Diane Horton v. Professional Bureau of Collections of Maryland , 238 W. Va. 310 ( 2016 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2016 Term FILED
_______________
November 15, 2016
released at 3:00 p.m.
No. 15-0692 RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
_______________ OF WEST VIRGINIA
DIANE HORTON, EXECUTRIX OF THE ESTATE OF
GENE RAY DUDDING,
Plaintiff Below, Petitioner
v.
PROFESSIONAL BUREAU OF COLLECTIONS
OF MARYLAND, INC.,
Defendant Below, Respondent
____________________________________________________________
Appeal from the Circuit Court of Putnam County
The Honorable Phillip M. Stowers, Judge
Civil Action No. 13-C-273
AFFIRMED
____________________________________________________________
Submitted: October 5, 2016
Filed: November 15, 2016
Anthony J. Majestro, Esq. David P. Cook, Jr., Esq.
Powell & Majestro, PLLC MacCorkle Lavender, PLLC
Charleston, West Virginia Charleston, West Virginia
Attorney for Respondent
Benjamin Sheridan, Esq.
Klein Sheridan & Glazer, LC
Hurricane, West Virginia
Attorneys for Petitioner
JUSTICE BENJAMIN delivered the Opinion of the Court.
CHIEF JUSTICE KETCHUM, JUSTICE WORKMAN, and JUSTICE LOUGHRY
concur and reserve the right to file concurring opinions.
JUSTICE DAVIS dissents and reserves the right to file a dissenting opinion.
SYLLABUS BY THE COURT
1. “A circuit court’s entry of summary judgment is reviewed de novo.”
Syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
2. “The essential elements in an action for fraud are: ‘(1) that the act
claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was
material and false; that plaintiff relied upon it and was justified under the circumstances
in relying upon it; and (3) that he was damaged because he relied on it.’ Horton v. Tyree,
104 W. Va. 238, 242, 139 S.E. 737 (1927).” Syl. pt. 1, Lengyel v. Lint, 167 W. Va. 272,
280 S.E.2d 66 (1981).
3. A claim brought under W. Va. Code § 46A-2-127(c) (1997) of the
West Virginia Consumer Credit and Protection Act is not sufficiently analogous to a
claim for deceit and fraud so as to survive the death of the consumer pursuant to W. Va.
Code § 55-7-8a(a) (1959).
Benjamin, Justice:
The petitioner and plaintiff below, Diane Horton, Executrix of the Estate of
Gene Ray Dudding, appeals the June 18, 2015, order of the Circuit Court of Putnam
County that granted summary judgment to the respondent and defendant below,
Professional Bureau of Collections of Maryland, Inc., in the petitioner’s action against
the respondent alleging claims for violations of the West Virginia Consumer Credit and
Protection Act, W. Va. Code §§ 46A-1-101 to 8-102 (“the Act”).1 After considering the
parties’ arguments, relevant portions of the appendix, and the applicable law, we affirm
the circuit court’s order.
I. FACTUAL AND PROCEDURAL BACKGROUND
In August 2013, Gene Ray Dudding (“the decedent”) filed a complaint in
the Circuit Court of Putnam County alleging various causes of action against the
respondent, Professional Bureau of Collections of Maryland, Inc., arising from the
respondent’s actions in attempting to collect a debt from the decedent. Significant for the
purpose of this appeal, the decedent claimed that the respondent failed to disclose its
1
In his complaint below, the decedent also brought claims for negligence,
intentional infliction of emotional distress, and invasion of privacy. The circuit court’s
grant of summary judgment to the respondent on the petitioner’s claims for negligence
and intentional infliction of emotional distress were not appealed to this Court. The
petitioner waived her invasion of privacy claim before the circuit court.
1
name to the respondent when making a demand for money upon the decedent’s
indebtedness in violation of W. Va. Code § 46A-2-127(c).2
On July 9, 2014, the decedent died. In September 2014, the respondent filed
filed a Suggestion of Death and a motion for summary judgment. In the respondent’s
motion for summary judgment, the respondent argued that the decedent’s claims under
the Consumer Credit and Protection Act do not survive his death pursuant to W. Va.
Code § 55-7-8a(a) (1959). The respondent explained that under the Act, it is a consumer
that has a cause of action, and consumer is defined in the Act as any natural person
obligated or allegedly obligated to pay any debt. Therefore, the respondent concluded that
2
W. Va. Code § 46A-2-127 (1997) provides:
No debt collector shall use any fraudulent, deceptive or misleading
representation or means to collect or attempt to collect claims or obtain
information concerning consumers. Without limiting the general
application of the foregoing, the following conduct is deemed to violate this
section: . . . . (c) The failure to clearly disclose the name and full business
address of the person to whom the claim has been assigned for collection,
or to whom the claim is owed, at the time of making any demand for
money[.]
The decedent also brought claims under W. Va. Code §§ 46A-2-125,-128(e), and -127(a).
While the petitioner generally contends on appeal that these violations are analogous to a
claim for deceit and fraud under W. Va. Code § 55-7-8a(a), the petitioner fails to develop
these arguments. This Court has previously adhered to the rule that “[a]lthough we
liberally construe briefs in determining issues presented for review, issues which are . . .
mentioned only in passing but are not supported with pertinent authority, are not
considered on appeal. State v. Gray, 217 W. Va. 591, 600, 619 S.E.2d 104, 113 (2005)
quoting State v. LaRock, 196 W. Va. 294, 302, 470 S.E.2d 613, 621 (1996) (citation
omitted). Based on this rule, we decline to address the petitioner’s assertions regarding
other alleged violations of the Consumer Credit and Protection Act.
2
the decedent’s claims were extinguished upon his death because the claims are personal
to the consumer who owed the debt. Further, the respondent averred that an estate does
not have standing to bring a claim under the Act because under the law an estate is not a
natural person.
The petitioner subsequently filed a Suggestion of Death and moved to
substitute the decedent’s estate as plaintiff. In the petitioner’s response to the
respondent’s motion for summary judgment, the petitioner contended that W. Va. Code §
55-7-8a(a) does not extinguish the decedent’s claims under the Act. The petitioner
posited that both W. Va. Code § 55-7-8a(a) and the Act are remedial statutes that should
be construed liberally in favor of the plaintiff. The petitioner asserted that it would be
unfair to read W. Va. Code § 55-7-8a(a) in a way that extinguishes the decedent’s claims
under the Act.
In the circuit court’s hearing on the respondent’s motion for summary
judgment, the petitioner hinged his argument against summary judgment on the fact that
the decedent was alive when the respondent’s complained of acts occurred, and he was
alive when his action was filed against the respondent. The petitioner went on to explain:
So in order to cut [Mr. Dudding] off at this point is a
pretty harsh thing because what it says is essentially creditors
can wait until somebody is very ill and, perhaps, essentially
while they’re dying, and then they don’t really have much to
worry about if they pass away because their claims are cut off
immediately upon their death.
3
And I don’t think that’s a liberal construction of the
statute. And the Supreme Court said over and over again this
must be liberally construed to protect consumers in the State
of West Virginia.
In its June 18, 2015, order granting summary judgment in favor of the
respondent, the circuit court reasoned that the decedent is not a “natural person” for
purposes of the Act. Further, the circuit court found no evidence that any
communications from the respondent were directed to the estate or to Ms. Horton in her
capacity as executrix of the estate, and there is no evidence that the estate is obligated to
pay the alleged debt. Therefore, the circuit court concluded that the estate lacks standing
to maintain a private right of action as a “consumer” within the meaning of the Act.
The petitioner now appeals the circuit court’s order granting summary
judgment to the respondent.
II. STANDARD OF REVIEW
In syllabus point one of Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755
(1994), this Court held that “[a] circuit court’s entry of summary judgment is reviewed de
novo.” Therefore, we will conduct a de novo review of the circuit court’s summary
judgment order.
4
III. ANALYSIS
The dispositive issue before this Court is whether the decedent’s claim
under W. Va. Code § 46A-2-127(c) of the Act survives his death.3 The petitioner argues
on appeal that a claim brought under W. Va. Code § 46A-2-127(c) is sufficiently
analogous to a claim for fraud under W. Va. Code § 55-7-8a(a), so that the claim survives
the consumer’s death.
As a preliminary matter, we note that the petitioner did not make this
argument below either in her response to the defendant’s motion for summary judgment
or in the hearing before the circuit court. As a result, the circuit court did not address this
argument in its motion granting summary judgment to the respondent. Generally, this
Court will not address an issue raised for the first time on appeal and not decided by the
circuit court. See syl. pt. 2, Sands v. Sec. Trust Co., 143 W. Va. 522, 102 S.E.2d 733
(1958) (“This Court will not pass on a nonjurisdictional question which has not been
decided by the trial court in the first instance.”). We have explained these principles as
follows:
3
In her brief, the petitioner presented two assignments of error: (1) The circuit
court erred in concluding that a decedent’s estate does not have standing to pursue West
Virginia Consumer Credit and Protection Act claims and (2) the circuit court erred in
concluding that Consumer Credit and Protection Act claims do not survive the death of
the plaintiff. Because this Court concludes that the decedent’s claims do not survive his
death under W. Va. Code §55-7-8a(a), we do not find it necessary to address the standing
issue.
5
Ordinarily, a [party] who has not proffered a particular
claim . . . in the trial court may not unveil it on appeal.
Indeed, if any principle is settled in this jurisdiction, it is that,
absent the most extraordinary circumstances, legal theories
not raised properly in the lower court cannot be broached for
the first time on appeal. We have invoked this principle with
a near religious fervor. This variant of the “raise or waive”
rule cannot be dismissed lightly as a mere technicality. The
rule is founded upon important considerations of fairness,
judicial economy, and practical wisdom.
State v. Miller, 197 W. Va. 588, 597, 476 S.E.2d 535, 544 (1996). We have further
explained, however, that “the ‘raise or waive’ rule, though important, is a matter of
discretion. Thus, like most rules, this rule admits of an occasional exception.” Id., 197 W.
Va. at 598, 476 S.E.2d at 545. In this case, we deem it preferable to address the issue in
light of the fact that the facts of the case are sufficiently developed to permit meaningful
review, and the issue was fully briefed by both parties.
The applicable law in this case is found at W. Va. Code § 55-7-8a(a)
(1959), which provides:
In addition to the causes of action which survive at
common law, causes of action for injuries to property, real or
personal, or injuries to the person and not resulting in death,
or for deceit or fraud, also shall survive; and such actions may
be brought notwithstanding the death of the person entitled to
recover or the death of the person liable.
The petitioner posits that the decedent’s claim under W. Va. Code § 46A-2-127(c) is
sufficiently analogous to deceit and fraud so as to survive the death of the claimant
pursuant to W. Va. Code § 55-7-8a(a). In support of her position, the petitioner relies on
Stanley v. Sewell Coal Co., 169 W. Va. 72, 285 S.E.2d 679 (1981), in which this Court
6
found that a claim for retaliatory discharge is sufficiently related to an action for fraud
and deceit so that the claim survives the death of the plaintiff. According to the petitioner,
his claim under W. Va. Code 46A-2-127(c) is based on the same underlying principles of
deceit and constructive fraud found persuasive in Stanley. The petitioner contends that
the respondent’s failure to disclose the name of the business entity making a demand for
money upon the decedent’s indebtedness was fraudulent, deceptive, and misleading. The
petitioner contends that the respondent purposefully omitted its name in order to mislead
the decedent and to deceive him as to who was collecting the debt. The petitioner
concludes that this conduct falls within the penumbra of deceit or fraud set forth in W.
Va. 55-7-8a(a) and accepted by this Court in Stanley.
The respondent’s position is that the decedent’s claim under W. Va. Code
46A-2-127(c) is not analogous to deceit and fraud under the survival statute and does not
survive the decedent’s death. The respondent relies on this Court’s decision in Wilt v.
State Automobile Mutual Insurance Company, 203 W. Va. 165, 506 S.E.2d 608 (1998).
The respondent explains that in Wilt, one of the arguments presented was that provisions
contained in the West Virginia Unfair Trade Practices Act, W. Va. Code §§ 33-11-1 to
10, are sufficiently related to an action for deceit and fraud so that the two-year statute of
limitations applies under W. Va. Code §§ 55-2-12 and 55-7-8a.4 This Court rejected this
argument in Wilt observing that viewing claims under the Unfair Trade Practice Act as
4
This Court indicated in Snodgrass v. Sisson’s Mobile Home Sales, Inc., 161 W.
Va. 588, 244 S.E.2d 321 (1978), that W. Va. Code § 55-7-8a and W. Va. Code § 55-2-12
are to be read in pari materia.
7
being analogous to deceit and fraud is problematic because the type of conduct that
constitutes a violation of the Unfair Trade Practices Act may include a variety of factual
scenarios which lack the requisite elements of a fraud claim. The Court stated that while
the traditionally recognized elements of a fraud claim might exist with regard to those
acts of misrepresentation or deception that constitute a violation of the Unfair Trade
Practices Act, other conduct that violates the Unfair Trade Practices Act does not amount
to fraud. The respondent in this case contends that this Court’s reasoning in Wilt applies
equally to a claim brought under W. Va. Code § 46A-2-127(c) of the Consumer Credit
and Protection Act. According to the respondent, a claim under W. Va. Code § 46A-2­
127(c) does not necessarily constitute an action for deceit and fraud.
In order to determine whether a claim under W. Va. Code § 46A-2-127(c)
is analogous to deceit and fraud, we will first review our law concerning fraud. This
Court has held that
[t]he essential elements in an action for fraud are: (1)
that the act claimed to be fraudulent was the act of the
defendant or induced by him; (2) that it was material and
false; that plaintiff relied upon it and was justified under the
circumstances in relying upon it; and (3) that he was damaged
because he relied upon it.
Syl. pt. 1, Lengyel v. Lint, 167 W. Va. 272, 280 S.E.2d 66 (1981). The petitioner
specifically argues that a violation of W. Va. Code § 46A-2-127(c) is analogous to
constructive fraud. This Court engaged in a discussion of constructive fraud in Stanley as
follows:
8
Fraud may be either actual or constructive. The word
“fraud” is a general term and construed in its broadest sense
embraces both actual and constructive fraud. Actual fraud, or
fraud involving guilt, is defined as anything falsely said or
done to the injury of property rights of another. Actual fraud
is intentional, and consists of intentional deception to induce
another to part with property or to surrender some legal right,
and which accomplishes the end designed.
Constructive fraud is a breach of a legal or equitable
duty, which, irrespective of moral guilt of the fraud feasor,
the law declares fraudulent, because of its tendency to
deceive others, to violate public or private confidence, or to
injure public interests.
Perhaps the best definition of constructive fraud is that
it exists in cases in which conduct, although not actually
fraudulent, ought to be so treated, that is, in which conduct is
a constructive or quasi fraud, which has all the actual
consequences and legal effects of actual fraud. Constructive
fraud does not require proof of fraudulent intent. The law
indulges in an assumption of fraud for the protection of
valuable social interests based upon an enforced concept of
confidence, both public and private.
169 W. Va. at 76–77, 285 S.E.2d at 682–83 (citations and footnote omitted). This Court
has also described constructive fraud as resting upon the
presumption and rests less upon furtive intent than does moral
fraud. It is presumed from the relation of the parties to a
transaction or from the circumstances under which it takes
place. The conscience is not necessarily affected by it.
Indeed, it has been said that it generally involves a mere
mistake of fact. Hence, the terms “constructive fraud” and
“legal fraud” both connote that in certain circumstances, one
may be charged with the consequences of his words and acts,
as though he has spoken or acted fraudulently, although
properly speaking, his conduct does not merit this
opprobrium.
9
Miller v. Bridge Co., 123 W. Va. 320, 335, 15 S.E.2d 687, 695 (1941), quoting 23 Amer.
Jur., 756.
Based on our precedent, essentially in order for a plaintiff to prove constructive fraud, he
or she must prove the consequences of actual fraud, but does not have to prove a
fraudulent intent.
Application of the above description of constructive fraud compels this
Court to conclude that a claim brought under W. Va. Code § 46A-2-127(c) is not
sufficiently analogous to an action for deceit and fraud so as to survive the death of the
consumer pursuant to W. Va. Code § 55-7-8a(a). While the traditional elements of
constructive fraud as outlined above may well apply to an act that constitutes a violation
of W. Va. Code § 46A-2-127(c), other conduct that violates W. Va. Code § 46A-2-127(c)
does not. Therefore, we now hold that a claim brought under W. Va. Code § 46A-2­
127(c) (1997) of the West Virginia Consumer Credit and Protection Act is not
sufficiently analogous to a claim for deceit and fraud so as to survive the death of the
consumer pursuant to W. Va. Code § 55-7-8a(a) (1959).
The decedent’s claim is an example of conduct that does not constitute
constructive fraud. In his complaint below, the decedent stated that the respondent
violated W. Va. Code § 46A-2-127(c) by “failing to clearly disclose the name of the
business entity making a demand for money upon Plaintiff’s indebtedness.” West
Virginia Code § 46A-7-127(c) prohibits “[t]he failure to clearly disclose the name and
10
full business address of the person to whom the claim has been assigned for collection, or
to whom the claim is owed, at the time of making any demand for money.” There are no
facts alleged in the decedent’s complaint that explain how the respondent’s conduct
violated W. Va. Code § 46A-2-127(c).5 However, in the petitioner’s reply brief to this
Court, the petitioner indicated that the facts underlying the alleged violation of W. Va.
Code § 46A-2-127(c) are
that the Respondent failed to clearly disclose its identity, i.e.
name, in telephone calls to the Petitioner in the Caller ID
readout, but instead displayed “Toll Free Number” in order
that the Petitioner would be deceived and misled that it was
the Respondent, a debt collector, that was calling the
Petitioner.
Presuming that this complained of practice constitutes a violation of W. Va. Code § 46A­
2-127(c), it certainly does not constitute constructive fraud. Significantly, there is no
indication that the alleged misrepresentation was material and false. In other words, there
is no indication that the respondent’s employee was not calling from a toll free number.
Also, there is no indication that the decedent relied upon the alleged misrepresentation
and was damaged thereby. Therefore, we reject the petitioner’s argument that the claim
5
In his complaint, the decedent essentially asserted that after he became in arrears
on a debt, the respondent began to engage in collection of the debt through the use of
telephone calls, written, and other communications to the decedent; that the decedent
retained counsel to represent him in connection with the debt; that the respondent caused
a telephone call to be placed to the decedent’s home at which time the decedent informed
the respondent’s employee that he was represented by counsel and gave the employee his
counsel’s name and telephone number; and that the respondent continued to make
telephone calls to the decedent after being informed that the decedent was represented by
counsel.
11
brought under W. Va. Code 46A-2-127(c) is sufficiently analogous to a claim for deceit
and fraud under W. Va. Code § 55-7-8a(a) to survive the decedent’s death.6
IV. CONCLUSION
For the reasons set forth above, this Court affirms the June 18, 2015, order
of the Circuit Court of Putnam County that granted summary judgment to Respondent
Professional Bureau of Collections of Maryland, Inc. in an action brought against it by
Petitioner Diane Horton as Executrix for Gene Ray Dudding.
Affirmed.
6
West Virginia Code § 55-7-8a(a) also provides that “causes of action for injuries
to property, real or personal” survive the death of the plaintiff. According to the
petitioner, the decedent incurred attorney fees and costs of litigation in bringing his action
against the respondent which he is entitled to recover under the Act. The petitioner
contends that these attorney fees and costs constitute injuries to property rights that
survive death under W. Va. Code § 55-7-8a(a). Having determined that decedent’s claim
under W. Va. Code § 46A-2-127(c) did not survive his death, we find no merit to this
claim.
Finally, the petitioner argues that “[i]t is manifestly unjust and against public
policy to allow wrongdoers to escape due to the death of their victim.” We find no merit
to this argument. The survival of causes of action is governed by statute and not public
policy as set forth therein.
12
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