Court of Appeals of Ohio: Borrower's breach of contract claims against automobile lender began to run on date of alleged wrongful repossession

Foster v. Wells Fargo Fin. Ohio, Inc., 195 Ohio App.3d 497, 2011-Ohio-4632

            In a Court of Appeals case decided September 15, 2011, Ronald Foster attempted to overturn a judgment of dismissal that was based on limitations grounds. Foster had previously sued his lender, Wells Fargo over a disputed auto financing agreement. According to Foster, Wells Fargo charged an excessive interest rate, failed to credit his account for payments made, misrepresented the model year of the automobile in question, wrongfully repossessed the automobile when he was not in default, and slandered his name by misrepresenting him to credit agencies.

            In 2003, Foster purchased a 2003 Chevy Malibu from Ganley Chevrolet in Cleveland, Ohio. He put $900 down on the purchase and financed the remainder through Wells Fargo; a $12,019.82 loan with an interest rate of 17.15% per year. Foster included in his complaint a segment from his financial agreement that stated, "The plaintiff may only be deemed in default of the terms of the contract if the plaintiff fails to perform any obligation under the contract or the defendant believes that the plaintiff cannot or will not pay or perform the obligation of the contract."

            The disputed wrongful repossession stemmed from this; Foster failed to make his payment of $299.69 in January 2006, and Wells Fargo claimed to never have received a payment for March 2006, either. They acknowledged that payments were made in February and April of 2006, but denied receiving a March payment despite the fact that Foster provided a copy of a money order receipt dated March 14, 2006. Wells Fargo then claimed that his January payment was still unaccounted for and repossessed the car on May 6, 2006, which they sold at auction.

            Foster filed against Wells Fargo on March 26, 2010, alleging failure to credit his account for payments made, charging an excessive interest rate, fraud for mislabeling the car's model year, wrongful repossession, and defamation for Wells Fargo's incorrect report to credit agencies. Unfortunately, Mr. Foster did not comply with the statute of limitations on the first two of his claims. While they may have been legitimate, there is a two-year statute of limitations concerning the Consumer Sales Practices Act, as well as for breach of contract that would have also applied to his claims of failure to credit and charging an excessive interest rate. In order to bring these claims forward with legitimacy, Foster would have had to file "two years from the occurrence of the violation, or one year after termination of the proceedings with the attorney general with respect to the violation, whichever is later." Foster signed his financial agreement with Wells Fargo on June 30, 2003, and after his repossession on May 6, 2006, notified the Pennsylvania attorney general of his grievances.

            Herein is where Foster's problems truly began. In March 2007, the attorney general's office notified Foster that they could not resolve his complaint because they were "unable to compel or force a company to resolve a dispute if they do not wish to cooperate." In other words, Wells Fargo did not want to resolve the matter out of court and was refusing to cooperate with the attorney general's office. The office advised Foster to take on private legal counsel as they felt he had valid claims, but Foster remained pro se, without an attorney. Following this, Foster filed his complaint on March 26, 2010, "almost seven years after the delivery of the vehicle, four years after his car was repossessed, and three years after the attorney general's office concluded its proceedings on Foster's claims." The judgment therefore stood to bar Foster's claims of failure to credit his account for payments made, charging an excessive interest rate and therefore, breach of contract for this claim, because they were not addressed within the two-year statute of limitations under the Consumer Sales Practices Act.

             Foster's fraud allegation also followed suit, as the statute of limitations for fraud is four years after the cause accrued. Foster had possession of the car on and since June 30, 2003, had access to the VIN number which had the correct model year attached, and did not file until March 2010, almost three years after the statute expired.

            However, there was good news for Foster concerning his final two claims of wrongful repossession and defamation. Foster did file his wrongful repossession claim within the applicable four-year statute of limitations and the court sustained that "Wells Fargo did had no statutory or contractual authority to repossess the vehicle... Thus, the breach of contract accrued on the date of repossession." Foster's allegation of defamation (libel or slander) concerning Wells Fargo's incorrect reporting to credit bureaus was also upheld.

            Foster made several missteps throughout this process that ultimately caused him to invalidate several of his own claims. His failure to take on private counsel when advised by the attorney general meant he did not have the legal knowledge to take proper filing steps in time for all of his claims to be considered. Foster's case was heard without a jury trial, but as the Ohio Supreme Court explains:

            The right of "every person" to bring an action in an Ohio court is not an unlimited, absolute guarantee that every cognizable claim filed in a court of general jurisdiction will be litigated to a final conclusion in such court. Litigants may find their claims barred by a reasonable statute of limitations, stayed by lawful injunction, dismissed by summary judgment and tempered by any number of other devices consonant with due process or "due course of law."