Scott v. FOREST LAKE CHRYSLER-PLYMOUTH

• Decision Date: 24 August 1999
• Docket Number: No. C4-99-161.,C4-99-161.
• Citation: 598 N.W.2d 713
• Parties: Raymond SCOTT, Appellant, v. FOREST LAKE CHRYSLER-PLYMOUTH-DODGE, Respondent.
• Court: Minnesota Court of Appeals

598 N.W.2d 713

Raymond SCOTT, Appellant, v. FOREST LAKE CHRYSLER-PLYMOUTH-DODGE, Respondent.

No. C4-99-161.

Court of Appeals of Minnesota.

August 24, 1999.

Thomas J. Lyons, Jr., Consumer Justice Center, P.A., and Thomas J. Lyons, Thomas J. Lyons & Associates, P.A., Maplewood, for appellant.

Gregory J. Johnson, Klay C. Ahrens, Johnson & Van Vliet, L.L.P., St. Paul, forrespondent.

Considered and decided by SHUMAKER, Presiding Judge, SHORT, Judge, and PETERSON, Judge.

OPINION

PETERSON, Judge

This action arises from appellant Raymond Scott's purchases of two Dodge Caravans from respondent Forest Lake Chrysler-Plymouth-Dodge. Scott alleged that Forest Lake Chrysler violated the Minnesota Motor Vehicle Retail Installment Sales Act (MMVRISA) by using a conditional delivery agreement and by failing to provide him with copies of retail installment contracts signed by Forest Lake Chrysler. Scott also alleged that Forest Lake Chrysler violated the Minnesota Prevention of Consumer Fraud Act. The district court granted summary judgment in favor of Forest Lake Chrysler on all claims and dismissed Scott's complaint with prejudice. This appeal is from the judgment in favor of Forest Lake Chrysler. We affirm in part, reverse in part, and remand. We grant Forest Lake Chrysler's motion to strike.

FACTS

On August 11, 1994, Scott signed a retail installment contract to purchase a 1991 Dodge Caravan from Forest Lake Chrysler for $15,257 plus $815.71 in fees. The contract provided that credit would be extended in the amount of $15,177.71, that interest would be charged at an 11.5% annual percentage rate, and that Scott would make 60 monthly payments of $335.39. Under these terms, Scott's total interest charge would have been $4,945.69 and the total amount paid under the contract, excluding Scott's initial $900 down payment, would have been $20,123.40. The contract provided that Forest Lake Chrysler assigned its interest in the contract to Comerica Bank. The copy of the contract given to Scott was not signed by Forest Lake Chrysler.

The same day, Scott and Forest Lake Chrysler executed a conditional delivery agreement that stated:

YOU, the undersigned Buyer * * *, agree with ME, the Dealer, to incorporate the following terms by reference into the Motor Vehicle Purchase Contract and any Installment Sales Contract to purchase [the 1991 Dodge Caravan].

* * * *

2. YOU understand and agree that the vehicle has been delivered to YOU conditionally subject to approval of financing. If financing is not approved, I will notify YOU and YOU agree to immediately return the vehicle to ME. In addition, YOU agree to pay twenty-five cents per mile for all miles placed on the vehicle after delivery plus any or all damages beyond normal wear and tear. If financing is not approved, any Installment Sales Contract executed for purchase of the above-described vehicle shall be null and void.

Comerica declined to extend financing to Scott under the terms of the retail installment contract. After Forest Lake Chrysler lowered the purchase price for the 1991 Dodge Caravan to $14,988 plus fees of $803.22, Chrysler Credit agreed to extend credit to Scott in the amount of $14,891.22 for a 60-month period with monthly payments of $384.27 and interest charged at an 18.4% annual percentage rate. Under these terms, Scott's total interest charge would be $8,164.98 and the total amount paid under the contract, excluding the $900 down payment, would be $23,056.20. On August 23, 1994, Scott signed a retail installment contract containing these terms. The copy of the retail installment contract given to Scott was not signed by Forest Lake Chrysler.

Scott alleges that Forest Lake Chrysler notified him that it had obtained financing from a source other than Comerica but failed to disclose that other terms of the August 23, 1994, retail installment contract differed from the terms of the August 11, 1994, retail installment contract. Scott also alleges that, while at Forest Lake Chrysler on August 23, 1994, his wife pointed out the increased interest rate and monthly payments, and a Forest Lake representative stated that the van's purchase price had been lowered to compensate for the increased interest rate. Later that day, after realizing that the increased interest rate would increase the total contract price by $2,932.80, Scott returned to Forest Lake Chrysler seeking to return the 1991 Dodge Caravan and to have his trade-in vehicle returned to him. Scott stated in an affidavit that Forest Lake Chrysler informed him that he was bound by the August 23, 1994, retail installment contract and that his trade-in vehicle had already been sold.

In November 1995, Scott returned to Forest Lake Chrysler and traded in the 1991 Dodge Caravan for a 1995 Dodge Caravan. The purchase price of the 1995 Dodge Caravan was $23,988 plus $746.95 in fees. The contract provided that credit would be extended in the amount of $23,954.95, that interest would be charged at an 11.05% annual percentage rate, and that Scott would make 66 monthly payments of $486.26. The total amount to be paid under the contract was $32,093.16, excluding Scott's $785 down payment. The copy of the November 1995 retail installment contract provided to Scott was not signed by Forest Lake Chrysler.

I S S U E S

I. Did Forest Lake Chrysler violate Minn.Stat. § 168.71(a)(1) (1994) by using the conditional delivery agreement?

II. Did Forest Lake Chrysler violate Minn.Stat. § 168.71(a)(1) (1994) by failing to furnish Scott with copies of the retail installment contracts that were signed by Forest Lake Chrysler?

III. Did Forest Lake Chrysler violate the Minnesota Prevention of Consumer Fraud Act by using the conditional delivery agreement?

ANALYSIS

On appeal from a summary judgment, this court must review the record to determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. In re Estate of Palmen, 588 N.W.2d 493, 495 (Minn.1999). We must view the evidence in the light most favorable to the nonmoving party. Id.

I.

Statutory interpretation is a question of law subject to de novo review. Metropolitan Sports Facilities Comm'n v. County of Hennepin, 561 N.W.2d 513, 515 (Minn.1997).

When interpreting statutes, our function is to ascertain and effectuate the intention of the legislature. If the statute is free from ambiguity, we look only at its plain language. However, if the statute's literal meaning leads to an absurd result that utterly departs from the legislature's purpose, we may look beyond the language and examine other indicia of legislative intent. If, by contrast, the statute's unambiguous language merely produces a troubling result, we must apply it without reference to its drafting history.

Anker v. Little, 541 N.W.2d 333, 336 (Minn.App.1995) (citations omitted), review denied (Minn. Feb. 9, 1996).

Minn.Stat. § 168.71 (1994) provides:

(a)(1) Every retail installment contract shall be in writing, shall contain all the agreements of the parties, shall be signed by the retail buyer and seller, and a copy thereof shall be furnished to such retail buyer at the time of the execution of the contract.

* * * *

(b) The retail installment contract shall contain the following items:

(1) The cash sale price of the motor vehicle which is the subject matter of the retail installment contract;

(2) The total amount of the retail buyer's down payment, whether made in money or goods, or partly in money or partly in goods;

(3) The difference between items one and two;

(4) The charge, if any, included in the transaction for any insurance and other benefits not included in clause (1), specifying the types of coverage and taxes, fees, and charges that actually are or will be paid to public officials or government agencies, including those for perfecting, releasing, or satisfying a security interest if such taxes, fees, or charges are not included in clause (1);

(5) Principal balance, which is the sum of items three and four;

(6) The amount of the finance charge;

(7) The total of payments payable by the retail buyer to the retail seller and the number of installment payments required and the amount of each installment expressed in dollars or percentages, and date of each payment necessary finally to pay the total of payments which is the sum of item five and item six.¹

Forest Lake Chrysler argues that the August 11, 1994, retail installment contract contained all of the information required by Minn.Stat. § 168.71(b) and, therefore, using the conditional delivery agreement did not violate Minn.Stat. § 168.71. The express language of Minn.Stat. § 168.71(a)(1), however, requires that the retail installment contract "shall contain all the agreements of the parties." One of the agreements between Scott and Forest Lake Chrysler was that the retail installment contract and the credit terms therein were conditional and would be null and void if financing was not approved. That agreement was not set forth or referenced anywhere in the retail installment contract. Use of the conditional delivery agreement, thus, violated the express language of Minn.Stat. § 168.71(a)(1).

One of the purposes of Minn.Stat. § 168.71(a)(1) "is to inform the installment buyer of the cost of the credit extended to him." O'Brien v. Phillips Motors Excelsior, Inc., 288 Minn. 183, 185, 179 N.W.2d 158, 160 (1970). Although the conditional delivery agreement did not directly contradict or alter any term of the retail installment contract, the failure to obtain financing approval ultimately invalidated the entire retail installment contract and led to a second retail installment contract with a significantly higher interest rate and a $2,932.80 increase in the total contract price. Due to the failure to obtain financing approval, the retail installment contract did not inform Scott of the cost of credit to him. Consequently, use of the conditional delivery agreement directly contravened the...