Justia Consumer Law Opinion Summaries

The issue this case presented to the Supreme Court started from an agreement between Respondents, the University of South Carolina and the University Gamecock Club, and Appellant George M. Lee, III. In exchange for Appellant purchasing a $100,000 life insurance policy and naming the University the sole, irrevocable beneficiary of the policy, Appellant was given the "opportunity to purchase tickets" for his lifetime to University football and basketball games. Years later, the University instituted a program that required all Gamecock Club members, including Appellant, to pay a seat license fee as a prerequisite for purchasing season tickets. Believing that the University could not require him to pay additional consideration for the opportunity to purchase tickets without violating the agreement, Appellant brought a declaratory judgment action. The trial court entered judgment for the University and the Gamecock Club, finding that Appellant was not deprived of the opportunity to purchase season tickets when the University instituted the seat license fees. The Supreme Court reversed: the Agreement unambiguously prohibited the University from requiring Lee to pay the seat license fee as a prerequisite for the opportunity to purchase tickets pursuant to the Agreement. View "Lee v. University of South Carolina" on Justia Law

The Fleets applied to have their Bank of America (BofA) home loan modified in 2009 under the Making Homes Affordable Act. The result of multiple telephone calls and letters to various BofA-related personnel, the Fleets were either (a) assured the Fleets that everything was proceeding smoothly or (b) told BofA had no knowledge of any loan modification application. Finally, in November 2011, BofA informed the Fleets they had been approved for a trial period plan under a Fannie Mae modification program. All they had to do, was to make three monthly payments starting on December 1, 2011. If they made the payments, then they would move to the next step (verification of financial hardship); if they passed that test, their loan would be permanently modified. The Fleets made the first two payments, for December 2011 and January 2012, which BofA acknowledged receiving, and therefore foreclosure proceedings had been suspended. Toward the end of January 2012, their house was sold at a trustee’s sale. Two days after the sale, a representative of the buyer showed up at the house with a notice to quit. The Fleets informed him that the house had significant structural problems, and he said he was going to rescind the sale. The Fleets continued to try to communicate with BofA regarding the property. A BofA representative left voice mail messages to the effect that BofA wanted to discuss a solution to the dispute, but otherwise it appeared that productive conversation between the Fleets and BofA and between the Fleets and the buyer had ceased. In light of this silence (which they interpreted to mean the buyer was trying to rescind the sale), the Fleets spent $15,000 to repair a broken sewer main, which was leaking sewage onto the front lawn. They were evicted in August 2012. In June 2012, the Fleets sued BofA, the trustee under their deed of trust, BofA officers and some of the employees who had been involved in handling their loan modification, and the buyer of the property and its representative. BofA’s demurrer to the first amended complaint was sustained without leave to amend as to the remaining causes of action promissory estoppel, breach of contract, fraud, and accounting. All of the BofA defendants were dismissed. The Court of Appeal reversed: "Although the Fleets’ amended complaint spreads the fraud allegations over three causes of action and contains a great deal of extraneous information, it also alleges the requisite elements of promissory fraud. [. . .] This cause of action may or may not be provable; what it definitely is not is demurrable." The Court sustained the demurrer to the Fleets' action for promissory estoppel, and affirmed the trial court in all other respects. The case was remanded for further proceedings. View "Fleet v. Bank of America" on Justia Law

The Seventh Circuit consolidated class action appeals filed under the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g), which provides that “no person that accepts credit cards or debit cards ... shall print [electronically] more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale.” Willful violation entitles a consumer who sustains no harm to statutory damages, but a consumer harmed by the violation can obtain actual damages by showing that the violation was the result of negligence. Consumers who bought products at RadioShack stores paid with credit or debit cards, and received electronically printed receipts that contained the card’s expiration date. The parties settled; each class member who responded positively was to receive a $10 coupon that could be used at any RadioShack store. The face value of all the coupons was $830,000. RadioShack was to pay class counsel $1 million. The Seventh Circuit reevaluated the value of the settlement to class members and the benefits of costs incurred and, noting Radio Shack’s fragile financial condition, stated ”A renegotiated settlement will simply shift some fraction of the exorbitant attorneys’ fee awarded class counsel in the existing settlement that we are disapproving to the class members. While Radio Shack’s violation was willful, given earlier litigation, Shoe Carnival had no previous violation to alert the company. Instead of omitting the entire expiration date from credit‐card receipts, Shoe Carnival omitted just the year The Seventh Circuit concluded that there was sufficient ambiguity in the statute to justify the district court’s determination that Shoe Carnival had not willfully violated FACTA. View "Aliano v. RadioShack Corp." on Justia Law

Plaintiff filed suit on behalf of himself and a putative class, alleging claims under the Telephone Consumer Protection Act (TCPA), 42 U.S.C. 227(b)(1)(A)(iii), that Campbell-Ewald instructed or allowed a third-party vendor to send unsolicited text messages on behalf of the Navy, with whom Campbell-Ewald had a marketing contract. The district court granted summary judgment to Campbell-Ewald under the doctrine of derivative sovereign immunity. The court rejected Campbell-Ewald's claim that the personal and putative class claims were mooted by petitioner's refusal to accept the settlement offer; Campbell-Ewald's constitutional claims were unavailing where the company relied upon a flawed application of First Amendment principles; the TCPA imposes vicarious liability where an agency relationship, as defined by federal common law, is established between the defendant and a third-party caller; and the application of the doctrine of derivative sovereign immunity is inapplicable in this case. Because Campbell-Ewald failed to demonstrate that it was entitled to judgment as a matter of law, the court vacated and remanded for further proceedings. View "Gomez v. Campbell-Ewald Co." on Justia Law

After Jerramy Johnson, the owner of Front Row Motors, LLC, sold Scott Jones a used car, Jones filed an action against Front Row Motors, alleging, inter alia, a violation of the Indiana Deceptive Sales Act. Jones subsequently filed an amended complaint adding Johnson as a party defendant. The trial court awarded damages in favor of Jones and against Johnson and Front Row Motors jointly and severally. Defendants moved to set aside the default judgments for imperfect service of process. The trial court set aside the default judgment as against Johnson but denied the motion as to Front Row Motors. The Supreme Court reversed, holding that the trial court abused its discretion in denying Front Row Motors’ motion to set aside the judgment, as Front Row Motors did not receive proper notice of the damages hearing, and therefore, the default judgment entered against it was void for want of jurisdiction.View "Front Row Motors, LLC v. Jones" on Justia Law

The United States District Court for the Western District of Washington certified a question of Washington law to the Washington Supreme Court. The issue centered on whether Washington law recognized a cause of action for monetary damages where a plaintiff alleges violations of the deeds of trust act (DTA), chapter 61.24 RCW, but no foreclosure sale has been completed. The Supreme Court was also asked to articulate the principles that would apply to such a claim under the DTA and the Consumer Protection Act (CPA), chapter 19.86 RCW. The Court held that the DTA does not create an independent cause of action for monetary damages based on alleged violations of its provisions where no foreclosure sale has been completed. The answer to the first certified question was no-at least not pursuant to the DT A itself. Furthermore, the Court found that under appropriate factual circumstances, DTA violations may be actionable under the CPA, even where no foreclosure sale has been completed. The answer to the second certified question was that the same principles that govern CPA claims generally apply to CPA claims based on alleged DTA violations. View "Frias v. Asset Foreclosure Servs., Inc." on Justia Law

Appellee, Peter Rosenow, brought a class-action complaint individually and on behalf of similarly situated persons against Appellants, Alltel Corporation and Alltel Communications, Inc. (collectively, Alltel), alleging violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment arising from Alltel’s imposition of an early termination fee on its cellular-phone customers. Alltel filed a motion seeking to compel arbitration based on an arbitration clause contained in its “Terms and Conditions.” The circuit court denied the motion, concluding that Alltel’s arbitration provision lacked mutuality. The Supreme Court affirmed, holding that the circuit court did not err in finding that a lack of mutuality rendered the instant arbitration agreement invalid. View "Alltel Corp. v. Rosenow" on Justia Law

Plaintiffs, appellants, and cross-respondents were consumers who purchased vehicles from defendant, respondent, and cross-appellant Raceway Ford. Plaintiffs raised numerous causes of action based on laws proscribing certain acts against consumers, unfair competition, and deceptive business practices, bringing both individual claims and claims on behalf of two certified classes. After a bench trial, the trial court entered judgment in favor of Raceway and against plaintiffs on all causes, except that a single plaintiff was granted rescission on a single cause of action. Separately, the trial court awarded attorneys’ fees and costs to Raceway. In consolidated appeals, plaintiffs challenged the trial court’s judgment on the merits (case No. E054517) and fee order (case No. E056595); Raceway cross-appealed regarding one aspect of the trial court’s fee order. In their appeal, plaintiffs specifically argued that, as a matter of law, Raceway’s previous practice of “backdating” second or subsequent contracts for sale of a vehicle to the original date of sale violated the Automobile Sales Finance Act (also known as the Rees-Levering Motor Vehicle Sales and Finance Act (ASFA)), the Consumer Legal Remedies Act (CLRA), and the Unfair Competition Law (UCL). The Court of Appeal agreed that the practice of backdating could have resulted in inaccurate disclosures to class members, thereby violating the ASFA, at least in some cases. On the record, however, the Court declined to order entry of judgment in favor of the plaintiff class, rather reversed the trial court’s judgment in favor of Raceway with respect to plaintiffs’ backdating claims. Plaintiffs also appealed the judgment in favor of Raceway with respect to claims of a second certified class, consisting of Raceway customers who purchased used diesel vehicles from Raceway and who were charged fees for smog checks and smog certifications that were only properly applicable to purchases of gasoline vehicles. The Court of Criminal Appeals affirmed the trial court’s judgment with respect to plaintiffs’ smog fee claims. Additionally, plaintiffs appealed the judgment in favor of Raceway on certain individual plaintiffs’ claims that Raceway violated the ASFA by failing to provide them with copies of their credit applications. The Court found plaintiffs’ evidence in support of these claims was insufficient to overturn the trial court's decision, so that ruling was also affirmed. Lastly, plaintiffs appealed the judgment in favor of Raceway with respect to claims under the UCL and the CLRA brought by plaintiff Francisco Salcedo in his individual capacity. The trial court found in favor of Mr. Salcedo on his claim of fraud, and granted him the remedy of rescission, though it declined to award any punitive damages. Plaintiffs contended that the judgment in Mr. Salcedo’s favor on his fraud claim established as a matter of law that he should also have judgment entered in his favor on his UCL and CLRA claims. The Court of Appeal agreed, and reversed. The basis for the trial court’s award of fees to Raceway was, in part, undermined by the Court's partial reversal of the judgment. The case was therefore remanded with respect to Raceway's claims in light of remand on other issues. View "Raceway Ford Cases" on Justia Law

Cavalry SPV I, LLC (Cavalry) purchased Patty Simpson’s delinquent credit card account and retained the McHughes Law Firm (McHughes) to collect on the delinquent account. McHughes, on behalf of Cavalry, commenced an action seeking to collect the debt, and a default judgment was entered against Simpson. Simpson then sued Cavalry, alleging state and federal claims. As grounds for her claims Simpson asserted that Cavalry was not licensed in Arkansas as a debt collector. The action was removed to federal court. Cavalry moved for summary judgment, asserting that it was not required to be licensed because it did not attempt to collect delinquent accounts or bills but, rather, hired a licensed Arkansas lawyer to collect on delinquent accounts and file lawsuits on its behalf. The Supreme Court accepted certification of two questions of law and answered (1) an entity that purchases delinquent accounts and then retains a licensed Arkansas lawyer to collect on the delinquent accounts and file lawsuits on its behalf meets the definition of “collection agency” pursuant to Ark. Code Ann. 17-24-101; and (2) an entity, such as Cavalry, that purchases and attempts to collect delinquent accounts must be licensed by the Arkansas State Board of Collection Agencies. View "Simpson v. Cavalry SPV I, LLC" on Justia Law

Quest provides diagnostic and clinical testing. In general, it tests a patient’s specimens upon the request of a referring physician. Once Quest bills a patient’s insurance provider, the provider reviews the claim and sends Quest an Explanation of Benefits (EOB) or an Electronic Remittance Advice (ERA), which informs Quest of the amount, if any, that the patient is responsible for paying. Quest then sends the patient a bill, and, if no response is received, it may turn the bill over to a collection agency. Plaintiffs in a putative class action claimed that Quest billed patients in excess of the amount stated on the EOB or ERA. The district court denied certification as to all four proposed classes and granted summary judgment against an individual plaintiff, as to her state law claims of consumer fraud and unjust enrichment. The Third Circuit affirmed. The court properly found that individual inquiries would be required to determine whether an alleged overbilling constituted unjust enrichment for each class member. View "Grandalski v. Quest Diagnostics Inc." on Justia Law