Fanning v. Fritz's Pontiac-Cadillac-Buick, Inc.
| Decision Date | 02 April 1996 |
| Docket Number | INC,No. 24443,PONTIAC-CADILLAC-BUIC,24443 |
| Court | South Carolina Supreme Court |
| Parties | Flossie Mae FANNING and Nathaniel Fanning, Sr., Individually and as Representatives of All Persons Similarly Situated, Collectively Designated as John Doe and Jane Doe, Appellants, v. FRITZ'Sand C & S National Bank, Respondents. . Heard |
Christopher G. Isgett, of Lee, Isgett, Eadon & Popwell and Cheryl F. Perkins, of James C. Anders & Associates, Columbia, for appellants.
David W. Robinson, II and Thomas W. Bunch, II, both of Robinson, McFadden & Moore, Columbia, for respondent C & S National Bank, and Mr. Fritz Waidner of Fritz's Pontiac-Cadillac-Buick, Inc., pro se of Newberry.
The sole issue in this class action is whether Fritz Cadillac 1 violated the South Carolina Consumer Protection Code (SCCPC), S.C.Code Ann. § 37-1-101 et seq. (1989), in charging an $87.00 "Procurement Fee" on automobiles purchased between 1983 and 1989. The circuit court found no violation of the SCCPC. We affirm.
Appellants, the Fannings, purchased a 1989 Fleetwood Cadillac from Fritz in June, 1989. Included in the "Total Cash Price" of the car was an $87.00 "procurement fee." The record reflects two invoices prepared by Fritz: one specifically enumerates the $87.00 fee in arriving at a total cash price, the other does not enumerate the fee but includes the fee in the price of the car. 2 It is undisputed The Fannings instituted this action in 1990 claiming, among other things, that the $87.00 procurement fee was in violation of the SCCPC in that it was an illegal "additional charge" under S.C.Code Ann. § 37-2-202 (1989) and that it was unconscionable under § 37-5-108 (1989). On motion of the parties, the trial court granted partial summary judgment, ruling that the $87.00 fee was not prohibited by the SCCPC. 3
that the $87.00 fee was charged to all of Fritz' customers, cash and credit alike.
The purpose of the SCCPC is to clarify the law governing consumer credit and to protect consumer buyers against unfair practices by suppliers of consumer credit. S.C.Code Ann. § 37-1-102 (1989). Chapter 2 of Title 37 governs "Consumer Credit Sales." Section 37-2-110 defines "cash price" as:
the price at which goods, services, or interest in land are offered for sale by the seller to cash buyers in the ordinary course of business, and may include (1) applicable sales, use, and excise and documentary stamp taxes, (2) the cash price of accessories or related services such as delivery, installation, servicing, repairs, alterations and improvements and (3) amounts actually paid or to be paid by the seller for registration, certificate of title, or license fees.
This section defines the true cash price at which goods are offered for sale in order that consumers may make a meaningful choice among credit sellers and the true charge actually imposed for credit; this section also prevents sellers' attempts to "bury" charges actually imposed for credit in overstating cash price. See Haynsworth, The South Carolina Consumer Protection Code 54, Comments to § 37-2-110 (2d Ed.1990). A consumer may rebut the presumption that the cash price disclosed is the true cash price by showing that the cash price disclosed is not offered to cash buyers in the ordinary course of business. Id. Further, a seller has the option of either including the charges enumerated in (1), (2), and (3) in the cash price or stating them separately. In either case, the sum on which the credit service charge is based will be the same since the amount financed includes both the cash price and the enumerated charges. 4 Id.
The Fannings contend the "procurement fee" is an unauthorized "additional fee" and is therefore illegal. S.C.Code Ann. § 37-2-202, permits a seller to charge, in addition to total cash price, certain specified fees. We agree with the Fannings that the procurement fee is not within the permissible "additional charges" as defined in section 37-2-202. However, in our opinion, the fee is not an "additional charge" but is, rather, an element of the negotiated cash price of the vehicle.
The dilemma in this case results from the failure to make a clear distinction between the portion of the transaction where the cash price is negotiated versus the portion of the transaction which relates to the extension of credit. Here, it is undisputed that the procurement fee was charged to all of Fritz's customers in establishing total cash price. Moreover, it is clear that the Fannings were advised of the fee prior to obligating themselves under the credit agreement. 5 Accordingly, the fee was not an impermissible "additional fee" under § 37-2-202. See, e.g., Johns v. Ford Motor Credit Company, 49 Ohio St.3d 84, 551 N.E.2d 179 (1990); Ford Motor Credit Company v. Gamez, 617 S.W.2d 720 (Tex.Civ.App.1980); Stasher v Finally, the Fannings contend the procurement fee is unconscionable under S.C.Code Ann. § 37-5-108. We disagree.
Harger-Haldeman, 58 Cal.2d 23, 22 Cal.Rptr. 657, 372 P.2d 649 (1962) (). 6
Unconscionability has been recognized as the absence of meaningful choice on the part of one party due to one-sided contract provisions, together with terms which are so oppressive that no reasonable person would make them and no fair and honest person would accept them. Jones Leasing v. Gene Phillips and Assoc., 282 S.C. 327, 318 S.E.2d 31 (Ct.App.1984). In the case of consumer credit sales, courts are to consider the gross disparity between the prices of the property or services sold, and the value of property or services measured by the price at which similar property or services are readily...
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