Chevy Chase Bank v. McCamant

• Decision Date: 14 December 1998
• Docket Number: No. 25049.,25049.
• Citation: 512 S.E.2d 217,204 W.Va. 295
• Court: West Virginia Supreme Court
• Parties: CHEVY CHASE BANK, Appellee, v. William C. McCAMANT, Jr., Appellant.

512 S.E.2d 217

204 W.Va. 295

CHEVY CHASE BANK, Appellee, v. William C. McCAMANT, Jr., Appellant.

No. 25049.

Supreme Court of Appeals of West Virginia.

Submitted October 27, 1998.

Decided December 14, 1998.

Stephen L. Gaylock, Esq., Michael R. Cline Law Offices, Charleston, West Virginia, Attorney for the Appellee.

Stephen Gibson Skinner, Nichols & Skinner, L.C., Charles Town, West Virginia, Attorney for the Appellant.

PER CURIAM:

The defendant below/appellant, William C. McCamant, Jr. [hereinafter "McCamant" or "appellant"], appeals the July 22, 1997, order of the Circuit Court of Jefferson County which denied the appellant's motion for a new trial or, in the alternative, to alter or amend the judgment in an action by the plaintiff below/appellee, Chevy Chase Bank [hereinafter "Chevy Chase" or "appellee"], against the appellant to collect $5,115.28 plus interest for unpaid credit card charges. In its May 8, 1997 final order, the circuit court found the appellee to be entitled to $5,115.28 plus interest from January 26, 1996 and further found that the appellee had violated the West Virginia Consumer Credit and Protection Act [hereinafter "WVCCPA"], W.Va. Code § 46A-1-101 et seq. Because of the single violation of the WVCCPA, the circuit court found that the appellant was entitled to collect $1000.00 from the appellee. As a result, the circuit court entered judgment for the appellee in the amount of $4,115.28 plus interest. Both parties moved for attorney fees which were denied.

This Court has before it the petition for appeal, all matters of record, and the briefs and argument of counsel. For the reasons set forth below, we affirm.

I. FACTS

The appellant is a resident of Jefferson County, West Virginia. The appellee is a federally regulated savings bank currently based in Virginia. At the time the events at issue occurred, the appellee was located in Maryland.

The appellant applied for and received a credit card from the appellee and began charging goods and services. The appellant's monthly statements for the years 1989 to 1991 reveal a fairly active account. In time, however, trouble developed between the appellant and the appellee. The appellant's account became chronically delinquent, and the appellant disputed with the appellee over increases in the interest rate being charged on the balance of his account. As a result of the delinquency, the appellee suspended the appellant's charging privileges and made efforts to collect the amount due on the account.

The appellee ultimately filed suit in the Circuit Court of Jefferson County to collect from the appellant $5,115.28 plus interest in unpaid credit card charges. The appellant answered the complaint with a general denial and served a ten count amended counterclaim alleging various violations of the WVCCPA and the Federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. [hereinafter "FDCPA"]. The appellant later voluntarily withdrew those counts which alleged violations of the FDCPA.

The appellant's allegations of violations of the WVCCPA were based, in part, on a letter he received from the appellee's Maryland lawyer, Stephen G. Peroutka [hereinafter "Peroutka" or "Attorney Peroutka"] in which Peroutka warned of possible legal consequences if the appellant did not pay his credit card balance and invited the appellant to contact the appellee so that a satisfactory resolution of the matter could be achieved. The appellant also alleged in his counterclaim that a telephone call made by an employee of the appellee to the appellant's neighbor, Douglas Stein [hereinafter "Stein"], constituted a violation of the WVCCPA. At trial, the content of this telephone conversation between the appellee's employee and Stein was in dispute. Stein testified that the employee informed him there was a "banking emergency" and requested that Stein ask the appellant to call the appellee. The appellee's employee testified that, although she could not recall the specific conversation she had with Stein, she would not have used the term "banking emergency."

On May 6, 1997, the Circuit Court of Jefferson County conducted a bench trial and issued a final order on May 8, 1997. The circuit court found that the appellee is entitled to $5,115.28 plus prejudgment interest at the rate of 24% from January 26, 1996 until the date of the order and statutory interest subsequent. The circuit court further found as a matter of law that the letter from Attorney Peroutka to the appellant did not constitute a violation of the WVCCPA. In addition, the circuit court found that the appellee violated the WVCCPA by telephoning Stein and falsely stating that there was a banking emergency.¹ As a result, the circuit court imposed the statutory penalty of $1000.00 against the appellee for its violation of the WVCCPA. Finally, the court concluded that this results in a net judgment in the amount of $4,115.28 owed by the appellant to the appellee. Both parties subsequently moved for attorney fees which were denied. By order of July 22, 1997, the circuit court denied the appellant's motion for a new trial or, in the alternative, to alter or amend the judgment.

II. STANDARD OF REVIEW

We are guided by the fact that "[t]his Court reviews the circuit court's final order and ultimate disposition under an abuse of discretion standard. We review challenges to findings of fact under a clearly erroneous standard; conclusions of law are reviewed de novo." Syllabus Point 4, Burgess v. Porterfield, 196 W.Va. 178, 469 S.E.2d 114 (1996).

III. DISCUSSION

1. Federal Preemption

The appellee argues, in its cross-assignment of error, that because it is a federal savings bank organized under 12 U.S.C. § 1464 and insured by the Federal Deposit Insurance Corporation, the WVCCPA is preempted from regulating the appellee's debt collection practices by federal law and regulations. Because one of the issues before us concerns the WVCCPA's applicability to specific conduct engaged in by the appellee, we will consider this issue first.

In support of its position, the appellee states, first, that it is a federally chartered savings bank and is subject to regulation by the Office of Thrift Supervision, which has promulgated numerous regulations, including 12 C.F.R. § 545.1 (1998) and § 545.2 (1998).² According to § 545.1, entitled "General authority,"

A Federal savings association may exercise all authority granted it by the Home Owners' Loan Act of 1933 ("Act"), 12 U.S.C. 1464, as amended, and its charter and bylaws, whether or not implemented specifically by Office regulations, subject to the limitations and interpretations contained in this part.

§ 545.2, entitled "Federal preemption," provides,

The regulations in this part 545 are promulgated pursuant to the plenary and exclusive authority of the Office to regulate all aspects of the operations of Federal savings associations, as set forth in section 5(a) of the Act. This exercise of the Office's authority is preemptive of any state law purporting to address the subject of the operations of a Federal savings association.

The appellee concludes from the language of § 545.2 that it is the intention of the federal government that "the federal lending laws and regulations occupy the entire field of lending regulation for federal savings associations, leaving no room for state regulation." Citing 61 Fed.Reg. 50965 (1996). The appellee also points to various federal regulations, such as the Fair Debt Collection Practices Act, which are designed to protect consumers in their dealings with federal banks, including debt collection. The appellee concludes that these regulations preempt the operation of the WVCCPA. We note that the trial court found that the appellant's counterclaims regarding the West Virginia Consumer Credit and Protection Act are not preempted by federal law. As this is a conclusion of law, our review is de novo. See Syllabus Point 4, Burgess v. Porterfield, supra.

The preemption doctrine originates in the Supremacy Clause of the United States Constitution which provides:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

U.S. Const. art. VI, cl. 2. We have stated that "[t]he Supremacy Clause of the United States Constitution, Article VI, Clause 2, invalidates state laws that interfere with or are contrary to federal law." Syllabus Point 1, Cutright v. Metropolitan Life Ins. Co., 201 W.Va. 50, 491 S.E.2d 308 (1997). "Despite the existence of this doctrine, however, preemption is disfavored in the absence of convincing evidence warranting its application[.]" Hartley Marine Corp. v. Mierke, 196 W.Va. 669, 673, 474 S.E.2d 599, 603 (1996), cert denied sub nom. Hartley Marine Corp. v. Paige, 519 U.S. 1108, 117 S.Ct. 942, 136 L.Ed.2d 832 (1997). As a result, there is a strong presumption that Congress does not intend to preempt areas of traditional state regulation. See FMC Corp. v. Holliday, 498 U.S. 52, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990). "This presumption, however, can be rebutted by a clear declaration of legislative intent to preempt state law." Hartley, 196 W.Va. at 673, 474 S.E.2d at 603 (citation omitted).

In analyzing the question of preemption, the focus is on congressional intent. See Hartley, supra. This intent may be manifested by express language in a federal statute or implicit in the structure and purpose of the statute. Id.

[I]n the absence of explicit statutory language signaling an intent to pre-empt, we infer such intent where Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the states to supplement federal law, or where the state law at issue conflicts with

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