Tag: unfair and deceptive trade practices

Bankr. E.D.N.C.: In re American Ambulette & Ambulance Service – Unfair and Deceptive Trade Practices Negatively Affecting Consumers


The Chapter 7 Trustee alleged that the defendants’ misrepresentations to the debtor regarding expansion opportunities constituted unfair or deceptive acts or practices, as these induced the debtors to transfer their valuable business assets to the defendant’s competing businesses . The Trustee alleged that, in fact, the true purpose of the transfers was to force the debtors into bankruptcy.

In ruling on the defendant’s Rule 12(b)(6) motion to dismiss, the bankruptcy court began with restating the elements of the Unfair and Deceptive Trade Practices Act at N.C.G.S. § 75 claims:

(1) The defendant committed an unfair or deceptive act or practice;
(2) The action in question was in or affecting commerce; and
(3) The act proximately caused injury to the plaintiff.… Read More

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N.C. Court of Appeal: Nash Hospitals v. State Farm- Failure to Honor Perfected Medical Lien


Jessica Whitaker was injured in an automobile accident and incurred, with $1,515 in costs to other medical providers, $757 for treatment at Nash Hospitals. State Farm, the insurer for the driver of the other vehicle, received notice of Nash Hospital’s medical liens under N.C.G.S. §§ 44-49 and 50. After questioning the necessity of all of the medical treatment, State Farm settled with Ms. Whitaker, who was unrepresented, for a total of $1,943, providing her with a check payable to Ms. Whitaker, Nash Hospital and the other medical provider. By statute, Nash Hospital was entitled to a pro rated share of no more than 50% of the settlement.… Read More

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Bankr. E.D.N.C.: In re Alvarez- Mortgage Servicing Claims


The Alvarezes purchased their home in 2007 and refinanced in 2009 with PNC Mortgage servicing the loan for Fannie Mae. At that time the mortgage documents provided that the Alvarezes would maintain homeowner’s insurance and property taxes directly, without an escrow account. The Alvarezes began to have financial difficulties in 2012, but were denied mortgage assistance by PNC. Starting in August 2012, the Alvarezes alleged that PNC began misapplying their payments, holding funds in a suspense account and paying taxes and insurance from that account, violating numerous protections under the deed of trust, 12 C.F.R. § 1024.17 and N.C.G.S. § 45-93.… Read More

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M.D.N.C.: Nance v. Citimortgage- Causes of Action following Illegal Foreclosure


Despite being provided with evidence in the form of cancelled checks and insurance policies showing that they were not delinquent in their mortgage payments, Citimortgage commenced foreclosure against the Nances.  After refinancing their house, the Nances brought suit against Citimortgage alleging, among other causes of action,  unfair and deceptive trade practices, negligent and/or intentional infliction of emotional distress, defamation and negligent and/or intentional damage to credit report.  Citimortgage moved to dismiss.

As to the unfair and deceptive trade practices claim, the district court restated the requirements to state a claim as:

(1) the obligation owed must be a debt;

(2) the one owning the obligation must be a consumer;

(3) the one trying to collect the obligation must be a debt collector;

(4) an unfair or deceptive act;

(5) in or affecting commerce; and

(6) proximately causing injury.… Read More

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E.D.N.C.: Fritz v. Duke Energy- FCRA Does Not Preempt State Debt Collection Protections


Fritz closed his account with Duke Energy when he moved, but was one week late in paying the final bill, so it was referred to a debt collector. He did pay the balance to Duke Energy, who applied the amount to the balance on his new utility bill. The debt collector was not informed of the payment and two months later, reported Fritz as delinquent to the three major credit bureaus, resulting in a 77 point decline in his credit score. Fritz brought suit against Duke Energy (as well as the debt collector under other bases) under N.C.G.S. § 75-54, alleging that Duke Energy had falsely represented to the debt collector the status of the debt.… Read More

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Bankr. M.D.N.C.: Rutledge v. Wells Fargo Bank, N.A.- State Law Claims for Failure Related to HAMP Modification


The Debtor, after various alleged inconsistencies and shenanigans by Wells Fargo in application of her payments and insurance proceeds, as well as failures in the review of her loan modification application, filed bankruptcy and brought suit alleging, among other causes of action, breaches of contract and duties of good faith & fair dealing and fiduciary duty, fraud and constructive fraud, and violations of the North Carolina Unfair and Deceptive Trade Practice Act. Wells Fargo sought dismissal for failing to state a claim. Following Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), the bankruptcy court examined the treatment of allegations of state law violations arising from failures under federal regulations related to the providing and servicing of mortgages, finding that the cases fell into three categories: 1.… Read More

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Bankr. E.D.N.C.: Edward v. Vanderbilt- Mandatory Arbitration of State Law Claims


The debtor brought adversary proceeding against Vanderbilt and its agent Mr. Gibson, alleging that they had violated N.C.G.S. §§ 75-51 through 54, by making harassing phone calls that caused an employment demotion and loss of pay, mental and emotional distress, panic attacks, and medical expenses and were, under N.C.G.S. § 75-1.1, unfair and deceptive trade practices, subjecting Vanderbilt to treble damages. Vanderbilt contends that, pursuant to its contract, the Debtor the must pursue this claim through arbitration, requesting that the adversary proceeding be stayed to allow for arbitration.

The bankruptcy court held that mandatory arbitration is not appropriate when “a core proceeding is at issue, the policy in favor of centralized determination in the bankruptcy court generally prevails.” TP, Inc.… Read More

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Bankr. E.D.N.C.: McClendon v. Walter Home Mortgage- Usury and Unfair & Deceptive Trade Practices


The McClendons sought to purchase a home built by Jim Walters Homes (JWH) and financed by Walter Mortgage Company (WMC). Both the construction and the financing went through several permutations, with the size of the house, the amount of the loan, and the loan interest rate, increasing several times. Ultimately, the McClendons owned a home they had difficulty affording, faced foreclosure, filed bankruptcy and brought an Adversary Proceeding against WMC, alleging usury and multiple mortgage financing violations and unfair and deceptive acts and practices.

The first issue addressed was that the alleged usurious financing occurred more than two years prior to the instigation of the Adversary Proceeding.… Read More

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Bankr. E.D.N.C.: Moses v. Cashcall, Inc.- Arbitration and Bankruptcy Court Jurisdiction of Counterclaims against Creditor


Chapter 13 Debtor brought an Adversary Proceeding against Cashcall, seeking a declaratory judgment that the debt owed to Cashcall (resulting from a $1,500.00 payday loan) was in violation of the North Carolina Consumer Finance Act, N.C. Gen. Stat. §§ 53-164 to -191 (2012) and alleging that Cashcall engaged in acts that qualify as Prohibited Acts by Debt Collectors under N.C. Gen. Stat. § 75-50 to -56 (2012) in attempts to collect on the debt, seeking actual and statutory damages.

Cashcall sought dismissal of the Adversary Proceeding on the basis that it was a non-core matter or, alternatively, that it be sent for arbitration.… Read More

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Bankr. E.D.N.C.: Etheridge Oil Co. V. Brown, et al.- Discharge Action Moot following Dismissal; Termination of Bank Draft as Breach of Contract; Liability of Corporate Officeres


A tangle of multiple cases- Thomas Brown, Michael Barns , W. Watson Barns and David Woodard were directors of Brown Oil. Brown filed Chapter 11 on August 3, 2007, but that case was dismissed on November 30, 2011. An involuntary Chapter 7 was filed for Brown Oil on October 19, 2010. Michael Barnes filed Chapter 13 on July 19, 2011.

Etheridge Oil brought an adversary proceeding against Brown seeking to have his debt declared nondischargable pursuant to 11 U.S.C. § 523(a)(2) and (a)(6). The bankruptcy court found that the dischargeability complaint was moot in the Chapter 11 case, as it had been dismissed.… Read More

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