which states the following: “One must not change his purpose to the injury of another”.  (Complaint ¶ 21.)

·       “Plaintiff had previously brought the matter to the attention of the defendant CHASE by calling them, and getting oral promise that the corrections would be made.”  (Complaint ¶ 22.)

·       “Even though, the Defendant had promised to correct, the defendant did not inform the plaintiff in writing of the outcome of the investigation, and correction.”  (Complaint ¶ 23.)

·       “But, the inaccurate information continued to appear in the plaintiff’s credit report.”  (Complaint ¶ 24.)

·       “Among other inaccuracies, the said Report, did not reflect the account being disputed by the plaintiff, as it is required under the code.” (Complaint ¶ 25.)

·       “As a result of the defendants violation of CCRA, FCRA, CIV 1785.25(a). CIV178525(c), the plaintiff has sustained injuries as follows:
I. Said adverse information had reduced the plaintiff’s credit score.
II. Plaintiff was not able to get favorable rate on his debt.
III. Plaintiff was not able to benefit from his statutory entitlement to good credit history.”  (Complaint ¶ 29.)

Thus, the Complaint alleges clearly enough that Defendant (1) misreported to Experian  the date plaintiff Dhanani made payments about 60 times and (2) failed to report that the account was being disputed by Plaintiffs in violation of Civil Code section 1785.25, subdivision (a) and California’s Unfair Competition Law (“UCL”).

Moreover, although Defendant brings the demurrer on the grounds of uncertainty, the brief contains no specific arguments that any portions of the Complaint are so bad that Defendant cannot reasonably determine what issues must be admitted or denied, or what claims are directed against it.  The Court thus declines to sustain Defendant’s demurrer to the first cause of action on the basis of uncertainty. 

B.    FAILURE TO STATE A CAUSE OF ACTION

                                                         i.          Plaintiff Amin

As to Plaintiff Amin, Defendant argues the Complaint fails to state a cause of action at all, because “Plaintiff” is defined only as Dhanani, and all allegations are alleged as to the singular “plaintiff” throughout the Complaint.  Thus, the Complaint contains no allegations whatsoever pertaining to Amin.

As such, the Court sustains Defendant’s demurrer as to Plaintiff Amin in its entirety.

                                                       ii.          First Cause of Action – Violation of Civil Code Section 1785.25, subd. (a)

Civil Code section 1785.25, subdivision (a) provides, “A person shall not furnish 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.”

Subdivision (c) provides, “So long as the completeness or accuracy of any information on a specific transaction or experience furnished by any person to a consumer credit reporting agency is subject to a continuing dispute between the affected consumer and that person, the person may not furnish the information to any consumer credit reporting agency without also including a notice that the information is disputed by the consumer.”

Subdivision (g) provides, “A person who furnishes information to a consumer credit reporting agency is liable for failure to comply with this section, unless the furnisher establishes by a preponderance of the evidence that, at the time of the failure to comply with this section, the furnisher maintained reasonable procedures to comply with those provisions.”

            Similarly, Section 1785.31 provides:

(a) Any consumer who suffers damages as a result of a violation of this title by any person may bring an action in a court of appropriate jurisdiction against that person to recover the following:

(1) In the case of a negligent violation, actual damages, including court costs, loss of wages, attorney’s fees and, when applicable, pain and suffering.

(2) In the case of a willful violation:

(A) Actual damages as set forth in paragraph (1) above:

(B) Punitive damages of not less than one hundred dollars ($100) nor more than five thousand dollars ($5,000) for each violation as the court deems proper;

(C) Any other relief that the court deems proper.

As to Plaintiff Dhanani, the Complaint alleges Defendant violated Section 1785.25, subdivision (a) by furnishing Experian with both incomplete and inaccurate information, which it knew or should have known was incomplete or inaccurate, by virtue of Dhanani calling to inform them, which cost Dhanani a favorable rate on his debt, in addition to causing a reduction in his credit score.

Defendant argues that (1) conflicting allegations about duplicate entries on his credit report and the inaccuracies being about the timing of over-the-phone payments he made are insufficiently clear to establish Chase furnished any inaccurate information and (2) being unable to get a favorable rate on his debt is too vague to be actionable. 

Ultimately, whether Chase actually reported inaccurate information, and whether and to what extent Dhanani actually paid a higher rate are factual questions to be determined at later stages of the litigation.

But at the pleading stage, Dhanani has adequately alleged a violation of Section 1785.25 to withstand demurrer.

                                                     iii.          Second Cause of Action – Violations of UCL

Defendant demurs to the second cause of action for violations of the UCL on the grounds that relief under the UCL is preempted by the Fair Credit Reporting Act (“FCRA”). 

The FCRA regulates the duties and responsibilities of “furnishers” of credit information.  (See 15 U.S.C. § 1681(b) [“It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title”].)   

Included in the matters the FCRA regulates are the responsibilities of persons who furnish information to consumer reporting agencies.  (See 15 U.S.C. § 1681s-2(a)(1)(A) [“Reporting information with actual knowledge of errors”] & (B) [“Reporting information after notice and confirmation of errors”].)  

In pertinent part, the FCRA expressly preempts most state laws:

No requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under […] (F) section 623 [§ 1681s-2], relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply […] (ii) with respect to section 1785.25(a) of the California Civil Code (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996)

(15 U.S.C. § 1681t(b)(1)(F).)   Thus, although the first cause of action, brought under Civil Code section 1785.25, is not preempted by the FCRA, to the extent the UCL cause of action is premised upon Defendant’s alleged furnishing of inaccurate or misleading information to the credit bureaus, such cause of action is preempted by the FCRA.

            Here, in addition to the above allegations, as to the UCL, the Complaint alleges:

·       “There did exist understanding that the Defendants and all of them would treat consumers fairly and do not use their superior bargaining position to impose unfair condition on the consumers.  Therefore the defendant’s conduct was designedly unfair.”  (Complaint ¶ 39.)

·       “Defendants, and each of them, have breached their duty of fair dealing and good faith owed to plaintiff in the following respects:

(a) Setting up a system designed to compromise the consumer’s ability to avoid late payments even though there was no activity.

(b) Failure to make corrections to reports made to credit bureaus, regarding the plaintiff’s history with them at a time when defendants knew plaintiff was entitled to have accurate information regarding plaintiff’s credit data to be furnished to consumer credit reporting agencies.  Said conduct is clearly unlawful under FCRA and Civil Code 1785.25(a), and Civil Code 1785.25(c), which is prosecutable by the attorney general of California.

(c) Said Conduct is in conclusive violation of California Civil Code 3512. (Paragraph 9 and following paragraphs of this civil complaint.)

(d) Defendant was unfair to the plaintiff when willfully and in bad faith withheld accurate data from Trans Union and Equifax regarding plaintiff’s history (An additional mail fraud violation).

(e) Defendant had known about the inaccuracy and adversity of the furnished information.

(f) Defendant has been aware of the defendant’s superior power over the plaintiff and knowingly denied from the plaintiff the commitments the defendant had made under the licensing agreements with the State of California, where the plaintiff is a citizen.  This justifying imposition of punitive and exemplary damages.

(g) Defendant had Made a representation to public (including plaintiff) that the defendant would furnish accurate and complete information only.

(h) At time defendant either did not have sufficient information to make such a  conclusive representation, or had knowledge of its falsity, and continued to violate civil code 1785.25(a), and civil code 1785.25(c).

(i) State of California, which plaintiff is citizen of, relied on defendant’s representation and allowed the defendant do business in California, or in the case of plaintiff do business with the defendant.

(j) As a result of defendant’s failure to keep defendant’s promise as set above, the plaintiff has sustained injury.”

(Complaint ¶ 41.)

·       “As a further proximate result of the aforementioned wrongful conduct of defendants, plaintiff has suffered anxiety, worry, mental and emotional distress and other incidental damages, justifying punitive and exemplary damages under Civil Code 3295.” (Complaint ¶ 42.)

Thus, viewing the entire complaint in context, all of the UCL allegations pertain to Defendant’s alleged furnishing of false or misleading information to the credit bureaus, conduct which is governed by the FCRA, which expressly pre-empts state laws like the UCL. 

Therefore, the Court sustains Defendant’s demurrer to the second cause of action.

2.     LEAVE TO AMEND

A plaintiff has the burden of showing in what manner the complaint could be amended and how the amendment would change the legal effect of the complaint, i.e., state a cause of action. (See The Inland Oversight Committee v. City of San Bernardino (2018) 27 Cal.App.5th 771, 779; PGA West Residential Assn., Inc. v. Hulven Int'l, Inc. (2017) 14 Cal.App.5th 156, 189.) A plaintiff must not only state the legal basis for the amendment, but also the factual allegations sufficient to state a cause of action or claim. (See PGA West Residential Assn., Inc. v. Hulven Int'l, Inc., supra, 14 Cal.App.5th at p. 189.) Moreover, a plaintiff does not meet his or her burden by merely stating in the opposition to a demurrer or motion to strike that “if the Court finds the operative complaint deficient, plaintiff respectfully requests leave to amend.” (See Major Clients Agency v Diemer (1998) 67 Cal.App.4th 1116, 1133; Graham v. Bank of America (2014) 226 Cal.App.4th 594, 618 [asserting an abstract right to amend does not satisfy the burden].)

Here, Plaintiffs have failed to meet this burden as they did not oppose the demurrer and therefore did not address whether leave should be granted if the demurrer is sustained. 

CONCLUSION AND ORDER

For the reasons stated, the Court sustains Defendant’s demurrer as to Amin for both causes of action without leave to amend, and sustains Defendant’s demurrer as to Dhanani with respect to the second cause of action without leave to amend.  Further, the Court overrules Defendant’s Demurrer as to Dhanani with respect to the first cause of action. 

Further, the Court orders Defendant to file and serve an Answer to the Complaint on or before January 15, 2025. 

Further, on the Court’s own motion, the Court continues the Case Management Conference from January 23, 2025 to May 21, 2025 at 8:30 A.M. in Department 207.  All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences.  In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725). 

Defendant shall provide notice of the Court’s orders and file the notice with a proof of service forthwith. 

DATED:  December 18, 2024                                                ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court