Compton v. Altavista Motors, Inc.

• Decision Date: 21 November 2000
• Docket Number: No. CIV. A. 6:00CV0015.,CIV. A. 6:00CV0015.
• Citation: 121 F.Supp.2d 932
• Parties: Sandra COMPTON, Plaintiff, v. ALTAVISTA MOTORS, INC., Defendant.
• Court: U.S. District Court — Western District of Virginia

121 F.Supp.2d 932

Sandra COMPTON, Plaintiff, v. ALTAVISTA MOTORS, INC., Defendant.

No. CIV. A. 6:00CV0015.

United States District Court, W.D. Virginia, Lynchburg Division.

November 21, 2000.

Elmer Woodard, Danville, VA, for Plaintiff.

William D. Bayliss, Marissa M. Henderson, Williams, Mullen, Clark & dobbins, P.C., Richmond, VA, for Defendant.

OPINION

MOON, District Judge.

The plaintiff, Sandra Compton, brought this action against the defendant, Altavista Motors, as a result of a used-car deal that she entered into with the defendant in 1999. In her amended complaint, Compton sets forth four different causes of action against Altavista Motors based on the deal. First, Compton claims that Altavista Motors violated the Truth in Lending Act (TILA). Second, Compton asserts that Altavista violated the Virginia Consumer Protection Act (VCPA). Compton's third cause of action alleges that Altavista Motors offended Virginia usury law, and her fourth cause of action claims that Altavista committed federal and Virginia odometer fraud. The parties filed cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Specifically, Compton moved for summary judgment as to her TILA and VCPA claims, and Altavista Motors filed a cross-motion for summary judgment as to Compton's TILA, usury, and odometer fraud claims. In her response to Altavista's cross-motion for summary judgment, Compton moved for summary judgment in her favor as to the usury claim. For the reasons set forth in this Opinion, the Court will grant in part and deny in part Compton's motion for summary judgment as to the TILA cause of action and will deny Compton's motion for summary judgment as to the VCPA and state-law usury claims. Furthermore, the Court will grant in part and deny in part Altavista's cross-motion for summary judgement on the TILA cause of action, will deny Altavista's motion for summary judgment on the usury claim, and will grant Altavista's motion as to the odometer fraud claims.

I. FACTS

On February 19, 1999, Sandra Compton visited Altavista Motors and decided to purchase a 1991 Dodge Daytona. Compton purchased the car in a finance sale, and, during the course of their transaction, Altavista presented Compton with several documents, including a downpayment agreement, buyer's order, credit contract, and total loss protection program form. The downpayment agreement established a $600 downpayment, but stated that Compton would make an immediate payment of $350, leaving a balance of $250 that would be payable in three installments ending March 13. The buyer's order listed the price of the car as $3995, along with a $120 processing fee and $380 for insurance, which added up to the total delivered price of $4495. The credit contract made various TILA disclosures, including the APR, finance charge, and amount financed. The credit contract also indicated that payments would be made in weekly installments beginning on March 21, 1999. The total loss protection program form indicated that the enrollment charge for GAP insurance would be $380 and explained that the insurance was not required in order to finance the vehicle. Altavista disclosed the car's mileage by using an odometer disclosure statement, rather than by indicating the mileage on the title certificate at the time it delivered possession of the vehicle to Compton. After completing this paperwork, Compton drove her newly purchased car off of the lot with temporary license plates ("thirty-day tags") that had been placed on the vehicle by Altavista. Out of this seemingly commonplace scenario arose the multiple causes of action alleged by Compton in her amended complaint.

II. SUMMARY JUDGMENT STANDARD

Summary judgment should only be granted if, viewing the record as a whole in the light most favorable to the nonmoving party, no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Terry's Floor Fashions, Inc. v. Burlington Industries, Inc., 763 F.2d 604, 610 (4th Cir.1985). In considering a motion for summary judgment, "the court is required to view the facts and draw reasonable inferences in a light most favorable to the non-moving party." Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.1994) (citations omitted).

III. DISCUSSION

Compton has asserted four different causes of action against Altavista Motors, often alleging several different theories of liability for a particular claim. The Court will now take up each of Compton's claims separately.

A. Truth in Lending Act

The Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq. (1994), as implemented by Regulation Z, 12 C.F.R. pt. 226 (2000), was designed by Congress as a tool "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him ... and to protect the consumer against inaccurate and unfair credit billing ... practices." 15 U.S.C. § 1601(a). To that end, the TILA mandates that creditors make specific disclosures when extending credit to consumers. See 15 U.S.C § 1638(a); Gilbert v. Wood Acceptance Co., 486 F.2d 627 (7th Cir.1973). These disclosures include the identity of the creditor, the amount financed, the finance charge, and the total number of payments. 15 U.S.C. § 1638(a). Because the TILA is to be broadly construed to provide protection for the consumer, any failure to disclose information as required by the TILA or Regulation Z results in a technical violation. See Walker v. College Toyota, Inc., 399 F.Supp. 778 (W.D.Va.1974), aff'd 519 F.2d 447 (4th Cir. 1975); Riggs v. Government Emp. Financial Corp., 623 F.2d 68 (9th Cir.1980).

Altavista Motors is a creditor as defined by 15 U.S.C. § 1602(f). Compton is a consumer as defined by 15 U.S.C § 1602(h). The deal that took place on February 19, 1999, between Compton and Altavista Motors was a credit sale under 15 U.S.C. § 1602(g). See also 12 C.F.R. § 226.2(a)(16) (defining "credit sale" as "a sale in which the seller is a creditor"). Compton contends in her amended complaint and motion for summary judgment that the parties engaged in two separate credit transactions, and she sets forth a vast array of liability theories under the TILA's disclosure requirements with regard to each transaction. However, for purposes of establishing liability under the TILA, proving a single violation is just as good as proving one hundred violations. The law is clear in this Circuit that, even though a particular transaction may violate the TILA in numerous ways, a plaintiff is only entitled to one recovery per credit transaction. See 15 U.S.C. § 1640(g) (stating that "multiple failure to disclose to any person any information required under this part ... shall entitle the person to a single recovery"); Carney v. Worthmore Furniture, Inc., 561 F.2d 1100, 1103 (4th Cir.1977) (stating, after having affirmed the district court's grant of summary judgment on the plaintiff's first theory of TILA liability, that it was "unnecessary to address the [plaintiff's second theory of liability], as the Act authorizes but one recovery for a given credit transaction regardless of the number of infractions compounded in it"); see also Jackson v. Columbus Dodge, Inc., 676 F.2d 120, 121 (5th Cir.1982) ("A creditor can only be liable for a single recovery even though there are multiple truth-in-lending violations."). For the reasons that follow, the Court holds that Compton is entitled to a recovery under the TILA for disclosure violations committed by Altavista with regard to the credit contract, but not with regard to the deferred downpayment agreement. Thus, the Court will grant and deny both parties' cross-motions for summary judgment as appropriate.

1. The Credit Contract

Compton has alleged numerous violations of the TILA concerning the credit contract entered into by the parties as a result of Compton's car purchase. Although the credit contract may have, and probably did, violate the TILA in several different ways, the Court need not address all of the theories set forth by Compton in order to award summary judgment in her favor, for she is allowed only one recovery under the TILA for the transaction embodied by the credit contract. See Carney, 561 F.2d at 1103. For the reasons set forth below, the Court finds that Altavista has violated the TILA with regard to the credit contract and, therefore, will grant Compton's motion for summary judgment and deny Altavista's motion on this claim.

One of the principal disclosures required by the TILA is the "amount financed." 15 U.S.C. § 1638(a)(2)(A). In disclosing the amount financed, a creditor must either (1) "provide a statement of the consumer's right to obtain, upon a written request, a written itemization of the amount financed," id. § 1638(a)(2)(B), or (2) "skip this stage and simply provide the itemization of the amount financed without being asked for it," Gibson v. Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 285 (7th Cir.1997) (citing 12 C.F.R. pt. 226, Supp. I § 18(c)). If the creditor provides an itemization, it must contain an accurate disclosure of "each amount that is or will be paid to third persons by the creditor on the consumer's behalf, together with an identification of or reference to the third person." 15 U.S.C. § 1638(a)(2)(B)(iii); see also Gibson, 112 F.3d at 285 (emphasizing that the disclosures must be accurate in order to comply with the TILA). However, certain third persons, such as public officials, government agencies, credit reporting agencies, appraisers, and insurance companies, can be identified "using generic or other general terms." 12 C.F.R. § 226.18(c)(1)(iii) n. 41. Lastly, Regulation Z commands that TILA disclosures such as the amount financed must be made "before consummation of the transaction." Id. § 226.17(b); see also 15 ...