Tucker et al v. Navy Federal Credit Union
Filing
82
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION 59 FOR SUMMARY JUDGMENT. Signed by Chief Judge John Preston Bailey on 12/14/2011. (tlg)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG
CECIL L. TUCKER, JR., and
SHANNON R. TUCKER,
Plaintiffs,
v.
Civil Action No. 3:10-CV-59
(BAILEY)
NAVY FEDERAL CREDIT UNION,
Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Pending before this Court is Defendant Navy Federal Credit Union’s Motion for
Summary Judgment [Doc. 59], filed October 17, 2011. The plaintiffs responded on
November 8, 2011 [Doc. 65], and the defendant replied on November 22, 2011 [Doc. 66].
The Court has reviewed the record and the arguments of the parties and, for the reasons
set out below, concludes that the defendant’s motion should be GRANTED IN PART and
DENIED IN PART.
BACKGROUND
I.
Factual History
A.
Undisputed Material Facts
Since 2007, Navy Federal Credit Union (“Navy Federal”) has loaned the plaintiffs
over $100,000 in the form of two unsecured personal expense loans, three secured vehicle
loans, and three credit cards. The outstanding balance at the time the plaintiffs recently
received a discharge in bankruptcy was $88,433.09.
In late 2009, the plaintiffs began defaulting on their loans. As a result, beginning in
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January 2010, Navy Federal attempted to contact the plaintiffs to discuss the loans. On
a number of occasions when Navy Federal telephoned the plaintiffs, Mr. Tucker answered
but immediately ended the call to prevent Navy Federal from leaving a voicemail. On other
occasions, Mr. Tucker would press “answer ignore” on his cell phone to mimic a dropped
call and prevent Navy Federal from leaving a voicemail. On at least four occasions, Ms.
Tucker answered, pretended she was someone else, and forwarded the calls to her
voicemail. In April 2010, Navy Federal and the plaintiffs entered into extension agreements
on two of the loans.
Each of the agreements involved expressly permits Navy Federal to seek attorneys’
fees and other costs related to the collection of its debt in the event of default. Each
agreement also unambiguously provides that Navy Federal may report the plaintiffs’
defaults to consumer reporting agencies.
B.
Disputed Material Facts
Based upon call logs that Navy Federal disclosed during discovery, the plaintiffs
contend that Navy Federal made 548 phone calls during a period of six months in 2010
concerning eight different accounts. Navy Federal disputes this contention, arguing that
the number offered is not clearly reflected in the call logs produced.
III.
Procedural History
On June 10, 2010, the plaintiffs filed suit against Navy Federal in the United States
District Court for the Northern District of West Virginia [Doc. 1], claiming that between
January and June of 2010, the Navy Federal committed several violations of the West
Virginia Credit and Consumer Protection Act (“WVCCPA”), W.Va. Code § 46A-2-122, et
seq., as well as the tort of intentional infliction of emotional distress. For the most part, the
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plaintiffs allege that these violations stemmed from multiple telephoned calls Navy Federal
made during that six-month period in an attempt to collect on their automobile loans,
personal loans, and credit card accounts. When filed, the Complaint contained three
counts.
In Count I, the plaintiffs allege that each phone call made between January and June
of 2010 violated W.Va. Code §§ 46A-2-125, 46A-2-126, 46A-2-127, 46A-2-128, and 46A-2129a. In addition, the plaintiffs allege that Navy Federal faxed collection letters to their
places of employment, in violation of W.Va. Code §§ 46A-2-125, 46A-2-127, 46A-2-128,
and 46A-2-129a. Further, the plaintiffs allege that these fax transmissions stated that it
was “imperative,” “very urgent,” and that a call back should be made “immediately,” in
violation of W.Va. Code §§ 46A-2-125, 46A-2-127, and 46A-2-128. Finally, the plaintiffs
allege that their automobile loan contracts violate the provisions of the WVCCPA and thus
are unenforceable and void. ([Doc. 1] at ¶¶ 10-24). In Count II, the plaintiffs claim that the
violations contained in Count I were committed willfully, and thus, the plaintiffs should be
awarded punitive damages. In support of this claim, the plaintiffs allege that the actions of
Navy Federal represent its stated policy and were carried out by its employees in knowing
violation of state law. (Id. at ¶ 25). In Count III, the plaintiffs claim that Navy Federal
committed the tort of intentional infliction of emotional distress (“IIED”). In support of this
claim, the plaintiffs allege that the actions of Navy Federal were willful and malicious. (Id.
at ¶ 26).
On July 6, 2010, Navy Federal moved to dismiss the Complaint or to order the
plaintiffs to provide a more definite statement of their claims [Doc. 6]. On August 26, 2010,
this Court denied the motion, concluding that dismissal was premature and that the
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plaintiffs’ allegations were not so indefinite that the defendant could not ascertain the nature
of the claims being asserted [Doc. 11].
On August 30, 2010, Navy Federal answered the Complaint and counterclaimed for
breach of contract, detinue, and unjust enrichment [Doc. 14]. On September 17, 2010, the
plaintiffs answered Navy Federal’s counterclaims, denying liability [Doc. 22].
The plaintiffs jointly filed a voluntary Chapter 7 bankruptcy petition on October 28,
2010, in the United States Bankruptcy Court for the Northern District of West Virginia [Doc.
25]. In recognition of the automatic stay provisions of 11 U.S.C. § 362, this Court ordered
this matter stayed on November 1, 2011 [Doc. 26]. On January 3, 2011, the plaintiffs
moved to lift the stay, noting that the bankruptcy court had ordered on December 29, 2010,
that the plaintiffs’ counsel in this civil action be employed as special counsel for the purpose
of pursuing their consumer protection claims against Navy Federal [Doc. 27]. This Court
lifted the stay on the same day [Doc. 28].
After the close of discovery on September 22, 2011, Navy Federal filed the instant
Motion for Summary Judgment on October 17, 2011 [Doc. 59], arguing that the plaintiffs
have failed to present a genuine issue of material fact on any of their claims. For example,
Navy federal argues that although there is no dispute that it made numerous attempts to
contact the plaintiffs between January and June of 2010, the plaintiffs have presented no
genuine issue of material fact that Navy Federal’s intent was to annoy, harass, or threaten
[Doc. 59-1].
During the briefing of this motion, the parties attended a mediation conducted by
United States Magistrate Judge David J. Joel on October 26, 2011. The mediation did not
result in settlement. However, the plaintiffs moved to voluntarily dismiss Count III (IIED)
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on November 4, 2011 [Doc. 63], which this Court granted on November 7, 2011 [Doc. 64].
On November 8, 2011, the plaintiffs filed a Response [Doc. 65], arguing that they
have presented genuine issues of material fact that preclude summary judgment. For
example, the plaintiffs argue that the intent to annoy, harass, or threaten can be inferred
from the number of calls placed to the plaintiffs during a six month period, which the
plaintiffs contend that Navy Federal’s call logs show totaled approximately 548 calls.
On November 16, 2011, the bankruptcy court granted the plaintiffs a discharge
pursuant to 11 U.S.C. § 727. A week later, on November 22, 2011, Navy Federal filed a
Reply [Doc. 66], reiterating and supplementing its previous arguments for summary
judgment.
On November 29, 2011, the parties filed a joint stipulation withdrawing the plaintiffs’
request for a jury trial and requesting that this matter proceed as a bench trial [Doc. 69].
In light of this stipulation, this Court terminated the November 30, 2011, deadline for jury
instructions, voir dire, and verdict forms and ordered the parties to file proposed findings
of fact and conclusions of law on or before December 16, 2011 [Doc. 70]. The parties filed
their Joint Pretrial Order [Doc. 81] on December 12, 2011.
A pretrial conference is currently scheduled for December 29, 2011, to be followed
by a bench trial on January 10, 2012 [Doc. 13].
DISCUSSION
I.
Summary Judgment Standard
Summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a
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judgment as a matter of law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). A genuine issue exists “if the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250 (1986). Thus, the Court must conduct “the threshold inquiry of determining
whether there is the need for a trial-- whether, in other words, there are any genuine factual
issues that properly can be resolved only by a finder of fact because they may reasonably
be resolved in favor of either party.” Id. at 250.
The party opposing summary judgment “must do more than simply show that there
is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). That is, once the movant has met its
burden to show absence of material fact, the party opposing summary judgment must then
come forward with affidavits or other evidence demonstrating there is indeed a genuine
issue for trial. Fed. R. Civ. P. 56(c); Celotex Corp., 477 U.S. at 323-25; Anderson, 477
U.S. at 248. “If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted).
II.
Analysis
In its motion, Navy Federal argues that it is entitled to summary judgment on both
of the plaintiffs’ remaining counts, while the plaintiffs argue that they have presented
genuine issues of material fact which preclude summary judgment on either count. Below,
the Court will consider each count in turn.
A.
Count I: Violations of Numerous Debt Collection Statutes
1.
W.Va. Code § 46A-2-125 (Oppression and Abuse)
During discovery, the plaintiffs limited their claim of oppression and abuse to § 46A6
2-125(d), which prohibits a debt collector from “[c]ausing a telephone to ring or engaging
any person in telephone conversation repeatedly or continuously, or at unusual times or
at times known to be inconvenient, with intent to annoy, abuse, oppress or threaten any
person at the called number.”
In its motion, Navy Federal contends that there is insufficient evidence that it violated
§ 46A-2-125(d). Though Navy Federal does not dispute that it placed numerous calls to
the plaintiffs, it argues that the number of calls made was primarily due to the fact that the
calls did not connect, and had to be redialed. Specifically, Navy Federal notes that Mr.
Tucker testified during his deposition that on several occasions, he purposefully
disconnected the call by pressing answer and then ignore on his cell phone to mimic a
dropped call and to prevent Navy Federal from leaving a voicemail. Similarly, Ms. Tucker
testified during her deposition that on at least four occasions, she answered calls from Navy
Federal, pretended that she was someone else, and forwarded the calls to her voicemail.
With regard to the content of the calls, Ms. Tucker testified that she did not find the calls
to be harassing. As for the timing of the calls, Navy Federal’s call logs reflect that no calls
were made before 8:00 a.m. or after 9:00 p.m. Also in this regard, Ms. Tucker admitted
during discovery that she never advised Navy Federal that a particular time of day was
inconvenient for her to receive a call. In addition, Navy Federal argues that there is no
evidence of an intent to annoy, abuse, oppress, or threaten the plaintiffs.
Instead,
according to Navy Federal’s manager of specialized collections, the purpose of the calls
was to negotiate payment plans, to ascertain the status and assurance of payments, to
provide financial management counseling, to protect the credit of its members, and to keep
their accounts current. In fact, in April 2010, the calls resulted in the negotiation of two
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extension agreements that enabled the plaintiffs to avoid repossession of their two
automobiles. During his deposition, Mr. Tucker acknowledged that Navy Federal was trying
to help him.
In response, the plaintiffs argue that Navy Federal’s call logs show that it called them
approximately 548 times or more from January 4, 2010, to June 25, 2010. As such, the
plaintiffs contend that Navy Federal’s intent to annoy, abuse, oppress, or threaten can be
inferred from the number of calls. In support of this proposition, the plaintiffs cite Duncan
v. JP Morgan Chase Bank, N.A., 2011 WL 5359698 (S.D. W.Va. Nov. 4, 2011).
In reply, Navy Federal asserts that for the number of calls to create an inference of
the requisite intent described in § 46A-2-125(d), Duncan requires that there be some
evidence that the plaintiffs asked Navy Federal to cease communications with them.
However, Navy Federal argues that the plaintiffs themselves continued the communications
in many instances and those communications resulted in loan extensions.
Upon careful consideration of the above, this Court concludes that the plaintiffs have
presented a genuine issue of material fact with regard to whether Navy Federal acted with
the intent required to violate § 46A-2-125(d). In so concluding, this Court rejects Navy
Federal’s reading of Duncan. In Duncan, JP Morgan Chase Bank, N.A. (“Chase”) placed
68 phone calls to a consumer over a period of 11 months. During that period, the
consumer requested that Chase cease and desist from placing any further phone calls.
When the calls continued, the consumer then sued Chase for violating § 46A-2-125(d).
Chase moved for summary judgment, arguing that the consumer had failed to present
sufficient evidence of the requisite intent. The consumer responded that the intent element
could be satisfied by the volume of calls. The court concluded that the consumer had
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“made the requisite showing to demonstrate a genuine issue of material fact with respect
to the issue of [Chase’s] intent, given the number of calls which were repeatedly placed .
. ..” Duncan, 2011 WL 5359698, at *4 (emphasis added). The court explained that “[t]he
plain language of [§ 46A-2-125(d)] aptly sets forth that a statutory violation can be bourne
from the mere volume of calls placed to a debtor. This is so, based on the statute’s
reference to calls which are ‘repeated[ ]’ or ‘continuous[.]’” Id. Nothing in Duncan requires
that a consumer ask a debt collector to cease and desist as a prerequisite to bringing a §
46A-2-125(d) claim.
Like the consumer in Duncan, the plaintiffs have successfully presented a genuine
issue of material fact with respect to the issue of Navy Federal’s intent, given the number
of calls which were repeatedly placed to the plaintiffs’ phones.1 This Court agrees with the
reasoning in Duncan that the plain language of § 46A-2-125(d) supports this conclusion.
Specifically, the statute explains that calls can be abusive in three ways, namely: (1) when
the calls are made “repeatedly or continuously;” (2) when the calls are made “at unusual
times;” or (3) when the calls are made “at times known to be inconvenient.” W.Va. Code
§ 46A-2-125(d). Only the third avenue appears to imply that the debt collector know the
1
Navy Federal disputes that it made 548 phone calls during the relevant time period.
In so doing, Navy Federal objects to the plaintiffs’ Exhibits A and C, which are the call logs
Navy Federal produced in discovery and the plaintiffs’ summary of those calls, respectively.
For at least two reasons, Navy Federal’s objection should be overruled. First, this Court
is at a loss to understand Navy Federal’s objection to Exhibit A in light of the fact that Navy
Federal has provided the same exhibit as Defendant’s Trial Exhibit Nos. 10 and 11.
Second, at this stage, this Court finds no issue with the plaintiffs’ Exhibit C, which appears
to constitute a demonstrative exhibit of the calls placed. In sum, this Court finds that the
exact number of calls made is an issue reserved for the trier of fact, though a review of the
call logs leads this Court to believe that the volume of calls reflected is sufficient to preclude
summary judgment.
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calls are inconvenient. Here, however, the plaintiffs rely almost exclusively upon the
volume of calls, or their repeated nature, to claim abuse. In this case, that reliance is
sufficient to preclude summary judgment. Accordingly, the plaintiffs’ § 46A-2-125(d) claims
in Count I MAY PROCEED. In this regard, this Court notes that it will hear evidence at trial
regarding the particular circumstances surrounding each call, unless satisfied with the
parties’ forthcoming joint exhibit.
2.
W.Va. Code § 46A-2-126 (Unreasonable Publication)
During discovery, the plaintiffs limited their claim of unreasonable publication to §
46A-2-126(b), which prohibits a debt collector from unreasonably publicizing information
related to any alleged indebtedness or consumer to “any relative or family member of the
consumer if such a person is not residing with consumer, except through proper legal
action or process or at the express and unsolicited request of the relative or family
member.”
In its motion, Navy Federal states that while it did “inadvertently speak with Ms.
Tucker’s aunt when it called for Ms. Tucker, Plaintiffs acknowledge that Navy Federal did
not disclose any information relating to [their] indebtedness.” ([Doc. 59-1] at 7). “In fact,”
Navy Federal notes, “anything the aunt would have known about the debts owed to Navy
Federal was a result of Plaintiffs providing her with this information.” (Id.). Specifically,
“[t]he aunt worked with Ms. Tucker [who] acknowledged talking with her aunt at a family
function and prior to the time of the call with Navy Federal about financial troubles with
several creditors, including Navy Federal.” (Id.). In response, the plaintiffs question what
reason Navy Federal would have to contact Ms. Tucker’s aunt if not to collect its debt. The
plaintiffs also note that Navy Federal sent a fax to Ms. Tucker’s place of employment and
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that it is unknown how many coworkers read the contents of this fax.2 In reply, Navy
Federal emphasizes that the plaintiffs do not dispute that it did not disclose any information
of indebtedness to Ms. Tucker’s aunt and that the aunt was already aware of the plaintiffs’
indebtedness. Instead, the plaintiffs state only that the content of the phone conversation
could not be ascertained from the call logs. Navy Federal notes that the fax does not
convey any information about the plaintiffs’ indebtedness. In their Joint Pretrial Order, the
parties stipulate that “[t]he fax sent to Ms. Tucker at her work did not disclose information
about Plaintiffs’ indebtedness.” ([Doc. 81] at 10).
Upon careful consideration of the above, this Court concludes that the plaintiffs have
failed to present a genuine issue of material fact with regard to whether information
concerning their indebtedness was disclosed in violation of § 46A-2-126(b). First, the
parties’ stipulation that the fax sent to Ms. Tucker at her place of employment did not
disclose any information about the plaintiffs’ indebtedness limits the plaintiffs’ § 46A-2126(b) claim to Navy Federal’s phone conversation with Ms. Tucker’s aunt. Second, the
plaintiffs have failed to offer sufficient evidence that Navy Federal disclosed any information
of the plaintiffs’ indebtedness during that phone conversation. In fact, Ms. Tucker testified
during her deposition that her aunt merely answered the phone and took a message that
it was imperative for Ms. Tucker to call Navy Federal. (See [Doc. 59-4] at 4). Accordingly,
the plaintiffs’ § 46A-2-126(b) claim in Count I is hereby DISMISSED.
2
In addition, the plaintiffs claim, apparently for the first time, that Navy Federal
threatened to contact Mr. Tucker’s commanding officer on several occasions. ([Doc. 65]
at 8). The plaintiffs then argue that this conduct violated §§ 46A-2-126 and 46-2-124(f).
First, § 46A-2-126 has no application to threats to disclose information. Second, the
plaintiffs are precluded from asserting a violation of § 46A-2-124(f) because they neither
asserted said claim in their Complaint nor sought leave to amend.
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3.
W.Va. Code § 46A-2-127 (Fraudulent, Deceptive, or Misleading
Representations)
During discovery, the plaintiffs limited their claim that Navy Federal used fraudulent,
deceptive, or misleading representations to the statute’s general prohibition and § 46A-2127(g), which prohibits a debt collector from using “[a]ny representation that an existing
obligation of the consumer may be increased by the addition of attorney’s fees,
investigation fees, service fees or any other fees or charges when in fact such fees or
charges may not legally be added to the existing obligation.” Specifically, in response to
Navy Federal’s interrogatories, the plaintiffs stated that Navy Federal violated § 46A-2-127
by: (1) sending letters “threatening to garnish wages”; (2) threatening to charge them “the
legal fees and costs of suing [them]”; and (3) “misrepresenting that [Navy Federal] would
negatively report [their] debts.” ([Doc. 59-6] at 3); [Doc. 59-7] at 3).
In its motion, Navy Federal argues that none of the specified representations are
fraudulent, deceptive, or misleading. First, Navy Federal contends that it could have
obtained a judgment and garnished the plaintiffs’ wages pursuant to W.Va. Code §§ 38-715 and 46A-2-118. Similarly, Navy Federal asserts that it was entitled to report the
plaintiffs’ defaults to consumer reporting agencies pursuant to the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681, et seq. Finally, Navy Federal notes that the loan documents
and credit card contracts provide that in the event of default, all reasonable costs of
collection, including court costs, expenses, and reasonable attorneys’ fees will be paid by
the borrower. In response, the plaintiffs argue that the representation regarding the
garnishment of wages is misleading because it omits that Navy Federal would first have
to obtain a judgment against the plaintiffs. In addition, the plaintiffs note that the threat to
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report their defaults also referenced that the Freedom of Information Act (“FOIA”), 5 U.S.C.
§ 552, et seq., would allow current or future employers to obtain the information reported.
According to the plaintiffs, the FOIA exempts their personal financial information from such
disclosures.3
In reply, Navy Federal reasserts its previous arguments for summary
judgment.
Upon careful consideration of the above, this Court concludes that the plaintiffs have
failed to present a genuine issue of material fact with regard to whether Navy Federal used
fraudulent, deceptive, or misleading representations in violation of § 46A-2-127. First, this
Court agrees that Navy Federal could have lawfully sought to garnish the plaintiffs’ wages.
See W.Va. Code §§ 38-7-15 and 46A-2-118. In so finding, this Court rejects the plaintiffs’
argument that a threat to seek garnishment of a consumer’s wages is fraudulent, deceptive,
or misleading, solely because the debt collector did not explain that it would have to first
obtain a judgment.
Second, this Court agrees that Navy Federal was entitled to report the plaintiffs’
default to consumer reporting agencies pursuant to the FCRA. See 15 U.S.C. § 1681s-2.
As a prerequisite to this entitlement, the FCRA requires a furnisher of negative information,
including delinquencies, to provide a notice of such furnishing to the consumer. See §
1681s-2(a)(7)(A). Here, each agreement notified the plaintiffs that Navy Federal was
permitted to report their default to consumer reporting agencies. (See [Doc. 59-3] at 9, 11,
3
The plaintiffs also contend for the first time that the specified representations
constituted the furnishment of legal advice, which is prohibited by W.Va. Code § 46A-2123(a). In reply, Navy Federal argues that plaintiffs should not be able to assert a § 46A-2123(a) claim at this stage when they neither asserted such a claim in their Complaint nor
sought leave to amend. This Court agrees and finds that the plaintiffs are precluded from
asserting a claim pursuant to § 46A-2-123(a).
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13, 15, 17, & 21).
For these reasons, Navy Federal’s representation that it would
negatively report the plaintiffs’ defaults to consumer reporting agencies is not fraudulent,
deceptive, or misleading. Similarly, Navy Federal’s indication that the information furnished
to the consumer reporting agencies could then be obtained by current or future employers
pursuant to the FOIA does not constitute a fraudulent, deceptive, or misleading
representation. Information that a consumer defaulted on personal expense loans, vehicle
loans, or credit cards does not fall into any of the categories of information exempted from
the disclosure required by the FOIA. See 5 U.S.C. § 552(b).
Finally, this Court agrees that the agreements at issue expressly permit Navy
Federal to seek attorneys’ fees and other reasonable costs associated with collecting its
debt once the plaintiffs defaulted. The two personal expense loans and the three vehicle
loans identically provide that “[i]n the event of default, all reasonable costs of collection
including but not limited to court costs, expenses and reasonable attorney’s fees, will be
paid by the Borrower.” ([Doc. 59-3] at 10, 12, 14, 16, & 18). Similarly, Navy Federal’s
credit card agreements provide that in the event of default, Navy Federal may “declare due
and payable the unpaid portion of [the] balance, together will all costs relating to the
collection, of this account but not limited to unassessed finance charges, court costs,
expenses and attorney fees.” (Id. at 22). The plaintiffs do not dispute that they were in
default when Navy Federal made the representation about attorneys’ fees and legal costs.
As such, the representation cannot be characterized as fraudulent, deceptive, or misleading
as a matter of law because § 46A-2-127(g) applies only when “such fees or charges may
not legally be added to the existing obligation.” Accordingly, the plaintiffs’ § 46A-2-127
claim in Count I is hereby DISMISSED.
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4.
W.Va. Code § 46A-2-128 (Unfair or Unconscionable Means)
During discovery, the plaintiffs limited their claim that Navy Federal used unfair or
unconscionable means to § 46A-2-128(c) and (d), which prohibit a debt collector from
collecting or attempting to collect “all or any part of the debt collector’s fee or charge for
services rendered” or “any interest or other charge, fee or expense incidental to the
principal obligation” unless authorized by the parties’ agreement.
In its motion, Navy Federal argues that the plaintiffs cannot maintain claims pursuant
to § 46A-2-128(c) or (d) because the loan agreements and credit card contracts permit it
to recover court costs, expenses, and reasonable attorneys’ fees from the plaintiffs in the
event of default. In response, the plaintiffs argue, without elaboration, that Navy Federal’s
reference to the legal consequences of their default “can . . . constitute an unfair of [sic]
unconscionable means under Section 128.” ([Doc. 65] at 9). Navy Federal does not
discuss § 46A-2-128 in its reply brief.
Upon careful consideration of the above, this Court concludes that the plaintiffs have
failed to present a genuine issue of material fact concerning whether Navy Federal used
unfair or unconscionable means in violation of § 46A-2-128(c) and (d). As explained in
dismissing the plaintiffs’ § 46A-2-127 claim, the agreements at issue permit Navy Federal
to recover court costs, expenses, and reasonable attorneys’ fees from the plaintiffs in the
event of default. As such, Navy Federal could not have violated § 46A-2-128(c) or (d), both
of which apply only when an agreement does not authorize the fees referenced.
Accordingly, the plaintiffs’ § 46A-2-128 claim in Count I is hereby DISMISSED.
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5.
W.Va. Code § 46A-2-129a (Deceptive or Oppressive Telephone
Calls)
Pursuant to W.Va. Code § 46A-2-129a, “[n]o debt collector shall place a telephone
call or otherwise communicate by telephone with a consumer or third party, at any place,
including a place of employment, falsely stating that the call is ‘urgent’ or an ‘emergency.’”
In its motion, Navy Federal presents two arguments in support of summary
judgment, namely: (1) the plaintiffs voluntarily dismissed any § 46A-2-129a claim based
upon a fax containing the word “urgent,” and (2) the plaintiffs have not presented evidence
that the calls were not, in fact, urgent. In response, the plaintiffs argue that they have not
voluntarily dismissed their § 46A-2-129a claims.
However, the plaintiffs provide no
response regarding the falsity of any statement that the calls were urgent. In reply, Navy
Federal reasserts its two previous arguments for summary judgment.
Upon careful consideration of the above, this Court concludes that the plaintiffs have
presented a genuine issue of material fact precluding summary judgment on their § 46A-2129a claims concerning the phone calls placed. The issue of falsity is a matter for the trier
of fact. To hold otherwise and accept Navy Federal’s argument that the calls were urgent
because the plaintiffs were in default would unreasonably eliminate any application of §
46A-2-129a. Accordingly, the plaintiffs’ § 46A-2-129a claims in Count I MAY PROCEED
to the extent that they are based upon telephone calls in which Navy Federal falsely stated
that the matter was urgent. In this regard, the Court agrees with Navy Federal that the
plaintiffs have voluntarily dismissed their § 46A-2-129a claims that were based upon fax
transmissions. (See [Doc. 10] at 3; [Doc. 11] at 3 n. 1).
16
B.
Count II: Willful Violations – W.Va. Code § 46A-5-105
In Count II, the plaintiffs claim that the violations contained in Count I were
committed willfully, and thus, the plaintiffs should be awarded “punitive damages” pursuant
to W.Va. Code § 46A-5-105. ([Doc. 1] at ¶ 25). In support of this claim, the plaintiffs allege
that the actions of Navy Federal represent its stated policy and were carried out by its
employees in knowing violation of state law. (Id.). For the reasons that follow, this Court
will GRANT summary judgment in favor of Navy Federal on Count II.
W.Va. Code § 46A-5-105 provides, as relevant here, that:
If a creditor has willfully violated the provisions of this chapter applying to
illegal, fraudulent or unconscionable conduct or any prohibited debt collection
practices, . . . the court may cancel the debt when the debt is not secured by
a security interest.
Three reasons require summary judgment dismissal of Count II. First, the exclusive
remedy provided in § 46A-5-105 is the cancellation of unsecured debt, not punitive
damages. Second, the penalty provision of the WVCCPA has been interpreted to preclude
the award of punitive damages. See One Valley Bank of Oak Hill, Inc. v. Bolen, 188
W.Va. 687, 692, 425 S.E.2d 829, 834 (1992) (“[P]unitive damages are not available under
the fraud or unconscionable conduct provisions of [the WVCCPA].”). Third, the plaintiffs
appear to withdraw their request for punitive damages in responding to the instant motion
by stating: “The Plaintiffs will seek actual and statutory damages on the basis of the
WVCCPA violations. The Plaintiffs will not seek punitive damages on the basis of the tort
of intentional infliction of emotion [sic] harm.” ([Doc. 65] at 11). For these reasons, Count
II (Willful Violations) is hereby DISMISSED.
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CONCLUSION
For the foregoing reasons, this Court concludes that Defendant Navy Federal Credit
Union’s Motion for Summary Judgment [Doc. 59] should be, and hereby is, GRANTED IN
PART and DENIED IN PART.
It is so ORDERED.
The Clerk is hereby directed to transmit copies of this Order to counsel of record.
DATED: December 14, 2011.
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