Tribeca Lending Corp. v. McCormick

• Decision Date: 18 June 2013
• Docket Number: No. 12–0150.,12–0150.
• Parties: TRIBECA LENDING CORPORATION, Petitioner v. James E. McCORMICK, Respondent.
• Court: West Virginia Supreme Court

231 W.Va. 455

745 S.E.2d 493

TRIBECA LENDING CORPORATION, Petitioner

v.James E. McCORMICK, Respondent.

No. 12–0150.

Supreme Court of Appeals of West Virginia.

Submitted April 16, 2013.

Decided June 18, 2013.

Syllabus by the Court

1. “The appellate standard of review of questions of law answered and certified by a circuit court is de novo.” Syllabus Point 1, Gallapoo v. Wal–Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996).

2. “Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.” Syllabus Point 1, Appalachian Power Co. v. State Tax Dept. of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995).

3. “Where the language of a statute is clear and without ambiguity the plain meaning is to be accepted without resorting to the rules of interpretation.” Syllabus Point 2, State v. Elder, 152 W.Va. 571, 165 S.E.2d 108 (1968).

4. The one-year statute of limitation provided by W.Va.Code § 38–1–4a [2006] governs only an “action or proceeding to set aside a trustee's sale due to the failure to follow any notice, service, process or other procedural requirement relating to a sale of property under a trust deed.” Challenges to a trustee's sale that do not pertain to the procedural requirements of the sale are not subject to the limitation period set forth in W.Va.Code § 38–1–4a.

5. “Where a consumer is sued for the balance due on a consumer transaction, any asserted defense, setoff, or counterclaim available under the Consumer Credit Protection Act, W.Va.Code, 46A–2–101, et seq., may be asserted without regard to any limitation of actions under W.Va.Code, 46A–5–102 (1974).” Syllabus Point 6, Chrysler Credit Corp. v. Copley, 189 W.Va. 90, 428 S.E.2d 313 (1993).

6. Under W.Va.Code § 46A–5–101(1) [1996], which provides that an action under the West Virginia Consumer Credit and Protection Act involving certain “regulated consumer loans” must be brought within one year after the “due date of the last scheduled payment of the agreement,” the statute of limitation begins to run on the date under the parties' agreement providing for the final periodic payment of the debt. However, if the periodic payments are accelerated under the terms of the agreement, causing all payments to become immediately due and payable by the consumer, then the statute of limitation begins to run on the date when the accelerated payment is due.

Christopher R. Arthur, Esq., Lora A. Dyer, Esq., Lesley A. Wheeler–Hoops, Esq., Samuel I. White, P.C., Charleston, WV, for Petitioner.

Thomas A. Heywood, Esq., Sandra M. Murphy, Esq., Stuart A. McMillan, Esq., Bowles Rice McDavid Graff & Love LLP, Charleston, WV, for Amici Curiae, West Virginia Bankers Association, Inc., and Community Bankers of West Virginia, Inc.

Sara Bird, Esq., Mountain State Justice, Inc., Clarksburg, WV, Daniel F. Hedges, Esq., Bren J. Pomponio, Esq., Mountain State Justice, Inc., Charleston, WV, for Respondent.

KETCHUM, Justice:

The petitioner, Tribeca Lending Corporation (“Tribeca”), received a deed to a house as a result of a foreclosure action. Tribeca filed an unlawful detainer action against the occupant of the house, respondent James E. McCormick, because Mr. McCormick refused to vacate the house. In response, Mr. McCormick asserted various counterclaims against Tribeca alleging violations of the West Virginia Consumer Credit and Protection Act, W.Va.Code § 46A–1–101 to –8–102 [1974].

The Circuit Court of Kanawha County has certified two questions for this Court's consideration regarding whether Mr. McCormick timely asserted his counterclaims. We determine that Mr. McCormick's counterclaims were not timely.

I.FACTUAL AND PROCEDURAL BACKGROUND

The facts are not disputed by the parties. On September 30, 2005, Mr. McCormick refinanced the mortgage on his home in Saint Albans, West Virginia, with a loan he obtained from Tribeca.¹ The loan agreement provided that Mr. McCormick would repay the $116,900.00 loan to Tribeca, over the course of thirty years, by making monthly payments of $1,112.38. Tribeca's loan was secured by a deed of trust, also dated September 30, 2005, which similarly required Mr. McCormick to make payments of the loan's principal and interest in accordance with the loan's repayment schedule.

In addition to the loan repayment provisions, the deed of trust stated that if Mr. McCormick failed to make his scheduled payments, or otherwise defaulted on the terms of the loan agreement or deed of trust, Tribeca would give notice to Mr. McCormick and provide him an opportunity to cure his default. If Mr. McCormick then failed to cure his default, the documents allowed Tribeca to accelerate the loan's payments, saying “upon acceleration all sums ... and accrued interest thereon shall at once become due and payable.” The documents signed by Mr. McCormick permitted Tribeca to ultimately institute a foreclosure sale.²

Thereafter, Mr. McCormick failed to make his monthly loan payments in accordance with the parties' agreement. Consequently, on July 26, 2007, Tribeca sent Mr. McCormick a notice that he was in default and that he had a right to cure. Mr. McCormick failed to cure his default. Accordingly, Tribeca accelerated the loan's payments causing the balance of the loan to become immediately due and payable, and also invoked its right to initiate a foreclosure sale of the Saint Albans house.³

The foreclosure sale was held at a public auction on December 19, 2007. The property was sold to Tribeca. On January 8, 2008, a trustee's deed was recorded conveying ownership of the property to Tribeca.

Later in 2008, Tribeca—as owner of the Saint Albans house—filed an unlawful detainer action ⁴ against Mr. McCormick in the Magistrate Court of Kanawha County, alleging that he was unlawfully occupying its property. Mr. McCormick removed Tribeca's action from magistrate court to the Circuit Court of Kanawha County ⁵ and asserted defenses and counterclaims to Tribeca's action (and which are similar to those he later asserted in the instant case). On September 25, 2009, the circuit court dismissed Tribeca's action because there “ha[d] been no activity in this action for a period of more than one (1) year[.]”

On June 2, 2011, Tribeca filed a new unlawful detainer action against Mr. McCormick based upon his failure to vacate the Saint Albans home. The action was filed in magistrate court.

Mr. McCormick answered the complaint, and also asserted numerous counterclaims against Tribeca alleging violations of the Consumer Credit and Protection Act, W.Va.Code § 46A–1–101 to –8–102. Specifically, Mr. McCormick asserted counterclaims against Tribeca alleging unconscionable contract (Count I); fraud (Count II); fraudulent appraisal (Count III); and unlawful debt collection (Count IV). Again, Mr. McCormick removed Tribeca's unlawful detainer action to the Circuit Court of Kanawha County. Tribeca then moved to dismiss Mr. McCormick's counterclaims as untimely.

By order entered November 18, 2011, the circuit court conditionally granted Tribeca's motion to dismiss Mr. McCormick's counterclaims. The circuit court additionally certified the following two questions to this Court, which it answered as follows:

1. Is W.Va.Code § 38–1–[4a], which gives a borrower one year to challenge the validity of a foreclosure sale, and provides in applicable part that “no action or proceeding to set aside a trustee's sale ... shall be filed or commenced more than one year from the date of the sale” applicable when counter-claims are asserted challenging the enforceability of the underlying mortgage loan agreement in response to an unlawful detainer action?

[Answer:] Yes.

2. Under W.Va.Code § 46A–5–101[1] ⁶, which provides in applicable part that “[w]ith 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.” (emphasis added) When does the statute of limitations begin to run: the date the applicable Loan was accelerated and all amounts became due and payable; or, the projected date of the final installment payment of the executed loan agreement?

[Answer:] The date the applicable Loan was accelerated and all amounts became due.

(Emphasis in original). From this order of certification, the parties ⁷ now seek this Court's answers to the questions posed.

II.STANDARD OF REVIEW

The case sub judice presents two certified questions. We review anew a circuit court's answers certified to this Court. “The appellate standard of review of questions of law answered and certified by a circuit court is de novo.” Syllabus Point 1, Gallapoo v. Wal–Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996). Moreover, the circuit court's answers to the two certified questions in this case required the circuit court to interpret statutory law. With respect to a circuit court's rulings on matters of statutory construction, we have held that “[i]nterpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.” Syllabus Point 1, Appalachian Power Co. v. State Tax Dept. of West Virginia, 195 W.Va. 573, 466 S.E.2d 424 (1995). Accord, Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995) ( “Where 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.”). Accordingly, we will accord a plenary review to the circuit court's certified questions as well as to the circuit court's answers thereto.

III.ANALYSIS

This Court is asked to answer two certified questions concerning the timeliness of the counterclaims that Mr. McCormick asserted in response to Tribeca's action for unlawful detainer. We will consider each question in turn.

A. First Certified Question

The first question certified by the circuit court, rephrased to remove...