Justia Consumer Law Opinion Summaries

Plaintiff's suit concerning purchase of an aircraft claimed specific performance; and, in the alternative, breach of contract; breach of the covenants of good faith and fair dealing; and breach of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. 501.2105. The district court rejected the claims; proceeded under the Arizona Consumer Fraud Act, as requested by plaintiff; ruled in favor of defendant, but refused to award attorney fees under FDUPTA. After concluding that FDUTPA and its fee award provision are applicable as substantive law of the forum state, the Eleventh Circuit certified questions to the Florida Supreme Court: Whether an offer of judgment may be viable when it purports to settle "all claims," even though it does not explicitly state whether the proposal includes attorneys' fees and whether fees are part of the legal claim; Whether the fee provision applies to a lawsuit seeking damages or, in the alternative, specific performance; Whether the fee-shifting provision applies to an action with the case's unique procedural history; and Whether the provision applies only to fees incurred during the seven months before the FDUTPA claim was defeated at summary judgment, or also to fees incurred during subsequent litigation.

Plaintiff obtained a mortgage in 1999 and refinanced four times over six years, each time pulling out more equity. The last refinancing and a mortgage obtained for a new house, (the first house was for sale), were based on documents inaccurately describing plaintiff's income and position. Plaintiff, who claimed to be unaware of the inaccurate information, defaulted on payments. The district court rejected his suit, alleging a violation of Mass. Gen. Laws ch. 93A (unfair or deceptive practices), unjust enrichment, a violation of the implied covenant of good faith and fair dealing, negligence, and entitlement to rescission of the loan and an injunction ordering the removal of the loan from his credit history. The First Circuit affirmed dismissal of the covenant claim relating to one loan, the negligence claim, and the rescission/equitable relief claim, but vacated dismissal of the other claims. Whether plaintiff or the loan officer deliberately falsified the loan application and whether default was foreseeable are questions of fact suitable for trial.

Mortgage company Fifth Third filed a foreclosure action against a debtor. Judge Nancy Russo of the county court issued an order stating if the parties reached an agreement to notify the court. Subsequently, the parties negotiated a loan-modification agreement, and Fifth Third filed a notice voluntarily dismissing its complaint without prejudice. Judge Russo issued an entry (1) striking Fifth Third's notice of dismissal, and (2) ordering a show-cause contempt hearing due to Fifth Third's filing a notice of dismissal when the case was settled via loan modification. Fifth Third filed complaints against Judge Russo in the court of appeals for writs of mandamus and prohibition. The court granted a writ of mandamus to compel Judge Russo to vacate her order striking Fifth Third's notice of voluntary dismissal and a writ of prohibition to prevent Judge Russo from proceeding on the foreclosure case but denied a writ of prohibition to prevent the judge from proceeding on the contempt order. The Supreme Court affirmed, holding the court of appeals ruled properly in the underlying writ case because (1) Fifth Third properly dismissed its case without prejudice, and (2) Fifth Third had an adequate remedy at law following the contempt order.

Minnesota homeowners brought this action against Zurn Pex, Inc. and Zurn Industries, Inc. (Zurn), alleging that brass fittings used in the company's cross linked polyethylene (PEX) plumbing systems was inherently defective. Zurn appealed the order issued by the district court certifying the warranty and negligence classes. The court held that the district court did not err by conducted a focused Daubert analysis which scrutinized the reliability of the expert testimony in light of the criteria for class certification and the current state of the evidence. In doing so, the district court conducted the requisite "rigorous analysis" of the parties' claims to determine "whether the defendant's liability to all plaintiffs may be established with common evidence." After thoroughly reviewing the record made in the district court in light of the controlling law, the court held that the district court did not commit legal error or abuse its discretion and its class certification was affirmed.

Countrywide Home Loans, a mortgage holder on certain real estate, foreclosed its mortgage, took title to the property at a sheriff's sale, and then sold the property to a third party. Before these events, the property owners executed a promissory note in favor of Citizens State Bank. When the property owners failed to pay the note, Citizens Bank obtained a judgment in trial court, which was properly recorded. At the time Countrywide filed its foreclosure action, it did not name Citizens Bank as a party. After Countrywide discovered Citizens Bank's judgment lien on the property, Countrywide filed an action to foreclose any interest Citizen Bank may have had on the property. Citizens Bank filed a separate complaint seeking to foreclose its judgment lien. The trial court directed Citizens Bank to redeem Countrywide's mortgage or be barred from asserting its judgment lien. The court of appeals reversed. The Supreme Court also reversed the judgment of the trial court but on different grounds, holding that because Citizen Bank's lien on the property was properly recorded and indexed and because Countrywide did not explain why the lien was overlooked, Countrywide failed to demonstrate that it was entitled to the remedy of strict foreclosure.

TCF National Bank (TCF) sued to enjoin a portion of the Dodd-Frank Wall Street Reform Act (Act) of 2010, Pub. L. No. 111-203, 124 Stat. 1376, that would limit the rate some financial institutions could charge for processing debit-card transactions. Section 1075 of the Act, the Durbin Amendment, amended the Electronic Fund Transfer Act, 15 U.S.C. 1693, et seq., by adding several provisions regarding debit-card interchange fees. TCF alleged that section 1693o-2(a)(2), (a)(4), and (a)(6) of the Act were facially unconstitutional because these provisions would require the Board of Governors of the Federal Reserve Board (Board) to set an interchange rate below the cost of providing debit-card services. TCF also alleged that these provisions arbitrarily exempted smaller issuers from the Board's rate regulations and thus violated TCF's due process and equal-protection rights under the Fifth Amendment. The court held that the challenged provisions in the Durbin Amendment survived rational basis review where "Congress's decision to link interchange fees to issuing banks' actual costs was reasonably related to proper legislative purposes: (1) to ensure that such fees were reasonable and (2) to prevent retailers and consumers from having to bear a disproportionate amount of costs of the debit card system." The court also held that the Durbin Amendment's distinction between larger and smaller issuers of debit-cards was rationally related to the government's legitimate interests in protecting smaller banks, which did not enjoy the competitive advantage of their larger counterparts and which provided valuable diversity in the financial industry. Therefore, the court held that TCF was not likely to prevail on its equal-protection argument. Accordingly, the court affirmed the district court's denial of TCF's motion for a preliminary injunction.

This case arose from a products-liability suit filed in New Jersey state court where Robert Nicastro seriously injured his hand while using a metal-shearing machine manufactured by defendant. The accident occurred in New Jersey, but the machine was manufactured in England, where defendant was incorporated and operated. At issue was whether the New Jersey courts had jurisdiction over defendant, notwithstanding the fact that the company at no time either marketed goods in the State or shipped them there. The Court held that due process protected defendant's right not to be coerced except by lawful judicial power. As a general rule, the exercise of judicial power was not lawful unless defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." The Court held that there could be exceptions, say, for instance, in cases involving an intentional tort, but the general rule was applicable in this products-liability case, and the so-called "stream-of-commerce" doctrine could not displace it. Therefore, the Court held that the facts did not demonstrate that defendant purposefully availed itself of the New Jersey market and New Jersey was without power to adjudge the rights and liabilities of defendant where its exercise of jurisdiction would violate due process. Accordingly, the judgment of the New Jersey Supreme Court was reversed.

Respondents, North Carolina residents whose sons died in a bus accident outside Paris, France, filed a suit for wrongful death damages in North Carolina state court alleging that the accident was caused by tire failure. At issue was whether foreign subsidiaries of a United States parent corporation were amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum state. The Court held that, because the episode-in-suit, the bus accident, occurred in France, and the tire alleged to have caused the accident was manufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy. The Court also held that a connection so limited between the forum and the foreign corporation was an inadequate basis for the exercise of general jurisdiction where such a connection did not establish the "continuous and systematic" affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation's contacts with the State. Therefore, the Court held that petitioners were not amendable to suit in North Carolina and the judgment of the North Carolina Court of Appeals was reversed.

The debtor did not pay his $2,902 bill for treatment of an infection, which was turned over to a collections agency. He made payments for several years. When the balance was at $536.35 the agency sued in Michigan court for $678.27, attaching to the complaint a document titled "Combined Affidavit of Open Account and Motion for Default Judgment." An agency employee then incorrectly told the debtor that he owned $1,016. The district court rejected the debtor's suit under the Fair Debt Collection Practices Act 15 U.S.C. § 1692e. The Sixth Circuit reversed in part, holding that the title to the document attached to the complaint could be misleading. The mistaken balance was not given as part of a collection effort and was not a violation of the Act.

Cach, L.L.C., alleging that it was an assignee of Bank of America, filed a complaint against Nathaniel Kulas seeking principal and interest on an unpaid credit card balance. The complaint stated that Kulas owed $6042 on the account. Cach then filed a motion for summary judgment, supporting its motion with affidavits and other documents alleging that the balance due on the account was $6042. In response, Kulas filed an objections to the summary judgment motion. The court found Kulas's responses were procedurally defective and granted Cach's motion for summary judgment. On appeal, the Supreme Court held that Cach's support for its assertions that it received an assignment of the account from the bank and that Kulas owed $6042 on the account was inadequate. Because Cach failed to properly establish each element of its claim without dispute as to material fact, the Court vacated the district court's grant of summary judgment and remanded the case.