Lara Jr. v. Experian Information Solutions, Inc

• Court: District Court, S.D. California
• Decided: March 11, 2021
• Docket: 3:20-cv-02449
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 ALFREDO LARA JR., Case No.: 20-cv-2449-MMA (MDD) 11 ORDER GRANTING PENNYMAC 12 Plaintiff, LOAN SERVICES, LLC’S MOTION v. TO DISMISS 13 EXPERIAN INFORMATION [Doc. No. 8] 14 SOLUTIONS, INC., et al., 15 Defendants. 16 17

18 19 On December 12, 2020, Plaintiff Alfredo Lara Jr. (“Plaintiff”) filed a Complaint 20 against Experian Information Solutions, Inc., Merchants Credit Guide Company, 21 Pennymac Loan Services, LLC, and Bank of America, N.A. See Doc. No. 1 (“Compl.”). 22 Plaintiff seeks to recover under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. 23 (“FCRA”), the California Credit Consumer Reporting Agencies Act, Cal. Civ. Code § 24 1785.1 et seq. (“CCRA”), the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et 25 seq. (“FDCPA”), the California Rosenthal Act, Cal. Civ. Code § 1788 et seq. (“Rosenthal 26 Act”), and the California Identity Theft Act, Cal. Civ. Code § 1798.92 et seq. (“CITA”). 27 Defendant Pennymac Loan Services, LLC (“Pennymac”) moves to dismiss, or in 28 the alternative, for a more definite statement. See Doc. No. 8. Plaintiff filed an 1 opposition, to which Pennymac replied. See Doc. Nos. 11, 12. The Court found the 2 matter suitable for disposition on the papers and without oral argument pursuant to 3 Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 13. 4 For the reasons set forth below, the Court GRANTS Pennymac’s motion to dismiss. 5 I. BACKGROUND 6 Plaintiff alleges that he is the victim of identity theft. See Compl. at ¶ 15. 7 According to him, an identity thief opened an account in his name with Pennymac (the 8 “Account”).1 See id. He asserts he did not authorize anyone to open the Account. See 9 id. at ¶ 16. Plaintiff filed a police report documenting the incident. See id. at ¶ 18. 10 Pursuant to the FCRA, Plaintiff disputed the Account in writing with Experian 11 Information Solutions, Inc. (“Experian”)—a consumer reporting agency (“CRA”). See 12 id. at ¶¶ 7, 21. He alleges that Experian then notified Pennymac of the dispute and 13 furnished it with a copy of the police report. See id. at ¶ 21. Nonetheless, Plaintiff says 14 Pennymac “continued to collect on the Account[] after it had knowledge Plaintiff was the 15 victim of identity theft,” id. at ¶ 25, and “reported the Account[] to Experian after it had 16 been disputed,” id. at ¶ 26. As a result, Plaintiff seeks to recover from Pennymac for 17 emotional distress damages and damage to his creditworthiness under the FCRA, 18 CCRAA, the Rosenthal Act, and CITA. 19 II. LEGAL STANDARD 20 A Rule 12(b)(6) motion tests the legal sufficiency of the claims made in the 21 complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must 22 contain “a short and plain statement of the claim showing that the pleader is entitled to 23 relief . . . .” Fed. R. Civ. P. 8(a)(2). However, plaintiffs must also plead “enough facts to 24

25 26 1 Plaintiff also maintains that an identity thief improperly opened accounts with defendants Merchants Credit Guide Company and Bank of America, N.A. The allegations against Pennymac, Merchants 27 Credit Guide Company, and Bank of America, N.A. are identical. However, because only Pennymac brings this motion to dismiss, the Court discusses Plaintiff’s allegations only as they relate to the 28 1 state a claim to relief that is plausible on its face.” Fed. R. Civ. P. 12(b)(6); Bell Atl. 2 Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility standard demands more 3 than “a formulaic recitation of the elements of a cause of action,” or “naked assertions 4 devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 5 (internal quotation marks omitted). Instead, the complaint “must contain allegations of 6 underlying facts sufficient to give fair notice and to enable the opposing party to defend 7 itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). 8 In reviewing a motion to dismiss under Rule 12(b)(6), courts must assume the truth 9 of all factual allegations and must construe them in the light most favorable to the 10 nonmoving party. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 11 1996). The court need not take legal conclusions as true merely because they are cast in 12 the form of factual allegations. See Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 13 1987). Similarly, “conclusory allegations of law and unwarranted inferences are not 14 sufficient to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 15 1998). 16 Where dismissal is appropriate, a court should grant leave to amend unless the 17 plaintiff could not possibly cure the defects in the pleading. See Knappenberger v. City 18 of Phoenix, 566 F.3d 936, 942 (9th Cir. 2009) (quoting Lopez v. Smith, 203 F.3d 1122, 19 1127 (9th Cir. 2000)). 20 21 22 23 *** 24 25 26 27 28 1 III. DISCUSSION 2 Pennymac seeks to dismiss all of the claims against it. This includes four claims 3 brought under the FCRA, CCRAA, the Rosenthal Act, and CITA. The Court addresses 4 the sufficiency of each claim in turn. 5 A. FCRA Claim 6 Plaintiff first brings a claim against Pennymac under section 1681s-2 of the FCRA 7 for allegedly providing inaccurate information to Experian. See e.g., Compl. at ¶ 32. “To 8 ensure that credit reports are accurate, the FCRA imposes duties on entities called 9 ‘furnishers,’ which are the sources that provide credit information to credit reporting 10 agencies.” Snyder v. Nationstar Mortg. LLC, No. 15-cv-03049-JSC, 2015 U.S. Dist. 11 LEXIS 154680, at *8 (N.D. Cal. Nov. 13, 2015) (citing Gorman v. Wolpoff & Abramson, 12 LLP, 584 F.3d 1147, 1153–54 (9th Cir. 2009)). Under the FCRA, one such duty is 13 “triggered” when a furnisher “receives notice from the CRA that the consumer disputes 14 the information.” Langan v. United Servs. Auto. Ass’n, 69 F. Supp. 3d 965, 978 (N.D. 15 Cal. 2014) (quoting Gorman, 584 F.3d at 1154) (internal quotation marks omitted). 16 “Upon receiving such a notice, the furnisher is required to conduct an investigation with 17 respect to the disputed information and to take steps to ensure that any errors are 18 corrected.” Id. (quoting 15 U.S.C. § 1681s-2(b)) (internal quotation marks omitted). “‘If 19 an item of information disputed by a customer is found to be inaccurate or incomplete’ 20 following an investigation, the furnisher must modify, delete or block reporting of that 21 information.” Finley v. Transunion, No. 17-cv-07165-HSG, 2020 U.S. Dist. LEXIS 22 12151, at *6 (N.D. Cal. Jan. 24, 2020) (quoting 15 U.S.C. § 1681s-2(b)(1)). 23 FCRA section 1681s-2(b) provides a private right of action to challenge a 24 furnisher’s failure to investigate and report results after receiving notice of a dispute. See 25 Gorman, 584 F.3d at. To prevail on a claim under section 1681s-2(b), a plaintiff must 26 allege that: (1) she notified a CRA of a dispute regarding the accuracy of an account; 27 (2) the CRA notified the furnisher of the information; and (3) the furnisher failed to take 28 the remedial measures required by statute. See Kozlowski v. Bank of Am., N.A., No. 1:18- 1 cv-00131-DAD-EPG, 2018 U.S. Dist. LEXIS 76887, at *8 (E.D. Cal. May 4, 2018) 2 (citing Matracia v. JP Morgan Chase Bank, N.A., No. 2:11-190 WBS JFM, 2011 U.S. 3 Dist. LEXIS 128227, at *8 (E.D. Cal. Nov. 4, 2011)). 4 Plaintiff asserts that Experian is a CRA and Pennymac is a furnisher as those terms 5 are defined by the FCRA. See Compl. at ¶¶ 5, 7. Taking the facts in the Complaint as 6 true, Plaintiff informed Experian of the identity theft, disputing the Account, and 7 Experian notified Pennymac of the dispute. See id. at ¶ 31. Thus, Plaintiff adequately 8 alleges that the duty under section 1681s-2 was triggered. Plaintiff further asserts that 9 Pennymac did not subsequently comply with the provisions of the FCRA. Namely, he 10 claims that Pennymac did not “fully and properly investigate Plaintiff’s dispute[],” 11 “review all relevant information regarding” the Account, “accurately respond to 12 EXPERIAN,” or “permanently and lawfully correct its own internal records to prevent 13 the re-reporting of the false information to EXPERIAN.” See id. at ¶ 32. Without more, 14 this is insufficient. Plaintiff does not identify the Account or the alleged inaccuracy. Nor 15 does he explain how Pennymac failed to properly investigate the dispute. For example, 16 there is no “chronology of correspondence” or other factual assertions as to what took 17 place following Pennymac’s notice. See, e.g., Cisneros v. Trans Union, L.L.C., 293 F. 18 Supp. 2d 1167, 1175 (D. Haw. 2003) (denying the defendant’s motion to dismiss the 19 plaintiff’s FCRA claim stating that “[a]lthough vague, Plaintiff’s complaint does provide 20 a chronology of correspondence between Plaintiff and these Defendants”). And finally, 21 Plaintiff does not factually support the contention that the Account was or is still being 22 improperly reported. Therefore, the Court DISMISSES the FCRA claim against 23 Pennymac with leave to amend. 24 B. CCRAA Claim 25 Plaintiff’s CCRAA cause of action is similarly insufficient under the Rule 12(b)(6) 26 standard. Section 1785.25(a) of the CCRAA states that “[a] person shall not furnish 27 information on a specific transaction or experience to any consumer credit reporting 28 agency if the person knows or should know the information is incomplete or inaccurate.” 1 Cal. Civ. Code § 1785.25(a). 2 The only allegation supporting this claim is that Pennymac “violated California 3 Civil Code §1785.25(a) by furnishing information on a specific transaction or experience 4 to a consumer credit reporting agency that the Furnishers knew or should have known 5 was incomplete or inaccurate.” Compl. at ¶ 37(c). This is wholly insufficient as it is 6 merely a formulaic recitation of the cause of action. Plaintiff does not allege the Account 7 with any specificity. See Caruso v. Cavalry Portfolio Svcs, No. 19-CV-1224-CAB-AHG, 8 2019 U.S. Dist. LEXIS 208371, at *7 (S.D. Cal. Dec. 3, 2019). Nor does he identify any 9 reported information, nonetheless that it was incomplete or inaccurate. Put simply, he 10 does not factually assert any details about the Account, its accuracy, or Pennymac’s 11 reporting. Absent this information, Plaintiff’s CCRAA claim cannot survive Rule 12 12(b)(6). Consequently, the Court DISMISSES the CCRAA claim against Pennymac 13 with leave to amend. 14 C. Rosenthal Act Claim 15 “Section 1788.17 of the Rosenthal Act incorporates certain provisions of the 16 FDCPA. Thus, violations of the FDCPA’s substantive provisions also violate section 17 1788.17.” Mariscal v. Flagstar Bank, No. ED CV 19-2023-DMG (SHKx), 2020 U.S. 18 Dist. LEXIS 151301, at *5 n.3 (C.D. Cal. Aug. 4, 2020) (first citing Riggs v. Prober & 19 Raphael, 681 F.3d 1097, 1100 (9th Cir. 2012); and then citing Diaz v. Kubler Corp., 785 20 F.3d 1326, 1328 (9th Cir. 2015)). Pursuant to his Rosenthal Act claim, Plaintiff asserts 21 that Pennymac is liable under section 1788.17(a) for failing to comply with various 22 FDCPA provisions. See Compl. at ¶ 45. Specifically, 15 U.S.C. §§ 1692e, e(2)(a), e(8), 23 e(10), f, and f(1). See id. at ¶ 45(a)–(f). Sections 1692e and 1692f generally prohibit a 24 “debt collector” from using “unfair or unconscionable means” or “false, deceptive, or 25 misleading representation or means in connection with the collection of any debt.” 15 26 U.S.C. §§ 1692e–f. 27 Plaintiff’s Rosenthal Act allegations are, again, merely restatements of those 28 statutes. As a starting point, Plaintiff does not adequately allege a debt, nonetheless that 1 it was consumer in nature. See Cutler ex rel. Jay v. Sallie Mae, Inc., No. EDCV-13- 2 2142-MWF (DTBx), 2014 U.S. Dist. LEXIS 181914, at *3–4 (C.D. Cal. Sep. 9, 2014) 3 (“The FDCPA applies only to consumer debts, defined as ‘any obligation or alleged 4 obligation of a consumer to pay money arising out of a transaction in which the money, 5 property, insurance, or services which are the subject of the transaction are primarily for 6 personal, family, or household purposes.’ 15 U.S.C. § 1692a(5).”). He also does not 7 sufficiently assert that Pennymac is or was a “debt collector”, or that it improperly 8 attempted to collect on the Account. See Cal. Civ. Code § 1788.17. Further, Plaintiff 9 fails to include any facts of Pennymac’s alleged wrongdoing. Without this information, 10 Pennymac is not on notice of its alleged wrongdoing and is unable to effectively defend 11 itself. See Starr, 652 F.3d at 1216. Accordingly, the Court DISMISSES Plaintiff’s 12 Rosenthal Act claim against Pennymac with leave to amend. 13 D. CITA Claim 14 Pursuant to CITA, “[a] person may bring an action against a claimant to establish 15 that the person is a victim of identity theft in connection with the claimant’s claim against 16 that person.” Cal. Civ. Code § 1798.93(a). “Cal. Civ. Code § 1798.92(a) defines a 17 ‘claimant’ as ‘a person who has or purports to have a claim for money or an interest in 18 property in connection with a transaction procured through identity theft.’ The plain 19 statutory terms of Cal. Civ. Code § 1798.93(a) provide that an identity theft victim may 20 pursue an action only against a party that has made a ‘claim against that person.’” 21 Sarukhanov v. J.P. Morgan Chase Bank, N.A., 691 F. App’x 383, 384 (9th Cir. 2017) 22 (quoting Cal. Civ. Code § 1798.92(a)). The statute further defines a “victim of identity 23 theft” as “a person who had his or her personal identifying information used without 24 authorization by another to obtain credit, goods, services, money, or property, and did not 25 use or possess the credit, goods, services, money, or property obtained by the identity 26 theft, and filed a police report in this regard pursuant to Section 530.5 of the Penal Code.” 27 Cal. Civ. Code § 1798.92(d); see also Satey v. JPMorgan Chase & Co., 521 F.3d 1087, 28 1092 (9th Cir. 2008). Pursuant to CITA, 1 Civil penalties are available if the victim of identity theft proves all of the 2 following by clear and convincing evidence:

3 (A) That at least 30 days prior to filing an action or within the cross-complaint 4 pursuant to this section, he or she provided written notice to the claimant at the address designated by the claimant for complaints related to credit 5 reporting issues that a situation of identity theft might exist and explaining the 6 basis for that belief. 7 (B) That the claimant failed to diligently investigate the victim's notification 8 of a possible identity theft. 9 (C) That the claimant continued to pursue its claim against the victim after the 10 claimant was presented with facts that were later held to entitle the victim to 11 a judgment pursuant to this section.

12 13 Satey, 521 F.3d at 1092 (citing Cal. Civ. Code § 1798.93(c)(6)). 14 Plaintiff fails to adequately plead the elements of a CITA claim. For example, 15 Plaintiff does not sufficiently allege that Pennymac is a “claimant” as defined by 16 California law: a person who has “a present tense interest in a debt or attempt to collect.” 17 Id. The general, vague allegation that the Account exists is insufficient. Plaintiff must 18 provide more information regarding the debt to show that Pennymac has a present 19 interest in it. There is also no allegation in the Complaint that Plaintiff complied with the 20 30-day statutory notice requirement. Finally, the Court is dubious that the general 21 statement that “Plaintiff is a victim of identity theft,” see Compl. at ¶ 15, is sufficient to 22 allege that he is, in fact, a victim of identity theft; that he “did not use or possess the 23 credit, goods, services, money, or property obtained by the identity theft.” See Satey, 521 24 F.3d at 1087. The Court, therefore, DISMISSES Plaintiff’s CITA claim against 25 Pennymac with leave to amend. 26 27 28 ] IV. CONCLUSION 2 For the foregoing reasons, the Court GRANTS Pennymac’s motion and 3 || DISMISSES Claims 1, 2, 4, and 5 against Pennymac with leave to amend. Plaintiff must 4 || file an amended complaint on or before April 9, 2021. Any amended complaint will be 5 || the operative pleading as to all defendants, and therefore all defendants must then 6 || respond within the time prescribed by Federal Rule of Civil Procedure 15. Defendants 7 named and any claim not re-alleged in the amended complaint will be considered 8 || waived. See S.D. Cal. CivLR 15.1; Hal Roach Studios, Inc. v. Richard Feiner & Co., 9 || Inc., 896 F.2d 1542, 1546 (9th Cir. 1989) (“[A]n amended pleading supersedes the 10 || original.”); Lacey v. Maricopa Cnty., 693 F.3d 896, 928 (9th Cir. 2012) (noting that 11 |}claims dismissed with leave to amend which are not re-alleged in an amended pleading 12 be “considered waived if not repled’’). 13 IT IS SO ORDERED. 14 || Dated: March 11, 2021 I Mitel -(hille 16 HON. MICHAEL M. ANELLO 7 United States District Judge 18 19 20 21 22 23 24 25 26 27 28