Jerry Washington v. Countrywide Home Loans, Inc.
2014 U.S. App. LEXIS 4928
| 8th Cir. | 2014Background
- Washingtons sued Countrywide for MSMLA violations arising from four charges added to their April 2005 loan disbursement.
- Accrual date identified as April 21, 2005; suit filed May 2008, over three years later.
- District court dismissed as time-barred under § 516.130(2) RSMo; relied on Rashaw v. United Consumers Credit Union.
- Washingtons argued six-year limit under § 516.420 RSMo or continuing/repeated wrong exception.
- Missouri law controls accrual and damages; damages could be known at loan signing due to HUD-1 and disclosure.
- Court must determine whether § 516.130(2) governs MSMLA actions or if § 516.420 applies and whether continuing/repeated wrong applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What statute of limitations governs MSMLA actions? | Washingtons rely on § 516.420. | Countrywide (and Rashaw) support § 516.130(2). | § 516.130(2) governs MSMLA actions. |
| Does Rashaw control over Schwartz regarding the correct limitations period? | Washingtons contend Schwartz controls as the better interpretation. | Rashaw governs due to Missouri Supreme Court precedent and later history. | Rashaw controls; Schwartz is not binding precedent here. |
| Is there a continuing or repeated wrong exception to toll the statute? | Washingtons invoke continuing/repeated wrong for post-signing damages. | Damages are ascertainable at signing; no continuing wrong exception. | Continuing/repeated wrong exception does not apply. |
| Does the damage accrual theory permit recovery of all damages when the contract was signed? | All damages were known at closing; entire damages capable of ascertainment. | Damages accrue over time; violation occurs with each charge. | Damage accrual occurred at signing; entire damages were ascertainable then. |
Key Cases Cited
- Rashaw v. United Consumers Credit Union, 685 F.3d 739 (8th Cir. 2012) (controls limitations interpretation for MSMLA actions; 516.420 not applicable to civil penalties under 516.130(2))
- Schwartz v. Bann-Cor Mortgage, 197 S.W.3d 168 (Mo. App. 2006) (applied 516.420 to MSMLA actions; later considered not controlling here)
- Davis v. Laclede Gas Co., 603 S.W.2d 554 (Mo. banc 1980) (damages accrual when damage is capable of ascertainment)
- M & D Enters., Inc. v. Wolff, 923 S.W.2d 389 (Mo. App. 1996) (damages accrue when damages become ascertainable; entire damages can be pursued)
- Vogel v. A.G. Edwards & Sons, Inc., 801 S.W.2d 746 (Mo. App. 1990) (continuing/repeated wrong in investment churning distinguished as fresh injuries)
- Eubank v. Kansas City Power & Light Co., 626 F.3d 424 (8th Cir. 2010) (principle for predicting Missouri law where state law is unsettled)
- Salve Regina Coll. v. Russell, 499 U.S. 225 (1981) (standard for reviewing state-law questions by federal courts)