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Curtis v. Propel Prop. Tax Funding, LLC

United States Court of Appeals for the Fourth Circuit

October 30, 2018, Argued; February 6, 2019, Decided

No. 17-2114

Opinion

 [*237]  DUNCAN, Circuit Judge:

Appellants Propel Property Tax Funding, LLC and Propel Financial Services, LLC (collectively "Propel") entered into a Tax Payment Agreement (a "TPA") with Appellee Garry Curtis pursuant to Virginia Code section 58.1-3018. Curtis sued Propel on behalf of himself and other similarly situated individuals, alleging violations of the Truth in Lending Act (the "TILA"), 15 U.S.C. § 1601 et. seq., the Electronic Funds Transfer Act (the "EFTA"), id. § 1693 et. seq., and the Virginia Consumer Protection Act (the "VCPA"), Va. Code Ann. § 59.1-196 et. seq. Propel [**2]  moved to dismiss Curtis's claims under TILA and EFTA, contending that the TPA is not a consumer credit transaction governed by those statutes. The district court denied Propel's motion and sua sponte certified two rulings for interlocutory review pursuant to 28 U.S.C. § 1292(b): (1) its determination that Curtis has standing to proceed on his EFTA claims against Propel and (2) its decision that these TPAs are consumer credit transactions for purposes of TILA and EFTA. For the reasons that follow, we affirm the district court on both issues.

] Virginia allows taxpayers to enter into agreements with third parties to finance payment of local taxes. Va. Code Ann. § 58.1-3018.1 Under these agreements, a  [*238]  third party agrees to pay taxes owed to a locality on behalf of a taxpayer, and the taxpayer agrees to repay the third party in installments, with fees and interest. Id. The terms of the agreement, including repayment periods, interest rates, and other fees, are prescribed by statute. Id. For the period during which the taxpayer repays the third party, the locality tolls the enforcement period for the taxes owed. Id. § 58.1-3018(E). Nothing in the statute indicates that these agreements have any effect on tax liens that may be imposed by Virginia [**3]  law.2 If the taxpayer defaults on the agreement despite the third party's good-faith efforts to collect from him, the third party can ask the locality to reimburse the third party for any taxes paid and to reinstate the full tax obligation against the taxpayer (minus any principal payments made by the taxpayer to the third party). Id. § 58.1-3018(C). Upon reimbursement, "[a]ny right of the third party to payment" under the agreement terminates. Id. § 58.1-3018(C)(4).

Curtis owed $13,734.43 in residential property taxes to the city of Petersburg, Virginia and entered into a TPA with Propel to finance payment of them. The parties agree that the TPA at issue operates in conformity with Virginia's statutory framework, id. § 58.1-3018; see J.A. 32 (stating that under the terms of the TPA, "[o]ur financing of taxes on your behalf pursuant to this Agreement is made pursuant to Va. Code Section 58.1-3018"). For instance, the TPA requires Curtis to pay an origination fee equal to ten percent of his tax obligation, which is the maximum origination fee allowed under the statute. See Va. Code Ann. § 58.1-3018(B)(2); J.A. 30. The TPA also sets Curtis's interest rate at 10.95 percent, below the statutory maximum of sixteen percent, and specifies that no interest shall accrue during the first [**4]  six months of the agreement, as the statute requires. See Va. Code Ann. § 58.1-3018(B)(2); J.A. 30. The TPA requires Curtis to repay Propel in monthly installments for ninety-six months, which is the maximum period allowed by the statute. See Va. Code Ann. § 58.1-3018(B)(2); J.A. 31.

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915 F.3d 234 *; 2019 U.S. App. LEXIS 3684 **

GARRY CURTIS, Plaintiff - Appellee, v. PROPEL PROPERTY TAX FUNDING, LLC; PROPEL FINANCIAL SERVICES, LLC, Defendants - Appellants.

Prior History:  [**1] Appeal from the United States District Court for the Eastern District of Virginia, at Richmond. (3:16-cv-00731-JAG). John A. Gibney, Jr., District Judge.

Curtis v. Propel Prop. Tax Funding, LLC, 265 F. Supp. 3d 647, 2017 U.S. Dist. LEXIS 125757 (E.D. Va., Aug. 8, 2017)

Disposition: AFFIRMED.

CORE TERMS

third-party, financing, taxpayer, consumer, tax obligation, credit transaction, third party, locality, tax lien, payor, regulation, terms, consumer credit, bank loan, property taxes, contends, defer payment, transactions, district court, taxes, authorization, preauthorized, alleges, qualify, motion to dismiss, obligations, repayment, Funding, defer, consumer transaction

Tax Law, State & Local Taxes, Administration & Procedure, Collection of Taxes, Banking Law, Consumer Protection, Truth in Lending, Disclosure, Liability for Violations, Bank Activities, Electronic Banking, Electronic Banking Disclosures, Electronic Banking Requirements, Constitutional Law, Case or Controversy, Standing, Elements, Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Bankruptcy Law, Individuals With Regular Income, Eligibility, Regular Income