Metropolitan News-Enterprise


Thursday, May 14, 2020


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Judge’s Disallowance of Single Interrogatory Results in Reversal of Summary Judgment

Court of Appeal’s Majority Finds Triable Issue As to Whether Lenders That Accessed Consumer Reports Were Making ‘Firm Offer of Credit’


By a MetNews Staff Writer


Div. Three of the Fourth District Court of Appeal, in a 2-1 decision, yesterday reversed a summary judgment in favor of two lenders that were sued by a consumer over accessing her credit reports without her consent, holding that the trial judge erred in denying a motion to compel a response to an interrogatory which might have given the plaintiff the evidence she needed to prevail.

At issue was whether the conduct of accessing credit reports and sending out solicitations to those with good credit was authorized by Civil Code §1785.11(b)(2) which permits such access where a lender intends to make a “firm offer of credit to the consumer.” The defendants—CashCall, Inc. and LoanMe, Inc.—insisted that in sending a solicitation to the plaintiff, they did intend to deposit funds in her account if she accepted the offer.

In the absence of such an intent, a consumer whose records have been examined can recover civil penalties up to $2,500 for each privacy breach.

The interrogatory which Orange Superior Court Judge Walter P. Schwarm said the defendants did not need to answer asked “how many of the consumers were actually given loans” among those who were sent solicitations.

The majority opinion was authored by Justice Eileen C. Moore and joined in by Acting Presiding Justice William W. Bedsworth. Justice Richard M. Aronson dissented.

Moore’s Opinion

Moore wrote:

“We think this interrogatory was highly relevant to the lenders’ intent. That is, the answer would have provided circumstantial evidence relevant to the issue of whether the lenders intended to honor the proposed loan terms if consumers such as Sosa accepted the mailed offers.”

She commented:

“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.”

Aronson’s Dissent

In his dissent, Aronson insisted that Schwarm “did not err in concluding the interrogatory was overbroad and irrelevant because a response would not show the lenders did not make a bona fide offer of credit to Sosa.”

He maintained:

“The lenders expressly guaranteed they would honor the credit offers if Sosa continued to meet the prescreening qualifications. The mailed offers stated the loan amount “will be electronically deposited’ upon approval verification.”

Initial Burden

The jurist said that “based solely on the mailed offers, the lenders met their initial burden to show they would have honored the offer if Sosa had accepted and remained qualified” and that the burden then shifted to Sosa to show the existence of a disputed fact. She failed to meet that burden, he opined, declaring:

“There simply is no basis to conclude there is a triable issue on whether the lenders would have honored their mailed offer when Sosa presented no evidence she or anyone else accepted the offer but were rejected by the lenders.”

The case is Sousa v. CashCall, Inc., 2020 S.O.S. 2326.


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