Justia Consumer Law Opinion Summaries

If the principal secured by a mortgage or deed of trust becomes due because of the borrower’s default in making payments Civil Code 2924c allows the borrower to reinstate the loan and avoid foreclosure by paying the amount in default, plus specified fees and expenses. Under section 2953, the right of reinstatement cannot be waived in any agreement “at the time of or in connection with the making of or renewing of any loan secured by a deed of trust, mortgage or other instrument creating a lien on real property.” The borrowers missed four monthly payments on a mortgage loan that had been modified after an earlier default. The modification deferred amounts due on the original loan and provided that any default would allow the lender to void the modification and enforce the original loan. The borrowers sought to reinstate the modified loan by paying the four missed payments, plus fees and expenses. The lender argued that section 2953 does not apply to the modified loan and that the borrowers may reinstate the original loan by paying the amount of the earlier default on the original loan plus the missed modified payments.The court of appeal ruled in favor of the borrowers. Modification is appropriately viewed as the making or renewal of a loan secured by a deed of trust and is subject to the anti-waiver provisions. Section 2924c gives the borrows the opportunity to cure their precipitating default (the missed modified monthly payments) by making up those missed payments and paying the associated late charges and fees, to avoid the consequences of default on the modified loan. View "Taniguchi v. Restoration Homes LLC" on Justia Law

This case involved the sale of a certified preowned Mercedes Benz that still had a portion of the new vehicle warranty remaining, and which was accompanied by an additional used vehicle warranty issued by the manufacturer. An uncurable defect manifested after the expiration of the new vehicle warranty, but during the duration of the used vehicle warranty. Mercedes Benz refused to repurchase the vehicle, and the plaintiff sued. A jury found Mercedes Benz liable under the Song-Beverly Consumer Warranty Act for breach of both the express warranty and the implied warranty of merchantability, and, pursuant to the stipulation of the parties as to the amount of damage, awarded the same compensatory damages on both causes of action. The court entered judgment on the jury’s special verdict after striking the damages for breach of the implied warranty, presumably to avoid a double recovery. Mercedes Benz appealed. The Court of Appeal affirmed the jury's verdict on the breach of express warranty claim. "Although the Song-Beverly Act generally binds only distributors and retail sellers in the sale of used goods, we conclude Mercedes Benz stepped into that role by issuing an express warranty on the sale of a used vehicle." Accordingly, judgment was affirmed. View "Kiluk v. Mercedes-Benz USA, LLC" on Justia Law

The Fair Debt Collection Practices Act (FDCPA) authorizes private civil actions against debt collectors “within one year from the date on which the violation occurs,” 15 U.S.C. 1692k(d). Klemm sued Rotkiske to collect an unpaid debt and attempted service at an address where Rotkiske no longer lived. An individual other than Rotkiske accepted service. Rotkiske failed to respond to the summons; Klemm obtained a default judgment in 2009. Rotkiske claims that he first learned of this judgment in 2014 when his mortgage application was denied. He filed suit, alleging that Klemm violated the FDCPA by contacting him without lawful ability to collect. Rotkiske argued for the application of a “discovery rule” to delay the beginning of the limitations period until the date that he knew or should have known of the alleged FDCPA violation. The Third Circuit and Supreme Court affirmed the dismissal of the suit. Absent the application of an equitable doctrine, section 1692k(d)’s limitations period begins to run when the alleged FDCPA violation occurs, not when the violation is discovered. Rotkiske cannot rely on the application of an equitable, fraud-specific discovery rule to excuse his otherwise untimely filing, having neither preserved that issue before the Third Circuit nor raised it in his certiorari petition. View "Rotkiske v. Klemm" on Justia Law

Each plaintiff purchased an opaque, seven-ounce box of Fannie May chocolates for $9.99 plus tax. Although the boxes accurately disclosed the weight of the chocolate within and the number of pieces, the boxes were emptier than each had expected. A box of Mint Meltaways contained approximately 33% empty space, and a box of Pixies contained approximately 38% empty space. The plaintiffs filed a putative class action, alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and asserting claims for unjust enrichment and breach of implied contract. The Seventh Circuit affirmed the dismissal of the case. The court rejected the district court’s reasoning that the claims were preempted by the Food, Drug, and Cosmetic Act, 21 U.S.C 301–399, but reasoned that the Illinois Act requires proof of actual damage. The plaintiffs never said that the chocolates they received were worth less than the $9.99 they paid for them, or that they could have obtained a better price elsewhere. That is fatal to their effort to show a pecuniary loss. The receipts embody the contract between the parties. State law does not recognize an implied contract in this situation View "Benson v. Fannie May Confections Brands, Inc." on Justia Law

Liberty National Life Insurance Company and Marcus Rich sought mandamus relief to direct the Montgomery Circuit Court ("the trial court") to vacate its order denying their motions to transfer an action filed against them by Kenny and Margie Girdner to Elmore County and to enter an order transferring the action. According to the allegations in the Girdners' complaint, starting in 2017 Liberty National agent Rich came to their house in Wetumpka and offered to restructure their existing Liberty National life-insurance policies; Rich said the restructuring could save the Girdners money. The Girdners alleged that the policies were restructured under the assurances that their premiums would not increase substantially. In late March 2018, three different Liberty National agents met with the Girdners at their house to discuss fixing the "mess" Rich created with their policies. The Girdners alleged that they were given information at that meeting that indicated either that Rich did not know what he was doing or that Rich had intentionally allowed their policies to lapse in order to gain additional commission when new policies were issued. The Girdners again agreed to restructure the policies as the three agents recommended to have their policies reinstated. By September 2018, after Liberty National had failed to reinstate their insurance policies, the Girdners sued Liberty National and Rich alleging misrepresentation, suppression, deceit, unjust enrichment, negligent and/or wanton hiring, supervision, and training, breach of contract, conversion, and "negligent/wanton service." The Girdners asserted that venue was proper in Montgomery County under section 6-3-7(a)(1) and (3), Ala. Code 1975. The Girdners also stated Liberty National had a registered agent in Wetumpka, Elmore County, and that Rich was a resident of Butler County. The Alabama Supreme Court concluded Liberty National and Rich demonstrated venue was improper in Montgomery County and was proper in Elmore County under sections 6-3-7(a)(1) and 6-3-2(a)(3), they demonstrated a clear legal right to have the underlying action transferred to Elmore County. View "Ex parte Liberty National Life Insurance Company and Marcus Rich." on Justia Law

Renovate America, Inc. (Renovate) appealed an order denying its petition to compel arbitration of Rosa Fabian's claims related to the financing and installation of a solar energy system in her home. Fabian filed a complaint against Renovate alleging that solar panels she purchased for her home were improperly installed. Fabian alleged that, in early 2017, Renovate made an unsolicited telephone call to her home about financing the solar panels and "signed" her name on a financial agreement. All communications between Fabian and Renovate's representative occurred telephonically and she was never presented with any documents to sign. Fabian claims she did not sign a financial agreement with Renovate; nevertheless, Renovate incorporated the solar panel payments set forth in the financial agreement into her mortgage loan payments. Fabian thus alleged that Renovate violated: (1) the Consumers Legal Remedies Act; (2) the Unfair Competition Law; and (3) the California Contract Translation Act. Renovate petitioned to compel arbitration of Fabian's claims and stay judicial proceedings pending arbitration, supported by an Assessment Contract (Contract) that Renovate claimed Fabian had signed electronically. Renovate contended the trial court erred in ruling that the company failed to prove by a preponderance of the evidence that Fabian electronically signed the subject contract. The Court of Appeal found that by not providing any specific details about the circumstances surrounding the Contract's execution, Renovate offered little more than a bare statement that Fabian "entered into" the Contract without offering any facts to support that assertion. "This left a critical gap in the evidence supporting Renovate's petition." The Court therefore affirmed denial of the petition to compel arbitration. View "Fabian v. Renovate America, Inc." on Justia Law

Around 2009, Saccameno defaulted on her mortgage. U.S. Bank began foreclosure proceedings. She began a Chapter 13 bankruptcy plan under which she was to cure her default over 42 months while maintaining her monthly mortgage payments, 11 U.S.C. 1322(b)(5). In 2011, Ocwen acquired her previous servicer. Ocwen, inexplicably, informed her that she owed $16,000 immediately. Saccameno continued making payments based on her plan. Her statements continued to fluctuate. In 2013, the bankruptcy court issued a notice that Saccameno had completed her payments. Ocwen never responded; the court entered a discharge order. Within days an Ocwen employee mistakenly treated the discharge as a dismissal and reactivated the foreclosure. For about twp years, Saccameno and her attorney faxed her documents many times and spoke to many Ocwen employees. The foreclosure protocol remained open. Ocewen eventually began rejecting her payments. Saccameno sued, citing breach of contract; the Fair Debt Collection Practices Act; the Real Estate Settlement Procedures Act; and the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFDBPA), citing consent decrees that Ocwen previously had entered with regulatory bodies, concerning inadequate recordkeeping, misapplication of payments, and poor customer service. The jury awarded $500,000 for the breach of contract, FDCPA, and RESPA claims, plus, under ICFDBPA, $12,000 in economic, $70,000 in non-economic, and $3,000,000 in punitive damages. The Seventh Circuit remanded. While the jury was within its rights to punish Ocwen, the amount of the award is excessive. View "Saccameno v. U.S. Bank National Association" on Justia Law

Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law

Defendant Sara Salcido was in the business of providing immigration services — typically, obtaining visas for her clients that would allow them to stay in the United States legally. Defendant failed to comply with the consumer protection requirements outlined in the Immigration Consultant Act, and was ultimately convicted on one count of misdemeanor unlawfully engaging in the business of an immigration consultant. The State argued, however, that each time defendant took money from a client in exchange for providing immigration services, she was committing theft by false pretenses, because she was not a legally qualified immigration consultant under state law. The trial court agreed; thus, it also convicted her on six counts of grand theft, and two counts of petty theft. It dismissed two additional counts of grand theft as time-barred. Defendant was placed on probation for five years. In the published portion of its opinion, the Court of Appeal held federal law did not preempt the application of the Act to defendant. In the unpublished portion, the Court held one of defendant’s probation conditions had to be stricken. Accordingly, judgment was affirmed as modified. View "California v. Salcido" on Justia Law

Plaintiffs filed suit against the storage company, demanding to be paid for their losses after water damaged their property. In this case, the contract the customers signed specified that the company was not responsible for water damage, and that customers storing property with it did so at their own risk. The contract offered insurance options to the customers, but the customers declined insurance.The Court of Appeal affirmed the trial court's judgment in favor of the company on the customers' breach of contract claim, holding that one may not contract to accept risk, decide to be self-insured, and then retroactively demand to be paid by the other side after there is a loss. Finally, the court held that the customers forfeited their claim under the Consumer Legal Remedies Act. View "Kanovsky v. At Your Door Self Storage" on Justia Law