Pollock v. Birmingham Trust Nat. Bank

• Decision Date: 17 July 1981
• Docket Number: No. 80-7417,80-7417
• Citation: 650 F.2d 807
• Parties: J. A. POLLOCK and Sharon M. Pollock, Plaintiffs-Appellants, v. BIRMINGHAM TRUST NATIONAL BANK, Defendant-Appellee. . Unit B
• Court: U.S. Court of Appeals — Fifth Circuit

Page 807

650 F.2d 807

J. A. POLLOCK and Sharon M. Pollock, Plaintiffs-Appellants, v. BIRMINGHAM TRUST NATIONAL BANK, Defendant-Appellee.

No. 80-7417.

United States Court of Appeals, Fifth Circuit.

Unit B

July 17, 1981.

Edward Still, Birmingham, Ala., Joseph H. King, Jr., Atlanta, Ga., for plaintiffs-appellants.

Bradley, Arant, Rose & White, Laurence D. Vinson, Jr., Birmingham, Ala., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before TJOFLAT, HATCHETT and THOMAS A. CLARK, Circuit Judges.

THOMAS A. CLARK, Circuit Judge:

The Pollocks appeal from summary judgment granted in favor of the bank, Birmingham Trust National Bank ("BTNB" or "the Bank"). In their complaint the Pollocks alleged generally that BTNB was a "creditor" within the meaning of the Truth in Lending Act, 15 U.S.C. § 1601 et seq., and that it failed to make all the disclosures required by that Act, all in connection with the credit purchase of an automobile. The plaintiffs sought summary judgment, which was denied, and the lower court granted summary judgment for BTNB, which had not moved for summary judgment. Because the granting of summary judgment for the nonmoving party might have foreclosed plaintiffs' opportunity to dispute issues of fact material to a theory of liability that was not necessarily drawn into issue by the plaintiffs' own motion for summary judgment, we reverse.

The Act imposes liability on both nondisclosing "creditors" and their "subsequent assignees," although the scope of liability of the latter is considerably less than that of the former. Cf. 15 U.S.C. § 1640 with § 1614. ¹ Although a party cannot ordinarily be both a creditor and a subsequent assignee, one can be a "creditor" within the meaning of Regulation Z in either of two ways, by "extending" consumer credit or by "arranging for the extension" of consumer credit. 12 C.F.R. § 226.2(s). See also Meyers v. Clearview Dodge Sales, Inc., 539 F.2d 511 (5th Cir. 1976); Cenance v. Bohn Ford, Inc., 621 F.2d 130 (5th Cir. 1980). Meyers added that whether a party is a creditor or a subsequent assignee does not turn upon what appears on the face of the papers, but depends instead on the substantive relationship between the ostensible creditor and assignee. If the original creditor is a mere arranger of credit, the apparent assignee may be the actual extender of credit, with the same responsibility and scope of liability under the Act as any other creditor. All this would turn on the facts of a given case, facts largely outside what is apparent on the face of a disclosure statement. In contrast, the liability of an assignee, if that is a party's true status under the Act, is, for the most part, determined by what is "apparent on the face of the instrument assigned." 15 U.S.C. § 1614.

Plaintiffs filed a motion for summary judgment after limited discovery, consisting of interrogatories, none of the answers to which established in any factual detail the ongoing business relationship between the Bank and the automobile dealer. Plaintiffs' summary judgment motion did not, on its face, recite whether it was based on the claim that there were no material issues of fact respecting BTNB's status as a "creditor" on the one hand, or as a "subsequent assignee" on the other. No memorandum in support of this motion accompanies the Record on Appeal. From the record and briefs it is apparent that BTNB filed with the lower court a memorandum in opposition to plaintiffs' summary judgment motion, but that memorandum also is not a part of the Record on Appeal. In that memorandum, we were told at oral argument, BTNB argued that it was not liable under either an "extender of credit" theory, as an original creditor, nor as a subsequent assignee. Concerning the latter theory of liability, BTNB argued both that it was a subsequent assignee, and therefore not an original creditor, and that the nondisclosures giving rise to liability under the Act were not apparent on the face of the instrument assigned to it by the automobile dealership.

In response to the defendant's memorandum in opposition to the summary judgment motion, and before the district court reached its decision to grant summary judgment for the Bank, plaintiffs' counsel sent a letter to the district judge in which he stated that "we have not taken the position that BTNB is liable as an initial creditor, but that it is liable (as a subsequent assignee)." ² The letter did not bother to specify that the "position taken" in the motion for summary judgment was on one of more than one distinct theories of liability comprehended by the general allegations of the complaint. With this concession in mind, the district judge reasonably understood the plaintiffs to be limiting their theory of prosecution against the Bank to one of assignee liability. ³ He thereupon addressed the claim of assignee liability, examined the instrument assigned, and concluded, as a matter of law, that BTNB was outside the scope of assignee liability. ⁴

In a motion to reconsider, which also comes to us without any accompanying briefs that might have been filed in the lower court, the plaintiffs explained, without elaboration, that the letter merely referred to "the limited nature of the theory on which summary judgment was being sought," presumably the theory of assignee liability. R., 29. In his order denying reconsideration, the district judge clearly based his decision on the effect of the letter as an abandonment of any theory of original creditor liability. ⁵ There is no indication in the record of any further hearings, motions, or exchanges.

The parties have argued as if the central issue in this appeal is whether a district court has the power under the Federal Rules of Civil Procedure to grant summary judgment for a nonmoving party, but we do not think that question is involved. There is no question presented by this record of the power of a district court, in the proper circumstances, to grant summary judgment for a nonmoving party. The great weight of authority, and of our own authority by direct implication, supports the existence of such a power. Moore's Federal Practice, P 56.12; Wright & Miller, Federal Practice and Procedure: Civil § 2716, at n. 7; and Black Warrior Electric Membership Corp. v. Mississippi Power Co., 413 F.2d 1221 (5th Cir. 1969). But wherever the power has been admitted to exist, it has been attended with the most important qualification: Absent an otherwise effective abandonment, the party against whom judgment is rendered must not be foreclosed from litigating issues of fact material to any surviving claims. Prof. Moore makes explicit what is otherwise assumed whenever summary judgment is granted:

Care should, of course, be taken by the district court to determine that the party against whom summary judgment is rendered has had a full and fair opportunity to meet the proposition that there is no genuine issue of material fact to be tried, and that the party for whom summary judgment is rendered is entitled thereto as a matter of law.

Moore's Federal Practice, P 56.12, at 56-334.

What is at issue, therefore, is whether there was a live claim, adequately stated by the complaint, as to which there were unresolved issues of material fact at the time the district judge granted summary judgment for the Bank. ⁶ Plaintiffs argue that summary judgment was sought on a distinct theory of liability, that of assignee liability, reserving by implication the issue of the Bank's liability as an original creditor. The Bank argues that, by not explicitly reserving the issue of creditor liability, that claim, along with the claim of assignee liability, was necessarily submitted for judgment on the facts as they were then established. Both parties look to the letter in support of their position, although both sides find it necessary to add words to the letter in order to give it the full meaning argued for here. The Pollocks contend that what their lawyer meant to say was that "we have not taken the position (in our motion for summary judgment) that BTNB is liable as an initial creditor." The Bank argues instead that the meaning actually conveyed was that "we have not taken the position (in our motion for summary judgment, and we do not take the position in our complaint,) that BTNB is liable as an initial creditor."

What this appeal comes down to, then, is whether the district court correctly construed the ambiguous letter as an effective abandonment of the Pollocks' claim of original creditor liability against the Bank. If the letter is an effective abandonment of the original creditor claim, then the Pollocks' subsequent abandonment of the assignee theory of liability leaves nothing for us but to affirm, because the complaint does not purport to state any other claim against the Bank. If the letter does not operate as an effective abandonment of the original creditor theory of liability then summary judgment for the Bank was error, not because summary judgment can never be granted in favor of a nonmoving party, but because there remained unresolved issues of fact concerning an alternative claim that had been adequately stated in the complaint and had neither been submitted for judgment nor abandoned.

On its face the letter is ambiguous, but considered in context it does not amount to an abandonment of the complaint's claim of creditor liability. ⁷ A single sentence in a short letter, equally susceptible to an interpretation that a claim is being abandoned as it is to an interpretation that it is not, cannot operate to terminate that claim over objection. There must be something more, either in the way of conduct or declared intentions, before we can ignore a party's own interpretation of the meaning intended.

Our conclusion is buttressed by circumstances suggesting the alternative character of plaintiffs' summary judgment motion. The only supporting evidence that plaintiff...