Stokes v. Fidelity Acceptance Corp., 79-1087

Citation644 F.2d 355
Decision Date27 April 1981
Docket NumberNo. 79-1087,79-1087
PartiesRobert L. STOKES, Plaintiff-Appellant, v. FIDELITY ACCEPTANCE CORPORATION, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Joseph H. King, Jr., Atlanta, Ga., for plaintiff-appellant.

Lucian Lamar Sneed, Decatur, Ga., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before HENDERSON, POLITZ and WILLIAMS, Circuit Judges.

PER CURIAM:

Robert L. Stokes filed this action against Fidelity Acceptance Corporation (hereinafter referred to as "Fidelity") alleging violations of the Truth-in-Lending Act, 15 U.S.C.A. § 1601 et seq. Fidelity answered, admitting the general factual allegations of the complaint, but denying non-compliance with truth-in-lending disclosure requirements. Stokes then sought leave to amend the complaint to assert a cause of action for wilful violations of the Georgia Motor Vehicle Sales Finance Act, Ga.Code Ann. § 96-1001 et seq. He also moved for partial summary judgment on the truth-in-lending claim. The district court, acting upon the magistrate's recommendations, granted both motions. Stokes was awarded the maximum statutory penalty of $1,000.00 on the federal claim. 15 U.S.C.A. § 1640.

At this juncture, the district court remanded the case to the magistrate and ordered Stokes' attorney to submit his claim and supporting affidavit for attorney's fees. The attorney complied with this directive, seeking compensation for 5.75 hours at a base rate of $50.00 per hour, to be enhanced by 331/3 percent due to the contingent nature of his fee arrangement. Among the 5.75 hours was one hour designated as "anticipated future time in prosecuting case." The magistrate recommended that the "future time" hour and any enhancement of the $50.00 per hour rate be disallowed.

Stokes' subsequent motion for summary judgment on the pendent Georgia cause of action was unopposed. Accordingly, the magistrate recommended that the motion be granted, but concluded that Stokes was entitled under Ga.Code Ann. 96-1008(c) to the minimum statutory penalty of $100.00, rather than the amount he sought of twice the illegal finance charge. The district court adopted the magistrate's recommendations both as to the attorney's fee award and the appropriate Georgia penalty. Stokes appeals from these portions of the judgment. We reverse and remand.

Section 96-1008(c) provides that, in the case of a wilful violation of the Georgia Motor Vehicle Sales Finance Act, the buyer may recover "a minimum of $100.00, or double the time price differential ..." plus attorney's fees and court costs. Stokes maintains that Fidelity attempted to extract from him an illegal finance charge of at least $1,825.20, and that, under the terms of the statute, he is entitled to an award of double that amount. The magistrate apparently construed the statute to authorize the court to award, in its discretion, either the $100.00 minimum or double the time price differential. Although we find no Georgia decision interpreting this penalty provision, we are convinced that Stokes' position is correct. Section 96-1008(b) provides for the forfeiture of the finance charge as a consequence of any violation of the statute, regardless of its character. Surely the Georgia legislature did not intend by its language in § 96-1008(c) to allow courts to choose the $100.00 penalty in cases involving wilful violations. Rather, it seems clear that the $100.00 minimum was meant to...

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