Justia Consumer Law Opinion Summaries

Respondents, three married couples, obtained home equity lines of credit from Petitioners, a bank and its loan officer. Approximately four years later, Petitioners filed a putative class action alleging that these transactions were part of an elaborate “buy-first-sell-later” mortgage fraud arrangement carried out by Petitioners and other defendants. Petitioners alleged numerous causes of action, including fraud, conspiracy, and violations of Maryland consumer protection statutes. The circuit court granted summary judgment for Petitioners, concluding that the statute of limitations barred several of Respondents’ claims and that no Petitioner violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Court of Special Appeals reversed. The Court of Appeals reversed, holding that the Court of Special Appeals (1) erred in concluding that Respondents stated a claim upon which relief could be granted under the Maryland Secondary Mortgage Loan Law; and (2) erred in concluding that it was a question of fact to be decided by the jury as to whether Respondents’ claims against Petitioners were barred by the relevant statute of limitations. View "Windesheim v. Larocca" on Justia Law

Plaintiffs, consumers who purchased joint health supplements produced and sold by GNC and Rite Aid, filed suit alleging that GNC and Rite Aid violated the consumer protection laws of various states by marketing these supplements as promoting joint health, even though many scientific studies have shown that the ingredients they contain, glucosamine and chondroitin, are no more effective than a placebo in treating the symptoms of osteoarthritis. The district court granted GNC and Rite Aid's motion to dismiss the complaint for failure to state a claim. The court affirmed, concluding that marketing statements, like the ones at issue here, that accurately describe the findings of duly qualified and reasonable scientific experts are not literally false. View "Brown v. GNC" on Justia Law

In 2011, the IRS required tax preparers who were neither attorneys nor CPAs to pass a certification exam and obtain an identification number. H&R, a nation-wide tax service, passed anticipated costs to its customers by charging a “Compliance Fee.” H&R explained at its offices and on its website that the fee would cover only the costs to comply with the new laws. In 2011, the fee was $2; in 2012, the fee was $4. Perras sued on behalf of himself and a putative class. Perras alleged that the amount collected exceeded actual compliance costs. Perras sued under the Missouri Merchandising Practices Act. The district court compelled arbitration of the 2011 claims. Later, the court declined to certify the class, agreeing that the proposed class met the requirements under Federal Rule of Civil Procedure 23(a) of “numerosity, commonality, typicality, and fair and adequate representation,” but Rule 23(b)(3), requires that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The Eighth Circuit affirmed, reasoning that the Supreme Court of Missouri would likely conclude that the MMPA does not cover the out-of-state transactions. The law applicable to each class member would be the consumer-protection statute of that member’s state; questions of law common to the class members do not predominate over individual questions. View "Perras v. H&R Block" on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law

Plaintiffs Heidi and James Glassford appealed a superior court decision denying their motion for summary judgment and granting it to defendant Dufresne & Associates, P.C. on plaintiffs' claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). Plaintiffs were homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to 10 V.S.A 1973(e). On October 20, 2005, defendant's employee sent the certification required by the statute. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing. On January 13, just prior, plaintiffs' attorney prepared a certificate of title that noted the wastewater and water supply permit. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system's failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had "completed the original" inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system's failure both before and after hiring defendant to inspect the system. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant's failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency. Upon review of the superior court decision, the Supreme Court found that the completion and filing of defendant's certificate was a prerequisite to D&L's ability to sell the home, the certificate was unrelated to the sale. The law required that it be sent only to the government agency that issued the permit. Furthermore, there was no allegation that D&L used the certificate as part of its sales pitch, and no allegation that defendant had any part in the sales. The standard for CPA liability required that a person be directly involved in the transaction that gave rise to the claimed liability. That standard was not met here. Accordingly, the Court affirmed the superior court's decision. View "Glassford v. Dufresne & Associates, P.C." on Justia Law

Wells Fargo appealed a jury verdict finding that it committed violations of the Texas Debt Collection Act (TCDA), Tex. Fin. Code 392.001-392.404, and awarding damages and attorney's fees. The court concluded that plaintiffs had standing to bring their TCDA claims; the economic loss rule does not bar plaintiffs' TDCA claims; the evidence supports a finding that Wells Fargo violated section 392.304(a)(12); the evidence does not support the jury's award to plaintiffs for expenses; the evidence does not support a finding that Wells Fargo violated section 392.301(a)(3) so there is no basis upon which to award plaintiffs statutory damages; and the court affirmed in all other respects. View "McCaig v. Wells Fargo Bank" on Justia Law

After Plaintiff bought a parcel of property from Fauber Enterprises, Inc., the basement of the house flooded when it rained. Plaintiff filed a complaint against Fauber, Fauber’s real estate agent, and others, alleging violations of the Virginia Consumer Protection Act (VCPA). The jury returned a verdict in favor of Defendants. Plaintiff moved for a new trial, arguing that the instructions given on the standard of proof were incorrect. The circuit court denied the motion. The Supreme Court reversed, holding (1) a plaintiff must prove a violation of the VCPA by a preponderance of the evidence; and (2) therefore, the circuit court erred by concluding that Plaintiff was required to prove her VCPA claims by clear and convincing evidence. Remanded. View "Ballagh v. Fauber Enters." on Justia Law

Justin Leber and Katherine Neumann (collectively, Leber) sued DKD of Davis, Inc. and General Motors Company (not a party on appeal) under California's "lemon law" after buying a Silverado truck with an allegedly defective transmission. Leber alleged the Silverado was “a new motor vehicle,” and DKD and General Motors issued an ""express warranty.'" The Silverado had a defect, despite a reasonable number of repairs, and was not fit for ordinary purposes, but neither defendant replaced it or offered restitution. DKD denied the allegations, arguing Leber did not state a claim under the Act, no warranty was given, and the Silverado was sold "as is." DKD presented evidence the truck had previously been sold to another buyer, who traded it in nearly a year later. During the sale at issue here, Leber signed various documents, including a “Buyers Guide” which states the Silverado was bought “used,” “AS IS-NO WARRANTY,” and with over 10,000 miles on it. Leber opposed DKD’s motion with a combination of legal arguments and facts regarding a warranty by General Motors. Leber also proffered several opposing facts, including that the General Motors warranty was transferrable to subsequent owners, and General Motors had paid for the unsuccessful attempts to fix the alleged defect. The trial court sustained objections to some of Leber’s evidence including evidence showing how other dealers filled out the Buyers Guide to account for the transfer of a manufacturer’s warranty. Leber appealed when the trial court granted DKD's motion for summary judgment. Finding no reversible error, the Court of Appeal affirmed. View "Leber v. DKD of Davis" on Justia Law

Plaintiffs filed suit against Kennedy, alleging that Kennedy’s attempts to collect a debt from plaintiffs violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. The district court dismissed the amended complaint. The court concluded that the district court had personal jurisdiction over Kennedy where Kennedy's three purposeful contacts with New York meet the minimum contacts test; Kennedy can easily defend itself in New York; New York has a manifest interest in the suit; and plaintiffs have an interest in adjudicating their case in the state where they reside. In regards to the FDCPA claim, the court concluded that plaintiffs’ alleged obligation to pay the $8,000 balance exists only because of the exchange of nursing home services for money and accordingly constitutes a debt under the FDCPA. However, plaintiffs have failed to allege that Kennedy's debt collection activities are actionable under the FDCPA. Accordingly, the court affirmed in part and vacated in part, remanding for further proceedings. View "Eades v. Kennedy, PC Law Offices" on Justia Law

In May 2006, Sparkle Hill, Inc. and its vice president and owner (collectively, Sparkle Hill), received an unsolicited advertisement on Sparkle Hill’s fax machine from Interstate Mat Corporation (Interstate). Nearly five years later, Sparkle Hill filed suit in federal district court individually and on behalf of others who also received an identical fax from Interstate in May 2006 alleging that Interstate violated the Telephone Consumer Protection Act. Interstate moved for summary judgment on the ground that a four-year statute of limitations barred Sparkle Hill’s claim. Sparkle Hill did not oppose the merits of Interstate’s limitations defense. The district court entered summary judgment dismissing the case, concluding that Sparkle Hill’s silence constituted a concession and that, on the merits, Sparkle Hill’s claim was time-barred. The First Circuit affirmed, holding that Appellant waived its arguments for finding error in the district court’s decision to hold it accountable for its lack of opposition to Interstate’s limitations defense. View "Sparkle Hill, Inc. v. Interstate Mat Corp." on Justia Law