OPINION BY MUSMANNO, J.:
In this class action contract dispute, Cody Cubler ("Cubler"), individually and on behalf of all others similarly situated, appeals from the Order that granted the Motion for judgment on the pleadings filed by TruMark Financial Credit Union ("TruMark"), and dismissed Cubler's Complaint with prejudice. We reverse and remand for further proceedings.
The trial court set forth the relevant facts underlying this appeal as follows:
Trial Court Opinion, 4/4/13, at 1-3 (footnote added).
Cubler filed his Complaint on April 16, 2012, approximately 2 ½ years after TruMark repossessed and sold his vehicle. In his Complaint, Cubler objected to TruMark's failure to provide him (and his fellow class members) proper notice pursuant to the provisions of Article 9 of the UCC, and sought to recover "statutory damages" under section 9625 of the UCC. See 13 Pa.C.S.A. § 9625 (titled "[r]emedies for secured party's failure to comply with division."). Section 9625 provides, in relevant part, as follows:
13 Pa.C.S.A. § 9625. Accordingly, Cubler asserted that section 9625 afforded him and his fellow class members a recovery of (a) "minimum damages of not less than the credit service charge plus 10% of the principal amount of the obligation[,]" id. § 9625(c)(2); and (b) additional statutory damages in the amount of $500, pursuant to sub-section 9625(e)(5).
Following a procedural history that is not relevant to our disposition of this appeal, on July 30, 2012, TruMark filed a Motion for judgment on the pleadings. TruMark asserted that it was entitled to judgment as a matter of law because Cubler's claims were barred by the applicable statute of limitations.
By an Order entered on October 23, 2012, the trial court granted TruMark's Motion for judgment on the pleadings, dismissed Cubler's Complaint with prejudice, and entered judgment against him and the putative class. In this Order, the trial court stated that the two-year limitations period applied, thereby barring Cubler's action, based upon its finding that the relevant provisions of section 9625 are punitive in nature. In support of this determination, the trial court opined that "the intended purpose of [section 9625] is not to compensate [an aggrieved party,] but to punish the offending entity and deter future violations.... [T]he damages sought by [Cubler] are directly analogous to a civil penalty or forfeiture." Trial Court Opinion, 4/4/13, at 10. The trial court further stated that "damages pursuant to [section] 9625 constitute a statutory penalty[,] in that they are penal, deterrent, punitive, and non-compensatory in nature[. Cubler] is not required to prove any injury or loss in order to recover[.]" Id. at 9 (emphasis in original).
Brief for Appellant at 3-4 (brackets omitted). We will address Cubler's closely related issues simultaneously.
Our standard of review is as follows:
Coleman v. Duane Morris, LLP, 58 A.3d 833, 836 (Pa.Super.2012) (citation omitted).
Cubler argues that the trial court erred in disregarding the plain language of section 9625, which, itself, is titled "Remedies for secured party's failure to comply with division." Brief for Appellant at 12 (quoting 13 Pa.C.S.A. § 9625 (emphasis supplied by Cubler)). Cubler emphasizes that section 9625 never mentions the words "civil penalty" or "forfeiture." Brief for Appellant at 12, 15. Cubler further points out that the relevant provisions of section 9625 specifically provide for the "recover[y]" of "statutory damages." Id. at 13, 15 (quoting Pa.C.S.A. § 9625(c)(2) and (e)(5)). Cubler argues that "[t]here is simply no ambiguity in [the words] `remedy,' `damages' or `[] recovery' that would permit the trial court to disregard the text of [section 9625], ostensibly `because the intended purpose of the statute is not to compensate [a] plaintiff, but to punish the offending entity and deter future violations.'" Brief for Appellant at 15 (quoting Trial Court Opinion, 4/4/13, at 10 (emphasis supplied by Cubler)).
According to Cubler, the reasoning of the Pennsylvania Supreme Court in the analogous case of Pantuso Motors, supra, should guide our analysis, and lead to a determination that a plain reading of the unambiguous language of section 9625 reveals that it is a remedial statute intended to compensate aggrieved debtors/obligors for their losses. In Pantuso Motors, the Supreme Court addressed whether the plaintiff's action seeking liquidated damages under 42 Pa.C.S.A. § 8104(b) (providing for liquidated damages in actions concerning
Pantuso Motors, 798 A.2d at 1281-82 (citations to case law omitted). The Supreme Court went on to hold that, based upon a plain reading of the language of Section 8104(b), "[i]t would [] be anomalous for this Court to declare ... that a remedy which the General Assembly has specifically designated as liquidated damages is in fact a statutory penalty or forfeiture." Id. at 1283 (emphasis added). Additionally, the Supreme Court disagreed with the defendant's argument that "the remedy provided by Section 8104(b) is primarily punitive in nature, as it is designed to encourage timely removal of satisfied judgments from court dockets, rather than to compensate the debtor for any harm suffered." Id. at 1281. Instead, the Supreme Court held that although the imposition of liquidated damages under Section 8104(b) may have a "punitive" effect on an offending party, the General Assembly intended such damages to primarily serve as a remedy to compensate aggrieved claimants, not as a penalty against offending parties. Id. at 1283-84.
In the instant case, we agree with Cubler that the Supreme Court's approach in Pantuso Motors should guide our analysis; neither TruMark nor the trial court provide us with any compelling reasons to the contrary.
Moreover, a determination that the statutory damages provided for in section 9625 are intended to be compensatory and not penal in nature is supported by section 1305 of the UCC. Section 1305 provides that "neither consequential or special damages nor penal damages may be had except as specifically provided in this title or by other rule of law." 13 Pa.C.S.A. § 1305(a) (emphasis added). Furthermore, section 9625 provides a damages formula that is expressly linked to the aggrieved party's injury, not to the degree of the offending party's culpability, which is a feature inherent in penalties. See, e.g., 13 Pa.C.S.A. § 9625(b) (providing that "a person is liable for damages in the amount of any loss caused by a failure to comply with this division"); id. § 9625(c)(2) (providing that an aggrieved debtor/obligor is entitled to an award "not less than the credit service charge plus 10% of the principal amount of the obligation or the time price differential plus 10% of the cash price."). Finally, like the circumstances presented in Pantuso Motors, even if the imposition of statutory damages under section 9625 may have the effect of encouraging compliance with the provisions of Article 9, the General Assembly intended such damages to serve primarily to compensate aggrieved claimants, not as a penalty against offending parties. See Pantuso Motors, 798 A.2d at 1283-84.
The trial court sought to support its determination that the General Assembly drafted section 9625 with the intent to punish offending parties and incentivize compliance with the provisions of Article 9 of the UCC, rather than to compensate aggrieved parties for their losses, by pointing to the following Official Comment to section 9625:
13 Pa.C.S.A. § 9625, cmt. ¶ 4 (emphasis added); see also Trial Court Opinion, 4/4/13, at 7. We find the trial court's interpretation of this Official Comment to be misguided.
As stated above, the plain statutory text of section 9625 reveals that its remedies are compensatory; the statute contains no language suggesting that it is primarily "penal." Concerning the language "regardless of any injury that may have resulted" used in the above-mentioned Official Comment, the drafters of section 9625 did not include this language to express an intent for section 9625 to serve as a penalty for creditor non-compliance regardless of the debtor's/obligor's injury. Rather, the drafters included this language in the Official Comment, and removed the requirement for an aggrieved debtor/obligor to prove actual damages in order to recover statutory damages under section 9625, in recognition of the inherent difficulty for a claimant to quantify and prove actual damages. See, e.g., 13 Pa.C.S.A. § 9625(b) (providing that "[l]oss caused by a failure to comply may include loss resulting from the debtor's inability to obtain ... alternative financing"); accord In re Koresko, 91 B.R. 689, 699 (Bankr.E.D.Pa.1988) (analyzing the predecessor statute to section 9625 and pointing out that one injury that might flow from an insufficient motor vehicle repossession notice, but is difficult for the debtor/obligor to prove, is the lost opportunity to attend the sale and affect any deficiency resulting from a sale of the vehicle for less than its fair market value).
Based upon the foregoing, we conclude that the trial court committed an error of law by granting TruMark's Motion for judgment on the pleadings. We hold that the relevant provisions of section 9625 are not "punitive" in nature, nor do they provide for a "civil penalty" or "forfeiture." Therefore, the trial court erred in determining that Cubler's class action was time-barred by the two-year statute of limitations set forth in 42 Pa.C.S.A. § 5524(5). Cubler's action fell under the residual six-year statute of limitation, see 42 Pa.C.S.A. § 5527(b), and, therefore, his Complaint was timely filed within this limitation period. Accordingly, we reverse the trial court's Order dismissing Cubler's Complaint and entering judgment against him and his fellow class members, and we remand the case to the trial court for further proceedings.
Order reversed. Case remanded for further proceedings. Jurisdiction relinquished.