Spurned Chase cardholder deserves credit
Matthew Pinnavaia was among the hundreds of thousands of people whose credit card accounts were either shut down or limited over the last couple of years as banks grappled with the meltdown of the financial markets.
Unlike most people, though, Pinnavaia decided to do something about it. He taught himself the law and sued Chase bank.
Now there’s a chance — a slim one, perhaps, but a chance — that he could be awarded $2 million in damages by a San Diego County Superior Court judge because Chase failed for months to respond to his lawsuit, as required by state law.
On the other hand, Pinnavaia, 52, may be about to learn that he’s swimming with sharks.
“It’s not at all unusual for a corporation to wait until a judgment comes down and then send in a team of lawyers to say that mistakes were made and ask to start over,” said Clark Brown, general counsel for the Los Angeles County Bar Assn.
“More often than not, a Superior Court judge will agree with that request, forcing the plaintiff to go back to square one.”
It’s a war of attrition. And in a battle like that the little guy seldom comes out ahead.
Still, give Pinnavaia points for pluck.
“I’m not doing this for myself,” he told me. “I’m doing this for everyone who might have been mistreated by Chase.”
Early last year, Chase began charging many cardholders a $10 monthly fee for accounts with large balances. It also notified many cardholders that their credit card accounts were being closed because balances were too large or payments were late.
A spokeswoman said at the time that the bank may “make changes to pricing, terms or credit lines based on borrower risk, market conditions, and the costs to us of making loans.”
Oceanside resident Pinnavaia was notified in November that Chase was closing his two business accounts and four personal accounts, even though the balance on each card was no more than $4,000.
Not only did he view this as unfair, but he saw it as a threat to his livelihood. Pinnavaia works as a jeweler and gemologist, and requires credit to conduct his business.
“Credit is very important in the jewelry business,” he said. “Your credit record has to be pristine.”
Chase, he said, refused to negotiate the reopening of his accounts. Worse, he said bank representatives began calling multiple times daily demanding that he pay off his balances. In one instance, Pinnavaia said, the rep used abusive language.
“I finally said to myself that I’m not going to roll over,” he said. “I was going to fight back.”
Pinnavaia said he went to the library and read law books. He studied court decisions and other people’s lawsuits. “I learned how to do it,” he said.
In April, he filed suit against Chase in San Diego County Superior Court claiming “unlawful, fraudulent and unfair business practices” and violations of a variety of state laws and statutes. The lawsuit seeks $1 million in punitive damages and $1 million in compensatory damages.
A Chase spokesman declined to comment on any aspect of pending litigation.
A key issue now is that Chase didn’t file a response to the lawsuit within the required 30 days. In early June, Pinnavaia asked the court to issue a default judgment in his favor on the grounds that Chase failed to meet its legal obligations.
A hearing on the default judgment was scheduled for October. Yet still Chase was silent.
It wasn’t until I contacted the bank to discuss the case that Chase suddenly seemed to wake from its legal stupor. The bank retained a private law firm — Stroock & Stroock & Lavan — to represent it.
And just as Brown at the bar association had predicted, a pair of lawyers from the high-power firm finally showed up in court last week to ask Judge Jacqueline Stern for an immediate dismissal of the default judgment.
The attorney in Stroock’s L.A. office overseeing the case didn’t return my repeated calls for comment. But Pinnavaia said that last week’s hearing turned into a smackdown for Chase.
“The judge seemed pretty angry,” he said. “She told them I’d filed all my paperwork correctly and wanted to know why they were challenging the decision.”
Stern was unavailable for comment.
At this point, the default judgment remains a possibility. But Stern agreed to allow Chase to once again challenge the filing next month.
“I feel pretty good,” Pinnavaia said. “It’s a big victory for a guy going up against one of the biggest banks in the United States.”
Not yet it isn’t. And considering that Chase’s parent, JPMorgan Chase & Co., said last week that its quarterly profit soared 78% to $4.8 billion, the company can afford to mount a vigorous defense.
By the same token, it can certainly afford to settle a case for which the bank only has itself to blame.
I don’t know how it will all shake out. But maybe next time Chase will take it more seriously when a customer stands up for himself and demands a little justice.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.
