Sosa v. Cashcall, Inc.

• Citation: 262 Cal.Rptr.3d 552,49 Cal.App.5th 42
• Decision Date: 13 May 2020
• Docket Number: G056974
• Parties: Alexis Michele SOSA, Plaintiff and Appellant, v. CASHCALL, INC., et al., Defendants and Respondents.
• Court: California Court of Appeals

49 Cal.App.5th 42

262 Cal.Rptr.3d 552

Alexis Michele SOSA, Plaintiff and Appellant,

v.CASHCALL, INC., et al., Defendants and Respondents.

G056974

Court of Appeal, Fourth District, Division 3, California.

Filed May 13, 2020

OPINION

MOORE, J.

Potential lenders are generally prohibited from accessing a consumer's credit report without the consumer's consent. There is an exception for lenders who intend to make a "firm offer of credit to the consumer." ( Civ. Code, § 1785.11, subd. (b)(2).)¹ A "firm offer of credit" is a term of art; essentially it means the lender intends to make the loan if a consumer agrees to the proposed terms. If a consumer proves that a potential lender accessed his or her credit report without the requisite intent, then the consumer can recover civil penalties (up to $2,500) for each unauthorized access.

Defendants CashCall, Inc. and LoanMe, Inc. (collectively "the lenders"), accessed thousands of credit reports and mailed loan offers to the consumers. Plaintiff Alexis Michele Sosa was among those consumers. Sosa sued the lenders for accessing her credit report. During discovery, Sosa asked the lenders: of the consumers who were mailed offers, how many were actually given loans? The trial court found Sosa's interrogatory to be irrelevant and granted the lenders' motion for summary judgment.

We disagree. There is a triable issue of material fact: whether the lenders intended to honor the proposed loan terms if Sosa accepted the offers. Further, Sosa's interrogatory was relevant to the lenders' intent. Indeed, the trial court's rulings dealt a "one-two punch" to her lawsuit: the court first prohibited Sosa from obtaining relevant evidence; then the court dismissed her case, in part, for lack of relevant evidence. Thus, we reverse the court's granting of the lenders' motion for summary judgment.

IFACTS AND PROCEDURAL BACKGROUND

Through a marketing and solicitation vendor (Ralis), the lenders requested from a credit reporting agency (Experian), a broad list of anonymous consumers who met certain loan criteria. After the lenders screened the initial list, Experian sent the lenders a second, narrower list which included the consumers' names, addresses, partial social security numbers, and credit information. Through a print vendor, the lenders then mailed loan offers to the targeted consumers.

A typical offer stated: "You are Pre-Qualified for a Personal Loan of up to $10,600."² The offers included a toll-free number: "Say ‘YES’ Now[.]" The offers stated the proposed loan terms and conditions: "The APR ranges from 99.75% to 184.36%[.]" The offers included prescreen and opt-out notices: "This ‘prescreened’ offer of credit is based on information in your credit report indicating that you meet certain criteria. This offer is not guaranteed if you do not meet our criteria. If you do not want to receive prescreened offers of credit from this and other companies, call the consumer reporting agencies toll-free ...."

In April 2015, LoanMe obtained a list of 369,025 consumer credit reports from Experian, including Sosa's credit report. Within 30 days, LoanMe mailed Sosa a loan offer. LoanMe repeated this process in October 2015 (Sosa was among 250,000 consumers), and March 2016 (Sosa was among 519,848 consumers). In March 2017, CashCall obtained a list of 598,816 consumer credit reports from Experian, including Sosa's consumer credit report.

Court Proceedings

Sosa filed a lawsuit alleging the lenders had violated the California Consumer Reporting Agencies Act (CCRAA). (See § 1785.1 et seq.) Sosa brought the action on behalf of herself. Sosa requested "two civil penalties of $2,500 each for each occasion on which [the lenders] obtained data from [her] consumer's file or her consumer credit report without permission or an authorized purpose ...."

Later, Sosa filed a motion to compel responses to special interrogatories. One interrogatory asked the lenders: " ‘With respect to each firm offer of credit ... state what specific criteria was used to select [Sosa] for the offer ....’ " The court granted the motion in a written ruling because "there is an issue as to whether [the lenders] accessed [Sosa's] credit report for a permissible purpose ...." The second interrogatory asked the lenders how many of the consumers who were mailed offers were actually given loans. The court denied the motion in a written ruling because it "is beyond the scope of relevant discovery (overbroad) as it does not pertain to the issue of whether a ‘firm offer of credit’ was extended to [Sosa]."

The lenders filed a motion for summary judgment. The court found that "it is undisputed that [the lenders] mailed offers of credit to [Sosa] as a result of the soft inquir[ies] ... made on [Sosa's] credit.... Additionally, it is undisputed the offers of credit ‘contained a minimum loan amount, the range of potential interest rates, and an explanation of repayment terms.’ ... The only reference to a possible denial of credit included within the offers, referred specifically to circumstances where [Sosa] no long met the standards used to send out the offer."

The court ruled "the evidence offered to dispute the instant motion for summary judgment is speculative and insufficient to support a finding in favor of [Sosa]. Consequently, the motion is granted." (Boldfacing and capitalization omitted.)

IIDISCUSSION

Sosa argues the trial court erred in granting the lenders' motion for summary judgment, in part, based on its discovery ruling. We agree.

A. Standards of Review

Summary judgment "provide[s] courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute." ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844, 107 Cal.Rptr.2d 841, 24 P.3d 493 ( Aguilar ).) The trial court properly grants the motion if all the papers submitted establish there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. ( Id. at p. 843, 107 Cal.Rptr.2d 841, 24 P.3d 493 ; Code Civ. Proc., § 437c, subd. (b).)

The moving party bears the initial burden to make a prima facie showing that no triable issue of material fact exists. ( Aguilar, supra , 25 Cal.4th at p. 843, 107 Cal.Rptr.2d 841, 24 P.3d 493.) If this burden is met, the party opposing the motion bears the burden of showing the existence of disputed facts. ( Ibid. ) Courts " ‘construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it. ’ " ( Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202, 119 Cal.Rptr.2d 160, italics added.)

In a motion for summary judgment "the court shall consider all of the evidence set forth in the papers ... and all inferences reasonably deducible from the evidence, ... that raise a triable issue as to any material fact." ( Code Civ. Proc., § 437c, subd. (c).) A motion for summary judgment ruling is reviewed de novo. ( Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68, 99 Cal.Rptr.2d 316, 5 P.3d 874.)

A proponent of discovery must explain how the evidence sought is relevant to a disputed material fact. ( Code Civ. Proc., § 2031.310, subd. (b)(1).) We review a court's ruling on a motion to compel discovery for an abuse of discretion. ( 2,022 Ranch v. Superior Court (2003) 113 Cal.App.4th 1377, 1387, 7 Cal.Rptr.3d 197.) An abuse of discretion "arises if the trial court based its decision on impermissible factors [citation] or on an incorrect legal standard [citations]." ( People v. Knoller (2007) 41 Cal.4th 139, 156, 59 Cal.Rptr.3d 157, 158 P.3d 731.)

B. Legal Principles Regarding Access to Consumer Credit Reports

Generally, credit reporting agencies are prohibited from disclosing confidential consumer credit information. ( § 1785.11, subd. (a).) "In addition to any other remedy provided by law, a consumer may bring an action for a civil penalty, not to exceed two thousand five hundred dollars ($2,500), against" a party who illegally obtains access and/or acquires data from a consumer's credit report. (§ 1785.19, subd. (a)(1) & (2).) "If a plaintiff prevails in an action under subdivision (a) he or she shall be awarded the civil penalty, costs, and reasonable attorney fees." (§ 1785.19, subd. (b).)³

Without a consumer's consent, a potential lender may only access or obtain data from a consumer credit report when the expected credit transaction "involves a firm offer of credit to the consumer." ( § 1785.11, subd. (b).) A "firm offer of credit" is statutorily defined as "any offer of credit to a consumer that will be honored if, based on information in a consumer credit report on the consumer and other information bearing on the creditworthiness of the consumer, the consumer is determined to meet the criteria used to select the consumer for the offer." (§ 1785.3, subd. (h).)

"To determine whether the offer of credit comports with the statutory definition, a court must consider the entire offer and the effect of all the material conditions that comprise the credit product in question. If, after examining the entire context, the court determines that the ‘offer’ was a guise for solicitation rather than a legitimate credit product, the communication cannot be considered a firm offer of credit." ( Cole v. U.S. Capital Inc. (7th Cir. 2004) 389 F.3d 719, 727-728 ( Cole ).)⁴ "To decide whether [a lender] has adhered to the statute, a court need only determine whether the four corners of the offer satisfy the statutory definition (as elaborated in Cole ), and whether the terms are honored when consumers accept. " ( Murray v. GMAC Mortg. Corp. (7th Cir. 2006) 434 F.3d 948, 956 ( Murray ), italics added.)

C. Analysis

If we were to confine our review to the "four corners" of the lenders' offers, we would conclude that offers met the definition of a "firm offer of credit." As the trial court...