Opinion ID: 2681043
Heading Depth: 2
Heading Rank: 3

Heading: Ms. Patton Finances the Purchase of a New Car

Text: The complaint, including attachments, that initiated this case in the Circuit Court alleged the following facts: In 2005, Appellant Carolyn Delorise Patton purchased a new Chevrolet Malibu from Fox Chevrolet, Inc. (“Fox Chevrolet”), a car dealership located in Maryland. Ms. Patton entered into a retail installment sales contract with Fox Chevrolet to finance the purchase. The contract was set forth on a standard form that contained the terms of the contract and blanks for the names of the parties and various monetary amounts specific to the transaction. Under that contract, Ms. Patton agreed to make monthly payments, covering principal in the amount of $22,095.74 and interest in the amount of $14,098.66 (calculated at a rate of 17.9%), over a six-year period. In addition, Ms. Patton gave Fox Chevrolet a security interest in the car to secure payment of the amount owed. The contract also recited various consequences if Ms. Patton failed to make the scheduled payments, including repossession of the car by the lender, acceleration of the obligation to pay the principal, and assessment of collection costs. 5 In a section entitled “Applicable Law,” the contract form stated that “Federal law and Maryland law and specifically Subtitle 10 of Title 12 of the Commercial Article of the Maryland Code apply to this Contract.” As noted above, subtitle 10 of Title 12 of the Commercial Law Article is the formal designation of CLEC. The bottom of the contract form contained a space for assignment of the contract by the seller. The form also contained a notice in boldface print that stated that “Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder.” 6 After the sale of the car to Ms. Patton, Fox Chevrolet assigned the loan contract to Appellee Wells Fargo Financial Maryland, Inc. (“Wells Fargo Financial”). D. Ms. Patton Fails to Make Payments; Repossession and Sale of the Car In 2007, Ms. Patton stopped making the monthly payments required by the contract. In November 2007, Wells Fargo Financial repossessed the car. It immediately notified her of the repossession and of the date that the car would be sold at a private sale if she did not 6 The contract form further explained that this notice “applies only if the ‘personal, family, or household’ box in the ‘Primary Use for Which Purchase’ section of this contract is checked. In all other cases, Buyer will not assert against any subsequent holder or assignee of this contract any claims or defenses the Buyer (debtor) may have against the Seller, or against the manufacturer of the vehicle or equipment obtained under this contract.” The “personal, family or household” box on Ms. Patton’s contract form is checked. 6 make the payments necessary to redeem it. Ms. Patton did not make the required payment and Wells Fargo Financial proceeded with the sale. In January 2008, it informed Ms. Patton of the sale and also noted that she still owed a deficiency of $13,227.28. E. Ms. Patton’s Lawsuit On March 5, 2010, more than two years after she had been notified that Wells Fargo Financial had sold the car at a private sale, Ms. Patton sued Wells Fargo Financial7 in the Circuit Court for Anne Arundel County, alleging various violations of CLEC in connection with the repossession and sale of the car.8 Her complaint had seven counts:9 The first three counts alleged specific violations of CLEC – in particular, of CL §121021 – in the repossession and sale of the car. The first count alleged that, after Wells Fargo Financial repossessed the car, it did not provide her with a written notice stating “the rights of the consumer borrower to redeem the vehicle, and the amount payable by it; the rights of the consumer borrower as to a resale, and his liability for a deficiency; and the exact location where the vehicle is stored and the address where any payment is to be made,” as required 7 Ms. Patton initially named Wells Fargo Bank, N.A. as the defendant. She later amended the complaint to replace “Wells Fargo Bank, N.A.” with “Wells Fargo Financial Maryland, Inc.” 8 Ms. Patton sought to prosecute her complaint as a class action pursuant to Maryland Rule 2-231 and requested that a class be certified. That issue is not before the Court. 9 Some of the counts of the complaint were mislabeled – i.e., there was no count labeled “IV” and there were two counts labeled “VII.” For ease of reference, we refer to the counts by their sequential order rather than by their label. 7 by CL §12-1021(e), and instead only sent a notice stating the location where the car was being stored. The second count alleged that Wells Fargo Financial had violated CLEC by charging Ms. Patton for the cost of repossessing her car because it had not provided her with an advance notice of the repossession, contrary to CL §12-1021(c) & (h)(3). The third count alleged that Wells Fargo Financial had failed to provide Ms. Patton with a “full accounting” after it disposed of her vehicle at a private sale, including “the purchaser’s name, address, and business address; the number of bids received; and any statement as to the condition of the vehicle at the time of repossession,” in violation of CL §12-1021(j)(2). The fourth count alleged that the provisions of CLEC had “become a part of the [loan] contract just as if the parties expressly included the CLEC provisions in their credit contracts” and that, as a result of the violations of CLEC identified in the first three counts, Wells Fargo Financial was liable for breach of contract. The fifth count was brought under the Declaratory Judgments Act10 and sought a declaration that Wells Fargo Financial was precluded from seeking a deficiency judgment against Ms. Patton as a result of the alleged CLEC violations. 10 Maryland Code, Courts & Judicial Proceedings Article, §3-401 et seq. 8 The sixth count asserted that Wells Fargo Financial had been unjustly enriched as a result of its CLEC violations and sought restitution of any funds paid toward the deficiency balance, interest, fees, and other costs claimed by Wells Fargo Financial. The seventh count alleged that Wells Fargo Financial’s failure to comply with CLEC and its assertion that Ms. Patton owed a deficiency balance constituted unfair and deceptive trade practices, in violation of the Consumer Protection Act.11 F. Dismissal of Complaint and Appeal Wells Fargo Financial moved to dismiss Ms. Patton’s complaint. After a hearing on the motion, the Circuit Court entered an order dated October 8, 2010, dismissing all counts of the complaint. The court dismissed four counts – the first three counts alleging violations of CLEC and the fourth count alleging breach of contract – with prejudice, but gave Ms. Patton leave to amend the three remaining counts of the complaint. Although the court did not issue a written opinion, it appears that the court agreed with Wells Fargo Financial that the CLEC claims were untimely and that Ms. Patton’s complaint did not state a cause of action for breach of contract. Ms. Patton filed a notice of appeal. The Court of Special Appeals dismissed Ms. Patton’s appeal without prejudice, on the ground that Circuit Court’s judgment was not a final, appealable order. Wells Fargo Financial then moved in the Circuit Court for dismissal of the remaining counts of the complaint with prejudice, on the ground that Ms. Patton had 11 Maryland Code, Commercial Law Article, §13-101 et seq. 9 failed to amend those claims within the requisite period of time – a motion that Ms. Patton did not oppose so that a final judgment could be entered. The Circuit Court complied on March 30, 2012, and Ms. Patton refiled her notice of appeal. On December 14, 2012, prior to a hearing or decision by the Court of Special Appeals, we issued a writ of certiorari on our own initiative.