Cisneros v. U.D. Registry, Inc.
| Citation | 39 Cal.App.4th 548,46 Cal.Rptr.2d 233 |
| Decision Date | 19 October 1995 |
| Docket Number | No. BO55499,BO55499 |
| Court | California Court of Appeals |
| Parties | , 95 Cal. Daily Op. Serv. 8240, 95 Daily Journal D.A.R. 14,180 Ruth CISNEROS et al., Plaintiffs and Appellants, v. The U.D. REGISTRY, INC., et al., Defendants and Appellants. |
San Fernando Valley Neighborhood Legal Services, Inc., David Pallack, Pacoima, Western Center on Law and Poverty, Richard A. Rothschild, Los Angeles, Legal Aid Foundation of Los Angeles, Paul E. Lee, Yorba Linda, Roderick T. Field, Los Angeles, and Doug Brown, North Hollywood, for Plaintiffs and Appellants.
Earl Lui, San Francisco, for Amicus Curiae on behalf of Plaintiffs and Appellants.
Sumner B. Cotton, Harvey Saltz, Horvitz & Levy, Barry R. Levy and Lisa Perrochet, Encino, for Defendants and Appellants.
This case involves a suit brought by nine low income renters against defendants the U.D. Registry, Inc. ("UDR") and its president Harvey Saltz for alleged violations of the state and federal statutes that govern the activities of consumer credit reporting and investigative agencies. Both sides appeal from a judgment granting relief to plaintiffs Ruth Cisneros and Rudine Pettus on their claim for failure to respond to a dispute request, but in favor of defendants in all other respects. We affirm in part, reverse in part, and remand for retrial on certain issues we shall specify.
Defendant UDR gathers information regarding residential renters and sells that information to its subscribers, mainly landlords and their agents. The information comes Although what UDR does is similar to the task of a conventional credit agency, there are significant differences. A credit agency's data typically comes from credit and loan documents which contain ample information to identify the person involved, such as social security number, driver's license number, previous addresses, and spouse's name. UDR relies primarily on court files which contain little identifying information, usually just a name and possibly an address. When a subscriber calls UDR to obtain a report on a prospective tenant, the operator brings up all the information contained in the computer under that name. In many instances, the information available to the operator is not sufficient to determine whether or not the prospective tenant about whom the inquiry is being made is tied to the information appearing on the screen. At the time the lawsuit was filed, the practice of UDR was that if the operator did not have sufficient information from which to determine a definite match, the operator told the subscriber what there was under the name, and suggested that the subscriber make further inquiries to determine if it was the same person. This kind of match was known as a "possible." When a tenant requested disclosure of his or her file, UDR disclosed only the information definitely matched to the person making the request, not the information "possibly" related. UDR instructed its subscribers not to tell tenants or prospective tenants what UDR had reported.
from public records of unlawful detainers, forcible detainers, property damage cases, foreclosures, bankruptcies, and the like. UDR also solicits information from its subscribers, providing forms on which they are requested to describe each tenant, his or her treatment of the premises, and other behavior relevant to the tenancy. This information is then passed on to other subscribers screening applicants to fill a vacancy.
A statute in effect at the time the lawsuit was brought prohibited the reporting of unlawful detainer actions where the person against whom the action was filed was "adjudged the prevailing party." ( [Former] Civ.Code, § 1785.13, subd. (a)(4) (Stats.1982, ch. 1127, § 4; see U.D. Registry, Inc. v. State of California (1995) 34 Cal.App.4th 107, 40 Cal.Rptr.2d 228.) In accordance with its interpretation of this statute, UDR reported all unlawful detainer actions resolved in any way other than by adjudication after trial or summary judgment for the defendant, including, in at least some instances, actions resolved by demurrer, dismissal for failure to prosecute, and settlement. These reports were noted, "not adjudicated as the prevailing party."
The factual circumstances underlying each plaintiffs' claims were separate and distinct, and we shall discuss them in detail in the portion of the opinion to which they pertain. In general, plaintiffs alleged that UDR violated the federal Fair Credit Reporting Act [15 U.S.C. §§ 1681-1681t] ("FCRA"), the California Consumer Credit Reporting Agencies Act [Civ.Code, § 1785.1 et seq.] ("CCRAA"), and the Investigative Consumer Reporting Agencies Act [Civ.Code, § 1786 et seq.] ("ICRA") by: failing to maintain a public office where in-person disclosures of consumer files could be made, refusing to respond to requests for disclosure, failing to disclose all information in a consumer's file, reporting unlawful detainer cases in which the tenant was the prevailing party, failing to follow reasonable procedures to assure maximum possible accuracy of consumer records, failing to follow verification procedures for investigative reports, failing to respond or reinvestigate when disputes concerning the accuracy of information contained in consumer files were brought to its attention or demanding improper concessions from the consumer prior to reinvestigating, and failing to notify consumers of certain rights. Plaintiffs sought damages and injunctive relief. In addition, plaintiffs sought injunctive relief for violation of the Unfair Business Practices Act [Bus. & Prof.Code, § 17200 et seq.], and damages for negligent and intentional infliction of emotional distress. A demurrer was sustained without leave to amend to the Unfair Business Practices Act and negligent infliction of emotional distress claims.
The case was tried to the court, both sides having waived the right to jury trial. After The trial court ultimately found for defendants on all but two of the remaining claims. It granted judgment in favor of plaintiff Ruth Cisneros based on UDR's failure to formally respond to a consumer dispute letter as required by section 1785.16 of CCRAA. The court awarded her $250 for "pain and suffering." The court found for plaintiff Rudine Pettus on the same ground as Ms. Cisneros. It ruled that UDR should have responded to her letter outlining reasons why she should be deemed the prevailing party in the three unlawful detainers in which she was involved, even if it believed the dispute to be frivolous. The court awarded her $100 for "pain and suffering."
plaintiffs' case was complete, defendants brought a motion for [39 Cal.App.4th 558] judgment pursuant to section 631.8 of the Code of Civil Procedure. The court granted the motion as to the cause of action for intentional infliction of emotional distress in its entirety, and as to certain other individual claims.
Defendant Saltz was found jointly liable with UDR for the damages awarded because he personally made the decision not to respond to Ms. Cisneros and Ms. Pettus.
Both sides sought attorney's fees. Based on the split decision, the court awarded $40,000 to defendants and $12,500 to plaintiffs for a net award of $27,500 to defendants.
Plaintiffs' appeal raises seven separate issues. First, they challenge the sustaining of the demurrer to their unfair business practices claim. Second, plaintiffs argue the trial court erred in ruling that UDR was not required to maintain a public office. Third, plaintiffs contend that a report in which plaintiff June Halsell was described as having damaged a rental property was an investigative consumer report, and even if it was not, UDR's failure to assure the accuracy of what was told by Ms. Halsell's former landlord about her treatment of the premises, or to reinvestigate a dispute raised by Ms. Halsell concerning the accuracy of the report, violated CCRAA and FCRA. Fourth, plaintiffs maintain that FCRA and CCRAA require UDR to disclose tenant files when asked to do so by the tenant's attorney. Fifth, plaintiffs assert that injunctive relief should have been granted to prohibit UDR from reporting "possibles" and to require it to disclose to tenants when a "possible" match had been found or discussed. Sixth, Quida Johnson appeals the judgment for UDR on her claim of failing to ensure maximum possible accuracy and refusal to correct inaccurate records. Seventh, the plaintiffs attack the award of attorney's fees to UDR. Plaintiffs are supported in their appeal of the public office, attorney's fees, and the unfair business practices issues by amicus Consumers Union.
UDR and defendant Saltz cross-appeal, contending that UDR did not violate section 1785.16 of CCRAA when it disregarded the Cisneros and Pettus dispute letters, that those two plaintiffs should not have been awarded damages for "emotional distress" since it was not severe, that judgment was improperly rendered against defendant Saltz as an individual, and that plaintiffs should have been forced to elect between the federal and state statutory schemes. UDR also seeks a determination that it is not covered by FCRA.
Because of its pertinence to other issues, we address the last issue first--whether UDR is covered by FCRA. Some background about this statute is helpful to understanding the issues it presents in the context of this case. FCRA was enacted in 1969 because Congress found a "need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." (15 U.S.C. § 1681(a)(4).) Its stated purpose was "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information...
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