Redhouse v. Quality Ford Sales, Inc.

• Decision Date: 03 February 1975
• Docket Number: No. 74--1190,74--1190
• Parties: Little REDHOUSE, Brady Tah, on behalf of themselves and others similarly situated, Plaintiffs-Appellees, v. QUALITY FORD SALES, INC., a Utah Corporation, and Thomas E. Redd, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 230

511 F.2d 230

Little REDHOUSE, Brady Tah, on behalf of themselves and others similarly situated, Plaintiffs-Appellees, v. QUALITY FORD SALES, INC., a Utah Corporation, and Thomas E Redd, Defendants-Appellants.

No. 74--1190.

United States Court of Appeals, Tenth Circuit.

Argued Nov. 13, 1974.

Decided Feb. 3, 1975.

James Doyle, DNA People's Legal Services, Chinle, Ariz. (Eric Swenson, DNA People's Legal Services, Mexican Hat, Utah, on the brief), for plaintiffs-appellees.

Dean E. Conder, Salt Lake City, Utah (Arthur H. Nielsen, Salt Lake City, Utah, on the brief), for defendants-appellants.

Before SETH, BARRETT and DOYLE, Circuit Judges.

BARRETT, Circuit Judge.

Quality Ford Sales, Inc. (Quality Ford) and Thomas E. Redd (Redd), defendants below, appeal from an order granting plaintiffs' motion for summary judgment and the judgment that plaintiffs' cause of action be certified as a class action.

Appellees Little Redhouse (Redhouse) and Brady Tah (Tah), plaintiffs below, each purchased a pickup truck from Quality Ford. They thereafter sued defendants under the Federal Consumer Credit Protection Act, 15 U.S.C.A. § 1601 et seq. (hereinafter referred to as the 'Truth in Lending Act' or the 'Act'), and the Utah Uniform Consumer Credit Code (UUCCC) § 70B--1--101 et seq., U.C.A.1953, as amended, to recover statutory damages, attorney fees and costs, for defendants' alleged failure to comply with the disclosure provisions of the two Acts. The pertinent facts are not in dispute.

Appellees are Indians residing on the Navajo Indian Reservation in Apache County, Arizona. Quality Ford is a Utah corporation engaged in the sale of motor vehicles, doing business at Blanding, Utah, which is just north of the Navajo Reservation. Redd is the manager of Quality Ford and its principal owner.

On April 11, 1972, Redhouse purchased a 1966 Ford pickup truck from Quality Ford for $1,095.00. The sale was consummated with the help of an interpreter. The down payment due was $300.00. However, because Redhouse did not have the full $300.00, he was allowed to take delivery of the truck by paying $79.00 ¹ down and executing and delivering a short-term interest-free note for $221.00. The note was due in three weeks, i.e., the first part of May, 1972. Redhouse paid it in full on April 24, 1972. It was On May 30, 1972, Tah purchased a new 1972 Ford pickup truck from Quality Ford. The truck had a cash sales price of $3,695.00. The down payment due amounted to $1,062.00. Tah had only $800.00 for the down payment. However, she was permitted to take possession of the new truck by paying down $800.00 and executing and delivering a non-interest bearing 16-day note for the $262.00 balance due on the down payment. This sum was paid prior to its due date of June 15, 1972. It was admitted by plaintiffs' counsel that the financing statement given to Tah met all the disclosure requirements of the Act and the UUCCC, except as to the disclosure relative to the down payment. As with Redhouse, Tah's disclosure statement indicated that the full down payment had been actually received. There was no indication that a portion had been deferred. Full disclosure was accordingly not present on a single document as required by the Act in regard to either sale. However, full disclosure is present when all the forms used in each sale are considered in the aggregate. ² No evidence was offered indicating that the defendants were proceeding in bad faith in the sales transactions or attempting to purposefully defeat proper disclosure requirements.

admitted by defendants' counsel that the financial statements and forms used by defendants to accommodate the handling of Redhouse's down payment and to consummate the sale were not in accordance with the Act or the UUCCC.

Following the submission of briefs and oral arguments on plaintiffs' motion for summary judgment and for the determination of a class action, the Trial Court ordered that the action be maintained as a class action pursuant to Rule 23(a) and 23(b)(3) Fed.R.Civ.P., 28 U.S.C.A., and entered judgment granting plaintiffs' motion for summary judgment. In granting the motion for summary judgment, the Trial Court held, inter alia:

- - - that plaintiffs' motion for summary judgment is in all respects granted, - - -

- - - that the plaintiff, Little Redhouse, recover of the defendants, Quality Ford Sales, Inc. and Thomas E. Redd, jointly and severally, the sum of $394.80 with interest - - - (and) costs of action and his reasonable attorneys' fees - - -

- - - Brady Tah, recover of the defendants, Quality Ford Sales, Inc. and Thomas E. Redd, jointly and severally, the sum of $2,000 - - - (and) her costs of action, and reasonable attorneys' fee as provided by law.

By so doing, the Trial Court awarded damages as authorized under both the Truth in Lending Act, and the UUCCC.

Appellants allege that the Trial Court erred in: (1) granting summary judgment; (2) determining that the suit may be maintained as a class action; (3) permitting recovery under both the Truth in Lending Act and the UUCCC; (4) holding that a single-payment, non-interest bearing note could not be included as part of the 'cash down payment'; and (5) holding that Thomas E. Redd was individually liable under the Truth in Lending Act and the UUCCC.

I.

Appellants contend that the Trial Court erred in granting summary judgment and thereby taking the case from the jury when there were genuine issues of material fact in dispute which should have been resolved by the jury. Rule 56(c) Fed.R.Civ.P., 28 U.S.C.A. provides that summary judgment is to be granted only if the pleadings, depositions, interrogatories, admissions, together with any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Summary judgment cannot be awarded when there exists a genuine issue as to a material fact. Adickes v. S. H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970), White Motor Co. v. United States, 372 U.S. 253, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963), United States v. Diebold, Incorporated, 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962), Ando v. Great Western Sugar Company, 475 F.2d 531 (10th Cir. 1973). And it is not properly awarded when an issue turns on credibility. Eagle v. Louisiana and Southern Life Insurance Company, 464 F.2d 607 (10th Cir. 1972). Summary judgment does not serve as a substitute for trial, nor can it be employed so as to require parties to litigate via affidavits. Smoot v. Chicago, Rock Island and Pacific Railroad Company, 378 F.2d 879 (10th Cir. 1967). It is considered a drastic relief to be applied with caution. Jones v. Nelson,484 F.2d 1165 (10th Cir. 1973), Ando v. Great Western Sugar Company,supra. Pleadings, therefore, must be liberally construed in favor of the party opposing summary judgment. Harman v. Diversified Medical Investments Corporation, 488 F.2d 111 (10th Cir. 1973), Smoot v. Chicago, Rock Island and Pacific Railroad Company, supra. Appellate courts must consider factual inferences tending to show triable issues in a light most favorable to the existence of such issues. Dzenits v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 F.2d 168 (10th Cir. 1974).

By these standards, we must hold that the Trial Court erred in granting summary judgment. There was an unresolved question as to whether Redhouse purchased his pickup for personal use or for business use (and therefore exempt from the Acts). The issue was especially pertinent because the Act does 'not distinguish between full-time and part-time businesses.' Sapenter v. Dreyco, Incorporated, 326 F.Supp. 871 (E.D.La.1971) ³, cert. denied 406 U.S. 920, 92 S.Ct. 1775, 32 L.Ed.2d 120 (1972). In answer to the acknowledgement that if the Redhouse truck was purchased for business it would be outside of the Act, the Trial Court noted:

It sounds to me as though you have an issue of fact on that.

We are going to have to leave that to the jury.

Notwithstanding the above observation, however, the Trial Court nevertheless granted summary judgment for Redhouse, after erroneously excluding offered testimony of a conversation between Redd and Redhouse via an interpreter involving the very issue previously referred to.

The error in granting summary judgment to Redhouse was later compounded when the Trial Court observed from the bench in relation to Redhouse's credibility:

I have had a lot of experience with these Navajos and Hopis, and I have never seen an occasion yet when I didn't think they told the truth. This is an example of that.

The record discloses that the Trial Court's impetus to grant summary judgment was not predicated on an unbiased reliance upon the facts presented. The record reflects that the Trial Court unequivocally stated that 'prior injustices' to the American Indian mandated recovery for Redhouse and Tah. The Court said:

We are dealing here with Indians, native Americans, who do not understand our language. They do not know anything about the Federal Reserve Board. They do not know anything about the Truth in Lending Act. They do not know about the Utah Act that adopts the Congressional Act. They do not know anything about the way these Anglos, they call us, trade and deal.

The one thing they understand is that they get taken advantage of. They understand that in pretty good shape. We haven't dealt with them fairly. We haven't treated them right.

I think it behooves us in our business transactions with those people to go the last mile, and I am not going to draw any fine distinctions that will prevent that being done, so far as this court is concerned, because this is just the beginning of this.

The Trial Court cannot utilize the power of summary judgment to punish defendants-appellants Quality Ford and Redd for all 'prior injustices' allegedly visited upon American Indians. In view of the existence of genuine issues of material fact in the case at bar, the...