Opinion
Civil No. 01-12 (DSD/JMM).
October 9, 2001
Eric L. Crandall, Esq., Crandall Law Office, Stillwater, MN, counsel for plaintiff.
Gregory J. Johnson, Esq. and Johnson van Vliet, St. Paul, MN, counsel for defendants.
ORDER
This matter is before the court on defendant's motion for summary judgment and plaintiff's motion for partial summary judgment. Based on a review of the file, record, and proceedings herein, the court denies plaintiff's motion and grants defendant's motion.
BACKGROUND
On March 29, 2000, David Hermann Peter ("Peter") visited Wayzata Mitsubishi and expressed an interest in purchasing a 2000 Mitsubishi Eclipse GT automobile. (Belisle Aff. ¶ 3; see also Johnson Aff. ¶ 3). Peter wanted to trade in his 1998 Ford Explorer to purchase an Eclipse. (Belisle Aff. ¶ 3). Peter agreed to purchase an Eclipse for $23,452 and agreed to accept a trade-in allowance of $16,252 on his Explorer. (Id.) As a result, the total taxable sale was $7,200. (Id.) The total amount due on delivery, adding together the total taxable sale ($7,200), applicable sales tax ($648), fees ($323), and the outstanding lien on Peter's Explorer ($11,700) was $19,691. (Id.) Peter executed a purchase contract setting forth the terms of the purchase.
Peter's memorandum in opposition to defendant's motion for summary judgment mentions that only he signed the purchase contract. While no one at the dealership signed the agreement when Peter bought the Eclipse, there is no dispute that Village Imports performed its part of the bargain and that Peter left the dealership with the Eclipse.
After Peter executed the purchase contract and filled out a credit application, he met with the finance manager in Wayzata Mitsubishi's business department. (Id. ¶ 4). Peter agreed to make a purchase down payment of $7,991 to reduce the amount financed from $19,691 to $11,700. (Id.) Wayzata Mitsubishi arranged financing for the purchase. (Id.) The purchase contract stated: "If DEALER is arranging credit for YOU, this CONTRACT is not valid until a credit disclosure is made as described in Regulation Z and you have accepted the credit extended." (Johnson Aff. Ex. 1).
After the parties discussed financing, Peter was presented with an installment contract for his review. (Belisle Aff. ¶ 4). Financing was arranged through Mitsubishi Motors Credit of America ("MMCA") over a 36-month period at 0.00 percent annual percentage rate ("APR") with no payments for the first 90 days. (Johnson Aff. Ex. 2). The installment contract that was presented to Peter contained a segregated truth-in-lending disclosure box entitled, "DISCLOSURES PURSUANT TO TRUTH IN LENDING ACT," which also identified in bold, the "ANNUAL PERCENTAGE RATE" (0.00%), "AMOUNT FINANCED" ($11,700.00), "FINANCE CHARGE" ($0.00) "TOTAL OF PAYMENTS" ($11,700.00) and the "TOTAL SALE PRICE" of $24,243.00. (Id.)
Peter reviewed the installment contract, including the Truth in Lending Act (TILA) disclosures, and signed the contract. (Belisle Aff. ¶ 4.) Immediately above Peter's signature is a provision stating, in bold "NOTICE TO THE BUYER: 1. Do Not Sign This Contract Before You Read It OR If It Contains Any Blank Spaces. 2. You Are Entitled To An Exact Copy Of The Contract Before You Sign." (Johnson Aff. Ex. B). After signing, Peter handed the installment contract back to the Finance Manager. (Belisle Aff. ¶ 4). The Finance Manager then tore off the carbon copy marked "Borrower" on the bottom and gave Peter that copy. (Id.) Peter then took delivery of the vehicle (Belisle Aff. ¶ 4).
In response to Wayzata Mitsubishi's request of admission, Peter acknowledged that he reviewed all of the terms of the installment contract, including the TILA disclosures, before he executed the contract and that he received a copy of the installment contract. (Johnson Aff. Ex. A).
Peter filed this action against Village Imports alleging that Village Imports had engaged in unlawful practices in connection with the sale and finance of the motor vehicle, specifically, by failing to provide Peter with a copy of the retail installment contract prior to the time of execution. Village Imports now brings this motion for summary judgment, and Peter brings a motion for partial summary judgment. For the reason stated, defendant's motion is granted and plaintiff's motion is denied.
DISCUSSION
To prevail on a motion for summary judgment, the moving party must demonstrate to the court that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56(c). For purposes of summary judgment, a fact is material only when its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for the nonmoving party. Id. No genuine issue of material fact exists "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Anderson, 477 U.S. at 255. However, if a plaintiff cannot support each element of its claim, summary judgment must be granted, because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Celotex, 477 U.S. at 322-23. With this standard at hand, the court considers the parties' cross motions for summary judgment.
A. No TILA Violation Has Occurred.
Peter argues that the court should enter partial summary judgment against Village Imports for violation of TILA based on Village Imports' failure to provide Peter with a "timely" copy of the finance agreement prior to the time of execution. Village Imports argues that it did provide a copy of the finance agreement in accordance with TILA.
TILA, 15 U.S.C. § 1601 et seq. (1994), as implemented by Regulation Z, 12 C.F.R. pt. 226 (2000), was enacted by Congress as a tool "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him . . . and to protect the consumer against inaccurate and unfair credit billing . . . practices." 15 U.S.C. § 1601(a); see also First Nat'l Bank v. Office of the Comptroller, 956 F.2d 1456, 1461 (8th Cir. 1992). To meet this end, TILA mandates that creditors make specific disclosures when extending credit to consumers. See 15 U.S.C. § 1638(a). These disclosures include the identity of the creditor, the amount financed, the finance charge and the total number of payments. Id. TILA also requires that before consummation of the deal, consumers be given a copy of the credit term that they can keep to "assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available." 15 U.S.C. § 1601(a). Because TILA is to be broadly construed to provide protection for the consumer, any failure to disclose information as required by TILA or Regulation Z results in a technical violation. Riggs v. Gov't Emp. Financial Corp., 623 F.2d 68 (9th Cir. 1980).
In his memorandum of law in support of his motion for partial summary judgment Peter raises an allegation that the terms of the contract are not those that were orally negotiated by the parties. Since this claim was never pleaded in the underlying complaint the court will not address it. The court further notes that TILA is concerned with disclosures concerning the cost of credit. Peter's challenge to the bargain reached by the parties does not fall under the purview of TILA. TILA "is not intended as a vehicle for pursuing contract actions" whereby the purchaser can challenge the terms of the bargain. Paull v. Chrysler Credit Corp., 544 F. Supp. 848, 851 (N.D.Ill. 1982), aff'd 705 F.2d 944. Thus, Peter's claim concerning the oral agreements will not be considered by the court in determining the propriety of summary judgment.
Village Imports is a creditor as defined by 15 U.S.C. § 1602(f). Peter is a consumer as defined by 15 U.S.C. § 1602(h). The deal that took place on March 29, 2000, between Peter and Village Imports was a credit sale under 15 U.S.C. § 1602 (g). See also 12 C.F.R. § 226.2(a)(16) (defining "credit sale" as "a sale in which the seller is a creditor").
Peter argues that the disclosure of the credit terms contemporaneous with his obligation to sign the sales contract failed to provide him with an opportunity to "shop" for a better interest rate. While the Eighth Circuit has never directly addressed this issue, the court believes that giving a buyer the credit terms on a form that he is to sign complies with the timing requirements of TILA. The retail installment contract given to Peter contained all of the credit and financing terms of the transaction. Peter was given the opportunity to read the contract before he signed it. Peter did not become obligated on the credit transaction until he signed the contract. If Peter did not like the terms, he could have chosen not to sign at the time and taken the agreement with him to "shop" for a better rate. Peter made the choice to sign immediately and did not shop around. Village Imports cannot be held liable for Peter's decision.
The court finds this argument peculiar since Peter obtained an interest-free loan from Village Imports through MMCA. It is difficult to conclude that there may be a creditor willing to give a lower rate of interest than 0.00 percent.
Peter cites Polk v. Crown Auto, Inc. for the proposition that providing a buyer a retail installment contract itself for the buyer to sign does not satisfy the mandate and policy of TILA. 221 F.3d 691 (4th Cir. 2000). The court disagrees. The principal holding in Polk is that an auto dealership cannot give a buyer a copy of his credit terms after the consummation of a transaction. Id. The dealer must provide a detailed disclosure of the credit terms in writing before consummation of the transaction. Id. at 692. Furthermore, Polk is distinguishable because in that case the dealer explained the credit terms orally, had the buyer sign forms and then gave the buyer the full written disclosures in a form that he could keep. Id. at 691. Here, Peter was given an unsigned copy of the retail installment contract (which contained the TILA disclosures), he reviewed it and then signed it. The court finds that Village Imports satisfied TILA when it gave Peter the unsigned contract containing the TILA disclosures and Peter had the opportunity to defer signing it if he found the terms unacceptable.
B. No Actual or Statutory Damages
Even if the court adopted Peter's overly broad interpretation of TILA, Village Imports would still be entitled to summary judgment since Peter cannot demonstrate either statutory or actual damages. Statutory damages are only available for violations of 15 U.S.C. § 1638(a)(2), (3), (4), (5), (6) and (9). Otherwise, an individual is limited to suing for actual damages. 15 U.S.C. § 1640(a)(4). Village Imports's alleged failure to provide timely disclosures is a purported violation of 15 U.S.C. § 1638(b) for which only actual damages are available. Id. And Peter cannot assert any actual damages here since he received an interest rate of 0.00 percent. In other words, the court does not believe that Peter can reasonably contend that he suffered any actual damages on the basis of his alleged inability to shop around for a better rate since the one he received in the retail installment contract he signed with Village Imports was 0.00 percent. In sum, even if TILA were applicable, Peter would not be entitled to recover any statutory or actual damages.
CONCLUSION
Accordingly, for the foregoing reasons, IT IS HEREBY ORDERED that:
1. Defendant's motion for summary judgment is granted;
2. Plaintiff's motion for partial summary judgment is denied; and
3. Plaintiff's complaint is dismissed with prejudice
LET THE JUDGMENT BE ENTERED ACCORDINGLY.