Justia Consumer Law Opinion Summaries

Five individuals (collectively, “Plaintiffs”) each filed a petition for individual bankruptcy under Chapter 13 in the Bankruptcy Court for the District of Maryland. LVNV Funding, LLC and its affiliated companies (collectively, “Defendants”) filed a proof of unsecured claim based on defaulted debts it had acquired against each plaintiff. Each Chapter 13 plan was approved. Defendants’ claims were allowed, and they received payments from the Chapter 13 trustees on these claims. Plaintiffs subsequently filed this putative class action lawsuit in the District of Maryland alleging that Defendants violated the federal Fair Debt Collection Practices Act (FDCPA) and various Maryland laws by filing proofs of claim without a Maryland debt collection license. The district court dismissed the action, concluding (1) the state common law claims were barred by res judicata, and (2) the federal and state statutory claims failed to state a claim. The Fourth Circuit affirmed but on res judicata grounds, holding (1) Plaintiffs’ claims were based on the same cause of action as Defendants’ claims in the confirmed bankruptcy plans and were thus barred by res judicata; and (2) Plaintiffs’ statutory claims were subject to the normal principles of res judicata and were thus precluded by the confirmation of the Chapter 13 plans. View "Covert v. LVNV Funding, LLC" on Justia Law

Shaun Trabert purchased a used vehicle from an automobile dealer. Trabert signed a preprinted industry-drafted installment sales contract. The dealer then assigned the contract to Consumer Portfolio Services, Inc. Portfolio later repossessed Trabert's vehicle, and Trabert filed a class action complaint alleging Portfolio's repossession/default notices were defective under consumer statutes. This appeal was the second time the issue of an automobile purchaser who brought consumer claims against the creditor-assignee of the parties' sales contract came before the Court of Appeal. The first appeal involved the enforceability of an arbitration agreement in the contract. In "Trabert I," the Court held the arbitration agreement contained certain unconscionable provisions, and remanded for the court to determine whether these provisions could be severed from the remaining agreement. On remand, the trial court declined to sever the provisions and denied the creditor-assignee's motion to compel arbitration. Portfolio challenged the trial court's last order in this second appeal. After review, the Court of Appeal concluded the trial court erred in denying Portfolio's motion. "The unconscionable provisions concern only exceptions to the finality of the arbitration award, and can be deleted without affecting the core purpose and intent of the arbitration agreement. The deletion of these exceptions creates a binding arbitration award and promotes the fundamental attributes of arbitration, including speed, efficiency, and lower costs." The Court reversed and remanded with directions for the court to sever the unconscionable provisions from the arbitration agreement and granted Portfolio's motion to compel arbitration. View "Trabert v. Consumer Portfolio Services" on Justia Law

Plaintiff-appellant Patricia Clements refinanced a mortgage with Wells Fargo Bank, N.A., which hired LSI Title Agency, Inc. to provide mortgage refinancing services for the transaction. Because Georgia law required all closing services to be performed by a licensed attorney, LSI contracted with the Law Offices of William E. Fair, LLC to provide a closing attorney, and the Law Offices arranged for Sean Rogers to serve in that capacity. After the refinancing, Clements filed a putative class action in a state court against LSI, the Law Offices, Fair, and other unnamed defendants. Clements alleged that LSI routinely had non-attorneys prepare all of the documents for the closing and that the Law Offices and Fair arranged for a licensed attorney, Rogers, to witness the signing of the documents, in violation of Georgia law. This appeal presented three questions to the Eleventh Circuit Court of Appeals for review: (1) whether an allegation that a lender charged a borrower for unearned fees conferred standing on the borrower; (2) whether a mortgage service provider performs only nominal services when it procures a closing attorney; and (3) whether a mortgage service provider "give[s or] . . . accept[s] any portion, split, or percentage of any [settlement] charge" when it marks up the price of a third-party service. Clements alleged two violations of the Real Estate Settlement Procedures Act, and three violations of Georgia law. The district court dismissed the amended complaint for lack of standing. Although the Eleventh Circuit concluded that Clements had standing to sue, the Court affirmed in part the dismissal of her federal claims for failing to state a claim upon which relief could be granted, and vacated in part and remanded for the district court to decide whether to exercise supplemental jurisdiction over her claims under Georgia law. View "Clements v. LSI Title Agency, Inc." on Justia Law

LVNV collection agency bought Trice’s unpaid debt and filed suit. Trice later sought to vacate a judgment against him on the ground that LVNV was not an Illinois registered agency. The circuit court of Cook County declared sections of the Collection Agency Act (225 ILCS 425/4.5, 14, 14b) unconstitutional. The appellate court remanded after holding that “a complaint filed by an unregistered collection agency is … a nullity, and any judgment entered on such a complaint is void/” The circuit court then found the penalty provisions unconstitutional on grounds of due process, equal protection and vagueness, but held that though LVNV was unlicensed when it filed suit, the resulting judgment should have been “voidable rather than void.” The Illinois Supreme Court vacated the circuit court’s findings, rejected the analysis of the appellate court, and remanded. The circuit court’s initial denial of Trice’s petition was correct, LVNV has been granted relief on a nonconstitutional ground. Failure to comply with a statutory requirement or prerequisite does not negate the circuit court’s subject matter jurisdiction or constitute a nonwaivable condition precedent to that jurisdiction, so there was no need for the circuit court to address the Act’s constitutionality. View "LVNV Funding, LLC v. Trice" on Justia Law

Issiah Andra, a Missouri resident, filed a petition against Texas-based Left Gate Property Holding, Inc. after Andra purchased on eBay a vehicle from Left Gate that did not meet Andra’s expectations. The circuit court dismissed the petition for lack of personal jurisdiction over Left Gate. Andra appealed, arguing that Left Gate had sufficient minimum contacts with Missouri to be subject to personal jurisdiction in Missouri in accordance with the due process clause of the Fourteenth Amendment. The Supreme Court reversed, holding that Left Gate’s conduct in Missouri fell within Missouri’s long-arm statute, and Left Gate had sufficient minimum contacts with Missouri to satisfy the due process clause. View "Andra v. Left Gate Prop. Holding, Inc." on Justia Law

When two of Price Chopper’s employees saw Deborah Barkley head for the store’s exit without paying for certain items, they confiscated the items and detained her at the store’s security office on suspicion of shoplifting. Approximately forty-five minutes after Barkley was first detained, the police arrested her and escorted her from the store. Barkley was charged with shoplifting but was later acquitted of this charge. Barkley sued Price Chopper, alleging various torts arising out of her detention. At the close of the evidence, Barkley abandoned all of her claims except false imprisonment and battery. The jury found for Price Chopper on both counts. Barkley appealed, arguing that the merchant’s privilege extends to claims of battery, and the privilege ends when the merchant’s property is recovered. The Supreme Court affirmed, holding that a merchant is privileged to detain a person in a reasonable manner and for a reasonable time if the merchant has probable cause to believe that person is shoplifting, and the merchant may continue the detention after the property is recovered to determine whether the person was actually shoplifting and to summon the police and instigate criminal proceedings. View "Barkley v. McKeever Enters., Inc." on Justia Law

In this putative class action against the manufacturer of Lexapro, Forest Pharmaceuticals, Inc., Plaintiffs claimed that Lexapro’s FDA-approved drug label misleads California consumers by omitting material efficacy information in violation of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law. As relief, Plaintiffs requested that the court permanently enjoin Forest from continuing to sell or market Lexapro with its current drug label and to direct Forest to seek FDA approval of a new drug label. The district court dismissed the complaint, concluding that claims were barred by California’s safe harbor doctrine. The First Circuit affirmed the judgment dismissing the complaint but on other grounds, holding that federal law impliedly preempts Plaintiffs’ claims because the federal Food, Drug, and Cosmetic Act prohibits Forest from independently changing its FDA-approved label to read as Plaintiffs say it should have read in order to comply with California Law. View "Marcus v. Forest Pharms., Inc." on Justia Law

Plaintiff purchased a Life Fund 5.1, L.L.C. Capital Appreciation Bond from a company that subsequently filed for bankruptcy. More than two years after purchase, plaintiff sued the defendants for misrepresentations and omissions in the sale of securities, fraud, breach of fiduciary duty, and negligence. The district court granted the defendants' motion for summary judgment, ruling that the statute of limitations for each of the plaintiff's claims had run before she brought suit. Plaintiff appealed, and the Court of Civil Appeals affirmed. The question this case presented for the Supreme Court's review was whether the district court erred in granting the defendants' motion for summary judgment based on the expiration of the statutory limitations periods. As a threshold matter, the Court determined when plaintiff's claims accrued and whether the statute of limitations for each claim ran or was tolled from the accrual date based upon the discovery rule. After review, the Court held that defendants did not submit sufficient evidentiary material to support their arguments as to when the statute of limitations began to run on each claim. Therefore the Court reversed the grant of summary judgment and remanded the case for further proceedings. View "Horton v. Hamilton" on Justia Law

After experiencing problems with his Mercedes-Benz that required multiple repair attempts, MacQuiddy filed suit under the Song-Beverly Consumer Warranty Act (Civ. Code, 1790) and the Magnuson-Moss Warranty Act (15 U.S.C. 2301), seeking a refund for the car and a civil penalty for the alleged willful violation of the Act. Mercedes-Benz admitted it had not been able to conform the car to the applicable warranties within the time frames set forth in the Act and that it had not yet replaced the car or made restitution, but asserted it would offer to reimburse MacQuiddy as required under the Act. MacQuiddy subsequently rejected a statutory offer to compromise in which Mercedes-Benz offered to repurchase the car for an amount consistent with the Act, and to pay MacQuiddy’s attorney fees and costs incurred up to that point. A jury found Mercedes-Benz did not willfully fail to comply with the Act. The court of appeal affirmed in part, but reversed an order denying MacQuiddy costs and awarding costs to Mercedes-Benz. On remand, the court is to permit MacQuiddy to file a new Memorandum of Costs, and to recalculate such costs without regard to Mercedes-Benz’s section 998 offer. An order denying attorney fees was affirmed. View "MacQuiddy v. Mercedes-Benz USA, LLC" on Justia Law

Defendant financed his purchase of a used car with a retail installment loan from Plaintiff. Defendant defaulted on the loan, so Plaintiff repossessed the car and sold it. Plaintiff then brought this action against Defendant seeking a deficiency judgment, interest, and attorney’s fees. The trial court awarded Plaintiff compensatory damages and costs and attorney’s fees. The court also awarded prejudgment interest under Conn. Gen. Stat. 37-1 at the contract rate of 9.14 percent and discretionary postjudgment interest under Conn. Gen. Stat. 37-3a at an annual rate of two percent. Plaintiff appealed, arguing that the trial court improperly awarded discretionary postjudgment interest pursuant to section 37-3a. The Appellate Court affirmed, determining that the entry of judgment terminated the accrual of postmaturity interest on the loan, leaving any award of postjudgment interest to the trial court’s discretionary powers under Conn. Gen. Stat. 37-3a(a). The Supreme Court reversed, holding (1) the Appellate Court improperly concluded that postmaturity interest terminates upon the entry of judgment in the absence of a specific agreement for postjudgment interest; and (2) because the parties’ loan contract did not disclaim postmaturity interest Plaintiff was entitled to postmaturity interest under section 37-1(b). View "Sikorsky Fin. Credit Union, Inc. v. Butts" on Justia Law