Harvey v. HOUSING DEVELOPMENT CORP., ETC.

• Citation: 451 F. Supp. 1198
• Decision Date: 28 April 1978
• Docket Number: No. 76CV314-W-3.,76CV314-W-3.
• Parties: Vonsella HARVEY v. HOUSING DEVELOPMENT CORPORATION AND INFORMATION CENTER.
• Court: U.S. District Court — Western District of Missouri

451 F. Supp. 1198

Vonsella HARVEY v. HOUSING DEVELOPMENT CORPORATION AND INFORMATION CENTER.

No. 76CV314-W-3.

United States District Court, W. D. Missouri, W. D.

April 28, 1978.

Richard F. Halliburton, Legal Aid & Defender Society, Kansas City, Mo., for plaintiff.

James M. Ramsey, Kansas City, Mo., for defendant.

ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

RUSSELL G. CLARK, District Judge.

This is an action filed on June 2, 1976 in which plaintiff, Vonsella Harvey, charges defendant, Housing Development Corporation and Information Center, with having violated certain provisions of the Truth In Lending Act, 15 U.S.C. § 1601 et seq. and Regulation Z as promulgated by the Board of Governors of the Federal Reserve System.

Plaintiff seeks recission, damages, costs and reasonable attorney fees.

In a separate count plaintiff sought the same relief on the theory of false representations made by defendant's agents and on their breach of a fiduciary duty owed to plaintiff. Upon filing a motion for summary judgment, plaintiff expressly abandoned her alleged cause of action on this theory.

The parties have jointly executed and filed a Standard Pretrial Order No. 2 in which all material facts and all issues of law have been stipulated by the parties. A review of the stipulations reveals that there is no genuine issue as to any material fact determinative of the issue of liability Rule 56(c) F.R.C.P..

The stipulations filed by the parties reflect the following facts:

1. Plaintiff is a resident of Kansas City, Jackson County, Missouri, and presently resides and at all times relevant hereto did reside at 3001 East 32nd Street, Kansas City, Missouri. Defendant HDCIC is a not-for-profit corporation organized under the laws of the State of Missouri and has its principal place of business at 306 East 12th Street, Kansas City, Missouri.

2. On June 27, 1973, plaintiff and defendant entered into a credit transaction (hereinafter referred to as the "transaction") by the terms of which plaintiff borrowed from defendant the sum of $4,000.00 on which a finance charge of $441.00 was imposed by defendant, and which required payment by the plaintiff of a total of $4,441.00 in 84 monthly installments of $52.88 each.

3. In connection with the transaction, plaintiff, on June 27, 1973, executed a document entitled "Home Improvement Revolving Loan Fund Loan Agreement" (Plaintiff's Exhibit 1), and a promissory note (Plaintiff's Exhibit 2) in favor of defendant HDCIC.

4. On June 27, 1973, plaintiff, to secure payment of her obligation under the transaction, also executed a Deed of Trust (Plaintiff's Exhibit 4) in favor of defendant HDCIC and James H. Reed, Trustee, on her property located at 3001 East 32nd Street, Kansas City, Missouri.

5. The said $4,000.00 which plaintiff borrowed from defendant was combined by defendant with $500.00 paid by plaintiff to defendant, and defendant subsequently distributed the total $4,500.00 as follows: $1,480.00 was paid by defendant to J & T Construction Company, and $3,020.00 was paid to Keys Construction Company for certain home improvement and repair work allegedly done by said contractors on the residence of plaintiff located at 3001 East 32nd Street, Kansas City, Missouri.

6. In addition to the $500.00 sum contributed by plaintiff, plaintiff contributed an additional $52.00 which was distributed by defendant as follows: $20.00 was paid for a title report on plaintiff's residence; $8.00 was paid for a credit report on plaintiff; and $24.00 was paid by defendant to record, in the Office of the Jackson County Recorder of Deeds as security for said $4,000.00 loan, the second Deed of Trust (Plaintiff's Exhibit 4) on plaintiff's said residence.

7. At the time of the transaction between plaintiff and defendant, defendant, in the ordinary course of its business regularly extended credit in the form of loans of money to individuals for the purpose of financing improvements and repairs on the private residence of each such individual, on each of which obligation defendant imposed a finance charge, and each of which obligation was repayable to defendant in more than four installments.

8. In connection with the transaction defendant on June 27, 1973, delivered to plaintiff a document entitled "TRUTH-IN-LENDING DISCLOSURE STATEMENT" (Plaintiff's Exhibit 3), which is the only document delivered by defendant to plaintiff upon which defendant relies in providing proper Truth-In-Lending disclosures, exclusive of those disclosures required by § 226.9 of Regulation Z and § 125 of the Truth-In-Lending Act, to the plaintiff in connection with the transaction.

9. In connection with the transaction, defendant, on June 27, 1973, delivered to plaintiff a document entitled "NOTICE OF OPPORTUNITY TO RESCIND TRANSACTION" (Plaintiff's Exhibit 7), which is the only document delivered by defendant to plaintiff upon which defendant relies in providing plaintiff proper notice of her right to rescind the transaction as required by § 226.9(b) of Regulation Z and § 125 of the Truth-in-Lending Act.

10. The size of type contained in the said "Notice of Opportunity to Rescind Transaction" (Plaintiff's Exhibit 7) is less than 12 point type¹ in violation of § 226.9 of Regulation Z.

11. The original of a letter (Plaintiff's Exhibit 5) advising defendant of certain alleged violations of Truth-in-Lending Act and Regulation Z in connection with the transaction, was mailed on behalf of plaintiff on September 3, 1975, to Mr. Karl Arterbery, Executive Director of defendant HDCIC, by plaintiff's attorney at that time, James S. Bolan, and was received by defendant on September 4, 1975.

12. The original of a letter (Plaintiff's Exhibit 6) rescinding the transaction was mailed on behalf of plaintiff on September 3, 1975, to Mr. Karl Arterbery, Executive Director of defendant HDCIC, by plaintiff's attorney at that time, James S. Bolan, and was received by defendant on September 5, 1975.

13. Prior to the sending on plaintiff's behalf of Plaintiff's Exhibits 5 and 6 to defendant, plaintiff had paid to defendant a total of $1,067.60 toward her original obligation on the transaction between plaintiff and defendant.

14. Defendant has not at any time returned to the plaintiff any of the money paid by her to defendant in connection with the transaction.

15. Defendant has not taken any action to reflect the termination of the Deed of Trust (Plaintiff's Exhibit 4) executed by plaintiff in connection with the transaction.

16. On November 21, 1975, defendant, through its authorized agent and administrative officer, Robert J. Kelly, Jr., sent to plaintiff a letter (Plaintiff's Exhibit 8), demanding alleged past-due payments.

This Court has jurisdiction pursuant to 28 U.S.C. § 1337 and 15 U.S.C. § 1635 and § 1640(d) and (e).

The parties have stipulated to the execution and genuineness of the following documents which are before the Court:

Plaintiff's Exhibit 1: "Housing Development Corporation and Information Center Home Improvement Revolving Loan Fund Agreement" signed by plaintiff on June 27, 1973;

Plaintiff's Exhibit 2: Promissory note in the principal amount of $4,000.00 signed by plaintiff on June 27, 1973; Plaintiff's Exhibit 3: TRUTH-IN-LENDING DISCLOSURE STATEMENT" provided to plaintiff by defendant on June 27, 1973;

Plaintiff's Exhibit 4: Deed of Trust executed by plaintiff on June 27, 1973;

Plaintiff's Exhibit 5: Letter on behalf of plaintiff directed to defendant dated September 3, 1975 advising defendant of certain violations of the Truth-in-Lending Act and Regulation Z in connection with the transaction here in question;

Plaintiff's Exhibit 6: Letter on behalf of plaintiff to defendant dated September 3, 1975 in which plaintiff rescinded the loan transaction entered into on June 27, 1973;

Plaintiff's Exhibit 7: "NOTICE OF OPPORTUNITY TO RESCIND TRANSACTION" delivered to plaintiff by defendant on June 27, 1973. Plaintiff thereon acknowledges receipt of two copies on June 27, 1973;

Plaintiff's Exhibit 8: Letter dated November 21, 1975 from defendant to plaintiff in which defendant demanded past due payments.

Based upon the above stipulation of facts and exhibits before the Court, plaintiff's motion for summary judgment is denied for the reasons set forth herein.

We will first consider plaintiff's right to recover damages, costs and attorney's fees as provided under § 1640(a) and the subparagraphs thereunder of Title 15 U.S.C. which briefly provide that where a creditor fails to comply with the requirements of the Truth-in-Lending Act with respect to any person the lender shall be liable to such person:

1640(a)(2)(A)(i) "in the case of an individual action twice the amount of any finance charge in connection with the transaction," and

"(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court."

Plaintiff claims that the defendant violated the mandatory provisions of 15 U.S.C. § 1631 and § 226 of Regulation Z in that defendant's Truth-in-Lending Disclosure Statement was defective in that:

(a) the terms "finance charge" and "annual percentage rate" were not printed more conspicuously than other terminology used in the statement; as required in Section 121 of the Act, 15 U.S.C. § 1631 and § 226.6(a) of Regulation Z.

(b) the term finance charge is not properly disclosed in that the term "finance charges" is used in violation of § 226.8(d)(3) of Regulation Z.

(c) the statement failed to itemize the charges included in the "amount financed" as required by Section 129 of the Act, 15 U.S.C. § 1639;

(d) The "Notice of Opportunity to Rescind Transaction" was printed in letters other than 12-point bold faced type; in violation of Section 125 of the Act, 15 U.S.C. § 1635 and § 226.9 of Regulation Z;

(e) The Statement failed to indicate the total of payments and failed to use the term "total of payments"; as required by ...