D'Happart v. First Commonwealth Bank

282 A.3d 704

Scott A. D'HAPPART and Christina M. d'Happart, Appellants

v.FIRST COMMONWEALTH BANK

No. 580 WDA 2021

Superior Court of Pennsylvania.

Argued April 5, 2022

Filed: August 5, 2022

Aurelius P. Robleto and Renee M. Kuruce, Pittsburgh, for appellants.

Roy W. Arnold, Pittsburgh, for appellee.

BEFORE: BENDER, P.J.E., LAZARUS, J., and McCAFFERY, J.

OPINION BY BENDER, P.J.E.:

Appellants, Scott A. d'Happart and Christina M. d'Happart, appeal from the trial court's May 4, 2021 order sustaining Appellee's, First Commonwealth Bank ("FCB"), preliminary objections and dismissing Appellants’ complaint with prejudice. We affirm.

The trial court summarized the background of this matter as follows:

PROCEDURAL HISTORY

[Appellants] filed a class action complaint on behalf of themselves and other persons similarly situated on October 13, 2020[,] against [FCB], in the Allegheny County Court of Common Pleas Civil Division. In their complaint, [Appellants] allege five separate counts: Count I: statutory damages under 13 Pa.C.S.[ ] § 9625(c)(2) on behalf of the pre-sale notice subclass for violation of 13 Pa.C.S.[ ] §§ 9610, 9614[,] and 12 Pa.C.S.[ ] § 6256(c); Count II: statutory damages under 13 Pa.C.S.[ ] § 9625(c)(2) on behalf of the improper expenses subclass for violation of 13 Pa.C.S.[ ] §§ 9610, 9614[,] and 12 Pa.C.S.[ ] § 6256(c); Count III: statutory damages under 13 Pa.C.S.[ ] § 9625(e)(5) on behalf of the disposition notice subclass for violation of 13 Pa.C.S.[ ] §§ 9610 and 9616[,] and 12 Pa.C.S.[ ] § 6261(d); Count IV: statutory damages for breach of contract on behalf of the pre-sale notice subclass pursuant to 13 Pa.C.S.[ ] §§ 9610 and 9625; Count V: statutory damages for conversion on behalf of the pre-sale notice subclass pursuant to 13 Pa.C.S.[ ] §§ 9610 and 9625. By order of court dated November 19, 2020, this case was assigned to the Commerce and Complex Litigation Center, to be overseen by this court.

In response to the complaint, [FCB] filed preliminary objections on December 16, 2020[,] as well as a brief in support of preliminary objections. [Appellants] filed an answer to [FCB's] preliminary objections on February 5, 2021. [FCB] filed a reply brief on February 26, 2021. On March 11, 2021, this court heard the parties’ arguments on [FCB's] preliminary objections. On May 4, 2021, this court issued an order sustaining [FCB's] preliminary objections and dismissing [Appellants’] complaint with prejudice.

On May 5, 2021, [Appellants] filed a notice of appeal ..., appealing this [c]ourt's May 4, 2021 order sustaining [FCB's] preliminary objections to the Superior Court of Pennsylvania. On May 6, 2021, this court ordered [Appellants] to file a concise statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b). [Appellants] filed their concise statement of errors complained of on appeal on May 26, 2021.

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FACTUAL HISTORY

[Appellants] are natural persons and a married couple.... [Complaint ("Compl."), 10/13/20,] at 3.... [FCB] is a local banking association that is licensed to do business in the Commonwealth of Pennsylvania. Id. at 1. [FCB] is headquartered in Pennsylvania.... Id.

When considering preliminary objections in the nature of demurrer, a court must accept as true all well[-]pleaded material facts in the complaint, as well as inferences reasonabl[y] deductible therefrom. After reading [Appellants’] complaint, as well as all relevant subsequent materials, it is clear that no material facts are disputed. Admittedly, [FCB] provides additional facts in their preliminary objections that [Appellants] did not recite in their complaint.¹ [N.T., 3/11/21, at 33-35. Appellants] ha[ve] not given this court any indication that they dispute these additional facts. The court accepts as true all well[-]pleaded material facts in the complaint, as well as the additional facts [FCB] provided, because [Appellants] do not dispute that these facts occurred.

¹ While [Appellants’] counsel argued the bankruptcy petition, circumstances regarding surrender of the [at-issue] vehicle, description of sale and sale process, and several other facts were outside the record, [Appellants] did not dispute any of these facts in argument or in any of [Appellants’] filings. Further, some of these facts the [c]ourt may take judicial notice of, such as the bankruptcy filing by [Appellants] to be discussed further in this opinion. The court can take judicial notice of the bankruptcy petition because it is a matter of public record.

[FCB's] preliminary objections provide a concise statement of the facts that the court wishes to recite below.

On October 15, 2015, [Appellants] financed the purchase of a 2013 Ford Taurus (the "vehicle") from South Park Mitsubishi in Bethel Park, Pennsylvania.

They financed the purchase of the vehicle by entering into a Retail Installment Sales Contract ("RISC"). [FCB's Brief in Support of] Prelim[inary] Objections[ (hereinafter "FCB's BSPO"), 12/16/20,] at 3.... Immediately thereafter, [FCB] purchased the RISC for value and became the creditor and secured party under the RISC. Id.

[Appellants] purchased the vehicle primarily for consumer use, and the RISC is a "consumer credit contract." Compl. ... at 3.

The RISC sets forth certain rights and conditions between [FCB] and [Appellants] relating to the vehicle's purchase and financing. [FCB's BSPO] at 3. For example, [Appellants] agreed to make 72 monthly payments of $370.49, secured by the vehicle as collateral. Id. The RISC also explained the creditor's right to repossess the collateral if [Appellants] failed to make the required monthly payments: "If you do not meet your contractual obligations, you may lose the vehicle." Id.

The RISC specifically describes certain conditions that constitute a "default," including in relevant part, if either "[y]ou do not pay any payment on time" or "[y]ou start a proceeding in bankruptcy." Id. at 4.

In Section 3, the RISC detailed additional charges and fees that may be incurred if the borrowers/buyers defaulted, under the heading, "IF YOU PAY LATE OR BREAK YOUR OTHER PROMISES," including but not limited to, the following separate sub-headings: "You may owe late charges"; "You may have to pay collection costs," only if [FCB] has to go to court to recover the vehicle, and that in such circumstances, "You will pay reasonable attorney's fees and court costs as the law permits." Id.

The RISC also described [Appellants’] right to redeem the vehicle after any repossession, under the heading "How you can get the vehicle back if we take it." Id. As to potential redemption, the RISC provided: "If we repossess the vehicle, you may get it back by paying the unpaid part of the Amount Financed plus the earned and unpaid part of the Finance Charge, any late charges, and other amounts lawfully due under the contract (redeem). Your right to redeem ends when we sell the vehicle. We will tell you how much to pay to redeem." Id.

The RISC also explained [FCB's] right to sell the vehicle, if [Appellants] failed to redeem. Id. at 5. Under the heading "We will sell your vehicle if you do not get it back," the RISC confirmed that [FCB] "will send you a written notice of sale before selling the vehicle." Id.

The RISC also described the expenses [FCB] was permitted to recover from the sale price, including expenses incurred "as a direct result of taking the vehicle, holding it, preparing it for sale, and selling it, as the law allows." Id.

On November 13, 2017, [Appellants] filed a petition for Chapter 7 bankruptcy, which included the vehicle and related amounts still due and owing under the RISC. Id. at 4.^[1] The court can take judicial notice of the bankruptcy petition because it is a matter of public record. This was argued by defense counsel and was not disputed by [Appellants]. [N.T.] at 7....

After the bankruptcy petition, [Appellants] continued to pay the monthly loan amount for a brief time period before they surrendered the vehicle to [FCB] when they no longer made the monthly payments. [FCB's BSPO] at 5. [Appellants’] complaint (as well as subsequent documents) do[ ] not dispute that [Appellants] failed to make the required monthly payments and surrendered the vehicle to [FCB]. Id. On March 7, 2018, [Appellants] obtained a discharge order pursuant to Chapter 7 of the Bankruptcy Code. Id. After the vehicle was surrendered by [Appellants] and repossessed by [FCB], [FCB] sold the [v]ehicle.³Id. [FCB] avers that because of the discharge order, [FCB] did not send any post-sale deficiency notice because it could not seek to collect any deficiency based upon the prior discharge order. Id.

³ While [Appellants] surrendered the [v]ehicle, it is clear by the briefs and argument of counsel, the process is deemed a repossession of the vehicle.

Upon repossession, the vehicle was transported to an auto auction in Altoona, [Pennsylvania]. Id. at 6. Logic dictates, as an appropriate inference by this court, since [Appellants] surrendered the vehicle, they had the opportunity to remove their personal items. [Appellants’] complaint does not allege they needed to travel to Altoona to retrieve any personal possessions left in the vehicle. Id. This was not disputed by [Appellants’] counsel in oral argument. [N.T.] at ... 8....

On October 15, 2018, [FCB] sent a Notice of Repossession and Plan to Sell Vehicle ("Notice of Repossession") to both [Appellants], as co-borrowers. [FCB's BSPO] at 5. The Notice of Repossession stated, in relevant part, that the vehicle was seized "because you broke promises in our agreement. The vehicle is being stored at Altoona Auto Auction at the address below. We will sell this vehicle at public sale." Id.

The Notice of Repossession also stated the specific "location" where the sale will be held, including the name and address of the auto auction. Id. It further specifically stated that the vehicle will be sold at a "public sale," which "will be conducted using a sealed bid auction with bids accepted during the dates specified above." Id.

The

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