In Oya v. Wells Fargo Bank, 2018 WL 5761486 (S.D.Cal. 2018), Judge Huff imposed a increased standard under the CCRAA than mere inaccuracy, and dismissed the Plaintiff’s credit reporting case. The facts were as follows.

On June 15, 2018, Plaintiff Aki T. Oya filed for bankruptcy protection. (Id. ¶ 36.) Plaintiffs allege that Wells Fargo and Select had notice of Plaintiffs’ bankruptcy case. (Id. ¶ 44.) In addition, Plaintiffs allege that it was the custom and practice of Magnum and Strategic to confirm any bankruptcy stays before any foreclosure sales, and that Magnum and Strategic confirmed that Plaintiffs’ residence was subject to a bankruptcy case that prohibited a foreclosure sale. (Id. ¶¶ 52–53.) Wells Fargo and Select held the foreclosure sale on June 18, 2018. (Id. ¶ 47.) Magnum was the highest bidder for the property and purchased it, through Strategic, for $931,300. (Id. ¶ 49.) According to Plaintiffs, on June 19, 2018, Select represented to Plaintiffs that the foreclosure sale was postponed. (Id. ¶ 43.) In addition Plaintiffs allege that, on June 21, 2018, they received an email explaining that the sale of the property was rescinded and the funds were returned to the purchaser. (Id. ¶ 61.) On June 26, 2018, Magnum and Strategic filed a motion to retroactively annul the stay with the bankruptcy court. (Id. ¶ 64.) On August 15, 2018, the bankruptcy court granted the motion and validated the foreclosure sale. (Id. ¶ 70.)Also on August 15, 2018, Wells Fargo and Select sent Plaintiffs billing statements for past due mortgage statements. (Id. ¶ 86.) Plaintiffs allege that after the foreclosure sale on June 18, 2018, Wells Fargo and Select falsely reported to credit reporting agencies that Plaintiffs had $763,986 of outstanding debt and $96,740 past due. (Id. ¶¶ 83–84.)

Judge Huff found that the FCRA did not pre-empt the CCRAA’s section 1785.25(a), but the Plaintiff had not met the pleading standards of the CCRAA.

Plaintiffs also allege that after the property was sold, they received an email explaining that the sale of the property was rescinded and the funds returned to the purchaser. (Id. ¶ 61.) Plaintiffs allege further that, on June 26, 2018, Magnum and Strategic filed a motion to retroactively annul the stay, demonstrating that the foreclosure sale was not complete on June 18, 2018. (Id. ¶ 64.) Not until August 15, 2018, after the alleged violation of Cal. Civ. Code 1785.2(a), did the bankruptcy court grant the motion validating the foreclosure sale. (Id. ¶ 70.) On the one hand, Plaintiffs allege that the foreclosure sale established that they had no outstanding debt or past due payments. On the other hand, they allege that the foreclosure sale was rescinded and not validated by the bankruptcy court until after the alleged July 10, 2018 reports to credits agencies. Reviewing the complaint, Plaintiffs have not alleged that Wells Fargo and Select knew that the foreclosure sale resolved Plaintiffs’ debts. Thus, Plaintiffs have failed to allege that Wells Fargo and Select knowingly furnished inaccurate information to any consumer credit reporting agency. As a result, the Court dismisses Plaintiffs’ claim for violation of Cal. Civ. Code § 1785.25(a) with leave to amend.