This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The plaintiffs purchased a mobile home, which was later found to have defective plumbing that caused significant water damage. The plaintiffs sought to revoke acceptance of the mobile home and claimed the defendant bank, as the assignee of the sales contract, engaged in unfair trade practices by refusing to acknowledge their right to revoke. The plaintiffs also alleged emotional distress and defamation due to the bank's actions, including false credit reporting (paras 1-5).
Procedural History
- District Court of Santa Fe County: The trial court granted the plaintiffs' revocation of the sales contract, awarded damages for payments made under the contract, alternative housing costs, emotional distress, and defamation, and allowed attorney fees under the Unfair Practices Act. The court also permitted the bank to offset the judgment by the amount paid by the plaintiffs' insurance company (headnotes, para 1).
Parties' Submissions
- Defendant (Bank): Argued that the plaintiffs' claims were barred by the statute of limitations, that the mobile home was not in the same condition as at the time of sale, and that the plaintiffs failed to meet the requirements for revocation. The bank also contended that its refusal to acknowledge liability under the FTC Holder Rule did not violate the Unfair Practices Act and that its credit reporting was truthful (paras 6-7, 17-18, 26, 32).
- Plaintiffs: Asserted that the bank's refusal to acknowledge their revocation of acceptance and its actions under the FTC Holder Rule constituted unfair trade practices. They also argued that the statute of limitations did not bar their claims and that the bank's credit reporting was defamatory (paras 1, 10, 26, 32).
Legal Issues
- Was the plaintiffs' claim for revocation of acceptance barred by the statute of limitations?
- Did the plaintiffs revoke acceptance of the mobile home within a reasonable time?
- Did the bank's refusal to acknowledge liability under the FTC Holder Rule violate the Unfair Practices Act?
- Was the bank's credit reporting defamatory?
- Was the trial court's award of attorney fees appropriate?
Disposition
- The Court of Appeals affirmed the trial court's decision in all respects (para 45).
Reasons
Per Fry J. (Pickard and Robinson JJ. concurring):
Statute of Limitations: The court held that the four-year statute of limitations for breach of warranty claims did not apply to the revocation of acceptance. Instead, revocation must occur within a "reasonable time" under the Uniform Commercial Code. The trial court's finding that the plaintiffs acted within a reasonable time was supported by evidence of the hidden nature of the defect and the plaintiffs' efforts to resolve the issue (paras 8-16).
Condition of the Mobile Home: The court rejected the bank's argument that the mobile home was not in the same condition as at the time of sale. The bank failed to present evidence of depreciation, and the trial court's finding of no substantial change in condition was upheld (para 17).
FTC Holder Rule: The court found that the FTC Holder Rule does not limit affirmative claims to cases where rescission is appropriate. The rule's language is unambiguous, and the bank's refusal to acknowledge liability under the rule was a violation of the Unfair Practices Act (paras 18-25, 31).
Defamation: The court held that the bank's credit reporting was false because the plaintiffs had revoked acceptance of the mobile home, making them no longer liable for payments. The trial court's finding of bad faith on the part of the bank was supported by substantial evidence (paras 32-33).
Attorney Fees: The court upheld the trial court's reduction of the plaintiffs' attorney fees request, finding that the trial court appropriately limited the award to fees related to the Unfair Practices Act claim. The trial court's rationale was adequately explained, and there was no abuse of discretion (paras 38-43).