Justia Consumer Law Opinion Summaries

Articles Posted in Maryland Court of Appeals
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The Court of appeals issued one opinion to address two petitions for writ of certiorari filed by Clifford Cain, Jr. and Tasha Gambrell challenging the outcome of their putative class actions against Midland Funding, LLC, holding that the court of special appeals erred in part in the case of Cain and did not err in the case of Gambrell.Cain and Gambrell (together, Petitioners) filed two putative class action cases against Midland, alleging improper debt collection activities in connection with money judgments that Midland obtained against Plaintiffs during a period when Midland was not licensed as a collection agency under Maryland law. In Cain's case, the circuit court entered an order granting summary judgment to each party in part and a separate declaratory judgment declaring the rights of the parties. In Gambrell's case, the circuit court granted Midland's motion to dismiss. The court of appeals concluded that Petitioners were not entitled to relief. The Court of Appeals reversed in part, holding (1) Maryland recognizes cross-jurisdictional class action tolling; (2) in Gambrell's case, the lower courts did not err; and (3) as to Cain's individual claims, the court of special appeals erred in part. View "Cain v. Midland Funding, LLC" on Justia Law

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In this two putative class action cases concerning the applicable statute of limitations for claims filed by consumer debtors against a consumer debt buyer, Midland Funding, LLC, the Court of Appeals held that Petitioners' claims for unjust enrichment and statutory claims for money damages were subject to the three-year statute of limitations established by Md. Code Cts. & Jud. Proc. 5-101.Petitioner Clifford Cain and Petitioner Tasha Gambrell each filed a putative class action complaint against Midland, alleging improper debt collection activities in connection with money judgments that Midland obtained against the plaintiffs during a time when Midland was not licensed as a collection agency under Maryland law. In Cain's case, the circuit court granted summary judgment to each party in part and a separate declaratory judgment declaring the rights of the parties. In Gambrell's case, the circuit court granted Midland's motion to dismiss. The court of appeals held (1) Petitioners were not entitled to injunctive relief, and (2) Petitioners' claims seeking restitution under an unjust enrichment theory and money damages for statutory claims were barred by CJ 5-101's three-year statute of limitations. The Court of Appeals affirmed the judgment as to Gambrell in its entirety and reversed the judgment in part as to Cain, holding that Cain's individual claims were timely filed. View "Cain v. Midland Funding, LLC" on Justia Law

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The Court of Appeals reversed in part and affirmed in part the judgment of the court of special appeals dismissing an amended complaint for failure to state a claim upon which relief can be granted, holding that Petitioners' amended complaint adequately set forth a cause of action under Md. Code Real Prop. (RP) 7-113.Petitioners, occupants of residential property that they owned or leased, brought this action against Respondents, a mortgage servicer and a real estate broker, after Respondents posted eviction notices on Petitioners' properties in an attempt to gain possession of the properties without a court order. Petitioners claimed that Respondents violated RP 7-113 and the Maryland Consumer Protection Act (MCPA), Md. Code Comm. Law 13-101 et seq. The circuit court dismissed the complaint for failure to state a claim. The court of special appeals affirmed. The Court of Appeals reversed in part, holding (1) Petitioners set forth a cause of action under RP 7-113; and (2) this Court has not established a more demanding standard for pleading damages in private actions brought under the MCPA. View "Wheeling v. Selene Finance LP" on Justia Law

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The Court of Appeals affirmed the judgment of the court of special appeals reversing the decision of the circuit court entering judgment as a matter of law against Plaintiffs on their Consumer Protection Act (CPA) and Maryland Consumer Debt Collection Act (MCDCA) claims, holding that, in the context of debt collection activity, not all services provided by a lawyer or a law firm fall within the "professional services" exemption under the CPA.Plaintiffs brought this action against their homeowners association (HOA) alleging violations of the CPA and MCDCA in connection with the HOA's attempt to collect delinquent HOA assessments, fines, penalties, and attorney's fees. The HOA hired a law firm to undertake debt collection activities for delinquent HOA assessment accounts. Plaintiffs filed suit against HOA challenging its debt collection practices. The circuit court entered judgment as a matter of law against Plaintiffs on their CPA and MCDCA claims. The court of special appeals reversed. The Court of Appeals affirmed, holding (1) when a lawyer is engaged in debt collection activities, not all of the lawyer's services fall within the "professional services" exemption of the CPA; and (2) where the professional services exemption does apply to the lawyers' professional services, the statutory exemption does not flow to the client. View "Andrews & Lawrence Professional Services, LLC v. Mills" on Justia Law

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The Court of Appeals affirmed in part and reversed in part the judgment of the circuit court, holding that a confessed judgment is not an enforcement tool that an homeowners association (HOA) has at its disposal when seeking to collect delinquent HOA assessments, costs, and attorney's fees.Defendant became delinquent in her HOA assessment payments and signed a promissory note for the repayment. The document included a mortgage secured by Defendant's property and contained a confession of judgment provision. The HOA later filed a confessed judgment complaint attempting to recover the debt memorialized in Defendant's promissory note. The circuit court found that the payments and collection of homeowners association dues constituted a consumer transaction under the Consumer Protection Act (CPA) and that the use of a confessed judgment promissory note to collect the payments was prohibited. The Court of Appeals held (1) the collection of HOA assessments falls within the purview of the CPA; (2) the promissory note containing the confessed judgment clause constituted an extension of credit to Defendant to pay delinquent HOA assessments;" and (3) because the HOA lacked the legal authority to file a confessed judgment complaint the appropriate remedy under Maryland Rule 3-611(b) was dismissal of the case without prejudice to file a separate breach of contract action. View "Goshen Run Homeowners Ass'n v. Cisneros" on Justia Law

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In this class action lawsuit filed by individuals against whom Defendant, an unlicensed debt buyer, obtained judgments in the district court, the Court of Appeals vacated the decision of the Court of Special Appeals affirming the circuit court's rulings with respect to Defendant's liability under the Maryland Consumer Debt Collection Act, Md. Code Title 14, Subtitle 2 of the Commercial Law Article, but remanding the case for retrial on the issue of damages, holding that remand was necessary for a reassessment of damages.Because Defendant was unlicensed, Plaintiffs sought to have the judgments against them declared void and sought monetary damages. The circuit court dismissed the case, concluding that it was an impermissible collateral attack on enrolled judgments. The Court of Special Appeals remanded for trial, ruling that the enrolled judgments were void. On remand, the jury returned verdicts for Plaintiffs and the class. The Court of Special Appeals remanded for a new trial on damages after again holding that the district court judgments were void. The Court of Appeals held (1) the Court of Special Appeals erred in concluding that the judgments were void because the collateral attack on the enrolled judgments was not allowed; and (2) the licensing statute permits a private cause of action for acting as a collection agency without a license. View "LVNV Funding LLC v. Finch" on Justia Law

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In answering a question of law certified to it by the United States District Court of the District of Maryland, the Court of Appeals held that Md. Code Ann. Cts. & Jud. Proc. (CJP) 12-601 to 12-613 is a statutory specialty and that actions on it are accorded a twelve-year limitations period.At issue was whether the licensing requirement of the Maryland Consumer Loan Law (MCLL), Md. Code Ann. Com. Law 12-302, was a statutory specialty as contemplated by CJP 5-102(a)(6) requiring filing within twelve years after the cause of action accrues. The Court of Appeals answered the question certified to it in the affirmative, holding that the MCLL’s licensing requirement is an “other specialty” within the meaning of CJP 5-102(a)(6) and that a claim brought on it is entitled to a twelve-year limitations period. View "Price v. Murdy" on Justia Law

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At issue in this consolidated appeal was whether the Maryland Collection Agency Licensing Act (MCALA), as revised by a 2007 departmental bill, was constrained to the original scope of collection agencies seeking consumer claims or whether the revised statutory language required principal actors of Maryland’s mortgage market to obtain a collection agency license.In 2007, the Department of Labor, Licensing, and Regulation requested a department bill to revise the definition of collection agencies required to obtain the MCALA license. The enacted departmental bill changed MCALA’s definition of “collection agencies” to include a person who engages in the business of “collecting a consumer claim the person owns if the claim was in default when the person acquired it[.]” The circuit courts below dismissed the foreclosure actions at issue in this appeal, concluding that foreign statutory trusts acting as a repository for defaulted mortgage debts were required to obtain a MCALA license before its substitute trustees filed the foreclosure actions. The Supreme Judicial Court reversed, holding that the foreign statutory trusts did not fall under the definition of “collection agencies” that are licensed and regulated by MCALA, and therefore, the foreign statutory trusts were not required to obtain a license under MCALA before the substitute trustees instituted foreclosure proceedings on their behalf. View "Blackstone v. Sharma" on Justia Law

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Lender’s assignee (Assignee), while operating as an unlicensed debt collector, obtained a judgment against a credit card debtor (Debtor) in district court. Debtor’s contract with Lender included an arbitration provision. Debtor then filed a class action suit collaterally attacking the judgment based on violations of Maryland consumer protection laws. Assignee filed a motion to arbitrate the class action suit pursuant to an arbitration clause between Lender and Debtor. Assignee moved to compel arbitration. The circuit court granted the motion to compel, thus rejecting Debtor’s argument that Assignee waived its right to arbitrate when it brought its collection action against Debtor. The Court of Special Appeals affirmed. The Court of Appeals reversed, holding that because Assignee’s collection action was related to Debtor’s claims, Assignee waived its contractual right to arbitrate Debtor’s claims when it chose to litigate the collection action. View "Cain v. Midland Funding, LLC" on Justia Law

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Brown, Brown & Brown, P.C. (BB&B), a Virginia law firm, entered into more than fifty agreements over a nine-month period with Maryland homeowners facing foreclosure. Under the agreements, in return for an advance payment of money, BB&B promised to attempt to renegotiate the mortgage loan so that the homeowner could avoid foreclosure. Ultimately, BB&B did not obtain loan modifications for any of the homeowners. The Commissioner of Financial Regulation (Commissioner) concluded that BB&B had violated the Maryland Credit Services Businesses Act (MCSBA) and directed BB&B to pay treble damages to the Maryland homeowners with whom they had agreements. The circuit court reversed, concluding that the MCSBA did not apply to BB&B because the agreements at issue were for legal services rather than credit services. The Court of Appeals reversed, holding (1) BB&B’s activities fell within the definition of “credit services business” under the MCSBA; and (2) BB&B did not qualify for the attorney exemption in the MCSBA. View "Comm'r of Fin. Regulation v. Brown, Brown & Brown, P.C." on Justia Law