Justia Consumer Law Opinion Summaries

In 2006, Respondents obtained an adjustable rate mortgage loan from a mortgage company. Respondents executed a deed of trust on the real property being purchased and separately executed an arbitration rider. Respondents later defaulted on the loan, and Petitioner, which serviced the loan, assessed a number of fees. Respondents filed an action against Petitioner alleging violations of the West Virginia Consumer Credit and Protection Act. Petitioner filed a motion to compel arbitration. The circuit court denied the motion, concluding that the arbitration agreement was unenforceable under the Dodd-Frank Act and that it was procedurally and substantively unconscionable. The Supreme Court granted Petitioner's requested writ of prohibition to prevent enforcement of the circuit court's order, holding (1) the Dodd-Frank Act did not apply to the mortgage loan because the loan was executed prior to the Act's enactment; and (2) the arbitration agreement was neither procedurally nor substantively unconscionable.View "State ex rel. Ocwen Loan Servicing, LLC v. Circuit Court of Kanawha County" on Justia Law

Petitioners in this consolidated appeal were engaged in various aspects of the collection of consumer debts. After the Attorney General (AG) received complaints from consumers indicating that certain Petitioners had violated consumer protection laws, the AG issued an investigative subpoena, to which Petitioners objected. The AG filed a civil action against Petitioners seeking to compel Petitioners to comply with the subpoena. The circuit court ordered Petitioners to comply with the subpoena and temporarily enjoined Petitioners from collecting debts they had acquired before they were licensed. The Supreme Court primarily affirmed the circuit court's orders, holding (1) when the AG files a cause of action against an entity that is subject to an investigative subpoena, the AG's subpoena authority ends as to those matters that form the basis of the complaint's allegations, and the rules of discovery provide the method by which the AG may investigate the wrongdoing; (2) the investigative subpoena survives the AG's filing of a lawsuit when the subpoena pertains to matters that do not form the basis of the complaint; and (3) once the AG has instituted a civil action against an entity to enjoin unlawful conduct, the AG may seek temporary relief against the entity during the pendency of such proceedings. View "Cavalry SPV I, LLC v. Morrisey" on Justia Law

In 2005, James Wiese attended an auction held by Alabama Powersport Auction, LLC (APA) and purchased a "Yerf Dog Go-Cart," for his two minor sons. The go-cart was on consignment to APA from FF Acquisition; however, Wiese was not aware that FF Acquisition had manufactured the go-cart. Soon after purchasing the go-cart, Wiese discovered that the engine would not operate for more than a few minutes at a time. After several failed attempts to repair the go-cart, Wiese stored the go-cart in his garage for almost two years. In 2007, Wiese repaired the go-cart. Matthew Wiese was riding the go-cart and had an accident in which he hit his head on the ground causing a brain injury that resulted in his death in 2010. The elder Wiese brought contract claims against APA stemming from his purchase of the go-cart and for his son's death. APA appealed the circuit court's denial of its motion for summary judgment. Upon review of the matter, the Supreme Court concluded that based on the common-law principles of agency, an auctioneer selling consigned goods on behalf of an undisclosed principal may be held liable as a merchant-seller for a breach of the implied warranty of merchantability under 7-2-314, Ala. Code 1975. As a result,the Court affirmed the circuit court's judgment denying APA's summary-judgment motion as to Wiese's breach-of-the-implied-warranty-of-merchantability claim.View "Alabama Powersport Auction, LLC v. Wiese" on Justia Law

Plaintiff Janet Knutsen appealed a superior court decision to deny her motion for summary judgment and and for granting defendant Vermont Association of Realtors, Inc.'s (VAR) motion for summary judgment on her consumer fraud claim arising out of her purchase of a home in Moretown. Plaintiff argued that VAR's form purchase and sale agreement, which was used in her real estate purchase (to which VAR was not a party) violated the Vermont Consumer Fraud Act (CFA) in that two provisions of the form were unfair and deceptive, and that she was therefore entitled to damages under section 2461(b) of the CFA. Upon review of the facts of this case, the Supreme Court concluded that the trial court correctly held that 'VAR's sole connection to this case was its drafting of the template clauses that [plaintiff] and her buyer's broker used for the purchase of the house, and that could not support a consumer fraud claim.View "Knutsen v. Dion" on Justia Law

After purchasing a car from Defendant, a car dealership, Plaintiff discovered that the car had extensive problems. Plaintiff sued Defendant, alleging that advertising the car as a "Sporty Car at a Great Value Price" violated the Indiana Deceptive Consumer Sales Act and that the salesperson's representation to her that the car would "just need a tune-up" was fraudulent. The trial court granted summary judgment for Defendant. The Supreme Court affirmed in part and reversed in part, holding (1) the trial court correctly found that Defendant's advertisement was classic puffery, which was fatal to Plaintiff's deception claims; but (2) Plaintiff established an issue of material fact as to her fraud claim based on the salesperson's statements. Remanded.View "Kesling v. Hubler Nissan, Inc." on Justia Law

Donald Austin filed suit against Stokes-Craven, an automobile dealership, after he experienced problems with his used vehicle and discovered the vehicle had sustained extensive damage prior to the sale. The resolution of this case involved an interpretation of a narrow portion of the Supreme Court’s opinion in “Austin v. Stokes-Craven Holding Corp.,” (691 S.E.2d 135 (2010)). Specifically, the consolidated appeals were the result of a dispute over the Court's holding concerning Austin's entitlement to trial fees under the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act and whether the Supreme Court's denial of Austin's motion for appellate costs under Rule 222 of the South Carolina Appellate Court Rules had preclusive effect on his right to pursue appellate and post-appellate fees under the Dealer's Act. After careful review of the appellate record in this case, the Supreme Court affirmed the trial judge's award of trial fees to Austin and remanded this case to the circuit court to conduct a hearing to determine what amount of appellate and post-appellate fees should be awarded to Austin. View "Austin v. Stokes-Craven Holding" on Justia Law

Plaintiffs Peter and Nicole Dernier appealed the dismissal of their action for: (1) a declaratory judgment that defendant U.S. Bank National Association could not enforce the mortgage and promissory note for the debt associated with plaintiffs' purchase of their house based on irregularities and fraud in the transfer of both instruments; (2) a declaration that U.S. Bank has violated Vermont's Consumer Fraud Act (CFA) by asserting its right to enforce the mortgage and note; and (3) attorney's fees and costs under the CFA. They also appealed the trial court's failure to enter a default judgment against defendant Mortgage Electronic Registration Systems, Inc. (MERS). Plaintiffs fell behind on their mortgage, and brought suit against two parties: Mortgage Network, Inc. (MNI), which is in the chain of title for both the note and the mortgage, and MERS, which is in the chain of title for the mortgage as a "nominee" for MNI. Plaintiffs sought a declaratory judgment that the mortgage was void, asserting that: (1) MERS, as a nominee, never had any beneficial interest in the mortgage; (2) MNI had assigned its interest in both instruments to others without notifying plaintiffs; and (3) no party with the right to foreclose the mortgage had recorded its interest. MNI responded that plaintiffs had named MNI as a party in error, because MNI did "not own the right to the mortgage in question." MERS did not respond. Around this time, plaintiffs received a letter in which U.S. Bank represented that it possessed the original promissory note and mortgage and that it had the right to institute foreclosure proceedings on the property. The trial court denied plaintiffs' motion to amend and dismissed plaintiffs' case for failure to state a claim. Plaintiffs appealed. After careful consideration of the trial court record, the Supreme Court concluded the trial court erred in dismissing Counts 1 and 2 of plaintiffs' amended complaint for lack of standing, to the extent that these counts alleged irregularities in the transfer of the note and mortgage unconnected to the pooling and servicing agreement. The Court affirmed as to dismissal of Counts 3 and 4 of plaintiffs' proposed amended complaint. The case was remanded for further proceedings.View "Dernier v. Mortgage Network, Inc." on Justia Law

Defendant Ricardo Maldonado owned a business purchasing homes from financially distressed owners, negotiating with lenders, and repairing and selling the homes. Anthony D'Agostino saw an advertisement for Maldonado's company and contacted Maldonado in 2008, at which time the estimated fair market value of plaintiffs' property was $480,000. The parties verbally agreed that plaintiffs would pay Maldonado, and he would repair the property and bring the mortgage current using rental payments. The documents Maldonado prepared and plaintiffs signed created a trust naming Maldonado the sole trustee. An option allowed plaintiffs to recover title by paying Maldonado $400,000 within one year. In March 2008, plaintiffs executed a quitclaim deed transferring full interest in the property to Maldonado. The deed stated that Maldonado paid $360,000 for the interest, though he actually paid nothing. Over the following months, Maldonado spent his own money on mortgage payments, outstanding taxes, and repairs. Anthony D'Agostino later offered $40,000 to regain title. Maldonado declined, informing plaintiffs they could repurchase the property for $400,000. Plaintiffs filed a complaint, alleging a violation of the CFA. The trial court found that plaintiffs had sustained their burden with respect to the CFA violation since the transaction was based on misleading documents that gave rise to an "unconscionable commercial practice." The trial court voided the conveyance to Maldonado, restored title to plaintiffs, awarded treble damages and attorneys' fees. The parties appealed, and the Appellate Division remanded only for a recalculation of plaintiffs' damages. After its review, the Supreme Court concluded that the trial court correctly found Maldonado's execution of the transactions at issue gave rise to an unconscionable commercial practice, and that that the trial court did not abuse its discretion in its calculation and subsequent awarding of damages.View "D’Agostino v. Maldonado" on Justia Law

Appellant was in the business of extending high-risk loans to customers with poor credit ratings and operated primarily in Louisiana. Appellees, who resided in Arkansas, obtained four loans from Appellant at its location in Louisiana. After Appellees failed to make payments on the loans, Appellant filed in an Arkansas circuit court a notice of default and intention to sell Appellees' home. Appellees asserted the defenses of usury, unconscionability, esoppel, unclean hands, predatory lending practices, and a violation of the Arkansas Deceptive Trade Practices Act. The circuit court found that the loans constituted predatory lending by a foreign corporation not authorized to do business in Arkansas and that the contract between the parties was unconscionable and could not be given full faith and credit. The Supreme Court affirmed, holding (1) the circuit court's findings of unconscionability and predatory lending practices were not clearly erroneous; and (2) court did not err in refusing to enforce the mortgage, as to do so would contravene the public policy of the State of Arkansas.View "Gulfco of La. Inc. v. Brantley" on Justia Law

State Farm Fire and Casualty Company appealed an adverse judgment entered on a jury verdict in in favor of homeowner and policyholder Shawn Brechbill on his claim of "abnormal" bad-faith failure to investigate an insurance claim. "A bad-faith-refusal-to-investigate claim cannot survive where the trial court has expressly found as a matter of law that the insurer had a reasonably legitimate or arguable reason for refusing to pay the claim at the time the claim was denied. Because State Farm repeatedly reviewed and reevaluated its own investigative facts as well as those provided by Brechbill, it is not liable for a tortious failure to investigate." The Supreme Court reversed the trial court's judgment and remanded the case for further proceedings.View "State Farm Fire and Casualty Company v. Brechbill " on Justia Law