Judge: Teresa A. Beaudet, Case: 22STCV16284, Date: 2023-10-09 Tentative Ruling

Case Number: 22STCV16284    Hearing Date: October 9, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs Lawrence Vallely, Therese Vallely, Mary Bestwick, Nilan Gunewardena, Jessica Millan, Lubna Ibrahim, Taurell Lebeau, Julian Payton, David Ross, Hothyfa James Museitif, Giancarlo Samson, Curtis Saulnier, Suraj Sundar, Michael Capovilla, Lucia Senzatimore, Dustin Clark, Natalia Nowicka, Michael Samu, and Majan Zaldana (collectively, “Plaintiffs”) filed this action on July 12, 2023 against Defendant Equity Residential Management, LLC. The Complaint alleges causes of action for (1) violations of the Investigative Consumer Reporting Agencies Act, (2) invasion of privacy, and (3) declaratory relief.

On July 20, 2023, Plaintiffs filed an amendment to the Complaint naming Transunion Rental Screening Solutions, Inc. (“TURSS”) in place of Doe 1.

TURSS now demurs to each of the causes of action of the Complaint and moves to strike portions of the Complaint. Plaintiffs oppose both.

Request for Judicial Notice

The Court grants Plaintiffs’ request for judicial notice only as to the fact of the filing of the complaints attached as Exhibits 1 and 2 to the request. TURSS notes that “[i]t is well settled that a court cannot take judicial notice of the truth of matters stated in pleadings or affidavits in the court file of another case, although it can be noticed that the documents exist. Judicial notice can be taken only of the contents of orders, findings of fact, conclusions of law, and judgments.” (Bennett v. Regents of University of California (2005) 133 Cal.App.4th 347, 358, fn. 7 [emphasis in original].)

Demurrer

A.    Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

B.     Allegations of the Complaint

In the Complaint, Plaintiffs allege that “[i]n the past two years…Plaintiffs applied for housing at Jia Apartments, Pegasus Apartments, Park West Apartments, Academy Village Apartments, Versailles Apartments, Mariposa at Playa Del Rey Apartments, Kelvin Court Apartments, Market Street Village Apartments and City Pointe Apartments. Plaintiffs completed a mandatory multi-page ‘Application,’ which included a release of information permitting the Defendants to get private and personal information from third parties about the Plaintiffs.” (Compl., ¶ 31.) “Defendants then requested and obtained investigative consumer reports about the Plaintiffs during the processing of the Plaintiffs’ applications for an apartment home at Jia Apartments, Pegasus Apartments, Park West Apartments, Academy Village Apartments, Versailles Apartments, Mariposa at Playa Del Rey Apartments, Kelvin Court Apartments, Market Street Village Apartments and City Pointe Apartments without complying with the mandatory requirements, disclosures and authorizations required under the [Investigative Consumer Reporting Agencies Act (ICRAA)].” (Compl., ¶ 32.)

Plaintiffs allege that “[b]ased on the Defendants’ actions, which are deliberate planned violations of the ICRAA, invasion of privacy and unfair business practices, Plaintiffs are seeking damages, including actual damages, statutory damages, and punitive damages, and Plaintiffs are demanding declaratory relief and an injunction.” (Compl., ¶ 5.)

C.     First Cause of Action – Violations of the ICRAA

In the first cause of action for violations of the ICRAA, Plaintiffs allege, inter alia, that “[t]he ICRAA regulates landlords and agencies that gather information on consumers to provide to landlords and others for use by those persons in making residential rental decisions.” (Compl., ¶ 52.) Plaintiffs allege that Defendants failed to comply with certain provisions of the ICRAA. (Compl., ¶¶ 53-56.)

TURSS argues that “Plaintiffs’ claims as to Cal. Civ. Code § 1786, et. seq. fail because the provisions of the ICRAA cited in Plaintiffs’ Complaint are inapplicable to TURSS.” (Demurrer at p. 5:24-25.) TURSS asserts in the demurrer that “[w]hile TURSS is a consumer reporting agency, it is not a ‘landlord’ as alleged in Plaintiffs’ First Cause of Action and is therefore not an entity that ‘requests an investigative consumer report’ nor is it a ‘person procuring or causing the request [for an investigative consumer report] to be made.’” (Demurrer at p. 5:27-6:3, citing Armbruster Decl., ¶ 3.) The Court notes that TURSS cites to the Declaration of Vanessa Armbruster in support of this assertion. The Court finds that this is a factual argument that it not appropriate on demurrer. The Court notes that “¿[o]n a demurrer a court’s function¿is limited to testing the legal sufficiency of the complaint. A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.¿” (Joslin v. H.A.S. Ins. Brokerage¿(1986) 184 Cal.App.3d 369, 374 [internal quotations and citation omitted]¿; see also McHugh v. Howard (1958) 165 Cal.App.2d 169, 173-174 [“The purpose of a demurrer is to test the legal sufficiency of a pleading, not to test the¿evidence or other extrinsic matters.”])  

TURSS also argues that “because TURSS is not a ‘person procuring or causing the request [for an investigative consumer report] to be made,’ Plaintiffs’ contention in paragraph 55 of the Complaint that TURSS ‘did not notify Plaintiffs that an investigative consumer report would be made regarding his or her character, general reputation, personal characteristics, and mode of living, did not provide the name or address of the investigative consumer reporting agency that would prepare the reports, and did not provide a summary or copy of the provisions of California Civil Code section 1786.22’ is not applicable to TURSS…” (Demurrer at p. 6:12-18, citing Armbruster Decl. ¶ 4.) The Court notes that TURSS cites to the Declaration of Vanessa Armbruster in support of this assertion. The Court thus finds that this is also a factual argument not appropriate on demurrer.   

            Based on the foregoing, the Court overrules TURSS’s demurrer to the first cause of action.

D.    Second Cause of Action – Invasion of Privacy

            TURSS asserts that Plaintiffs’ second cause of action for invasion of privacy fails.

TURSS argues that, “[a]s stated previously, TURSS never ‘procures’ nor ‘causes requests to be made’ of investigative consumer reports. (See Armbruster Decl. ¶ 3.) TURSS is merely an agency that supplies consumer reports to those that request them (i.e. Equity ‘obtaining’ them) pursuant to the appropriate statutory guidelines under the Fair Credit Reporting Act and applicable California statute…Accordingly, Plaintiffs have failed to articulate any facts to suggest that TURSS remotely violated Plaintiffs’ right of privacy other than merely naming TURSS as a Doe Defendant.” (Demurrer at p. 6:25-7:4.) As discussed, the Court finds that this is a factual argument that it not appropriate on demurrer.

            TURSS also notes that “[t]he elements of a cause of action for violation of the California Constitution’s guaranteed right to privacy are (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy.” (Folgelstrom v. Lamps Plus, Inc. (2011) 195 Cal.App.4th 986, 990, citing Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 39-40

[internal quotations omitted].) TURSS asserts that here, Plaintiffs’ allegations do not support the second or third factors of an invasion of privacy claim.

            As noted by TURSS, Plaintiffs do not allege that they had “a reasonable expectation of privacy in the circumstances.” (Folgelstrom v. Lamps Plus, Inc., supra, 195 Cal.App.4th at p. 990.) In the second cause of action, Plaintiffs solely allege that “[b]y acting and failing to act as herein alleged, the Defendants have violated the ICRAA and invaded the Plaintiffs’ rights of privacy by obtaining investigative consumer reports about the Plaintiffs without complying with mandatory requirements under the ICAA for getting investigative reports about the Plaintiffs.” (Compl., ¶ 63.) TURSS also notes that the Complaint alleges that “Plaintiffs completed the required ‘Application’ that included a consent to release of information and submitted it to Defendant Equity Residential Management, LLC.” (Compl., ¶ 35.) TURSS asserts that “Plaintiffs have not and cannot state a claim because they admit they consented to the release of their information and, therefore, cannot allege they had a reasonable expectation of privacy that TURSS invaded.” (Demurrer at p. 7:7-9.)

            In the opposition, Plaintiffs assert that “TransUnion diverts the Court’s attention towards common law standards for invasion of privacy, while ignoring the fact that in certain circumstances, statutes may form the basis for recognizing a plaintiff’s reasonable expectation of privacy, such as the ICRAA…” (Opp’n at p. 4:1-4.) Plaintiffs cite to Civil Code section 1786.52, which provides, inter alia, that “[n]othing in this chapter shall in any way affect the right of any consumer to maintain an action against an investigative consumer reporting agency, a user of an investigative consumer report, or an informant for invasion of privacy or defamation.” But this statute does not demonstrate that the above-referenced elements of a cause of action for violation of the right to privacy do not apply. Civil Code section 1786.52 simply states that a consumer may “maintain an action against an investigative consumer reporting agency, a user of an investigative consumer report, or an informant for invasion of privacy or defamation.”

            Based on the foregoing, the Court sustains TURSS’s demurrer to the second cause of action, with leave to amend.

E.     Third Cause of Action – Declaratory Relief  

In support of the third cause of action for declaratory relief, Plaintiffs allege that “[a]n actual controversy has arisen and now exists between Plaintiffs and the Defendants regarding the legality and effect of the Defendants’ Application, which Plaintiffs contend violates the ICRAA. Defendants demands all leases must be renewed or re-certified, and because the same forms are always used, which authorizes the Defendants to obtain investigative consumer reports about the Plaintiffs, a judicial determination is necessary to prevent the Defendants’ continued violations of the ICRAA.” (Compl., ¶ 65.) Plaintiffs further allege that “[a] dispute and actual controversy have also arisen as to how to correct and mitigate the damages to Plaintiffs and other similar persons from Defendants’ illegal actions in violation of the ICRAA statutes, especially as to how to stop further violations of the ICRAA so that these wrongful acts will never occur again as to the apartments. Plaintiffs demand that an injunction follow the title to the land so that any future owners, managers or other persons in authority are aware of the judgment in this case and are bound by it.” (Compl., ¶ 66.)

TURSS asserts that the third cause of action for declaratory relief fails because Plaintiffs have not alleged any actual, present controversy. “A complaint for declaratory relief must demonstrate: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410.) “The ‘actual controversy’ requirement concerns the existence of present controversy relating to the legal rights and duties of the respective parties pursuant to contract (Code Civ. Proc., § 1060), statute or order…Where the allegations of the complaint reveal the controversy to be conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court, the fundamental basis of declaratory relief is lacking.” (Ibid. [emphasis omitted].)

TURSS asserts that “Plaintiffs cannot present a viable claim under the ICRAA or invasion of privacy for reasons set forth above, and therefore, fail to show the existence of an actual controversy.” (Demurrer at p. 9:25-27.) But as set forth above, the Court overrules TURSS’s demurrer to the first cause of action.

TURSS also argues that “Plaintiffs further reveal their alleged controversy to be fictional and only hypothetically anticipated to occur in the future, by explaining that their basis for seeking declaratory relief is to ‘stop further violations of the ICRAA so that these wrongful acts will never occur again as to the apartment complex.’…Plaintiffs appear to request declaratory relief that is simply a disguised attempt to obtain an advisory opinion from this Court regarding a hypothetical controversy that does not presently exist.” (Demurrer at p. 10:1-6.) It appears TURSS is referring to allegations in paragraph 66 of the Complaint in the foregoing argument. However, TURSS does not address Plaintiffs’ additional allegation that “[a]n actual controversy has arisen and now exists between Plaintiffs and the Defendants regarding the legality and effect of the Defendants’ Application, which Plaintiffs contend violates the ICRAA.” (Compl., ¶ 65.)

Based on the foregoing, the Court overrules TURSS’s demurrer to the third cause of

action.

            Motion to Strike

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or any part of a pleading “not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc., § 436.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

TURSS moves to strike a number of allegations from the Complaint.

First, TURSS moves to strike paragraph 61 of the Complaint, which is contained in the first cause of action and alleges, inter alia, that “Plaintiffs are also entitled to permanent injunctive against all Defendants and their heirs, executors, transferees and assigns, and declaratory relief to the following effect with any such injunction running with the land:…” (Compl., ¶ 61.) TURSS asserts that injunctive relief is not a remedy under the ICRAA, and that the ICRAA is limited to damages and attorney’s fees. TURSS cites to Civil Code section 1786.50 which provides, inter alia, that “(a) An investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report is liable to the consumer who is the subject of the report in an amount equal to the sum of all the following: (1) Any actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater. (2) In the case of any successful action to enforce any liability under this chapter, the costs of the action together with reasonable attorney’s fees as determined by the court. (b) If the court determines that the violation was grossly negligent or willful, the court may, in addition, assess, and the consumer may recover, punitive damages.”

            In the opposition, Plaintiffs note that TURSS cites to non-binding federal authority in support of the assertion that “[t]he ICRAA is limited to damages and attorney’s fees.” (Mot. at p. 5:11.) However, Plaintiffs do not address Civil Code section 1786.50, cited by TURSS and referenced above. As noted by TURSS, Plaintiffs do not provide any legal authority demonstrating that injunctive relief is a remedy under the ICRAA. Accordingly, the Court grants TURSS’s motion to strike paragraph 61 of the Complaint.

            Next, TURSS asserts that “Paragraphs 1, 2, 3, 5, 6, 9, and 10 of Plaintiff’s Complaint seeks general damages, compensatory damages, statutory damages, a declaratory judgment, permanent injunction, a writ of mandate, declaratory relief, and attorney’s fees. As further explained in TURSS’ concurrently filed Demurrer to the Complaint, Plaintiffs have failed to state a claim under the ICRAA because the provisions cited in Plaintiffs’ Complaint are not applicable to TURSS. Furthermore, Plaintiffs have failed to state a claim for declaratory relief because they have not alleged any actual, present controversy…. Therefore, Paragraphs 1, 2, 3, 5, 6, 9, and 10 of the Prayer for Relief must be stricken as irrelevant because Plaintiffs have not adequately alleged any cause of action under which the sought relief may be properly awarded.” (Mot. at p. 5:17-26.) As set forth above, the Court overrules TURSS’s demurrer to the first and third causes of action of the Complaint. Thus, the Court denies TURSS’s motion to strike Paragraphs 1, 2, 3, 5, 6, 9, and 10 of the Prayer for Relief of Plaintiff’s Complaint.

TURSS also asserts that Plaintiffs’ request for punitive damages found in Paragraphs 5, 47, and 59 of Plaintiffs’ Complaint and Paragraph 4 of the Prayer for Relief should be stricken. TURSS cites to Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63, where the Court of Appeal noted that “[i]n order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294…These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice.” TURSS argues that “Plaintiffs have failed to state any facts to show that TURSS’ conduct, if any, amounted to malice, oppression, or fraud.” (Mot. at p. 6:18-19.)

Plaintiffs assert that the ICRAA contains its own standard pertaining to punitive damages, citing to Civil Code section 1786.50, subdivision (b), which provides that “[i]f the court determines that the violation was grossly negligent or willful, the court may, in addition, assess, and the consumer may recover, punitive damages.” Plaintiffs assert that they have “alleged facts that support a finding that defendants have acted with lack of care with respect to obligations under the ICRAA, sufficient to constitute gross negligence.” (Opp’n at p. 4:21-23.) Plaintiffs cite to paragraph 47 of the Complaint, which alleges, inter alia, that “Defendants were aware of the Investigative Consumer Reporting Agencies Act (ICRAA) prior to committing the above violations and were on notice that their conduct was unlawful, and committed the above violations anyway.”

Plaintiffs also assert that willful conduct is alleged, citing to the allegations in the Complaint that “Defendants required a purported authorization to perform credit and background checks in the process of screening Plaintiffs for Jia Apartments, Pegasus Apartments, Park West Apartments, Academy Village Apartments, Versailles Apartments, Mariposa at Playa Del Rey Apartments, Kelvin Court Apartments, Market Street Village Apartments and City Pointe Apartments which, although defective, evidences Defendants’ awareness of and willful failure to follow the governing laws concerning such authorizations…” (Compl., ¶ 48.) Paragraph 48 of the Complaint also alleges, inter alia, that “Defendants did not want the tenants or prospective tenants to know about or have access to any confidential consumer reports about them, but wanted to manage and run the property free of any restrictions, questions or inquiries by tenants of information contained in any reports on them. Accordingly, Defendants’ conduct and violations of the ICRAA was and is willful and grossly negligent.” (Compl., ¶ 48.)

In the reply, TURSS does not cite to any legal authority demonstrating that Civil Code section 1786.50, subdivision (b) is not the appropriate standard here. TURSS does not appear to argue that Plaintiffs have failed to allege “that the violation was grossly negligent or willful…” (Civ. Code § 1786.50, subd. (b).) Thus, the Court denies TURSS’s motion to strike paragraphs 5, 47, and 59 of Plaintiffs’ Complaint and Paragraph 4 of the Prayer for Relief.

            Lastly, TURSS’s notice of motion indicates that TURSS moves “for an order striking Paragraphs 5, 47, 57, 59, 61, and 68 and Paragraphs 1 through 10 of the prayer relief asserted in the Complaint…” (Notice of Motion at p. 2:5-6.) However, as noted by Plaintiffs, TURSS’s memorandum of points and authorities in support of the motion does not contain any arguments pertaining to paragraphs 57 and 68 of the Complaint, or paragraphs 7 and 8 of the Prayer for Relief. Thus, the Court declines to strike these allegations.

Conclusion

For the foregoing reasons, the Court sustains TURSS’s demurrer to the second cause of action of the Complaint, with leave to amend. The Court overrules TURSS’s demurrer to the first and third causes of action of the Complaint.

The Court grants TURSS’s motion to strike as to paragraph 61 of the Complaint, with leave to amend. TURSS’s motion to strike is otherwise denied.

The Court orders Plaintiffs to file and serve an amended complaint, if any, within 20 days of the date of this Order. If no amended complaint is filed within 20 days of this Order, TURSS is ordered to file and serve its answer within 30 days of the date of this Order.¿ 

TURSS is ordered to give notice of this Order.¿ 

DATED:  October 9, 2023                              ________________________________

Hon. Rolf M. Treu

Judge, Los Angeles Superior Court