Tower v. Home Const. Co. of Mobile, Inc., Civ. A. No. 76-621-H.

• Court: United States District Courts. 11th Circuit. United States District Court of Southern District of Alabama
• Writing for the Court: Richard L. Thiry, Mobile, Ala., for defendant Home Construction Co., Inc
• Citation: 458 F. Supp. 112
• Parties: Ella TOWER et al., Plaintiffs, v. HOME CONSTRUCTION COMPANY OF MOBILE, INC., Defendant. Ex parte Paralee MOSS, Plaintiff-Intervenor.
• Decision Date: 29 September 1978
• Docket Number: Civ. A. No. 76-621-H.

458 F. Supp. 112

Ella TOWER et al., Plaintiffs,
v.
HOME CONSTRUCTION COMPANY OF MOBILE, INC., Defendant.
Ex parte Paralee MOSS, Plaintiff-Intervenor.

Civ. A. No. 76-621-H.

United States District Court, S. D. Alabama, S. D.

September 29, 1978.

Gregory B. Stein and Larry T. Menefee, Mobile, Ala., for plaintiffs Ella Tower et al.

H. Diana Hicks, Mobile, Ala., for plaintiff-intervenor Paralee Moss.

Richard L. Thiry, Mobile, Ala., for defendant Home Construction Co., Inc.

HAND, District Judge.

This action was commenced through the filing of a complaint by the plaintiff class representatives who sought certification of a class to prosecute this action. The lawsuit raises various claims of violations of the Truth-In-Lending Act, Title 15, U.S. C.A. § 1601 et seq. On May 20, 1977 the Court entered its Order certifying the class and the Notice to class members was approved on the same day. On June 20, 1977 the Court approved the class settlement agreed to by the parties. The settlement gave class members three options:

458 F. Supp. 113

(a) Exclusion from the class — under this election the class members could bring his or her own lawsuit;

(b) Receipt of a 15% reduction — under this election, the class members indebtedness to the defendant would be reduced by 15% of the remaining balance;

(c) Rescission or cancellation of the contract — the final election would allow the class member's contract to be rescinded or cancelled, with the class member to remit to the defendant the fair value of the work done on his or her property.

The Court's Order approving the settlement gave class members until June 24, 1977 to either accept the settlement's rescission provisions under subsection (c) or opt out of the class in accordance with subsection (a). Those failing to respond were deemed to have accepted the 15% reduction provided by subsection (b). Intervenor Moss responded by electing to rescind, and her rights in this action are accordingly limited by the provision of subsection (c).

On December 8, 1977 the Court referred the Moss matter, along with that of four other intervenors, to the United States Magistrate for the Southern District of Alabama, directing the Magistrate to give notice to these "class members to appear before him at a time stated where an effort shall be made by the Magistrate, with the assistance of counsel, to ascertain if the . . . class members desire to compromise their claims under their decision to rescind, whether they have counsel or desire to obtain counsel and proceed to a hearing as spelled out in the settlement agreement or whether they wish to change the option selected pursuant to the settlement agreement . . .." In response to the notice from the Magistrate setting the matter for a hearing on December 21, 1977, Moss phoned the Magistrate from Detroit and stated that it would be impossible for her to attend. The Magistrate then directed Moss to take her notice to her Detroit lawyers and to reduce to writing her answers to the questions concerning whether she wished to compromise the claim or rescind the contract, sending her response to this Court immediately. In response to this Moss sent the following letter to the Magistrate on December 30, 1977:

Dear Sir:

I am with you all the way against the high cost of improvement the Home Construction Company cost me.

The reason I can not come to Mobile is, I had just come from New York seeing my brother in the hospital and to see him go to a nursing home.

I am pleased what ever actions are taken by your office and thank you.

Respectfully yours /S/ Paralee Moss

This Court took over consideration of the Moss matter on February 21, 1978 by a letter to Moss from the Court. Enclosed with the letter was the settlement agreement and the Court in the body of the letter tried to explain the terms of the settlement to Moss. The Court noted that Moss had elected to rescind, but informed her that she could change her election at any time within 10 days of the Court's letter. Moss was instructed that if she did not reply her rescission election would be binding and the matter would be set for hearing by the Magistrate on the rescission.

On March 27, 1978 the Court entered an order noting that Moss had not responded to the February 21, 1978 letter in accordance with the Court's instructions and that she was thus limited to her rescission claims. On this basis the Court ordered that Moss "appear before the United States Magistrate for the Southern District of Alabama, either in person or through her counsel, within ten days from the date of this Order to prove to said Magistrate what the reasonable value of the improvements on her property were and to aid the Court in establishing the payment that is to be made to the defendant."

On April 13, 1978 attorney H. Diana Hicks filed a notice of appearance on behalf of Moss. On April 19, 1978 attorney Hicks filed, on Moss' behalf, a complaint seeking rescission of the contract and mortgage entered into by Moss and the defendant under

458 F. Supp. 114

the federal Truth-In-Lending Act raising various other claims under the Alabama Consumer Finance Act, Ala.Code, § 5-19-1 et seq. and under common law

The defendant has moved to strike the claims arising under state law and for summary judgment on the claims set out under the federal statutes. The Court heard argument on these motions on September 22, 1978, and the Court, having considered the record, the arguments and briefs of counsel, the affidavits submitted both in favor of and in opposition to the motions, together with the applicable law, finds as follows:

FINDINGS OF FACT

1. Intervenor Moss is a resident citizen of the State of Michigan, the defendant is a corporation organized and existing under the laws of the State of Alabama with its principal place of business being in Mobile, Alabama. Jurisdiction of this Court is sought to be invoked pursuant to Title 15, U.S.C.A., § 1640 with respect to the federal Truth-In-Lending claims, and the intervenor seeks to litigate state claims arising under sections 5-19-12 and 5-19-19 of the Alabama Code, together with common law counts of breach of contract and fraud, pursuant to this Court's pendent jurisdiction. The intervenor also seeks rescission of the contracts and mortgages entered into between the parties pursuant to Title 15, U.S.C.A., § 1635.

2. Intervenor Moss presently resides at 2295 West Grand Boulevard, Apartment 203, in Detroit,...