Source: https://www.hinshawlaw.com/newsroom-newsletters-93.html
Timestamp: 2019-04-19 19:24:44+00:00

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The Broward County (Florida) court recently held that the Federal National Housing Act (Act), 12 U.S.C. §1701(x)(c)(5) was not a valid defense to a foreclosure action. Defendant borrowers alleged violations of the Act as affirmative defenses to a foreclosure action. The Act provides that certain classes of homeowners shall be eligible for homeownership and pre-foreclosure counseling. The court, having reviewed the statutory language contained in the Act, agreed with plaintiff bank that compliance with the Act is not a condition precedent to a foreclosure action. The court found that the regulations promulgated under the Act deal only with relations between mortgagee and the government and give mortgagors no claim to a private right of action. Accordingly, the court granted the bank’s motion for partial summary judgment as to all affirmative defenses related to the Act.
Deutsche Bank National Trust Company v. Mario A. Lavette and Althea M. Lavette, Case No. 09-013453, Division 08 (Fla. 17th Cir., Broward County, Oct. 12, 2010).
For further information, please contact Glenn S. Banner or your regular Hinshaw attorney.
Plaintiff debtor filed a class action lawsuit, alleging that defendant creditor violated the Fair Debt Collection Practices Act (FDCPA) by filing an inflated proof of claim in the debtor’s bankruptcy case. The creditor moved to dismiss, arguing that, as a matter of law, an inflated proof of claim in a bankruptcy proceeding cannot be brought under the FDCPA. The district court agreed and dismissed the case. The U.S. Court of Appeals for the Second Circuit agreed, holding that “[t]he FDCPA is designed to protect defenseless debtors and give them remedies against abuse by creditors. There is no need to protect debtors who are already under the protection of the bankruptcy court, and there is no need to supplement the remedies afforded by the bankruptcy itself.” The Second Circuit has now articulated a point made by several district courts — that an inflated proof of claim in a bankruptcy proceeding cannot be the basis for an FDCPA claim.
Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2nd Cir. 2010).
For more information, please contact John P. Ryan or your regular Hinshaw attorney.
Plaintiff placed in her credit report a “fraud alert” message which stated that she was the victim of identity theft and that potential creditors should verify her identity by calling her cell phone number before establishing credit using her personal information. After a third party tried to open a satellite television account with DirecTV using plaintiff’s Social Security number, DirecTV received plaintiff’s fraud alert message and cell phone number from a credit bureau. Plaintiff did not have any relationship with DirecTV. DirecTV’s contractor, iQor, used a predictive dialer to call plaintiff’s cell phone and play a prerecorded message asking her to confirm whether she had opened a DirecTV account. Plaintiff then filed a class action lawsuit, alleging that iQor and DirecTV violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227(b)(1)(A)(iii), by using a prerecorded message to call her cell phone number, without her consent. Plaintiff sought statutory damages on behalf of herself and the class for each offending call. She also sought an injunction prohibiting defendants from committing further violations of the TCPA.
This case shows that a called party may give consent under the TCPA by knowingly releasing his or her number to the caller through an intermediary even where there is no direct relationship between the caller and called party. Absent a direct relationship, the caller must still demonstrate that the called party expressly consented to receiving the call in order to avoid liability under the TCPA.
Greene v. iQor Holdings US Inc., et al., No. 10-cv-117, 2010 U.S. Dist. LEXIS 118270 (N.D. Ill. Nov. 8, 2010).
For further information, please contact Peter E. Pederson or your regular Hinshaw attorney.
Plaintiff buyer, a Tennessee resident, brought a suit in Illinois state court seeking damages in connection with his purchase of a Kenmore-brand dryer from Sears. The buyer alleged that the advertising that defendant seller used to market the product was deceptive in that the dryer was advertised as “stainless steel,” when in fact part of the machine was made of mild steel. He claimed that as a result of the allegedly misleading advertising, his clothes were damaged by rust. The suit was brought on the buyer’s behalf and approximately 500,000 other purchasers from around the country. It was removed to federal district court, at which time the class was certified.
Steven Thorogood v. Sears, Roebuck and Company, No. 10-2407, --F.3d --, 2010 WL 4286367 (7th Cir. 2010).
For further information, please contact Jennifer W. Weller, or your regular Hinshaw attorney.

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