London v. Chase Manhattan Bank Usa, N.A.
| Decision Date | 30 March 2001 |
| Docket Number | No. 99-1298-CIV.,99-1298-CIV. |
| Citation | 150 F.Supp.2d 1314 |
| Parties | Roger LONDON, individually and on behalf of all others similarly situated, Plaintiffs, v. CHASE MANHATTAN BANK USA, N.A., et al., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Michael Elliott Criden, Alan H. Rolnick, Michael A. Hanzman, Hanzman, Criden, Chaykin & Rolnick, Coral Gables, FL, for Plaintiffs.
Katherine E. Sidaway, Greenberg Traurig, Stuart Harold Singer, Carlos Mario Sires, Daniel Arthur Casey, Kirkpatrick & Lockhart, Miami, FL, R. Bruce Allensworth, Kirkpatrick & Lockhart, Boston, MA, Franklin G. Burt, Farrokh Jhabvala, Jorden, Burt, Boros, Cicchetti, Berenson & Johnson, Miami, FL, for Defendants.
OMNIBUS ORDER
THIS CAUSE is before the Court upon Defendant Chase Manhattan Bank USA, N.A.'s Motion for Summary Judgment (DE 193), filed on June 15, 2000, and Plaintiff's Motion for Partial Summary Judgment on Liability (DE 179), filed on July 14, 2000.
THE COURT has considered the Motions, the pertinent portions of the record and is otherwise fully advised in the premises. For the reasons explained below, the Court finds that Plaintiff's Motion for Partial Summary Judgment to the extent based on Count I arising under the Truth in Lending Act, 15 U.S.C. § 1601 et. seq., should be granted, that Defendant Chase Manhattan Bank U.S.A., N.A.'s Motion for Summary Judgment to the extent based on Count I should be denied and that the cross motions for summary judgment to the extent based on Count II should be denied as moot in light of the amendments made to Count II in the Third Amended Complaint.
Defendants Chase and Wal-Mart Stores, Inc. ("Wal-Mart") offer a co-branded credit card to qualified applicants called the "Chase/Wal-Mart Mastercard." Statement of Undisputed Material Facts in Support of the Motions for Summary Judgment of Chase Manhattan Bank USA, N.A. and Wal-Mart Stores, Inc. ("Chase SUF") at ¶ A1. An individual desiring to apply for the Mastercard fills out a standard application (the "Take-One") that Wal-Mart makes available and which is designed to be completed at a Wal-Mart store. Id. at ¶ 5; Plaintiff's Statement of Undisputed Material Facts ("SUF") at ¶ A. Apart from soliciting information typically associated with the credit approval process, the Take-One asks whether the applicant wishes to enroll in a package of credit insurance called "LifePlus." Id. The LifePlus package consists of life, disability, involuntary unemployment, and leave of absence insurance coverages. Id. Only one form of the Take-One has been used since the inception of the Chase/Wal-Mart Mastercard in late 1996. Plaintiff's SUF at ¶ A.
The Take-One contains eight sections.2 Section 6 is entitled "LIFEPLUS CREDIT INSURANCE ENROLLMENT (OPTIONAL)" and states:
YES. I want to have the minimum monthly payment for this credit card made for me in the event my income is interrupted. Enroll me in optional LifePlus. I have read and understand the attached information on LifePlus and its cost. Be sure to include date of birth above. Your enrollment cannot be processed without it.
Exhibit A to Affidavit of Gregory Giordano. Within this section and to the right of the above text is the text "If yes, initial here X" and a line for the applicant's initials. Id.
The reverse side of the Take-One application contains additional information regarding LifePlus including, inter alia, that "[t]here is no charge for LifePlus in any month when [the applicant] has no outstanding balance" and that "the monthly premium is $.75 per $100 of the outstanding balance." The reverse side further states that "LifePlus is optional." Id.
On December 14, 1998, Plaintiff applied for a Chase/Wal-Mart Mastercard using a Take-One he obtained and completed at a Hallandale, Florida Wal-Mart store. Chase SUF at ¶ D1; Deposition of Roger London ("London Depo.") at 44, 52. Plaintiff completed the application in approximately 45 seconds. London Depo. at 48, 73. Plaintiff did not read any of the text on the reverse side of the application and read only part of the text of Section 6. Id. at 53, 54. In completing the application, Plaintiff initialed the line provided in Section 6 indicating his desire to purchase LifePlus. Id. at 52, 53.
Although Plaintiffs February 1999 credit card statement reflected a charge for LifePlus, Plaintiff testified that he was unaware he had purchased LifePlus until March 1999. Id. at 25, 60-61. To date, Plaintiff has not canceled his LifePlus coverage. Id. at 61-62.
Summary judgment is authorized only when the moving party meets its burden of demonstrating that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The Court explained that when assessing whether the movant has met this burden, the court should view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. See Adickes, 398 U.S. at 157, 90 S.Ct. 1598. See also Poole v. Country Club of Columbus, Inc., 129 F.3d 551, 553 (11th Cir.1997) (citing Adickes).
The party opposing the motion may not simply rest upon mere allegations or denials of the pleadings, after the moving party has met its burden of coming forward with proof of the absence of any genuine issue of material fact, the nonmoving party must make a sufficient showing to establish the existence of an essential element to that party's case and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barfield v. Brierton, 883 F.2d 923, 933 (11th Cir.1989).
If the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial. See Environmental Defense Fund v. Marsh, 651 F.2d 983, 991 (5th Cir.1981). Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the inferences that should be drawn from these facts. See Lighting Fixture & Elec. Supply Co. v. Continental Ins. Co., 420 F.2d 1211, 1213 (5th Cir.1969). If reasonable minds might differ on the inferences arising from undisputed facts then the court should deny summary judgment. See Impossible Elec. Techniques, Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d 1026, 1031 (5th Cir.1982). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ().
Moreover, the party opposing a motion for summary judgment need not respond to it with evidence unless and until the movant has properly supported the motion with sufficient evidence. See Adickes, 398 U.S. at 160, 90 S.Ct. 1598. The moving party must demonstrate that the facts underlying all the relevant legal questions raised by the pleadings or otherwise are not in dispute, or else summary judgment will be denied notwithstanding that the nonmoving party has introduced no evidence whatsoever. See Brunswick Corp. v. Vineberg, 370 F.2d 605, 611-12 (5th Cir.1967). The court must resolve all ambiguities and draw all justifiable inferences in favor of the nonmoving party. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
In Count I, Plaintiff alleges that Chase violated 15 U.S.C. § 1605(b) of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et. seq., and 12 C.F.R. §§ 226.4(b)(7), 226.4(d)(1)(i), and 226.4(d)(1)(iii) of Regulation Z by failing to disclose the cost of LifePlus as part of the finance charge on purchases made with the Chase/Wal-Mart Mastercard. Pursuant to these provisions, charges or premiums for credit life, accident or health insurance written in connection with any consumer credit transaction must be included in the finance charge unless certain requirements are met. Specifically, § 1605(b) of TILA provides that:
Charges or premiums for credit life, accident, or health insurance written in connection with any consumer credit transaction shall be included in the finance charge unless
(1) the coverage of the debtor by the insurance is not a factor in the approval by the creditor of the extension of credit, and this fact is clearly disclosed in writing to the person applying for or obtaining the extension of credit; and
(2) in order to obtain the insurance in connection with the extension of credit, the person to whom the credit is extended must give specific affirmative written indication of his desire to do so after written disclosure to him of the cost thereof.
15 U.S.C. 1605(b) (emphasis added). Similarly, § 226.4(d)(1) of Regulation Z provides, in relevant part:
(1) Voluntary credit insurance premiums. Premiums for credit life accident, health or loss-of-income insurance may be excluded from the finance charge if the following conditions are met:
(i) The insurance coverage is not required by the creditor, and this fact is disclosed in writing.
(ii) The premium for the initial term of insurance coverage is disclosed. If the term of insurance is less than the term of the transaction, the term of insurance also shall be disclosed.
(iii) The consumer signs or initials an affirmative written request for the insurance after receiving the disclosures specified in this paragraph.
12 C.F.R. § 226.4(d)(1) (emphasis added).
According to Plaintiff, the Take-One fails to satisfy TILA § 1605(b)(1) and (2) and Regulation Z § 226.4(d)(1) in the following three ways: (1) the Take-One fails to disclose in the precise language of ...
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