Bernuy v. Bridge Prop. Mgmt. Co.
| Docket Number | A163240 |
| Decision Date | 30 March 2023 |
| Citation | 89 Cal.App.5th 1174,306 Cal.Rptr.3d 539 |
| Parties | Ronald BERNUY, Plaintiff and Appellant, v. BRIDGE PROPERTY MANAGEMENT COMPANY, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Litigation Advocacy Group, Glenn A. Murphy, Westlake Village, for Plaintiff and Appellant
Goldfarb & Lipman, Celia W. Lee, James T. Diamond, Jr., Oakland, and Rye P. Murphy for Defendant and Respondent
The Investigative Consumer Reporting Agencies Act (ICRAA; Civ. Code, § 1786 et seq. )1 is a consumer protection measure that mandates certain disclosures for investigative consumer reports, which as relevant here are often used by landlords to make decisions regarding consumers who apply for housing. ICRAA requires the adoption of "reasonable procedures" for providing consumer information "in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization" of their information. ( § 1786, subd. (f).) Any investigative consumer reporting agency or user of information that fails to comply with the requirements of ICRAA is liable to the affected consumer for any actual damages or $10,000, whichever sum is greater. (§ 1786.50, subd. (a)(1).)
In 2015, a conflict developed in the Courts of Appeal over whether ICRAA was unconstitutionally vague and therefore unenforceable. In First Student Cases (2018) 5 Cal.5th 1026, 236 Cal.Rptr.3d 826, 423 P.3d 953 ( First Student ), the California Supreme Court resolved the conflict by upholding the constitutional validity of ICRAA and disapproving two earlier Court of Appeal decisions that concluded to the contrary.
This action filed by plaintiff Ronald Bernuy is one of 27 consolidated actions seeking damages against defendant Bridge Property Management Company (BPMC) for its commission of ICRAA violations in 2017. By stipulation and court order, Bernuy's action has been designated a "bellwether" case for purposes of adjudicating the following issues: (1) whether the California Supreme Court's 2018 decision in First Student amounted to a subsequent change in the law that relieves BPMC of liability for its ICRAA violations; and (2) whether certain plaintiffs’ ICRAA claims are time-barred under the applicable two-year statute of limitations or whether the limitations period was tolled by the pendency of a putative class action. The trial court granted summary adjudication in favor of BPMC on both of these issues.
We conclude the First Student decision is properly given retroactive effect so as to subject BPMC to liability for its ICRAA violations. But we also conclude that the policy considerations underlying the class action tolling doctrine do not support its application in Bernuy's case and that therefore his ICRAA claim is time-barred. Thus, while we hold the trial court erred in refusing retroactive application of the First Student decision, we will affirm the court's judgment in favor of BPMC on statute of limitations grounds.
The following undisputed facts are taken largely from the trial court's order on the parties’ cross-motions for summary adjudication.
BPMC manages and operates an affordable housing complex in Chino known as Ivy II at College Park Apartments (Ivy II). On May 24, 2017, BPMC received Bernuy's " ‘Application for Residency’ " for a unit in Ivy II. As part of the application process, Bernuy signed a " ‘Release of Information’ " form, and at some point by August 29, 2017, BPMC used the release form to obtain " ‘investigative consumer reports’ " about Bernuy from a company called National Tenant Network (NTN). BPMC obtained at least five investigative consumer reports about Bernuy without complying with ICRAA's legal requirements. These reports included: (1) a County Criminal Search report, dated August 9, 2017; (2) a multistate Criminal Search report, dated August 29, 2017; (3) an Office of Foreign Asset Control Terrorist Search report, dated August 9, 2017; (4) a Tenant Performance Profile report, dated August 9, 2017; and (5) a Decision Point Plus report, dated August 9, 2017.
On May 22, 2019, other Ivy II applicants who are not parties to this litigation filed a federal class action lawsuit called Limson v. Bridge Property Management Company (N.D.Cal. 2019) 416 F.Supp.3d 972 ( Limson ). As relevant here, the Limson class action complaint alleged that BPMC violated ICRAA for the same reasons alleged in the instant lawsuit. On December 9, 2019, the Limson plaintiffs voluntarily dismissed their ICRAA claims, apparently because they were unable to meet the $5 million amount-in-controversy requirement for class actions in federal court.2
Meanwhile, on September 16, 2019, Bernuy filed this action against BPMC alleging causes of action for violation of ICRAA, unfair business practices, declaratory relief, and invasion of privacy. Bernuy's complaint seeks "general and special damages in an amount to be determined by a jury for each violation" of his rights, as well as statutory damages, under ICRAA.
BPMC applied for trial court designation of Bernuy's case as complex, seeking to relate the action to 27 other lawsuits filed against BPMC for alleged ICRAA violations. The trial court granted a complex designation and consolidated Bernuy's case with the others for pretrial purposes.3 Thereafter Bernuy's action was selected as the "bellwether case" for a hearing on cross-motions for summary adjudication addressing a range of issues common to the plaintiffs in the consolidated cases.
As relevant here, the trial court ultimately issued a decision concluding BPMC could not be held liable for ICRAA violations committed before the California Supreme Court upheld ICRAA's constitutional validity in First Student , supra , 5 Cal.5th 1026, 236 Cal.Rptr.3d 826, 423 P.3d 953. In the trial court's view, BPMC had "reasonably relied" on a pair of 2007 Court of Appeal decisions that had invalidated ICRAA as unconstitutionally vague. The court also determined that Bernuy's ICRAA claim was filed after the applicable statute of limitations period had run and that the Limson class action did not toll the limitations period in his case.
Pursuant to the parties’ stipulation, the trial court severed Bernuy's action from the consolidated cases and dismissed all causes of action with prejudice so that Bernuy could seek expedited appellate review of the court's summary adjudication order on the retroactivity and statute of limitations issues. The court stayed all the consolidated cases pending the appellate decision in this case. This appeal followed.
In enacting ICRAA, the Legislature emphasized the need to ensure that "investigative consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." ( § 1786, subd. (b).) As relevant here, ICRAA includes the following liability provision to encourage compliance with its terms: "(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." (§ 1786.50, subd. (a)(1).)
This case presents two questions. First, did the trial court erroneously rule that the 2018 decision in First Student should not be given retroactive effect? Second, did the court err in holding that the Limson class action did not toll the applicable limitations period? We address these issues in order.
The material facts are undisputed. In 2007, a division of the Fourth District Court of Appeal ruled that ICRAA was unconstitutionally vague in Ortiz v. Lyon Management Group, Inc. (2007) 157 Cal.App.4th 604, 69 Cal.Rptr.3d 66 ( Ortiz ), a case that involved tenant screening reports. Specifically, the appellate court held that ICRAA failed to provide adequate notice as to its application because persons of reasonable intelligence could not readily determine whether the unlawful detainer information implicated in tenant screening reports was " ‘character’ " information subject to ICRAA or " ‘creditworthiness’ " information governed by the Consumer Credit Reporting Agencies Act (CCRAA; § 1785.1 et seq.). ( Ortiz , at p. 611, 69 Cal.Rptr.3d 66.) On the same day, the same division issued another opinion reiterating and applying Ortiz ’s ICRAA analysis in a companion case called Trujillo v. First American Registry, Inc. (2007) 157 Cal.App.4th 628, 68 Cal.Rptr.3d 732 ( Trujillo ). (See Trujillo , at p. 640, 68 Cal.Rptr.3d 732.) The California Supreme Court denied petitions for review and requests for depublication of these companion cases. (Ortiz (Rae F. ) v. Lyon Management Group, Inc. (Mar. 12, 2008, No. S159802) [2008 Cal. Lexis 3069] *1; Trujillo (Robert ) v. First American Registry, Inc. (Mar. 12, 2008, No. S159821) [2008 Cal. Lexis 2940] *1.)
A few years later, current and former bus drivers filed a class action lawsuit alleging the defendant conducted employee background checks on them in 2010 that violated ICRAA. (See First Student , supra , 5 Cal.5th at pp. 1030, 1031, 236 Cal.Rptr.3d 826, 423 P.3d 953.) In 2015, a division of the Second District Court of Appeal issued a published opinion in Connor v. First Student, Inc. ( Connor ),4 concluding that, "although ICRAA and CCRAA might overlap to some degree, there is no ‘positive repugnancy’ between them that would render ICRAA unconstitutional." ( First Student , at p. 1032, 236 Cal.Rptr.3d 826, 423 P.3d 953, quoting the Court of Appeal's Connor opinion.) Thus, the appellate court held, agencies that provide reports " ‘can...
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