Opinion ID: 2642181
Heading Depth: 1
Heading Rank: 2

Heading: A.3., infra.

Text: 4 further violations thereof, the Attorney General issued the subject investigative subpoena on January 25, 2010. Although all four Petitioners were referenced within the body of the investigative subpoena, only “CAVALRY SPV I, LLC and CAVALRY SPV II, LLC” were named in the style of the subpoena and in the accompanying letter detailing the “Investigation of Cavalry SPV I and II.”7 The Petitioners filed numerous objections in response to the Attorney General’s investigative subpoena. At this juncture, the parties differ as to whether the named Petitioners provided information requested by the investigative subpoena; however, it is clear that any such compliance did not respond completely to the subpoena’s demands. Thereafter, on June 3, 2010, the Attorney General filed a civil action in the Circuit Court of Kanawha County against all four Petitioners (1) seeking an order compelling the named Petitioners to comply with the investigative subpoena and (2) alleging violations of the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-1-101 et seq. See generally W. Va. Code § 46A-7-108 (1974) (Repl. Vol. 2006) (authorizing Attorney General to bring action to enjoin violations of chapter); W. Va. Code § 46A-7-111 (1999) (Repl. Vol. 2006) (permitting Attorney General to bring civil actions against creditors). As to the alleged statutory violations, the Attorney General also sought temporary relief pursuant to W. Va. Code § 46A-7-110 (1974) (Repl. Vol. 2006) to enjoin the Petitioners from 7 See infra notes 8 & 10. 5 continuing their alleged misconduct during the pendency of the enforcement proceedings. The Petitioners moved to dismiss the Attorney General’s complaint. By order entered October 7, 2011, which order forms the basis of Case Number 11-1564 in this Court, the circuit court denied the Petitioners’ motion to dismiss the complaint and granted the Attorney General’s request for temporary relief. In pertinent part, the court ruled: The Attorney General’s motion for temporary injunction against the LLC Defendants should be, and it hereby is, GRANTED against SPV I, SPV II, and Calvary [sic] Investments, but not CPS.[8] The Defendants SPV I, SPV II, and Calvary [sic] Investments should be, and they hereby are, ENJOINED from engaging in any actions to collect debts acquired prior to the date that they became licensed, including but not limited to, (i) collecting or continuing to collect payments arising from oral or written agreements; (ii) prosecuting or continuing to prosecute pending collection suits; (iii) collecting or continuing to collect payments arising from judgments already entered in lawsuits; and (iv) placing or continuing to place liens or attachments on personal or real property, including garnishment of wages, arising from judgments already entered in lawsuits. In addition, SPV I, SPV II, and Calvary [sic] Investments are hereby ORDERED to release all garnishments of wages and liens or 8 The circuit court found that three of the Petitioners did not become licensed and bonded with the West Virginia State Tax Department to collect debts until after the Attorney General had filed his complaint against them: SPV I (October 13, 2010), SPV II (October 12, 2010), and CI (October 7, 2010). By contrast, the court found that “CPS was licensed and bonded with the State Tax Department to collect debts at all relevant times in question.” 6 attachments filed against real or personal property prior to the time that they became licensed to collect debts in West Virginia. Notwithstanding all of the foregoing, SPV I, SPV II, and Calvary [sic] Investments may receive or continue to receive payments made voluntarily by consumers to them without solicitation or effort on their part. Provided, however, all such money received shall be placed in an escrow account and the LLC Defendants shall make appropriate periodic reports accounting for such funds to the Attorney General. The Attorney General’s request for an Order compelling the LLC Defendants to comply with his investigative subpoena should be, and it hereby is, GRANTED. (Footnote added). Finally, the order directed the Petitioners to send a letter to all affected consumers informing them of the existence of this Order so that they may decide whether to voluntarily continue to make payments to these entities as a result of any judgments, settlement agreements, or other collection activities initiated prior to the time that they became licensed to collect debts in West Virginia. From this order, the Petitioners appeal to this Court in Case Number 11-1564. Following the circuit court’s order restraining the Petitioners’ debt collection activities through its imposition of a temporary injunction, the Petitioners moved to dissolve or otherwise modify the terms of the temporary injunction. By order entered March 20, 2012, which order forms the basis of Case Number 12-0546 in this Court, the circuit court denied the Petitioners’ motion to dissolve or modify the temporary injunction. In rendering its ruling, the circuit court also declared final that portion of its earlier order compelling the 7 Petitioners to comply with the Attorney General’s investigative subpoena so as to permit the Petitioners to file an appeal therefrom. The court further clarified the language to be included in the aforementioned letter to affected consumers. In addition, the circuit court denied the Attorney General’s request to stay discovery pending the Petitioners’ compliance with the investigative subpoena thereby allowing discovery to proceed in the underlying civil action. Finally, with regard to the Petitioners’ subpoena compliance, the court recognized that, [i]nasmuch as the parties have advised the Court that they may have reached a tentative agreement to resolve their dispute concerning compliance with the subpoena, the parties’ respective motions pertaining to compliance with the subpoena will be held in abeyance to afford the parties an opportunity to finalize and perform the Agreement or to request further assistance from the Court. From this order, the Petitioners appeal to this Court in Case Number 12-0546.9 9 After the circuit court rendered these rulings, it appears that the Attorney General has continued to seek the Petitioners’ compliance with the terms of the investigative subpoena. In this regard, the Attorney General has filed a “Petition for Contempt” against the Petitioners on May 30, 2012, and an “Amended Petition for Contempt” against the Petitioners on July 5, 2012. Insofar as no corresponding orders of the circuit court holding the Petitioners in contempt, or failing to hold the Petitioners in contempt, for their alleged failure to comply with the Attorney General’s investigative subpoena have been appealed from herein, we need not consider these continuing proceedings in deciding the cases sub judice. 8