Montclair
Montclair v. L.O.I., Inc.
Opinion
Lead Opinion
MEMORANDUM *
Jesse Montclair filed an action seeking damages under the Racketeering Influenced and Corrupt Organization Act (“RICO”), 18 U.S.C. §§ 1962 , 1964, the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 , the Truth in Lending Act, 15 U.S.C. § 1640 , and Montana’s Deferred Deposit Loan Act (the “Act”), Montana Code Ann. § 31-1-702 et seq. The named defendants were L.O.I., Inc., doing business as E-Z Money Check Cashing Inc. (E-Z Money), which made a deferred deposit loan to Montclair, and Credit Service Company (Credit Service), a collection agency, to whom E-Z Money assigned Montclair’s account. Montclair’s federal claims were based on his contention that the state court’s award of $500 in bad check damages pursuant to Montana Code Ann. § 27-1-717 was a violation of Montana law. The district court held that Credit Service’s collection of $500 in bad check charges did not violate Montana law and dismissed the action. Montclair filed a timely appeal, and we now affirm the district court’s dismissal of his action.
The underlying facts are not contested and were set forth by the district court as follows:
A district court’s dismissal of an action pursuant to Federal…
Dissenting Opinion
Canby, J.
dissenting:
With all due respect to the majority’s view, I dissent. Montana’s Deferred Deposit Loan Act was enacted in 1999 to “protect consumers who enter into short-term, high-rate loans____” Montana Code Ann. § 31-1-702. One of the protections provided by the Act is that covered lenders may not charge more than $30 as a bad check penalty. Id. § 31-1-722(3). Thus, after Montclair defaulted, E-Z Money Check Cashing, Inc., the lender, could have pursued him for no more than the original $200 principal, plus the $45 interest and a $30 bad check charge, for a total of $275.
Instead of pursuing Montclair directly, however, E-Z Money assigned the account to a collection agency, L.O.I., Inc. L.O.I. sought and obtained a default judgment for $775, representing the $275 owed to EZ Money plus an additional $500 bad check charge purportedly owed to L.O.I.
This result totally frustrates the remedial purposes of the bad check charge limitation in Montana’s Deferred Deposit Loan Act. The protection of a maximum $30 bad check charge provided by the Act becomes wholly illusory, and Montclair becomes subject to a charge more than sixteen times as large.