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Complete Cash Holdings, LLC v. Fryer

Alabama Court of Civil Appeals

August 2, 2019

COMPLETE CASH HOLDINGS, LLC,
v.
Patricia Diana FRYER Complete Cash Holdings, LLC
v.
Gregory Dustin Killen Complete Cash Holdings, LLC
v.
Misty Dawn Kennedy Complete Cash Holdings, LLC
v.
Loretta Brown Painter Complete Cash Holdings, LLC
v.
Sean Tyson Woods Complete Cash Holdings, LLC
v.
Jasmine Summer Martinez.

         Rehearing Denied October 4, 2019.

         Appeal from Dale Circuit Court (CV-18-15)

         Appeal from Marshall Circuit Court (CV-18-18)

         Appeal from Jackson Circuit Court Nos. (CV-18-13), (CV-18-14), (CV-18-12)

         Appeal from Houston Circuit Court (CV-18-100)

Page 1224

          Andrew P. Campbell and Cason M. Kirby of Campbell Partners, LLC, Birmingham, for appellant.

          Griffin Sikes, Jr., Montgomery; Frank M. Wilson of Copeland, Franco, Screws & Gill, P.A., Montgomery; and Lynn W. Jinks III and Nathan A. Dickson II of Jinks, Crow & Dickson, P.C., Union Springs, for appellees.

         HANSON, Judge.

         These six consolidated appeals arise from cases involving six separate automobile-title loans extended by Complete Cash Holdings, LLC ("Complete Cash"), to Patricia Diana Fryer, Gregory Dustin Killen, Misty Dawn Kennedy, Loretta Brown Painter, Sean Tyson Woods, and Jasmine Summer Martinez ("the pawnors"). In each case, the pawnor pledged his or her vehicle as security for repayment of a

Page 1225

small, short-term loan[1] from Complete Cash. A form title-loan agreement signed by each pawnor granted Complete Cash the right to immediate possession and ownership of the pledged vehicle in the event that the pawnor defaulted on repayment of the loan or otherwise failed to redeem the title to the vehicle by the maturity date. In each case, the pawnor did not make the payments necessary to redeem the title to his or her pledged vehicle; Complete Cash then filed small-claims actions seeking recovery of an amount purportedly owed by each pawnor, and Complete Cash obtained either a default judgment or a consent judgment. These appeals arise from the pawnors' efforts to have those judgments set aside pursuant to Rule 60(b), Ala. R. Civ. P.

         Initially, we note that, under Alabama law, title loans are considered pawn transactions governed by the Alabama Pawnshop Act, § 5-19A-1 et seq., Ala. Code 1975 ("the act"). Floyd v. Title Exch. & Pawn of Anniston, Inc., 620 So.2d 576, 579 (Ala. 1993). As pawn transactions, title loans are generally considered to be nonrecourse loans that do not create personal debt on the part of a pawnor. For example, § 5-19A-6, Ala. Code 1975, provides that "[a] pledgor shall have no obligation to redeem pledged goods or make any payment on a pawn transaction." Section 5-19A-8(7), Ala. Code 1975, likewise provides that "[a] pawnbroker ... shall not ... [m]ake any agreement requiring the personal liability of a pledgor or seller...." Instead, should a borrower default on the loan or otherwise fail to redeem a pledged vehicle, a pawnbroker's remedy under the act is to take possession of that vehicle.

         Furthermore, the act designates the State of Alabama Banking Department ("the department") as the agency with the licensing and regulatory oversight of the pawn industry. Between 2008 and 2015, pursuant to the powers granted it by the act, the department conducted compliance examinations of various Complete Cash locations.[2] The department followed up its compliance examinations with letters to Complete Cash's home office detailing practices uncovered by those examinations that, the department determined, were in violation of the act. In particular, the department repeatedly notified Complete Cash that it could not threaten to initiate or initiate court actions against customers who failed to redeem titles to their vehicles. For example, on April 16, 2013, following an examination of Complete Cash's Boaz, Alabama, office, the department sent Complete Cash a letter, instructing:

"Pawns are non-recourse loans, except for forfeiture of the pledged goods. Therefore pledgors are not obligated to redeem pledged goods or make any payment on a pawn transaction. [Complete Cash] is not allowed to seek `Small Claims' judgments on pawn transactions. [Complete Cash] must discontinue this practice in connection with all pawn transactions."[3]

         Notwithstanding the department's warnings, Complete Cash filed a small-claims action against each of the pawnors. It is undisputed that, at the time it filed the small-claims actions, Complete Cash was

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not represented by counsel and that each of the lawsuits were prepared, filed, and prosecuted by employees of Complete Cash.[4] Attached to each form small-claims complaint was a copy of the title-loan agreement between Complete Cash and the pertinent defendant pawnor.

         On January 2, 2014, Complete Cash sued Kennedy in the small-claims division of the Jackson District Court, asserting that Kennedy had entered into a title-loan agreement with Complete Cash on August 29, 2013; that she had never made any payments on the title loan; and that the vehicle she had pledged as collateral had been "parted out, leaving only the shell to recover." Complete Cash sought a judgment in the amount of the balance due on the loan. Kennedy did not answer the complaint, and, on February 14, 2014, the Jackson District Court entered a default judgment against Kennedy in the amount of $3,000. A satisfaction of the judgment was filed by Complete Cash on November 1, 2016.

         On April 29, 2014, Complete Cash filed a complaint against Killen in the small-claims division of the Marshall District Court. Complete Cash alleged that Killen had entered into a title-loan agreement with Complete Cash on October 15, 2013, and that Killen had made two payments on his loan before informing Complete Cash that the vehicle securing the loan had been totally destroyed in an accident. Complete Cash alleged that Killen had then stopped all further payments. Complete Cash alleged that it had not recovered the vehicle and sought an award in the amount of the outstanding balance Complete Cash alleged was owed under the title-loan agreement. Killen did not answer the complaint, and a default judgment in the amount of $2,487.15 was entered in favor of Complete Cash against Killen by the Marshall District Court on June 10, 2014. Complete Cash initiated garnishment proceedings to enforce the judgment and ultimately filed a satisfaction of judgment.

         On November 12, 2014, Complete Cash filed an action against Fryer in the small-claims division of the Dale District Court. The complaint alleged that Fryer had entered into a title-loan agreement with Complete Cash on December 19, 2013; that Fryer had failed to repay the balance of her title loan; and that Fryer had concealed the location of the vehicle securing the loan. Complete Cash demanded possession of the vehicle or, alternatively, an amount it claimed represented the value of the vehicle. Fryer answered the complaint, and stated that Complete Cash had recovered the vehicle. Complete Cash amended its complaint, admitting that Fryer's vehicle had been recovered and sold by Complete Cash and requesting an award equal to the remaining loan balance less ...


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