DocDon
07-23-2004, 11:24 AM
Post your case law here with a brief description of what it pertains to. I think this will be an easy go-to resource if we can get all the different case laws into one area. Likewise if new rulings take precedent, point it out.
1. Bankruptcy and Foreclosures
Fidelity Fin. Serv., Inc. v. Fink, U.S. 118 S.Ct. 651 (1998) - Where all step necessary to perfect the security interest were not been completed within 20 days of bankruptcy debtor's receipt of possession of the vehicle, purchase-money security interest in vehicle may be avoidable in Chapter 13 bankruptcy as impermissibly preferential, and the interest does not fall within the "enabling loan" exception to trustee's preference-avoidance power, 11 U.S.C. ' 547(c)(3)(B).
Kawaauhau v. Geiger, U.S. 118 S.Ct. 974 (1998) - Debts arising from malpractice judgment based upon acts that were intended, but were not intended to cause damage, do not fall within the willful and malicious injury exception to discharge from bankruptcy, and therefore are dischargable.
Cohen v. Cruz, U.S. 118 S.Ct. 1212 (1998) - An award of treble damages pursuant to state law, for charging tenants rent in excess of rent control laws, is not dischargable in bankruptcy. The award falls within the scope of 11 U.S.C. ' 523(a)(2)(A), which excepts from discharge in bankruptcy Aany debt ... for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by ... false pretenses, a false representation, or actual fraud, including costs and attorney's fees.
Levine v. Weissing, 134 F.3d 1046 (11th Cir. 1998) - Chapter 7 debtors who converted non-exempt assets to annuities that were exempt under Florida law, shortly after learning that such transfer would be beyond reach of a particular creditor whom debtors had reason to believe would likely prevail in a lawsuit filed against them, purchased exempt annuities with intent to hinder or defraud known creditor, under Florida fraudulent transfer law, Fla. Stat. ' 726, and transfer therefore may be set aside by bankruptcy trustee.
Jost v. Key Bank of Maine, 136 F.3d 1455 (11th Cir. 1998) - Where creditor objects to Chapter 7 debtor's claimed Florida homestead exemption, alleging debtor converted nonexempt assets into exempt homestead with intent to hinder, delay, or defraud creditors, bankruptcy court is required to make finding of fact as to whether debtor's purchase of home and/or her prepayment of home mortgage were fraudulent transfers with intent to hinder, delay, or defraud any creditor. Left undecided was whether the Florida homestead exemption may be claimed in cases in which the home is purchased with non-exempt assets with fraudulent intent to hinder, delay, or defraud creditors in violation of Fla. Stat. ' 726.
Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998) (panel decision) - In Chapter 13 bankruptcy, vehicle that was repossessed prior to bankruptcy petition was not property of bankruptcy estate where, at time of petition under applicable state law (Alabama), debtor did not retain title, possession, or any other functionally equivalent ownership interest in repossessed vehicle. Instead, the debtor's statutory right of redemption in vehicle under state law became property of the bankruptcy estate.
United States v. May, 211 B.R. 991 (M.D.Fla. 1997) - In Chapter 13 bankruptcy, debtors' disputed debt to the IRS, that was subject of pending Tax Court litigation, was not sufficiently certain as to amount or liability to be unliquidated debt that would disqualify debtor from Chapter 13 eligibility.
Kapila v. Plave, Pfg, Inc., 11 Fla. L. Weekly Fed. D518, 217 B.R. 336 (S.D. Fla 1997) - Bankruptcy trustee established prima facie case of debtor's fraudulent transfer under Florida law, Fla. Stat. ' 726, where trustee presented evidence that debtor, while insolvent, used her own money to pay $45,000 legal fees owed by her husband, an "insider," for which she received no reasonably equivalent value from either third party or her husband.
Bakst v. Bennett, 208 B.R. 582 (Bankr.S.D.Fla. 1997) - In Chapter 7 bankruptcy, execution of promissory note by debtor in favor of his ex-wife for money which she had loaned him to purchase automobile, together with debtor's recording of lien in favor of ex-wife on certificate of title for vehicle and delivery of certificate of title to ex-wife, is not sufficient to create valid security interest on vehicle under Florida law, F.S. ' 319.27(2), because the note did not contain language granting the ex-wife a security interest.
In re Willoughby, 11 Fla. L. Weekly Fed. B71, 212 B.R. 1011 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor could not avoid his former wife's child support judgment lien on debtors' jointly owned homestead property, under 11 U.S.C. ' 522(f)(1); but debtor's current wife could avoid such lien, as judgment was not against her, and lien impaired her homestead exemption, even though it could not attach to the debtors' homestead pursuant to Article X, ' 4(a) of the Florida Constitution.
In re Sheffield, 11 Fla. L. Weekly Fed. B87, 212 B.R. 1019 (Bankr.M.D.Fla. 1997) - Insurance proceeds that Chapter 7 debtor received upon death of her former husband, under policy that former husband was required to maintain pursuant to reciprocal insurance clause in decree dissolving parties' marriage, were not in nature of alimony, in which debtor could claim exemption of proceeds from bankruptcy estate pursuant to 11 U.S.C. ' 522(d)(10)(D). Reciprocal nature of insurance obligation precluded finding that ex- husband's obligation to maintain policy for his former wife was intended by way of spousal support, though insurance provision was placed between two alimony-related provisions of dissolution decree.
In re Franklin, 11 Fla. L. Weekly Fed. B 105, 213 B.R. 781 (Bankr.N.D.Fla. 1997) - In Chapter 13 bankruptcy, replacement value of sports utility vehicle to be retained by debtor is average between vehicle's retail and wholesale bluebook values, as adjusted based on cost of repairs and value of remaining extended warranty coverage purchased by debtor.
In re Monzon, 11 Fla. L. Weekly Fed. B113, 214 B.R. 38 (Bankr.S.D.Fla. 1997) - Chapter 7 trustee can administer entireties property held by debtor and his nondebtor spouse, to the extent of the parties= joint unsecured debt, pursuant to 11 U.S.C. ' 522(b)(2)(B), even if debt is not reduced to judgment. The decision disagrees with In re Himmelstein, 203 B.R. 1009 (Bankr.M.D.Fla.1996), which held that under Florida law the joint debts must be reduced to judgment in order to reach entireties property. The decision also concluded that the liquidation proceeds should be available only to the joint creditors, with any excess proceeds from property's liquidation remaining exempt.
In re Campbell, 11 Fla. L. Weekly Fed. B120, 214 B.R. 411 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's exemption in automobile is limited to $1,000 under Florida law. Debtor's failure to provide documentary proof of intent to create entireties estate in household furnishings defeated her claim of their exemption from the bankruptcy estate. Real property was not subject to administration by trustee for benefit of couple's joint creditors, as no joint creditor held judgement against debtor and her husband.
In re Hickox, 11 Fla. L. Weekly Fed. B133, 215 B.R. 257 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's individual retirement account is exempt from creditors under Florida law, Fla. Stat. ' 222.21(2). The account=s proceeds could be traced to 401(k) disbursement that debtor had received upon termination from her employment, so that IRA was funded by rollover contribution from qualified trust, even though funds of the trust had been commingled with non-exempt funds in debtor's checking account and transferred to third- party's account prior to creation of IRA.
Jensen v. Groff, 11 Fla. L. Weekly Fed. B171, 216 B.R. 883 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor=s discharge is denied based upon 'false oath' exception to discharge, where debtor was sophisticated and made numerous omissions from statement of financial affairs, including his funds transfers from the joint account he shared with wife, his interest in various businesses, and his income tax refund; and also based upon fraudulent transfer of assets, where his transfer of wholly owned assets into to joint ownership with himself and his wife occurred subsequent to creditors obtaining judgments against him and within one year of his bankruptcy filing.
First Deposit Nat. Bank v. Mack, 11 Fla. L. Weekly Fed. B 215, 216 B.R. 981 (Bankr.N.D.Fla. 1997) - Credit card issuer failed to show that Chapter 7 debtor's charges on her credit card account were made with requisite fraudulent intent, so as to except debt from bankruptcy discharge, where debtor was a housewife who was financially unsophisticated, not involved in management of her family's finances, and unaware of their financial difficulties at the time the charges were incurred; her spending habits did not change leading up to bankruptcy; and the charges were not incurred for luxury items. Also, regardless of debtor's intent, the issuer failed to show that it had justifiably relied on representations, implied or otherwise, made by debtor, where issuer did not conduct credit investigation prior to issuing credit card to debtor.
In re McFadyen, 11 Fla. L. Weekly Fed. B149, 216 B.R. 1006 (Bankr.M.D. Fla. 1998) - Federal tax lien attaches to Chapter 13 debtor's Florida homestead, under 11 U.S.C. ' 522(c)(2)(B).
In re Bennett, 11 Fla. L. Weekly Fed. B156, 217 B.R. 654 (Bankr.M.D.Fla. 1998) - Revocable nature of Chapter 13 debtor's payee status, under annuity purchased by out-of-state insurer to fund its obligations under settlement with debtor, did not prevent debtor from claiming annuity proceeds as exempt under Florida law, and these proceeds thus could not be included in hypothetical Chapter 7 liquidation, for purpose of judging confirmability of debtor's plan.
In re Lazin, 11 Fla. L. Weekly Fed. B197, 217 B.R. 332 (Bankr.M.D. Florida 1998) - Chapter 7 debtor's accumulated benefits from Social Security and annuity contracts did not lose the exempt status because they were received and deposited by debtor into bank account; but allowance of an exemption in accumulated benefits from Social Security is contingent upon a factual showing that the allowance is necessary to enable debtor to satisfy her basic needs, following Citronelle-Mobile Gathering, Inc. v. Watkins, 934 F.2d 1180, 1192 (11th Cir.1991) (garnishment case).
Smallwood v. Finlayson, 11 Fla. L. Weekly Fed. B213, 217 B.R. 666 (Bankr.S.D.Fla. 1998) - Attorney fee obligation imposed on Chapter 7 debtor in marital dissolution action is properly characterized as nondischargeable "support" obligation, under 11 U.S.C. ' 523(a)(5), even though majority of issues litigated in state court case involved the equitable distribution of assets and not maintenance or support issues, where state court specifically indicated that it was awarding attorney fees because of disparity in parties' respective incomes, earning capacities and financial positions.
In re Allen, 11 Fla. L. Weekly Fed. B151, 217 B.R. 945 (Bankr.M.D.Fla. 1998) - Denial of Chapter 7 debtor's discharge, on grounds that he transferred property to individual retirement accounts within one year prior to bankruptcy petition date with intent to hinder, delay, or defraud creditor, did not bar debtor from avoiding judgment lien on the IRAs using 11 U.S.C. ' 522(f), which permits avoidance of leins on property described in federal bankruptcy exemptions, 11 U.S.C. ' 522(b).
In re McMurray, 218 B.R. 867 (Bankr.E.D.Tenn. 1998) - In deriving balances owed on lenders' claims in Chapter 13 bankruptcy, "Rule of 78" accounting method cannot be used to calculate rebate for unmatured interest on debtor's precomputed loans. The Rule results in inaccurate approximation of actuarial rate that favored creditor-companies to detriment of debtor, the estate, and other creditors, rather than true measure as required by the Bankruptcy Code. Bankr.Code, 11 U.S.C. ' 502(b)(2).
Galloway v. Long Beach Mortgage Co., 220 B.R. 236 (Bankr.E.D.Pa. 1998) - Pre-bankruptcy petition foreclosure judgment against Chapter 13 debtor does not bar litigation in bankruptcy case of mortgage arrearage or costs and fees associated with foreclosure action, where those issues were not addressed or required to be addressed in the foreclosure action.
American Express v. Tabar, 220 B.R. 701 (Bankr.M.D.Fla. 1998) - On motion for summary judgment by creditor, consumer debt of bankruptcy debtor of $16,700.50, representing luxury purchases made within 60 days of petition date, was excepted from discharge where, based upon admissions on file, purchases were of antiques, Persian rugs, antique reproductions, and floor coverings, and debtor did not respond to motion. 11 U.S.C. '523 (a)(2)(C). Full amount of credit card debt was excepted from discharge on actual fraud grounds where debtor failed to respond to, and thus admitted, requests for admission that he incurred charges at issue by actual fraud and that he did not intend to repay credit card issuer when he incurred charges.
Cohen v. Pond, 11 Fla. L. Weekly Fed. B267, 221 B.R. 29 (Bankr.M.D.Fla. 1998) - Chapter 7 debtors intended to defraud creditors, justifying denial of discharge, where they granted lien on their vehicle to debtor-wife's sister. Debtors' and sister's testimony that sister loaned debtors $5,000 in cash in exchange for lien was not credible where debtors admitted prior to trial to having no documentation for the loan.
In re Black, 221 B.R. 38 (Bankr.S.D.Fla. 1998) - Bank is not a "lender," within meaning of federal Thrift Institutions Restructuring Act, ' 341(d), 12 U.S.C. ' 1701j-3(d), which prohibits lenders from enforcing a due-on-sales clause in a mortgage simply because the mortgaged property is transferred, without its consent, pursuant to a dissolution of marriage decree or property settlement agreement; but bank's failure to invoke the due-on-sales clause until after Chapter 13 debtor had filed petition, when automatic stay went into effect, precluded bank from asserting that entire balance was due and payable. [The decision=s construal of Alender@ appears to be in error. The Comptroller of the Currency had determined that national banks are covered by the Act, 12 C.F.R. Part 34.5, and provided therein that they would be regulated on due-on-sale clauses as provided by the Act.]
In re Applegarth, 11 Fla. L. Weekly Fed. B 273, 221 B.R. 914 (Bankr.M.D.Fla. 1998) - Chapter 13 plan not confirmed, and evidentiary hearing required to determine whether debtor is unfairly classifying unsecured claims, where plan proposes to separately classify and pay in full an unsecured consumer debt incurred by debtor and guaranteed by debtor's mother, while paying distributions of approximately 10% to remainder of general unsecured creditors.
In re Lazin, 11 Fla. L. Weekly Fed. B314, 221 B.R. 982 (Bankr.M.D.Fla. 1998) - Homestead exemption of Chapter 7 debtor is not lost, even assuming that debtor=s prepetition conversion of non-exempt property to exempt form was accomplished with specific intent to defraud her creditors, where nonexempt assets that were used to acquire homestead were not fraudulently acquired. Seventy-nine-year-old debtor=s conversion of non-exempt stocks and bonds into exempt annuities was not accomplished with actual intent to defraud her creditors, so as to result in loss of debtor's exemption under Florida law, given that debtor was required to liquidate her investment portfolio by broker, because her account balance had fallen below the required minimum, and that broker's son had selected annuities solely because they would provide debtor with a stable, guaranteed income stream.
Leucht v. Leucht, 221 B.R. 1003 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor "transferred" assets, within meaning of discharge exception, when he left certain property in possession of former wife; and transfers were made with requisite fraudulent intent to hinder, delay or defraud creditor, so as to warrant denial of debtor's discharge.
In re Leucht, 11 Fla. L. Weekly Fed. B298, 221 B.R. 1009 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor would not be denied state law exemption of $1,000 in personal property based on lack of specificity in identifying household goods, where lack of specificity was result of mere transcribing error, and debtor clarified which goods were being claimed as exempt by his testimony at hearing on objection to his claimed exemptions. It was not appropriate for bankruptcy court, upon objection to debtor's claimed exemption, to determine extent of debtor's and estranged wife's respective interests in property claimed as exempt.
In re Williams, 222 B.R. 662 (Bankr.S.D.Fla. 1998) - After filing bankruptcy petition, Chapter 7 debtor cannot make election to receive distribution of benefits under life insurance policy in form of annuity rather than of cash distribution, in order to remove proceeds of policy from reach of creditors pursuant to Florida statute exempting beneficiary's interest in proceeds of annuity contract. The election instead was up to the trustee.
Del Rio v. Brandon, 696 So.2d 1197 (Fla. 3rd DCA 1997) - In foreclosure action brought by mortgagee, home purchasers' counterclaim against mortgagee for rescission based upon breach of contract and of implied warranty, for alleged faulty repairs of property by mortgagee, is compulsory, and final summary judgment of foreclosure should not be ordered before consideration of counterclaim.
Bates v. Bates, 705 So.2d 1045 (Fla. 4th DCA 1998) - In dissolution of marriage proceeding, a spouse may not raise claims that the some of the other spouse=s debts should be exempted from a prior bankruptcy discharge order obtained by the other spouse, where the spouse was given notice of the proceeding, because state court authority to apportion marital debt is abrogated by federal bankruptcy law, so that such claims must be brought in the bankruptcy court.
2. Consumer Credit and Usury
Beach v. Ocwen Fed. Bank, U.S. 118 S.Ct. 1408 (1998) - Statutory right of rescission under Truth in Lending Act may not be revived beyond three-year expiration period. Section 1635(f) was held to bar assertion of the right of rescission in recoupment after three years because it made reference Anot of a suit's commencement but of a right's duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous. 118 S.Ct. 1412.
Smith v. Highland Bank, 108 F.3d 1325 (11th Circuit 1997) - Mortgagee does not violate Truth in Lending Act's requirement of clear and conspicuous disclosure of right to rescind, 12 C.F.R. ' 226.23(b)(1), by a Notice of Right to Cancel that contains on the same page both an "Acknowledgment of Receipt," that the debtor was to sign to confirm that the mortgagee complied with TILA; and a "Certificate of Confirmation," that the debtor was to separately sign after three-day rescission period to indicate that she had not exercised rescission rights. A note below the Certificate of Completion stating that all parties executing the Acknowledgment of Receipt had to execute the Certificate, was not misleading, but rather was intended to ensure that all signatories to the Acknowledgment of Receipt concurred in the decision not to rescind. The decision affirmed the district court opinion.
Podell v. Citicorp Diners Club, Inc., 112 F.3d 98 (2d Cir. 1997) - Credit reporting agencies do not breach Fair Credit Reporting Act by relying upon reports from creditors, issued subsequent to consumer dispute of information, that continue to contain the same erroneous information, where consumer does not dispute these later reports.
Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997) - Credit reporting agency is required by the Fair Credit Reporting Act, in certain circumstances, to verify the accuracy of its initial source of information under 15 U.S.C. 1681(i). Whether the credit reporting agency has a duty to go beyond the original source depends upon (a) whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency itself knows or should know that the source is unreliable; and (b) the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer. In this case, the consumer notified the agency of error, and agency spent only approximately 75 cents per investigation, so question of whether agency should have verified accuracy of its source of information was question for jury. Consumer also stated a claim for defamation against agency under state law. The decision distinguished Podell on the ground that the opinion in that case does not indicate that the consumer questioned the sufficiency of the agencies= verification of the disputed information.
Buckman v. American Bankers Ins. Co. of Fla. et al, 115 F.3d 892 (11th Cir. 1997) - Execution of contingent note and mortgage as part of bail bond transaction is not extension of credit subject to the Truth in Lending Act, and bondsman's efforts to collect on note were covered by originator exception to Fair Debt Collection Practices Act.
Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998) - Lender's payment of yield spread premium to mortgage broker which originated loan is a splitting of a referral fee in connection with the funding and origination of federally related mortgage loans, that is prohibited by anti-kickback provisions of Section 8 of the Real Estate Settlement Procedures Act, 12 U.S.C. ' 2607(a, c). The yield spread premium, based solely upon the interest rate charged by lender, is not payment for goods or for services for purposes of exemption from RESPA's prohibition against referral fees.
Northrop v. Hoffman of Simsbury, Inc., 134 F.3d 41 (2d Cir. 1997) - Former provision of the Fair Credit Reporting Act, superseded September 30, 1997 by the 1996 amendments to the Act, that imposes liability upon users of credit reports that willfully fail to comply with Act requirements, 15 U.S.C. ' 1681n, applies to violations of ' 1681q, which prescribes criminal penalties for "any person" that procures credit information under false pretenses.
Chandler v. Norwest Bank Minnesota, N.A.,137 F.3d 1053 (8th Cir. 1998) - Mortgage company that uses financing from independent third party does not table-fund borrowers' mortgage loan for bank which serves as trustee for buyer that subsequently acquired loan pursuant to agreement made between buyer, mortgage company and trustee bank prior to loan closing, even though mortgage company received yield spread points from the bank for the mortgage, and thus the mortgage company does not bring loan transaction within coverage of Real Estate Settlement Procedures Act=s prohibitions against splitting unearned fees. The decision applies Rule 11 sanctions against borrowers' counsel for failure to conduct necessary inquiry to support borrowers' claim against bank. A dissenting opinion concludes that mortgagors had raised an issue of material fact as to whether the loan was Atable-funded,@ where the real financier of the loan appeared to be the eventual loan buyer, who agreed to buy the loan before it closed; and the mortgage company received yield spread points from the trustee bank on behalf of the buyer.
Stevenson v. Employers Mutual Association, 960 F.Supp. 141 (N.D.Ill. 1997) - Employee who is wrongly identified as convicted felon by credit reporting agency and, consequently, suspended from his job would be entitled to relief against credit reporting agency and its president under the Fair Credit Reporting Act and state law, where agency and president failed to check court files for physical description of felon; failed to contact employee's former company to check whether he was absent from work for years in which felon was imprisoned; and failed to report to employer that felon's birth date differed from employee's.
Yeager v. TRW, Inc., 961 F.Supp. 161 (E.D.Texas 1997) - Credit report that is issued in response to application for commercial credit, to a farmer for farm equipment, is not "consumer report" within meaning of Fair Credit Reporting Act, and therefore is not covered by the Act.
White v. Diamond Motors, Inc., 962 F.Supp. 867 (M.D.La. 1997) - Difference between amount actually paid for car license and amount charged by car dealership as license fee is not "finance charge" under Truth in Lending Act, since dealership charged license fee in both cash and credit sales if customer elected to have dealership handle application for title and license, and thus fee was not required precursor for extension of credit.
Taylor v. Union Planters Bank of So. Miss., 964 F.Supp. 1120 (S.D.Miss. 1997) - Bank's daily overdraft fee of $5.00, charged to checking account customers when their accounts became overdrawn, is not "finance charge" under Truth in Lending Act and Regulation Z.
Lukas v. Lucci Ltd., Inc., 966 F.Supp. 1163 (S.D. Fla. 1997) - Home remodeling contractor who executed ten contractual documents for different phases of one project, each of which required partial payment upon signing, and the remainder by completion of work under the particular contract, was not creditor for purposes of the Truth in Lending Act.
Burney v. Thorn Americas, Inc., 970 F.Supp. 668 (E.D.Wisc. 1997) - Rent-to-own transactions are not, as a matter of law "consumer credit transactions" under state (Wisconsin) law, reversing earlier summary judgment by court on a motion to reconsider, because cash purchase option prices of rent-to-own companies may not be a sham. Unresolved factual issues regarding this issue are whether option prices were nominal, and whether customers' obligations upon exercising option were enforceable.
Goodwin v. Ford Motor Credit Co., 970 F.Supp. 1007 (M.D.Ala. 1997) - Truth in Lending Act claims are subject to decision under arbitration agreements accompanying installment sales contracts between buyers and dealerships. The arbitration agreements are not void under Alabama law for lack of mutuality of remedy, since Alabama, according to the decision, does not require such mutuality; nor are they unconscionable. Buyers were equitably estopped from preventing assignee automobile credit corporation from enforcing arbitration agreements, where buyers sued assignees based upon contracts containing those agreements.
Edwards v. Your Credit, Inc., 971 F.Supp. 1045 (M.D.La. 1997) - Premium for lender's nonfiling insurance, written to protect lender from losses caused by failure to perfect security interests, could be included in amount financed, and was not for general default insurance, which must be included in finance charge, even though insurer may have paid for claims outside of policy=s limitations.
Noel v. Fleet Finance, Inc., 971 F.Supp. 1102 (E.D.Mich. 1997) - Mortgage broker which originated loans and allegedly assessed undisclosed finance charge is "creditor" under Truth in Lending Act. One year statute of limitations on borrowers' TILA claim against mortgage broker was subject to equitable tolling because broker allegedly actively concealed pertinent information. Yield spread premium paid by lender to mortgage broker, that was indirectly payable by borrowers over life of loan in higher interest payments, is a "finance charge" subject to disclosure under TILA, but is not a "prepaid finance charge" that was part of the amount financed.
Allen v. Aronson Furniture Co., 971 F.Supp. 1259 (N.D.Ill. 1997) - Credit application fee charged by furniture retailer is not a Truth in Lending Act Afinance charge, under 12 C.F.R. ' 226.4(c)(1), because it was charged to all applicants for credit, including applicants who failed to qualify for credit.
Ramadan v. Chase Manhattan Corp., 973 F.Supp. 456 (D.N.J. 1997) - One-year time limit on cause of action under Truth in Lending Act, for automobile finance company's alleged failure to properly disclose to buyer that dealer was retaining, as commission or finder's fee, a portion of fee allegedly paid to third party for extended warranty coverage on car buyer's behalf, was intended by Congress to be jurisdictional in nature, rather than statute of limitations, so as not to be equitably tolled during time that finance company and other defendants allegedly concealed true cost of extended warranty coverage. The court followed Hardin v. City Title & Escrow Co., 797 F.2d 1037 (D.C.Cir.1986), rather than Jones v. TransOhio Sav. Ass'n, 747 F.2d 1037, 1040-41 (6th Cir.1984), and King v. California, 784 F.2d 910 (9th Cir.1986).
Ditty v. Checkrite, Ltd., Inc., 973 F.Supp. 1320 (D.Utah 1997) - Issue of material fact exists as to whether debt collection agency which maintains nationwide database of makers of dishonored checks is consumer credit reporting agency. The agency=s debt collection attorney, though, is not.
Williams v. First Gov=t Mtg. And Investors Corp., 974 F.Supp. 17 (D.D.C. 1997) - Disbursement made by borrower in loan documents for life insurance is not for credit life insurance, and therefore not included in finance charge, for purposes of Truth in Lending Act disclosure requirements, where estate, rather than lender, is designated beneficiary.
Dubose v. First Security Savings Bank, 974 F.Supp. 1426 (M.D.Ala. 1997) - Real Estate Settlement Procedures Act does not preempt state (Alabama) law that does not require a mortgage broker and lender to disclose "yield-spread premium" arrangement to a borrower, such as would support state law claim for fraudulent nondisclosure, or a federal civil RICO claim, following Briggs v. Countrywide Funding Corp., 949 F.Supp. 812 (1996). Decision's discussion and holdings on yield-spread premiums under RESPA have been overridden by Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998).
Morgan v. Markerdowne Corp., 976 F.Supp. 301 (D.N. J. 1997) - A lender that delegates loan-making duties arising under the Federal Family Education Loan program to a school thereby establishes an "origination relationship" with loan borrowers, subjecting the lender and assignees to school-related defenses for loans made after promulgation of relevant regulations in 1986. Assignee liability is based upon the FTC "Holder Rule." However, the Higher Education Act of 1965 impliedly preempts state law that would impose additional treble damages upon lender and assignee, for misrepresentations by school to borrower, because the application of such penalties, in the opinion of the Court, Awould totally frustrate the purpose of HEA to encourage lenders and guarantors to make funds readily available to large numbers of low income students.@ Page 319.
Young v. 1st American Financial Svcs., 977 F.Supp. 38 (D.D.C. 1997) - Motion to dismiss borrowers' Truth in Lending Act rescission count would be denied, given dispute about validity of foreclosure sale that purportedly extinguished borrowers' TILA rescission rights. Fraud is pled with sufficient particularity where complaint alleges that mortgage broker's representatives promised borrowers that company would refinance original loan at lower interest rate if borrowers made timely payments for one year; that borrowers entered into loan agreement based on that promise; and that representatives made promise knowingly and with intent to induce borrowers into accepting loan. Claim for unconscionability also is sufficiently pled where complaint alleges that defendants held themselves out as experts in field of loan financing; that borrowers had no knowledge or expertise in that area and did not believe they had choice about terms offered; that defendants "contrived to trap" borrowers into making loan that would eventually default so that defendants could foreclose on their home; and that substantive terms of loan, particularly fees that amounted to ten percent of loan principal, were one-sided.
Cemail v. Viking Dodge, Inc., 982 F.Supp. 1296 (N.D.Ill. 1997) - Allegations that warranty disclosure statement in automobile sales contract is misleading, as falsely suggesting that entire extended warranty charge was paid to warranty provider, when, in fact, car dealer retained a substantial portion of fee; and that car dealer's assignee, an entity with considerable experience in automobile financing, should have realized that dealer was in fact retaining a portion of this fee, were sufficient to state claim against assignee under the Truth in Lending Act.
Morales v. Attorneys' Title Insurance Fund, Inc, 983 F.Supp. 1418 (S.D. Fla. 1997) - Filed rate doctrine, and doctrine of standing, bar insureds' claims that title insurers' practice of always or nearly always adhering to 70/30 split of premiums with their agents, though ostensibly in compliance with state law, violates federal Real Estate Settlement Procedures Act kickback provisions, 12 U.S.C. ' 2607, where state's scheme for regulating title insurance rates is comprehensive, including the splitting of premiums with agents, and allows for public input, even though HUD report had found that Florida title insurers= practices violate RESPA.
Brister v. All Star Chevrolet, Inc., 986 F.Supp. 1003 (E.D.La.1997) - Overstated registration fee and license fee in automobile dealer's purchase financing agreement are not "finance charges," under Truth in Lending Act, since they were charges also payable in a comparable cash transaction. Dealer's assignee is not liable for alleged inaccurate disclosures under Act because they were not apparent on the face of the agreement.
Hamilton v. York, 987 F.Supp. 953 (E.D.Kty. 1997) - Charges incurred by customers of check-cashing company that requires presentment of check two weeks after loan, and allows customers to defer presentment of checks in exchange for additional charges, constitute "interest" from short-term loans, not "service fees," so that customers stated claims under state (Kentucky) usury statutes. Customers also stated claims under federal and state RICO Acts; the Truth in Lending Act for lack of required disclosures; and state law fraud and UDAP laws, because check-cashing company disguised their consumer loan business as check-cashing operation, that company failed to disclose interest rates and finance charges, and that company threatened criminal prosecution for writing bad checks when it had to have known that customers could not have been prosecuted for failing to pay usurious loans.
Randolph v. Green Tree Financial Corp., 991 F.Supp. 1410 (M.D.Ala. 1998) - Arbitration provision contained in financing documents for mobile home purchases applies to claims under Truth in Lending Act and Equal Credit Opportunity Act. Arbitration provision that did not require that both parties submit dispute claims to arbitration, according to the decision, is valid and enforceable contract under Alabama law because such mutuality is not required. The decision distinguishes the case from the general waiver of remedies struck down in Parker v. Dekalb Chrysler Plymouth, 673 F.2d 1178 (11th Cir. 1982), even though Parker provides at page 1181 that Athe public must rely largely on the efforts of individual consumers acting as >private attorneys general= to achieve the disclosure system envisioned by the [Truth in Lending] Act.
Katz v. The Dime Savings Bank, FSB, 992 F.Supp. 250 (W.D.N.Y. 1997) - Pattern or practice of noncompliance is required to support statutory damages under the Servicer Act, 12 U.S.C. ' 2605, which governs the servicing of federally related mortgage loans. The parties were ordered to brief the court on how damages should be awarded under this standard.
Young v. 1st American Financial Svcs., 992 F.Supp. 440 (D.D.C. 1998) - Mortgage lender's inability to identify charge for title search of borrowers' property is insufficient to create genuine issue of material fact as to whether work was done, given invoice showing that charge was for title search. Lender's failure to include settlement agent fee in finance charges does not constitute TILA violation, absent evidence that lender required closing agent to be present to complete closing of borrowers' loan. Fact questions preclude summary judgment for mortgage broker on claims relating to its alleged fraudulent promise to refinance mortgage while knowing that mortgagors could not repay, but lender could not be held liable for mortgage broker's alleged fraud, on theory that broker was acting as lender's agent, absent evidence that lender exercised control over broker.
Hammons v. Enterprise Leasing Co., 993 F.Supp. 1388 (W.D.Okla. 1998) - Vehicle lessor did not violate Fair Credit Reporting Act by obtaining lessee's credit report after lessee failed to timely return vehicle, given lessee's written authorization for lessor to verify his personal information "through credit agencies or other sources."
Bolduc v. Beal Bank, SSB, 994 F.Supp. 82 (D.N.H. 1998) - Equal Credit Opportunity Act violation may be asserted as a right of recoupment to prevent mortgage foreclosure, even after the expiration of Act's two-year statute of limitations. Bank that had acquired promissory note from FDIC was not a "holder in due course" under state law, and therefore was subject to ECOA defenses, since bank had ample notice that notes had been dishonored as well as actual notice of existence of claim in recoupment. Original lender violated Act when it required borrower's wife to sign promissory notes, even though borrower was independently creditworthy; thus, wife's obligation under notes was invalid. Since parties mistakenly assumed, at time of forbearance agreement on which foreclosure was based, that borrower's wife was obligated on prior promissory notes, and mistaken assumption clearly had material effect on resulting forbearance agreement, mutual mistake rendered the forbearance agreement void. Mortgagors were entitled to preliminary injunction prohibiting bank from foreclosing on mortgages.
Ali v. Vikar Mgt. Ltd., 994 F.Supp. 492 (S.D.N.Y. 1998) - Landlord which lied to credit reporting agency as to its reasons for accessing address information about tenants in rent-stabilized apartment, claiming that it sought to forward mail to the tenants, obtained information about the consumers under false pretenses, in violation of the Fair Credit Reporting Act, even though the information requested was not a credit report. The mere presence of a landlord-tenant relationship does not permit landlord to access tenant's credit report to determine rent-stabilized tenant's primary residence.
Bumgardner v. Lite Cellular, Inc., 996 F.Supp. 525 (E.D. Va. 1998) - Fair Credit Reporting Act does not authorize injunctive relief as remedy, following Mangio v. Equifax, Inc., 887 F.Supp. 283 (S.D.Fla.1995). The consumer in this case sought an injunction ordering creditor to deliver to consumer all materials it has regarding consumer; to refrain from disseminating any information regarding consumer; to implement policies and procedures to verify names, addresses, and billing addresses of applicants for cellular telephone accounts; and to implement procedures and training for verifying applicants before accessing credit reports. The holding is based upon the Act=s failure to mention injunctive relief, combined with its grant of authorization to the Federal Trade Commission to enforce the Act. The court noted two cases as contrary authority, Greenway v. Information Dynamics, Ltd., 399 F.Supp. 1092 (D.Ariz.1974), aff'd per curiam, 524 F.2d 1145 (9th Cir.1975); and Wenger v. Trans Union Corp., No. 95-6445 (C.D.Cal. Nov. 14, 1995) (unpublished).
DeLeon v. Beneficial Construction Co., 998 F.Supp. 859 (N.D.Ill. 1998) - Allegation that mortgage brokerage fee for home improvement loan is a "sham" because broker did not provide mortgage broker services, but simply made referrals to pre-selected sources of financing, sufficiently states claim that charge constitutes a "referral fee" or "kickback" charge, as prohibited by Real Estate Settlement Procedures Act, ' 8, 12 U.S.C. ' 2607 and 24 C.F.R. ' 3500.14(c).
American Bankers Ins. Group, Inc. v. Board of Governors of the Federal Reserve, 3 F.Supp.2d 37 (D.D.C. 1998) - In challenge of regulation by credit insurance underwriters, held that Federal Reserve was authorized to adopt regulation which treated debt cancellation agreements and credit insurance uniformly for purposes of Truth In Lending Act disclosure requirements.
Williams v. AT&T Wireless Services, Inc., 5 F.Supp.2d 1142 (W.D.Wash. 1998) - Cellular telephone service provider has "legitimate business need" under Fair Credit Reporting Act for obtaining potential consumer's credit report, being to determine whether to grant consumer's application to become a cellular service subscriber, and thus obtains report for permissible purpose. Transaction is similar to credit transaction, and subscribers, particularly new subscribers, might incur very large bills within span of even one month.
Willis v. Quality Mortgage USA, Inc., 5 F.Supp.2d 1306 (M.D. Ala. 1998) - Real Estate Settlement Procedures Act's prohibition against splitting fees with third person, unless service was actually performed, is not expanded by HUD regulation that prohibits unearned payments. HUD was attempting to clarify kinds of fees that were included in prohibition against split fees and referral, not expand prohibition to include fees which were not split. 24 C.F.R. ' 3500.14(c) (1997).
Andrews v. Trans Union Corp., 7 F.Supp.2d 1056 (C.D.Cal. 1998) - Fair Credit Reporting Act allows individual consumer, injured when credit reporting agency erroneously included information regarding imposter's account in credit report on consumer, to seek injunctive relief requiring removal of this information from her file. Consumer credit reporting agency's failure to correct inaccuracy in consumer's file, consisting of entry regarding request for information filed by merchant dealing with admitted imposter, even after reporting agency determined that consumer was victim of fraud and that she had never opened account with merchant, would constitute "willful" violation of agency's duty under Fair Credit Reporting Act to reinvestigate, and also would entitle consumer to punitive damages under the Act.
Lopez v. Orlor, Inc., 176 F.R.D. 35 (D.Conn. 1997) - Debt cancellation fee charged by car dealer that was never identified as being optional, that would pay off car loan in event car was stolen or totaled, is "finance charge" under the Truth in Lending Act, and should have been disclosed as such. Car dealer's designation of the fee as "amount paid to others" was misleading, where only some of it was, and subjected dealer to TILA liability. Proposed class of customers charged fee by dealer is certified.
Washington v. CSC Credit Services, Inc., 178 F.R.D. 95 (E.D.La. 1998) - Consumers suing credit reporting agencies under Fair Credit Reporting Act, for failure of agencies to have reasonable procedures to ensure that insurance companies that requested reports had valid authorizations from consumers, granted class certification, where consumers contended that it was not reasonable under 15 U.S.C. ' 1681e(a) for agencies to rely solely on the insurance companies' blanket assertions that they had authorizations. The decision states at page 102 that having one's credit history released into electronic circulation without reasonable procedures in place to ensure permissible use is cause for sufficient anxiety and invasion of privacy to constitute an injury-in-fact in and of itself.
Soto v. PNC Bank, 221 B.R. 343 (Bankr.E.D.Pa. 1998) - Chapter 13 debtor, who granted bank prepetition mortgage on her house to in order to secure loan for her nephew, was entitled to receive from the bank Truth in Lending Act disclosures as a 'consumer', with the right to rescind the transaction. Her TILA damages claims, asserted as recoupment defense in Chapter 13 bankruptcy, were not time barred, because she never received the required notices. State court foreclosure judgment was not res judicata as to Chapter 13 debtor's claims relating to that case, because the state court did not appear to have personal jurisdiction over the debtor, due to absence of evidence of return of service; or subject matter jurisdiction, absent evidence of proper pre-foreclosure notice required of state law.
Kasket v. Chase Manhattan Mortgage Corp., 695 So.2d 431 (Fla. 4th DCA 1997) - Nongovernmental assignee of mortgage can be liable for originator's Truth in Lending Act violations, even though the assignor, the Resolution Trust Corporation, as federal agency, would have been exempt from such claims. The doctrine of D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447 (1942), codified as 12 U.S.C. ' 1823(e), which provides that assignees of the FDIC are entitled to avoid claims that are based upon agreements not in the records or books of the failed institutions under FDIC control, in order to protect the FDIC when it assesses these institutions, applies, but does not bar TILA claims because the claims are based upon mistakes on the face of the documents of the failed institution themselves.
Great Western Bank v. Shoemaker, 695 So.2d 805 (Fla. 2d DCA 1997) - Federal Express fee assessed to mortgagor for transmitting check to predecessor mortgagee need not, under Truth in Lending Act, be included in finance charge, following Veale v. Citibank, F.S.B., 85 F.3d 577 (11th Cir.1996); and Florida intangible tax paid by mortgagee could be excluded from finance charge under TILA, following Pignato v. Great Western Bank, 664 So.2d 1011 (Fla. 4th DCA 1995).
Dove v. McCormick, 698 So.2d 585 (Fla. 5th DCA 1997) - Original mortgage lender's involuntary assignment of mortgage to Resolution Trust Corporation (RTC) permanently extinguished mortgagor's right to pursue damages under Truth In Lending Act from subsequent purchasers, under Section 1641(a) of the Act.
BankAmerica National Trust Co. v. Zayas-Bazan, 698 So.2d 1261 (Fla. 4th DCA 1997) - Mortgagee's failure to recognize rescission demand did not constitute Truth in Lending Act violation, so as to warrant statutory penalty, because the demand was made after the statutory time limit for rescission had expired.
3. Debt Collection and Repossession
Terran v. Kaplan, 109 F.3d 1428 (9th Cir. 1997) - Language in debt collector-attorney's initial letter to debtor that warns debtor of need to "immediately" contact attorney in order to avoid possible legal action, does not contradict or overshadow validation notice itself, in violation of Fair Debt Collection Practices Act (FDCPA), where attorney did not require immediate payment but only an immediate call to his office, and where letter was typed in uniform, same-size type, which did not emphasize any particular statement in letter.
Garrett v. Derbes, 110 F.3d 317 (5th Cir. 1997) - Attorney who during nine-month period attempts to collect debts owed by 639 different debtors "regularly" attempts to collect debts owed another, and thus is "debt collector" under Fair Debt Collection Practices Act, even though debt collection services may have been only a small fraction of his total business activity.
Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997) - Payment obligation arising from dishonored check creates "debt" triggering protections of Fair Debt Collection Practices Act. Offer or extension of credit is not required for payment obligation to constitute "debt" under the Act. The decision found that Athe plain language of the Act defines 'debt' quite broadly as 'any obligation to pay arising out of a [consumer] transaction', 111 F.3d 1325, and that, while unnecessary to consider, legislative history shows that the Congress considered and chose not to adopt a limitation of the Act to extensions of credit. Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir.1987), was distinguished on the grounds that the conduct at issue in that case, a demand of payment for pirated cable signals, was not an obligation arising out of a consumer transaction, and the reasoning in Zimmerman that the Act applied only to debts owed on extensions of credit was disagreed with. A dissent concluded that the Act did not apply because checks are payments on debts, rather than debts themselves, and that the writing of bad checks often constitutes theft as was present in Zimmerman.
Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997) - Debt collection letter sent by collection agency that informed consumer, "Unless we receive a check or money order for the balance, in full, within thirty (30) days from receipt of this letter, a decision to pursue other avenues to collect the amount due will be made" contradicts mandatory validation notice disclosures giving consumer 30 days to dispute debt and request verification, leaving unsophisticated consumer confused as to what his rights were, and thus violates Fair Debt Collection Practices Act.
McKenzie v. E. A. Uffman and Assoc.,119 F.3d 358 (5th Cir. 1997) - Debt collector, by identifying itself as "Collections Department, Credit Bureau of Baton Rouge," violates Fair Debt Collection Practices Act prohibition against using "false, deceptive, or misleading representation" in connection with collection of debt. Collector licensed use of name "Collection Department, Credit Bureau of Baton Rouge" for five percent royalty on every collection.
Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477 (7th Cir. 1997) - Past-due condominium association assessment qualifies as "debt" covered by Fair Debt Collection Practices Act. The decision concluded that Athe obligation to pay [the assessments] arose in connection with the purchase of the homes themselves, even if the timing and amount of particular assessments was yet to be determined. Cf., In re Rosteck, 899 F.2d 694, 696 (7th Cir.1990) (obligation to pay condominium assessments arose upon purchase of unit, thereby satisfying Bankruptcy Code's definition of 'debt', and Atherefore qualify as obligation[s] of a consumer to pay money arising out of a transaction, as required by the Act. 19 F.3d 481
Charles v. Lundgren & Assoc., 119 F.3d 739 (9th Cir. 1997) - Dishonored check is debt within meaning of Fair Debt Collection Practices Act. The decision agreed with Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), because A>an offer or extension of credit is not required for a payment obligation to constitute a 'debt' under the FDCPA, id. at 1326. 119 F.3d 740.
Brown v. Budget Rent-a-Car, 119 F.3d 922 (11th Cir. 1997) - Unpaid administrative fees and other fees, that were charged under rental car agreement after the lessee had an accident involving the motor vehicle during the rental agreement, constitute "debt" covered by the Fair Debt Collection Practices Act. Following Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), infra, the decision, at 111 F.3d 1125, adopted the interpretation of the Act that "[a]s long as the transaction creates an obligation to pay, a debt is created."
Jang v. A. M. Miller and Assoc., 122 F.3d 480 (7th Cir. 1997) - After sending a debtor a notice of a right to contest debt within 30 days that is in compliance with the Fair Debt Collection Practices Act, a collection agency which receives a request for verification of a debt from a purported debtor is permitted by the Act, according to this decision, to choose between providing verification or ceasing collection of the debt, even though the agency is required in the notice to state that it will provide verification of a debt upon request.
Jenkins v. Heintz, 124 F.3d 824 (7th Cir. 1997) - Attorney and law firm retained only to collect a debt cannot be held liable for violating Fair Debt Collection Practices Act for collecting debt that included unauthorized premiums for force placed collateral insurance, absent sufficient evidence that they knew premiums were unauthorized. In addition, law firm's internal procedures to avoid Act violations, including requiring client to verify under oath true and correct nature of charges, was held to establish bona fide error defense under Act, 15 U.S.C. ' 1692k(c). A dissent, feeling that the majority failed to properly allocate burden of proof and to take into account the legal practice of the law firm, concluded that the evidence was sufficient for a fact finder to impute to the law firm knowledge of the unauthorized status, and that the firm=s internal procedures therefore were immaterial; and stated Athe majority goes a long way toward creating the very exemption for lawyers under the FDCPA that the Supreme Court, and this court in its earlier opinion, rejected.@ 124 F.3d 835.
Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997) - Debt collection letter that informed debtor that he would be sued absent payment within one week, but also told debtor of right to contest debt within 30 days, was confusing and violated Fair Debt Collection Practices Act. Debtor's failure to read collection letter did not preclude him from obtaining statutory damages for the letter's FDCPA violations. The decision includes a draft collection letter approved by the court within the Seventh Circuit that threatens lawsuit within the 30 day period if the debt is not paid.
Whitaker v. Ameritech Corp.,129 F.3d 952 (7th Cir. 1998) - Local telephone service company that acquires, and attempts to collect on debts due other telecommunications services is not "debt collector" for purposes of Fair Debt Collection Practices Act. State court default judgment for balance due on telephone bills bars, under state law doctrine of res judicata, claims based upon Racketeer Influenced and Corrupt Organizations Act, state UDAP law, common law fraud, and breach of fiduciary duty that alleged that company sent out fraudulent telephone bills.
Duffy v. Landberg, 133 F.3d 1120 (8th Cir. 1998) - Fair Debt Collection Practices Act's broad definition of "debt" as any obligation to pay arising from consumer transaction applied to dishonored checks, given that check issuers' payment obligations arose from transactions for personal or household goods; thus, check issuers stated claims under Act when they alleged that attorney and company attempting to collect payment on dishonored checks violated the Act.
Kobs v. Arrow Service Bureau, Inc., 134 F.3d 893 (7th Cir. 1998) - The Seventh Amendment right to jury trial entitles debtors who bring action for damages against debt collection agency under the Fair Debt Collection Practices Act to a jury trial.
Lewis v. ACB Business Services, Inc., 135 F.3d 389 (6th Cir. 1998) - Letter that debt collector sent to debtor who had exercised statutory right to demand cessation of communications, giving debtor opportunity to pay debt through various payment plans, is permissible communication under provision of Fair Debt Collection Practices Act permitting debt collector to notify debtor of collector's right to invoke specified remedies. Debt collector's use of pseudonym on letter sent to debtor did not violate Act because pseudonym was used to alert employees to status of account and only one notified of account status was debt collector. (A dissenting opinion disagreed with both of these conclusions.) Debt collector established bona fide error defense to debtor's FDCPA claim based on telephone contact from debt collector which occurred after debtor exercised right to demand that collection communications cease because contact resulted from coding error by creditor and debt collector's manual and computer systems were reasonably adapted to avoid such errors.
Schweizer v. Trans Union Corp., 136 F.3d 233 (2nd Cir. 1998) - Collection letter that simulates telegram does not violate provision of Fair Debt Collection Practices Act barring false or misleading representations, despite consumer's claim that it creates a false sense of urgency. The court concluded that a Aleast sophisticated debtor would not mistake letter for telegram, even though it had "Priority-Gram" and "Important Notice" printed on it, and that any sense of urgency created by envelope, which resembled a form of express mail delivery, was not sustained by text of letter itself.
Aubert v. American General Finance, Inc., 137 F.3d 976 (7th Cir. 1998) - Pursuant to exception for debt collection efforts of corporate affiliates, corporation whose principal business was not debt collection and which only collected debts for affiliated or related entities was not "debt collector" for purposes of Fair Debt Collection Practices Act, 15 U.S.C. ' 1692a(6)(B).
Snow v. Riddle, 143 F.3d 1350 (10th Cir. 1998) - Dishonored check written in payment for consumer goods created "debt" within purview of Fair Debt Collection Practices Act.
Beggs v. Rossi, 145 F.3d 511 (2nd Cir. 1998) - Personal property taxes levied by town upon plaintiffs' automobiles are not "debts" within meaning of Fair Debt Collection Practices Act (FDCPA), and therefore, debt collection service's efforts to collect those taxes from plaintiffs were not covered by Act.
Ladick v. Van Gemert, 146 F.3d 1205 (10th Cir. 1998) - An assessment owed to a condominium association qualifies as a "debt," within the meaning of the Fair Debt Collection Practices Act, even though the assessment did not involve an extension of credit; assessment qualified as an obligation of a consumer to pay money arising out of a "transaction," and while the assessment was used to maintain and repair the common area, it nevertheless had a primarily personal, family, or household purpose.
Savino v. Computer Credit, Inc., 960 F.Supp. 599 (E.D.N.Y. 1997) - Language in debt collection letter that creditor insists on immediate payment or valid reason for debtor's failure to pay contradicts statutory validation notice requirement of Fair Debt Collection Practices Act. Debtor's initial denial that he did not receive collection letter does not preclude statutory damages, because injury to debtor is not required to state violation under Act.
Trull v. GC Services Ltd. Partnership, 961 F.Supp. 1199 (N.D.Ill. 1997) - Statements in collection letter that debtor's name would be retained in agency's "master debtor file. . . along with others who, despite their good name and reputation, have shirked their payment responsibility" could falsely imply that collection agency is credit reporting agency, in violation of Fair Debt Collection Practices Act. Statement in second collection letter, sent within 30-day validation period, that "Since you ignored our previous notice, we assume this debt is correct," is misleading in violation of the Act. But collection letter's use of yellow paper; "STAR High Priority Communication" heading; and telegram-like layout and typeface, does not violate Act by overstating urgency of message, where letter was sent to debtor through regular mail.
Blum v. Fisher and Fisher, Attorneys at Law P.C., 961 F.Supp. 1218 (N.D.Ill. 1997) - Material questions of fact are raised by allegations that debt collection letter violated Fair Debt Collection Practices Act by misleading debtor into not taking prompt action to prevent foreclosure, through statement that debtor might be allowed to stay on mortgaged property absolutely rent free for roughly seven months following commencement of foreclosure action; and by further misleading debtor into not seeking counsel, through mere partial statement of remedies available to debtor.
Thomas v. Pierce, Hamilton, and Stern, Inc., 967 F.Supp. 507 (N.D.Ga. 1997) - Phrase "additional damages" in section of the Fair Debt Collection Practices Act providing that actual damages may be recovered with additional damages in amount not to exceed $1,000, is meant to include punitive damages, and to preclude award of punitive damages, pursuant to federal common law, in addition to statutory damages amount.
Harrison v. NBD Inc., 968 F.Supp. 837 (E.D.N.Y. 1997) - Offer of special discount in collection agency's demand letter that expired before 30-day period to dispute debt did not overshadow or contradict validation notice in violation of the Fair Debt Collection Practices Act. The letter's statement that "balance due" was $1,979 but that consumer's "liability" was $247.86, though, constituted deceptive means to collect debt in violation of Act.
Thies v. The Law Offices of William A. Wyman, 969 F.Supp. 604 (S.D.Cal. 1997) - Debtors' obligation to pay dues for services of homeowners association based on covenant running with their property, including fees for maintenance and improvement of common areas within housing development, constituted consumer debts covered by Fair Debt Collection Practices Act, even though many households used or benefitted from common areas.
Pittman v. J.J. Mac Intyre Co. of Nevada, Inc., 969 F.Supp. 609 (D.Nev. 1997) - Debt collector violates Fair Debt Collection Practices Act by continuing to call debtor at work after debtor indicates that she "could not talk at work;" and by contacting debtor after debtor informs collector, and collector's own records confirm, that debtor is making payments on schedule to creditor. The Act's requirement that the debtor's notice to debt collector disputing validity of debt be written applies only to initial communication between debt collector and debtor. Debtor is not required to join creditor as indispensable party to her action for Act violations.
Seibel v. Society Lease, Inc., 969 F.Supp. 713 (M.D.Fla. 1997) - Repossession agency's entry on property for self-help repossession after consent has been revoked is breach of peace in violation of Fla. Stat. 79.503
1. Bankruptcy and Foreclosures
Fidelity Fin. Serv., Inc. v. Fink, U.S. 118 S.Ct. 651 (1998) - Where all step necessary to perfect the security interest were not been completed within 20 days of bankruptcy debtor's receipt of possession of the vehicle, purchase-money security interest in vehicle may be avoidable in Chapter 13 bankruptcy as impermissibly preferential, and the interest does not fall within the "enabling loan" exception to trustee's preference-avoidance power, 11 U.S.C. ' 547(c)(3)(B).
Kawaauhau v. Geiger, U.S. 118 S.Ct. 974 (1998) - Debts arising from malpractice judgment based upon acts that were intended, but were not intended to cause damage, do not fall within the willful and malicious injury exception to discharge from bankruptcy, and therefore are dischargable.
Cohen v. Cruz, U.S. 118 S.Ct. 1212 (1998) - An award of treble damages pursuant to state law, for charging tenants rent in excess of rent control laws, is not dischargable in bankruptcy. The award falls within the scope of 11 U.S.C. ' 523(a)(2)(A), which excepts from discharge in bankruptcy Aany debt ... for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by ... false pretenses, a false representation, or actual fraud, including costs and attorney's fees.
Levine v. Weissing, 134 F.3d 1046 (11th Cir. 1998) - Chapter 7 debtors who converted non-exempt assets to annuities that were exempt under Florida law, shortly after learning that such transfer would be beyond reach of a particular creditor whom debtors had reason to believe would likely prevail in a lawsuit filed against them, purchased exempt annuities with intent to hinder or defraud known creditor, under Florida fraudulent transfer law, Fla. Stat. ' 726, and transfer therefore may be set aside by bankruptcy trustee.
Jost v. Key Bank of Maine, 136 F.3d 1455 (11th Cir. 1998) - Where creditor objects to Chapter 7 debtor's claimed Florida homestead exemption, alleging debtor converted nonexempt assets into exempt homestead with intent to hinder, delay, or defraud creditors, bankruptcy court is required to make finding of fact as to whether debtor's purchase of home and/or her prepayment of home mortgage were fraudulent transfers with intent to hinder, delay, or defraud any creditor. Left undecided was whether the Florida homestead exemption may be claimed in cases in which the home is purchased with non-exempt assets with fraudulent intent to hinder, delay, or defraud creditors in violation of Fla. Stat. ' 726.
Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998) (panel decision) - In Chapter 13 bankruptcy, vehicle that was repossessed prior to bankruptcy petition was not property of bankruptcy estate where, at time of petition under applicable state law (Alabama), debtor did not retain title, possession, or any other functionally equivalent ownership interest in repossessed vehicle. Instead, the debtor's statutory right of redemption in vehicle under state law became property of the bankruptcy estate.
United States v. May, 211 B.R. 991 (M.D.Fla. 1997) - In Chapter 13 bankruptcy, debtors' disputed debt to the IRS, that was subject of pending Tax Court litigation, was not sufficiently certain as to amount or liability to be unliquidated debt that would disqualify debtor from Chapter 13 eligibility.
Kapila v. Plave, Pfg, Inc., 11 Fla. L. Weekly Fed. D518, 217 B.R. 336 (S.D. Fla 1997) - Bankruptcy trustee established prima facie case of debtor's fraudulent transfer under Florida law, Fla. Stat. ' 726, where trustee presented evidence that debtor, while insolvent, used her own money to pay $45,000 legal fees owed by her husband, an "insider," for which she received no reasonably equivalent value from either third party or her husband.
Bakst v. Bennett, 208 B.R. 582 (Bankr.S.D.Fla. 1997) - In Chapter 7 bankruptcy, execution of promissory note by debtor in favor of his ex-wife for money which she had loaned him to purchase automobile, together with debtor's recording of lien in favor of ex-wife on certificate of title for vehicle and delivery of certificate of title to ex-wife, is not sufficient to create valid security interest on vehicle under Florida law, F.S. ' 319.27(2), because the note did not contain language granting the ex-wife a security interest.
In re Willoughby, 11 Fla. L. Weekly Fed. B71, 212 B.R. 1011 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor could not avoid his former wife's child support judgment lien on debtors' jointly owned homestead property, under 11 U.S.C. ' 522(f)(1); but debtor's current wife could avoid such lien, as judgment was not against her, and lien impaired her homestead exemption, even though it could not attach to the debtors' homestead pursuant to Article X, ' 4(a) of the Florida Constitution.
In re Sheffield, 11 Fla. L. Weekly Fed. B87, 212 B.R. 1019 (Bankr.M.D.Fla. 1997) - Insurance proceeds that Chapter 7 debtor received upon death of her former husband, under policy that former husband was required to maintain pursuant to reciprocal insurance clause in decree dissolving parties' marriage, were not in nature of alimony, in which debtor could claim exemption of proceeds from bankruptcy estate pursuant to 11 U.S.C. ' 522(d)(10)(D). Reciprocal nature of insurance obligation precluded finding that ex- husband's obligation to maintain policy for his former wife was intended by way of spousal support, though insurance provision was placed between two alimony-related provisions of dissolution decree.
In re Franklin, 11 Fla. L. Weekly Fed. B 105, 213 B.R. 781 (Bankr.N.D.Fla. 1997) - In Chapter 13 bankruptcy, replacement value of sports utility vehicle to be retained by debtor is average between vehicle's retail and wholesale bluebook values, as adjusted based on cost of repairs and value of remaining extended warranty coverage purchased by debtor.
In re Monzon, 11 Fla. L. Weekly Fed. B113, 214 B.R. 38 (Bankr.S.D.Fla. 1997) - Chapter 7 trustee can administer entireties property held by debtor and his nondebtor spouse, to the extent of the parties= joint unsecured debt, pursuant to 11 U.S.C. ' 522(b)(2)(B), even if debt is not reduced to judgment. The decision disagrees with In re Himmelstein, 203 B.R. 1009 (Bankr.M.D.Fla.1996), which held that under Florida law the joint debts must be reduced to judgment in order to reach entireties property. The decision also concluded that the liquidation proceeds should be available only to the joint creditors, with any excess proceeds from property's liquidation remaining exempt.
In re Campbell, 11 Fla. L. Weekly Fed. B120, 214 B.R. 411 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's exemption in automobile is limited to $1,000 under Florida law. Debtor's failure to provide documentary proof of intent to create entireties estate in household furnishings defeated her claim of their exemption from the bankruptcy estate. Real property was not subject to administration by trustee for benefit of couple's joint creditors, as no joint creditor held judgement against debtor and her husband.
In re Hickox, 11 Fla. L. Weekly Fed. B133, 215 B.R. 257 (Bankr.M.D.Fla. 1997) - Chapter 7 debtor's individual retirement account is exempt from creditors under Florida law, Fla. Stat. ' 222.21(2). The account=s proceeds could be traced to 401(k) disbursement that debtor had received upon termination from her employment, so that IRA was funded by rollover contribution from qualified trust, even though funds of the trust had been commingled with non-exempt funds in debtor's checking account and transferred to third- party's account prior to creation of IRA.
Jensen v. Groff, 11 Fla. L. Weekly Fed. B171, 216 B.R. 883 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor=s discharge is denied based upon 'false oath' exception to discharge, where debtor was sophisticated and made numerous omissions from statement of financial affairs, including his funds transfers from the joint account he shared with wife, his interest in various businesses, and his income tax refund; and also based upon fraudulent transfer of assets, where his transfer of wholly owned assets into to joint ownership with himself and his wife occurred subsequent to creditors obtaining judgments against him and within one year of his bankruptcy filing.
First Deposit Nat. Bank v. Mack, 11 Fla. L. Weekly Fed. B 215, 216 B.R. 981 (Bankr.N.D.Fla. 1997) - Credit card issuer failed to show that Chapter 7 debtor's charges on her credit card account were made with requisite fraudulent intent, so as to except debt from bankruptcy discharge, where debtor was a housewife who was financially unsophisticated, not involved in management of her family's finances, and unaware of their financial difficulties at the time the charges were incurred; her spending habits did not change leading up to bankruptcy; and the charges were not incurred for luxury items. Also, regardless of debtor's intent, the issuer failed to show that it had justifiably relied on representations, implied or otherwise, made by debtor, where issuer did not conduct credit investigation prior to issuing credit card to debtor.
In re McFadyen, 11 Fla. L. Weekly Fed. B149, 216 B.R. 1006 (Bankr.M.D. Fla. 1998) - Federal tax lien attaches to Chapter 13 debtor's Florida homestead, under 11 U.S.C. ' 522(c)(2)(B).
In re Bennett, 11 Fla. L. Weekly Fed. B156, 217 B.R. 654 (Bankr.M.D.Fla. 1998) - Revocable nature of Chapter 13 debtor's payee status, under annuity purchased by out-of-state insurer to fund its obligations under settlement with debtor, did not prevent debtor from claiming annuity proceeds as exempt under Florida law, and these proceeds thus could not be included in hypothetical Chapter 7 liquidation, for purpose of judging confirmability of debtor's plan.
In re Lazin, 11 Fla. L. Weekly Fed. B197, 217 B.R. 332 (Bankr.M.D. Florida 1998) - Chapter 7 debtor's accumulated benefits from Social Security and annuity contracts did not lose the exempt status because they were received and deposited by debtor into bank account; but allowance of an exemption in accumulated benefits from Social Security is contingent upon a factual showing that the allowance is necessary to enable debtor to satisfy her basic needs, following Citronelle-Mobile Gathering, Inc. v. Watkins, 934 F.2d 1180, 1192 (11th Cir.1991) (garnishment case).
Smallwood v. Finlayson, 11 Fla. L. Weekly Fed. B213, 217 B.R. 666 (Bankr.S.D.Fla. 1998) - Attorney fee obligation imposed on Chapter 7 debtor in marital dissolution action is properly characterized as nondischargeable "support" obligation, under 11 U.S.C. ' 523(a)(5), even though majority of issues litigated in state court case involved the equitable distribution of assets and not maintenance or support issues, where state court specifically indicated that it was awarding attorney fees because of disparity in parties' respective incomes, earning capacities and financial positions.
In re Allen, 11 Fla. L. Weekly Fed. B151, 217 B.R. 945 (Bankr.M.D.Fla. 1998) - Denial of Chapter 7 debtor's discharge, on grounds that he transferred property to individual retirement accounts within one year prior to bankruptcy petition date with intent to hinder, delay, or defraud creditor, did not bar debtor from avoiding judgment lien on the IRAs using 11 U.S.C. ' 522(f), which permits avoidance of leins on property described in federal bankruptcy exemptions, 11 U.S.C. ' 522(b).
In re McMurray, 218 B.R. 867 (Bankr.E.D.Tenn. 1998) - In deriving balances owed on lenders' claims in Chapter 13 bankruptcy, "Rule of 78" accounting method cannot be used to calculate rebate for unmatured interest on debtor's precomputed loans. The Rule results in inaccurate approximation of actuarial rate that favored creditor-companies to detriment of debtor, the estate, and other creditors, rather than true measure as required by the Bankruptcy Code. Bankr.Code, 11 U.S.C. ' 502(b)(2).
Galloway v. Long Beach Mortgage Co., 220 B.R. 236 (Bankr.E.D.Pa. 1998) - Pre-bankruptcy petition foreclosure judgment against Chapter 13 debtor does not bar litigation in bankruptcy case of mortgage arrearage or costs and fees associated with foreclosure action, where those issues were not addressed or required to be addressed in the foreclosure action.
American Express v. Tabar, 220 B.R. 701 (Bankr.M.D.Fla. 1998) - On motion for summary judgment by creditor, consumer debt of bankruptcy debtor of $16,700.50, representing luxury purchases made within 60 days of petition date, was excepted from discharge where, based upon admissions on file, purchases were of antiques, Persian rugs, antique reproductions, and floor coverings, and debtor did not respond to motion. 11 U.S.C. '523 (a)(2)(C). Full amount of credit card debt was excepted from discharge on actual fraud grounds where debtor failed to respond to, and thus admitted, requests for admission that he incurred charges at issue by actual fraud and that he did not intend to repay credit card issuer when he incurred charges.
Cohen v. Pond, 11 Fla. L. Weekly Fed. B267, 221 B.R. 29 (Bankr.M.D.Fla. 1998) - Chapter 7 debtors intended to defraud creditors, justifying denial of discharge, where they granted lien on their vehicle to debtor-wife's sister. Debtors' and sister's testimony that sister loaned debtors $5,000 in cash in exchange for lien was not credible where debtors admitted prior to trial to having no documentation for the loan.
In re Black, 221 B.R. 38 (Bankr.S.D.Fla. 1998) - Bank is not a "lender," within meaning of federal Thrift Institutions Restructuring Act, ' 341(d), 12 U.S.C. ' 1701j-3(d), which prohibits lenders from enforcing a due-on-sales clause in a mortgage simply because the mortgaged property is transferred, without its consent, pursuant to a dissolution of marriage decree or property settlement agreement; but bank's failure to invoke the due-on-sales clause until after Chapter 13 debtor had filed petition, when automatic stay went into effect, precluded bank from asserting that entire balance was due and payable. [The decision=s construal of Alender@ appears to be in error. The Comptroller of the Currency had determined that national banks are covered by the Act, 12 C.F.R. Part 34.5, and provided therein that they would be regulated on due-on-sale clauses as provided by the Act.]
In re Applegarth, 11 Fla. L. Weekly Fed. B 273, 221 B.R. 914 (Bankr.M.D.Fla. 1998) - Chapter 13 plan not confirmed, and evidentiary hearing required to determine whether debtor is unfairly classifying unsecured claims, where plan proposes to separately classify and pay in full an unsecured consumer debt incurred by debtor and guaranteed by debtor's mother, while paying distributions of approximately 10% to remainder of general unsecured creditors.
In re Lazin, 11 Fla. L. Weekly Fed. B314, 221 B.R. 982 (Bankr.M.D.Fla. 1998) - Homestead exemption of Chapter 7 debtor is not lost, even assuming that debtor=s prepetition conversion of non-exempt property to exempt form was accomplished with specific intent to defraud her creditors, where nonexempt assets that were used to acquire homestead were not fraudulently acquired. Seventy-nine-year-old debtor=s conversion of non-exempt stocks and bonds into exempt annuities was not accomplished with actual intent to defraud her creditors, so as to result in loss of debtor's exemption under Florida law, given that debtor was required to liquidate her investment portfolio by broker, because her account balance had fallen below the required minimum, and that broker's son had selected annuities solely because they would provide debtor with a stable, guaranteed income stream.
Leucht v. Leucht, 221 B.R. 1003 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor "transferred" assets, within meaning of discharge exception, when he left certain property in possession of former wife; and transfers were made with requisite fraudulent intent to hinder, delay or defraud creditor, so as to warrant denial of debtor's discharge.
In re Leucht, 11 Fla. L. Weekly Fed. B298, 221 B.R. 1009 (Bankr.M.D.Fla. 1998) - Chapter 7 debtor would not be denied state law exemption of $1,000 in personal property based on lack of specificity in identifying household goods, where lack of specificity was result of mere transcribing error, and debtor clarified which goods were being claimed as exempt by his testimony at hearing on objection to his claimed exemptions. It was not appropriate for bankruptcy court, upon objection to debtor's claimed exemption, to determine extent of debtor's and estranged wife's respective interests in property claimed as exempt.
In re Williams, 222 B.R. 662 (Bankr.S.D.Fla. 1998) - After filing bankruptcy petition, Chapter 7 debtor cannot make election to receive distribution of benefits under life insurance policy in form of annuity rather than of cash distribution, in order to remove proceeds of policy from reach of creditors pursuant to Florida statute exempting beneficiary's interest in proceeds of annuity contract. The election instead was up to the trustee.
Del Rio v. Brandon, 696 So.2d 1197 (Fla. 3rd DCA 1997) - In foreclosure action brought by mortgagee, home purchasers' counterclaim against mortgagee for rescission based upon breach of contract and of implied warranty, for alleged faulty repairs of property by mortgagee, is compulsory, and final summary judgment of foreclosure should not be ordered before consideration of counterclaim.
Bates v. Bates, 705 So.2d 1045 (Fla. 4th DCA 1998) - In dissolution of marriage proceeding, a spouse may not raise claims that the some of the other spouse=s debts should be exempted from a prior bankruptcy discharge order obtained by the other spouse, where the spouse was given notice of the proceeding, because state court authority to apportion marital debt is abrogated by federal bankruptcy law, so that such claims must be brought in the bankruptcy court.
2. Consumer Credit and Usury
Beach v. Ocwen Fed. Bank, U.S. 118 S.Ct. 1408 (1998) - Statutory right of rescission under Truth in Lending Act may not be revived beyond three-year expiration period. Section 1635(f) was held to bar assertion of the right of rescission in recoupment after three years because it made reference Anot of a suit's commencement but of a right's duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous. 118 S.Ct. 1412.
Smith v. Highland Bank, 108 F.3d 1325 (11th Circuit 1997) - Mortgagee does not violate Truth in Lending Act's requirement of clear and conspicuous disclosure of right to rescind, 12 C.F.R. ' 226.23(b)(1), by a Notice of Right to Cancel that contains on the same page both an "Acknowledgment of Receipt," that the debtor was to sign to confirm that the mortgagee complied with TILA; and a "Certificate of Confirmation," that the debtor was to separately sign after three-day rescission period to indicate that she had not exercised rescission rights. A note below the Certificate of Completion stating that all parties executing the Acknowledgment of Receipt had to execute the Certificate, was not misleading, but rather was intended to ensure that all signatories to the Acknowledgment of Receipt concurred in the decision not to rescind. The decision affirmed the district court opinion.
Podell v. Citicorp Diners Club, Inc., 112 F.3d 98 (2d Cir. 1997) - Credit reporting agencies do not breach Fair Credit Reporting Act by relying upon reports from creditors, issued subsequent to consumer dispute of information, that continue to contain the same erroneous information, where consumer does not dispute these later reports.
Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997) - Credit reporting agency is required by the Fair Credit Reporting Act, in certain circumstances, to verify the accuracy of its initial source of information under 15 U.S.C. 1681(i). Whether the credit reporting agency has a duty to go beyond the original source depends upon (a) whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency itself knows or should know that the source is unreliable; and (b) the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer. In this case, the consumer notified the agency of error, and agency spent only approximately 75 cents per investigation, so question of whether agency should have verified accuracy of its source of information was question for jury. Consumer also stated a claim for defamation against agency under state law. The decision distinguished Podell on the ground that the opinion in that case does not indicate that the consumer questioned the sufficiency of the agencies= verification of the disputed information.
Buckman v. American Bankers Ins. Co. of Fla. et al, 115 F.3d 892 (11th Cir. 1997) - Execution of contingent note and mortgage as part of bail bond transaction is not extension of credit subject to the Truth in Lending Act, and bondsman's efforts to collect on note were covered by originator exception to Fair Debt Collection Practices Act.
Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998) - Lender's payment of yield spread premium to mortgage broker which originated loan is a splitting of a referral fee in connection with the funding and origination of federally related mortgage loans, that is prohibited by anti-kickback provisions of Section 8 of the Real Estate Settlement Procedures Act, 12 U.S.C. ' 2607(a, c). The yield spread premium, based solely upon the interest rate charged by lender, is not payment for goods or for services for purposes of exemption from RESPA's prohibition against referral fees.
Northrop v. Hoffman of Simsbury, Inc., 134 F.3d 41 (2d Cir. 1997) - Former provision of the Fair Credit Reporting Act, superseded September 30, 1997 by the 1996 amendments to the Act, that imposes liability upon users of credit reports that willfully fail to comply with Act requirements, 15 U.S.C. ' 1681n, applies to violations of ' 1681q, which prescribes criminal penalties for "any person" that procures credit information under false pretenses.
Chandler v. Norwest Bank Minnesota, N.A.,137 F.3d 1053 (8th Cir. 1998) - Mortgage company that uses financing from independent third party does not table-fund borrowers' mortgage loan for bank which serves as trustee for buyer that subsequently acquired loan pursuant to agreement made between buyer, mortgage company and trustee bank prior to loan closing, even though mortgage company received yield spread points from the bank for the mortgage, and thus the mortgage company does not bring loan transaction within coverage of Real Estate Settlement Procedures Act=s prohibitions against splitting unearned fees. The decision applies Rule 11 sanctions against borrowers' counsel for failure to conduct necessary inquiry to support borrowers' claim against bank. A dissenting opinion concludes that mortgagors had raised an issue of material fact as to whether the loan was Atable-funded,@ where the real financier of the loan appeared to be the eventual loan buyer, who agreed to buy the loan before it closed; and the mortgage company received yield spread points from the trustee bank on behalf of the buyer.
Stevenson v. Employers Mutual Association, 960 F.Supp. 141 (N.D.Ill. 1997) - Employee who is wrongly identified as convicted felon by credit reporting agency and, consequently, suspended from his job would be entitled to relief against credit reporting agency and its president under the Fair Credit Reporting Act and state law, where agency and president failed to check court files for physical description of felon; failed to contact employee's former company to check whether he was absent from work for years in which felon was imprisoned; and failed to report to employer that felon's birth date differed from employee's.
Yeager v. TRW, Inc., 961 F.Supp. 161 (E.D.Texas 1997) - Credit report that is issued in response to application for commercial credit, to a farmer for farm equipment, is not "consumer report" within meaning of Fair Credit Reporting Act, and therefore is not covered by the Act.
White v. Diamond Motors, Inc., 962 F.Supp. 867 (M.D.La. 1997) - Difference between amount actually paid for car license and amount charged by car dealership as license fee is not "finance charge" under Truth in Lending Act, since dealership charged license fee in both cash and credit sales if customer elected to have dealership handle application for title and license, and thus fee was not required precursor for extension of credit.
Taylor v. Union Planters Bank of So. Miss., 964 F.Supp. 1120 (S.D.Miss. 1997) - Bank's daily overdraft fee of $5.00, charged to checking account customers when their accounts became overdrawn, is not "finance charge" under Truth in Lending Act and Regulation Z.
Lukas v. Lucci Ltd., Inc., 966 F.Supp. 1163 (S.D. Fla. 1997) - Home remodeling contractor who executed ten contractual documents for different phases of one project, each of which required partial payment upon signing, and the remainder by completion of work under the particular contract, was not creditor for purposes of the Truth in Lending Act.
Burney v. Thorn Americas, Inc., 970 F.Supp. 668 (E.D.Wisc. 1997) - Rent-to-own transactions are not, as a matter of law "consumer credit transactions" under state (Wisconsin) law, reversing earlier summary judgment by court on a motion to reconsider, because cash purchase option prices of rent-to-own companies may not be a sham. Unresolved factual issues regarding this issue are whether option prices were nominal, and whether customers' obligations upon exercising option were enforceable.
Goodwin v. Ford Motor Credit Co., 970 F.Supp. 1007 (M.D.Ala. 1997) - Truth in Lending Act claims are subject to decision under arbitration agreements accompanying installment sales contracts between buyers and dealerships. The arbitration agreements are not void under Alabama law for lack of mutuality of remedy, since Alabama, according to the decision, does not require such mutuality; nor are they unconscionable. Buyers were equitably estopped from preventing assignee automobile credit corporation from enforcing arbitration agreements, where buyers sued assignees based upon contracts containing those agreements.
Edwards v. Your Credit, Inc., 971 F.Supp. 1045 (M.D.La. 1997) - Premium for lender's nonfiling insurance, written to protect lender from losses caused by failure to perfect security interests, could be included in amount financed, and was not for general default insurance, which must be included in finance charge, even though insurer may have paid for claims outside of policy=s limitations.
Noel v. Fleet Finance, Inc., 971 F.Supp. 1102 (E.D.Mich. 1997) - Mortgage broker which originated loans and allegedly assessed undisclosed finance charge is "creditor" under Truth in Lending Act. One year statute of limitations on borrowers' TILA claim against mortgage broker was subject to equitable tolling because broker allegedly actively concealed pertinent information. Yield spread premium paid by lender to mortgage broker, that was indirectly payable by borrowers over life of loan in higher interest payments, is a "finance charge" subject to disclosure under TILA, but is not a "prepaid finance charge" that was part of the amount financed.
Allen v. Aronson Furniture Co., 971 F.Supp. 1259 (N.D.Ill. 1997) - Credit application fee charged by furniture retailer is not a Truth in Lending Act Afinance charge, under 12 C.F.R. ' 226.4(c)(1), because it was charged to all applicants for credit, including applicants who failed to qualify for credit.
Ramadan v. Chase Manhattan Corp., 973 F.Supp. 456 (D.N.J. 1997) - One-year time limit on cause of action under Truth in Lending Act, for automobile finance company's alleged failure to properly disclose to buyer that dealer was retaining, as commission or finder's fee, a portion of fee allegedly paid to third party for extended warranty coverage on car buyer's behalf, was intended by Congress to be jurisdictional in nature, rather than statute of limitations, so as not to be equitably tolled during time that finance company and other defendants allegedly concealed true cost of extended warranty coverage. The court followed Hardin v. City Title & Escrow Co., 797 F.2d 1037 (D.C.Cir.1986), rather than Jones v. TransOhio Sav. Ass'n, 747 F.2d 1037, 1040-41 (6th Cir.1984), and King v. California, 784 F.2d 910 (9th Cir.1986).
Ditty v. Checkrite, Ltd., Inc., 973 F.Supp. 1320 (D.Utah 1997) - Issue of material fact exists as to whether debt collection agency which maintains nationwide database of makers of dishonored checks is consumer credit reporting agency. The agency=s debt collection attorney, though, is not.
Williams v. First Gov=t Mtg. And Investors Corp., 974 F.Supp. 17 (D.D.C. 1997) - Disbursement made by borrower in loan documents for life insurance is not for credit life insurance, and therefore not included in finance charge, for purposes of Truth in Lending Act disclosure requirements, where estate, rather than lender, is designated beneficiary.
Dubose v. First Security Savings Bank, 974 F.Supp. 1426 (M.D.Ala. 1997) - Real Estate Settlement Procedures Act does not preempt state (Alabama) law that does not require a mortgage broker and lender to disclose "yield-spread premium" arrangement to a borrower, such as would support state law claim for fraudulent nondisclosure, or a federal civil RICO claim, following Briggs v. Countrywide Funding Corp., 949 F.Supp. 812 (1996). Decision's discussion and holdings on yield-spread premiums under RESPA have been overridden by Culpepper v. Inland Mortgage Corp., 132 F.3d 692 (11th Cir. 1998).
Morgan v. Markerdowne Corp., 976 F.Supp. 301 (D.N. J. 1997) - A lender that delegates loan-making duties arising under the Federal Family Education Loan program to a school thereby establishes an "origination relationship" with loan borrowers, subjecting the lender and assignees to school-related defenses for loans made after promulgation of relevant regulations in 1986. Assignee liability is based upon the FTC "Holder Rule." However, the Higher Education Act of 1965 impliedly preempts state law that would impose additional treble damages upon lender and assignee, for misrepresentations by school to borrower, because the application of such penalties, in the opinion of the Court, Awould totally frustrate the purpose of HEA to encourage lenders and guarantors to make funds readily available to large numbers of low income students.@ Page 319.
Young v. 1st American Financial Svcs., 977 F.Supp. 38 (D.D.C. 1997) - Motion to dismiss borrowers' Truth in Lending Act rescission count would be denied, given dispute about validity of foreclosure sale that purportedly extinguished borrowers' TILA rescission rights. Fraud is pled with sufficient particularity where complaint alleges that mortgage broker's representatives promised borrowers that company would refinance original loan at lower interest rate if borrowers made timely payments for one year; that borrowers entered into loan agreement based on that promise; and that representatives made promise knowingly and with intent to induce borrowers into accepting loan. Claim for unconscionability also is sufficiently pled where complaint alleges that defendants held themselves out as experts in field of loan financing; that borrowers had no knowledge or expertise in that area and did not believe they had choice about terms offered; that defendants "contrived to trap" borrowers into making loan that would eventually default so that defendants could foreclose on their home; and that substantive terms of loan, particularly fees that amounted to ten percent of loan principal, were one-sided.
Cemail v. Viking Dodge, Inc., 982 F.Supp. 1296 (N.D.Ill. 1997) - Allegations that warranty disclosure statement in automobile sales contract is misleading, as falsely suggesting that entire extended warranty charge was paid to warranty provider, when, in fact, car dealer retained a substantial portion of fee; and that car dealer's assignee, an entity with considerable experience in automobile financing, should have realized that dealer was in fact retaining a portion of this fee, were sufficient to state claim against assignee under the Truth in Lending Act.
Morales v. Attorneys' Title Insurance Fund, Inc, 983 F.Supp. 1418 (S.D. Fla. 1997) - Filed rate doctrine, and doctrine of standing, bar insureds' claims that title insurers' practice of always or nearly always adhering to 70/30 split of premiums with their agents, though ostensibly in compliance with state law, violates federal Real Estate Settlement Procedures Act kickback provisions, 12 U.S.C. ' 2607, where state's scheme for regulating title insurance rates is comprehensive, including the splitting of premiums with agents, and allows for public input, even though HUD report had found that Florida title insurers= practices violate RESPA.
Brister v. All Star Chevrolet, Inc., 986 F.Supp. 1003 (E.D.La.1997) - Overstated registration fee and license fee in automobile dealer's purchase financing agreement are not "finance charges," under Truth in Lending Act, since they were charges also payable in a comparable cash transaction. Dealer's assignee is not liable for alleged inaccurate disclosures under Act because they were not apparent on the face of the agreement.
Hamilton v. York, 987 F.Supp. 953 (E.D.Kty. 1997) - Charges incurred by customers of check-cashing company that requires presentment of check two weeks after loan, and allows customers to defer presentment of checks in exchange for additional charges, constitute "interest" from short-term loans, not "service fees," so that customers stated claims under state (Kentucky) usury statutes. Customers also stated claims under federal and state RICO Acts; the Truth in Lending Act for lack of required disclosures; and state law fraud and UDAP laws, because check-cashing company disguised their consumer loan business as check-cashing operation, that company failed to disclose interest rates and finance charges, and that company threatened criminal prosecution for writing bad checks when it had to have known that customers could not have been prosecuted for failing to pay usurious loans.
Randolph v. Green Tree Financial Corp., 991 F.Supp. 1410 (M.D.Ala. 1998) - Arbitration provision contained in financing documents for mobile home purchases applies to claims under Truth in Lending Act and Equal Credit Opportunity Act. Arbitration provision that did not require that both parties submit dispute claims to arbitration, according to the decision, is valid and enforceable contract under Alabama law because such mutuality is not required. The decision distinguishes the case from the general waiver of remedies struck down in Parker v. Dekalb Chrysler Plymouth, 673 F.2d 1178 (11th Cir. 1982), even though Parker provides at page 1181 that Athe public must rely largely on the efforts of individual consumers acting as >private attorneys general= to achieve the disclosure system envisioned by the [Truth in Lending] Act.
Katz v. The Dime Savings Bank, FSB, 992 F.Supp. 250 (W.D.N.Y. 1997) - Pattern or practice of noncompliance is required to support statutory damages under the Servicer Act, 12 U.S.C. ' 2605, which governs the servicing of federally related mortgage loans. The parties were ordered to brief the court on how damages should be awarded under this standard.
Young v. 1st American Financial Svcs., 992 F.Supp. 440 (D.D.C. 1998) - Mortgage lender's inability to identify charge for title search of borrowers' property is insufficient to create genuine issue of material fact as to whether work was done, given invoice showing that charge was for title search. Lender's failure to include settlement agent fee in finance charges does not constitute TILA violation, absent evidence that lender required closing agent to be present to complete closing of borrowers' loan. Fact questions preclude summary judgment for mortgage broker on claims relating to its alleged fraudulent promise to refinance mortgage while knowing that mortgagors could not repay, but lender could not be held liable for mortgage broker's alleged fraud, on theory that broker was acting as lender's agent, absent evidence that lender exercised control over broker.
Hammons v. Enterprise Leasing Co., 993 F.Supp. 1388 (W.D.Okla. 1998) - Vehicle lessor did not violate Fair Credit Reporting Act by obtaining lessee's credit report after lessee failed to timely return vehicle, given lessee's written authorization for lessor to verify his personal information "through credit agencies or other sources."
Bolduc v. Beal Bank, SSB, 994 F.Supp. 82 (D.N.H. 1998) - Equal Credit Opportunity Act violation may be asserted as a right of recoupment to prevent mortgage foreclosure, even after the expiration of Act's two-year statute of limitations. Bank that had acquired promissory note from FDIC was not a "holder in due course" under state law, and therefore was subject to ECOA defenses, since bank had ample notice that notes had been dishonored as well as actual notice of existence of claim in recoupment. Original lender violated Act when it required borrower's wife to sign promissory notes, even though borrower was independently creditworthy; thus, wife's obligation under notes was invalid. Since parties mistakenly assumed, at time of forbearance agreement on which foreclosure was based, that borrower's wife was obligated on prior promissory notes, and mistaken assumption clearly had material effect on resulting forbearance agreement, mutual mistake rendered the forbearance agreement void. Mortgagors were entitled to preliminary injunction prohibiting bank from foreclosing on mortgages.
Ali v. Vikar Mgt. Ltd., 994 F.Supp. 492 (S.D.N.Y. 1998) - Landlord which lied to credit reporting agency as to its reasons for accessing address information about tenants in rent-stabilized apartment, claiming that it sought to forward mail to the tenants, obtained information about the consumers under false pretenses, in violation of the Fair Credit Reporting Act, even though the information requested was not a credit report. The mere presence of a landlord-tenant relationship does not permit landlord to access tenant's credit report to determine rent-stabilized tenant's primary residence.
Bumgardner v. Lite Cellular, Inc., 996 F.Supp. 525 (E.D. Va. 1998) - Fair Credit Reporting Act does not authorize injunctive relief as remedy, following Mangio v. Equifax, Inc., 887 F.Supp. 283 (S.D.Fla.1995). The consumer in this case sought an injunction ordering creditor to deliver to consumer all materials it has regarding consumer; to refrain from disseminating any information regarding consumer; to implement policies and procedures to verify names, addresses, and billing addresses of applicants for cellular telephone accounts; and to implement procedures and training for verifying applicants before accessing credit reports. The holding is based upon the Act=s failure to mention injunctive relief, combined with its grant of authorization to the Federal Trade Commission to enforce the Act. The court noted two cases as contrary authority, Greenway v. Information Dynamics, Ltd., 399 F.Supp. 1092 (D.Ariz.1974), aff'd per curiam, 524 F.2d 1145 (9th Cir.1975); and Wenger v. Trans Union Corp., No. 95-6445 (C.D.Cal. Nov. 14, 1995) (unpublished).
DeLeon v. Beneficial Construction Co., 998 F.Supp. 859 (N.D.Ill. 1998) - Allegation that mortgage brokerage fee for home improvement loan is a "sham" because broker did not provide mortgage broker services, but simply made referrals to pre-selected sources of financing, sufficiently states claim that charge constitutes a "referral fee" or "kickback" charge, as prohibited by Real Estate Settlement Procedures Act, ' 8, 12 U.S.C. ' 2607 and 24 C.F.R. ' 3500.14(c).
American Bankers Ins. Group, Inc. v. Board of Governors of the Federal Reserve, 3 F.Supp.2d 37 (D.D.C. 1998) - In challenge of regulation by credit insurance underwriters, held that Federal Reserve was authorized to adopt regulation which treated debt cancellation agreements and credit insurance uniformly for purposes of Truth In Lending Act disclosure requirements.
Williams v. AT&T Wireless Services, Inc., 5 F.Supp.2d 1142 (W.D.Wash. 1998) - Cellular telephone service provider has "legitimate business need" under Fair Credit Reporting Act for obtaining potential consumer's credit report, being to determine whether to grant consumer's application to become a cellular service subscriber, and thus obtains report for permissible purpose. Transaction is similar to credit transaction, and subscribers, particularly new subscribers, might incur very large bills within span of even one month.
Willis v. Quality Mortgage USA, Inc., 5 F.Supp.2d 1306 (M.D. Ala. 1998) - Real Estate Settlement Procedures Act's prohibition against splitting fees with third person, unless service was actually performed, is not expanded by HUD regulation that prohibits unearned payments. HUD was attempting to clarify kinds of fees that were included in prohibition against split fees and referral, not expand prohibition to include fees which were not split. 24 C.F.R. ' 3500.14(c) (1997).
Andrews v. Trans Union Corp., 7 F.Supp.2d 1056 (C.D.Cal. 1998) - Fair Credit Reporting Act allows individual consumer, injured when credit reporting agency erroneously included information regarding imposter's account in credit report on consumer, to seek injunctive relief requiring removal of this information from her file. Consumer credit reporting agency's failure to correct inaccuracy in consumer's file, consisting of entry regarding request for information filed by merchant dealing with admitted imposter, even after reporting agency determined that consumer was victim of fraud and that she had never opened account with merchant, would constitute "willful" violation of agency's duty under Fair Credit Reporting Act to reinvestigate, and also would entitle consumer to punitive damages under the Act.
Lopez v. Orlor, Inc., 176 F.R.D. 35 (D.Conn. 1997) - Debt cancellation fee charged by car dealer that was never identified as being optional, that would pay off car loan in event car was stolen or totaled, is "finance charge" under the Truth in Lending Act, and should have been disclosed as such. Car dealer's designation of the fee as "amount paid to others" was misleading, where only some of it was, and subjected dealer to TILA liability. Proposed class of customers charged fee by dealer is certified.
Washington v. CSC Credit Services, Inc., 178 F.R.D. 95 (E.D.La. 1998) - Consumers suing credit reporting agencies under Fair Credit Reporting Act, for failure of agencies to have reasonable procedures to ensure that insurance companies that requested reports had valid authorizations from consumers, granted class certification, where consumers contended that it was not reasonable under 15 U.S.C. ' 1681e(a) for agencies to rely solely on the insurance companies' blanket assertions that they had authorizations. The decision states at page 102 that having one's credit history released into electronic circulation without reasonable procedures in place to ensure permissible use is cause for sufficient anxiety and invasion of privacy to constitute an injury-in-fact in and of itself.
Soto v. PNC Bank, 221 B.R. 343 (Bankr.E.D.Pa. 1998) - Chapter 13 debtor, who granted bank prepetition mortgage on her house to in order to secure loan for her nephew, was entitled to receive from the bank Truth in Lending Act disclosures as a 'consumer', with the right to rescind the transaction. Her TILA damages claims, asserted as recoupment defense in Chapter 13 bankruptcy, were not time barred, because she never received the required notices. State court foreclosure judgment was not res judicata as to Chapter 13 debtor's claims relating to that case, because the state court did not appear to have personal jurisdiction over the debtor, due to absence of evidence of return of service; or subject matter jurisdiction, absent evidence of proper pre-foreclosure notice required of state law.
Kasket v. Chase Manhattan Mortgage Corp., 695 So.2d 431 (Fla. 4th DCA 1997) - Nongovernmental assignee of mortgage can be liable for originator's Truth in Lending Act violations, even though the assignor, the Resolution Trust Corporation, as federal agency, would have been exempt from such claims. The doctrine of D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447 (1942), codified as 12 U.S.C. ' 1823(e), which provides that assignees of the FDIC are entitled to avoid claims that are based upon agreements not in the records or books of the failed institutions under FDIC control, in order to protect the FDIC when it assesses these institutions, applies, but does not bar TILA claims because the claims are based upon mistakes on the face of the documents of the failed institution themselves.
Great Western Bank v. Shoemaker, 695 So.2d 805 (Fla. 2d DCA 1997) - Federal Express fee assessed to mortgagor for transmitting check to predecessor mortgagee need not, under Truth in Lending Act, be included in finance charge, following Veale v. Citibank, F.S.B., 85 F.3d 577 (11th Cir.1996); and Florida intangible tax paid by mortgagee could be excluded from finance charge under TILA, following Pignato v. Great Western Bank, 664 So.2d 1011 (Fla. 4th DCA 1995).
Dove v. McCormick, 698 So.2d 585 (Fla. 5th DCA 1997) - Original mortgage lender's involuntary assignment of mortgage to Resolution Trust Corporation (RTC) permanently extinguished mortgagor's right to pursue damages under Truth In Lending Act from subsequent purchasers, under Section 1641(a) of the Act.
BankAmerica National Trust Co. v. Zayas-Bazan, 698 So.2d 1261 (Fla. 4th DCA 1997) - Mortgagee's failure to recognize rescission demand did not constitute Truth in Lending Act violation, so as to warrant statutory penalty, because the demand was made after the statutory time limit for rescission had expired.
3. Debt Collection and Repossession
Terran v. Kaplan, 109 F.3d 1428 (9th Cir. 1997) - Language in debt collector-attorney's initial letter to debtor that warns debtor of need to "immediately" contact attorney in order to avoid possible legal action, does not contradict or overshadow validation notice itself, in violation of Fair Debt Collection Practices Act (FDCPA), where attorney did not require immediate payment but only an immediate call to his office, and where letter was typed in uniform, same-size type, which did not emphasize any particular statement in letter.
Garrett v. Derbes, 110 F.3d 317 (5th Cir. 1997) - Attorney who during nine-month period attempts to collect debts owed by 639 different debtors "regularly" attempts to collect debts owed another, and thus is "debt collector" under Fair Debt Collection Practices Act, even though debt collection services may have been only a small fraction of his total business activity.
Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997) - Payment obligation arising from dishonored check creates "debt" triggering protections of Fair Debt Collection Practices Act. Offer or extension of credit is not required for payment obligation to constitute "debt" under the Act. The decision found that Athe plain language of the Act defines 'debt' quite broadly as 'any obligation to pay arising out of a [consumer] transaction', 111 F.3d 1325, and that, while unnecessary to consider, legislative history shows that the Congress considered and chose not to adopt a limitation of the Act to extensions of credit. Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir.1987), was distinguished on the grounds that the conduct at issue in that case, a demand of payment for pirated cable signals, was not an obligation arising out of a consumer transaction, and the reasoning in Zimmerman that the Act applied only to debts owed on extensions of credit was disagreed with. A dissent concluded that the Act did not apply because checks are payments on debts, rather than debts themselves, and that the writing of bad checks often constitutes theft as was present in Zimmerman.
Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997) - Debt collection letter sent by collection agency that informed consumer, "Unless we receive a check or money order for the balance, in full, within thirty (30) days from receipt of this letter, a decision to pursue other avenues to collect the amount due will be made" contradicts mandatory validation notice disclosures giving consumer 30 days to dispute debt and request verification, leaving unsophisticated consumer confused as to what his rights were, and thus violates Fair Debt Collection Practices Act.
McKenzie v. E. A. Uffman and Assoc.,119 F.3d 358 (5th Cir. 1997) - Debt collector, by identifying itself as "Collections Department, Credit Bureau of Baton Rouge," violates Fair Debt Collection Practices Act prohibition against using "false, deceptive, or misleading representation" in connection with collection of debt. Collector licensed use of name "Collection Department, Credit Bureau of Baton Rouge" for five percent royalty on every collection.
Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477 (7th Cir. 1997) - Past-due condominium association assessment qualifies as "debt" covered by Fair Debt Collection Practices Act. The decision concluded that Athe obligation to pay [the assessments] arose in connection with the purchase of the homes themselves, even if the timing and amount of particular assessments was yet to be determined. Cf., In re Rosteck, 899 F.2d 694, 696 (7th Cir.1990) (obligation to pay condominium assessments arose upon purchase of unit, thereby satisfying Bankruptcy Code's definition of 'debt', and Atherefore qualify as obligation[s] of a consumer to pay money arising out of a transaction, as required by the Act. 19 F.3d 481
Charles v. Lundgren & Assoc., 119 F.3d 739 (9th Cir. 1997) - Dishonored check is debt within meaning of Fair Debt Collection Practices Act. The decision agreed with Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), because A>an offer or extension of credit is not required for a payment obligation to constitute a 'debt' under the FDCPA, id. at 1326. 119 F.3d 740.
Brown v. Budget Rent-a-Car, 119 F.3d 922 (11th Cir. 1997) - Unpaid administrative fees and other fees, that were charged under rental car agreement after the lessee had an accident involving the motor vehicle during the rental agreement, constitute "debt" covered by the Fair Debt Collection Practices Act. Following Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir.1997), infra, the decision, at 111 F.3d 1125, adopted the interpretation of the Act that "[a]s long as the transaction creates an obligation to pay, a debt is created."
Jang v. A. M. Miller and Assoc., 122 F.3d 480 (7th Cir. 1997) - After sending a debtor a notice of a right to contest debt within 30 days that is in compliance with the Fair Debt Collection Practices Act, a collection agency which receives a request for verification of a debt from a purported debtor is permitted by the Act, according to this decision, to choose between providing verification or ceasing collection of the debt, even though the agency is required in the notice to state that it will provide verification of a debt upon request.
Jenkins v. Heintz, 124 F.3d 824 (7th Cir. 1997) - Attorney and law firm retained only to collect a debt cannot be held liable for violating Fair Debt Collection Practices Act for collecting debt that included unauthorized premiums for force placed collateral insurance, absent sufficient evidence that they knew premiums were unauthorized. In addition, law firm's internal procedures to avoid Act violations, including requiring client to verify under oath true and correct nature of charges, was held to establish bona fide error defense under Act, 15 U.S.C. ' 1692k(c). A dissent, feeling that the majority failed to properly allocate burden of proof and to take into account the legal practice of the law firm, concluded that the evidence was sufficient for a fact finder to impute to the law firm knowledge of the unauthorized status, and that the firm=s internal procedures therefore were immaterial; and stated Athe majority goes a long way toward creating the very exemption for lawyers under the FDCPA that the Supreme Court, and this court in its earlier opinion, rejected.@ 124 F.3d 835.
Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997) - Debt collection letter that informed debtor that he would be sued absent payment within one week, but also told debtor of right to contest debt within 30 days, was confusing and violated Fair Debt Collection Practices Act. Debtor's failure to read collection letter did not preclude him from obtaining statutory damages for the letter's FDCPA violations. The decision includes a draft collection letter approved by the court within the Seventh Circuit that threatens lawsuit within the 30 day period if the debt is not paid.
Whitaker v. Ameritech Corp.,129 F.3d 952 (7th Cir. 1998) - Local telephone service company that acquires, and attempts to collect on debts due other telecommunications services is not "debt collector" for purposes of Fair Debt Collection Practices Act. State court default judgment for balance due on telephone bills bars, under state law doctrine of res judicata, claims based upon Racketeer Influenced and Corrupt Organizations Act, state UDAP law, common law fraud, and breach of fiduciary duty that alleged that company sent out fraudulent telephone bills.
Duffy v. Landberg, 133 F.3d 1120 (8th Cir. 1998) - Fair Debt Collection Practices Act's broad definition of "debt" as any obligation to pay arising from consumer transaction applied to dishonored checks, given that check issuers' payment obligations arose from transactions for personal or household goods; thus, check issuers stated claims under Act when they alleged that attorney and company attempting to collect payment on dishonored checks violated the Act.
Kobs v. Arrow Service Bureau, Inc., 134 F.3d 893 (7th Cir. 1998) - The Seventh Amendment right to jury trial entitles debtors who bring action for damages against debt collection agency under the Fair Debt Collection Practices Act to a jury trial.
Lewis v. ACB Business Services, Inc., 135 F.3d 389 (6th Cir. 1998) - Letter that debt collector sent to debtor who had exercised statutory right to demand cessation of communications, giving debtor opportunity to pay debt through various payment plans, is permissible communication under provision of Fair Debt Collection Practices Act permitting debt collector to notify debtor of collector's right to invoke specified remedies. Debt collector's use of pseudonym on letter sent to debtor did not violate Act because pseudonym was used to alert employees to status of account and only one notified of account status was debt collector. (A dissenting opinion disagreed with both of these conclusions.) Debt collector established bona fide error defense to debtor's FDCPA claim based on telephone contact from debt collector which occurred after debtor exercised right to demand that collection communications cease because contact resulted from coding error by creditor and debt collector's manual and computer systems were reasonably adapted to avoid such errors.
Schweizer v. Trans Union Corp., 136 F.3d 233 (2nd Cir. 1998) - Collection letter that simulates telegram does not violate provision of Fair Debt Collection Practices Act barring false or misleading representations, despite consumer's claim that it creates a false sense of urgency. The court concluded that a Aleast sophisticated debtor would not mistake letter for telegram, even though it had "Priority-Gram" and "Important Notice" printed on it, and that any sense of urgency created by envelope, which resembled a form of express mail delivery, was not sustained by text of letter itself.
Aubert v. American General Finance, Inc., 137 F.3d 976 (7th Cir. 1998) - Pursuant to exception for debt collection efforts of corporate affiliates, corporation whose principal business was not debt collection and which only collected debts for affiliated or related entities was not "debt collector" for purposes of Fair Debt Collection Practices Act, 15 U.S.C. ' 1692a(6)(B).
Snow v. Riddle, 143 F.3d 1350 (10th Cir. 1998) - Dishonored check written in payment for consumer goods created "debt" within purview of Fair Debt Collection Practices Act.
Beggs v. Rossi, 145 F.3d 511 (2nd Cir. 1998) - Personal property taxes levied by town upon plaintiffs' automobiles are not "debts" within meaning of Fair Debt Collection Practices Act (FDCPA), and therefore, debt collection service's efforts to collect those taxes from plaintiffs were not covered by Act.
Ladick v. Van Gemert, 146 F.3d 1205 (10th Cir. 1998) - An assessment owed to a condominium association qualifies as a "debt," within the meaning of the Fair Debt Collection Practices Act, even though the assessment did not involve an extension of credit; assessment qualified as an obligation of a consumer to pay money arising out of a "transaction," and while the assessment was used to maintain and repair the common area, it nevertheless had a primarily personal, family, or household purpose.
Savino v. Computer Credit, Inc., 960 F.Supp. 599 (E.D.N.Y. 1997) - Language in debt collection letter that creditor insists on immediate payment or valid reason for debtor's failure to pay contradicts statutory validation notice requirement of Fair Debt Collection Practices Act. Debtor's initial denial that he did not receive collection letter does not preclude statutory damages, because injury to debtor is not required to state violation under Act.
Trull v. GC Services Ltd. Partnership, 961 F.Supp. 1199 (N.D.Ill. 1997) - Statements in collection letter that debtor's name would be retained in agency's "master debtor file. . . along with others who, despite their good name and reputation, have shirked their payment responsibility" could falsely imply that collection agency is credit reporting agency, in violation of Fair Debt Collection Practices Act. Statement in second collection letter, sent within 30-day validation period, that "Since you ignored our previous notice, we assume this debt is correct," is misleading in violation of the Act. But collection letter's use of yellow paper; "STAR High Priority Communication" heading; and telegram-like layout and typeface, does not violate Act by overstating urgency of message, where letter was sent to debtor through regular mail.
Blum v. Fisher and Fisher, Attorneys at Law P.C., 961 F.Supp. 1218 (N.D.Ill. 1997) - Material questions of fact are raised by allegations that debt collection letter violated Fair Debt Collection Practices Act by misleading debtor into not taking prompt action to prevent foreclosure, through statement that debtor might be allowed to stay on mortgaged property absolutely rent free for roughly seven months following commencement of foreclosure action; and by further misleading debtor into not seeking counsel, through mere partial statement of remedies available to debtor.
Thomas v. Pierce, Hamilton, and Stern, Inc., 967 F.Supp. 507 (N.D.Ga. 1997) - Phrase "additional damages" in section of the Fair Debt Collection Practices Act providing that actual damages may be recovered with additional damages in amount not to exceed $1,000, is meant to include punitive damages, and to preclude award of punitive damages, pursuant to federal common law, in addition to statutory damages amount.
Harrison v. NBD Inc., 968 F.Supp. 837 (E.D.N.Y. 1997) - Offer of special discount in collection agency's demand letter that expired before 30-day period to dispute debt did not overshadow or contradict validation notice in violation of the Fair Debt Collection Practices Act. The letter's statement that "balance due" was $1,979 but that consumer's "liability" was $247.86, though, constituted deceptive means to collect debt in violation of Act.
Thies v. The Law Offices of William A. Wyman, 969 F.Supp. 604 (S.D.Cal. 1997) - Debtors' obligation to pay dues for services of homeowners association based on covenant running with their property, including fees for maintenance and improvement of common areas within housing development, constituted consumer debts covered by Fair Debt Collection Practices Act, even though many households used or benefitted from common areas.
Pittman v. J.J. Mac Intyre Co. of Nevada, Inc., 969 F.Supp. 609 (D.Nev. 1997) - Debt collector violates Fair Debt Collection Practices Act by continuing to call debtor at work after debtor indicates that she "could not talk at work;" and by contacting debtor after debtor informs collector, and collector's own records confirm, that debtor is making payments on schedule to creditor. The Act's requirement that the debtor's notice to debt collector disputing validity of debt be written applies only to initial communication between debt collector and debtor. Debtor is not required to join creditor as indispensable party to her action for Act violations.
Seibel v. Society Lease, Inc., 969 F.Supp. 713 (M.D.Fla. 1997) - Repossession agency's entry on property for self-help repossession after consent has been revoked is breach of peace in violation of Fla. Stat. 79.503