Bumpers v. Community Bank of Virginia | Unfair and Deceptive Acts

In Bumpers v. Community Bank of Virginia, a borrower sued a lender for unfair and deceptive practices (under "Chapter 75"). The lender charged a "loan discount fee," when in fact the loan was not discounted. The borrower argued that this was unfair under Chapter 75, and sought treble damages.

The lower court ruled for the plaintiff (on a motion for summary judgment). The Court of Appeals in part and reversed in part. The Supreme Court reversed.

As for the claim based on the "loan discount fee," the court held that this was a claim for misrepresentation (and not "overcharging"), and would require proof of reliance. The court also ruled that it was not clear that the lender had made a misrepresentation (depending on how the HUD form is interpreted). The Court distinguished a prior case that did not seem to require reliance.

As for the claim based on the excessive fees, the evidence was that the plaintiffs paid between $1,180 and $1,145 for closing services that are typically between $258 and $324, with an upper limit of $400. The Court held that this did not support a Chapter 75 claim. "In most cases, there is nothing unfair or deceptive about freely entering a transaction on the open market." "As a result, when transacting parties willingly and honestly negotiate a transaction, generally the transaction is not said to be unfair or deceptive." The Court noted specific exceptions for price-gouging during an emergency.

The Court further noted that the plaintiffs entered the loan transactions freely, and he was aware that other closing agents existed.

Justices Hudson and Beasley dissented, in separate opinions. They argued that reliance was not required for this type of Chapter 75 claim, and that excessive pricing constitutes a Chapter 75 violation.

John Kirby has handled numerous cases involving claims for unfair and deceptive trade practices in North Carolina, and has defended a class action lawsuit asserting such claims.


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