Glover, M., Aplt. v. Udren Law Offices
139 A.3d 195
| Pa. | 2016Background
- Mary Glover obtained a residential mortgage and later defaulted; lender initiated foreclosure and retained Udren Law Offices to act on its behalf. Glover alleges Udren charged/collected excessive or unearned attorney’s fees in violation of the Loan Interest and Protection Law (Act 6).
- Act 6 § 406 limits the attorney’s fees a “residential mortgage lender” may contract for or receive; § 502 allows treble damages in a suit against the person who "collected" excess charges and defines “person” broadly to include but not be limited to residential mortgage lenders.
- Udren is not a residential mortgage lender; it moved to dismiss (preliminary objections) arguing Act 6 § 406 does not apply to attorneys and § 502 does not create liability against non-lenders acting as counsel.
- Trial court sustained preliminary objections and dismissed; Superior Court affirmed by majority (holding § 406 regulates only lenders and § 502 does not reach lender’s counsel); a dissent would have read § 502 more broadly to reach third-party collectors.
- Pennsylvania Supreme Court reversed the Superior Court: reading §§ 101, 406, and 502 together, it held § 406 limits what lenders may contract for/receive but § 502 provides a remedy against any “person” who collects excess charges, so an entity like a law firm can be sued under § 502 if it collected prohibited fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Act 6 § 502 authorizes suit against non‑lenders (e.g., law firms) who collect fees prohibited by § 406 | Glover: § 502’s remedy targets any “person” who collected excess fees; “person” is broadly defined and thus includes attorneys/agents who collect prohibited fees | Udren: § 406 regulates only residential mortgage lenders; § 502 is a generic remedy that cannot be read to impose liability on attorneys who are not lenders; overlap with FCEUA shows attorneys are excluded as debt collectors | Court: Reversed Superior Court; § 502 permits suit against any statutorily defined “person” who collected prohibited fees, not limited to lenders |
| Whether statutory definition of “person” should be narrowed to avoid exposing attorneys to Act 6 liability | Glover: Legislature defined “person” to include entities beyond lenders; narrowing would frustrate Act 6’s remedial purpose | Udren: Legislative scheme (including FCEUA exclusions) shows attorneys were not intended to be liable under Act 6; judicial expansion is improper | Court: Declined to narrow “person”; applied plain language and remedial purpose to allow liability where a non‑lender collected prohibited charges |
| Whether Act 6 would be rendered ineffective if lenders use proxies to collect fees | Glover: Allowing proxies to escape liability would defeat Act 6’s protections and invite evasion | Udren: Remedies exist elsewhere; plaintiffs sued lenders directly in federal court so not remediless | Court: Agreed with Glover that allowing proxies to evade liability would undermine Act 6; remedial purpose supports broad application of § 502 |
| Whether the meaning of the verb “collected” in § 502 was decided | Glover: argues collection by agents should trigger § 502 liability | Udren: stresses Glover paid fees to lender, not to law firm, complicating collection theory | Court: Did not decide the precise meaning of “collected”; limited ruling to whether § 502 can reach non‑lenders who collect prohibited fees |
Key Cases Cited
- Bayada Nurses, Inc. v. Dep’t of Labor & Indus., 8 A.3d 866 (Pa. 2010) (standard for accepting well‑pleaded facts on demurrer)
- Roethlein v. Portnoff Law Assocs., Ltd., 81 A.3d 816 (Pa. 2013) (discussing Act 6’s remedial purpose as a usury law protecting borrowers)
- Glover v. Udren Law Offices, P.C., 92 A.3d 24 (Pa. Super. 2014) (Superior Court majority and dissent addressing scope of § 502 liability)
- Burke ex rel. Burke v. Independence Blue Cross, 103 A.3d 1267 (Pa. 2014) (statutory interpretation principles; text as best evidence of legislative intent)
- Commonwealth ex rel. Creamer v. Monumental Props., Inc., 329 A.2d 812 (Pa. 1974) (Act 6 to be construed liberally to effectuate remedial aims)
- POM Wonderful LLC v. Coca‑Cola Co., 134 S. Ct. 2228 (U.S. 2014) (overlapping statutory schemes may each provide relief; one statute does not necessarily preclude another)
- J.E.M. Ag Supply, Inc. v. Pioneer Hi‑Bred Int'l, Inc., 534 U.S. 124 (U.S. 2001) (recognizing complementary operation of separate statutes)
- Glover v. FDIC, 698 F.3d 139 (3d Cir. 2012) (federal litigation addressing whether law firm was a debt collector under FCEUA/FDCPA)