No. 30839 - James Dunlap and Stephanie Gibson, on behalf
of themselves and all others similarly situated v. Friedman's, Inc., dba
Friedman's Jewelers, A Delaware Corporation, American Bankers Insurance
Company of Florida, Inc., American Bankers
Life Assurance Company of Florida, Alan Hopkins, William Perry, Nancy Tanoukhi,
Roy Batson, John Doe and Jane Doe
Davis, J., dissenting:
In this proceeding, the majority found that a consumer who is a party to a closed-end
credit transaction may choose between two different statutes of limitation under the West
Virginia Consumer Credit and Protection Act (hereinafter WVCCPA): either the four-
year period commencing with the date of the transaction or within one year of the due date
of the last payment, which ever is later. Syl. pt. 6, Maj. Op. I respectfully dissent from this
holding which applies two separate statutes of limitation to one single transaction as such a
conclusion elevates form over substance and defies common statutory construction.
Master Insulators of St. Louis v. International Ass'n of Heat & Frost Insulators, 925 F.3d
1118, 1121 (8th Cir. 1991).
W. Va. Code § 46A-5-101(1) provides, in pertinent part:
With respect to violations arising from consumer credit sales or
consumer loans made pursuant to revolving charge accounts or
revolving loan accounts, or from sales as defined in article six
of this chapter, no action pursuant to this subsection may be
brought more than four years after the violations occurred. With
respect to violations arising from other consumer credit sales or
consumer loans, no action pursuant to this subsection may be
brought more than one year after the due date of the last
scheduled payment of the agreement.
W. Va. Code § 46A-5-101(1) thus recognizes two kinds of credit transactions: (1) those involving revolving charge accounts, revolving loan accounts or from sales as defined in article six of the WVCCPA and (2) all other consumer credit sales or consumer loans. While W. Va. Code § 46A-5-101(1) does not use the specific term open-end credit, open-end credit is understood to be synonymous with revolving credit. E.g., H.R. Rep. 90-1040
(1967), reprinted in 1968 U.S.C.C.A.N. 1962, 1971 (recognizing that open-end credit
plans are more commonly known as revolving charge accounts).
(See footnote 1)
Moreover, while the majority asserts that W. Va. Code § 46A-5-101(1) does not
specifically address the concept of closed-ended contracts; [and that] the Appellees only
assume that the legislature's use of the term 'other contracts' embraced open-ended
contracts[,] Maj. Op. at 6, it does not explain what other consumer credit sales or consumer
loans could mean besides closed-ended contracts. This common sense recognition that if
the credit is not open-end, it must be closed-end, has antecedents in both state and federal
consumer law. For example, the official Kansas comment accompanying its adoption of the
UCCC's limitation provision
(See footnote 2)
explains that the one-year limitation for other consumer
transactions not covered by the two-year limitation for open end credit applies to closed-
end credit. Kan. Stat. Ann. § 16a-5-201(1) (1995), at Kansas comment 2000 ([S]ubsection
(1) also provides for a relatively short statute of limitations: one year after the last installment
is due under a closed end contract and two years after the violation occurs under open end
credit.). Likewise, the federal regulations implementing Title I of the Federal Consumer
Credit Protection Act explains that [c]losed-end credit means consumer credit other than
open-end credit as defined in this section. 12 C.F.R. § 226.2(10) (2003). Consequently,
W. Va. Code § 46A-5-101(1) makes provision for two different types of transactions_open-
end and closed-end. With this understanding, I now turn to an examination of whether
W. Va. Code § 46A-5-101(1) is ambiguous.
A number of well-established canons of statutory construction should guide our review in this case_the rule against statutory absurdity, the rule of ejusdem generis, the rule against statutory nullity and the rule that statutes of limitation are to be liberally construed to effectuate their manifest objective. We explained the rule against statutory absurdity in Charter Communications VI, PLLC v. Community Antenna Service, Inc., 211 W. Va. 71, 77, 561 S.E.2d 793, 799 (2002) (citations omitted), when we said, a well established cannon of statutory construction counsels against . . . an irrational result [for] '[i]t is the duty of this Court to avoid whenever possible a construction of a statute which leads to absurd, inconsistent, unjust or unreasonable results.' We explained the rule of ejusdem generis in Syllabus point 4 of Ohio Cellular RSA, Ltd. Partnership v. Board of Public Works, 198 W. Va. 416, 481 S.E.2d 722 (1996):
'In the construction of statutes, where general words
follow the enumeration of particular classes of persons or things,
the general words, under the rule of construction known as
ejusdem generis, will be construed as applicable only to persons
or things of the same general nature or class as those
enumerated, unless an intention to the contrary is clearly
shown.' Point 2, Syllabus, Parkins v. Londeree, Mayor, 146
W. Va. 1051[, 124 S.E.2d 471 (1962)]. Syl. pt. 2, The Vector
Co., Inc. v. Board of Zoning Appeals of the City of Martinsburg,
155 W. Va. 362, 184 S.E.2d 301 (1971).
We also have explained that the rule against statutory nullity is [a] cardinal rule of statutory construction . . . that significance and effect must, if possible, be given to every section, clause, word or part of the statute. Syl. pt. 3, Meadows v. Wal-Mart Stores, Inc., 207 W. Va. 203, 530 S.E.2d 676 (1999). Finally, we have observed that the
legislative policy in enacting . . . statutes [of limitation] is now
recognized as controlling and courts, fully acknowledging their
effect, look with favor upon such statutes as a defense. . . . It is
evident . . . that statutes of limitations are favored in the law and
cannot be avoided unless the party seeking to do so brings
himself strictly within some exception. It has been widely held
that such exceptions are strictly construed and are not enlarged
by the courts upon considerations of apparent hardship.
Johnson v. Nedeff, 192 W. Va. 260, 263, 452 S.E.2d 63, 66 (1994) (citations omitted). Thus, '[w]hile the courts will not strain either the facts or the law in aid of a statute of limitations, nevertheless it is established that such enactment will receive a liberal construction in furtherance of their [sic] manifest object, are [sic] entitled to the same respect as other statutes, and ought not to be explained away.' Id., 192 W. Va. at 263, 452 S.E.2d at 66 (citations omitted). See also Wood v. Carpenter, 101 U.S. 135, 139, 25 L. Ed. 807, 808 (1879) (Statutes of limitation are vital to the welfare of society and are favored in the law. They are found and approved in all systems of enlightened jurisprudence. They promote repose by giving security and stability to human affairs. An important public policy lies at their foundation. They stimulate to activity and punish negligence.). Applying these well- established rules to W. Va. Code § 46A-5-101(1) shows the flaws in the majority's opinion.
Simply put, the majority's reading of W. Va. Code § 46A-5-101(1) leads to an absurd
result. The majority holds in this case that a consumer who is a party to a closed-end credit
transaction has two different statutes of limitation: either the four-year period commencing
with the date of the transaction or within one year of the due date of the last payment, which
ever is later. Syl. pt. 6, Maj. Op. The majority opinion fails to draw the distinction set forth
in the statute between open-end credit and closed-end credit, thus ignoring the statutory
language. Further, not only does the majority make the four-year open-end credit limitation
apply to closed-end transactions, it then compounds its error by also making the one-year
limitation for closed-end credit apply as well. In essence, the majority has turned W. Va.
Code § 46A-5-101(1) on its head by converting the limitations period of no more than four
years for open-end transactions into one of at least four years for all transactions. This
particular construction of [W. Va. Code § 46A-5-101(1)] . . . result[s] in an absurdity, [so]
some other reasonable construction, which will not produce such absurdity, [must] be made.
Syl. pt. 7, in part, State ex rel. Charles Town Gen. Hosp. v. Sanders, 210 W. Va. 118, 556
S.E.2d 85 (2001) (internal quotations and citations omitted). Having so stated, I do agree
with the majority on one point. W. Va. § 46A-5-101(1)'s invocation of sales as defined in
article six [of the West Virginia Consumer Credit Protection Act] creates an ambiguity
requiring judicial resolution. Unfortunately, the majority failed to properly apply our rules
of statutory construction.
[S]ale as defined in article six [of the WVCCPA] is any sale, offer for sale or
attempt to sell any goods for cash or credit or any services or offer for services for cash or
credit. W. Va. Code § 46A-6-102(d) (1996) (Repl. Vol. 1999). W. Va. Code § 46A-5-
102(d) does not define the credit used in the sale as either open-end or closed-end.
However, W. Va. Code § 46A-5-101(1)'s invocation of sale as defined in article six is
preceded in W. Va. Code § 46A-5-101(1) by the definition of open-end consumer financing.
Consequently, the use of the term credit in the definition of sale in article six, section
102(d) of the WVCCPA must be understood as referring only to open-end credit
transactions_a result compelled by ejusdem generis since the general term credit in article
six is preceded by the more specific term revolving, or open-end credit transactions.
(See footnote 3)
conclusion is reinforced by the realization that any other reading of W. Va. Code § 46A-5-
101(1) nullifies the one-year limitation applicable to other consumer credit sales or
consumer loans[,] because if any sale involving any type of credit triggers the four year
statute of limitation, there would be no need for the one year limitation for other consumer
credit sales or consumer loans_a reading foreclosed by the rule against statutory nullity
requiring every portion of a statute be given effect. Thus, the one-year limitation under
W. Va. Code § 46A-5-101(1) must apply to closed-end credit transactions such as those at
issue in this case.
Consequently, application of the above rules to W. Va. Code § 46A-5-101(1)'s
limitations provisions requires us to find that the Legislature's use of sale as defined in
article six, in the four-year limitation provisions was meant only to assure that the four-year
limitation applies to any open-end contract, no matter the method used for establishing a
revolving or open-end contract, or how the transaction is characterized, i.e., as a credit
sale, consumer loan or any other type of arrangement. Thus, the majority's resort to a
liberal interpretation of the limitations provision as a remedial statute in the appellants' favor
is unwarranted. See Bishop Trust Co. v. Burns, 46 Haw. 375, 399-400, 381 P.2d 687, 701
(1963) (recognizing the rule that the tax statute must be construed in favor of the taxpayer
is only to be resorted to as an aid to construction when an ambiguity or doubt is apparent
on the face of the statute, and then only after other possible extrinsic aids of construction
available to resolve the ambiguity have been exhausted).
Finally, I believe the majority has erred by not affording W. Va. Code § 46A-5-101(1)
the same respect due other statutes and by not granting it a liberal construction in
furtherance of [its] manifest objective[,] Johnson, 192 W. Va. at 263, 452 S.E.2d at 66
(citations omitted), of encourag[ing] promptness in instituting actions; . . . suppress[ing]
stale demands or fraudulent claims; and . . . avoid[ing] inconvenience which may result from
delay in asserting rights or claims when it is practicable to assert them. Morgan v. Grace
Hosp., Inc., 149 W. Va. 783, 791, 144 S.E.2d 156, 161 (1965). The majority has denigrated
the importance of W. Va. Code § 46A-5-101(1)'s limitations provisions and, in so doing, has
ignored the plethora of our decisions reflect[ing] our commitment to ensuring that such time
limits are strictly followed. Perdue v. Hess, 199 W. Va. 299, 303, 484 S.E.2d 182, 186
W. Va. Code § 46A-5-101(1) must receive a liberal construction in furtherance of
[its] manifest object of establishing two different limitations periods for two different types
of consumer credit or loans_a four-year limitation for any open-end consumer credit or open-
end consumer loans and a one-year limitation for all other sales or loans, i.e., closed-end
consumer credit or closed-end consumer loans. Thus, contrary to the majority's ipse dixit
conclusion conflating open-end and closed-end credit and finding that a closed-end consumer
credit transaction has two applicable statutes of limitation under W. Va. Code § 46A-5-
101(1), I find that the law compels the following recognition. If a consumer asserts a
violation arising from consumer credit sales or consumer loans made pursuant to revolving
charge accounts or revolving loan accounts, or from sales as defined in article six of this
chapter, that is any transaction that involves open-end consumer credit or an open-end
consumer loan, the applicable limitations period is four years. However, if a consumer
asserts violations arising from other consumer credit sales or consumer loans[,] that is a
closed-end consumer credit or a closed-end consumer loan, the applicable period of
limitations is one year.
(See footnote 4)
Thus, I respectfully dissent. I am authorized to state that Justice Maynard joins me in this dissenting opinion.
harmonization between W. Va. Code § 46A-5-101(1) and § 46-2-725(1), both of which relate to consumer protection, is justified because a statute should be read to make it harmonize with other statutory enactments[.] Preston Mem. Hosp. v. Palmer, ___ W. Va. ___, ___, 578 S.E.2d 383, 390 (2003) (per curiam) (Davis, J., concurring) (citing Syl. pt. 7, Ewing v. Board of Educ. of Summers County, 202 W. Va. 228, 503 S.E.2d 541 (1998)).