Justia U.S. 5th Circuit Court of Appeals Opinion SummariesArticles Posted in Consumer Law
Germain v. US Bank National Association
Plaintiff appealed the district court's grant of summary judgment in favor of defendants in an action alleging claims under the Real Estate Settlement Procedure Act (RESPA); the Texas Debt Collection Act (TDCJ); promissory estoppel; and the Declaratory Judgment Act. The Fifth Circuit held that plaintiff failed to raise a genuine issue of material fact regarding defendants' compliance with 12 C.F.R. 1024.41 and properly dismissed his RESPA claims. The court also held that the district court did not err in dismissing plaintiff's TDCA claims and, because plaintiff's remaining claims were based on the underlying RESPA and TDCA claims, they were moot. Accordingly, the court affirmed the dismissal of plaintiff's action with prejudice. View "Germain v. US Bank National Association" on Justia Law
Calderone v. Sonic Houston JLR
The Fifth Circuit affirmed the district court's grant of summary judgment against plaintiff in an action alleging that he was unlawfully terminated under the Consumer Financial Protection Act (CFPA), 12 U.S.C. 5567(a)(1). Plaintiff, a car salesman, alleged that Sonic would not extend credit to minorities. The court held that nothing in section 5519(a) precluded the Department of Labor, a separate federal entity, from enforcing the anti-retaliation provision against dealers even though the CFPB could not; the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, as applied to automobile dealers, was not a statute subject to the jurisdiction of the Bureau, and thus, as a matter of law, Sonic could not have violated section 5567(a); and a reasonable belief that discrimination was occurring under the ECOA could not extend the jurisdictional scope of the CFPA to include actors to which the statute did not apply. View "Calderone v. Sonic Houston JLR" on Justia Law
Mahmoud v. De Moss Owners Association, Inc.
Plaintiffs filed suit against the condo owners association after the foreclosure sale of their condo unit, alleging common law claims for breach of contract, wrongful foreclosure, negligent misrepresentation, and breach of fiduciary duty, as well as violations of the Federal Debt Collection Practices Act (FDCPA), Texas Fair Debt Collection Practices Act (TFDCPA), and Texas Deceptive Trade Practices Act (TDTPA). The Fifth Circuit affirmed the district court's grant of summary judgment on all claims, holding that regardless whether the district court abused its discretion, any evidentiary error the district court made was harmless. In this case, the issue whether the late fee increase was properly adopted by the Association was not dispositive of any claims, so it did not affect the outcome of the litigation and did not affect their substantial rights. The court also held that plaintiffs' could not maintain their suit for breaches of the Condominium Declaration when they have themselves been in default of the contract; there was no authority supporting plaintiffs' conclusion that an inaccurate balance included in a default notice constitutes a defect in the foreclosure proceedings; and plaintiffs failed to cite specific negligent misrepresentations by defendants. The court rejected plaintiffs' remaining claims. View "Mahmoud v. De Moss Owners Association, Inc." on Justia Law
Sayles v. Advanced Recovery Systems, Inc.
The Fifth Circuit affirmed the district court's grant of summary judgment to plaintiff on grounds that ARS, a consumer debt-collection agency, violated section 807(8) of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e(8). The court held that the district court did not violate Fed. R. Civ. P. 56(f) where the district court gave the parties adequate notice of, and a reasonable time to respond to, its intention to consider summary judgment; even assuming arguendo that the district court erred, the error was harmless; and ARS's failure to communicate to credit bureaus that plaintiff disputed his debts violated section 807(8) of the FDCPA. Finally, the district court did not err when it found that plaintiff satisfied the elements of Article III standing. View "Sayles v. Advanced Recovery Systems, Inc." on Justia Law
Malvino v. Delluniversita
The executor of Bonnie Pereida's estate filed suit and obtained a judgment on claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961. Pereida had spent hundreds of thousands of dollars on rare coins that she thought would be a good hedge against inflation. In this case, the majority owner of the company that sold her the coins also owned the company that acted as a purportedly independent grader of the coins, and the grades it had assigned did not reflect the coins’ value. The court concluded that Pereida's RICO claims survived her death, but that the evidence did not prove a pattern of racketeering activity at trial. The court found that there is no evidence from which to conclude that the fraud Pereida fell victim to would have continued indefinitely but for this lawsuit. Accordingly, the court reversed and remanded for further proceedings as to state law claims. View "Malvino v. Delluniversita" on Justia Law
Daugherty v. Convergent Outsourcing, Inc.
Plaintiff filed suit against defendant debt collectors, alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p. The district court dismissed the complaint. At issue is whether a collection letter for a time-barred debt containing a discounted “settlement” offer—but silent as to the time bar and without any mention of litigation—could mislead an unsophisticated consumer to believe that the debt is enforceable in court, and therefore violate the FDCPA. The court concluded that while it is not automatically unlawful for a debt collector to seek payment of a time-barred debt, a collection letter violates the FDCPA when its statements could mislead an unsophisticated consumer to believe that her time-barred debt is legally enforceable, regardless of whether litigation is threatened. In this case, accepting as true the well-pleaded facts alleged by plaintiff, and viewing these facts in the light most favorable to her, the court concluded that her claim is facially plausible. Accordingly, the court reversed and remanded for further proceedings. View "Daugherty v. Convergent Outsourcing, Inc." on Justia Law
Bacharach v. Suntrust Mortgage, Inc.
Plaintiff filed suit against SunTrust under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, alleging that she suffered actual damages and emotional distress due to erroneous information from her credit reports. The district court granted summary judgment to SunTrust. The court concluded that the district court did not err in categorizing these real estate investment losses as related to a failed “commercial business transaction[ ]” that falls outside the scope of the FCRA. The court also concluded that plaintiff points to no evidence that the denial of home loan repairs was actually caused by SunTrust’s conduct. Finally, the court concluded that plaintiff is not entitled to emotional distress damages where the only evidence of emotional distress that plaintiff points to is her own vague and conclusory deposition testimony. Accordingly, the court affirmed the judgment. View "Bacharach v. Suntrust Mortgage, Inc." on Justia Law
Billings v. Propel Fin. Servs.
Plaintiffs are individuals who obtained property tax loans from defendant property tax lenders in exchange for the transfer of their tax liens pursuant to Sections 32.06 and 32.065 of the Texas Tax Code. In these four consolidated appeals, at issue is whether the Truth in Lending Act's (TILA), 15 U.S.C. 1602(f), (g), (i), disclosure and consumer protection requirements apply to transfers of property tax liens carried out under Section 32.06 of the Texas Tax Code. The court concluded that the transfer of a tax lien does not constitute an extension of “credit” that is subject to TILA. Accordingly, the court denied the district court's dismissal of No. 14-51326, and reversed the district court's denial of defendants' motion to dismiss in No. 15-50199, 15-50340, and 15-50437. View "Billings v. Propel Fin. Servs." on Justia Law
Villarreal v. Wells Fargo Bank, N.A.
Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law
Lawrence v. FHLMC
Plaintiffs appealed the district court's grant of summary judgment for Wells Fargo in a suit stemming from plaintiffs' default on a home mortgage. Plaintiff asserted claims for common-law fraud and fraudulent inducement. The court concluded that plaintiffs' claimed damages are either categorically not damages, too speculative, or unsubstantiated assertions. Because plaintiffs failed to give proof to support an element of their fraud claims, the district court committed no error in granting summary judgment. The district court did not commit error, let alone plain error, in denying a continuance where plaintiffs filed only a one-line request for a continuance without any supporting evidence regarding the need for additional discovery or why existing discovery had been incomplete. Accordingly, the court affirmed the judgment. View "Lawrence v. FHLMC" on Justia Law