Pub. 9 2018 Issue 2

Summer 2018 25 West Virginia Banker Tai C. Shadrick is an associate attorney in Spilman Thomas & Battle’s Charleston, West Virginia office. Her primary area of practice is consumer finance litigation. She can be reached at 304-357-4476 or tshadrick@spilmanlaw.com. Nicholas P. Mooney II is a Member attorney in Spilman Thomas & Battle’s Charleston, West Virginia office. His primary area of practice is consumer financial services litigation in federal and state courts. He has devoted all of his time for the past 17 years to that practice area. He can be reached at 304-340-3860 or nmooney@spilmanlaw.com. bank and the collection agency, arguing that the bank can be liable as aiding and abetting the agency in violating the CAA. W. Va. Code § 50-4-1 If you have ever tried to collect a debt by filing a collection lawsuit in magistrate court, you probably know that there are pre-printed forms available at the clerk's office that allow you to fill in the blank on the amount owed, sign the form, and commence the lawsuit. However, you may not know that there is a statute (W. Va. Code § 50-4-1) that seems to require a collector to include much more in the complaint, including: (1) the amount of the original obligation, (2) the portion thereof which constitutes principal, (3) the portion thereof which rep- resents interest, (4) the date and amount of payments, (5) the amount, if any, credited for the sale of repossessed collateral, and (6) the amount alleged to be due. If a bank files collection lawsuits in magistrate court to collect debt, whether it files those lawsuits itself by having an em- ployee sign the complaint, or it hires a collection lawyer to file those lawsuits, keep in mind the requirements set forth by W. Va. Code § 50-4-1. Collecting Debts After the Statute of Limitations Has Passed The statute of limitations ("SOL") is the time period in which a bank or creditor can file a collection lawsuit to recover a debt that is owed. At the heart of cases alleging violations of the SOL are two questions: What is the limitations period for seeking to collect a debt, and what must a creditor do if that limitations period has passed? West Virginia law has addressed the applicable limitations period for collecting various types of debts. However, con- sumer attorneys are arguing that these limitations periods don't apply. Instead, they argue that a little known statute called the "Borrowing Statute" requires West Virginia courts to use the limitations period of another state. If that period is shorter than West Virginia's, and the bank or other creditor sued after that shorter period expired, the consumers argue that the WVCCPA has been violated. The second issue relates to the actions that a bank or creditor is required to take when the limitations period has expired but it nonetheless seeks to collect the debt. New lawsuits allege a difference in a creditor saying, "we won't sue you" because the debt is past the SOL, and a creditor saying "we can't sue you" since the SOL precludes a lawsuit. Further, these lawsuits allege that the bank or creditor is under a duty to tell the con- sumer that a partial payment on the debt renews the SOL, and the bank or creditor can sue the consumer. Pre-suit Opportunities to Cure Violations In 2017, the WVCCPA was amended to add section § 46A-5- 108, which requires a consumer to send a bank or creditor a letter prior to filing a lawsuit against it. The letter must set forth the alleged violations and give the bank or creditor 45 days to respond and make a cure offer. We have seen pre-suit letters refer to § 46A-5-108 and state that the bank or creditor must respond within 45 days; however, if they relate to a home mortgage, the letters often also say that they are also being submitted as a "Qualified Written Request" under the Real Estate Settlement Procedures Act ("RESPA"). RESPA only gives 30 days to respond and it requires an initial confirmation of receipt of the request within five days. Creditors may miss the 5- and 30-day deadlines in RESPA if they focus only on the 45-day deadline referenced in the letter. Conclusion There is no shortage in the number of ways that people can think to sue a bank or other creditor. These ways change over time as statutes are amended and courts make decisions either approving or disapproving of a particular claim or defense. One of the best ways to address this is to be aware of the types of lawsuits that currently are being filed. If you have any questions about issues or any action that your bank is taking, call or e-mail us.  As a result, there has been an influx of class action lawsuits. Those lawsuits involve rights of class members who aren’t present in the lawsuit, and a court has extra duties to ensure that the class members are treated fairly. This leads to higher defense costs as a result of increased time, motions practice, and other litigation expenses.