Consumer Finance Litigation Blog | Burr & Forman LLP

Eastern District of Kentucky Holds Assignee of Debt May Seek Prejudgment Interest from Date of Charge-off of Debt

Frank Springfield, Rachel R. Friedman — Tue, 31 Dec 2013 09:00:01 -0500

The United States District Court for the Eastern District of Kentucky recently held that an assignee of a debt may request prejudgment interest in a collection complaint dating from the time the debt was charged off by the original creditor, even where the original creditor had stopped charging interest on the account post charge-off. In Stratton v. Portfolio Recovery Associates, LLC, Case no. 5:13-cv-147-DCR (E.D. Ky. Nov. 26, 2013), the plaintiff filed a putative class action complaint alleging that the debt collector, who had been assigned a debt owed by the plaintiff, violated ...

Ninth Circuit Issues Opinion on the use of Judicial Estoppel to bar Consumer Claims

Reid S. Manley — Mon, 30 Dec 2013 09:00:02 -0500

In Dzakula v. McHugh, No. 11-16404, 2013 WL 6483614 (9th Cir. Dec. 11, 2013), the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of an action on the ground of judicial estoppel where the plaintiff failed to identify the action as an asset on her bankruptcy schedules. The plaintiff did not amend the bankruptcy schedules until after the defendant filed a motion to dismiss, leading the court to infer that her omission had not been inadvertent. Distinguishing its recent decision Ah Quin v. County of Kauai Department of Transportation, 733 F.3d 267 (9th Cir. 2013), the ...

Oklahoma Federal Court Finds That Dodd-Frank Amendment to Statute of Limitation for ECOA Claim Does Not Apply Retroactively

David A. Elliott, Rachel Blackmon Cash — Fri, 20 Dec 2013 09:00:03 -0500

In Empire Bank v. Dumond, No. 13-CV-0388-CVE-PJC, 2013 WL 6238605 (N.D. Okla. Dec. 3, 2013), the U.S. District Court for the Northern District of Oklahoma recently held that the Dodd-Frank amendment to the statute of limitation for Equal Credit Opportunity Act ("ECOA") claims does not apply retroactively. While the court held that the statute of limitation barred spousal guarantors' ECOA counterclaim, the counterclaim was allowed to proceed because it was asserted under a recoupment theory. Empire Bank obtained guaranties from various individuals, entities, and spousal ...

Eastern District of Tennessee Questions Legitimacy of FDCPA Claims Predicated on State Court Collection Lawsuits

Zachary D. Miller — Mon, 25 Nov 2013 09:00:04 -0500

In White v. Sherman Financial Group, LLC, No. 3:12-cv-404, 2013 WL 5936679, 1 (E.D. Tenn. Nov. 4, 2013), the U.S. District Court for the Eastern District of Tennessee recently denied the plaintiff's partial motion for summary judgment and granted summary judgment in favor of the defendants on all but one the plaintiff's Fair Debt Collection Practices Act ("FDCPA") claims and, in the process, rendered a significant decision regarding the interplay between the FDCPA and filing state collection actions in Tennessee. In White, the plaintiff alleged the defendants, Sherman Financial ...

Massachusetts Federal Court Agrees Dodd-Frank Preemption Provisions Are Not Retroactive

David A. Elliott, Kristen Peters Watson — Fri, 22 Nov 2013 09:00:05 -0500

In Henning v. Wachovia Mortg., FSB, No. 11-11428-WGY, 2013 WL 5229837 (D. Mass. Sept. 17, 2013), the U.S. District Court for the District of Massachusetts recently agreed with numerous decisions of other courts finding that the preemption provisions of the Dodd-Frank Act do not apply retroactively. Plaintiff, a mortgagor, filed suit against Wachovia Mortgage raising a number of claims based on Wachovia's purported wrongful conduct in providing him with a subprime stated-income loan knowing that he would likely default. After removal, Wachovia moved to dismiss based on ...

New York Federal Court: Dodd-Frank Increase to TILA Damages Cap Not Effective Before January 21, 2013

David A. Elliott — Thu, 21 Nov 2013 09:00:06 -0500

In Zevon v. Department Stores Nat'l Bank, No. 12 Civ 7799(PAC), 2013 WL 5903024 (S.D.N.Y. Nov. 4, 2013), the U.S. District Court for the Southern District of New York recently held that the increased statutory cap on class action damages under the Truth-in-Lending Act ("TILA") became effective January 21, 2013, rather than upon the Dodd-Frank's enactment. Plaintiff Marcy Zevon filed suit against Department Stores National Bank ("DSNB") alleging DSNB violated TILA and Regulation Z by failing to include the full text of Regulation Z's model billing rights notice in monthly ...

Southern District of Florida: Plaintiff Sufficiently Alleged Foreclosure Notice was False, Deceptive Or Misleading In Violation Of FDCPA

Alan D. Leeth — Wed, 13 Nov 2013 09:00:07 -0500

In Shadrach Lewis v. Marinosci Law Group, P.C., No. 13-61676-CIV, 2013 WL 5789183 (S.D. Fla. Oct. 29, 2013), the Southern District of Florida denied a defendant's motion to dismiss and rendered an important decision regarding a notice provision contained in a foreclosure proceeding as being a potential violation of the Fair Debt Collection Practices Act ("FDCPA"). Specifically, the plaintiff alleged that the notice provision, as required by the FDCPA, was nevertheless a violation of 15 U.S.C. § 1692e generally as well as § 1692e(10), in particular, as the statement relating to ...

Fourth Circuit: Borrower Validly Waived ECOA Claim After Executing Waiver In Connection With Loan Restructuring Agreements

Alan D. Leeth, Kristen Peters Watson — Tue, 12 Nov 2013 09:00:08 -0500

The U.S. Court of Appeals for the Fourth Circuit recently held that waiving any and all claims as part of loan restructuring agreements applied to a claim under the Equal Credit Opportunity Act ("ECOA"). In Ballard v. Bank of America, N.A., --- F.3d ---, 2013 WL 5814757 (4th Cir. 2013), the plaintiff filed suit alleging that the lender violated the ECOA by requiring her to guarantee loans to her husband's business. The plaintiff's husband obtained a business loan and, after defaulting on the loan, sought to restructure the debt. The lender required the plaintiff to guarantee the ...

Colorado Federal Court Finds Dodd-Frank Does Not Retroactively Nullify Arbitration Agreement

David A. Elliott, Rachel Blackmon Cash — Mon, 11 Nov 2013 09:00:09 -0500

Weller v. HSBC Mortgage Services, Inc., No. 13-cv-00185-REB-MJW, -- F. Supp. 2d -- , 2013 WL 4882758 (D. Colo. Sept. 11, 2013). The U.S. District Court for the District of Colorado recently held that the Dodd-Frank Act did not apply retroactively to nullify an arbitration agreement contained in a mortgage loan contract. In Weller, the plaintiff mortgagor brought a putative class action alleging violations of the civil RICO statute and Truth in Lending Act, breach of contract, and other claims arising from his mortgagee's "force placement" of insurance on the mortgaged property ...

Litigation Exposure Under the 2013 Dodd-Frank Mortgage Servicing Regulations

David A. Elliott — Wed, 06 Nov 2013 09:00:10 -0500

On July 10, 2013, the CFPB issued mortgage rules under Regulation Z and Regulation X pursuant to its authority under the Dodd-Frank Act. The CFPB further amended the mortgage rules on September 15, 2013 and October 1, 2013. The result is a super regulation which keeps the original framework of Regulations X and Z, but adds entirely new provisions addressing eight major topics. In this article, David A. Elliott discusses the new regulations and the possible effect on mortgage litigation. You can find a copy of the article by clicking here. For more information on consumer finance ...