Fielder v. Credit Acceptance Corp., 96-1210-CV-W-3.
| Decision Date | 04 August 1998 |
| Docket Number | No. 96-1210-CV-W-3.,96-1210-CV-W-3. |
| Citation | 19 F.Supp.2d 966 |
| Parties | Marvin FIELDER, et al., Plaintiffs, v. CREDIT ACCEPTANCE CORPORATION, et al., Defendants. |
| Court | U.S. District Court — Western District of Missouri |
Dale K. Irwin, Slough, Connealy, Irwin & Madden, Kansas City, MO, Bernard E. Brown, The Brown Law Firm, Kansas City, MO, for Marvin Fielder, Deborah Williams.
Nancy Louise Ellingsworth, Daniel Yves Hall, Bryan Cave LLP, Kansas City, MO, Bryan E. Martin, Mitchell & Martin, Blue Springs, MO, Frank W. Lipsman, Mark W. Brennan, Bryan Cave, Kansas City, MO, John P. Scotellaro, Robert M. Moye, Bell, Boyd & Lloyd, Chicago, IL, for Credit Acceptance Corp.
David R. Mitchell, Bryan E. Martin, Mitchell & Martin, Blue Springs, MO, for Northeast Auto Credit Inc.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTIONS FOR SUMMARY JUDGMENT AND DENYING DEFENDANT CAC'S CROSS-MOTION FOR SUMMARY JUDGMENT
Pending is Plaintiffs' Motion for Partial Summary Judgment for the "Post-Maturity Interest" Class for Liability and Injunctive and Declaratory Relief against Credit Acceptance Corporation ("CAC") (Doc. # 81), Plaintiffs' Motion for Partial Summary Judgment for the "Official Fees" Class for Liability and Injunctive and Declaratory Relief against CAC (Doc. # 82), Plaintiffs' Motion for Partial Summary Judgment for the "Repossession" Subclass for Liability and Injunctive and Declaratory Relief against CAC (Doc. # 83), and CAC's Cross-Motion for Summary Judgment (Doc. # 128). Plaintiffs' Motions have been considered together and for the reasons set forth below are DENIED IN PART AND GRANTED IN PART. CAC's Cross-Motion is DENIED except as to the post-sale notices.
The factual background of this case has been previously set forth in detail in Fielder v. Credit Acceptance Corp., 175 F.R.D. 313 (1997) () and in Fielder v. Credit Acceptance Corp., 1998 WL 394995 (W.D.Mo.1998) ().1 Therefore, only the facts relevant to this Order shall be discussed.
Plaintiffs Marvin Fielder and Deborah Williams initially filed this matter in Missouri state court on October 15, 1996. Defendants CAC and Northeast Auto Credit, Inc. ("NAC") removed it to this Court on November 25, 1996, based upon Plaintiffs' claims asserted under the Truth in Lending Act, 15 U.S.C. §§ 1601, et seq. On October 9, 1997, this Court granted Plaintiffs' Motion for Class Certification. The case is presently pending on Plaintiffs' Third Amended Complaint filed on March 10, 1998, containing fourteen counts against Defendant CAC and Defendant NAC.
Plaintiffs have moved for summary judgment pursuant to Federal Rule of Civil Procedure 56 for liability and injunctive and declaratory relief against Defendant CAC. Plaintiffs' Motion requests relief under Counts VI, VII, VIII and IX for the "official fees" class, under Counts X, XI, and XIII for the "post-maturity interest" class, and under Counts XII and XIII for the "repossession" subclass. CAC filed its suggestions in opposition to Plaintiffs' motions and it filed a Cross-Motion for Summary Judgment.
The following statement of uncontroverted facts either has been agreed to by the parties in their briefs or has been determined by the Court as uncontroverted after review of all the pleadings and documents in the matter.
1. Defendant CAC is engaged in the business of financing, administering, servicing and collecting retail installments used in the purchase and sale of used automobiles.
2. Plaintiffs Marvin Fielder and Deborah Williams entered into an installment contract for the purchase of a vehicle from Defendant Northeast Auto Credit, Inc., which contract contained a charge of $43.50 denominated as "Filing fees" and as "Other Charges" "To Public Officials".
3. Plaintiffs Jerry Dau and Kimberly Williams entered into an installment contract for the purchase of a vehicle from Preferred Auto Sales, which contract contained a charge of $25.00 denominated as "Paid to Public Officials — Filing Fees".
4. Plaintiffs Jerome Henderson and Lucy Henderson entered into an installment contract for the purchase of a vehicle from Charles Brock Oldsmobile.
5. The Fielder/Williams and the Dau/Williams installment contracts were assigned by the selling dealers to CAC.
6. The above Plaintiffs' motor vehicle installment sale contracts all contain the following clause:
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS AND SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.
7. The Fielder/Williams and Henderson retail installment contracts contain the following Prepayment clause:
You may prepay this contract in whole or in part at any time. However, any partial prepayment will not reduce or excuse any later payments until this note is paid in full. If and when prepaid in full, or upon maturity by acceleration, the interest portion of the finance charge will be recomputed using the rule of 78's (as provided in Section 365.140 RSMo) to determine the exact amount then due. No refund or credit of less than $1.00 will be made.
8. The William/Dau retail installment contract contains the following Refund Calculation clause:
If you prepay in full or if you default and we demand payment of the unpaid balance, you may be entitled to a refund credit of part of the recomputed finance charge. If the term of this Contract is 61 months or less, we will determine the credit using the sum of the balances method provided for in Mo.Rev.Stat. § 365.140. We will retain a $15.00 acquisition fee when making this calculation. If the Contract is greater than 61 months, we will use an actuarial method to determine the credit. We will apply the credit to the amount you owe us or refund it to you. We will not refund amounts less than $1.00.
A refund of any prepaid, unearned insurance premiums may be obtained from us or from the insurance company named in you policy or certificate of insurance.
9. CAC supplied the above-mentioned installment sale contract forms to the selling dealers.
10. CAC took possession of a vehicle purchased by Plaintiffs Fielder and Williams, sold it and sued Plaintiffs Fielder and Williams on the installment contract for a deficiency.
11. CAC charged and obtained payments of finance charges, interest, and delinquency and collection charges on certain contracts.
12. The Fielder/Williams installment contract contained a 9% post-maturity interest clause and CAC filed suit against Plaintiffs Fielder/Williams requesting post-maturity interest at the rate of 22%.
13. CAC filed suit against Plaintiffs Fielder and Williams and the Petition requested $4,177.42, including $88.72 in interest which was added to the balance of $4,088.70.
14. The Henderson installment contract contained a blank post-maturity interest clause.
15. In December of 1996, CAC filed an action for judgment in the St. Louis County Associate Circuit Court against Jerome and Lucy Henderson requesting a judgment on the retail installment contract with interest in the amount of 18%.
16. CAC filed suit against Plaintiffs Jerome and Lucy Henderson and the Petition requested $4,354.71 including $394.50 in interest which was added to the balance of $3,960.21.
17. CAC obtained a default judgment against Plaintiffs Jerome and Lucy Henderson which included a provision for interest at 18%.
18. CAC filed affidavits in connection with filing certain lawsuits in Missouri which contained erroneous post-maturity interest rates.
19. CAC sent certain pre-sale notices to Plaintiffs Fielder, Williams and the Hendersons.
20. Neither the Fielder/Williams nor the Henderson installment contract contains a provision for compound interest.
21. CAC apparently always charged compound interest in the same fashion as charged on the Fielder/Williams and Henderson accounts when it repossessed a vehicle and filed a collection action.
22. The balance stated in the Fielder/Williams and the Henderson pre-sale notice included unrebated charges.
23. In many cases, including the Fielder/Williams and Henderson cases, CAC did not sell the debtors' repossessed vehicles until some time after the sale date set by the pre-sale notice.
24. With respect to the following contracts, for example, which contained a 9% figure in the post-maturity interest clause CAC sought and obtained judgments for post-maturity interest on the following dates at the following rates: (1) March 17, 1997, account # 167196 at 22% and (2) March 11, 1997, account # 242669 at 22%.
25. With respect to the following contracts, for example, which contained no figure in the post-maturity interest clause CAC sought and obtained judgments for post-maturity interest on the following dates at the following rates: (1) January 27, 1997, account # 150094 at 18% (2) January 7, 1997, account # 189660 at 18%; and (3) March 12, 1997, account # 233967 at 23%.
26. CAC determines whether to accept the assignment of a consumer's retail installment contract by reviewing consumer's credit application and the other "Documents needed for deal approval." After CAC agrees to accept assignment of a consumer's contract, the contract is filled in, the consumer signs the contract, the dealer executes the assignment portion and forwards the executed contract to CAC.
27. CAC requires a Missouri dealer to submit a copy of the consumer's Title Application, along with certain other "[d]ocuments needed for deal advance" before it will advance a dealer any funds on a given transaction. Ordinarily, these documents are submitted to CAC several days after CAC has agreed to accept the assignment....
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