Carr v. Blazer Financial Services, Inc. of Georgia, 76-4396

Citation598 F.2d 1368
Decision Date23 July 1979
Docket NumberNo. 76-4396,76-4396
Parties26 UCC Rep.Serv. 1336 Jannette CARR, Plaintiff-Appellee-Cross-Appellant, v. BLAZER FINANCIAL SERVICES, INC. OF GEORGIA, Defendant-Appellant-Cross-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Frank P. Brannen, Savannah, Ga., Arthur Gregory, Atlanta, Ga., for defendant-appellant-cross-appellee.

Herman G. Okhuysen, Savannah, Ga., for plaintiff-appellee-cross-appellant.

Appeals from the United States District Court for the Southern District of Georgia.

Before MORGAN, RONEY and VANCE, Circuit Judges.

RONEY, Circuit Judge:

This truth-in-lending case raises questions similar to those decided in the companion case of Plant v. Blazer Financial Services, Inc., 598 F.2d 1357 (5th Cir. 1979), and its disposition is in large part based upon the Court's reasoning in Plant. 15 U.S.C.A. § 1601 Et seq.; 15 U.S.C.A. § 1640(a). In addition, we here decide that failure to disclose the 10-day limit in the after-acquired property clause constitutes a truth-in-lending violation, but reject plaintiff debtor's cross-appeal challenge to the adequacy of the attorney's fee award.

On March 18, 1974, plaintiff Jannette Carr co-signed a note in favor of defendant Blazer Financial Services, Inc. of Georgia in the principal sum of $1,800.00. The note included a security agreement containing the following after-acquired property clause:

To secure the payment of the above described loan and any future advances to the undersigned, Debtor(s) grant(s) a security interest to the Secured Party in the following described property:

(4) All accessions to, substitutions for, replacements of and proceeds from the described collateral and all other after-acquired property of like nature.

Approximately one year later, the note being in default, plaintiff filed this civil action under the Truth-in-Lending Act, 15 U.S.C.A. § 1639(a) and Regulation Z, 12 C.F.R. § 226.8(b)(5) (1978). Defendant filed a counterclaim for the balance due on the note.

The district court held that the after-acquired property clause violated the Act since it failed to disclose that state law limited defendant's security interest in after-acquired property to property acquired within ten days of the time that value was given. Plaintiff was awarded $688.56 damages and $400.00 in attorney's fees. The court then found that the note was in default and awarded defendant a judgment of $1,578.41 and $236.76 attorney's fees on the counterclaim. Plaintiff's damage recovery was setoff against the amount due on the counterclaim, leaving a net indebtedness in defendant's favor. The court specifically held, however, that the attorney's fees were to be awarded directly to plaintiff's counsel and were not subject to setoff. Defendant appeals plaintiff's judgment on the original claim and the direct award of attorney's fees. Plaintiff cross-appeals the amount of the fee award.

We affirm the district court's decision as to the truth-in-lending violation. Under a Federal Reserve Board regulation issued pursuant to the Truth-in-Lending Act, 12 C.F.R. § 226.8(b)(5) (1978), there must be disclosure that the secured interest in after-acquired property was limited to property acquired within ten days under the Uniform Commercial Code. Ga.Code Ann. 109A-9-204(2).

The regulation provides:

If after-acquired property will be subject to the security interest, or if other or future indebtedness is or may be secured by any such property, this fact shall be clearly set forth in conjunction with the description or identification of the type of security interest held, retained or acquired.

12 C.F.R. § 226.8(b)(5) (1978).

Ga.Code Ann. 109A-9-204(2) provides:

No security interest attaches under an after-acquired property clause to consumer goods other than accessions (section 109A-9-314) when given as additional security unless the debtor acquires rights in them within 10 days after the secured party gives value.

A panel of this Court has already decided this issue in Pollock v. General Finance Corp., 535 F.2d 295 (5th Cir. 1976), Petition for rehearing denied, 552 F.2d 1142, Cert. denied, 434 U.S. 891, 98 S.Ct. 265, 54 L.Ed.2d 176 (1977), and we are bound by its decision. United States v. Lewis, 475 F.2d 571, 574 (5th Cir. 1972).

We also affirm the district court's decision that attorney's fees should not be subject to setoff for the reasons set forth in Plant v. Blazer Financial Services, Inc., supra. In that opinion, we indicated that the trial court would have discretion to develop an appropriate mechanism by which the attorney could be paid. The method chosen here, the direct payment of fees to plaintiff's attorney, does not constitute an abuse of discretion.

Plaintiff disputes the $400.00 award and claims $1,505.00 instead. This larger figure was evidently reached by multiplying the amount of time allegedly spent on this case by the attorney's usual fee of $50.00 per hour.

An award of attorney's fees will be modified only upon proof of an abuse of discretion. Thomas v. Myers-Dickson...

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    • United States
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    • September 2, 1980
    ...603 F.2d 13, 19 (7th Cir. 1979), cert. denied, 444 U.S. 1016, 100 S.Ct. 668, 62 L.Ed.2d 646 (1980); Carr v. Blazer Financial Servs., Inc., 598 F.2d 1368, 1370 (5th Cir. 1979); Lindy II, 540 F.2d at 115 & n.11; Evans, 503 F.2d at 187.38 Cuneo v. Rumsfeld, 553 F.2d 1360, 1368 (D.C. Cir. 1977)......
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    ...not the client. This finding is supported by cases holding that a court may directly pay the attorney, Carr v. Blazer Financial Services, Inc., 598 F.2d 1368, 1370 (5th Cir.1979), and that the award is not subject to setoff. Plant v. Blazer Financial Services, Inc., 598 F.2d 1357, 1365 (5th......
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    ...with Hill, Henry is simply questionable since, in this Circuit, one panel can not overrule another. E. g., Carr v. Blazer Financial Services, Inc., 598 F.2d 1368, 1370 (5th Cir. 1979); United States v. Lewis, 475 F.2d 571, 574 (5th Cir. ...
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    • U.S. Court of Appeals — Fifth Circuit
    • July 23, 1979
    ...on the underlying debt. In an appeal involving issues similar to those raised in the companion cases of Carr v. Blazer Financial Services, Inc., 598 F.2d 1368 (5th Cir. 1979) and Williams v. Blazer Financial Services, Inc., 598 F.2d 1371 (5th Cir. 1979), also decided today, plaintiff attack......
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