Justia Consumer Law Opinion Summaries

Plaintiff Alfredo Fuentes entered into a written agreement with defendant TMCSF, Inc., doing business as Riverside Harley-Davidson (Riverside), to buy a motorcycle. At the same time, he entered into a written agreement with Eaglemark Savings Bank (Eaglemark) to finance the purchase. The loan agreement included an arbitration clause; the purchase agreement did not. Fuentes then filed suit against Riverside, alleging that Riverside made various misrepresentations and violated various statutes in connection with the sale of the motorcycle. Riverside petitioned to compel arbitration. The trial court denied the petition. The Court of Appeal held Riverside was not entitled to compel arbitration because it was not a party to the arbitration clause, it was not acting in the capacity of an agent of a party to the arbitration clause, and it was not a third party beneficiary of the arbitration clause. Moreover, Fuentes was not equitably estopped to deny Riverside’s claimed right to compel arbitration. View "Fuentes v. TMCSF, Inc." on Justia Law

Pittman's mortgage note requires that Pittman pay $1,980.42 monthly. iServe initially serviced the loan. Pittman failed to make two payments in 2011. iServe granted Pittman a Trial Modification Plan (TPP) under the Home Affordable Mortgage Program. Pittman was to make three $1,357.80 payments in 2012; “[a]fter all trial period payments are timely made ... your mortgage will be permanently modified.” Pittman made the payments but the TPP was never made permanent in writing. Pittman continued to make reduced payments. Servicing of the loan was assigned to BSI, which sent Pittman a notice of default. Pittman’s attorney, Borman discovered that iServe did not report the modification to the Treasury Department. In January 2013, iServe emailed BSI that“[t]he borrower … made all payments on time, contractually entitling him to a permanent mod [sic] in April 2012.” BSI told Pittman to continue the trial payment amount. In 2014, Pittman obtained a credit report, which showed that both servicers had reported his payments as past due. Pittman sent letters to credit reporting agencies disputing the information. The loan servicers concluded that the payments were untimely as reported. In addition, BSI had not made property tax payments from Pittman's escrow account. Pittman sued, alleging negligent and willful violation of the Fair Credit Reporting Act, 15 U.S.C. 1681n, 1681o. The court granted the servicers summary judgment. The Sixth Circuit reversed in part. The reasonableness of the investigations is a question for the trier of fact to resolve. Pittman’s missed payments did not constitute a substantial breach, so Michigan’s first substantial breach rule does not prevent Pittman from bringing a breach of contract claim against BSI. View "Pittman v. Experian Information Solutions, Inc." on Justia Law

The Levins allege that HRRG violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692- 1692p by leaving telephone voice messages that did not use its true name, did not meaningfully disclose its identity, and used false representations and deceptive means to attempt to collect a debt or obtain information about a consumer. They complained that messages in which HRRG went by the name of “ARS” were insufficient to identify it as HRRG or even as “ARS ACCOUNT RESOLUTION SERVICES,” which is HRRG's alternative business name. The Third Circuit reversed, in part, the dismissal of the complaint, finding that the Levinses stated a plausible claim that HRRG violated section 1692e(14)’s “true name” provision, but have not stated plausible claims under 1692d(6) or 1692e(10). ARS is neither HRRG’s full business name, the name under which it usually transacts business, nor a commonly used acronym of its registered name. With respect to section 1692d(6), the court stated that the messages provided enough information about the caller’s identity for the least sophisticated debtor to know that the call was from a debt collector and was an attempt to collect a debt. Nothing in the messages rises to the level of being materially deceptive, misleading, or false under section 1692e(10). View "Levins v. Healthcare Revenue Recovery Group, LLC" on Justia Law

Holcomb did not pay her credit-card bill. The creditor hired the Freedman law firm, which sued Holcomb on the creditor’s behalf in state court. Holcomb initially appeared pro se but later retained Attorney Finko. When Freedman moved for default judgment, Finko had not yet filed a written appearance. Freedman served the motion on both Holcomb and Finko. Holcomb alleges that Freedman violated the Fair Debt Collection Practices Act, which prohibits a debt collector from directly contacting a debtor who is represented by counsel absent “express permission” from “a court of competent jurisdiction,” 15 U.S.C. 1692c(a)(2). Freedman argued that it had “express permission” because Illinois Supreme Court Rule 11 requires service of court papers on a party’s “attorney of record,” if there is one, but “[o]therwise service shall be made upon the party.” Freedman argued that Finko was not yet Holcomb’s “attorney of record” for purposes of Rule 11, requiring service on Holcomb directly. The district judge rejected this argument as “hyper-technical.” The Seventh Circuit reversed. An attorney becomes a party’s “attorney of record” for Rule 11 purposes only by filing a written appearance or another pleading with the court. Finko had done neither, so Rule 11 required Freedman to serve the default motion on Holcomb directly. View "Holcomb v. Freedman Anselmo Lindberg, LLC" on Justia Law

The Supreme Court affirmed the judgment of the Court of Appeal concluding that some overlap between the Investigative Consumer Reporting Agencies Act (ICRAA), Cal. Civ. Code 1786 et seq. and the Consumer Credit Reporting Agencies Act (CCRAA), Cal. Civ. Code 1785.1 et seq., does not render ICRAA unconstitutionally vague as applied to employer background checks when the statutes are otherwise unambiguous.In this class action, Plaintiff sued Defendants, investigative consumer reporting agencies, for violating ICRAA because Defendants did not obtain her written authorization to conduct a background check. Defendants moved for summary judgment, claiming (1) ICRAA was unconstitutionally vague as applied to Plaintiff’s claim because it overlapped with CCRAA, and (2) Defendants satisfied CCRAA. The trial court granted the motion. The Court of Appeal reversed. The Supreme Court affirmed and remanded, holding (1) the background check that Defendants conducted was an investigative consumer report under ICRAA; and (2) although the CCRAA also applied here, Defendants were not exempted from the requirement that they obtain Plaintiff’s written authorization under ICRAA before conducting or procuring a background investigation. View "Connor v. First Student, Inc." on Justia Law

The Fair Debt Collection Practices Act provides for class statutory damages not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector. The statute is silent as to which party bears the burden of introducing evidence at trial to establish the debt collector's net worth.The Ninth Circuit affirmed the district court's dismissal of a consumer class action under the FDCPA and held that plaintiff carried the burden of producing evidence at trial of the debt collector's net worth to establish entitlement to class statutory damages under the FDCPA. In this case, plaintiff had every opportunity to acquire evidence of defendant's net worth but failed to produce any competent evidence of this amount at trial. View "Tourgeman v. Nelson & Kennard" on Justia Law

Plaintiff brought a putative class action against Air EVAC asserting three claims for relief under Arkansas law. The district court dismissed all claims as preempted by the express preemption provision in the Airline Deregulation Act (ADA).The Eighth Circuit affirmed on a narrower basis and held that the fairness of plaintiff's transaction with Air EVAC and the reasonableness of Air EVAC's price were governed by federal law. Likewise, the court held that the ADA preempted plaintiff's claim that Air EVAC may not seek restitution against class members because it lacked clean hands. Finally, the court held that plaintiff's declaratory judgment claims, like his fraud claims, were ADA-preempted. The court noted that plaintiff's may bring contract defenses and unpreempted judicial remedies were also available. View "Ferrell v. Air EVAC EMS, Inc." on Justia Law

Portalatin allegedly owed $1,330.75 in consumer debt. The Blatt law firm, on behalf of Midland, filed a debt‐collection suit against Portalatin in the Circuit Court of Cook County’s First Municipal District (Chicago). Seventh Circuit precedent under the Fair Debt Collection Practices Act (FDCPA) then allowed Blatt to sue Portalatin in that forum even though she lived in the Fourth Municipal District (15 U.S.C. 1692i(a)(2)). The Seventh Circuit subsequently overruled that precedent and held the FDCPA requires debt collectors to file suits in the smallest venue‐relevant geographic unit where the debtor signed the contract or resides. Blatt complied, but the ruling was retroactive. Portalatin sued Blatt and Midland for violating the FDCPA. Portalatin settled with Midland and expressly abandoned all claims against Blatt except her claim for FDCPA statutory damages. Blatt argued that Portalatin’s settlement with Midland mooted her claim for FDCPA statutory damages against Blatt. The district court denied Blatt's motions. The jury awarded Portalatin $200 in statutory damages against Blatt; the court awarded Portalatin $69,393.75 in attorney’s fees and $772.95 in costs against Blatt. The Seventh Circuit reversed. The settlement with Midland mooted Portalatin’s claim for FDCPA statutory damages against Blatt. Portalatin is not entitled to attorney’s fees or costs from Blatt. View "Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC" on Justia Law

The Supreme Court held that the interest rate on consumer loans of $2,500 or more may render the loans unconscionable under section 22302 of the Financial Code.Defendant, a lender of consumer loans to high-risk borrowers, had as one of its signature products an unsecured $2,600 loan carrying an annual percentage rate (APR) of either ninety-six percent or, later in the class period, 135 percent. Plaintiffs alleged that CashCall violated California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 because its lending practice was unlawful where it violated section 22302, the section that applies the unconscionability doctrine to consumer loans. The district court certified Plaintiffs’ lawsuit as a class action and then granted CashCall’s motion for summary judgment. On appeal, the federal court of appeals certified to the Supreme Court a question of law. The Supreme Court answered in the positive, holding that an interest rate on consumer loans of $2,500 or more may be deemed unconscionable under section 22302. View "De La Torre v. CashCall, Inc." on Justia Law

The FHA-insured mortgage on the Schlafs’ property is serviced by Green Tree. The Schlafs defaulted. Green Tree was unable to contact them. Green Tree contracts with Safeguard, a “mortgage field servicing company,” to perform services on properties with defaulted mortgages, including maintenance, winterizing, lock changes, and utility management. Safeguard assists Green Tree in complying with HUD regulations: When a mortgage is in default and efforts to reach the mortgagor have proven unsuccessful, the mortgagee must make an inspection to determine if the property is vacant or abandoned. During these inspections, Safeguard representatives place hangers on an outside doorknob, with instructions for the property owner: PLEASE CALL … GREEN TREE 800‐666‐1143. The door hanger does not identify Safeguard. Safeguard representatives leave the notice even if they encounter the homeowner; they do not identify themselves as Safeguard representatives and avoid talking about why they are there. Safeguard acknowledges that the door hanger is an effort to have the mortgagor contact the client. At least once, Schlaf encountered a Safeguard representative. Schlaf, unable to identify or speak with the Safeguard representative, called the number on the door hanger, which “took [him] right to Green Tree.” He testified that he did not know if Safeguard collected debt. Schlaf sued Safeguard under the Fair Debt Collection Practices Act. The court granted Safeguard summary judgment The Seventh Circuit affirmed. Safeguard’s actions were too attenuated from Green Tree’s debt‐collection efforts; Safeguard is not a debt collector. View "Schlaf v. Safeguard Property, LLC" on Justia Law