SANTE FE, N.M.—The New Mexico Supreme Court has issued a ruling that allows for a previously dismissed class-action lawsuit against Guadalupe Credit Union to proceed, Aol.com reported.
The court held unanimously that the credit union broke the law by having employees who were not attorneys file lawsuits in Magistrate Court seeking to collect money from the credit union's borrowers, Aol.com said.
"In affirming the Court of Appeals, we clarify that corporations, such as Guadalupe, must appear before our courts through duly licensed counsel unless otherwise authorized by this Court's rules," the Supreme Court wrote in an opinion authored by Justice Michael E. Vigil.
The opinion issued this week upholds a ruling which found the state District Court wrongly dismissed a lawsuit filed in 2019 by eight people and a class of what their lawyer said Monday could be hundreds, if not thousands, of other consumers who faced the unlawful collections efforts in violation of the state Unfair Trade Practices Act, Aol.com said.
"This ruling offers protections to consumers who are taken advantage of by financial institutions who press collections actions without attorneys," plaintiff's lawyer Rob Treinen, who worked on the case alongside attorney Robert David Humphreys, told Aol.com. "Attorneys are constrained by ethical and professional requirements, and the court is recognizing that for consumers to be protected courts must be fair.”
CU’s Appeal
In its appeal, the credit union had maintained state law allows non-attorneys to practice in magistrate courts — which have the authority to hear civil lawsuits up to $10,000 — and that they were essentially acting as self-represented litigants in the debt-collection lawsuits, according to a statement issued by the Administrative Office of the Courts.
The Supreme Court disagreed, opining that corporations can appear in Magistrate Court through non-attorneys only in limited instances which do not include Guadalupe's debt-collection actions, Aol.com said.
"Corporations are held to different standards than individuals," the court wrote. "As a corporation, Guadalupe cannot represent itself or appear pro se. Instead, a corporation must act through an agent, such as an employee, and that agent can only represent the corporation if they are authorized to practice law."
The state Supreme Court's ruling sends the 2019 lawsuit back to the District Court where, Treinen said, the primary question will be the amount of money the plaintiffs and class members are due in connection with having faced the illegal collection efforts. Treinen said the case was dismissed out of District Court before those calculations began so he doesn't yet know how much money could be at stake in the case, Aol.com said.
In a released statement, the $300-million Guadalupe Credit Union, based in Sante Fe, N.M., said it acknowledges the recent ruling by the New Mexico Supreme.
“GCU respects the court’s decision and would like to reassure its members that the credit union proactively implemented policy and procedural changes upon first notification of this case. Since 2019, Guadalupe Credit Union has taken significant steps to align its procedures with legal requirements, including ensuring attorney representation in all court proceedings and conducting comprehensive staff training to reinforce fair and ethical service, the CU said.
“As a credit union rooted in our New Mexico community, we are dedicated to serving our members with transparency and care,” said GCU Board Chair Linda Medina in the release. “Our board fully supports GCU’s ongoing commitment to integrity and trust as we continue to improve our processes in service to our members.”