Baker v. Sunny Chevrolet, Inc.

• Decision Date: 04 November 2003
• Docket Number: No. 02-1381.,02-1381.
• Parties: Wanda BAKER and Scott Zalewski, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. SUNNY CHEVROLET, INC., a Michigan corporation d/b/a Wayland Chevrolet, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

349 F.3d 862

Wanda BAKER and Scott Zalewski, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. SUNNY CHEVROLET, INC., a Michigan corporation d/b/a Wayland Chevrolet, Defendant-Appellee.

No. 02-1381.

United States Court of Appeals, Sixth Circuit.

Argued: September 11, 2003.

Decided and Filed: November 4, 2003.

John E. Anding (argued and briefed), Drew, Cooper & Anding, Phillip C. Rogers (briefed), Grand Rapids, MI, for Appellants.

Daniel S. Saylor (argued and briefed), Garan, Lucow, Miller, PC, Detroit, MI, Michael D. Wade (briefed), Garan, Lucow, Miller, PC, Grand Rapids, MI, for Appellee.

Before: KENNEDY, GUY, and DAUGHTREY, Circuit Judges.

KENNEDY, J., delivered the opinion of the court. RALPH B. GUY, JR., J. (pp. 871-73), delivered a separate concurring opinion, in which DAUGHTREY, J., joined.

OPINION

KENNEDY, Circuit Judge.

This case presents an appeal from the district court's order granting summary judgment in favor of Defendant-Appellee Sunny Chevrolet. Plaintiffs-Appellants Baker and Zalewski argue that the district court erred when it determined that even if Defendant had violated 15 U.S.C. § 1638(b)(1), Defendant was not liable for statutory damages. We AFFIRM.

BACKGROUND

On December 28, 2000, Plaintiff Baker signed a retail installment sales contract ("RISC") to purchase a car and took possession of the vehicle on that date. Although she asked for a copy of the contract, Defendant refused the request. On January 11, 2001, citing inability to obtain financing under the RISC,¹ Defendant requested that Plaintiffs return to the dealership to re-execute the deal adding the latter as a buyer. At the dealership, Defendant informed Plaintiffs that they would each have to sign a second contract. Once again, despite being asked for a copy of the signed contract, Defendant refused to provide Plaintiffs with a copy of either contract. Plaintiffs finally received a copy of the second contract approximately three weeks later, around January 29, 2001. Plaintiff Baker never received a copy of the first contract that she signed. It is undisputed that Plaintiffs were given the actual RISC document for review prior to signing it and that the actual RISC accurately disclosed all of the transactions' credit terms.

Plaintiffs filed a class action lawsuit for violations of Truth in Landing Act ("TILA") and the underlying Regulation Z, alleging that Defendant repeatedly failed to give the consumer "a copy of the contract [in connection with the purchase and finance of a motor vehicle] to keep prior to consummation of the transaction." First Am. Class Action Compl. J.A. at 9. Plaintiffs, however, do not allege any actual damages, nor do they claim that any of the disclosures that were made before they signed the RISC were inaccurate. Plaintiffs sued only for statutory damages under 15 U.S.C. § 1640. The district court, per order dated February 6, 2002, denied the motion for class certification because the Plaintiffs were not typical of their proposed class and because the class definition was inadequate. The district court also, per order dated March 8, 2002, granted Defendant's motion for summary judgment and dismissed Plaintiffs' complaint in its entirety on the basis that Defendant's refusal to provide the copies of the disclosures, while "seemingly inappropriate," could not give rise to TILA statutory damages. Plaintiffs appealed both orders to this Court. Both sides, however, only briefed the issue of statutory damages. Plaintiffs asked for reconsideration of the class certification ruling pending a reversal of the statutory damages ruling.

STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo. Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174, 178 (6th Cir.1996). In deciding a summary judgment motion, this court cannot weigh the evidence, judge the credibility of witnesses, or determine the truth of the matter asserted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We must, however, view the evidence and draw all "justifiable inferences" in the light most favorable to the non-movant. Id. Summary judgment is appropriate where "there is no genuine issue as to any material fact and... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment ..." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in original). Mixed questions of law and fact are reviewed de novo. Williams v. Mehra, 186 F.3d 685, 689 (6th Cir.1999) (en banc).

ANALYSIS

Congress enacted TILA in 1968 with the broad purpose of promoting the informed use of credit by assuring meaningful disclosure of credit terms to consumers. See generally, 15 U.S.C. § 1601(a); Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980); Begala v. Ohio Nat'l Ass'n, 163 F.3d 948, 950 (6th Cir.1999). This Court has held that the statute must be considered liberally in the consumer's favor. Jones v. TransOhio Sav. Ass'n, 747 F.2d 1037, 1040 (6th Cir.1984). The sections of TILA principally involved here are 15 U.S.C. §§ 1638(a)² and 1638(b),³ which required creditors to make specific disclosures, and 15 U.S.C. § 1640(a),⁴ which provides consumers with a cause of action for certain violations of the act. Also of relevance on this appeal is Regulation Z, 12 C.F.R. § 226.1, et seq., a regulation promulgated by the Federal Reserve Board to implement TILA. Regulation Z prescribes the form in which a creditor must disclose the items pursuant to 15 U.S.C. § 1638.⁵

The district court assumed, without so holding, that Defendant violated § 1638(b)(1).⁶ It then held that statutory damages were not available for this violation. Baker v. Sunny Chevrolet, Inc., No. 1:01-CV-109, slip op. at 3, 5-6 (W.D.Mich. March 8, 2002). The District Court further held that failure to provide Plaintiffs with a copy of their contracts at signing did not entitle Plaintiffs to statutory damages for violations of 15 U.S.C. §§ 1638(a)(3)-(a)(6), 1638(a)(9).⁷

1. Plaintiffs are not entitled to Statutory Damages for Violations of 15 U.S.C. § 1638(b)(1)

Plaintiffs argue that Defendant violated the form and timing requirements of § 1638(b)(1) of TILA, and the related provisions of Regulation Z. Regulation Z provides, in relevant part, that "[t]he creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep." 12 C.F.R. § 226.17(a)(1). Defendant first argues that this Court should assume without deciding, as did the District Court, that a violation of § 1638(b)(1) occurred. Defendant then argues that statutory damages are not recoverable for violations of § 1638(b)(1) because consumers aggrieved by disclosure violations of § 1638 may seek statutory damages only in those case involving violations of §§ 1638(a)(2)(some), (3)-(6), (9).

As noted above, the district court assumed for the purposes of the summary judgment motion that a violation of § 1638(b)(1) took place. Plaintiffs urge us to go beyond the district court's opinion and find that a violation did actually occur. This Court will typically refrain from considering issues not passed upon by the lower courts. See, e.g., Blue Cross & Blue Shield Mut. of Ohio v. Blue Cross and Blue Shield Ass'n, 110 F.3d 318, 335 (6th Cir.1997). This restraint, however, is simply a matter of discretion, as the Courts of Appeals remain free to resolve such issues if the "proper resolution is beyond doubt" or "`where injustice might otherwise result.'" Id. (citing Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976)). Defendant relies on the district court's discussion in its opinion denying class certification to argue that proper resolution is not beyond doubt. Baker v. Sunny Chevrolet, No. 1:01-CV-109, slip op. at 5 (W.D.Mich. Feb. 6, 2002) ("Because the facts have not been fully developed, the Court cannot determine whether a violation has occurred.") Plaintiffs do not address this argument in the appellate brief. We decline to resolve the factual question of whether a violation occurred and instead assume, as did the district court, that a violation did occur.

The district court, relying heavily on a Seventh Circuit decision, found that statutory damages are not available for a violation of § 1638(b). The Seventh Circuit found that:

Statutory damages are available, this final sentence says, "only for failing to comply with the requirements of section 1635 of this title or of paragraph (2) (insofar as it requires a disclosure of the `amount financed'), (3), (4), (5), (6), or (9) of section 1638(a) of this title, or for" other situations not presented by these cases. "Only," the word we have italicized is conclusive against plaintiffs, for it confines statutory damages to a closed list. Failure to emphasize the typeface of "finance charge" and "annual percentage rate" violates § 1632(a); omission of descriptive explanations violates § 1638(a)(8); appearance of extra matter in the federal box violates § 1638(b)(1). None of these subsections is on the list of violations eligible for statutory damages.

Baker v. Sunny Chevrolet Inc., No. 1:01-CV-109, slip op. at 4 (quoting Brown, 202 F.3d 987, 991 (7th Cir.2000)). The District Court also noted that a number of district courts outside the Seventh Circuit have followed the Brown decision. Id. at 4-5.

Plaintiffs, relying almost exclusively on Lozada v. Dale Baker Oldsmobile, Inc., 145 F.Supp.2d 878 (W.D.Mich.2001), argue that the Seventh Circuit and the district court misread § 1640(a) to reach their respective holdings. The Lozada opinion makes a very intricate argument that the § 1640(a) discussion of statutory damages simply does not apply at all to § 1638(b)(1) claims. In other words, the...