Articles Posted in Consumer Law

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Consumer, an Ohio resident, defaulted on credit-card debt. Consumer was sued by the entities that purchased her debt in an effort to collect on the debt. Consumer counterclaimed, alleging violations of the federal Fair Debt Collection Practices Act (FDCPA) and the Ohio Consumer Sales Practices Act (OCSPA). The trial court entered judgment against Consumer. The Appellate Court reversed and remanded. The Supreme Court affirmed, holding (1) the underlying cause of action for default on the credit card in this case accrued in Delaware, the home state of the bank that issued the credit card and where Consumer’s payments were made; (2) Delaware’s statute of limitations determines whether the collection action was timely filed; (3) the filing of a time-barred collection action may form the basis of a violation under the FDCPA and the OSCPA; (4) a consumer can bring actionable claims under the FDCPA and the OSCPA based upon debt collectors’ representations made to courts in legal filings; and (5) debt buyers collecting on credit-card debt and their attorneys are subject to the OSCPA. View "Taylor v. First Resolution Inv. Corp." on Justia Law

Posted in: Consumer Law

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Appellees damaged their vehicle when they collided with a deer in the roadway. Appellant insured the vehicle. Appellees had their vehicle repaired using aftermarket replacement parts that were not produced by the original equipment manufacturer (OEM). Appellant, however, refused to pay for OEM parts after providing an estimate that was based on the use of non-OEM parts. Appellees filed a complaint alleging eight causes of action related to Appellant’s estimate and its refusal to pay for OEM parts. The trial court granted summary judgment to Appellees on their claim that Appellant violated the Consumer Sales Practices Act by failing to obtain one of Appellees’ signatures on the bottom of the estimate, and Appellees voluntarily dismissed the remainder of their claims. The trial court awarded Appellees actual damages, statutory treble damages, attorney fees, and expenses. The court of appeals modified and affirmed the trial court’s award of damages. The Supreme Court vacated the judgment of the court of appeals and dismissed the cause, holding that Appellant’s provision of a repair estimate to Appellees was not in connection with a consumer transaction and, therefore, was not an “unfair or deceptive act or practice” pursuant to Ohio Rev. Code 1345.02. View "Dillon v. Farmers Ins. of Columbus, Inc." on Justia Law

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This appeal arose from two related class-action lawsuits that were first brought by Appellees almost fifteen years ago. Appellees sought damages from Appellants, Ganley Chevrolet and Ganley Management Company, as well as declaratory and injunctive relief, alleging violations of the Ohio Consumer Sales Practices Act (OCSPA). The trial court eventually certified a class of plaintiffs and ruled that all class members could recover damages. The trial court then ruled that Appellants violated the OCSPA and awarded damages to each class member. The appellate court affirmed the trial court’s order certifying the class without squarely addressing Appellants’ claim that there was no showing that all class members had suffered damages. The Supreme Court reversed the judgment of the court of appeals and vacated the trial court’s order certifying the class, holding (1) all members of a plaintiff class must have suffered injuries as a result of the conduct challenged in the suit; and (2) because the class certified in this case included plaintiffs whose damages were inchoate, the class as certified was inconsistent with the law. View "Felix v. Ganley Chevrolet, Inc." on Justia Law

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Appellant, a registered lender under the Mortgage Loan Act (MLA), and Appellee executed a customer agreement for a single-installment, $500 loan governed by the MLA. Appellee later defaulted on his loan. Appellant filed this action to recover on its loan to Appellee, seeking the unpaid principal balance on the loan along with interest and fees permitted by the MLA. A magistrate judge determined that Appellee’s loan was impermissible under the MLA and that the loan should be governed by the Short-Term Lender Act (STLA). The court of appeals affirmed, holding that the MLA does not authorize single-installment, interest-bearing loans and that the STLA prohibits MLA registrants from making single-installment loans of short duration. The Supreme Court reversed, holding (1) an “interest-bearing loan,” as defined by the MLA, may include a loan requiring repayment in a single installment; (2) Lenders registered under the MLA may make single-installment, interest-bearing loans, and the STLA does not limit the authority of lenders registered under the MLA to make any loans authorized by the MLA; and (3) Appellant’s loan to Appellee was an interest-bearing loan as defined under the MLA.View "Ohio Neighborhood Fin., Inc. v. Scott" on Justia Law

Posted in: Consumer Law

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Defendant in the underlying action was a "mortgage servicer" that engaged in the business of serving residential mortgages of individuals. Plaintiff in the underlying proceeding contended that mortgage servicing is a "consumer transaction" as defined in the Ohio Consumer Sales Practices Act (CSPA), Ohio Rev. Code 1345.01. Defendant countered that mortgage servicers perform services for financial institutions, not for borrowers, and therefore the transactions are commercial in nature and are not covered by the CSPA. The Supreme Court accepted certification of state-law questions from the federal district court concerning the proper interpretation of Ohio Rev. Code 1345.01(A) and (C). The Supreme Court held that the CSPA does not apply to the servicing of residential mortgage loans because mortgage servicing is not a consumer transaction under the CSPA, and an entity that services a residential mortgage loan is not a "supplier" that engages "in the business of effecting or soliciting consumer transactions" within the meaning of the CSPA. View "Anderson v. BarclayÂ's Capital Real Estate, Inc." on Justia Law

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