Judge William A. Crowfoot, Case Number: 25NNCV00663, Date: 2025-04-25 Tentative Ruling

Judge: William A. Crowfoot, Case: 25NNCV00663, Date: 2025-04-25 Tentative Ruling

On January 31, 2025, plaintiff Haroutyun Harry Malyan (“Plaintiff”) filed this action against defendants JPMorgan Chase Bank, N.A. (“Defendant”, erroneously sued as “JPMorgan Chase & CO.”), Midland Credit Management, Inc. (“Midland”), Equifax Information Services LLC (“Equifax”), Experian Information Solutions, Inc. (“Experian”) and Transunion Teledata LLC (“Transunion”). Plaintiff asserts violations of the Consumer Credit Reporting Agency Act (“CCRAA”) and alleges Defendant inaccurately reported the date of a payment delinquency and the amount of the account to Equifax, Experian, and Transunion (collectively, “Credit Reporting Agencies”). (Compl., ¶¶ 14, 17.)

On March 12, 2025, Defendant filed a demurrer and motion to strike. Defendant argues that Plaintiff’s claim is barred by the statute of limitations and fails to state sufficient facts. Defendant also moves to strike Plaintiff’s prayer for punitive damages.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) A demurrer for uncertainty will be sustained only where the complaint is so bad that the defendant cannot reasonably respond. (Code Civ. Proc., § 430.10, subd. (f).)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

As an initial matter, the Court SUSTAINS without leave to amend Defendant’s demurrer to Plaintiff’s claim against Defendant for furnishing information to the Credit Reporting Agencies without including a notice that the information is disputed in violation of Civil Code section 1785.25(c). (Compl., ¶¶ 46-47 [described as “Count 2”.) Defendant argues, and Plaintiff agrees, that Plaintiff’s claim is preempted by the federal Fair Credit Reporting Act. This leaves Plaintiff’s claim against Defendant for violating Civil Code section 1785.33(a), described as “Count 1,” which the Court proceeds to discuss below.

Plaintiff alleges that Defendant furnished information about him to a credit reporting agency that it “at least should have known was inaccurate.” (Compl., ¶ 45.) Defendant first argues that Plaintiff’s claim is time-barred because the applicable statute of limitations tolls “two years from the date the plaintiff knew of, or should have known of, the violation.” (Civ. Code, 1485.33.) Defendant contends that the statute of limitations began to run in 2020 because Plaintiff should have known that there would be negative credit reporting when his account was not paid in full and a portion of the debt was forgiven. (Demurrer, pp. 2-3.) In essence, Defendant argues that Plaintiff should have been monitoring his credit report in order to make sure that any information reported was accurate. This argument is unpersuasive because “a continuing obligation to [require plaintiff to] monitor [her] credit report ... places an unreasonable burden on the [p]laintiff.” (Banga v. Chevron, U.S.A., Inc., 2013 WL 71772, at *15 (N.D. Cal. Jan. 7, 2013).

The Court also rejects Defendant’s claim that Plaintiff fails to plead around the statute of limitations by omitting the date of discovery. “For a demurrer based on the statute of limitations to be sustained, the untimeliness of the lawsuit must clearly and affirmatively appear on the face of the complaint and matters judicially noticed.” (Schmier v. City of Berkeley (2022) 76 Cal.App.5th 549, 554.) The fact that Plaintiff failed to state the date that he discovered Defendant’s inaccurate reporting means that it is impossible to resolve the statute of limitations issue on its face. (Ibid.) Accordingly, the demurrer to Count 1 based on the statute of limitations is OVERRULED.

Next, Defendant argues that Plaintiff fails to allege that any information reported was inaccurate. With respect to the “charge-off” amount, Plaintiff alleges that the amount was incorrectly reported as $3,186 even though in 2020, he and Defendant settled the balance for $1,300 and he timely made a payment for $1,300. (Compl., ¶¶ 12.) Plaintiff also alleges that Defendant inaccurately reported that the date of his First Delinquency was January 2019, even though his accounts had become delinquent by December 2018. (Compl., ¶¶ 14-15.) The prohibition on furnishing “incomplete or inaccurate” information includes “information that is materially misleading.” (Huizar v. Wells Fargo Bank, N.A. (2017) 257 F.Supp.3d 1103, 1108.) Defendant cites to a number of federal cases interpreting the FCRA for the proposition that reporting “historical account information” is not inaccurate or misleading. (Demurrer, p. 8.) These cases are instructive because while Plaintiff could allege that Defendant furnished misleading information by failing to include or report his eventual payment of $1,300, the Complaint currently omits any allegations to show that the reported charge-off amount of $3,186 was inaccurate or misleading information instead of “historical account information.” (See, e.g., Bibbs v. Trans Union, LLC (3d Cir. 2022) 43 F.4th 331, 344 (3d Cir. 2022); Zavala v. Trans Union, LLC (E.D. Cal. Sept. 28, 2023) 2023 U.S. Dist. LEXIS 175521, at *8.) Therefore, the demurrer is SUSTAINED, with 20 days’ leave to amend, on the ground that the Complaint fails to state sufficient facts showing that the information reported was inaccurate.

The Complaint is also deficient because Plaintiff fails to allege actual damages resulting from the alleged inaccuracies. (See Trujillo v. First American Registry, Inc. (2007) 157 Cal.App.4th 628, 637.) In Levinson v. Transunion (C.D. Cal. June 2, 2016) 2016 U.S. Dist. LEXIS 72284, the district court held that plaintiffs’ “bare allegation that they are entitled to ‘actual damages, loss of wages, damage to credit reputation, pain and suffering, costs and attorney fees’” was “without sufficient facts to demonstrate any particular injury resulting from [the defendant’s] purported CCRAA violation.” (Id. at *18.) Since Plaintiff fails to cite to any authority holding that a decreased credit score constitutes “actual damages”, Defendant’s demurrer is SUSTAINED, with 20 days’ leave to amend, on the ground that Plaintiff fails to plead actual damages as required for the CCRAA.

The demurrer to Plaintiff’s Count No. 1 against Defendant is SUSTAINED with 20 days’ leave to amend.

The demurrer to Plaintiff’s Count No. 2 against Defendant is SUSTAINED without leave to amend.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.