Motion for Summary Judgment
LINE # CASE # CASE TITLE RULING LINE 1 16CV300096 Velocity Investments, LLC v. Canul See Line 1 for tentative ruling. LINE 2 18CV338986 Velocity Investments LLC v. Pascual See Line 2 for tentative ruling. LINE 3 21CV386630 Chavez v. United Security Bank (Class See Line 3 for tentative ruling. Action/PAGA) LINE 4 22CV397991 Marmolejo v. Significant Cleaning See Line 4 for tentative ruling. Services, LLC (Class Action) LINE 5 24CV441948 Hakimzada v. My Wireless NCC, Inc. See Line 5 for tentative ruling. (Class Action) LINE 6 24CV448348 Edward Lee vs Gilroy IM 2 LLC See Line 6 for tentative ruling. LINE 7 LINE 8 LINE 9 LINE 10 LINE 11 LINE 12 LINE 13
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Case Name: Velocity Investments LLC v. Pascual Case No.: 18CV338986
This is a certified class action under the California Fair Debt Buying Practices Act (the “Debt Buyers Act” or “CFDBPA”), Civil Code section 1788.50–1788.64. Liability has been established. Cross-complainant Eva Pascual now moves for summary judgment on the crosscomplaint, asking the Court to determine damages. Cross-Defendants Velocity Investments, LLC (“Velocity”) and Velocity Portfolio Group, Inc. (“VPGI”) (collectively, “Cross- Defendants”), oppose the motion.
As discussed below, the Court GRANTS Cross-Complainant Eva Pascual’s motion for summary judgment in part, as follows: (1) the Court awards Eva Pascual $1,000 in individual statutory damages under Civil Code section 1788.62(a); (2) the Court awards the class $500,000 in additional damages under Civil Code section 1788.62(b); (3) the Court reserves the request for service award for the motion for attorney’s fees and costs; and (4) the Court finds that Eva Pascual is entitled to reasonable attorney’s fees, in an amount to be determined following noticed motion.
I.
Background
Velocity is a debt buyer. On December 10, 2018, Velocity sued Pascual to collect a charged-off consumer debt. The complaint pleaded common counts. Velocity attached a Truth in Lending Act (“TILA”) disclosure statement and identified it as the document required by Civil Code section 1788.52(b).
Pascual incurred the underlying loan through the Prosper online platform. She signed a borrower registration agreement with WebBank on May 23, 2016. WebBank gave her a TILA disclosure statement the same day. That statement estimated an annual percentage rate of 23.51 percent. The loan issued on May 25, 2016, and a promissory note was executed on Pascual’s behalf. The note rate was 19.73 percent. The TILA disclosure predated the loan and recited a different rate. Velocity did not attach the borrower agreement or the promissory note to its complaint.
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Pascual answered and filed a class-action cross-complaint on February 19, 2019. Velocity dismissed its own complaint on August 14, 2019. Pascual added Velocity Portfolio Group, Inc. (“VPGI”). On June 15, 2022, the parties stipulated that VPGI is Velocity’s alter ego for all purposes in this action. The operative First Amended Cross-Complaint was filed November 4, 2021.
On August 31, 2022, the Court certified a class of 473 members. On November 7, 2022, the parties stipulated that each Cross-Defendant’s net worth exceeds $50,000,000. They further stipulated that neither would contest any class-damages determination on the basis of its financial resources.
Both sides previously moved for summary judgment. On November 7, 2023, the Court granted Velocity’s motion on standing grounds and entered judgment against Pascual. The Court of Appeal, Sixth Appellate District, reversed on May 12, 2025 (Nos. H051695 and H051696). The Supreme Court denied review on July 30, 2025. The remittitur issued from the Court of Appeal.
On October 23, 2025, this Court vacated the prior judgment, found standing under Chai v. Velocity Investments, LLC (2025) 108 Cal.App.5th 1030 (Chai), granted summary adjudication on the section 1788.58(b) violation, and ordered further briefing on remedies. This motion followed.
II.
Legal Standard
Summary judgment is proper when there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c(c).) A crosscomplainant carries its initial burden by proving each element of its cause of action. (Id. at § 437c(p)(1).) The burden then shifts to the cross-defendant to show a triable issue. (Ibid.)
A cross-complainant need not disprove affirmative defenses. (Oldcastle Precast, Inc. v. Lumbermens Mut. Cas. Co. (2009) 170 Cal.App.4th 554, 564–565.) A cross-defendant resisting the motion must produce evidence raising a triable issue on any defense it would bear the burden of proving at trial. (Ibid.)
III.
Discussion
Pascual seeks (1) the statutory maximum of $1,000 in individual statutory damages under Civil Code section 1788.62(a); (2) $1,000,000 in class “additional damages” under section 1788.62(b) (the statutory maximum of $500,000 for each Cross-Defendant); (3) a $5,000 service award; and (4) attorney’s fees and costs by later motion. Cross-Defendants oppose the motion, arguing that the violation was immaterial and the product of bona fide error, that the class cap is $500,000 (not $1,000,000), and that the appropriate award is nominal or zero.
A. Liability is Established
Liability is settled because the Court of Appeal directed summary adjudication for Pascual on her failure-to-attach claim. This Court entered that adjudication on October 23, 2025. The Civil Code section 1788.58(b) violation is the law of the case. Cross-Defendants concede the violation, and the only open questions concern remedies.
The undisputed facts establish each element. Velocity is a debt buyer, and Pascual incurred a consumer debt. The action was brought by a debt buyer on a consumer debt. Civil Code section 1788.58(b) required Velocity to attach a copy of the contract, or another document evidencing Pascual’s agreement to the debt, to its complaint. Velocity attached only the TILA disclosure statement. The TILA disclosure statement does not evidence Pascual’s agreement to the debt. It predated consummation of the loan and recited a different interest rate. Because the attachment requirement was not met, the violation is established.
B. Bona Fide Error Defense
Cross-Defendants contend the violation occurred as a result of a bona fide error. (Opposition, pp. 14–16; Reply, pp. 3–5.) Section 1788.62(e) bars civil liability where a violation was not intentional, resulted from a bona fide error, and occurred despite procedures reasonably adapted to avoid the error. The defense is not available here.
Cross-Defendants raised bona fide error in the trial court in 2023. They did not advance it on appeal. The Court of Appeal deemed Pascual’s summary judgment motion submitted on her brief and then directed summary adjudication for Pascual. Thus, the bona fide error defense was not preserved and it is foreclosed by waiver and by the law of the case.
The defense also fails on the merits. Civil Code section 1788.62(e) bars “civil liability under this section.” It is a defense to liability, not a factor in setting the amount of damages. Liability is established. The defense cannot now reduce the award.
The evidence does not support the defense in any event. The Sgro declaration describes general policies governing which documents Velocity must hold before suit. It identifies no procedure adapted to ensure that the correct document is attached to a complaint. It shows no procedure that was followed in this case. The declaration states that Velocity attached the TILA disclosure “for the purpose of complying with” Civil Code sections 1788.52(b) and 1788.58(b). The attachment was therefore intentional. A mistaken view of the statute’s requirements is a mistake of law. A mistake of law is not a bona fide error. (See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A. (2010) 559 U.S. 573, 604–605.) No triable issue is raised.
C. Materiality
Cross-Defendants contend the violation was not material. (Opposition, pp. 9–13; Reply, pp. 5–7.) A violation of section 1788.58(b) does not depend on materiality. The Debt Buyers Act imposes liability for noncompliance. No injury beyond noncompliance is required. (Chai, supra, 108 Cal.App.5th at p. 1040.) The least-sophisticated-debtor materiality standard governs alleged misrepresentations. It does not govern a failure to attach a required document. The immateriality contention does not defeat the motion or the claim.
D. Class Additional Damages
Pascual argues that all relevant factors support an award of a maximum statutory recovery. (Memorandum, pp. 16–17; Reply, pp. 7–8.) Cross-Defendants contend the pertinent factors weigh against awarding the maximum amount of statutory damages, and that the class may recover only nominal damages. (Opposition, pp. 16–20.)
Civil Code section 1788.62(b) authorizes additional class damages upon a finding of a pattern and practice of violations. The record establishes a pattern and practice. The same defective attachment appears in all 473 class complaints. Velocity filed 1,845 similar complaints in the companion Canul action. The Court finds a pattern and practice of violating section 1788.58(b).
Civil Code section 1788.62(b) caps class additional damages at the lesser of $500,000 or one percent of the net worth of the debt buyer. The net worth of each Cross-Defendant exceeds $50,000,000. The one-percent figure exceeds $500,000. The applicable cap is $500,000. The cap applies once to this action. VPGI is Velocity’s stipulated alter ego. Alter ego doctrine treats the two entities as one. An alter ego defendant has no separate primary liability. (Hennessey’s Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d 1351, 1358– 1359.) This action involves a single pattern and practice and a single set of class injuries. A party may not recover more than once for the same item of damage. (Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 702.) The cap does not double to $1,000,000 because a stipulated alter ego is named. The maximum class recovery in this action is $500,000.
The Court awards the class $500,000 in additional damages. The factors in Civil Code section 1788.62(d) support the award. The noncompliance was frequent and persistent. The number of persons affected is 473. The resources of the debt buyer are substantial. This class is smaller than the 1,845-member class in the companion Canul action. The smaller class does not lower the statutory cap. The cap is the lesser of $500,000 or one percent of net worth. It does not vary with the size of the class. An award of $500,000 yields approximately $1,057 per class member. That figure exceeds the $1,000 maximum for an individual action. The excess does not bar the award. Civil Code section 1788.62(b) measures class damages in the aggregate. The pattern and practice matches the companion action. The penal purpose is the same. The Court awards the statutory maximum of $500,000.
E. Named-Plaintiff Statutory Damages
Pascual seeks the maximum of individual statutory damages. (Memorandum, pp. 15– 16; Opposition, p. 20; Reply, p. 9.) Civil Code section 1788.62(a) entitles Pascual to individual statutory damages of not less than $100 and not more than $1,000. The facts bearing on the amount are undisputed. The Court fixes the amount on this motion. The statute is penal. The violation was part of a litigation practice repeated across the class. The litigation has been lengthy and included a successful appeal. The Court awards Pascual $1,000 in individual statutory damages.
F. Service Awards
Pascual requests a $5,000 service award. (Memorandum, pp. 17–18; Opposition, p. 20; Reply, p. 9.) The present record does not establish the risk, expense, or hardship that would support that amount. The Court reserves any service award for determination with the motion for attorney’s fees and costs. Pascual may renew the request and supplement the record at that time.
G. Attorney’s Fees and Costs
Pascual is the prevailing consumer. Civil Code section 1788.62(c)(1) entitles a prevailing consumer to costs and reasonable attorney’s fees. The Court confirms the entitlement. The amount will be fixed by noticed motion.
IV.
Conclusion
For the reasons stated, the Court GRANTS Cross-Complainant Eva Pascual’s motion in part, as follows: (1) the Court awards Eva Pascual $1,000 in individual statutory damages under Civil Code section 1788.62(a); (2) the Court awards the class $500,000 in additional damages under Civil Code section 1788.62(b); (3) the Court reserves the request for service award for the motion for attorney’s fees and costs; and (4) the Court finds that Eva Pascual is entitled to reasonable attorney’s fees, in an amount to be determined following noticed motion.
Cross-complainant Pascual shall prepare the order in accordance with California Rules of Court, rule 3.1312.
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