Frisch v. Casavely-Machens Ford, Inc.
| Decision Date | 29 September 1980 |
| Docket Number | No. 79-944C(2).,79-944C(2). |
| Citation | 497 F. Supp. 565 |
| Parties | Elizabeth F. FRISCH, Plaintiff, v. CASAVELY-MACHENS FORD, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Barbara J. Gilchrist, Ann B. Lever, Legal Services of Eastern Missouri, Inc., St. Louis, Mo., for plaintiff.
Norman H. Anderson, Fortus & Anderson, St. Louis, Mo., Robert S. Allen, Lewis, Rice, Tucker, Allen & Chubb, St. Louis, Mo., for defendant.
This case is now before the Court on the parties' cross-motions for partial summary judgment. Plaintiff brought this suit pursuant to the Truth-In-Lending Act, 15 U.S.C. § 1601 et seq., and the accompanying regulation, Federal Reserve Board Regulation Z, 12 C.F.R. § 226 et seq. Plaintiff seeks to recover statutory damages plus attorneys' fees and costs.
On the instant motions for partial summary judgment, the following facts are not in dispute. Plaintiff purchased a used automobile from defendant in August 1978. Defendant is in the business of selling new and used automobiles, and regularly extends or arranges for the extension of credit to its customers for which a finance charge is imposed and which is payable in more than four installments. Defendant has admitted that it arranged for the extension of credit to plaintiff which is involved in this case. On completion of the agreement, the contract was immediately assigned by defendant to the Ford Motor Credit Company (Ford Credit), as defendant routinely does with a large percentage of its credit agreements.
Plaintiff asserts that defendant failed to comply with the Truth-In-Lending Act in various respects. The instant cross-motions for partial summary judgment are addressed to those claims dealing with the adequacy of the disclosures made by defendant. Plaintiff's assertion that defendant violated the Act by failing to provide her with a duplicate of the disclosure statement at the time the disclosures were made is not involved in the instant motions.
Plaintiff claims that defendant violated the Act by failing to make the required disclosures in a meaningful sequence,1 as required by § 226.6(a) of Regulation Z. This Court must concur with defendant that the applicable regulation has been met. Section 226.6(a) is meant to ensure that the required disclosures follow a logical order and are not scattered throughout the agreement. Basham v. Finance America Corp., 583 F.2d 918 (7th Cir. 1978). The key factors to be considered in determining whether this regulation has been violated are the reasonable proximity of the disclosures to each other and the comprehensibility of the agreement; no particular format is mandated. Id., Warren v. Credithrift of America, Inc., 599 F.2d 829 (7th Cir. 1979).
The very format involved in this case was examined in Murphy v. Ford Motor Credit Co., 477 F.Supp. 59 (E.D.Mo. 1979), aff'd in part, rev'd in part No. 79-1822, No. 79-2061, 629 F.2d 556 (8th Cir. August 28, 1980). There, the Court concluded that "the terms of this contract are grouped together rather than scattered throughout the contract, and, therefore, plaintiff's contention that the contract terms are not in meaningful sequence is without merit." Id., at 62. This Court must agree. There can be no exact formulation as to what constitutes a logical or meaningful sequence, and extended discussion of how one factor relates to others and would be better placed in a different position is unnecessary. Suffice it to say that, in viewing the disclosure statement involved in this case, this Court is convinced that the statement is both logical and comprehensive, and that the Act is not violated in this respect.
Plaintiff argues that defendant failed to comply with § 226.8(a) of Regulation Z in failing to disclose Ford Credit as a creditor on the face of the agreement. Defendant does not acknowledge that Ford Credit was, in fact, a creditor, and this Court need not decide that issue. For it is clear that, assuming Ford Credit was a creditor, its status was adequately disclosed in the agreement.
Ford Credit's role in the transaction was disclosed through the following clause:
The foregoing contract is hereby accepted by the seller and assigned to Ford Motor Credit Company in accordance with the terms of the Assignment set forth on the reverse side hereof.
Seller ________________________________ By _____________________ Title ________ This clause has been held to adequately disclose the assignee's prospective involvement in the transaction in several cases. The leading case on this subject is Milhollin v. Ford Motor Credit Co., 588 F.2d 753 (9th Cir. 1978), rev'd on other grounds, 444 U.S. 555, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980). The court in Milhollin rejected plaintiff's argument that the word "creditor" must be used.
Nowhere does Regulation Z require use of the word "creditor". Here, the exact role that Ford Credit ultimately played in each transaction was clearly disclosed. Requiring Ford Credit to use the word "creditor" would not have given Consumers additional information nor better served the purposes of the Act. Id. at 757.
This same conclusion has been reached recently with respect to similar clauses by the Sixth and Seventh Circuit Courts of Appeals. Augusta v. Marshall Motor Co., 614 F.2d 1085 (6th Cir. 1979); Sharp v. Ford Motor Credit Co., 615 F.2d 423 (7th Cir. 1980). This Court is not inclined to go against this persuasive weight of authority.
Plaintiff also argues that defendant violated the Act by not disclosing Ford Credit's local business address. This Court can find no such requirement in the Act or the accompanying regulation. The case relied on by plaintiff, Welmaker v. W. T. Grant Company, 365 F.Supp. 531 (N.D.Ga. 1972), is not persuasive. Rather than ruling that disclosure of the creditor's local address is always required, Welmaker held that, in light of the partial disclosures which were made, failure to disclose the...
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