Taylor v. First Resolution Invest. Corp. (Slip Opinion)
72 N.E.3d 573
Ohio2016Background
- Sandra J. Taylor Jarvis (Ohio resident) defaulted on a Chase-issued credit‑card account; last payment recorded June 28, 2006; account charged off and later sold to First Resolution Investment Corp. (FRIC).
- FRIC sued Taylor Jarvis in Ohio in March 2010 to collect the debt; complaint sought principal, accrued interest and post‑judgment interest at 24% but did not attach the underlying cardholder agreement.
- A default judgment was entered, vacated after Taylor Jarvis moved to vacate; she then asserted counterclaims under the FDCPA and OCSPA alleging the suit was time‑barred and that the interest sought was unlawful.
- The trial court granted summary judgment to FRIC and its lawyers; the Ninth District reversed, holding Delaware’s three‑year statute of limitations applied and that the complaint’s interest demand could state FDCPA/OCSPA claims.
- The Ohio Supreme Court: (1) held the cause of action accrued where payment was to be received (Delaware), so Ohio’s borrowing statute imported Delaware’s shorter limitations period; (2) held filing a time‑barred suit and asserting interest unavailable by law in a complaint can violate the FDCPA and the OCSPA; and (3) held debt buyers and their attorneys are subject to the OCSPA.
Issues
| Issue | Plaintiff's Argument (Taylor Jarvis) | Defendant's Argument (FRIC/Cheek) | Held |
|---|---|---|---|
| Where did the underlying collection cause of action accrue for borrowing‑statute purposes? | Accrual occurred in Delaware because payments and the bank were located in Delaware. | Accrual occurred in Ohio where Jarvis lived, used the card and ceased payments. | Accrued in Delaware (where payment was to be received); borrowing statute applies to import Delaware's limitation. |
| Does Ohio’s borrowing statute apply prospectively when cause of action accrued shortly before its effective date? | Borrowing statute applies to actions commenced after its effective date; not unconstitutionally retroactive here. | Applying the statute retroactively would destroy vested rights and is unconstitutional. | Application of R.C. 2305.03(B) to this suit was permissible; not unconstitutionally retroactive given the short interval. |
| Can filing a time‑barred collection suit constitute a violation of the FDCPA and OCSPA? | Yes — filing or threatening suit on a time‑barred claim misrepresents legal status and is deceptive/unconscionable. | No — courts/pleadings are supervised; a complaint’s prayer is a request to the court, not a demand to the debtor. | Yes — filing a time‑barred suit may violate 15 U.S.C. §§1692e, 1692f and the OCSPA; remanded for further proceedings. |
| Can a debt collector’s claim in a complaint for interest unavailable as a matter of law support FDCPA/OCSPA claims? | Yes — asserting entitlement to unlawful interest in a complaint can mislead the least sophisticated consumer and is actionable. | No — a prayer for relief is an aspirational request to the court and not a communication to the debtor giving rise to FDCPA liability. | Yes — seeking unlawful interest in the complaint was a representation/demand actionable under FDCPA and OCSPA; remanded to assess bona‑fide‑error defense and other issues. |
Key Cases Cited
- Heintz v. Jenkins, 514 U.S. 291 (1995) (FDCPA applies to attorneys engaging in debt‑collection litigation)
- Stratton v. Portfolio Recovery Assocs., L.L.C., 770 F.3d 443 (6th Cir. 2014) (litigation pleadings can give rise to FDCPA claims where they misstate legal status/amounts; court applied least‑sophisticated‑consumer test)
- Meekison v. Groschner, 153 Ohio St. 301 (1950) (cause of action accrues where payment is to be made / where default occurs)
- Combs v. Internatl. Ins. Co., 354 F.3d 568 (6th Cir. 2004) (discussing borrowing statutes and choice‑of‑law between forum and foreign accrual locations)