Source: http://californiafinance.mwbllp.com/2018/08/
Timestamp: 2020-06-04 06:55:57
Document Index: 323208085

Matched Legal Cases: ['§ 1788', '§ 337', '§ 1788', '§ 1658', '§ 3953', '§ 1658', '§ 1658', '§ 1658', '§ 1658', '§ 1658', '§ 1658', '§ 1658']

California Finance Litigation Blog: August 2018
FYI: CA Imposes SOL Notice Requirement on Debt Collectors; Bans Legal Action on 'Time-Barred' Debt
The California legislature recently passed Assembly Bill 1526, relating to the collection of a debt that is beyond the statute of limitations for bringing legal action.
As you may recall, since 2014, when collecting from California residents, debt buyers have been required by Cal. Civ. Code § 1788.52(d)(2) to provide one of two notices, as applicable, when a debt is "time-barred."
"The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.";
The new law also amends Cal. Civ. Proc. Code § 337, pertaining to the statute of limitations for written contracts and book accounts, by prohibiting the initiation of a legal action on time-barred debt, rather than requiring a consumer to raise it as an affirmative defense. A similar prohibition currently exists for debt buyers under Cal. Civ. Code § 1788.56.
FYI: 9th Cir Holds 4-yr Federal "Catch-All" SOL Applies to SCRA Claims
On an issue of first impression, the U.S. Court of Appeals for the Ninth Circuit recently held the federal catchall statute of limitations of four years under 28 U.S.C. § 1658(a) applies to private suits alleging violations of section 303(c) of the federal Servicemembers Credit Relief Act ("SCRA").
Accordingly, the Ninth Circuit affirmed the dismissal of the plaintiff's complaint as time-barred.
In 2006, the plaintiff ("Plaintiff"), a U.S. Marine, refinanced a mortgage loan on his home in the state of Washington with a loan from the defendant mortgagee ("Mortgagee"). On January 16, 2009, the Mortgagee initiated foreclosure proceedings. Four months later, on May 18, 2009, the Marines recalled Plaintiff to active service in Iraq.
On July 21, 2010, after Plaintiff completed his service in Iraq, the Marines released him from military duty. Following his release, Plaintiff advised the Mortgagee of his military service and requested an opportunity to refinance his loan.
The Mortgagee allegedly ignored his request and proceeded with a foreclosure sale of Plaintiff's home on August 20, 2010.
Almost six years after the sale, Plaintiff filed suit in federal district court against the Mortgagee alleging it violated section 303(c) of the SCRA, which at that time prohibited the "sale, foreclosure, or seizure of property" for a breach of a mortgage obligation if "made during, or within nine months after, the period of the servicemember's military service" unless such sale, foreclosure, or seizure occurred by court order or under waiver by the servicemember of his SCRA rights. 50 U.S.C. § 3953(c).
The Mortgagee moved to dismiss the complaint as time-barred, arguing that the SCRA does not contain a statute of limitations, and therefore the district court should apply the closest state-law analogue to the SCRA, which the Mortgagee argued was the Washington Consumer Protection Act (four-year limitation period), or the Deeds of Trust Act (two-year limitation period).
In response, Plaintiff argued that the court need not look to a state statute, and that the Uniformed Services Employment and Reemployment Rights Act ("USERRA") was the most analogous. The USERRA expressly provides that "there shall be no limit on the period for filing" a claim. Plaintiff argued in the alternative that the court should apply the six-year statute of limitations for breach of contract claims.
In its reply, the Mortgagee argued for the first time that 28 U.S.C. § 1658(a) should apply, which provides a four-year statute of limitations.
The trial court granted the Mortgagee's motion to dismiss, applying the four-year statute of limitations contained in the Washington Consumer Protection Act. The trial court did not comment on the applicability of 28 U.S.C. § 1658(a). The case was then appealed to the Ninth Circuit.
On appeal, Plaintiff argued that the trial court erred and should have applied the limitations period of either the USERRA or breach of contract claim. The Mortgagee's primary argument on appeal was that the SCRA claim was time-barred under the catchall four-year limitations period of 28 U.S.C. § 1658(a).
The Ninth Circuit first noted that "[t]raditionally, when a federal statute creating a right of action did not include a limitations period, courts would apply the limitations period of the 'closest state analogue.'" However, "in 1990, Congress established – in 28 U.S.C. § 1658(a) – a uniform, catchall limitations period for actions arising under federal statutes enacted after December 1, 1990." Section 1658(a) provides a four-year limitation period.
Notably, a cause of action "'aris[es] under an Act of Congress enacted after' 1990 within the meaning of § 1658(a) if the 'plaintiff's claim against the defendant was made possible by a post-1990 enactment.'" Further, "[s]uch enactments include amendments to preexisting statutes that create 'new rights of action and corresponding liabilities.'"
The Mortgagee argued that because no private right of action for section 303(c) violations existed until 2010 when the SCRA was amended to add an express private right of action, section 1658(a) applied.
The Ninth Circuit agreed, stating that "[t]he applicability of § 1658(a) turns on whether the 2010 amendment to the SCRA created a 'new right[] of action and corresponding liabilities' that were not available to servicemembers before 1990.'"
It was undisputed that neither the SCRA nor its predecessors (which dated back to 1918) contained an express private right of action until Congress, in the Veterans' Benefits Act of 2010, added a section to the SCRA providing that servicemembers whose SCRA rights are violated may "obtain any appropriate equitable or declaratory relief . . . [and] recover all other appropriate relief, including monetary damages."
However, Plaintiff argued that despite lack of an express right of action prior to 2010, servicemembers had an implied private right of action under the predecessor to the SCRA before 1990.
The Ninth Circuit disagreed, noting that "[n]o federal appeals court, including this Court, has ever held that these acts created a private right of action before 2010, and several district courts in this circuit and elsewhere that addressed this question have come to difference conclusions about the various sections of the SCRA."
Accordingly, the Ninth Circuit held that Plaintiff's "complaint arises under an Act of Congress enacted after 1990 and is thus governed – and barred – by the four-year limitations period in 28 U.S.C. § 1658(a)."
FYI: CA Imposes SOL Notice Requirement on Debt Col...