St. Germain v. Bank of Hawaii
| Citation | 413 F. Supp. 587 |
| Decision Date | 12 April 1976 |
| Docket Number | Civ. No. 75-0143. |
| Parties | Chuck ST. GERMAIN, Plaintiff, v. BANK OF HAWAII, Defendant. |
| Court | U.S. District Court — District of Hawaii |
John H. Paer, Legal Aid Society of Hawaii, Honolulu, Hawaii, for plaintiff.
George L. Dyer, Jr., David J. Reber, Goodsill Anderson & Quinn, Honolulu, Hawaii, for defendant.
DECISION
Plaintiff seeks to recover statutory damages and costs of litigation, including reasonable attorney's fees, alleging violations of the Truth-in-Lending provision of the Federal Consumer Credit Protection Act (Act), 15 U.S.C.A. ?? 1601-1641, and Federal Reserve Regulation Z (Regulation Z), 12 C.F.R. 226, arising from the assignment of a retail installment contract to defendant Bank of Hawaii (Bank) pursuant to the purchase of an automobile by plaintiff. Jurisdiction is conferred on this court by 15 U.S.C.A. ? 1640(e). On the uncontroverted facts set forth below, plaintiff has moved for summary judgment, defendant has cross-moved for summary judgment, and upon oral argument and submission of closing briefs by both parties, the following issues raised at various stages of these proceedings require resolution:
On November 23, 1974, plaintiff Chuck St. Germain executed a retail installment contract (contract) with Windward Volkswagen, Inc., for purchase of a 1970 Volkswagen. Plaintiff's copy of the contract labeled "Buyer's Copy" had no entry under item 9 of the Statement of Charges, opposite the entry "Annual Percentage Rate ____%." On the "Original-Bank's Copy" of the contract this blank was filled in with the handwritten figures "18.15", and was received by defendant Bank in that form.
On the face of the contract, paragraph 5, headed "Security Interest", states that defendant Bank retains title to the property, previously described at the head of the contract and thereafter described as "property", and has a security interest therein until payment in full of the contract obligation. The description of the car includes year, make, model, body type, serial number, and license number.
Item 9 of the Statement of Charges of the contract is titled "Finance Charge at Annual Percentage Rate" with all words except "at" in bolder relief and larger print than appears in the other items of the Statement of Charges.
In paragraph 10 on the reverse of the contract, a bold-type heading "Seller's Rights and Remedies" appears. The paragraph states that upon default by the buyer or the occurrence of other events leading seller to believe that payment or performance is impaired, at seller's option the full amount due will be immediately due and payable. The paragraph further enumerates seller's rights upon default as those accruing under the provisions of Chapter 476, H.R.S., the retail installment sales act of Hawaii. Reference is also made to remedies under the Uniform Commercial Code to the extent that there is no conflict with Chapter 476.
The "TOTAL CASH PRICE", item 1 of the Statement of Charges in the contract, includes a one dollar motor vehicle transfer fee imposed on the transferee by H.R.S. ?? 286-51 and 286-52. Two additional one dollar fees were charged plaintiff by the dealer for replacement of previously lost or defaced motor vehicle legal ownership and registration certificates, respectively, such charges being provided for in H.R.S. ? 286-55. This court takes judicial notice of the fact that the motor vehicle transfer fee, supra, includes the issuance of a new certificate of ownership and certificate of registration to the transferee complying with the statute.
The two one dollar fees, supra, were charged by the dealer in this transaction to obtain the certificates of ownership and registration which would subsequently be required to effect transfer of title under ?? 286-51 and 286-52.
The finance charge under item 9 of the Statement of Charges in the contract has a single entry of $313.40.
Items 4 through 8 of the Statement of Charges in the contract appear as follows:
4. TOTAL DOWN PAYMENT $ 250.00
5. UNPAID BALANCE OF CASH PRICE $1567.00
6. INSURANCE-Total from Insurance
Statement $ 0
7. TITLE TRANSFER AND/OR RECORDING
FEES $ Included
8. AMOUNT FINANCED (Total items
5 through 7) $1567.00
Below a heading "ASSIGNMENT AND GUARANTY OF CONTRACT" on the reverse of the "Original-Bank's Copy" of the contract is the date November 23, 1974, and signature of an agent of Windward Volkswagen, Inc., assigning the contract to defendant Bank. The signature of Chuck St. Germain appears on the face of the contract below all entries described above as being on the face of the contract.
Plaintiff commenced this action on May 15, 1975.
In view of the strict civil liability imposed on creditors by the Act, it is appropriate to delineate here the sources of law and interpretation available to creditor in his determination of what he is required to disclose under the Act. These sources include the Act itself, Regulation Z promulgated by the Federal Reserve Board, formal interpretations appended to Regulation Z and number-coded to the appropriate section of the Regulation, 12 C.F.R. 226.201-226.1002, FRB and Federal Trade Commission staff opinion letters, and the case decisions of the district and circuit courts. Because of this awesome, confusing and sometimes conflicting mass of "authority", this court has attempted to set forth hereinafter in almost hyper-detail an analysis of the "sources of law and interpretation", in hope that the creditor may find some relief therein.
The validity of Regulation Z as a proper exercise of the Federal Reserve Board's statutory authority was upheld in Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1660, 36 L.Ed.2d 318, 329 (1973):
Where the empowering provision of a statute states simply that the agency may "make . . . such rules and regulations as may be necessary to carry out the provisions of this Act," we have held that the validity of a regulation promulgated thereunder will be sustained so long as it is "reasonably related to the purposes of the enabling legislation."
Consistent with this holding, after finding that 15 U.S.C.A. ? 1604 of the Act constituted a broad grant of rulemaking authority as to defining classifications of transactions necessary to carry out the objectives of the Act, the Court accepted the remedial measure chosen by the Board in Regulation Z:
We have consistently held that where reasonable minds may differ as to which of several remedial measures should be chosen, courts should defer to the informed experience and judgment of the agency to whom Congress delegated appropriate authority. 411 U.S. at 371-72, 93 S.Ct. at 1662, 36 L.Ed.2d at 331.
The weight to be given agency interpretation of its administrative regulations is set forth in Bowles v. Seminole Rock Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700, 1702 (1945):
Since this involves an interpretation of an administrative regulation a court must necessarily look to the administrative construction of the regulation if the meaning of the words is in doubt. . . The ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation. The legality of the result reached by this process, of course, is quite a different matter. (Emphasis added.)
That greater weight should be given to an agency's interpretation of its administrative regulations than to an agency's interpretation of a statute is reflected in Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1964). Udall was more concerned with the problem of administrative agency interpretation of a statute than agency interpretation of administrative regulations promulgated pursuant to an enabling statute. However, Udall established its own spectrum of deferential weight. After acknowledging that great deference should be shown the interpretation given the statute by the officers or agency charged with its administration, the Court went on to say:
When the construction of an administrative regulation rather than a statute is in issue, deference is even more clearly in order. 380 U.S. at 16, 85 S.Ct. at 801, 13 L.Ed.2d at 625.1
The recent enactment of subsection (f) to 15 U.S.C.A. ? 16402 provides a "good faith compliance" defense, in the event of the...
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