Askew v. HRFC, LLC, 1:12-cv-03466

Background

Dante Askew bought a used 2005 Buick on Sept. 4, 2008 under a Retail Installment Sales Contract (RISC) that elected Maryland Subtitle 10 (Credit Grantor Closed End Credit Provisions, CLEC).
The RISC was assigned to HRFC, LLC on Sept. 10, 2008; the contract listed and HRFC charged a 26.99% interest rate, above CLEC’s 24% cap for such loans.
HRFC discovered in mid-2010 that some accounts (including Askew’s) were charged rates exceeding CLEC limits; it corrected Askew’s account, backdated the correction to July 23, 2010, reduced the rate to 23.99%, and credited $845.40, then notified Askew by letter dated Sept. 17, 2010.
After the cure, Askew had additional late payments and HRFC’s collection communications (letters and one phone call) threatened repossession and included references to attorney fees and MVA involvement; Askew later sued in state court and HRFC removed the case.
Claims: (1) violation of CLEC (Md. Code Ann., Com. Law § 12-1003), (2) breach of contract, and (3) violation of the Maryland Consumer Debt Collection Act (MCDCA). HRFC moved for summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether HRFC violated CLEC by disclosing and charging >24%	Askew: RISC disclosed and charged unlawful >24% rate, giving statutory remedies	HRFC: admitted overcharge but invoked §12-1020 cure provision because it discovered and corrected the error before suit	Court: Single CLEC violation was the overcharge; HRFC timely discovered and cured within §12-1020, barring relief under CLEC
Whether cure period began at assignment or at actual discovery	Askew: §12-1020’s 60-day window should run from assignment/when HRFC knew or should have known	HRFC: §12-1020 runs from actual discovery of the error; it discovered in July/August 2010 and cured within 60 days	Court: Statute’s plain language supports actual discovery; cure period did not begin at assignment; defendant entitled to cure
Whether breach of contract survives when CLEC violation was cured	Askew: CLEC violation implies breach of RISC; claim stands	HRFC: CLEC cure also cures any contract-based claim; no uncompensated damages remain	Court: Cure eliminated the statutory violation and thus forecloses breach claim; summary judgment for HRFC on breach
Whether HRFC’s collection communications violated MCDCA §14-202(6) (harassment)	Askew: letters and a call while represented by counsel were abusive/harassing and created jury question	HRFC: communications were limited (several letters, one isolated call) and did not rise to level of actionable harassment	Court: On undisputed facts, communications did not reasonably constitute harassment as a matter of law; summary judgment for HRFC

Key Cases Cited

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard)
Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514 (4th Cir.) (genuine-issue standard)
Biggus v. Ford Motor Credit Co., 613 A.2d 986 (Md. 1992) (context on deregulation and legislative response)
Holloman v. Circuit City Stores, Inc., 894 A.2d 547 (Md. 2006) (presumption a party has read contract terms)
Epps v. J.P. Morgan Chase Bank, N.A., 675 F.3d 315 (4th Cir.) (assignee bound by CLEC and contract at motion-to-dismiss stage)
Decohen v. Capital One, N.A., 703 F.3d 216 (4th Cir.) (same principle for assignees and CLEC issues)
Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F. Supp. 2d 492 (D. Md.) (MCDCA is not strict liability; harassing-communication analysis)
Mirabal v. General Motors Acceptance Corp., 537 F.2d 871 (7th Cir.) (discussion of bona fide error in disclosure contexts)