Rojas v. HSBC Card Servs. Inc.

• Docket Number: D077931, D078511
• Decision Date: 20 July 2023
• Citation: 93 Cal.App.5th 860,311 Cal.Rptr.3d 393
• Parties: Dalia ROJAS, Plaintiff and Appellant, v. HSBC CARD SERVICES INC., et al., Defendants and Appellants. Dalia Rojas, Plaintiff and Appellant, v. HSBC Card Services Inc., et al., Defendants and Respondents.
• Court: California Court of Appeals

93 Cal.App.5th 860

311 Cal.Rptr.3d 393

Dalia ROJAS, Plaintiff and Appellant,

v.HSBC CARD SERVICES INC., et al., Defendants and Appellants.

Dalia Rojas, Plaintiff and Appellant,

v.HSBC Card Services Inc., et al., Defendants and Respondents.

D077931, D078511

Court of Appeal, Fourth District, Division 1, California.

Filed July 20, 2023

Law Offices of Deborah L. Raymond and Deborah L. Raymond, Del Mar, for Plaintiff and Appellant.

Stroock & Stroock & Lavan, Julia B. Strickland, John R. Loftus, David W. Moon and Christine E. Ellice, Los Angeles, for Defendants, Cross-appellants and Respondents.

IRION, J.

This is the second round of appeals arising from Dalia Rojas's lawsuit against HSBC Card Services, Inc.(HSBC Card Services) and HSBC Technology & Services (USA) Inc. (HSBC Tech Services; together, HSBC) for violations of the California Invasion of Privacy Act(Privacy Act;Pen. Code, § 630, et seq. )¹ Rojas received hundreds of personal calls from her daughter Alejandra, an employee at an HSBC call center, which were recorded by HSBC's full-time recording system.Rojas alleges HSBC intentionally recorded confidential calls without her consent, in violation of section 632, subdivision (a).She also alleges HSBC intentionally recorded calls to her cellular and cordless phones without her consent, in violation of section 632.7, subdivision (a).

The trial court granted summary judgment to HSBC, and Rojas appealed.( Rojas v. HSBC Card Services Inc.(2018)20 Cal.App.5th 427, 431, 228 Cal.Rptr.3d 640( Rojas I ).)We reversed, concluding HSBC had not met its initial burden to show there was no triable issue of material fact on intent.( Id. , at pp. 429, 432, 228 Cal.Rptr.3d 640.)

On remand, HSBC made a Code of Civil Procedure section 998 offer, which Rojas did not accept.The case proceeded to a bench trial, where HSBC relied, in part, on workplace policies that purportedly barred call center agents from making personal calls at their desks to show it did not intend to record the calls.HSBC also presented evidence that Rojas received recording disclosures in connection with her HSBC credit card, through the cardmember agreement and her monthly payment calls to HSBC.Rojas elicited testimony that HSBC managers knew personal calls were being made by call center agents, including by Alejandra, and denied she consented to recording.The trial court entered judgment for HSBC.Pertinent here, the court found Rojas did not prove HSBC's intent to record.The court also found Rojas impliedly consented to being recorded, and did not prove lack of consent.HSBC sought costs, including pursuant to its section 998 offer, which Rojas moved to strike or tax.The court ruled the section 998 offer was valid and denied Rojas's motion.

Rojas appeals from the judgment, contending the trial court made several errors in determining she did not prove her Privacy Act claims and that the evidence did not support its findings.Rojas also appeals from the denial of her motion to strike or tax costs, arguing the section 998 offer was invalid and the court erred in awarding HSBC expert costs, failing to consider her limited resources in awarding those costs, and awarding costs for unused trial exhibits.²

We conclude the trial court applied correct legal standards in assessing lack of consent and substantial evidence supports its finding that Rojas impliedly consented to being recorded.We are compelled to affirm the judgment under these circumstances.Although we determine the record does not support the court's finding that HSBC did not intend to record the calls between Rojas and her daughter, that determination does not require reversal.What it underscores, however, is that a business's full-time recording of calls without adequate notice creates conditions ripe for potential liability under the Privacy Act, and workplace policies prohibiting personal calls may not mitigate that risk.On the costs order, we conclude the court properly determined the section 998 offer was valid, and did not abuse its discretion in awarding costs.The judgment and postjudgment order are affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

I.Underlying Events³

A. HSBC's Salinas Facility

During the relevant time period (March 2009 to May 2012), HSBC's business included issuing credit cards.HSBC Tech Services provided telephone recording services to HSBC Card Services.

Rojas's daughter, Alejandra, worked at the HSBC Card Services call center in Salinas, California ("the Salinas facility").At this facility, all calls to and from call center agent's desk phones (i.e., customer-facing phones) were recorded.There was no way for agents to disable recording on their desk telephones.There was an automated disclosure for inbound calls, which stated "This call is being recorded for quality purposes," but no automatic outbound recording disclosure.

James Ivey had managerial responsibilities for the fraud and disputes departments in the Salinas facility.He oversaw department managers, who oversaw unit managers, who supervised the agents.Alma Escamilla was a unit manager, and then department manager in dispute processing.Leticia Ramirez was a senior unit manager in dispute processing, and then a quality manager.

B. HSBC Workplace Policies Applicable To The Salinas Facility

The Salinas facility was subject to two sets of written policies: "Inside HR," and "Scout."Inside HR housed HSBC's global, companywide human resources policies.These included an "Electronic Monitoring and Device Use" policy, which stated HBSC "periodically monitors and/or records certain employee telephone conversations."The policy also stated employees "may use" telephones "for occasional non-work purposes," and explained, "[P]ersonal calls may be recorded, but should never be monitored; if you identify a personal call in the course of monitoring an employee, the monitoring should be discontinued immediately."

Scout was a "database of policies and procedures for all operational units," and had "more relevant information ... specific to ... operational areas ... within the call centers."These policies included a "Call Avoidance" policy, which barred employees from making outbound calls to avoid taking inbound ones; a "Recording Disclosure to Third Parties" policy, which applied when a non-cardmember was on the line; and a "Call Cardmember Procedure," for calls to resolve disputes, which said to "[u]se the following suggested dialogue ... [¶][T]his call may be recorded and monitored for quality assurance purposes" and required a recording disclosure to third parties.

As we discuss post , HSBC also had a practice of sending a cardmember agreement to all cardholders, which contained a recording disclosure.

C. HSBC Records Calls To Rojas

HSBC recorded over 300 calls from Alejandra to Rojas.⁴Some calls were made to Rojas's cell phone; others were made to her home telephone line, which had both corded and cordless handsets; and still others were to her work telephone at J.C. Penney.

II.Litigation

A.Lawsuit, Summary Judgment, And First Appeal

Rojas sued HSBC for Privacy Act violations in 2014.In her operative first amended complaint, she alleged HSBC "willfully employ[ed] ... recording ... equipment" to record her communications "without [her] knowledge or consent ...."She asserted one cause of action under section 632(which covers "confidential communication[s]"), and a second cause of action under section 632.7(which applies to cellular or cordless phones, and does not require confidentiality).( § 632, subds. (a), (c);§ 632.7, subd. (a).)⁵

HSBC moved for summary judgment in 2016.The trial court granted summary judgment, Rojas appealed, and we reversed.( Rojas I, supra , 20 Cal.App.5th at p. 431, 228 Cal.Rptr.3d 640.)We discuss Rojas I in addressing intent, post.Here, it suffices to say we held HSBC did not establish as a matter of law that it lacked the intent to record, and that a reasonable trier of fact could find it did have such an intent.( Id. at p. 435, 228 Cal.Rptr.3d 640.)The remittitur issued in 2019.

B.Trial

The case proceeded to an eight-day bench trial in 2020.One hundred and nine call recordings were played at trial, and several witnesses testified.⁶

Richard Marcy, HSBC Tech Services’ head of telecommunications for the United States and Latin America, confirmed the Salinas facility used an automatic recording disclosure on inbound calls, and testified they used employee disclosures for outbound calls.He acknowledged they were able to include an automatic disclosure or beep on outbound calls, but HSBC Card Services decided not to do so.HSBC expert witness Darlene Geller-Stoff testified this was consistent with best practices, and explained that "launching the call with an automated message very, very significantly decreases the chance that the call will be answered ...."

Peter Garcia, Jr., a senior branch manager who had worked at call centers including the Salinas facility, testified HSBC trained call center agents to make recording disclosures on all outbound calls.Ivey, who led fraud and disputes at the Salinas facility, explained call disclosures were a "critical" training item, and "one of the things that [they] paid the most attention to."He acknowledged it was a "risk" the "agent won't make the proper disclosure to a merchant ...."Marcy similarly testified outbound calls were a concern, "because they knew that not all agents were doing [the disclosure], and there was a risk."All three witnesses indicated agent calls were monitored to ensure compliance.Ivey and Garcia further testified failure to provide an outbound recording disclosure was grounds for employee discipline.

Ivey and Garcia, as well as Salinas department manager Escamilla, also testified HSBC policy barred call center agents from making personal calls from their desks and agents would be disciplined or subject to corrective action for this conduct.⁷

Rojas and Alejandra also testified at trial.Rojas lived with...