Articles Posted in Consumer Law

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Two credit card holders defaulted on their accounts, and the issuing bank elected to litigate debt-collection actions. After courts entered default judgments against both card holders, the card holders filed new and separate suits alleging that the bank violated the Uniform Trade Practices and Consumer Protection Act (UTPA) during the earlier debt collection actions. The bank moved in each case to arbitrate the UTPA claims, and the superior court stayed the UTPA litigation and ordered arbitration. The issue presented for the Supreme Court's review was whether the bank waived its right to demand arbitration of the subsequent UTPA claims by litigating the debt-collection claims. Because the Court concluded that the two claims were not sufficiently closely related, it held that the bank did not waive its right to demand arbitration of the separate UTPA claims. But The Court also concluded that it was error for the superior court to interpret the arbitration agreement on the question of the availability of statewide injunctive relief: the interpretation of an arbitration agreement is in the first instance a matter for the arbitrator. View "Hudson v. Citibank (South Dakota) NA" on Justia Law

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A client personally financed the sale of his business corporation. His attorney drafted documents that secured the buyer’s debt with corporate stock and an interest in the buyer’s home. Over seven years later the government imposed tax liens on the corporation’s assets; according to the client, it was only then he learned for the first time that his attorney had not provided for a recorded security interest in the physical assets. The client sued the attorney for malpractice and violation of the Alaska Unfair Trade Practice and Consumer Protection Act (UTPA). The superior court held that the statute of limitations barred the client’s claims and granted summary judgment to the attorney. But after review, the Alaska Supreme Court concluded that it was not until the tax liens were filed that the client suffered the actual damage necessary for his cause of action to be complete. Therefore, the Court reversed the superior court's judgment and remanded the case for further proceedings. View "Jones v. Westbrook" on Justia Law

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Brett and Josephine Ambridge defaulted on their home loan. Alaska Trustee, LLC sent the Ambridges a notice of default that failed to state the full amount due as required by the federal Fair Debt Collection Practices Act (FDCPA). The Ambridges filed suit against Alaska Trustee and its owner, Stephen Routh, seeking damages under the FDCPA and the Alaska Unfair Trade Practices and Consumer Protection Act (UTPA), as well as injunctive and declaratory relief. The superior court held that both Alaska Trustee and Routh were “debt collectors” subject to liability under the FDCPA, awarded damages under the Act, and awarded injunctive relief under the UTPA. Alaska Trustee and Routh appealed, arguing that neither of them is a debt collector as defined by federal law and that injunctive relief was improperly awarded. The Supreme Court found no reversible error in the Superior Court's judgment and affirmed. View "Alaska Trustee, LLC v. Ambridge" on Justia Law

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In 2009 Elisabeth Bachmeier defaulted on a loan secured by a deed of trust against her home, and a nonjudicial foreclosure was initiated. Bachmeier requested a reinstatement quote in order to halt the foreclosure. Alaska Trustee, the trustee under the deed of trust, replied with a quote which included foreclosure costs that were not attorney's fees or court costs, the only items the foreclosure statute expressly mentions as recoverable in a reinstatement amount. Bachmeier brought suit against Alaska Trustee, Routh Crabtree Olsen (the law firm aiding in the foreclosure), and Richard Ullstrom (an attorney employed by Routh Crabtree Olsen), alleging that the inclusion of the disputed foreclosure costs violated the foreclosure statute and was a deceptive practice in violation of the Unfair Trade Practices and Consumer Protection Act (UTPA). Bachmeier also argued that her deed of trust did not provide that all foreclosure costs could be recovered in the reinstatement amount. Both sides moved for summary judgment. The superior court concluded that the inclusion of the foreclosure costs violated the foreclosure statute and that the UTPA applied to nonjudicial foreclosures. Alaska Trustee appealed. The Supreme Court granted review to determine: (1) the scope of permissible charges to be included in the reinstatement amount given to homeowners facing nonjudicial foreclosure under AS 34.20.070(b); and (2) whether the UTPA applied to nonjudicial deed of trust foreclosures. The Court held that because the beneficiary of a deed of trust has a right to be returned to its status quo ante when the borrower reinstates after a default, Alaska Trustee could include in Bachmeier's reinstatement amount all reasonable costs it incurred pursuing the foreclosure under the foreclosure statute, regardless of whether Bachmeier's deed of trust specifically provided for the inclusion of such costs. Furthermore, the Court held that the UTPA did not apply to nonjudicial deed of trust foreclosures. View "Alaska Trustee, LLC v. Bachmeier" on Justia Law

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Claire Donahue broke her tibia during a class at the Alaska Rock Gym after she dropped approximately three to four-and-a-half feet from a wall onto the floormat. Before class, Donahue had been required to read and sign a document that purported to release the Rock Gym from any liability for participants’ injuries. Donahue brought claims against the Rock Gym for negligence and violations of the Uniform Trade Practices and Consumer Protection Act (UTPA). The Rock Gym moved for summary judgment, contending that the release barred the negligence claim. It also moved to dismiss the UTPA claims on grounds that the act did not apply to personal injury claims and that Donahue failed to state a prima facie case for relief under the act. Donahue cross-moved for partial summary judgment on the enforceability of the release as well as the merits of her UTPA claims. The superior court granted the Rock Gym’s motion and denied Donahue’s, then awarded attorney’s fees to the Rock Gym under Alaska Civil Rule 82. Donahue appealed the grant of summary judgment to the Rock Gym; the Rock Gym also appeals, contending that the superior court should have awarded fees under Alaska Civil Rule 68 instead of Rule 82. After review, the Supreme Court affirmed the superior court on all issues. View "Donahue v. Ledgends, Inc." on Justia Law

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Appellant purchased a home and fell behind on her mortgage payments. Despite the bank having agreed to postpone a foreclosure sale, it proceeded with the sale. After she threatened suit, the bank re-purchased the home and entered into settlement negotiations with appellant; the bank promised to re-convey the property to appellant so that she could proceed with a sale to a third party. The bank subsequently refused to perform and appellant sued both the bank and the bank's counsel for breach of the settlement agreement and fraudulent inducement. The superior court granted partial summary judgment to the woman on her breach of contract claim, finding that a binding settlement contract had been formed between appellant and the bank. Appellant then filed for bankruptcy. The bankruptcy trustee sold the property and the bankruptcy estate abandoned the present state court claim, placing the remaining balance from the sale of the property into the superior court registry. The superior court held a bench trial on the remaining fraud claim and on the parties' respective damages. At the conclusion of appellant's case, the court granted a directed verdict to the bank and the bank's counsel on the fraud claim. The superior court awarded the bank the unpaid loan balance as well as the fair rental value of the property for appellant's post-foreclosure occupancy of the property, and awarded the woman lost sale damages. The superior court also awarded the parties prejudgment interest, and later awarded the bank and its counsel attorney's fees. Appellant appealed the superior court's final judgment. Upon review, the Supreme Court concluded that the bank abandoned its claim for rental damages at trial. Accordingly, the Court reversed the superior court's award of rental damages and any accompanying award of prejudgment interest. Because any right to recover fees for work performed on behalf of the dismissed defendants was waived, because it was error to award attorney's fees to the bank's counsel in responding to the bankruptcy petition, and because the superior court did not properly calculate attorney's fees under Alaska Civil Rule 68, the case was remanded to recalculate attorney's fees. The superior court was affirmed in all other respects. View "Taylor v. Wells Fargo Home Mortgage" on Justia Law

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Diana Albrecht brought a class-action lawsuit against Alaska Trustee, LLC, on behalf of a group of Alaska homeowners who had faced foreclosure on their homes. Alaska Trustee, acting as foreclosure trustee, had provided Albrecht and the other homeowners reinstatement quotes that included the costs of foreclosure. Albrecht maintained that the inclusion of foreclosure costs in her reinstatement quote violated her right to cure under a former version of AS 34.20.070(b), the non-judicial foreclosure statute, which provided that a homeowner’s "default may be cured by payment of the sum in default other than the principal that would not then be due if no default had occurred, plus attorney fees or court costs actually incurred by the trustee due to the default." According to Albrecht, Alaska Trustee's inclusion of foreclosure costs in addition to "attorney's fees or court costs" constituted a violation of not only the non-judicial foreclosure statute but also Alaska’s Unfair Trade Practices Act (UTPA). The superior court concluded that Albrecht lacked standing to sue and denied her motion for class certification. The superior court further ruled that Alaska Trustee's practice of including various fees and charges as foreclosure costs was permitted under the statute. The superior court awarded attorney's fees to Alaska Trustee as the prevailing party, enhancing those fees under AS 45.50.537(b) on the ground that Albrecht's claims were frivolous. Because the inclusion of foreclosure costs in a reinstatement quote did not violate AS 34.20.070, the Supreme Court affirmed the superior court in most respects. But because the Court concluded that Albrecht’s claims were not frivolous and attorney's fees could not be awarded under Rule 82 for time spent litigating the structure of a class action, the Court remanded for recalculation of fees awarded. View "Albrecht v. Alaska Trustee, LLC" on Justia Law

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The issue presented to the Supreme Court in this case was whether under the Unfair Trade Practices and Consumer Protection Act a misrepresentation by a seller of a used motor home is subject to a defense that the misrepresentation was made in good faith. Plaintiff Robert Borgen bought a used Travelaire motor home from A&M Motors, Inc. in 2004. The motor home had previously been owned by Thom and Linda Janidlo; the Janidlos traded in the vehicle to A&M Motors about two weeks before Borgen bought it. When the Janidlos traded in the motor home, they indicated that it was a 2002 model. At some point, someone changed the model year to 2003 on the documents at A&M Motors. The title from the State of Alaska showed that the motor home was a 2003 model, but the vehicle identification number (VIN) indicated that the motor home was a 2002 model. Both trial experts testified that the tenth digit of a VIN of a chassis indicates the model year of the chassis, but their testimony as to whether the same holds true for the VIN of a coach was unclear. The VIN on the chassis is the VIN on the vehicle’s title, but a motor home’s model year is determined by the model year of the coach. A&M Motors sold the Travelaire to Borgen as a 2003 model. In August 2005 Borgen discovered documents in the motor home indicating the motor home was actually a 2002 model. He contacted A&M Motors to complain; the only compensation they offered him was a $1,000 service contract. Borgen sued A&M Motors, pleading three causes of action: (1) misrepresentation, (2) violation of the Unfair Trade Practices and Consumer Protection Act (UTPA), and (3) breach of contract. Borgen moved for summary judgment on his UTPA claim in February 2008. The trial court denied that motion, and a jury ultimately decided that A&M Motors had not engaged in an unfair or deceptive act in its dealings with Borgen. Finding that the trial court did not err by finding the UTPA implied an unknowing affirmative misrepresentation of material fact would not give rise to liability, the Supreme Court affirmed the trial court's judgment with respect to Borgen's UTPA claims, but remanded for further proceedings on treble damages. View "Borgen v. A&M Motors, Inc." on Justia Law