Johnson v. Fleet Finance, Inc., s. 92-8352

• Citation: 4 F.3d 946
• Decision Date: 19 October 1993
• Docket Number: Nos. 92-8352,92-8621,s. 92-8352
• Parties: Johnnie L. JOHNSON, Barbara Ann Johnson, William L. Mance, Mary L. Mance, Waralene Hopkins and all Persons Similarly Situated, Plaintiffs-Appellants, v. FLEET FINANCE, INC., Fleet Finance, Inc. of Ga., Tower Financial Services, Inc., Mortgage Equity Services and Donnetta Lowe, d/b/a Lowe and Associates, Defendants-Appellees. Johnnie J. JOHNSON, Barbara Ann Johnson, William L. Mance, Mary L. Mance, John Mance, Waralene Hopkins and all other persons similarly situated, Plaintiffs-Appellants, v. FLEET FINANCE, INC., Fleet Finance, Inc. of Georgia, Mortgage Equity Services, and Donnetta Lowe, d/b/a Lowe and Associates, Defendants, Tower Financial Services, Inc., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 946

4 F.3d 946

Johnnie L. JOHNSON, Barbara Ann Johnson, William L. Mance,

Mary L. Mance, Waralene Hopkins and all Persons

Similarly Situated, Plaintiffs-Appellants, v. FLEET FINANCE, INC., Fleet Finance, Inc. of Ga., Tower

Financial Services, Inc., Mortgage Equity Services

and Donnetta Lowe, d/b/a Lowe and

Associates, Defendants-Appellees.

Johnnie J. JOHNSON, Barbara Ann Johnson, William L. Mance, Mary L. Mance, John Mance, Waralene Hopkins and all other persons similarly situated, Plaintiffs-Appellants, v. FLEET FINANCE, INC., Fleet Finance, Inc. of Georgia,

Mortgage Equity Services, and Donnetta Lowe, d/b/a

Lowe and Associates, Defendants,

Tower Financial Services, Inc., Defendant-Appellee.

Nos. 92-8352, 92-8621.

United States Court of Appeals, Eleventh Circuit.

Oct. 19, 1993.

Larry Ira Smith, James Marion Thompson, Thompson & Smith, P.C., Thomas Reuben Burnside, Jr., Harry Duff Revell, James Barnard Wall, Burnside Wall Daniel & Ellison, Stephen Eugene Shepard, Augusta, GA, for plaintiffs-appellants.

Donald A. Loft, Walter Rhett Tanner, Gregory R. Hanthorn, Jones Day Reavis & Pogue, Atlanta, GA, William Augustus Trotter, III, Robert C. Hagler, Benjamin F. McElreath, Augusta, GA, Hugh W. Gibert, Arnall, Golden & Gregory, William S. Duffey, Jr., Sean R. Smith, Frank C. Jones, King & Spaulding, Atlanta, GA, for defendants-appellees.

Appeals from the United States District Court for the Southern District of Georgia.

Before KRAVITCH and BLACK, Circuit Judges, and DYER, Senior Circuit Judge.

PER CURIAM:

Two issues are presented in this appeal: the proper construction of the Georgia criminal usury statute, Ga.Code Ann. Sec. 7-4-18 (Case No. 92-8352); and whether a loan broker's fee constitutes a finance charge under the federal Truth in Lending Act, 15 U.S.C. Sec. 1605(a), when the lender neither receives part of the fee nor requires the borrower to use a loan broker (Case No. 92-8621).

As to the first issue, federal courts sitting in diversity must apply the substantive law of the forum state. Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). In particular, we are bound by the state court's interpretation of its own state statute. E.g., Wisconsin v. Mitchell, --- U.S. ----, ----, 113 S.Ct. 2194, 2198, 124 L.Ed.2d 436 (1993). In Fleet Finance, Inc. of Georgia v. Jones, 263 Ga. 228, 430 S.E.2d 352 (1993), the Supreme Court of Georgia adopted the same construction of section 7-4-18 as did the district court in this case. We are obliged to follow Jones. Accordingly, we affirm the district court on this issue.

As to the second issue, we agree with both the judgment and the reasoning of the district court. We therefore adopt its opinion, which we attach as an appendix, as the opinion of this court.

AFFIRMED.

APPENDIX

United States District Court

Southern District of Georgia

Augusta Division

JOHNNIE J. JOHNSON, BARBARA ANN JOHNSON, WILLIAM L. MANCE,

MARY L. MANCE, JOHN MANCE, WARALENE HOPKINS, and

all other persons similarly situated, Plaintiffs,

v.

FLEET FINANCE, INC., FLEET FINANCE INC. OF GEORGIA, TOWER

FINANCIAL SERVICES, INC., MORTGAGE EQUITY SERVICES

and DONNETTA LOWE, d/b/a LOWE &

ASSOCIATES, Defendants.

CV 191-121

Filed June 5, 1992

ORDER

On February 21, 1992, this Court dismissed all of the Plaintiffs' claims except one. Remaining is a claim that Defendant Tower Before the Court is Tower's motion for summary judgment on this TILA claim. As explained below, the Court GRANTS this motion.

Financial Services, Inc. ("Tower") violated the federal Truth in Lending Act ("TILA"), 15 U.S.C. Secs. 1601-77 (1988). Although Plaintiffs Mary L. and John Mance concede that Tower disclosed all fees and charges on the Mances' disclosure documents, the Mances argue that Tower listed one fee improperly. Specifically, the Mances contend that Tower violated TILA by disclosing a fee paid to a broker, Donnetta Lowe, as part of the "amount financed" rather than as a separate "finance charge."

BACKGROUND

On about September 1, 1990, the Mances responded to Lowe's newspaper advertisement, which offered residential mortgage loans. Lowe went to the Mances' home and obtained information that she needed to broker a mortgage loan for them. On September 24, 1990, the Mances executed and delivered to Tower a promissory note in the principal amount of $30,800.00 and a deed to secure debt as security for that loan. On October 1, 1990, Tower transferred and assigned the note and deed to secure debt to Fleet Finance of Georgia. For her role in the transaction, Lowe received a $3,080.00 fee. Tower calls this fee a brokerage fee, but the Mances describe it as an origination fee.

At issue in this case is whether Tower properly disclosed Lowe's brokerage or origination fee to the Mances within the loan disclosure documents. As indicated above, Tower included the fee as part of the "amount financed" on the face of the note. On a separate document entitled "Itemization of Amount Financed," Tower listed Lowe's fee as a separate entry. The Mances claim that Tower should have included Lowe's fee as a separate "finance charge" rather than as part of the "amount financed." If so, then the disclosure documents suggested that the cost of the loan was lower than it actually was. As explained in more detail below, the Mances' claim that Lowe's fee is a finance charge is valid only if Tower requires borrowers to use a broker's services.

Although brokers are involved in many Tower loan transactions, Tower claims that it has never required borrowers to use a broker in order to obtain a Tower loan. According to Tower, between January 1987 and June 1991, Tower made 2,155 mortgage loans. Of those loan transactions, 1,497 involved the services of a broker, but 658 did not. From June 21, 1990 to June 21, 1991, Tower claims that it made 406 mortgage loans. Of those 406 transactions, brokers were involved in 294, but not involved in 112. The Mances controvert these figures with evidence that shows that from June 21, 1990 to November 26, 1991, brokers or originators were involved in 83.5% of Tower's loan transactions.

ANALYSIS

I. Summary Judgment

The "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56 advisory committee's note). The Court's analysis ends "where there is no genuine issue of material fact and where the moving party is entitled to judgment as a matter of law." Great Lakes Dredge & Dock Co. v. Miller, 957 F.2d 1575, 1578 (11th Cir.1992); Real Estate Fin. v. Resolution Trust Corp., 950 F.2d 1540, 1543 (11th Cir.1992) (both citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986)). Thus, summary judgment is appropriate where the nonmovant "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552; Tidmore Oil Co. v. BP Oil Co./Gulf Prods. Div., a Div. of BP Oil Co., 932 F.2d 1384, 1387-88 (11th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 339, 116 L.Ed.2d 279 (1991).

"[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. at 2552; see Goree v. Winnebago Indus., Inc., 958 F.2d 1537, 1539 (11th Cir.1992). If the movant successfully discharges this initial burden, the burden shifts to the nonmovant to establish, by going beyond the pleadings, that there is a genuine issue as to facts material to the nonmovant's case. Thompson v. Metropolitan Multi-List, Inc., 934 F.2d 1566, 1583 n. 16 (11th Cir.1991); see Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 913, 116 L.Ed.2d 813 (1992); Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir.1991).

The nonmovant "must present affirmative evidence in order to defeat a properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986); United States v. Gilbert, 920 F.2d 878, 882 (11th Cir.1991). If the nonmoving party's response to the summary judgment motion consists of nothing more than mere conclusory allegations, then the Court must enter summary judgment in the moving party's favor. Peppers v. Coates, 887 F.2d 1493, 1498 (11th Cir.1989).

In assessing whether the movant is entitled to summary judgment in its favor, the district court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmoving party. Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir.1992); Ryder Int'l Corp. v. First Am. Nat'l Bank, 943 F.2d 1521, 1523. The Court must avoid weighing conflicting evidence, Liberty Lobby, 477 U.S. at 255, 106 S.Ct. at 2513; Ryder, 943 F.2d at 1523; Brown v. Hughes, 894 F.2d 1533, 1536 (11th Cir.), cert. denied, 496 U.S. 928, 110 S.Ct. 2624, 110 L.Ed.2d 645 (1990); Tippens v. Celotex Corp., 805 F.2d 949, 953 (11th Cir.1986), or making credibility determinations. Liberty Lobby, 477 U.S. at 255, 106 S.Ct. at 2513; McKenzie v. Davenport-Harris Funeral Home, 834 F.2d 930, 934 (11th Cir.1987). A mere "scintilla" of evidence supporting the opposing party's position, however, will not suffice. E.g., Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.1990). Nevertheless, where a reasonable fact finder may "draw more than one inference from the facts, and that inference creates a general issue of material fact, then the court...