Justia Consumer Law Opinion Summaries

Jason Blanks, Peggy Manley, Kimberly Lee, Nancy Watkins, Randall Smith, Trenton Norton, Earl Kelly, Jennifer Scott, and Alyshia Kilgore (referred to collectively as "the customers") appealed the denial of a motion to compel arbitration and a declaratory judgment entered in an action brought by TDS Telecommunications LLC, and its two affiliates, Peoples Telephone Company, Inc., and Butler Telephone Company, Inc. (referred to collectively as "the Internet providers"). The customers subscribed to Internet service furnished by the Internet providers; their relationship was governed by a written "Terms of Service." The customers alleged that the Internet service they have received was slower than the Internet providers promised them. At the time the customers learned that their Internet service was allegedly deficient, the Terms of Service contained an arbitration clause providing that "any controversy or claim arising out of or relating to [the Terms of Service] shall be resolved by binding arbitration at the request of either party." In the declaratory-judgment action, the trial court ruled that the Internet providers were not required to arbitrate disputes with the customers. The Alabama Supreme Court determined the arbitration clause in the applicable version of the Terms of Service included an agreement between the Internet providers and the customers that an arbitrator was to decide issues of arbitrability, which included the issue whether an updated Terms of Service effectively excluded the customers' disputes from arbitration. Accordingly, the Supreme Court reversed the trial court's denial of the customers' motion to compel arbitration and its judgment declaring the updated Terms of Service "valid and enforceable," and remanded the case for further proceedings. View "Blanks et al. v. TDS Telecommunications LLC" on Justia Law

The First Circuit reversed in part and affirmed in part the decision of the district court dismissing with prejudice Plaintiff's claims of alleging that he was denied the fruits of a profitable exclusive-seller agreement for the sale of a Ferrari when Defendant caused the breach of that agreement by threatening economic harm to the other party to the contract, holding that Plaintiff plausibly pleaded his claim of tortious interference with an existing contract. Plaintiff brought suit against Defendant alleging claims of tortious interference with an advantageous business relationship, tortious interference with an existing contract, and violations of Massachusetts's Consumer Protection Law, Mass. Gen. Laws ch. 93A, 11. The district court dismissed the suit, concluding that Plaintiff had failed plausibly to allege any impermissible motive or means of interference with Plaintiff's business relationships or existing contracts. The First Circuit reversed in part, holding (1) Plaintiff plausibly pleaded that Defendant harmed Plaintiff by tortiously interfering with the contract; and (2) the district court correctly dismissed Plaintiff's remaining claims. View "Hamann v. Carpenter" on Justia Law

Plaintiffs own two dental practices, several properties that generate rental income, a sports bar, and an indoor basketball gymnasium that they rent out as an event center. Around 2009, they began “buying property” and obtained a $300,000 commercial line of credit from First Southern. In 2013, Plaintiffs sought a loan from Southern to convert a vacant former hotel into apartment units and commercial spaces. Southern approved a “maximum total principal balance” that “will not exceed $1,013,519.00.” Plaintiffs later sought additional funds to complete the renovation. A revised total estimated cost was $1,654,648.65, approximately $712,000 above the total cost for the project represented in Plaintiffs’ loan application. Southern then learned about Plaintiffs’ additional debt burden, refused to loan additional funds, and declined to extend the maturity date on the line of credit. After Scott paid off his debts with Southern, Southern’s automated computer system continued to report Scott’s entire prior payment history, including that he had previously been delinquent on his loans. Southern represented to Plaintiffs that it had contacted a consumer credit agency about the error. The Sixth Circuit affirmed summary judgment in favor of the defendants in a suit under the Fair Credit Reporting Act, 15 U.S.C. 1681. Plaintiffs never notified a consumer reporting agency about their dispute, a prerequisite for prevailing under the Act, which preempts state common law claims involving reporting to consumer reporting agencies. View "Scott v. First Southern National Bank" on Justia Law

In 2012, California enacted legislation known as the California Homeowner Bill of Rights, or HBOR, which imposed specific limitations regarding the nonjudicial foreclosure of owner-occupied residential real property. The trial court granted Rosana Bustos’ ex parte application for a temporary restraining order (TRO) and order to show cause regarding preliminary injunction, which sought to prevent a trustee’s sale of her home due to several alleged violations of the HBOR related to her submission of a loan modification application. Central to Bustos’ application was a “blatant violation” of the HBOR’s prohibition against dual tracking--when a mortgage servicer continues foreclosure proceedings while reviewing a homeowner’s application for a loan modification. After the trial court denied Bustos’ request for a preliminary injunction and vacated the TRO, it awarded her $4,260 in attorney fees and costs, finding Bustos was a “prevailing borrower” under the HBOR because she obtained injunctive relief in the form of a TRO against her mortgage servicer, Wells Fargo Bank, N.A. On appeal, Wells Fargo argued the trial court erred in interpreting Civ. Code section 2924.12 as authorizing an award of attorney fees and costs to a borrower who obtains a TRO enjoining a trustee’s sale of his or her residence. Wells Fargo alternatively contended the trial court abused its discretion in awarding attorney fees and costs to Bustos under the circumstances of this case. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Bustos v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs, a class of borrowers, filed suit in Georgia against their lenders, alleging that their loan agreements violated state usury laws. After removal to federal court, the district court concluded that the forum selection clause and class action waiver were unenforceable based on Georgia public policy. The Eleventh Circuit affirmed, holding that Georgia's Payday Lending Act and Industrial Loan Act articulate a clear public policy against enforcing forum selection clauses in payday loan agreements and in favor of preserving class actions as a remedy for those aggrieved by predatory lenders. View "Davis v. Oasis Legal Finance Operating Co." on Justia Law

Plaintiff Gregory Moore contacted defendant Wells Fargo, N.A. to discuss possible assistance programs while he was unemployed. Wells Fargo recommended the forbearance plan (Plan) under the Home Affordable Unemployment Program (Unemployment Program) outlined in the United States Department of the Treasury’s Home Affordable Mortgage Program (HAMP) supplemental directive 10-04, May 11, 2010 (Directive 10-04). Wells Fargo explained the Plan would allow Moore to make reduced monthly payments for a period of time and said there was “no downside” to the Plan -- if Moore qualified for a permanent loan modification at the conclusion of the Plan, the arrears would be added to the modified loan balance and, if Moore did not qualify for a permanent loan modification, he would return to making his normal monthly payments. Moore applied for and was accepted to participate in the Plan. Moore made the Plan payments and later applied for a permanent loan modification. Three days after receiving a denial of his permanent loan modification application, Moore received a letter from Wells Fargo stating he was in default on his loan, demanding immediate payment of his normal mortgage payment and the arrears consisting principally of the difference between his normal mortgage payments and the reduced Plan payments (i.e., a balloon payment), and threatening foreclosure. Moore sued to stop the foreclosure and asserted the following causes of action: (1) declaratory relief; (2) negligence; (3) breach of the covenant of good faith and fair dealing; (4) fraud; and (5) violation of Business and Professions Code section 17200, the unfair competition law. In pretrial rulings, the trial court, among other things, adjudicated Moore’s declaratory relief cause of action in favor of Wells Fargo’s contractual interpretation permitting it to demand the balloon payment and dismissed Moore’s negligence cause of action in response to Wells Fargo’s motion for judgment on the pleadings. After Moore rested his case at trial, the trial court granted Wells Fargo’s motion for nonsuit as to Moore’s breach of the implied covenant of good faith and fair dealing cause of action. The trial court further granted Wells Fargo’s motion for judgment notwithstanding the verdict after the jury found Wells Fargo had committed fraud. The trial court also adjudicated the unfair competition law cause of action posttrial, finding in favor of Wells Fargo, and granted Wells Fargo’s motion for costs and attorney fees. The Court of Appeal reversed the trial court's rulings in favor of Wells Fargo, and the jury's verdict in favor of Moore on the intentional misrepresentation cause of action was reinstated. View "Moore v. Wells Fargo Bank, N.A." on Justia Law

After Ellen Gittel Gordon defaulted on her mortgage, the loan servicer initiated nonjudicial foreclosure proceedings to sell her home at auction. Gordon submitted multiple loan modification applications and appeals in an attempt to keep her home but ultimately, all were rejected. As a result, Gordon initiated the underlying action in district court to enjoin the foreclosure sale. Upon the filing of a motion to dismiss that was later converted to a motion for summary judgment, the district court dismissed Gordon’s action and allowed the foreclosure sale to take place. Gordon timely appealed. The Idaho Supreme Court concluded none of the reasons Gordon offered were sufficient to reverse the district court judgment, and affirmed dismissal of Gordon’s complaint. View "Gordon v. U.S. Bank" on Justia Law

Receiving a single unsolicited text message, sent in violation of a federal statute, is not a concrete injury in fact that establishes standing to sue in federal court. Plaintiff filed suit against defendant, alleging violations of the Telephone Consumer Protection Act of 1991 (TCPA) after he received unsolicited text messages from defendant's law firm. The court found that the history and the judgment of Congress did not support a finding of concrete injury in plaintiff's allegations. In this case, plaintiff's allegations of a brief, inconsequential annoyance were categorically distinct from those kinds of real but intangible harms. The court noted that its assessment was qualitative, not quantitative. Accordingly, the court reversed and remanded with instructions to dismiss without prejudice the amended complaint. View "Salcedo v. Hanna" on Justia Law

Plaintiffs Malik Hasan, M.D. and Seeme Hasan appealed the entry of summary judgment against them and the denial of their motion for leave to amend their complaint. Plaintiffs sought to recover under an insurance policy with Defendant AIG Property Casualty Co. for the alleged loss of wine bottles that were not delivered to them by a retailer whom they had paid for the wine. The retailer had declared bankruptcy and its principal had pleaded guilty to conducting a Ponzi scheme. The district court held that Plaintiffs were not entitled to recover because they had not shown any physical loss or damage to the wine they had ordered. The Tenth Circuit affirmed summary judgment, although on a different ground: plaintiffs’ loss was not insured because they failed to present adequate evidence that they were the owners of any wine bottles not delivered to them. View "Hasan v. AIG Property" on Justia Law

The Sparkses own property subject to a homeowners’ association. When they fell behind on their assessments, the Association engaged Equity Experts to collect that debt. Equity Experts also sought to collect from the Sparkses the $270 fee it charges the Association for its collection services; the Sparkses contend that those attempts violated the Fair Debt Collection Practices Act (FDCPA). That Act prohibits debt collectors from attempting to collect debts not “expressly authorized by the agreement creating the debt or permitted by law,” 15 U.S.C. 1692f(1). The Sixth Circuit affirmed summary judgment in favor of Equity Experts. The agreement at issue expressly authorizes the Association to collect its “costs.” The Declaration’s use of “costs” is best read in its ordinary sense to mean all “costs of collection,” and not just taxable “legal costs.” The Sparkses did not argue that Equity Experts’ fees were unreasonably high, nor did they provide substantial evidence of an understanding between Equity Experts and the Association that the Association would never actually have to pay the collection fees. View "Melvin Sparks v. EquityExperts.org, LLC" on Justia Law