2013 West Virginia Consumer Credit & Protection Act Decisions

Transcription

1 2013 West Virginia Consumer Credit & Protection Act Decisions West Virginia State Court Cases ISSUES WVAG s subpoena and enforcement powers under WVCCPA WVAG has broad common law authority to hire private outside counsel and to pay them through the proceeds of litigation (arising out of challenge in Mason County cases by WVAG and private firms against all major credit card banks regarding their marketing of payment protection plans) No retroactive invalidation of arbitration provision by Dodd-Frank Arbitration provision in mortgage loan was not unconscionable (procedurally or substantively) Arbitration of consumer note enforceable Appeal of WVCCPA debt collection decision in which liability determined but not damages was interlocutory; damages were not mechanical because of discretion afforded court by WVCCPA Syl. Pt. 6. Under W. Va. Code 46A 5 101(1) [1996], which provides that an action under the West Virginia Consumer Credit and Protection Act involving certain regulated consumer loans must be brought within one year after the CASES Cavalry SPV I, LLC v. Morrissey, 2013 WL (W. Va. Nov. 2013) State ex rel. Discover Fin l Servs., Inc. v. Nibert, 231 W.Va. 227, 744 S.E.2d 625 (2013) State ex rel. Ocwen Loan Servicing, LLC v. Webster, 2013 WL (W. Va. Nov. 2013) See also Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556 (2013) (arbitration provision not procedurally or substantively unconscionable) Green Tree Servicing, LLC v. Figgatt, 2013 WL (W. Va. Oct. 2013) (mem. dec.) See also Shorts v. AT&T Mobility, 2013 WL (W. Va. June 2013) (mem. dec.) (arbitration provision in mobile phone contract is enforceable) Ally Fin l, Inc. v. Smallwood, 2013 WL (W. Va. Sept. 2013) (mem. dec.) Tribeca Lending Corp. v. McCormick, 231 W. Va. 455, 745 S.E.2d 493 (2013)

2 due date of the last scheduled payment of the agreement, the statute of limitation begins to run on the date under the parties' agreement providing for the final periodic payment of the debt. However, if the periodic payments are accelerated under the terms of the agreement [i.e., by default], causing all payments to become immediately due and payable by the consumer, then the statute of limitation begins to run on the date when the accelerated payment is due. Orders dismissing WVCCPA case for plaintiffs failure to prosecute upheld Farm loan not subject to claims for unfair debt collection under the WVCCPA, W. Va. Code 46A and 46A Enrollment agreement between students and state college did not constitute a consumer credit sale under WVCCPA, and thus, students did not have cognizable causes of action for unconscionability and inducement by unconscionable conduct under Act; credit was not granted to students by the college, which was the seller of education services, nor did the college grant credit to students pursuant to a seller credit card, and instead, credit was granted to students in the form of student loans by third parties, and college as the seller of education services did not extend credit to students for the payment of those educational services. WVCCPA Damages: (1) debtor's award of civil penalties under the WVCCPA was not conditioned on an award of actual damages; (2) maximum civil penalty award under the WVCCPA was not excessive and thus did not violate due process or the prohibition on excessive fines; Arbogast v. Ally Financial, Inc., 2013 WL ; Carroll v. Nuvell Credit Co., LLC, 2013 WL ; Arbogast v. Ally Financial, Inc., 2013 WL (W. Va. April 2013) (mem. dec.) Miller v. Clear Mtn. Bank, Inc., 2013 WL (W. Va. March 2013) (mem. dec.) Mountain State College v. Holsinger, 230 W. Va. 678, 742 S.E.2d 94 (2013) Vanderbilt Mortg. and Finance, Inc. v. Cole, 230 W. Va. 505, 740 S.E.2d 562 (2013)

3 (3) creditor abandoned any claims of error relating to civil penalties based on jury's findings; and (4) debtor was entitled to award of attorney fees as a prevailing party despite victory on less than half of her claims. Subsequent purchaser of car cannot exercise limited warranty for car battery and bring WVCCPA claims when warranty was limited by its terms to initial purchaser; the Court really means it this time Statutory bonds, required for a mortgage lender/broker license, are viewed as judgment bonds, rather than performance bonds, for which the surety is liable even absent notice of the pending claim or default judgment. The court did not address how a claim upon such a bond would be decided when a judgment cannot be obtained, such as in bankruptcy. State ex rel. Advance Stores Co., Inc. v. Recht (McMahon II), 230 W. Va. 464, 740 S.E.2d 59 (2013) Hartford Fire Ins. C. v. Curtis, 231 W.Va. 596, 748 S.E.2d 662 (2013) West Virginia Federal Court Cases ISSUES Dismissal of WVCCPA claim where mortgage borrower failed to plead delinquency of loan. Plaintiff did not have standing to bring suit under WVCCPA as an executor of an estate without personally assuming the debts of the estate. WVCCPA not preempted by federal Home Owners Loan Act CASES Wittenburg v. First Indep. Mortg. Co., Nos , , 2013 U.S. App. LEXIS (4th Cir. Jul. 31, 2013) (unpublished). Ballard v. Bank of Am., N.A., No. 2: , 013 U.S. Dist. LEXIS (S.D.W.Va. Nov. 7, 2013). Lenhart v. EverBank, No. 2:12-cv-4181, 2013 U.S. Dist. LEXIS (S.D.W. Va. Oct. 21, 2013).

4 Statute of limitations for claim under 46A-5-101(1) is triggered by the due date of the last payment scheduled under agreement. SERP benefits constitute wages protected by title III of the FCCPA. Maximum statutory penalties are appropriate measure of amount in controversy for diversity jurisdiction in WVCCPA action. Maximum statutory penalties are appropriate measure of amount in controversy for diversity jurisdiction in WVCCPA action. Motion to dismiss WVCCPA claims granted as Plaintiff failed to allege that creditor was debt collector within statute, and failed to allege any debt collection activity. Motion to dismiss WVCCPA claims regarding unconscionable conduct granted, as Plaintiff must allege more than Plaintiff is unsophisticated and home appraisal was inflated. Statute of limitations for WVCCPA claim is triggered by the due date of the last payment scheduled under agreement. Kennedy v. BAC Home Loans Serving, LP, No. 3: , 2013 U.S. Dist. LEXIS (S.D.W. Va. Sept. 18, 2013). Sposato v. First Mariner Bank, No. CCB , 2013 U.S. Dist. LEXIS (S.D.W. Va. Aug. 8, 2013). Jefferson v. Quicken Loans, Inc., No. 5:13CV59, 2013 U.S. Dist. LEXIS (N.D.W. Va. Jul. 19, 2013). McNickle v. Am. Express Co., No. 5:13CV60, 2013 U.S. Dist. LEXIS (N.D.W. Va. Aug. 8, 2013). Elkins v. Diversified Collection Servs., No. 5:13-cv-00927, 2013 U.S. Dist. LEXIS (S.D.W. Va. Jul. 15, 2013). O Brien v. Quicken Loans, Inc., No. 2:12-cv- 5138, 2013 U.S. Dist. LEXIS (S.D.W. Va. May 28, 2013). Estep v. Fed. Home Loan Mortg. Corp., No. 5:13-cv-02128, 2013 U.S. Dist. LEXIS (S.D.W. Va. May 16, 2013). Resolution of motion to amend pleadings. Issa v. Wells Fargo Bank, N.A., No. 3: , 2013 U.S. Dist. LEXIS (S.D.W. Va. May 9, 2013). Purported real property tax assessment does not trigger statute of limitations in WVCCPA action. Plaintiff survives motion to dismiss on claims of unconscionable conduct under 46A by pleading closing agent s misconduct and misrepresentations, and unfair monthly payment terms and closing costs. White v. Ally Fin., Inc., No. 2:12-cv-00384, 2013 U.S. Dist. LEXIS (S.D.W. Va. May 2, 2013). Lenhart v. Bank of Am., N.A., No. 3: , 2013 U.S. Dist. LEXIS (S.D.W. Va. May 1, 2013).

5 Statute of limitations for WVCCPA claim is triggered by the due date of the last payment scheduled under agreement; resolution of motion to dismiss on unconscionability claims. Lender s phone calls to residence do not de facto violate 46A-2-125, rather Plaintiff must show unreasonable nature of calls. Evaluating reasonableness of alleged attorneys fees under WVCCPA by applying Aetna factors/ Rule 1.5(a) of the Rules of Professional Conduct. Reiteration of Firestone broad definition of debt collector ; resolution of motion to dismiss on claims under 46A-2-114; ; ; Denial of motion to dismiss on as mortgagor sufficiently stated WVCCPA claim by alleging misrepresentations by lender made about notice provided to borrower in first foreclosure proceeding. Plaintiff s WVCCPA claims survive motion to dismiss by pleading contact to borrower while represented. Lenders have duty to attempt to ascertain identity of borrower s attorney; however, duty is not a heavy burden. Representations that a Plaintiff may receive a refund on money spent at casino does not constitute a violation of 46A-6D-3 and -4. Applicability of Grable test/ substantial federal question for purposes of determining federal question jurisdiction. Hatcher v. Bank of Am., N.A., No. 2:12-cv- 5793, 2013 U.S. Dist. LEXIS (S.D.W. Va. Apr. 25, 2013). Adams v. Chrysler Fin. Co., LLC, No. 5:11-cv , 2013 U.S. Dist. LEXIS (S.D.W. Va. Apr. 3, 2013). Koontz v. Wells Fargo, N.A., No. 2:10-cv , 2013 U.S. Dist. LEXIS (S.D.W. Va. Mar. 29, 2013). Patrick v. PHH Mortg. Corp., 937 F. Supp. 2d 773 (2013). Joy v. MERSCORP, Inc., 935 F. Supp. 2d 848 (2013). Wrenn v. Bank of Am. Home Loans, LP, No. 5:12-cv-01169, 2013 U.S. Dist. LEXIS (S.D.W. Va. Jan. 30, 2013). Shaffer v. HSBC Bank Nev., No. 5:12-cv , 213 U.S. Dist. LEXIS 7001 (S.D.W. Va. Jan. 17, 2013). Koerber v. Wheeling Island Gaming, Inc., No. 5:12CV97, 2013 U.S. Dist. LEXIS 5923 (N.D.W. Va. Jan. 15, 2013). W. Va. ex rel. McGraw v. Fast Auto Loans, Inc., 918 F. Supp. 2d 551 (2013).