Huizar v. Wells Fargo Bank, N.A.
257 F. Supp. 3d 1103
E.D. Cal.2017Background
- Plaintiff Sandra Hui-zar filed suit alleging Bank of America (BANA) violated California’s Consumer Credit Reporting Agencies Act (CCRAA), Cal. Civ. Code § 1785.25(a), by reporting discharged bankruptcy debt as charged-off with an outstanding balance.
- Plaintiff completed a Chapter 13 plan; the bankruptcy court issued a discharge on October 28, 2014, and the Bankruptcy Noticing Center mailed notice to BANA.
- In June and September 2016, Plaintiff obtained credit reports showing BANA reported a charged-off status and an outstanding balance (~$82,691) despite the discharge.
- Plaintiff asserts BANA’s reports were “incomplete or inaccurate” and “materially misleading” because they failed to reflect the debt as discharged and thus suggested ongoing personal liability.
- BANA moved to dismiss under Rule 12(b)(6), arguing (1) the CCRAA claim is preempted/defective and (2) the claim is time-barred by the CCRAA statute of limitations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff sufficiently alleges a violation of Cal. Civ. Code § 1785.25(a) | BANA knew or should have known its reports were inaccurate after notice of discharge and nonetheless reported charged-off balance; that is materially misleading | The reporting was not actionable or is preempted (BANA contends §1785.1 language) | Court: Plaintiff plausibly alleged §1785.25(a) claim; reports were materially misleading and BANA had notice of bankruptcy discharge, so motion to dismiss denied |
| Whether claims are barred by CCRAA statute of limitations (2-year discovery / 7-year outer limit) | Claim accrued when Plaintiff discovered the inaccuracy (June 2016 credit reports), so timely | Plaintiff should have discovered the inaccuracy at time of discharge (Oct 2014); suit filed Mar 2017 is untimely | Court: Dismissal denied. Defendant failed to show a reasonably diligent plaintiff would have discovered the violation in 2014; complaint alleges discovery in 2016 |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (standards for plausibility on a motion to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards and requirement that factual allegations plausibly suggest entitlement to relief)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (Ninth Circuit: private right to enforce §1785.25(a) not preempted by FCRA)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (CRAs must strive for maximum possible accuracy; discussion of FCRA preemption scope)
- Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100 (plaintiff discovery rule for CCRAA limitations; burden on defendant to show when a reasonably diligent plaintiff would have discovered violation)