Justia Virginia Supreme Court Opinion SummariesArticles Posted in Consumer Law
Stahl v. Stitt
The Supreme Court affirmed the judgment of the circuit court concluding that Plaintiff lacked standing to enforce the "midnight deadline" rule set forth in section 4-302 of the Uniform Commercial Code (UCC), as adopted by Va. Code 8.4-302 and W. Va. Code 46-4-302, holding that there was no error.In her second amended complaint, Plaintiff alleged that MCNB Bank and Trust Company (MCNB) violated the midnight deadline rule adopted from the UCC and, therefore, MCNB was strictly liable for the payment of a check in the amount of $245,271.25. The circuit court granted summary judgment for MCNB, concluding that Plaintiff lacked standing to pursue her claim because she did not have any right to rely on the prompt payment of the check at issue. The Supreme Court affirmed, holding that the circuit court did not err when it granted MCNB’s motion for summary judgment based on Plaintiff's alleged lack of standing to enforce the midnight deadline rule. View "Stahl v. Stitt" on Justia Law
NC Financial Solutions of Utah, LLC v. Commonwealth
The Supreme Court affirmed the judgment of the circuit court refusing to enforce arbitration agreements between NC Financial Solutions of Utah, LLC (NCFS-Utah) and the individual consumers who were affected by alleged violations of the Virginia Consumer Protection Act (VCPA), Va. Code 59.1-196-59.1-207, holding that the circuit court did not err.The Attorney General, acting on behalf of the Commonwealth, filed this action against NCFS-Utah to enforce the provisions of the VCPA. The complaint requested injunctive relief, civil penalties, and awards of attorney's fees, costs, and reasonable expenses. NCFS-Utah filed a motion to dismiss, arguing that the individual Virginia consumers had agreed to arbitrate any disputes arising from the loans at issue. The circuit court denied the motion, concluding that the Commonwealth was not bound by the arbitration agreements between NCFS-Utah and the Virginia consumers. The Supreme Court affirmed, holding that sections 59.1-203 and 59.1-205, read together, implicitly authorize the Attorney General to request a restitution award when pursuing a VCPA enforcement action on behalf of the Commonwealth. View "NC Financial Solutions of Utah, LLC v. Commonwealth" on Justia Law
Ballagh v. Fauber Enters.
After Plaintiff bought a parcel of property from Fauber Enterprises, Inc., the basement of the house flooded when it rained. Plaintiff filed a complaint against Fauber, Fauber’s real estate agent, and others, alleging violations of the Virginia Consumer Protection Act (VCPA). The jury returned a verdict in favor of Defendants. Plaintiff moved for a new trial, arguing that the instructions given on the standard of proof were incorrect. The circuit court denied the motion. The Supreme Court reversed, holding (1) a plaintiff must prove a violation of the VCPA by a preponderance of the evidence; and (2) therefore, the circuit court erred by concluding that Plaintiff was required to prove her VCPA claims by clear and convincing evidence. Remanded. View "Ballagh v. Fauber Enters." on Justia Law
Owens v. DRS Auto. FantomWorks, Inc.
Plaintiffs hired Defendants, an automotive business and its owner, to repair and restore a 1960 Ford Thunderbird. After disputes arose between the parties, Plaintiffs filed this action in the circuit court alleging breach of contract, violation of the Virginia Consumer Protection Act (VCPA), fraud and detinue. Defendants moved to strike Plaintiffs’ evidence as to all counts. The trial court granted the motion as to the fraud and VCPA counts. After a trial on the breach of contract count, the jury returned a verdict for Defendants. The Supreme Court affirmed, holding that the circuit court did not err in (1) striking the evidence after commenting that two witnesses were “believable” and “credible,” as the comments did not usurp the function of the jury; and (2) striking the evidence on the VCPA claim because the evidence was insufficient to go to the jury. View "Owens v. DRS Auto. FantomWorks, Inc." on Justia Law
St. Joe Co. v. Norfolk Redev. and Hous. Auth.
Norfolk Redevelopment and Housing Authority (NRHA) filed a complaint against the St. Joe Company and Advantis Real Estate Services Company alleging unjust enrichment and seeking imposition of a constructive trust and recovery of funds supplied by NRHA to its agent, Advantis, for the payment of contractors who had performed services for NRHA. St. Joe held a perfected secured interest in Advantis's operating account and exercised its rights as a secured creditor over that account to have funds from Advantis's account, including those entrusted to Advantis as NRHA's agent, transferred to a St. Joe account. The circuit court entered summary judgment in favor of NRHA. The Supreme Court affirmed, holding that the imposition of a constructive was was proper and necessary to prevent a failure of justice and unjust enrichment. View "St. Joe Co. v. Norfolk Redev. and Hous. Auth." on Justia Law
First Am. Title Ins. Co. v. W. Surety Co.
First American Title Insurance Company (FATIC) provided title insurance for a mortgage refinancing to SunTrust Mortgage through FATIC's title agent, First Alliance. First Alliance subsequently obtained a $100,000 surety bond pursuant to the Virginia Consumer Real Estate Settlement Protection Act (CRESPA) from Western Surety (Western). After the property owner defaulted under the original mortgages, SunTrust lost $734,296. FATIC paid the full amount of this loss then made a formal demand upon Western for $100,000. Western refused to pay FATIC the amount of the surety bond. FATIC sued Western and First Alliance for breach of contract. The district court entered judgment in FATIC's favor for $100,000. The Supreme Court held (1) CRESPA does not recognize a private cause of action that may be asserted against a surety and the surety bond issued pursuant to former Va. Code Ann. 6.1-2.21(D)(3); (2) Virginia law nonetheless permits a cause of action against a surety and the surety bond executed pursuant to CRESPA by the assertion of a common law claim; and (3) a title insurance company may have standing, not in its own right, but as a subrogee of its insured, to maintain a cause of action against a surety and the surety bond. View "First Am. Title Ins. Co. v. W. Surety Co." on Justia Law
Ruby v. Cashnet, Inc.
From March 2005 to November 2007, Appellee Wilma Ruby entered into a total of 33 payday loan agreements with Appellant Cashnet, Inc. The amount of each loan increased over time. Appellee failed to pay her last loan. In 2008, Appellee brought suit against Cashnet alleging that with each loan she made, she was refinancing, renewing or extending the previous loan, in violation of state law. She further alleged that the annual percentage rate for each loan exceeded the finance fee allowed under state law. Appellee sought the return of interest paid or statutory damages and attorney's fees. A bench trial was held on Appellee's claims; the circuit court ruled in Cashnet's favor, holding that the loans did not constitute a refinance, renewal or extension, and were not in violation of the law. On appeal, the Supreme Court gave ordinary meaning to the terms at issue in the lower court's ruling: "refinance" and "renew." The Court found that "refinancing" is the exchange of an old debt for a new one; "renewal" is the recreation of a legal relationship or the replacement of an old contract with a new one. By looking at the substance of the transactions between Cashnet and Appellee, the Court deduced that the proceeds from each new loan were being used to repay the previous loan, therefore each transaction was refinanced. The Court held that Cashnet's practice of making loans to Appellee immediately after she repaid a previous loan was a refinancing in violation of state law. It reversed the circuit court's decision and remanded the case for further proceedings.