Earlier this year, the Legislature introduced SB5, a bill aimed at amending Article 5, §§ 104 and 108 of the West Virginia Consumer Credit and Protection Act, as well as adding an entirely new section to Article 5. Governor Justice signed off on the bill and the changes went into effect this past summer. These changes do several things: (1) codify factors a court must consider in determining whether to award reasonable attorney’s fees and expenses to a consumer, (2) revised the language in § 108 to expand the applicability of § 108 to causes of action under Article 6 of the West Virginia Consumer Credit and Protection Act; and (3) provided a process in which offers of judgment are evaluated in actions brought under the West Virginia Consumer Credit and Protection Act.
First, the smallest and least substantive amendment was to § 46A-5-108. Essentially, all this change did was add additional language to the “right to cure” provisions of Article 5 to also include actions brought pursuant to § 46A-6-1 et seq. There is no further substantive change to this section.
Regarding the amendment to § 46A-5-104, besides minor stylistic changes to the phrasing of this section, the amendment has codified twelve separate factors that courts must consider if awarding reasonable attorney’s fees and expenses to a consumer bringing an action under the West Virginia Consumer Credit and Protection Act. The factors the court must consider are:
(1) The time and labor required;
(2) The novelty and difficulty of the questions;
(3) The skill requisite to perform the legal service properly;
(4) Preclusion of other employment by the attorney due to acceptance of the case;
(5) The customary fee;
(6) Whether the fee is fixed or contingent;
(7) Time limitations imposed by the client or the circumstances;
(8) The amount involved, and the amount of the judgment and any nonmonetary relief obtained;
(9) The experience, reputation, and ability of the attorneys;
(10) The undesirability of the case;
(11) The nature and length of the professional relationship with the client; and
(12) Awards in similar cases.
The amendment to § 46A-5-104 then goes on to state that if a claim was brought in bad faith and for the purposes of harassment, the court may award reasonable attorney’s fees and expenses to the defendant under the analysis using the above-mentioned factors.
Finally, the most substantive amendment was the addition of § 46A-5-109. This lengthy section essentially provides that if a defendant makes an offer of judgment that is rejected by the plaintiff, the plaintiff may not recover fees or expenses from the date of the offer through the entry of judgment if the final judgment is one of no liability or if the final judgment obtained, exclusive of attorneys' fees and expenses, is less than 75% of the offer. If the judgment entered does not exceed 75%, the defendant may be entitled to reasonable fees and expenses incurred from the date of the offer to the entry of final judgment if the court finds that the plaintiff acted without substantial justification or without good faith in rejecting the defendant’s offer. Additionally, this new section provides that a prevailing party may be entitled to fees and costs if the court determines that the opposing party presented a frivolous claim or defense. In that event, the court would hold a separate bifurcated hearing wherein it shall make a determination of whether the frivolous claims or defenses were asserted and to award damages, if any, against the party presenting the frivolous claims or defenses.
