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Posts published in February 2016

Florida Court Holds Foreclosure Not Barred by Lack of FCCPA Notice of Assignment

The District Court of Appeal of Florida, Second District, recently held that a notice of assignment of a mortgage loan pursuant to the Florida Consumer Collection Practices Act (FCCPA) is not a condition precedent to filing a mortgage foreclosure action, but certified the question to the Florida Supreme Court for resolution as one of great public importance. A copy of the opinion in Brindise v. U.S. Bank National Association is available at:  Link to Opinion. Husband and wife borrowers obtained a mortgage loan in 2005, which was later transferred to a new holder via “blank endorsement,” which under section 673.205(2) of Florida’s…

Florida Bankruptcy Court Denies Mortgagee’s Motion to Reopen Chapter 7 Case

The U.S. Bankruptcy Court for the Southern District of Florida recently denied a mortgagee’s motion to reopen a Chapter 7 case to compel the surrender of real property, due to a five-year delay in filing the motion. In so ruling, the court agreed with an earlier ruling from the U.S. Bankruptcy Court for the Middle District of Florida (In re Plummer, 513 B.R. 135 (Bankr. M.D. Fla. 2014)), distinguishing “surrender” from “foreclosure,” and holding that a creditor cannot use the Bankruptcy Code to circumvent the obligations imposed by state law. A copy of the opinion in In Re Kourogenis is available…

9th Cir. Rules in Favor of Defendant in Putative TCPA Class Action Involving Third Party Consent

In an unreported ruling, the U.S. Court of Appeals for the Ninth Circuit recently affirmed summary judgment for the defendant in a putative class action for alleged violation of the federal Telephone Consumer Protection Act (TCPA). The Court held that the named plaintiff expressly consented to the text message in question when she provided her cell phone number to a third party contracting with the defendant while using the third party’s services. A link to the opinion in Baird v. Sabre, Inc. can be found here:  Link to Opinion. The named plaintiff booked flights online for herself and her family…

Rhode Island ‘Expired Debt Act’ More Than Name Implies

On Jan. 7, the Expired Debt Act (EDA) was introduced in the Rhode Island House of Representatives and referred to the House Committee on Judiciary.  The bill was introduced by State Representatives Shekarchi, Solomon, Regunberg, McEntee, and Craven. Since 2007, Rhode Island has had its own Fair Debt Collection Practices Act (RIFDCPA) that is, for the most part, identical to its federal counterpart.  The EDA, however, introduces new definitions and restrictions related to debt collection. The EDA defines a “collector” as “a person collecting or attempting to collect an alleged debt arising out of a consumer transaction.”  The definition is…

4th Cir. Holds No Violation of Maryland Usury Law Where Lender Properly Cured Interest Rate

The U.S. Court of Appeals for the Fourth Circuit recently held that a finance company properly cured a contractual interest rate provision in excess of the statutory cap, and was not liable under the Maryland Credit Grantor Closed End Credit Provisions (MCLEC). However, the Court also held that the defendant could be liable under the Maryland Consumer Debt Collections Act (MCDCA) if it falsely claimed to have taken legal actions against the debtor. A copy of the opinion in Askew v. HRFC, LLC is available at:  Link to Opinion. In 2008, a customer entered into a retail installment sales contract…

7th Cir. Holds Lender’s Inquiry Notice Allows Avoidance of Security Interest in Bankruptcy

The U.S. Court of Appeals for the Seventh Circuit recently held that a lender that is on inquiry notice that its security interest in the collateral had been fraudulently conveyed may lose its secured status. However, the Court also held that the lender’s negligence here did not amount to “purposeful avoidance of the truth” sufficient to justify application of the doctrine of equitable subordination, which allows a bankruptcy court to reduce the priority of a claim in bankruptcy. A copy of the opinion in In Re Sentinel Management Group, Inc. is available at: Link to Opinion. The bankrupt debtor was a…

4th Cir. Revives Homeowner’s ‘Unconscionable Inducement’ Claims Against Mortgage Lender

In a case that attracted a number of amici for both the borrower and the mortgagee, the U.S. Court of Appeals for the Fourth Circuit recently affirmed a trial court’s summary judgment ruling against a borrower holding that “the amount of a mortgage loan, by itself, cannot show substantive unconscionability under West Virginia law.” However, the Fourth Circuit allowed the borrower’s claim of “unconscionable inducement,” holding that the applicable West Virginia statute authorized such a claim “even when the substantive terms of a contract are not themselves unfair.” A copy of opinion in McFarland v. Wells Fargo Bank, N.A. is available at: Link…

Illinois Enacts Legislative Fix to Collection Agency Act

On Jan. 29, 2016, Illinois Governor Bruce Rauner signed into law SB 1369 that provides welcomed corrections to the Illinois Collection Agency Act that was amended in 2015 by HB 3332. In a previous CFS blog, we described the proposed changes in SB 1369 that would rewind some of the unintended consequences wrought by HB 3332. The Illinois Legislature should be commended for its quick turnaround in implementing this fix, which became effective upon the Governor’s signature.    

9th Cir. Affirms Denial of Class Cert. in TCPA Action on Ascertainability, Predominance Grounds

The U.S. Court of Appeals for the Ninth Circuit recently affirmed a district court’s order denying class certification in a lawsuit alleging violation of the federal Telephone Consumer Protection Act (TCPA), holding that the “district court did not abuse its discretion by finding the requirements of Rule 23(b)(3) unsatisfied,” and that the “district court appropriately determined that it would be extremely difficult to ascertain the identities of the individuals who had not consented to receive the messages.” A copy of the Ninth Circuit’s opinion in Gannon v. Network Telephone Services, Inc. is available at:  Link to Opinion.  A copy of the…