Thursday, January 02, 2014

car repo - improper notice - UCC consumer remedies - statute of limitations

Cubler et al. v. Trumark Financial Credit Union - Dec. 20, 2013 - Superior Court

Consumer remedies under UCC, 13 Pa. C.S. 9625, are subject to the general 6-year statute of limitations under 42 Pa. C.S. 5527(b) and not the 2-year SOL under 42 Pa. C.S. 5524)5), which governs "actions upon a statute for a civil penalty or forfeiture."  The remedies under sec. 9625 are compensatory and not penal.

The court held that the reasoning of the Pennsylvania Supreme Court in the analogous case of Pantuso Motors, Inc. v. Corestates Bank, N.A., 798 A.2d 1277, 1281 (Pa. 2002);  should guide its analysis, and lead to a determination that a plain reading of the unambiguous language of section 9625 reveals that it is a remedial statute intended to compensate aggrieved debtors/obligors for their losses.

The court held that it  must provide “substantial weight” to the fact that, in drafting section 9625, the General Assembly specifically chose to use the word “[r]emedies” in the heading of the statute. See Pantuso Motors, 798 A.2d at 1282; see also 1 Pa.C.S.A. § 1924. Furthermore, the relevant provisions involved in this case, 13 Pa.C.S.A. § 9625(c)(2) and (e)(5), both specifically provide for “recover[y]” of “statutory damages.” Id. Importantly, the language of section 9625 does not contain any reference to penalties of any sort. Accordingly, it would be anomalous for this Court to declare that a statute that the General Assembly has specifically designated as being remedial, and which expressly provides for recovery of statutory damages, is, in fact, a civil penalty or forfeiture. See Pantuso Motors, 798 A.2d at 1283.

See also 1 Pa.C.S.A. § 1921(b) (rule of statutory construction providing that where, as here, “the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.”). Moreover, a determination that the statutory damages provided for in section 9625 are intended to be compensatory and not penal in nature is supported by section 1305 of the UCC. Section 1305 provides that “neither consequential or special damages nor penal damages may be had except as specifically provided in this title or by other rule of law.” 13 Pa.C.S.A. § 1305(a) (emphasis added). Furthermore, section 9625 provides a damages formula that is expressly linked to the aggrieved party’s injury, not to the degree of the offending party’s culpability, which is a feature inherent in penalties. See, e.g., 13 Pa.C.S.A. § 9625(b) (providing that “a person is liable for damages in the amount of any loss caused by a failure to comply with this division”); id. § 9625(c)(2) (providing that an aggrieved debtor/obligor is entitled to an award “not less than the credit service charge plus 10% of the principal amount of the obligation or the time price differential plus 10% of the cash price.”). Finally, like   the circumstances presented in Pantuso Motors, even if the imposition of statutory damages.  Finally, like the circumstances presented in Pantuso Motors, even if the imposition of statutory damages under section 9625 may have the effect of encouraging compliance with the provisions of Article 9, the General Assembly intended such damages to serve primarily to compensate aggrieved claimants, not as a penalty against  offending parties. See Pantuso Motors, 798 A.2d at 1283-84.