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ST. LOUIS RECORD

Wednesday, April 24, 2024

Court of Appeals reverses dismissal in favor of borrowers in class action that originated 18 years ago

KANSAS CITY – The Missouri Court of Appeals, Western District has reversed a Clay County Circuit Court ruling that had dismissed class action claims against Century Financial Group and other lenders.

In an order filed April 24, a three-judge panel found that the claims of second mortgage loan borrowers were not barred by a statute of limitations in a case that had been certified as a class in 2003.

According to the ruling, the case has a "long and complicated history." Background information in the ruling indicates borrowers – which included class representatives James and Jill Baker, Jeffrey and Michelle Cox and William and Linda Springer – filed suit in 2000 over loans originating in 1997.

In a fourth amended petition filed in 2004, the borrowers claimed that lenders violated the Missouri Second Mortgage Loan Act (MSMLA), and continued to violate it by charging and/or receiving interest and principal on loans, which included portions of "illegal settlement charges" that had been financed as part of principal loan amounts.

Relief sought by the class included recovery of all excessive loan origination and other fees they were charged with the Century Financial Group loans and all interest paid or would be paid. They further sought prejudgment interest, punitive damages and fees.

Because of an 8th Circuit Court of Appeals ruling holding that a three-year statute of limitation applies in MSMLA claims, the Clay County court granted summary judgment and dismissed some of the defendants from the case in 2016.

The borrowers asked the court to enter final judgment on their claims and stay the remainder of the class action pending their appeal of the court's 2016 ruling.

In the meantime, Chase moved for summary judgment raising the statute of limitations defense, which was granted. The borrowers appealed.

Appellate Judges Thomas H. Newton, Victor C. Howard and Karen King Mitchell ruled for borrowers.

In part, they held that, "[W]e reject the 8th Circuit’s conclusion...Because the plain language of the statute indicates that it applies whenever a suit is filed against a moneyed corporation, and here, the defendants were all moneyed corporations, the six-year statute of limitations applies."

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