Source: http://bencarterlaw.com/blog/kentucky-consumer-law-outline
Timestamp: 2019-04-24 04:29:32+00:00

Document:
Tomorrow, I have the opportunity to talk for an hour about consumer law at the Kentucky Bar Association's New Lawyers Program. In anticipation of the presentation (and so I didn't have to fill my slides with text), I prepared a non-comprehensive outline about many of the common law causes of action, state laws, and federal statues that constitute "Consumer Law".
Below is the outline with some hyperlinks, but because the formatting will never be right in this post, here is a .pdf of the Kentucky Consumer Law Outline. Use it instead. In case you thought it might be, I need to say that this consumer law outline is absolutely not legal advice, dummy.
And, yes, the presentation will have a Lebowski theme.
I do mind, man. The dude minds. This aggression will not stand, man.
• 1.1.2 “The Kentucky legislature created a statute which has the broadest application in order to give Kentucky consumers the broatest possible protection for allegedly illegal acts. In addition, KRS 446.080 requires the statutes of this Commonwealth are to be liberally construed.” Stevens v. Motorist Mutual Ins. Co., Ky. S.W. 2d 819 (1988).
▾ 1.2 Who is protected?
• 1.3.3.2 Summary: Buyers of “as is” mobile home can still maintain causes of action for fraudulent misrepresentation and KCPA. Elendt v. Green Tree Servicing, LLC (Ky.App. 2014) 443 S.W.3d 612.
• 1.3.4.1 A federal court has interpreted case law and the KCPA to determine that the sale of credit, so long as it was purchased for personal use, is covered by KCPA. Stafford v. Cross Co. Bank, 262 F. Supp. 2d 776, 792-3 (W.D.Ky. 2003).
▾ 1.4 What are they protected from?
• 1.4.1.1 KRS 367.170: (1) Unfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
(2) For the purposes of this section, unfair shall be construed to mean unconscionable.
• 1.4.1.2 “The terms ‘false, misleading and deceptive’ has sufficient meaning to be understood by a reasonably prudent person of common intelligence. Therefore, when the evidence creates an issue of fact, that any particular action is unfair, false, misleading or deceptive it is to be decided by a jury.” Stevens v. Motorist Mutual Ins. Co., 759 S.W.2d 819, 820 (Ky. 1988).
▾ 1.5 What are they not protected from?
• 1.5.1.1 “While there can be no doubt Gamble was initially buried in the wrong plot in contravention of the burial contract, ‘[n]ot every failure to perform a contract is sufficient to trigger application of the Consumer Protection Act. The statute requires some evidence of “unfair, false, misleading or deceptive acts” and does not apply to simple incompetent performance of contractual duties unless some element of intentional or grossly negligent conduct is also present.’” Keaton v. G.C. Williams Funeral Home, Inc., 436 S.W.3d 538, 546 (Ky. Ct. App. 2013) quoting Capitol Cadillac Olds, Inc. v. Roberts, 813 S.W.2d 287, 291 (Ky.1991).
• 1.5.2.1 A mere breach of promise does not constitute an unfair, false, misleading or deceptive act. The facts in Miles v. Shauntee indicate that the landlord made assurances of repair which were never significantly honored or fulfilled. This Court cannot hold as a matter of law that such assurances constitute unfair, false, misleading or deceptive acts declared unlawful under the Consumer Protection Act. Miles v. Shauntee, 664 S.W.2d 512, 519 (Ky. 1983).
▾ 1.5.2.2 But, breach of promise to do something in the future is actionable when there is no present intent to perform that future act.
PCR Contractors, Inc. v. Daniel, 354 S.W.3d 610, 614 (Ky. App. 2011) quoting Bear, Inc. v. Smith, 303 S.W.3d 137, 142, 614 (Ky. App. 2010).
▾ 1.6.1.2.1 No case that says damages for mental and emotional suffering are available under KCPA. No Kentucky case says they’re not.
• 1.6.3.1 KRS 367.220(1): Nothing in this subsection shall be construed to limit a person’s right to seek punitive damages where appropriate.
▾ 1.6.3.2 Because actual damages will likely be relatively small, punitive damages in consumer cases can be larger than punitive damages in other kinds of cases.
3) a comparison of penalties that could be imposed for similar conduct in similar analogous cases.
▾ 1.6.4 Attorney’s fees should be included in the damages awarded when determining the reasonableness of the ratio between actual harm and punitive damages.
• 1.6.4.1 In Willow Inn, Inc. v. Public Service Mut. Ins. Co., the Third Circuit Court of Appeals included the attorney’s fees into the ratio calculus of an insurance bad faith case (called a Section 8371 action in Pennsylvania). It explained, “Section 8371's attorney fees and costs provisions vindicate the statute's policy by enabling plaintiffs such as Willow Inn to bring § 8371 actions alleging bad faith delays to secure counsel on a contingency fee. Moreover, “one function of punitive-damages awards is to relieve the pressures on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes,” Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672, 676 (7th Cir.2003), and the structure of § 8371 enlists counsel to perform a filtering function akin to prosecutorial discretion, because rational attorneys will refuse to work on a contingent fee arrangement when their investigation reveals the bad faith allegations of prospective clients to be meritless.” Willow Inn, Inc. v. Pub. Serv. Mut. Ins. Co., 399 F.3d 224, 236 (3d Cir. 2005).
• 1.6.4.2 The Third Circuit noted that its decision to include attorney’s fees in the ratio analysis “is supported in the case law” and explained that a recent Pennsylvania state court decision also included the attorney’s fees incurred in a bad faith claim in the ratio analysis. This position has also been adopted by the 11th Circuit in Action Marine, Inc. v. Cont’l Carbon Inc., 481 F.3d 1302 (11th Cir. 2007) and Illinois state courts in Kirkpatrick v. Strosberg, 894 N.E.2d 781 (Ill. App. Ct. 2008).
• 1.6.5.1 KRS 367.220(3) In any action brought by a person under this section, the court may award, to the prevailing party, in addition to the relief provided in this section, reasonable attorney's fees and costs.
• 1.6.5.3.2 You must keep your time contemporaneously. I suggest using a time-tracking service like Harvest (https://www.getharvest.com/) to capture and track time.
• 2.1.1 Kentucky’s “Lemon Law” is intended to accomplish three goals: (1) To protect consumers who buy or lease new motor vehicles that do not conform to applicable warranties by holding manufacturers accountable for certain nonconformities; (2) To limit the number of attempts and the amount of times that a manufacturer or its agents shall have to cure such nonconformities; and (3) To require manufacturers to provide, in as expeditious a manner as possible, a refund, not to exceed the amount in KRS 367.842, or replacement vehicle that is acceptable to the aggrieved consumer when the manufacturer or its agents fail to cure any nonconformity within the specified limits.
• 2.1.2 Note: the Magnuson-Moss Warranty Act (15 USC § 2301, et seq.) may also offer remedies for breach of warranty issues arising from the sale of a new vehicle.
• 2.2.1 Kentucky’s Lemon Law applies to new motor vehicles and not to: (a) Any vehicle substantially altered after its initial sale from a dealer to an individual; (b) Motor homes; (c) Motorcycles; (d) Mopeds; (e) Farm tractors and other machines used in the production, harvesting, and care of farm products; or (f) Vehicles which have more than two (2) axles.
▾ 2.3.1 KRS 367.842 outlines the process and rights of consumers afflicted with a “lemon”.
▾ 2.3.1.1 Consumers must give the manufacturer a “reasonable number” of attempts to repair any nonconformity.
• 2.3.1.1.1 A presumption that the consumer has given the manufacturer a reasonable opportunity to repair the vehicle if he or she has a) returned the vehicle for repair of the same nonconformity 4 times or b) lost use of the vehicle for the nonconformity for more than 30 days.
• 2.3.1.2 The nonconformity must “sustantially impact” the “use, value, or safety” of the motor vehicle”.
• 2.3.1.3 The consumer must report the failure to repair the nonconformity in writing to the manufacturer in the first 12 months or 12,000 miles of use, whichever comes sooner.
▾ 2.3.3.1 The consumer can choose between replacement of the vehicle or refunding the money he or she paid for the vehicle.
• 2.3.3.1.1 Under KRS 367.842(2), “the manufacturer, at the option of the buyer, shall replace the motor vehicle with a comparable motor vehicle, or accept return of the vehicle from the buyer and refund to the buyer the full purchase price. The full purchase price shall include the amount paid for the motor vehicle, finance charge, all sales tax, license fee, registration fee, and any similar governmental charges plus all collateral charges, less a reasonable allowance for the buyer's use of the vehicle.
• 3.1 There is an entire book published by the National Consumer Law Center on protecting consumers from repossession, prosecuting wrongful repossession, and helping consumers recover from repossessions.
▾ 3.2 Reposssessions in Ketucky are governed by KRS 355.9-601, et seq.
• 3.2.2 The repossessing business can resell the collateral but only after providing notice to the consumer KRS 355.9-610 and 9-611.
• 3.2.3 Remedies for violations of UCC’s repossession provisions are located at KRS 355.9-625.
• 4.1.1.2 On loans greater than $15,000, the parties can contract for whatever interest rate they want.
• 4.1.2.1 The taking, receiving, reserving, or charging a rate of interest greater than is allowed by KRS 360.010, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the creditors taking or receiving the same: provided, that such action is commenced within two (2) years from the time the usurious transaction occurred.
• 4.1.3 Often, businesses effectively charge interest greater than the legal or contractual rate by padding the deal with additional charges and fees. You must acquaint yourself with the case law on these statutes to determine whether certain charges are “interest” and therefore usurious.
• 5.1.4 Again, the National Consumer Law Center publishes an entire book on this subject and some practitioners focus exclusively on prosecuting these claims.
▾ 5.1.7 This area of law is extremely rewarding and challenging. Abuse is rampant and the issues that arise are novel and nuanced.
• 5.1.7.1 Conway v. Portfolio Recovery Associates, LLC, 13 F.Supp.3d 711 held that a person stated a cause of action for FDCPA violations when a debt collector that received payments in Virginia sued on the debt in Kentucky. Conway’s attorney argued that the debt collector violated the FDCPA because it sued beyond the statute of limitations of the debt and the Court held that the SOL that applied was Virginia’s (3 years), not Kentucky’s (5 or 15 years).
▾ 5.2 Fair Credit Reporting Act (FCRA) 15 USC § 1681 et seq.
• 5.2.1 Provides a mechanism for consumers to dispute inaccurate information on their credit reports and imposes penalties on credit reporting agencies and furnishers of credit information for failure to correct inaccuracies.
▾ 5.3 Truth in Lending Act (TILA) 15 USC ch 41 § 1601 et seq.
• 5.5.1 The Telephone Consumer Protection Act prohibits obnoxious and costly use of telephones. It limits the circumstances under which businesses can contact consumers and places meaningful restrictions on telemarketers and the use of automated dialing systems (“autodialers” or “robodialers”), text messages, voice recordings, and fax machines.
• 6.1.1 KRS 383.500 requires local governments to adopt URLTA in its entirety and without amendment. As of 2009, the following jurisditions had adopted URLTA’s provisions: Barbourville, Bellevue, Bromley, Covington, Dayton, Florence, Lexington-Fayette County, Georgetown, Louisville-Jefferson County, Ludlow, Melbourne, Newport, Oldham County, Pulaski County, Shelbyville, Silver Grove, Southgate, Taylor Mill and Woodlaw.
• 6.1.2.1 KRS 383.520: (1) The remedies provided by KRS 383.505 to 383.715 shall be so administered that an aggrieved party may recover appropriate damages. The aggrieved party has a duty to mitigate damages. (2) Any right or obligation declared by KRS 383.505 to 383.715 is enforceable by action unless the provision declaring it specifies a different and limited effect.
• 6.1.2.2 No decision on whether attorney’s fees are “appropriate damages” under URLTA.
▾ 6.2 Equitable Estoppel: Fluke Corporation v. LeMaster, 306 SW 3d 55 (Ky. 2010).
The essential elements of equitable estoppel are[:] (1) conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; and (3) knowledge, actual or constructive, of the real facts. And, broadly speaking, as related to the party claiming the estoppel, the essential elements are (1) lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance, in good faith, upon the conduct or statements of the party to be estopped; and (3) action or inaction based thereon of such a character as to change the position or status of the party claiming the estoppel, to his injury, detriment, or prejudice.
• 6.3.1 In certain circumstances, unscrupulous businesses’ actions will rise to the level of Intentional Infliction of Emotional Distress.
• 6.4.1 Of course, in many cases, not only will you have KCPA violations and tortious activity, you will also have breach of contract claims.
• 6.5.1 Kentucky’s Unfair Claims Settlement Practices Act (KRS 304.12-230) supplements common law “bad faith” administration of insurance claims.
• 6.5.2 It prohibits specific activities that are unfortunately common during the process of making a claim for coverage including, but not limited to, “failing to acknowledge and act reasonably promptly upon communications”, failing to investigate claims, “failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed”, and “not attempting in good faith to effectuate prompt, fair, equitable settlements of claims in which liability has become reasonably clear.” Reading the entire statute and surrounding jurisprudence is, of course, necessary.
• 6.6.3.1 This subset of “fraud” is a common cause of action in consumer law practice.

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