Opinion ID: 1375292
Heading Depth: 1
Heading Rank: 4

Heading: Analysis of the Attorney General's Statutory Claim

Text: Applying this standard of review, the complaint and this appeal present several important questions of law. The defendants contend they cannot be sued by the Attorney General under the CCPA because they are not in any way guilty of the specific wrongdoing made actionable by the statute. They contend that a fair reading of the complaint indicates they are not alleged to have committed any wrongdoing with regard to the excess charges imposed by Scott Runyan. Thus, they assert the complaint is insufficient against them as a matter of law. We believe the defendants misconstrue the law in West Virginia, the pertinent statutory provision, and the allegations against them in the complaint. We hold that the complaint clearly states a claim against the defendants upon which relief can be granted and is sufficient to withstand a motion to dismiss made pursuant to Rule 12(b)(6). More specifically, we hold that the Attorney General has authority under the CCPA to proceed against holders of notes obtained by their assignor in violation of the law's provisions pursuant to his authority to commence a civil action against a creditor for making or collecting charges in excess of those permitted by law. W.Va. Code, 46A-7-111(1). This Court previously explained that the Attorney General's powers are limited to those specifically conferred by statute. As we stated in Syllabus Point 2 of State ex rel. Fahlgren Martin, Inc. v. McGraw, 190 W.Va. 306, 438 S.E.2d 338 (1993): `The powers and duties of the Attorney General are specified by the constitution and by the rules of law prescribed pursuant thereto.' Syllabus point 1, Manchin v. Browning, 170 W.Va. 779, 296 S.E.2d 909 (1982). In Manchin, 170 W.Va. at 786, 296 S.E.2d at 916, we followed numerous other jurisdictions that held [t]he Attorney General has no common law powers and duties where the constitutional provision which creates the office makes no specific grant of powers other than requiring him to perform such duties as are `prescribed by law.' (Citations omitted). In Fahlgren Martin, 190 W.Va. at 312, 438 S.E .2d at 344, we reiterated: [T]he reasoning set forth in Manchin remains valid: because the Attorney General has no common law authority, his power is limited to what is conferred by law through statute and the Constitution. Because the Constitution confers only those powers `prescribed by law,' we turn to the statute to see what powers have been granted by the legislature. If possible, a statute should be construed in a way that conforms to the plain meaning of the text. [9] In State ex rel. Frazier v. Meadows, 193 W.Va. 20, 23-24, 454 S.E.2d 65, 68-69 (1994), we stated: We begin, as we must, by examining the statutory language, bearing in mind that we should give effect to the legislative will as expressed in the language of the statute.... Generally, words are given their common usage.... Courts are not free to read into the language what is not there, but rather should apply the statute as written. If the statute `is clear' ...; if `the statutory scheme is coherent and consistent'...; and if the law is within the constitutional authority of the lawmaking body that passed it, then the duty of interpretation does not arise, and the rules for ascertaining uncertain language need no discussion. (Citations omitted). We believe W.Va.Code, 46A-7-111(1), is clear on its face; even if we found there was ambiguity, we would resolve any doubt in this case against the defendants. When a statute's language is ambiguous, a court often must venture into extratextual territory in order to distill an appropriate construction. Absent explicatory legislative history for an ambiguous statute governing the duties of the Attorney General under the CCPA, this Court is obligated to consider the overarching design of the statute. The purpose of the CCPA is to protect consumers from unfair, illegal, and deceptive acts or practices by providing an avenue of relief for consumers who would otherwise have difficulty proving their case under a more traditional cause of action. As suggested by the court in State v. Custom Pools, 150 Vt. 533, 536, 556 A.2d 72, 74 (1988), [i]t must be our primary objective to give meaning and effect to this legislative purpose. Where an act is clearly remedial in nature, we must construe the statute liberally so as to furnish and accomplish all the purposes intended. Kisamore v. Coakley, 190 W.Va. 147, 437 S.E.2d 585 (1993) (per curiam); Hubbard v. SWCC and Pageton Coal Co., 170 W.Va. 572, 295 S.E.2d 659 (1981); Wheeling Dollar Savings & Trust Co. v. Singer, 162 W.Va. 502, 250 S.E .2d 369 (1979). In surveying the terrain occupied by the statute, the threshold question is whether the circuit court correctly interpreted the CCPA insofar as it grants to the Attorney General authority to bring lawsuits against the defendants on behalf of consumers. Under the CCPA, the extent of the Attorney General's special authority to seek relief for consumers is generally set forth in W.Va.Code, 46A-7-108 through -111. W.Va.Code. 46A-7-108 (1974), authorizes the Attorney General to file a civil action to restrain a person from violating this Chapter and for other appropriate relief. W.Va.Code, 46A-7-109 (1974), allows the Attorney General to bring an action to restrain creditors from engaging in specific types of unconscionable or fraudulent conduct, and W.Va.Code, 46A-7-110 (1974), permits the Attorney General to seek temporary relief when there is reasonable cause to believe violations of the CCPA are occurring or will occur. In this case, because the Attorney General did not charge the defendants with any specific, deliberate violations of the CCPA, nor did he make any allegations of ongoing unconscionable or fraudulent conduct requiring temporary injunctive-type relief, the defendants claim that absent specific allegations of conduct which would permit the Attorney General to proceed under W.Va.Code, 46A-7-108, -109, or -110, he is without authority to do so. We disagree. Our analysis boils down to an inquiry of whether the defendants are liable under W.Va.Code, 46A-7-111(1), by virtue of the excess charges the seller imposed upon the consumers. W.Va.Code, 46A-7-111(1), in relevant part, states: After demand, the attorney general may bring a civil action against a creditor for making or collecting charges in excess of those permitted by this chapter. If it is found that an excess charge has been made, the court shall order the respondent to refund to the consumer the amount of the excess charge. If a creditor has made an excess charge in a deliberate violation of or in reckless disregard for this chapter, or if a creditor has refused to refund an excess charge within a reasonable time after demand by the consumer or the attorney general, the court may also order the respondent to pay to the consumer a civil penalty in an amount determined by the court not in excess of the greater of either the amount of the sales finance charge or loan finance charge or ten times the amount of the excess charge.... If the creditor establishes by a preponderance of evidence that a violation is unintentional or the result of a bona fide error, no liability to pay a penalty shall be imposed under this subsection. (Emphasis added). This statute clearly gives the Attorney General the power to act on behalf of a consumer when an excess charge has been imposed. Upon a prevailing action by the Attorney General, the circuit court is explicitly mandated to refund the excess charge to the consumer. The circuit court also has discretion to award a civil penalty if there is a deliberate violation or reckless disregard of the chapter, or if the creditor has refused to refund an excess charge within a reasonable time after demand[.] Significantly, a civil penalty may not be imposed upon a creditor if the creditor demonstrates the excess charge was unintentional or a bona fide error. The defendants appear to base their argument with regard to W.Va.Code, 46A-7-111(1), upon their lack of wrongdoing. However, the law in West Virginia makes the wrongdoing of the defendants irrelevant. In reaching this decision, we are required to move beyond the four corners of the statute's text. In doing so, we find the irrelevancy of the wrongdoing of the defendants has deep roots in precedent and policy. A virtually unbroken skein of our cases are illustrative. In One Valley Bank of Oak Hill, Inc. v. Bolen, 188 W.Va. 687, 425 S.E.2d 829 (1992), a car previously used as a rental car was sold to the purchasers who were unaware of the car's history. On the day the car was purchased, the seller sold the purchasers' credit obligation to One Valley Bank of Oak Hill. Upon learning of the car's history, the purchasers alleged fraud and stopped making payments to the bank. One Valley brought suit against the purchasers, and the purchasers countersued. This Court stated in Syllabus Point 1: When a note is created as a result of a consumer transaction, an assignee of such a note takes the note subject to all claims and defenses, regardless of whether the assignee is a holder in due course. W.Va. Code 46A-2-102 [1990]. [10] Thus, under this analysis, One Valley took the note subject to the claims and defenses the purchasers had as a result of the wrongdoing of the original seller. Similarly, in Chrysler Credit Corp. v. Copley, 189 W.Va. 90, 92, 428 S.E.2d 313, 315 (1993), this Court applied Syllabus Point of 1 of Bolen, and found the purchasers of a defective car could, under the CCPA, assert such defects as a defense to the suit [brought] by Chrysler Credit Corporation as the assignee of the financing documents[.] [11] As explained in Bolen, 188 W.Va. at 690, 425 S.E.2d at 832, the purpose of the Legislature's enactment of the CCPA and stripping assignees of consumer commercial paper of most of the benefits of being holders in due course is to mitigate the harshness of the holder in due course rules on consumers[.] [12] Citing Clendenin Lumber and Supply Co., Inc. v. Carpenter, 172 W.Va. 375, 379-80, 305 S.E.2d 332, 336-37 (1983). In addition, as is relevant to the present case, in Harless v. First National Bank, 162 W.Va. 116, 125, 246 S.E.2d 270, 276 (1978), we also recognized that under Article 7 of the [CCPA], the Attorney General is given broad powers to supervise, investigate and prosecute violations in order to see that compliance with the [CCPA] is maintained. We can discern no basis for rejecting this imposing array of well-reasoned opinions. Thus, under the foregoing cases and W.Va.Code, 46A-7-111(1), the Attorney General clearly has the right to bring a civil action against an assignee to collect a refund of an excess charge imposed upon a consumer regardless of whether the assignee committed any wrongdoing. The issue of wrongdoing only is relevant under W.Va.Code, 46A-7-111(1), when the assignee may be subjected to a civil penalty. [13] If the assignee can establish an unintentional violation or a bona fide error on the part of the wrongdoer, which in this case is the seller, [14] by a preponderance of the evidence, a penalty may not be imposed under this subsection. W.Va. Code, 46A-7-111(1). [15] Our conclusion is buttressed by nothing less than logic and experience, on one hand, and by precedent on the other hand. Logic and experience dictate that if the types of lawsuits which the Attorney General could bring under the CCPA did not include lawsuits against financial institutions such as the defendants, these institutions could, if unsavory, run in effect a laundry for fly-by-night retailers that seek to excessively charge their customers. Consequently, the real meaning of consumer protection would be stripped of its efficacy. [16] Again, logic dictates that the burden of cost of the seller's misconduct in violation of the CCPA may be placed on the financing party to the transaction. Financing parties, more so than consumers, are in a position to police the activities of the seller-retailer and to protect themselves against misconduct. See Custom Pools, 150 Vt. at 536, 556 A.2d at 74, citing George J. Wallace, The Logic of Consumer Credit Reform, 82 Yale L.J. 461 (1973). Indeed, we would be derelict in our duties were we to frustrate that intent ... it is our duty to give effect and meaning to the will of the Legislature. Custom Pools, 150 Vt. at 536, 556 A.2d at 74. In determining that the Attorney General has the authority to litigate excess charges on behalf of a consumer and that the assignee of a consumer note is subject to the claims and defenses a consumer may have against a seller, we recognize that W.Va. Code, 46A-7-111(1), is substantially similar to Section 6.113(1) of the Uniform Consumer Credit Code, 1968 Act. 7 Uniform Laws Annotated, Master Edition 841-42 (1985). [17] The first Comment following Section 6.113 of the Uniform Act states, in part, that Subsection (1) allows the [Attorney General] ... to bring suit for refunds on behalf of all [consumers] who have been overcharged, so long as the statute of limitations specified in the section has not run. As explained in this Comment, the purpose for allowing the Attorney General to take such action is because [i]ndividual excess charges are often very small sums; this section provides a practical way to litigate the question of whether such excess charges have been made. Uniform Laws Annotated at 842. The third Comment to this section further provides that the Attorney General may recover excess charges from an assignee only where the assignee has undertaken direct collection or enforcement. Uniform, Laws Annotated at 843, citing Section 5.202(3). Section 5.202(3) virtually is identical to W.Va.Code, 46A-5-101(3) (1974), which states in full: A consumer is not obligated to pay a charge in excess of that allowed by this chapter, and if he has paid an excess charge he has a right to a refund. A refund may be made by reducing the consumer's obligation by the amount of the excess charge. If the consumer has paid an amount in excess of the lawful obligation under the agreement, the consumer may recover in an action the excess amount from the person who made the excess charge or from an assignee of that person's rights who undertakes direct collection of payments from or enforcement of rights against the consumer arising from the debt. (Emphasis added). See also W.Va.Code, 46A-2-102. Thus, the Uniform Act and W.Va.Code, 46A-5-101(3), and W.Va.Code, 46A-7-111(1), do not rest a consumer's ability to be relieved of the responsibility to pay an excess charge or to receive a refund for an excess charge upon the fault of the assignee. The assignee takes the note subject to all the rights a consumer may have against a seller, and, upon demand, the Attorney General may enforce those rights on behalf of a consumer. There is ample authority from other jurisdictions that have taken a similar approach. Many courts interpret the powers of their State's Attorney General broadly and refuse to restrict the Attorney General's authority to protect the public's interest where the limitations would rob the statute of its purpose. Western, Food Plan, Inc. v. District Court, 198 Colo. 251, 598 P.2d 1038 (1979); State ex rel. Hartigan v. E & E Hauling, Inc., 153 Ill.2d 473, 180 Ill.Dec. 271, 607 N.E.2d 165 (1992); State ex rel. Guste v. Orkin Exterminating Co., Inc., 528 So.2d 198 (La.App.1988); State ex rel. Celebrezze v. Grogan Chrysler-Plymouth, Inc., 73 Ohio App.3d 792, 598 N.E.2d 796 (1991); State v. International Collection Serv., Inc., 156 Vt. 540, 594 A.2d 426 (1991).