Dunlap v. Friedman's, Inc.

• Decision Date: 06 May 2003
• Docket Number: No. 30839.,30839.
• Citation: 582 S.E.2d 841,213 W.Va. 394
• Parties: James DUNLAP and Stephanie Gibson, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs Below, Appellants, v. FRIEDMAN'S, INC., dba Friedman's Jewelers, a Delaware Corporation, American Bankers Insurance Company of Florida, Inc., American Bankers Life Assurance Company of Florida, Alan Hopkins, William Perry, Nancy Tanoukhi, Roy Batson, John Doe and Jane Doe, Defendants Below, Appellees.
• Court: West Virginia Supreme Court

582 S.E.2d 841

213 W.Va. 394

James DUNLAP and Stephanie Gibson, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs Below, Appellants, v. FRIEDMAN'S, INC., dba Friedman's Jewelers, a Delaware Corporation, American Bankers Insurance Company of Florida, Inc., American Bankers Life Assurance Company of Florida, Alan Hopkins, William Perry, Nancy Tanoukhi, Roy Batson, John Doe and Jane Doe, Defendants Below, Appellees.

No. 30839.

Supreme Court of Appeals of West Virginia.

Submitted April 15, 2003.

Decided May 6, 2003.

Dissenting Opinion of Justice Davis July 7, 2003.

David L. Grubb, Grubb Law Group, John W. Barrett, Barrett Law Firm, PLLC, Brian A. Glasser, Bailey & Glasser, LLP, Charleston, for the Appellant, Stephanie Gibson.

P. Michel Pleska, Bowles Rice McDavid Graff & Love, PLLC, Charleston, for the Appellee, Friedman's, Inc.

Charles Woody, Spilman, Thomas & Battle, PLLC, Charleston, for the Appellees, American Bankers Insurance Co., et al.

ALBRIGHT, Justice.

This is an appeal by Stephanie Gibson and James Dunlap¹ (hereinafter "Appellants") from a final order of the Circuit Court of Kanawha County dismissing Consumer Credit and Protection Act (hereinafter "CCPA") claims for failure to file a complaint within the applicable statute of limitations period. On appeal, the Appellants assert that the lower court erred in finding that the applicable statute of limitations period was one year from the date of the last payment due; rather, the Appellants contend that the applicable statute of limitations period is four years from the date of the alleged violation.

I. Factual and Procedural History

On December 12, 1997, Appellant Stephanie Gibson purchased an item of jewelry from Friedman's Inc., doing business as Friedman's Jewelers (hereinafter "Friedman's"). The jewelry was priced at $949.00. With tax and "other charges," the total amount of the transaction was $1,156.62. Financing was accomplished through a retail installment sales contract requiring fifteen monthly payments beginning on January 1, 1998, and ending on February 25, 1999. With the addition of financing charges, the total sale price was $1,268.84. It is the imposition of the "other charges" that the Appellants attempted to challenge through the civil action. These "other charges" included $8.55 for credit life insurance, $22.45 for credit disability insurance, and $40.08 for property insurance, totaling $71.08 for all three insurance charges.

The Appellant alleges that she was charged for these insurance products without her knowledge or consent.² In her complaint, filed May 4, 2000, the Appellant alleged that conduct engaged in by Friedman's constitutes an unfair or deceptive trade practice in violation of the CCPA and that such conduct was part of a systematic scheme to deceive consumers and enhance business profit.³

The lower court entered an order dated September 14, 2001, granting the Appellees' motion to dismiss the complaint based upon the lower court's finding that the complaint had not been filed within the applicable one year statute of limitations. On appeal, the Appellants assert that the statutorily-mandated statute of limitations for this action is actually four years from the date of the alleged violation.

II. Standard of Review

In syllabus point two of State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995), this Court explained: "Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." The lower court's decision to dismiss the claim in this matter was based upon statutory interpretation, and according to syllabus point one of Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995), "[w]here the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." See also Ewing v. Board of Educ. of County of Summers, 202 W.Va. 228, 503 S.E.2d 541 (1998)

; Syl. Pt. 1, University of West Virginia Board of Trustees ex rel. West Virginia University v. Fox, 197 W.Va. 91, 475 S.E.2d 91 (1996). In Scott Runyan, this Court also clarified that "[a]s a result of this inquiry being strictly a matter of statutory construction, our power of interpretive scrutiny is plenary." 194 W.Va. at 776,

461 S.E.2d at 522.

III. Discussion

A. West Virginia Code § 46A-5-101(1)

West Virginia Code § 46A-5-101(1) (1996) (Repl.Vol.1998)⁴ provides as follows:

If a creditor has violated the provisions of this chapter applying to collection of excess charges, security in sales and leases, disclosure with respect to consumer leases, receipts, statements of account and evidences of payment, limitations on default charges, assignment of earnings, authorizations to confess judgment, illegal, fraudulent or unconscionable conduct, any prohibited debt collection practice, or restrictions on interest in land as security, assignment of earnings to regulated consumer lender, security agreement on household goods for benefit of regulated consumer lender, and renegotiation by regulated consumer lender of loan discharged in bankruptcy, the consumer has a cause of action to recover actual damages and in addition a right in an action to recover from the person violating this chapter a penalty in an amount determined by the court not less than one hundred dollars nor more than one thousand dollars. With respect to violations arising from consumer credit sales or consumer loans made pursuant to revolving charge accounts or revolving loan accounts, or from sales as defined in article six [§ 46A-6-101 et. seq.] of this chapter, no action pursuant to this subsection may be brought more than four years after the violations occurred. With respect to violations arising from other consumer credit sales or consumer loans, no action pursuant to this subsection may be brought more than one year after the due date of the last scheduled payment of the agreement.

W. Va.Code § 46A-5-101(1) (emphasis supplied). "Sale" as defined in West Virginia Code § 46A-6-102(d) "includes any sale, offer for sale or attempt to sell any goods for cash or credit or any services or offer for services for cash or credit."

The Appellees contend that the one-year statute of limitations applies to this cause of action based upon the fact that this was a closed-ended contract, including fifteen payments,⁵ and, as such, is not encompassed within the "revolving charge accounts or revolving loan accounts" to which the four-year statute of limitations applies, pursuant to statute. The Appellees further contend that such application of the statutory language is consistent with the Uniform Consumer Credit Code upon which the West Virginia Legislature allegedly based its provisions. The Appellees claim that the West Virginia Legislature combined various model codes to formulate the current provision, and that it must have intended to create a statute of limitations distinction between open-ended and closed-ended contracts. The statute, however, does not specifically address the concept of closed-ended contracts; the Appellees only assume that the legislature's use of the term "other contracts" embraced closed-ended contracts. Thus, while the Appellees' approach presents an intriguing analytical framework, it does not definitively resolve the issue because the legislature in fact enacted a statute which is different in form from the various model codes it may have relied upon in its formulation of the present language.

The Appellants contend that this closed-ended contract is included within the definition of sales, West Virginia Code § 46A-6-102(d), to which the four-year statute of limitations explicitly applies, pursuant to statute.

B. Ambiguity of Statute

In resolving this issue raised in this appeal, we note that this Court has consistently acknowledged that statutes of limitations serve a significant function in the operation of the law. "The basic purpose of statutes of limitations is to encourage promptness in instituting actions; to suppress stale demands or fraudulent claims; and to avoid inconvenience which may result from delay in asserting rights or claims when it is practicable to assert them." Morgan v. Grace Hospital, Inc., 149 W.Va. 783, 791, 144 S.E.2d 156, 161 (1965) (citations omitted). In Perdue v. Hess, 199 W.Va. 299, 484 S.E.2d 182 (1997), for instance, this Court reviewed the numerous cases in which this Court has encouraged strict compliance with statutes of limitations as a means of requiring "the institution of a cause of action within a reasonable time." 199 W.Va. at 303, 484 S.E.2d at 186.

Where, however, the legislature has not expressed its intended statutes of limitation with clarity, such a laudable goal of strict compliance is unattainable. Although this Court has invariably recognized that clear and unambiguous statutes are not subject to interpretation,⁶ we have also observed:

Ambiguity is a term connoting doubtfulness, doubleness of meaning of indistinctness or uncertainty of an expression used in a written instrument. It has been declared that courts may not find ambiguity in statutory language which laymen are readily able to comprehend; nor is it permissible to create an obscurity or uncertainty in a statute by reading in an additional word or words.

Crockett v. Andrews, 153 W.Va. 714, 718-19, 172 S.E.2d 384, 387 (1970). A finding of ambiguity must be made prior to any attempt to interpret a statute. As the Court stated in syllabus point one of Ohio County Comm'n v. Manchin, 171 W.Va. 552, 301 S.E.2d 183 (1983), "Judicial interpretation of a statute is warranted only if the statute is ambiguous and the initial step in such interpretative inquiry is to ascertain the legislative intent." Likewise, in syllabus point one of Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992), this Court further explained: "A statute that is ambiguous must be construed before it can...