DEBT ADJUSTERS ACT
Fithian v. Accredited Financial, Inc., Knox Cty. Case No. 10 OT 06-352, PIF 2928
Defendants were in the business of offering consumers debt counseling and debt adjusting services. The Court found that Defendants violated the CSPA by: 1) misrepresenting their success rate and the results of their program prior to Plaintiff signing the contract, 2) falsely promising to provide Plaintiff with third-party legal assistance and failing to provide that assistance when Plaintiff was sued by a creditor in Defendants' program, 3) charging illegal fees pursuant to R.C. 4710.02(B), and 4) knowing at the time the transaction with Plaintiff was entered into that Plaintiff would not receive a substantial benefit from the transaction. The Court found that Plaintiff had suffered damages of $4,237.38, which it trebled to $12,712.14. In addition, the Court found that Plaintiff was entitled to punitive damages due to Defendants' reckless, wanton, willful and gross conduct, and awarded $42,373.80 in punitive damages. The Court found that Plaintiff was entitled to attorney fees and awarded $1,449.00.
Ferron v. Video Professor, Inc., S.D. Ohio Case No. 10-CV-343, PIF 2927
Plaintiff brought suit based upon commercials and infomercials offering Defendants' goods and services which offered a "free" computer learning tutorial. Plaintiff alleged that the commercials and infomercials violated the CSPA by representing that the tutorials were free when, in fact, they were not. Plaintiff alleged that each commercial violated the CSPA in numerous ways, that he had viewed nine advertisements a total of 504 times, and was entitled to $200 in statutory damages for each violation in each viewing. The Court found that where multiple violations arise from the same act or if the violations are so similar that only one violation can be found, then a consumer is limited to one recovery per act. The Court also found that Plaintiff would be entitled to damages for only one viewing of each of the nine advertisements; that allowing recovery for each of the 504 viewings would amount to a personal windfall for the Plaintiff which would be inconsistent with the purposes of the CSPA. The Court found that, as Plaintiff could potentially recover only $1,800 in damages, Plaintiff failed to meet the requirement for federal diversity jurisdiction and dismissed.
In re Home Service USA Corp., AVC No. 405874, PIF 2937
Suppliers offer service contracts that support customer water service lines and sewer septic lines. Suppliers mailed numerous solicitations to Ohio consumers that contained unfair or deceptive representations. Suppliers agree to: 1) refrain from using unfair, deceptive, and/or misleading advertisements, 2) refrain from representing that the subject of a consumer transaction has sponsorship, approval, performance characteristics, accessories, uses, or benefits that it does not have, and 3) refrain from representing that the supplier has a sponsorship, approval, or affiliation that the supplier does not have. Suppliers agree to send a mailing to Ohio consumers who received one of the previous mailings and contracted with Suppliers which clarifies that the water line service coverage is a voluntary service which is not required by the consumers' water utility company. Suppliers to pay $15,000.00 for attorney fees and costs ($5,000.00 suspended).
Anderson Law Office, LLC v. Esquire Deposition Services, LLC., N.D. Ohio Case No. 09-CV-1909, PIF 2938
Plaintiffs contracted with Defendant for court reporting services. Plaintiffs believed that Defendant would charge a flat fee for attending proceedings and would charge a per page fee for transcribing the testimony. Plaintiffs allege that the per page fee in the contract did not apply to the word index, but Defendant charged the same per page rate for the index as for the transcribed pages. Plaintiffs alleged that Defendant violated the CSPA by charging the same rate for index pages as for transcribed pages. The Court found that Plaintiff Anderson Law Office lacked standing to bring its CSPA claim because it is not a natural person.
FAILURE TO DELIVER
State ex rel DeWine v. American Escrow, LLC, Franklin Cty. Case No. 10 CVH-06-9632, PIF 2929
Defendants violated the CSPA by: 1) accepting money from consumers to be held in escrow to pay real estate taxes and insurance premiums and then failing to make the tax and insurance payments and failing to return the money to consumers in violation of OAC 109:4-3-09, 2) representing that property taxes and insurance had been paid in accordance with prior representations when they had not, 3) providing inconsistent and inadequate information regarding consumers' accounts, including but not limited to whether activity statements were sent and the value of deposits held in escrow to pay property taxes and insurance. Defendants committed unconscionable acts in violation of the CSPA by: 1) entering into a consumer transaction while knowing of the inability of the consumer to receive a substantial benefit from the subject of the consumer transaction, 2) entering into consumer transactions and accepting money from consumers when Defendants knew, or should have known, that due to the financial condition of American Escrow the contracts would not be honored, 3) entering into consumer transactions without disclosing the substantial likelihood that American Escrow's financial condition would adversely affect Defendants' ability to honor the contracts, 4) knowingly making misleading statements of opinion on which consumers were likely to rely upon to their detriment, including statements regarding individual consumer accounts and deposits held in escrow to pay property taxes and insurance. Defendants ordered to pay consumer restitution of $171,122.68 and civil penalties of $125,000.
Flex Homes, Inc. v. Ritz-Craft Corp. of Michigan, Inc. N.D. Ohio 07 CV 1005, PIF 2925
Plaintiffs purchased a prefabricated home from Defendant Ritz-Craft. Ritz-Craft contracted with Citadel Builders to assemble the home on Plaintiff's site. Plaintiffs filed suit against the Defendants, alleging various defects in the design, construction, and installation of the home. The Court dismissed Plaintiffs' CSPA claims against Citadel, finding that they had failed to establish that a consumer transaction had occurred between the Plaintiffs and Citadel. The contract between the Plaintiffs and Ritz-Craft which was attached to the Complaint did not indicate that Citadel performs services for the ultimate purchaser of a Ritz-Craft home, and the agreement between Ritz-Craft and Citadel was for services to be provided to Ritz-Craft, not to the Plaintiffs. The Court therefore found that Plaintiffs' Complaint had failed to allege facts sufficient to support the existence of a consumer transaction between the Plaintiffs and Citadel.
Gilham v. Stasiulewicz (Jefferson Cty.), 2010-Ohio- 6407, PIF 2924
Plaintiff hired Defendant to replace the cement surrounding her swimming pool as well as pipes leading to the pool. The pool liner was also replaced by another contractor. After the work was completed and the pool was filled, water collected behind the liner and the pump did not function properly; ultimately five return lines were replaced by another contractor. The trial court found that Plaintiff had failed to establish by a preponderance of the evidence that the Defendant had performed substandard work or had violated the CSPA. The Court of Appeals affirmed, finding that the evidence had not established how many or which lines Defendant had replaced or that any of the lines Defendant had replaced were the lines that were leaking. The evidence also failed to support Plaintiff's claim that Defendant's work was substandard or that it had caused any damage to the pipes or the pool liner. There was evidence that Defendant had failed to provide an estimate for work over $25 required by OAC 109:4-3-(A)(1), a receipt for additional work performed, or an itemized list of parts required by OAC 109:4-3-05(D)(12). The Court of Appeals found that Plaintiff was entitled to the statutory damages of $200 for each of those violations. The case was remanded to the trial court for a determination if Plaintiff was entitled to an award of attorney fees for those counts.
In re Ronald Schumacher, AVC No. 427148, PIF 2936
Supplier violated the CSPA by: 1) accepting monies from consumers for goods or services and then permitting eight weeks to elapse without making delivery of the goods or services ordered, making a full refund, advising the consumer of the duration of an extended delay, offering a refund if requested, or furnishing similar goods or services of equal or greater value as a good faith substitute; 2) making false and misleading statements to consumers. Supplier to pay $23,545.80 in consumer restitution and $2,500 to the Consumer Protection Enforcement Fund.
State ex rel DeWine v. Otworth, Franklin Cty. Case No. 10-CVH-04-6124, PIF 2940
Defendant violated the CSPA by: 1) accepting deposits from consumers for home improvement goods and services and failing to provide information to consumers as to the time during which the option was binding, failing to provide dated receipts, and failing to indicate whether the deposit was refundable and under what conditions in violation of 109:4-3-07(B); 2) accepting monies from consumers and then failing to deliver the goods or services purchased or to return the down payment to consumers in violation of 109:4-3-09(A)(1); 3) performing shoddy and unworkmanlike services; 4) failing to honor implied warranties of merchantability; and 5) making false and misleading statements regarding his ability to complete the transactions. Defendant violation HSSA and the CSPA by soliciting consumers for household goods and services and failing to evidence the solicitations in written agreements, and by failing to provide consumers with the proper notice of their right to cancel their contracts by a specific date. The amount of consumer restitution and civil penalties to be determined at a damages hearing.
Burns v. Spitzer Management, Inc. (Cuyahoga Cty.), 190 Ohio App. 3d 365, 2010-Ohio-5369, PIF 2935
The trial court erred in granting Defendant Alan Sptizer's motion for summary judgment. The Court of Appeals held that it was not necessary to pierce the corporate veil in order to find a corporate officer liable for violations of the CSPA. The Court found that an officer of a corporation can be held to be individually liable for violations of the CSPA in which they personally participated.
Blankenship v. CFMOTO Powersports, Inc., Clermont Cty. Case No. 2009 CVH 1340, PIF 2922
Plaintiff purchased a motorcycle manufactured and distributed by Defendants. Plaintiff alleged that the motorcycle's braking system violated federally mandated rear brake safety standards for motorcycles. Plaintiff made class action claims for failing to manufacture motorcycles that complied with federal safety standards, including sub-issues of a vehicle recall and false representations and marketing, and failing to provide the Ohio Lemon Law notices with the motorcycles. Defendants argued that Plaintiff and proposed class members lacked standing to bring the action as there was no actual injury alleged. The Court found that the CSPA provides for economic damages and injunctive relief; therefore an actual physical injury need not be alleged. The Court found that, pursuant to the standard set forth in Marrone, Plaintiff had failed to provide evidence of court decisions in the Public Inspection File that involved industries and conduct that were substantially similar to the Defendants except for the claims regarding false representations and marketing. The Court therefore ruled that the false representation claim was the only class action claim that could proceed.
Turk v. Serpentini Chevrolet, Inc., Portage Cty. Case No. 2007 CV 1356, PIF 2932
Defendant Serpentini Chevrolet violated the CSPA by failing to post a completed buyers guide in the window of the motor vehicle sold to Plaintiff and by failing to provide the buyers guide to Plaintiff.
State ex rel DeWine v. Action Integrated Marketing, Inc., Franklin Cty. Case No. 11- CVH-03-3786, PIF 2934
Defendants are in the business of creating and selling advertising campaigns and associated promotional materials to motor vehicle dealerships. Defendants agree to: 1) not make false, deceptive, or misleading representations of fact concerning any motor vehicle sales promotion or event, contest, or prize offer; 2) clearly and conspicuously, in close proximity to the terms of any offer, disclose all material terms, limitations, exclusions, conditions, and restrictions relating to any such offer; 3) not make false or misleading claims in advertisements regarding the origin of vehicles offered for sale; 4) not make or imply a false premise for a sale of motor vehicles; 5) not make false or misleading claims regarding the premise of a sale, the offering prices of any vehicles, monthly payments, any other terms of payment, the interest rate and/or availability of credit, the amount of any down payment, or the availability of significant discounts or savings; 6) comply with the Fair Credit Reporting Act and the Truth in Lending Act; 7) fully comply with the state's motor vehicle dealer and salesperson licensing requirements and not contract with independent contractors to conduct a sale unless the contractor is in compliance with dealer and salesperson licensing requirements; 8) not advertise in a manner which may create a false sense of urgency based upon misrepresentations related to the source or nature of the vehicles offered for sale; 9) include within the price of vehicles offered for sale all mandatory charges for non-governmental fees; and 10) not use footnotes or asterisks in advertisements that confuse, contradict, materially modify, and/or unreasonably limit the terms of more prominent content of the advertisement. Defendants to pay the signing states $130,000.00 as a civil penalty.
State ex rel DeWine v. AstraZeneca Pharmaceuticals LP, Franklin Cty. Case No. 11 CVH-03-3133, PIF 2931
Defendant agrees not to promote its antipsychotic, Seroquel, for off-label use. Prohibited actions include: 1) presenting patient profiles/types based on selected symptoms unless the drug's FDA-approved indications are stated clearly and conspicuously in the same spread, 2) financial incentives for marketing and/or sales personnel that encourage the improper promotion, sales, and marketing of Seroquel, 3) detailing Seroquel to providers who are unlikely to prescribe Seroquel for a use consistent with its FDA-approved indications, 4) distributing any medical articles, study results, reports, etc. that describe the off-label use of Seroquel that make any false, misleading, or deceptive representation about Seroquel or any competing product, 4) responding to requests from providers for medical articles, study results, or reports by sales or marketing personnel. Defendant is required to disclose information about medical education grants regarding Seroquel, including CME grants, and shall not use any type of grant to promote Seroquel, and to disclose information about payments made to U.S.-based physicians who served as a promotional speaker in the United States. Defendant to pay $68.5 million to the participating states.
In re Ramos Law Group, AVC No. 408774, PIF 2926
Suppliers agree to comply with the CSPA in their actions related to the sale and advertising for mortgage loan modifications goods and services and/or services related to providing assistance to distressed borrowers. Suppliers are prohibited from soliciting, advertising, or accepting any business involving modification of real estate loans and/or mortgages that does not comply with all applicable laws and from accepting money from a consumer for goods or services ordered by mail, telephone or otherwise and then permitting eight weeks to elapse without making shipment or delivery of the goods or services ordered, making a full refund, advising the consumer of the duration of an extended delay and offering to send the consumer a refund within two weeks if the consumer so requests, or furnishing similar goods or services of equal or greater value as a good faith substitute. Suppliers agree to pay a civil penalty of $25,000 (suspended).
Williams v. CitiMortgage, Inc., S.D. Ohio Case No. 08-CV-368, PIF 2939
Plaintiff was refinancing her home and requested a payoff statement from Defendant. The payoff statement indicated that the amount was good through September 1, 2006; Plaintiff closed on her refinancing on July 31, 2006 and sent the full amount shown on the payoff statement. She later received a refund of the excess interest paid. Plaintiff filed suit alleging that CitiMortgage violated the CSPA by requiring consumers to pay interest and fees in excess of what was actually owed. The Court granted the Defendant's motion to dismiss, finding that the clear language of the payoff statement contradicted the allegations of Plaintiff's complaint. The payoff statement said that the amount shown was good through September 1, stated that the amount may change due to account activity, and provided information regarding the daily interest rate and daily interest charge. The payoff statement also directed the Plaintiff to call to confirm the correct payoff amount before sending any money and stated that any escrow funds or excess payoff amounts would be refunded within 30 days. The Court found that statement provided clear evidence to refute Plaintiff's claims that Defendant regularly required consumers to pay excess interest and fees and dismissed the complaint with prejudice.
TELEMARKETING SALES RULE
Burdge v. Association Health Care Management, Inc., S.D. Ohio Case No. 10-CV-100, PIF 2923
Plaintiff brought suit based upon ten telemarketing calls made to his residential phone number. The Court found that the claims made under 47 CFR 64.1200(d)(4) do not provide for a private right of action, therefore Plaintiff had failed to state a claim upon which relief could be granted in those claims and dismissed counts 3-6. The Court found that of Plaintiff's claims under the Telephone Solicitation Sales Act, only the claims that Defendant had acted as a telephone solicitor without having first obtained a certificate or registration from the Attorney General and that Defendant acted as a telephone solicitor without having first obtained a surety bond had been timely filed. Additionally, the Court found that, pursuant to the holding in Charvat v. EchoStar Satellite, the TCPA did not confer exclusive jurisdiction of TCPA claims upon state courts and that Plaintiff's claims could proceed in federal court.
TELEPHONE CONSUMER PROTECTION ACT
Charvat v. DFS Services LLC, S.D. Ohio Case No. 09-CV-490, PIF 2933
Plaintiff filed suit against multiple telemarketers for violations of the TCPA and the CSPA based upon telemarketing calls made on behalf of Discover Card. The Court dismissed Plaintiff's CSPA claims against Discover, holding that the solicitations constituted a transaction between a financial institution and its customers, and was therefore exempt from the CSPA. The Court dismissed Plaintiff's CSPA claims against the telemarketers because he had failed to state a claim that telemarketing calls that allegedly violate the TCPA also violate the CSPA, absent some allegation of deception. The Court also dismissed Plaintiff's claim that Defendants violated the CSPA by using a fictitious name that had not been registered with the Ohio Secretary of State, finding that, absent an allegation that the use of the fictitious name is deceptive or intended to deceive, there is no violation of the CSPA.
TELEPHONE SOLICITATION SALES ACT
State ex rel DeWine v. Kirkland Young, LLC, Franklin Cty. Case No. 09-CVH-11-1749, PIF 2930
Defendant marketed a loan modification/loss mitigation program to Ohio consumers to make their mortgage payments more affordable and to prevent consumers from losing their homes in foreclosure. Consumers contacted Defendant by telephone after seeing their website. The Court found that a supplier violated the TSSA and the CSPA by: 1) engaging in telephone solicitations without obtaining a certificate of registration from the Attorney General's office; 2) engaging in telephone solicitations while making misrepresentations, including misrepresenting a material aspect of the nature or terms of its cancellation or refund policy; and 3) making false or misleading statements, including that it can get consumers out of foreclosure, get consumers into new loans with lower interest, can get consumers' loans reduced, or get consumers into loan modifications with fixed rates, in order to induce consumers to pay for goods or services. A supplier violates 1345.02 of the CSPA by making false and misleading statements. A Supplier commits unconscionable acts in violation of the CSPA by knowingly taking advantage of the inability of consumers to receive a substantial benefit from the subject of the consumer transaction; by entering into consumer transactions on terms the supplier knows are substantially one-sided in favor of the supplier; and by making misleading statements of opinion upon which consumers relied to their detriment. A supplier that holds out that it can effect the adjustment, compromise, or discharge of any account, note, or other indebtedness and charges a fee in excess of $75.00 for the initial set-up of its services, violates the Debt Adjuster Act and the CSPA. Defendant ordered to make payment to consumers who file claims with the receivership pending in the Southern District of Florida in accordance with any order by that court. Defendant ordered to pay a civil penalty of $150,000.