Justia Consumer Law Opinion Summaries

The plaintiff purchased a boat that included an engine manufactured and expressly warranted by the defendant. Shortly after purchase, the engine began to overheat, causing the boat to become disabled on several occasions. The plaintiff brought the boat to authorized service facilities multiple times, but the overheating persisted. After repeated failures to repair the issue, it was discovered that a cracked exhaust manifold allowed water to enter the engine. The manufacturer initially declined to authorize warranty repairs, prompting the plaintiff to file a lawsuit under the Song–Beverly Consumer Warranty Act. Eleven days later, without knowledge of the lawsuit, the manufacturer agreed to replace the engine at no cost. The plaintiff continued with his lawsuit, asserting that the defendant’s obligation under the Act required replacement of the entire boat or reimbursement of its full purchase price, not just replacement of the engine.The Alameda County Superior Court granted summary judgment for the defendant. The court found that the plaintiff had not provided evidence showing damages beyond the defective engine, which was replaced. There was no evidence that the overheating caused damage to any other part of the boat or that the boat remained prone to overheating following the engine replacement. The plaintiff’s claims related to breach of implied warranties were not pursued on appeal.The Court of Appeal of the State of California, First Appellate District, Division Three, reviewed the case de novo and affirmed the judgment. The court held that the Song–Beverly Act obligates a manufacturer to replace or reimburse only the goods it sold and expressly warranted—not the entire consumer good into which its component is incorporated—when it cannot conform those goods to the warranty after a reasonable number of repair attempts. The court concluded the plaintiff failed to establish damages cognizable under the Act and affirmed summary judgment in favor of the defendant. View "Phillips v. Volvo Penta of the Americas" on Justia Law

The case involves a dispute between a finance company and two individuals who purchased a used vehicle using a retail installment contract containing an arbitration clause. After defaulting on payments, the individuals surrendered the vehicle for repossession, but the resale did not cover the remaining debt. The finance company filed a civil action in the Circuit Court of Jackson County to recover the outstanding balance. The individuals initially responded without counsel, contesting the debt, and later, after several years, obtained legal counsel and filed an amended answer with counterclaims alleging violations of various state and federal laws.Over the course of litigation, the finance company served limited discovery and moved for summary judgment based on unanswered requests for admission. The individuals’ amended answer and counterclaims expanded the complexity of the dispute, seeking damages and equitable relief. Shortly after, the finance company moved to compel arbitration of all claims, relying on the contract’s arbitration clause. The Circuit Court denied the motion, finding that the finance company had waived its right to arbitrate due to substantial litigation activity and the passage of time before asserting arbitration.The Supreme Court of Appeals of West Virginia reviewed the circuit court’s denial de novo, applying state contract principles and the Federal Arbitration Act. The Court held that the finance company did not impliedly waive its contractual arbitration rights, emphasizing that the arbitration clause expressly allowed arbitration to be invoked before or after a lawsuit or counterclaims. The Court concluded that the litigation activity was limited and not inconsistent with the right to arbitrate, especially given the late and substantial expansion of the dispute by the counterclaims. The circuit court’s order was reversed, and the case remanded with instructions to permit arbitration and stay further proceedings pending its outcome. View "Credit Acceptance Corporation v. Stanley" on Justia Law

A Florida attorney was retained by a consumer who was sued in small claims court for an alleged debt. The attorney attempted to resolve the case with the debt collector’s counsel before a scheduled pretrial conference and was told a settlement would be communicated to the court. Relying on this, he did not attend the conference. The court entered a default against the consumer for failure to appear. Despite assurances from opposing counsel that the default would be set aside, and after a settlement agreement was executed, the debt collector moved for a default judgment and the court entered a default final judgment against the consumer. The attorney spent significant time and effort remedying the situation, ultimately securing vacatur of the default judgment. He then brought suit in federal court in his own name, alleging violations of the Fair Debt Collection Practices Act and Florida law, claiming personal injuries such as distress, embarrassment, and lost time.The United States District Court for the Southern District of Florida dismissed the case, finding the attorney lacked statutory standing under both federal and state law because the alleged debt collection activities targeted his client, not him. The district court did not reach the merits of the state law claim because it found no standing.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s dismissal. The appellate court held that the attorney had not alleged a concrete injury in fact sufficient to establish Article III standing. The court explained that any harm he experienced was derivative of his client’s injury and did not amount to a cognizable injury for standing purposes. The Eleventh Circuit therefore dismissed the appeal for lack of jurisdiction, without reaching the merits of the statutory claims. View "Light v. LVNV Funding, LLC" on Justia Law

Leonard and Pauline Cortellino executed a promissory note and mortgage in 2006 for the purchase of property in Maine. The mortgage, originally granted to Mortgage Electronic Registration Systems (MERS) as nominee for Mortgage Lenders Network USA, Inc. (MLN), was later assigned multiple times, ultimately to Wilmington Savings Fund Society, FSB, as Trustee for Brougham Fund I Trust in 2016. However, MLN filed for bankruptcy in 2007 and ceased operations after the bankruptcy concluded in 2012. Due to deficiencies in prior assignments following the Maine Supreme Judicial Court’s decision in Bank of America, N.A. v. Greenleaf, parties sought to cure the assignment defects. In 2021, a receiver for MLN, appointed by the Delaware Court of Chancery, assigned the Cortellino mortgage to Wilmington Savings, which was recorded in 2022.After the Cortellinos defaulted on their mortgage payments in 2014, Wilmington Savings sent them a notice of default and right to cure in August 2022. Wilmington Savings filed a foreclosure action in the Maine Superior Court (Androscoggin County) in October 2022. Following a trial in October 2024 and post-trial submissions, the Superior Court entered a judgment of foreclosure and sale in April 2025. The court found Wilmington Savings owned the mortgage and denied the Cortellinos’ motion for additional findings. The Cortellinos appealed.The Maine Supreme Judicial Court reviewed the Superior Court’s factual findings for clear error and its legal conclusions de novo. The Court held that Wilmington Savings was the rightful owner of the mortgage due to the valid receiver’s assignment, but found that the right-to-cure notice was legally defective. The notice overstated the amount required to cure the default and contained numerical inconsistencies, failing to strictly comply with Maine’s statutory requirements. The Court vacated the judgment and remanded for entry of dismissal. View "Wilmington Savings Fund Society v. Cortellino" on Justia Law

A lessee filed a lawsuit against a vehicle manufacturer and an authorized dealership, alleging that his leased vehicle had multiple defects that could not be repaired after several attempts. The lessee claimed he revoked acceptance of the vehicle due to these defects, but the defendants refused to provide the remedies he sought. Both the lease agreement and the manufacturer’s warranty booklet contained arbitration provisions, including opt-out clauses, and the lessee signed documents confirming receipt of these materials.The Superior Court of Los Angeles County denied the defendants’ motion to compel arbitration. The court found that the defendants did not establish the existence of enforceable arbitration agreements. Specifically, it determined there was insufficient evidence that the dealership, Standard Motor, was doing business as the named lessor in the lease. The court also concluded that the manufacturer, American Honda Motor Co., could not enforce the arbitration provision, and that the warranty booklet’s arbitration agreement was unenforceable due to concerns about consumer assent.The California Court of Appeal, Second Appellate District, Division Two, reviewed the case. It held that the defendants met their initial burden by presenting copies of the arbitration agreements and reciting the relevant terms. The court emphasized that the lessee’s own pleadings constituted a judicial admission that Standard Motor was doing business as the named lessor, and the lessee did not dispute the authenticity or existence of the arbitration agreements. The court also found the lessee failed to present evidence disputing the existence of an arbitration agreement in the warranty booklet. The Court of Appeal reversed the trial court’s order and remanded with instructions to grant the motion to compel arbitration. View "Kostandian v. American Honda Motor Co." on Justia Law

Guild Mortgage Company LLC and CrossCountry Mortgage LLC are direct competitors in the residential mortgage industry. Over an 18-month period, several Guild employees in the Kirkland, Washington branch, including the branch manager and other high-level staff, were allegedly recruited by CrossCountry while still employed by Guild. According to the complaints, these employees solicited their colleagues to also move to CrossCountry, diverted customers and loan applications, and accessed Guild’s computer systems to take confidential and proprietary information. The employees had signed agreements with Guild prohibiting such conduct, and Guild subsequently lost nearly its entire Kirkland branch workforce to CrossCountry.After Guild initiated arbitration against the former employees and prevailed, it filed a lawsuit in the Superior Court of San Diego County against CrossCountry. Guild’s claims included interference with economic advantage, interference with contract, violation of California’s Comprehensive Computer Data Access and Fraud Act (CCDAFA), unfair competition, and aiding and abetting tortious conduct. The Superior Court sustained CrossCountry’s demurrers, finding that the claims were preempted by the California Uniform Trade Secrets Act (CUTSA) or otherwise failed to state a cause of action, and dismissed the case without leave to amend.The Court of Appeal, Fourth Appellate District, Division One, reviewed the case. It held that Guild had adequately alleged actionable duties of loyalty and, for the branch manager, fiduciary duty, that were breached by the employees and aided by CrossCountry. The court found that the claims for interference and violation of the CCDAFA were not displaced by CUTSA because they arose from conduct beyond trade secret misappropriation. The court also held that the unfair competition claim could proceed since the other claims were viable. The Court of Appeal reversed the judgment in favor of CrossCountry and remanded for further proceedings. View "Guild Mortgage Company v. CrossCounty Mortgage" on Justia Law

A debt buyer sought to collect a credit card debt from a consumer, alleging that it had purchased the debt from the original creditor, Comenity Bank. In its complaint filed in county court, the debt buyer attached a bill of sale, two credit card statements, and an affidavit from its custodian of records. However, the bill of sale did not specifically reference the consumer’s account, as the accompanying asset schedule left the relevant account information blank. The affidavit attempted to confirm the purchase of the consumer’s debt but was not accompanied by a non-affidavit document establishing ownership of the specific debt.The county court found that the debt buyer’s complaint complied with the Colorado Fair Debt Collection Practices Act’s requirement to attach documents establishing ownership of the debt, reasoning that the bill of sale and affidavit were sufficient. The county court ruled against the consumer’s counterclaim, which sought damages, costs, and attorney fees for violation of the Act. The Boulder County District Court affirmed the county court’s judgment, concluding that the county court did not clearly err in determining compliance with the statutory requirements.Upon certiorari review, the Supreme Court of Colorado held that the debt buyer’s complaint did not comply with section 5-16-111(2)(b) of the Act because it lacked a non-affidavit writing establishing ownership of the consumer’s specific debt. The Court clarified that an affidavit cannot substitute for the required documentary evidence under the Act. The Supreme Court reversed the district court’s judgment and remanded the case for determination of damages, costs, and attorney fees owed to the consumer, holding that the debt buyer violated the Act and is liable under section 5-16-113. View "Wright v. Portfolio Recovery Assocs." on Justia Law

The plaintiff, after facing possible foreclosure on her home during the Covid pandemic, engaged what she believed to be a nonprofit law clinic offering free foreclosure prevention services. She alleges that the organization, in fact, operated as a front for a predatory lending scheme involving multiple corporate defendants, including the appellant, Professional Business Management Corporation (PBMC). The plaintiff claims that the defendants orchestrated a scheme where distressed homeowners were enticed with promises of free services, only to be trapped in high-fee, short-term loans that ultimately forced them to sell their homes under duress.In the Superior Court of Los Angeles County, the plaintiff named PBMC as a defendant in her second amended complaint, designating it as an alter ego, agent, or successor of the signatory to the service agreement, Nonprofit Alliance of Consumer Advocates (NACA Law). When NACA Law moved to compel arbitration based on a clause in the agreement, the court granted that motion as to NACA Law. However, PBMC's attempt to join the motion was denied because PBMC was not a party to the agreement and provided no evidence of an agency or alter ego relationship. The court later denied PBMC’s own motion to compel arbitration, finding that PBMC had failed to carry its burden to show that it could enforce the arbitration agreement as a nonsignatory.Upon appeal, the Court of Appeal of the State of California, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that mere unverified allegations in a complaint that a nonsignatory is a successor, agent, or alter ego of a signatory do not constitute a judicial admission and are insufficient, without supporting evidence, to allow the nonsignatory to compel arbitration. PBMC’s lack of evidence and its denial of any agency relationship precluded enforcement of the arbitration agreement. The order denying PBMC’s motion to compel arbitration was affirmed. View "Watson v. Professional Business Management Corp." on Justia Law

A nonprofit organization focused on reducing consumer exposure to chemical toxins alleged that two companies selling dietary supplements violated California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). The nonprofit, through its law firm, sent the required pre-suit notice to the companies, public prosecutors, and the Attorney General. The notice identified the nonprofit and its chief executive officer but did not expressly provide the address and telephone number of a responsible individual within the organization, instead listing only the law firm’s contact information. The nonprofit later filed suit seeking civil penalties and injunctive relief.The Superior Court of Alameda County granted the defendants’ motion for judgment on the pleadings, finding that the pre-suit notice did not strictly comply with the relevant regulation, which requires the name, address, and telephone number of the noticing individual or a responsible individual within the noticing entity. The trial court held that providing only an officer’s name and the law firm’s contact information was insufficient, and entered judgment for the defendants.The California Court of Appeal, First Appellate District, Division Two, reviewed the matter de novo. The appellate court concluded that the doctrine of substantial compliance applies to the statutory and regulatory pre-suit notice requirements under Proposition 65. The court held that, although the notice did not literally meet every technical requirement, it substantially complied by providing sufficient information for the defendants and public officials to assess and respond to the alleged violations. Accordingly, the appellate court reversed the judgment, directed the trial court to deny the motion for judgment on the pleadings, and ordered costs to the plaintiff. View "Chemical Toxin Working Group v. Best Naturals, Inc." on Justia Law

In this case, the plaintiff, acting individually and on behalf of a proposed class, alleged that the defendant, a health insurance marketing company, violated the Telephone Consumer Protection Act (TCPA) by sending her a prerecorded telemarketing call without her prior express consent. The defendant argued that the plaintiff had given such consent when she used a third-party “lead generation” website operated by a non-party, where she filled out a form seeking insurance quotes. The online process included an agreement (the “Terms of Use”) with an arbitration clause covering disputes related to the website’s use and consent to be contacted by marketing partners, although the defendant was not named in the agreement.After the plaintiff filed suit in the United States District Court for the Eastern District of North Carolina, the defendant moved to compel arbitration, arguing that it could enforce the arbitration clause as a third-party beneficiary under Delaware law. The district court denied the motion, holding that, although the defendant benefited from the agreement, it was not a third-party beneficiary because the benefit was not central to the contract’s purpose. The court also determined that, under Fourth Circuit precedent, the court—not an arbitrator—must decide whether a non-signatory like the defendant can enforce the arbitration agreement.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s denial of arbitration de novo. The Fourth Circuit agreed that the district court, not an arbitrator, was the proper forum to decide the defendant’s standing to enforce the arbitration clause. However, the court disagreed with the district court’s interpretation of Delaware law, concluding that the benefit to the defendant was material to the agreement’s purpose, making the defendant a third-party beneficiary. The Fourth Circuit reversed the district court’s order and remanded with instructions to compel arbitration and stay the federal court proceedings. View "Sessoms v. USHealth Advisors, LLC" on Justia Law