Burton v. G. A. C. Finance Co., 75--3026
| Decision Date | 12 January 1976 |
| Docket Number | No. 75--3026,75--3026 |
| Citation | 525 F.2d 961 |
| Parties | Virgil L. BURTON, Plaintiff-Appellant, v. G.A.C. FINANCE COMPANY, Defendant-Appellee. Summary Calendar. * |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert E. Steele, Jr., Macon, Ga., for plaintiff-appellant.
Lucian Lamar Sneed, Atlanta, Ga., for defendant-appellee.
Appeal from the United States District Court for the Middle District of Georgia.
Before WISDOM, BELL and CLARK, Circuit Judges:
Because the dismissal of this case at the pleading stage has abridged the adversary process, we vacate the judgment and remand the cause for further proceedings.
The complainant in this case sought money damages under the Consumer Credit Protection Act (Truth in Lending Act), 15 U.S.C. § 1601 et seq., and its implementing Regulation Z, 12 C.F.R. § 226.1 et seq., adopted by the Board of Governors of the Federal Reserve System. It alleges a failure to include in the 'finance charge' the cost of insurance issued in connection with the renewal of a loan. Attached as exhibits to this pleading were a copy of a statement of loan and a federal disclosure statement furnished to the borrower. The complaint asserted that specified charges had been made for credit life, credit disability and fire insurance coverages, but that the lender had not obtained a signed statement from the borrower indicating his desire to purchase these coverages. The assertion was made that the lender's failure to obtain such a signed statement necessitated the inclusion of the listed charges in the 'finance charge,' that this had not been done, and that the deficit rendered the lender liable to the borrower for damages and attorneys' fees under the Act. The answer of the defendant finance company admitted that the amounts alleged had been collected for the credit and for the fire coverages, but denied that the lender had failed to obtain a written indication of the borrower's desire to purchase those categories of insurance and denied that the 'finance charge' was incorrectly computed.
Approximately two and one-half months after the answer was filed, the clerk of the district court wrote to counsel for plaintiff and defendant:
'Gentlemen:
'Is there any reason why the Court cannot dispose of the above styled case on the basis of what is now of record in the file and without further hearing?
'Please advise the Court by replying to this letter within 10 days.'
Counsel for the plaintiff duly responded:
'Dear Mr. (Clerk):
'Although the defendant has requested a jury trial it is believed that a pre-trial hearing would show there is nothing for a jury to determine.'
A copy of this response was sent to counsel for defendant.
Eight days after plaintiff's letter, counsel for the defendant wrote:
'Dear Mr. (Clerk):
'As per our conversation of last week, I am enclosing a copy of the Federal Disclosure Statement in the above referenced case.
'If there is anything further necessary, please call our office.'
Counsel for the defendant did not serve a copy of this response or its enclosure on counsel for the plaintiff. The disclosure statement forwarded to the clerk was different from that exhibited to the complaint in that it purported to be signed in two places by the borrower and contained in added language an election to purchase credit life and disability insurance through the lender.
After receipt of this document and without further contact with counsel, the court filed its Findings of Fact, Conclusions of Law, and Opinion, and on the same date a final judgment dismissing the action was entered. The court found that the parties had agreed to the disposition of the case 'on the basis of the pleadings and documents on file.' The court then adjudicated that the document subsequently furnished ex parte by counsel for the defendant lender furnished a sufficient basis for concluding that the loan transaction accorded with the provisions of law and implementing regulations governing the optional purchase of credit life and disability insurance. Additionally the court determined that the fire insurance premium was also properly excluded from the 'finance charge' because the disclosure form advised the borrower that he had the choice of obtaining this coverage either from lender or some other insurance source.
Counsel for plaintiff moved to set aside the judgment under Fed.R.Civ.P. 60(b), asserting (1) that the additional document furnished by his opponent prior to the court's judgment was not evidence properly before the court; (2) that he had not been afforded an opportunity to present his evidence or legal position; and (3) that his client had not received a duplicate of the additional document furnished by his adversary. The district court denied this motion, finding:
The findings as to grounds (1) and (2) are without basis in the record. The fact that counsel for the defendant had mailed a particular document to the clerk does not make such a document a part of the pleadings and records. Rule 5 of the Federal Rules of Civil Procedure requires that documents such as counsel's letter, which furnish information critical to the cause of action asserted be served upon opposing counsel in the manner provided by that...
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In re Steinbrecher
...Loan of Mississippi, Inc.; Davis v. United Companies Mortg. & Invest. of Gretna, Inc., 551 F.2d 971 (5th Cir.1977); Burton v. G.A.C. Finance Co., 525 F.2d 961 (5th Cir.1976); Brown v. National Permanent Federal Sav. & Loan Assoc., 526 F.Supp. 815 (D.D.C.1981), aff'd in pertinent part, 683 F......
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Wright v. Tower Loan of Mississippi, Inc., 81-4154
...such as the insurance policy. Lyles v. Commercial Credit Plan, 660 F.2d 129, 131-32 (5th Cir. 1981); see Burton v. G. A. C. Fin. Co., 525 F.2d 961, 964 (5th Cir. 1976) ("The borrower's written election to obtain optional credit insurance ... is not a lender disclosure within the meaning of ......
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Gillard v. Aetna Finance Co., Inc., Civ. A. No. 75-1042.
...written election of insurance coverage required by 15 U.S.C. § 1605(b)(2) and 12 C.F.R. § 226.4(a)(5)(ii). Burton v. G.A.C. Finance Co., 525 F.2d 961 (5 Cir. 1976). The plaintiffs contend that Aetna failed to disclose the costs of insurance clearly, conspicuously and in a meaningful sequenc......
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Souife v. FIRST NAT. BANK OF COMMERCE, NEW ORLEANS, Civ. A. No. 77-958.
...credit insurance from the lender is not a "lender disclosure" within the meaning of 12 C.F.R. § 226.8(a). See Burton v. G. A. C. Finance Co., 525 F.2d 961 (5th Cir. 1976); Gillard v. Aetna Finance Co., Inc., 414 F.Supp. 737 For the foregoing reasons, the motion for summary judgment filed on......