Friday, November 1, 2002
Court of Appeal Reinstates Consumers’ Claim That They Were Victimized by Out-of-State Bank
By a MetNews Staff Writer
The First District Court of Appeal has reinstated, for the second time, a Northern California couple’s suit claiming their rights were violated by a Virginia bank that sued them in that state for not making their credit card payments.
Div. Four Wednesday ruled that William and Darlene Yu had stated causes of action for unfair business practices and abuse of process against Signet Bank/Virginia, which issued them a credit card secured by a bank deposit, and Capital One Bank, which acquired Signet.
Signet sued the Yus in Virginia, obtained a judgment, and garnished William Yu’s wages by serving a writ on a Virginia office of his employer, the couple alleged in an Alameda Superior Court complaint. Such conduct may constitute “distant forum abuse” entitling the couple to damages, Presiding Justice Laurence D. Kay wrote for the Court of Appeal.
A summary judgment for the banks was previously reversed by the Court of Appeal. But Judge Barbara J. Miller sustained the banks’ demurrer on remand, concluding that the banks’ alleged conduct did not amount to an abuse of process and thus could not constitute an unlawful business practice.
Kay disagreed, saying the filing of the Virginia suit could, under California law, be sufficient to constitute abuse of process. He also concluded that Capital One, which was not a party to the underlying suit prior to judgment, could still be sued for abuse of process because it allegedly participated in the garnishment after it acquired Signet in 1994.
Kay also concluded that an anti-SLAPP motion filed by the banks—who claimed the Yus’ suit impinged on their constitutional right to sue—was properly denied.
While acknowledging the irony of the banks’ position—claiming a constitutional right to sue in the face of allegations that the suit was an abuse of that right—Kay agreed that the banks’ satisfied their burden of showing that the suit impinged on rights of free speech or petition.
But the Yus, he said, carried their burden of showing that they will probably prevail on their claims at trial.
In reaching that conclusion, the jurist rejected the banks’ contention that Virginia courts had personal jurisdiction over the Yus. Their deposit of funds with Signet, the only commercial activity they have ever entered into with a Virginia entity, is not sufficient to confer such jurisdiction as a matter of due process, Kay wrote.
The case is Yu v. Signet Bank/Virginia, 02 S.O.S. 5555.
Copyright 2002, Metropolitan News Company