In Midland Funding LLC v. Thiel, involving three consolidated matters, the Appellate Division firmly announced that N.J.S.A. 12(a):2-725, with its four-year statute of limitation, rather than N.J.S.A. 2(a):14-1, with its six-year period, applies to a claim regarding a retail customer’s use of a store-issued credit card for purchases made at that store. The rule also applies if a third-party financial institution issues the card on behalf of the retailer. Furthermore, unless a plaintiff can demonstrate a “bona fide error,” the filing of a stale action is an automatic violation of the Fair Debt Collection Practice Act (FDCPA), 15 U.S.C.A. §§ 1692 to 1692(p), with its attendant award of attorney’s fees and statutory damages.

All three of these actions were filed more than four years after the first default of each defendant, but within six years of the contract statute of limitations. The Appellate Division—in finding the transaction was a sale of goods, with a four year statute of limitation—affirmed prior case law, published and unpublished, and noted that the “court must examine the whole transaction between the parties and look to the essence or main objective of the parties’ agreement.” A prior Supreme Court case, Sliger v. R.H. Macy & Co., had affirmed such a transaction as a sale of goods with the shorter statute of limitations. Financing by a third-party creditor did not change the nature of the transaction. The Appellate Division made short shrift of plaintiff’s argument that the consumer’s partial payments tolled the running of the statute of limitation, commenting that the cause of action accrued when the first breach occurred, and the creditor had the immediate right to sue.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]