In Lee v. K.B.R., Inc., No. A159980, 2021 Cal. App. Unpub. LEXIS 8047, at *15-17 (Dec. 22, 2021), the Court of Appeal found that the CLRA did not cover post-origination account servicing, such as credit reporting.
As to her CLRA claim, Lee argues that the trial court erred in concluding that the statute did not apply to KBR. The CLRA provides a non-exclusive statutory remedy for “unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer.” (§ 1770, subd. (a); Gallin v. Superior Court (1991) 230 Cal.App.3d 541, 545-546, 281 Cal. Rptr. 304.) It defines “[t]ransaction” as “an agreement between a consumer and another person” (§ 1761, subd. (e)); “[g]oods” as “tangible chattels bought or leased for use primarily for personal, family, or household purposes” (id., subd. (a)); and “[s]ervices” as “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods” (id., subd. (b)). Lee does not contend that KBR directly transacted with her, or that KBR provided her with a “good” or “service” as defined by the CLRA. Instead, without any supporting authority, she claims that KBR is subject to the CLRA because she (Lee) transacted with the East Bay Municipal Utility [*16] District (EBMUD) for a service, incurred a debt to EBMUD, and KBR subsequently acted “in furtherance of that transaction in attempting to collect on it” as either a “successor owner” or “agent” of EBMUD. As a preliminary matter, the argument is not supported by the allegations in Lee’s complaint: it does not allege that KBR was engaged in any debt collection activities or efforts but instead alleges KBR furnished inaccurate or incomplete information to third-party credit reporting agencies. Moreover, we are not persuaded that such actions fall within the scope of the CLRA. While we agree that the CLRA must be “liberally construed and applied” to protect against unfair and deceptive practices, the plain language of the statute explicitly limits its purview to actions undertaken “in a transaction intended to result or that results in the sale or lease of goods or services to any consumer.” (§§ 1760, 1770, subd. (a).) Courts have rejected similar attempts to seek CLRA coverage by relying on actions that are ancillary to the “goods” or “services” provided in a particular transaction. In Fairbanks v. Superior Court (2009) 46 Cal.4th 56, 92 Cal. Rptr. 3d 279, 205 P.3d 201, for example, the plaintiffs argued that life insurance policies were not “services” as defined by the CLRA, but that services related to those policies—including the use of agents or employees to assist customers or process claims—fell within the reach of the statute. (Fairbanks, at p. 65.) The California Supreme Court disagreed, concluding that virtually all intangible goods were connected to ancillary services and that such services could not be used to bring the life insurance policies within the scope of the CLRA. (Fairbanks, at p. 65.) In Alborzian v. JPMorgan Chase Bank, N.A. (2015) 235 Cal.App.4th 29, 185 Cal. Rptr. 3d 84, the plaintiffs asserted a CLRA claim based on the defendants’ collection letters and calls after plaintiffs had defaulted on their mortgage loan. (Alborzian, at pp. 33-34.) The appellate court concluded that such ancillary services did not convert mortgage loans into “goods” or “services” under the CLRA. (Alborzian, at p. 40.) The same reasoning applies here with even greater force: KBR’s credit reporting to third-party agencies is far removed from the transaction between EBMUD and Lee that resulted in EBMUD’s provision of utility services and accordingly does not fall within the specific proscriptions of the CLRA. In sum, we conclude that the trial court did not err in sustaining the demurrer on the CCRAA and CLRA causes of action.