Justia Consumer Law Opinion Summaries

Plaintiff filed suit against Absolute Collection, alleging that the collection agency's conduct violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the North Carolina Collection Agency Act, N.C. Gen. Stat. 58-70-1 et seq. Plaintiff alleged that Absolute Collection falsely reported the status of a 2008 debt to credit bureaus as "past due." The district court granted plaintiff's motion for judgment as a matter of law with respect to certain claims under the FDCPA and allowed the state claims to go to the jury, which found in favor of plaintiff. Absolute Collection appealed. The court concluded that the district court did not err in denying Absolute Collection's motion for judgment as a matter of law and held that a debtor is not required to dispute his or her debt under section 1692g as a condition to filing suit under section 1692e. The court rejected Absolute Collection's remaining arguments and affirmed the judgment of the district court. View "Russell v. Absolute Collection Services" on Justia Law

The FTC appealed the damages portion of a district court order granting in part the FTC's motion for contempt relating to defendants' violation of a Consent Order. The FTC argued that it was entitled to a presumption that consumers relied, when deciding to purchase defendants' products, on defendants' omissions and misrepresentations. Therefore, the FTC sought over $14 million in contempt damages, an amount equal to defendants' gross receipts. As a preliminary matter, the court concluded that the FTC may pursue recovery for contempt damages based on alleged violations of a Consent Order. The court agreed with the FTC and joined its sister circuits in holding that the FTC is entitled to a presumption of consumer reliance. Here, in the context of a contempt action arising out of violations of a promise to refrain from misrepresentations concerning material terms or omissions of material terms, the court held that the calculation of the appropriate measure of loss begins with defendants' gross receipts derived from such contumacious conduct. After the court uses defendants' gross receipts as a baseline for calculating damages, the court must permit defendants to put forth evidence showing that certain amounts should offset the sanctions assessed against them. The court vacated that portion of the district court's contempt order that has calculated damages and remanded for further proceedings. View "FTC v. BlueHippo, et al." on Justia Law

This case stemmed from issues arising from plaintiff Maria Mendoza’s purchase of a home with proceeds of a loan secured by a deed of trust, and the subsequent loss of the home in a nonjudicial foreclosure sale. The trial court sustained the banks' demurrer to plaintiff’s complaint without leave to amend, rejecting her attempt to void the trustee's sale based on purported defects in the assignment of her deed of trust, irregularities in the substitution of trustees, and flaws in the securitization of her loan. The homeowner contends that not only should she be allowed to remain in her home, but that she is entitled to outright ownership without paying her debt because the banks have "already benefitted from an American taxpayer bailout of unprecedented proportions." In affirming the trial court’s dismissal of the second amended complaint for wrongful foreclosure, declaratory relief, and quiet title, the Court of Appeal concluded: (1) plaintiff failed to make a specific factual showing that the foreclosing parties did not have the requisite interest in the property to issue the notice of default, the notice of trustee’s sale, and the trustee’s deed of sale; and (2) in the absence of prejudice, she lacked standing to challenge irregularities in the securitization process. View "Mendoza v. JPMorgan Chase Bank, N.A." on Justia Law

Plaintiffs entered into a loan agreement with Potomac Realty Capital LLC (PRC) to rehabilitate and renovate certain property. As security for the loan, NV One granted a mortgage on the property. Plaintiffs later filed a complaint against PRC, asserting violations of the Rhode Island usury law, among other claims. The trial justice granted summary judgment to Plaintiffs with respect to the usury claim, entered an order declaring the loan usurious and void, and voided the mortgage. At issue on appeal was whether a usury savings clause in the loan document validated the otherwise usurious contract. The Supreme Court affirmed, holding that Plaintiffs were entitled to judgment as a matter of law on their usury claim because (1) the loan was a usury; and (2) the usury savings clause was unenforceable on public policy grounds.View "NV One, LLC v. Potomac Realty Capital, LLC" on Justia Law

MPHJ Technology Investments, LLC (MPHJ) owned several patents relating to network scanner systems. Through subsidiary licensees, MPHJ wrote to various business and non-profit organizations operating in Vermont, requesting the recipient to confirm it was not infringing MPHJ’s patents or, alternatively, to purchase a license. If there was no response, a Texas law firm sent follow-up correspondence stating that an infringement suit would be filed. The State of Vermont filed suit against MPHJ in Vermont state court alleging MPHJ engaged in unfair and deceptive trade practices under the Vermont Consumer Protection Act, stating that the letters contained threatening, false, and misleading statements. MPHJ removed the case to the United States District Court for the District of Vermont, asserting federal question jurisdiction and diversity jurisdiction. The State moved to remand the case back to state court for lack of subject matter jurisdiction. MPHJ opposed the State’s motion to remand, and filed a motion to dismiss for lack of personal jurisdiction and a motion for sanctions. Finding that it lacked jurisdiction to grant MPHJ its requested relief, the Federal Circuit Court of Appeals dismissed the petition and appeal. View "Vermont v. MPHJ Technology Investments" on Justia Law

First Resolution Investment Corp. filed a notice of judgment lien against Roslyn Currier's home and maintained it for approximately one month although the judgment it was based on never became final and was vacated. Upon review of the matter, the Sixth Circuit Court of Appeals held that filing and failing to release an invalid judgment lien against a debtor's home while the related state court collection action remained pending fell within the broad scope of practices prohibited by the Fair Debt Collection Practices Act (FDCPA). Because Currier stated a plausible claim under the FDCPA, the Court reversed the dismissal of her claims and remanded the case for further proceedings. View "Currier v. First Resolution Inv. Corp." on Justia Law

In 2009 Elisabeth Bachmeier defaulted on a loan secured by a deed of trust against her home, and a nonjudicial foreclosure was initiated. Bachmeier requested a reinstatement quote in order to halt the foreclosure. Alaska Trustee, the trustee under the deed of trust, replied with a quote which included foreclosure costs that were not attorney's fees or court costs, the only items the foreclosure statute expressly mentions as recoverable in a reinstatement amount. Bachmeier brought suit against Alaska Trustee, Routh Crabtree Olsen (the law firm aiding in the foreclosure), and Richard Ullstrom (an attorney employed by Routh Crabtree Olsen), alleging that the inclusion of the disputed foreclosure costs violated the foreclosure statute and was a deceptive practice in violation of the Unfair Trade Practices and Consumer Protection Act (UTPA). Bachmeier also argued that her deed of trust did not provide that all foreclosure costs could be recovered in the reinstatement amount. Both sides moved for summary judgment. The superior court concluded that the inclusion of the foreclosure costs violated the foreclosure statute and that the UTPA applied to nonjudicial foreclosures. Alaska Trustee appealed. The Supreme Court granted review to determine: (1) the scope of permissible charges to be included in the reinstatement amount given to homeowners facing nonjudicial foreclosure under AS 34.20.070(b); and (2) whether the UTPA applied to nonjudicial deed of trust foreclosures. The Court held that because the beneficiary of a deed of trust has a right to be returned to its status quo ante when the borrower reinstates after a default, Alaska Trustee could include in Bachmeier's reinstatement amount all reasonable costs it incurred pursuing the foreclosure under the foreclosure statute, regardless of whether Bachmeier's deed of trust specifically provided for the inclusion of such costs. Furthermore, the Court held that the UTPA did not apply to nonjudicial deed of trust foreclosures. View "Alaska Trustee, LLC v. Bachmeier" on Justia Law

A commercial tenant (Tenant) remained in possession of property for over ten years after Tenant lost its lease when the property was sold through foreclosure. The new owner (Owner) continually insisted that Tenant vacate the premises, and Tenant ultimately conceded that it had become a tenant at sufferance. Owner filed suit against Tenant, alleging claims for breach of the terminated lease, for trespass and other torts, and for violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). The trial court entered summary judgment for Tenant on all claims. The court of appeals reversed and remanded in part. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) a tenant at sufferance cannot be liable for breach of a previously terminated lease agreement; (2) a tenant at sufferance is trespassing and can be liable in tort, including tortious interference with prospective business relations; (3) Tenant in this case could not be liable under the DTPA; and (4) Owner in this case could not recover attorney’s fees under the Texas Uniform Declaratory Judgments Act. View "Coinmach Corp. v. Aspenwood Apartment Corp." on Justia Law

Plaintiffs filed suit alleging, among other things, fraud and unfair business practices in the origination of plaintiffs' residential mortgage loans, and negligence in the subsequent servicing of the loans. On appeal, plaintiffs argued that the trial court erred in concluding that the complaint failed to allege fraud for which defendants are responsible and in concluding that defendants owed no duty of care to plaintiffs in the review of their applications for a loan modification. The court concluded that plaintiffs have alleged a cause of action for fraud against defendants where the complaint alleged that the loan documents concealed the terms of plaintiffs' loans and plaintiffs have alleged facts establishing defendants' liability for the alleged fraud. Accordingly, the court reversed as to plaintiffs' first, second, and sixth causes of action and remanded for further proceedings. View "Alvarez v. BAC Home Loans Servicing, L.P." on Justia Law

In 2006, Joseph and Mary Romero signed a mortgage contract with the Mortgage Electronic Registration Systems (MERS) as nominee for Equity One, Inc. They pledged their home as collateral for the loan. The Romeros alleged that Equity One urged them to refinance their home for access to the home's equity. The terms of the new loan were not an improvement over their then-current loan: the interest rate was higher and the loan amount due was higher. Despite that, the Romeros would receive a net cash payout they planned to use to pay other debts. The Romeros later became delinquent on their increased loan payments. A third party, Bank of New York (BONY), identified itself as a trustee for Popular Financial Services Mortgage, filed suit to foreclose on the Romeros' home. BONY claimed to hold the Romeros' note and mortgage with the right of enforcement. The Romeros defended by arguing that BONY lacked standing to foreclose because nothing in the complaint established how BONY held their note and mortgage, and that the contracts they signed were with Equity One. The district court found that BONY had established itself as holder of the Romeros' mortgage, and that the bank had standing to foreclose. That decision was appealed. Upon review, the Supreme Court concluded the district court erred in finding BONY's evidence demonstrated that it had standing to foreclose. Accordingly, the Court reversed the district court and remanded the case for further proceedings.View "Bank of New York v. Romero" on Justia Law