65 F.3d 475 (5th Cir. 1995), 94-60754, Fairley v. Turan-Foley Imports, Inc.

Docket Nº:94-60754.
Citation:65 F.3d 475
Party Name:Juanita B. FAIRLEY, Plaintiff-Appellant, v. TURAN-FOLEY IMPORTS, INC., d/b/a Turan-Foley Mitsubishi, Defendant-Appellee.
Case Date:October 03, 1995
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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65 F.3d 475 (5th Cir. 1995)

Juanita B. FAIRLEY, Plaintiff-Appellant,


TURAN-FOLEY IMPORTS, INC., d/b/a Turan-Foley Mitsubishi,


No. 94-60754.

United States Court of Appeals, Fifth Circuit

October 3, 1995

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Albert H. Pettigrew, Biloxi, MS, for appellant.

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Henry F. Laird, Jr., Aultman, Tyner, McNeese, Ruffin & Laird, Gulfport, MS, for appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before E. GRADY JOLLY and BENAVIDES, Circuit Judges, and FITZWATER [*], District Judge.

E. GRADY JOLLY, Circuit Judge:

Congress designed the Truth-in-Lending Act ("TILA"), 15 U.S.C. Sec. 1601 et seq., to protect consumers from inaccurate and unfair credit practices. Juanita Fairley took advantage of the Act and sued Turan-Foley Imports, Inc. ("Turan-Foley"), alleging violations of the TILA and state law against misrepresentation related to Fairley's purchase of a car. Her financing agreement listed 8.5 percent as the annual percentage rate, when the actual rate was 11.75 percent annually. When she took possession of the car, she was also under the impression that she had obtained credit life and disability insurance, as well as an extended warranty. After denying Turan-Foley's motion for summary judgment, the district court, acting on a motion for reconsideration, found that because no contract existed between the parties, it lacked subject matter jurisdiction over the case, and subsequently dismissed the case. Fairley appealed. Contrary to the district court's action, we believe this is the type of case for which Congress tailored the TILA. For the reasons explained below, we hold that the district court erred when it determined that a contract between the parties did not exist under Mississippi law, and, thus, the district court erred when it dismissed the case for lack of subject matter jurisdiction. Accordingly, we reverse and remand for further consideration.


This case comes to us in a rather unusual posture. A thorough discussion of the facts and procedural history therefore will help to explain the result we reach today.

On July 24, 1992, Juanita Fairley went to Turan-Foley to shop for a new automobile. Finding a 1992 Mitsubishi Eclipse sports car that she liked, Fairley completed and signed a credit application form from General Motors Acceptance Corporation ("GMAC") that had been given to her by a Turan-Foley finance and insurance manager, Thomas Matherne. Matherne promised Fairley a competitive interest rate of 8.5 percent. Wishing to check her credit union for a better interest rate, Fairley left the dealership. Matherne, however, called Fairley before she had time to check other rates and convinced her to return to Turan-Foley to see what he could offer her through GMAC.

On July 27, 1992, Fairley returned to Turan-Foley and spoke with Matherne and Jimmy Yelverton, the general manager of the dealership. Fairley told them that she wanted her payments to be between $250 and $267 per month for sixty months, and that she wanted credit life and disability insurance, as well as an extended warranty. She took the Eclipse for a test drive, and signed forms for credit life and disability insurance, an application for a certificate of title, and a sheet stating that Turan-Foley would install air conditioning and provide other services (the "We owe" document). The record also indicates that Fairley made a downpayment on the car in the amount of $1,000, which was received by the dealership on July 29. Fairley did not take the car home after the July 27 visit, but instead arranged to pick it up on Friday, July 31.

When Fairley arrived to claim the car on Friday, she spoke with Matherne and reminded him that they still had to complete an agreement regarding financing. Matherne told her that it was all taken care of and that a copy was in the glove compartment. When Fairley examined the supposed agreement, she found that it was not satisfactory for several reasons. First, the piece of paper that was called an agreement by Matherne was actually a partial copy of a finance agreement; that is, the lower portion of the page was missing. Second, this lone piece of paper was not what Fairley anticipated as a

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contract for the sale of the car. She expected the contract to be in a "pack" of documents. Third, the space on the agreement where the annual percentage rate and the finance charge were located was completely covered by a white sticker, so that the area was blank. When Fairley confronted Matherne with these shortcomings and demanded a complete agreement, Matherne first told her that he could not give her the contract because, as it was late on a Friday afternoon, everything was already locked for the evening. When this information did not appease her, he agreed to write in the area reserved for the annual percentage rate and the finance charge that the annual percentage rate was 8.5 percent for 60 months, he noted on the paper that the original contract could be obtained on Monday, August 3, and he signed this notation. Despite Matherne's assurances that everything was okay, Fairley was bothered by the fact that she had not actually signed what she considered to be a contract, the financing agreement.

On Monday, August 3, 1992, Fairley tried repeatedly by phone to contact Matherne, but he could not be reached. She did, however, leave a message that she wanted her contract. After several unsuccessful attempts to reach Matherne that week, Fairley was phoned by a representative of the dealership on Saturday, August 8, about returning to Turan-Foley to sign papers. Fairley could not go to the dealership at that time because she was about to travel out of town for the remainder of the weekend, but she told the representative that she wanted...

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