Justia Consumer Law Opinion Summaries

Plaintiff filed a complaint alleging that Zurich American Insurance Co. committed unfair claim settlement practices in violation of Mass. Gen. Laws ch. 176D, 3(9)(f) and Mass. Gen. Laws ch. 93A, 2. Specifically, Plaintiff claimed that Zurich violated these statutory provisions when it conditioned the payment of its primary insurance policy limit on a release of all claims against its insureds, notwithstanding the availability of excess insurance. The superior court judge concluded that Zurich was entitled to judgment as a matter of law because it did not engage in unfair claim settlement practices. The Supreme Judicial Court affirmed, holding that Zurich did not engage in unfair claim settlement practices in violation of Mass. Gen. Laws ch. 176D, 3(9)(f) and Mass. Gen. Laws ch. 93A, 2. View "Caira v. Zurich American Insurance Co." on Justia Law

Serena Kwan appealed the dismissal of her second amended complaint for failing to state a claim upon which relief can be granted. In 2014, Kwan, On Behalf of Herself and All Others Similarly Situated, filed a class action against Defendants-Appellees, SanMedica International, LLC (“SanMedica”), and Sierra Research Group, LLC (“Sierra”), alleging violations of California’s Unfair Competition Law (“UCL”) and California’s Consumers Legal Remedies Act (“CLRA”). The complaint was based on an allegation that the defendants falsely represented that their product, SeroVital, provided a 682% mean increase in Human Growth Hormone (“HGH”) levels, that it was clinically tested, and that “peak growth hormone levels” were associated with “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution." The Ninth Circuit concluded the district court correctly concluded that California law did not provide for a private cause of action to enforce the substantiation requirements of California’s unfair competition and consumer protection laws. Further, the district court did not err in concluding that Kwan’s second amended complaint failed to allege facts that would support a finding that SanMedica International’s claims regarding its product, SeroVital, were actually false. Accordingly, the Court affirmed dismissal. View "Kwan v. Sanmedica Int'l" on Justia Law

Appellees brought a collection action against Lyshe and served Lyshe with discovery requests. They did not send a separate electronic copy, but instructed Lyshe to contact them if he wanted an electronic copy. Requests for admission required that Lyshe verify his responses, included a blank notary block, and provided that any matter would be deemed admitted unless Lyshe made a sworn statement in compliance with the Ohio Rules of Civil Procedure. Lyshe sued, alleging violation of the Fair Debt Collection Practices Act (FDCPA) by failing to provide electronic discovery without prompting and requiring that the responses to the requests for admission be sworn and notarized. The district court concluded that it lacked subject matter jurisdiction and dismissed the case, reasoning that Lyshe did not plead any injury in connection with the alleged violations of the state rules. Appellees did not violate the Ohio Rules of Civil Procedure by offering to send electronic copies of the discovery only upon Lyshe’s request. Regarding alleged errors in the requests for admissions, the court reasoned that Lyshe failed to allege that he was misled or felt compelled to make a sworn verification or that he even responded to the requests. The Sixth Circuit affirmed, agreeing that Lyshe did not suffer any concrete harm. View "Lyshe v. Levy" on Justia Law

Hubbard Systems, Inc. (HSI) was in the business of developing, marketing, and selling a debt collection software program titled “Collection Partner.” In 1992, Gregory Turner entered into a rent-to-own agreement with HSI in which he was granted a temporary rental license for the use of Collection Partner. Turner made the final installment payment in 1996, after which Turner owned a permanent license to the software. In April 2011, HSI sent Turner a new license key to reflect an update in the software. The license expired on May 31, 2011. On June 1, 2011, HSI sent Turner a new license key that permitted him uninterrupted access to the software. In 2012, Appellant brought suit, alleging that HSI violated the Computer Fraud and Abuse Act when it issued a license key that expired on May 31, 2011, despite the fact that he owned a permanent license to the Collection Partner software. The district court accepted and adopted the magistrate judge’s report and recommendation, denied Turner’s motion to strike, and granted summary judgment in favor of HSI. The First Circuit affirmed, holding that the district court did not err in granting HSI’s motion for summary judgment and denying Turner’s motion to strike. View "Turner v. Hubbard Systems, Inc." on Justia Law

Appellee The Bank of New York Mellon, f/k/a The Bank of New York brought a foreclosure proceeding against Appellants J.M. and and Kathy Shrewsbury. The Bank was not the original mortgagee; it received the Shrewsbury mortgage by an assignment from the original mortgagee. The Shrewsburys answered the complaint asserting that the note representing the debt secured by the mortgage had not been assigned to The Bank. They further asserted that since the note had not been assigned to The Bank, it did not have the right to enforce the underlying debt and, therefore, did not have the right to foreclose on the mortgage. The Superior Court rejected the Shrewsburys' argument and granted summary judgment to The Bank. The narrow question presented on appeal was whether a party holding a mortgage must have the right to enforce the obligation secured by the mortgage in order to conduct a foreclosure proceeding. After review, the Supreme Court held that a mortgage assignee must be entitled to enforce the underlying obligation which the mortgage secures in order to foreclose on the mortgage. Accordingly, the Court reversed the trial court and remanded for further proceedings. View "Shrewsbury v. The Bank of New York Mellon" on Justia Law

Medical service providers referred plaintiffs’ debts to defendants, who sent letters, demanding payment of the principal plus 5% interest. Plaintiffs claimed that this violated 15 U.S.C. 1692g(a)(1), the Fair Debt Collection Practices Act, which states that debt collectors must specify the amount of the debt, and that Wisconsin law provides for interest (absent a contractual provision) only if a debt has been reduced to judgment, and any pre-judgment request for interest is forbidden. The Seventh Circuit affirmed summary judgment for the defendants. Wis. Stat. 426.104(4)(b), the “safe harbor” for people who act in ways approved by the Administrator of Wisconsin’s Department of Financial Institutions applies because the defendants sent the Administrator a letter asking whether they were entitled to add 5% interest to debts for the provision of medical services. The Administrator’s silence for 60 days resulted in deemed approval. The defendants were entitled to demand payment of both principal and interest, so the letters did not violate 15 U.S.C. 1692e(2)(A), which prohibits false representations about the character, amount, or legal status of a debt. The federal Act otherwise allows debt collectors to add interest when permitted by law. Plaintiffs’ debts arose under state contract law and are subject to the safe harbor provision. View "Aker v. Collection Associates, LTD." on Justia Law

Plaintiff opened a credit card account with Defendant Citibank, N.A. and purchased a credit protector plan. Defendant later amended the original agreement by adding an arbitration provision. The provision waived the right to seek public injunctive relief in any forum. The arbitration provision became effective in 2001. In 2011, Plaintiff filed this class action based on Defendant’s marketing of the Plan and the handling of a claim she made under it when she lost her job, alleging claims under the Consumers Legal Remedies Act (CLRA), the unfair competition law (UCL), and the false advertising law. Defendant petitioned to compel Plaintiff to arbitrate her claims on an individual basis pursuant to the arbitration provision. Based on the Broughton-Cruz rule, the trial court ordered Plaintiff to arbitrate all claims other than those for injunctive relief under the UCL, the CLRA, and the false advertising law. The Court of Appeal reversed and remanded for the trial court to order all of Plaintiff’s claims to arbitration, concluding that the Federal Arbitration Act preempts the Broughton-Cruz rule. The Supreme Court reversed, holding that the arbitration provision was invalid and unenforceable because it waived Plaintiff’s right to seek public injunctive relief in any forum. Remanded. View "McGill v. Citibank, N.A." on Justia Law

Plaintiffs filed suit against Nationstar and others, asserting claims relating to defendants' servicing of plaintiffs' home loan. Plaintiffs alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p; intentional infliction of emotional distress (IIED); and a violation of the Nevada Deceptive Trade Practices Act (DTPA), Nev. Rev. Stat. 598.0915–598.0925, 598.0934. The district court dismissed the complaint. The court concluded that the district court properly dismissed plaintiffs' claims of violations of sections 1692c(a)(2), 1692d, and 1692e pursuant to Ho v. ReconTrust Co. The court reasoned that Nationstar was not engaged in "debt collection" and thus defendants were not "debt collectors" when interacting with plaintiffs. The court concluded, however, that the district court erred in dismissing plaintiffs' claim under section 1692f(6) on the ground that Nationstar was not collecting a debt. The court explained that, unlike sections 1692c(a)(2), 1692d, and 1692e, the definition of debt collector under section 1692f(6) includes a person enforcing a security interest. In this case, plaintiffs alleged that Nationstar threatened to take non-judicial action to dispossess plaintiffs of their home without a legal ability to do so. The court noted that such conduct is exactly what section 1692f(6) protects borrowers against. Finally, the court concluded that the district court correctly dismissed plaintiffs' claims of IIED and of violation of the DTPA. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Dowers v. Nationstar Mortgage" on Justia Law

Trinity Health provided Charles Tuttle with $127,001.07 in medical services. Tuttle applied for financial assistance with Trinity, but was denied. Tuttle failed to pay the medical bill after Trinity demanded payment. Trinity subsequently assigned the debt to A.R. Audit Services. A.R. Audit sued Tuttle to collect the medical debt. Tuttle counterclaimed, alleging A.R. Audit failed to provide him thirty days to respond to the debt collection demand. A.R. Audit moved for summary judgment, arguing Tuttle was responsible for the entire debt because he failed to provide to Trinity information necessary to complete the application for financial assistance. Tuttle responded with a motion to dismiss, arguing Trinity should have sued him to collect the debt instead of A.R. Audit. He also claimed Trinity representatives told him he qualified for financial assistance with Trinity and would not owe any money to Trinity. The district court denied Tuttle's motion to dismiss, dismissed his counterclaims, and granted A.R. Audit's summary judgment motion, concluding Tuttle failed to show he was not responsible for the debt. Tuttle appealed. After review, the Supreme Court modified the judgment to reimburse Tuttle for paying A.R. Audit's $80 filing fee, and affirmed the judgment as modified. View "A. R. Audit Services, Inc. v. Tuttle" on Justia Law

Plaintiff, individually and on behalf of others similarly situated, filed suit against defendant, alleging violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiff alleged that defendant failed to provide the "amount of the debt" within five days after an initial communication with a consumer in connection with the collection of a debt, as required by section 1692g. The court declined to hold that a mortgage foreclosure complaint was an initial communication with a consumer in connection with the collection debt. In this case, the court concluded that neither the Foreclosure Complaint nor the July Letter were initial communications giving rise to the requirements of section 1692g(a). The court held, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt. The Payoff Statement included a "Total Amount Due," but that amount may have included unspecified "fees, costs, additional payments, and/or escrow disbursements" that were not yet due at the time the statement was issued. The court explained that a statement was incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase. Accordingly, the court vacated and remanded for further proceedings. View "Carlin v. Davidson Fink LLP" on Justia Law