Baker v. Autos, Inc., 20180238

Decision Date15 March 2019
Docket NumberNo. 20180238,20180238
Citation924 N.W.2d 441
Parties Darilyn BAKER, individually, and on behalf of all persons similarly situated, Plaintiff and Appellant v. AUTOS, INC., a North Dakota Corporation, d/b/a Global Auto; RW Enterprises Inc., a North Dakota Corporation; Randy Westby, an individual, James Hendershot, an individual, and Robert Opperude, an individual, Defendants and Appellees
CourtNorth Dakota Supreme Court

Larry M. Baer (argued), West Des Moines, IA, and Robert G. Ackre (on brief), Cando, ND, for plaintiff and appellant.

Bryan L. Van Grinsven, Minot, ND, for defendants and appellees RW Enterprises, Inc. and Randy Westby.

Sean F. Marrin (argued) and Kraig A. Wilson (on brief), Grand Forks, ND, for defendants and appellees Autos, Inc. d/b/a Global Auto, Robert Opperude and James Hendershot.

VandeWalle, Chief Justice.

[¶1] Darilyn Baker, individually and on behalf of a class of more than 500 persons similarly situated, appealed from a judgment dismissing her class action against Autos, Inc., doing business as Global Autos, Robert Opperude, James Hendershot, RW Enterprises, Inc., and Randy Westby for claimed violations of the North Dakota Retail Installment Sales Act, N.D.C.C. ch. 51-13, and state usury laws and from an order denying her motion to amend the judgment. Baker argues the retail sellers failed to make required disclosures of certain finance charges and late fees in retail installment contracts and they lost their regulated lender status and were subject to state usury laws. We conclude the retail installment contracts failed to disclose loan fees as finance charges, and we reverse and remand.


[¶2] In 2007, Baker purchased a used vehicle from Global Autos by trading in her vehicle and financing the balance due through Global Autos, a company owned by Opperude and Hendershot. In conjunction with the purchase, Baker executed two documents, a "buyer’s order" and a "retail installment contract and security agreement." The buyer’s order included a right hand column that, from top to bottom, identified a cash price of $6990, a trade allowance of $3500, a difference of $3490, a motor vehicle excise tax of $174.50, a line for license and title fees that was blank, a document administration fee of $195, an amount owing on trade of $1411.44, a loan fee of $200, and a total balance of $5470.94. The buyer’s order identified the buyer as Baker, the vehicle purchased, and the date of the purchase, and was signed twice by Baker. One signature was for an odometer disclosure statement and the other signature was under a statement that "[t]he front and back of this Order compromise the entire agreement affecting this purchase and no other agreement or understanding of any nature concerning same has been made or entered into, or will be recognized. I hereby certify that no credit has been extended to me for the purchase of this motor vehicle except as appears in writing on the face of this agreement. I have read the matter printed on the back hereof and agree to it as part of the order the same as if it were printed above my signature."

[¶3] The "Retail Installment Contract and Security Agreement" included a statement identifying the purchased vehicle as collateral for installment payments and a heading in the middle of the page for "truth in lending disclosures." Immediately below that heading were five boxes from left to right identifying an annual percentage rate of 25%, a finance charge of $1941.61, the amount financed of $5470.94, the total payments of $7412.55, and the total sale price of $7412.55. The amount financed was described as "[t]he amount of credit provided to you or on your behalf" and was the same amount as the total balance from the buyer’s order, which included amounts for the "loan fee" and the "document administration fee." Immediately below the truth in lending disclosures were boxes stating the number of monthly payments as 30, the amount of each monthly installment payment as $247.08, the due date for each monthly payment as the first of each month, and a late charge of $25 for payments more than 10 days late.

[¶4] Baker was late in making some of her required monthly payments under the retail installment contract and her vehicle was repossessed. Before Baker defaulted on her loan, Global Autos assigned her retail installment contract to RW Enterprises, which was owned by Westby. After the car was repossessed, Baker sued Global Autos, RW Enterprises, and their individual owners, alleging they violated state statutory requirements for retail installment contracts and charged usurious interest rates. Baker alleged a willful violation of the Retail Installment Sales Act in failing to accurately disclose the annual percentage rate and the finance charges incident to investigating and contracting for the extension of credit. Baker also alleged a willful violation of the Retail Installment Sales Act by contracting to charge a late fee in excess of the statutory maximum of $10.

[¶5] Baker moved for class action certification for all purchasers who, subject to the applicable statute of limitations, may have been injured as a result of the defendants’ business practices. The district court denied Baker’s motion for class certification, and a majority of this Court reversed the denial and remanded for reconsideration of her motion. Baker v. Autos, Inc. , 2015 ND 57, 860 N.W.2d 788.

[¶6] The district court subsequently granted class certification consisting of more than 500 retail installment buyers, and Baker thereafter moved for partial summary judgment on multiple issues. The court granted the motion in part, and denied it in part. The court rejected Baker’s assertion she was entitled to judgment as a matter of law on her claim involving the failure to disclose the document administration fee and loan fee as finance charges. The court concluded the "buyer’s order" and the "retail installment contract and security agreement" must be construed together as one retail installment contract and, reading those documents together, the court declined to conclude as a matter of law that Global Autos failed to disclose either fee. The court ruled all class members who were charged and paid a $25 late fee on any delinquent installment payment due under their retail installment contracts were entitled to a refund because the amount of that late fee exceeded the maximum allowable late fee of $10 authorized by N.D.C.C. § 51-13-02(2)(e). The court decided the excessive late fee was not an additional finance charge and did not deprive the defendants of protection as a regulated lender under the state’s usury laws in N.D.C.C. ch. 47-14. The court said N.D.C.C. § 51-13-07 provided the remedy for a violation of the excessive late fee requirement and denied Baker’s motion for partial summary judgment on that issue. The court reserved ruling on which defendant was liable for repayment of any excessive late fees actually paid by any buyers.

[¶7] The parties thereafter stipulated to certain legal and factual issues and for certification under N.D.R.Civ.P. 54(b). The district court adopted the stipulation and certified the partial summary judgment as final under N.D.R.Civ.P. 54(b). The stipulated partial summary judgment determined the imposition of a $25 late fee violated state law and all class members who were actually assessed and paid a late fee in excess of the statutory maximum of $10 were entitled to a refund of all late fees paid. The judgment identified issues remaining to be determined as: (1) the identity of class members entitled to recover; (2) the individual liability of Hendershot and Opperude; and (3) the potential liability of RW Enterprises and Westby. The court’s partial summary judgment dismissed all of Baker’s other claims. On appeal we held the Rule 54(b) certification was improvidently granted and dismissed Baker’s appeal from the partial summary judgment. Baker v. Autos, Inc. , 2017 ND 229, 902 N.W.2d 508.

[¶8] Baker, individually and on behalf of the class, thereafter waived the right to recover any and all sums charged and collected in excess of the $10 statutory maximum late fee on delinquent payments. The district court entered judgment dismissing with prejudice all of Baker’s claims. The court thereafter denied Baker’s motion to amend the judgment under N.D.R.Civ.P. 59.


[¶9] Baker argues the retail installment contracts did not disclose the "document administration fee" and the "loan fee" as finance charges and did not comply with the finance charge disclosure requirements mandated by the Retail Installment Sales Act in N.D.C.C. § 51-13-02. Baker argues that because the retail sellers failed to satisfy those disclosure requirements, they are not entitled to regulated lender status under N.D.C.C. § 51-13-03(1) and are subject to state usury laws in N.D.C.C. § 47-14-09. Baker argues that omitting known costs of obtaining credit from the disclosed amount of finance charges in a retail installment contract and that contracting to charge and collect an excessive late fee are willful violations of the Retail Installment Sales Act.

[¶10] Our analysis of Baker’s arguments requires review of the statutory provisions for retail installment contracts in N.D.C.C. ch. 51-13. Statutory interpretation is a question of law, fully reviewable on appeal. Zajac v. Traill Cty. Water Res. Dist. , 2016 ND 134, ¶ 6, 881 N.W.2d 666. The primary objective in interpreting a statute is to determine the intention of the legislation. Id. Words in a statute are given their plain, ordinary, and commonly understood meaning, unless defined by statute or unless a contrary intention plainly appears. N.D.C.C. § 1-02-02. Statutes are construed as a whole and are harmonized to give meaning to related provisions. N.D.C.C. § 1-02-07. If the language of a statute is clear and unambiguous, that language is not to be disregarded under the pretext of pursuing its spirit. N.D.C.C. § 1-02-05. The language of a statute must be interpreted in...

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