Herrera v. First Northern Sav. and Loan Ass'n

• Decision Date: 17 November 1986
• Docket Number: Nos. 80-2311,81-1019,s. 80-2311
• Citation: 805 F.2d 896
• Parties: Manuel HERRERA and Lupe Herrera, Plaintiffs-Appellees, Cross-Appellants, v. FIRST NORTHERN SAVINGS AND LOAN ASSOCIATION, Defendant-Appellant, Cross- Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 896

805 F.2d 896

6 Fed.R.Serv.3d 878

Manuel HERRERA and Lupe Herrera, Plaintiffs-Appellees Cross-Appellants, v. FIRST NORTHERN SAVINGS AND LOAN ASSOCIATION Defendant-Appellant, Cross- Appellee.

Nos. 80-2311, 81-1019.

United States Court of Appeals Tenth Circuit.

Nov. 17, 1986.

Harvey Fruman, Santa Fe, N.M., for plaintiffs-appellees, cross-appellants.

John A. Mitchell, (Christina L.G. Chavez of Mitchell, Alley & Rubin, Santa Fe, N.M., was also on brief) for defendant-appellant, cross-appellee.

Before HOLLOWAY, Chief Judge, and McKAY, Circuit Judge, and KANE, District Judge. ^*

HOLLOWAY, Chief Judge.

Plaintiffs and defendant appeal different provisions of the district court's order granting summary judgment for the plaintiffs-appellants Manuel and Lupe Herrera. The court held that defendant-appellee, First Northern Association (First Northern), had not complied with requirements of the Truth-in-Lending Act (TILA or Act), 15 U.S.C. Sec. 1601 et seq., and the Federal Reserve Board Regulations pursuant thereto, Regulation Z, 12 C.F.R. Sec. 226.1 et seq. (1980). Four questions are presented by the appeal and cross-appeal: (1) whether plaintiffs' cross-appeal was timely; (2) whether there were genuine issues of material fact, legal grounds, or defenses which precluded summary judgment for plaintiffs; (3) whether the court properly limited plaintiffs to one statutory $1,000 penalty; and (4) whether the court erred in disallowing recovery of the New Mexico gross receipts tax imposed on the fees of their attorney.

I

Plaintiffs and defendant entered into a real estate loan agreement, evidenced by a promissory note secured by a mortgage on the Herreras' real property. Pursuant to this agreement, First Northern, in its ordinary course of business, extended credit to the Herreras, jointly and severally, as husband and wife, and imposed a finance charge. First Northern provided the Herreras with a TILA disclosure statement entitled "NOTICE TO CONSUMER REQUIRED BY LAW," which disclosed among other things the interest charged, expressed as an "annual percentage rate."

The Herreras sued First Northern alleging numerous violations of TILA and Regulation Z, and sought to recover statutory damages, reasonable attorney's fees and costs. Plaintiffs sought summary judgment, which was granted. The court held that defendant's disclosure of the "annual percentage rate" on its TILA disclosure statement did not fulfill the "more conspicuously" mandate of Parts 226.6(a) and 226.8(b)(2) of Regulation Z, and therefore, violated the Act. I R. 67. It found that while the term "annual percentage rate" appeared on the "Notice to Customer Required by Federal Law" in all capital letters, over 30 other terms and phrases appeared on this disclosure statement printed in the identical size, style and boldness of type in the capitalized format. I R. 64-65. The court granted plaintiffs a single statutory penalty of $1,000 to be divided between them, costs of $20.16, and attorney's fees of $1,930.00. This appeal and cross-appeal followed.

II

On our own motion, we raised the question of the timeliness of the cross-appeal. The summary judgment order was filed in the clerk's office on November 18, 1980. It was entered on the court's civil docket on November 28. Defendant's notice of appeal was filed on December 4 and plaintiffs' notice of cross-appeal was filed on December 19.

The rules concerning notices of appeal in civil cases are provided by Rules 3 and 4(a) of the Federal Rules of Appellate Procedure. Rule 3 provides that an appeal is perfected by filing a notice of appeal with the clerk of the district court within the time allowed by Rule 4. Rule 4(a)(1) requires that a notice of appeal be filed within 30 days of entry of the judgment or order appealed from. However, Rule 4(a)(3) provides alternative time periods for filing cross-appeals. If a timely notice of appeal is filed, any other party may file a notice of appeal within 14 days after filing of the first notice of appeal, or within the time otherwise prescribed by this Rule 4(a), whichever period last expires. Rule 4(a)(3), F.R.A.P.

The timeliness of plaintiffs' notice of cross-appeal turns on whether the time began to run from the date of filing of the summary judgment order, or from the entry of the order on the civil docket. If the former date controls, the notice of cross-appeal was untimely. However, we are persuaded that the time period is computed from the order's entry on the civil docket and not the date of its filing so that the notice of the cross-appeal was timely. ¹ With respect to the interpretation of Rule 4, F.R.A.P., 9 Moore's Federal Practice p 204.03 states that the "time for appeal commences to run from the date on which the judgment that has thus been set forth in a separate document is entered on the civil docket." See also Rules 58 and 79(a), F.R.Civ.P. ² This date of entry of the order must be recorded in the official court docket and the order is not final or appealable until so entered. Chem-Haulers, Inc. v. United States, 536 F.2d 610, 615 (5th Cir.1976). "Entry" and "filing" are words of art:

"Entry" has a well defined meaning under the rules; it occurs only when the essentials of a judgment or order are set forth in a written document separate from the court's opinion and memorandum and when the substance of this separate document is reflected in an appropriate notation on the docket sheet assigned to the action in the district court.

[Emphasis in original.] Caperton v. Beatrice Pocahontas Coal Co., 585 F.2d 683, 688 (4th Cir.1978). Filing, on the other hand, means "the delivery of the thing filed into the actual custody of the proper officer keeping the records of the court. It connotes a deposit for permanent presentation." The Washington, 16 F.2d 206, 208 (2d Cir.1926). "Entry ... is ordinarily synonymous with recording. It connotes a duty greater than, or additional to, that preservation which is the essence of filing." Id.

The summary judgment order was filed on November 18, 1980, but not entered on the docket until November 28. I R. 103. Hence the date on which the notice of the cross-appeal was filed was 21 days after entry of the judgment and, therefore, within the alternative 30-day period prescribed by Rule 4(a)(3).

III

First Northern contends that the district court erred in granting summary judgment in favor of plaintiffs for three principal reasons: (1) that genuine issues as to material facts existed regarding the sufficiency of the "annual percentage rate" disclosure which precluded summary judgment; (2) that in any event the "annual percentage rate" disclosure was properly shown so as to meet the Sec. 226.6(a) requirements; and (3) that even if there was a violation of the Act, defendant is not liable because of the "bona fide error" and "informed use of credit" defenses.

A.

Plaintiffs contend that First Northern's TILA disclosure statement violates Sec. 226.6(a) of Regulation Z, 12 C.F.R. Sec. 226.6(a) (1980), as a matter of law because the term "annual percentage rate" is not printed "more conspicuously" than other terminology required by the Consumer Credit Protection Act, 15 U.S.C. Sec. 1601 et seq. (1980). Section 226.6(a) of the Regulation states in pertinent part:

The disclosures required to be given by this part shall be made clearly, conspicuously, in meaningful sequence, in accordance with the further requirements of this section, and at the time and in the terminology prescribed in applicable sections.... [W]here the terms "finance charge" and "annual percentage rate" are required to be used, they shall be printed more conspicuously than other terminology required by this part.

(Emphasis added.)

The validity of this provision in the Regulation is not questioned and only the issue of violation of it here is involved. It is unnecessary for plaintiffs to show any actual damage in order to recover for TILA violations under Sec. 1640. Hinkle v. Rock Springs Nat'l Bank, 538 F.2d 295 (10th Cir.1976). On the disclosure statement, the term "annual percentage rate" is printed in all capital letters in boldface type. I R. 36. However, Sec. 226.6(a) of the Regulation requires that the APR be printed "more conspicuously" than other required terms. However, as the district court concluded, over 30 other terms and phrases appearing on the disclosure statement are also printed in capital letters, in the identical size, style and boldness of type as the "annual percentage rate". Thus, the APR disclosure does not meet the Sec. 226.6(a) mandate.

Defendant argues that there is a genuine issue as to whether the "annual percentage rate" is "more conspicuously" shown and that the issue of "conspicuousness" is one on which reasonable minds could differ, precluding summary judgment. We disagree. We hold that reasonable minds cannot differ with the ruling that the disclosure statement fails to meet the Sec. 226.6(a) mandate. See Shroder v. Suburban Coastal Corp., 729 F.2d 1371, 1379-80 (11th Cir.1984) (where annual percentage rate was printed in all capital letters but other required terminology was likewise shown, Sec. 226.6(a) was violated); Dixey v. Idaho First Nat'l Bank, 677 F.2d 749 (9th Cir.1982) (Although the "annual percentage rate" term was in boldface type on bank's standard loan agreement, the disclosure statement violated conspicuousness requirement of Sec. 226.6(a) where numerous other headings on the page were also in boldface type).

Moreover, the district court's conclusion comports with the underlying policies of the Truth-in-Lending Act. The Act was passed "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 avoid the uninformed use of credit." 15 U.S.C. Sec. 1601 (1982). The most important disclosures mandated are those on which consumers can compare competing loans--the finance charge and annual percentage...