Appendix — Ford Motor Credit Co. v. Milhollin
Supreme Court brief1980
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Buprome Cour, U.
FILED |
AUG 22 1979
JOINT APPENDIX
MiGHARL ROBAK, JR., CLERK
a
IN THE
Supreme Court of the United States
October Term, 1979
No. 78-1487
Forp MoTor CREDIT COMPANY, et al.,
Petitioners,
—V.—
DENNIS MILHOLLW, et al.,
Respondents.
ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT
PETITION FOR CERTIORARI FILED
MARCH 27, 1979
7 CERTIORARI GRANTED JUNE 18, 1979
SUBJECT INDEX
Page
FORD MOTOR CREDIT COMPANY and DEE
THOMASON FORD v. DENNIS MILHOLLIN
and MICHELLE MILHOLLIN |
Relevant Docket Entries .....................-.-.-+-- App. p. 1
Complaint to Enforce Civil Liability Under Truth
RE SR RO RNS ESI 3
Exhibit A to Complaint—Oregon Automobile
Retail Instalment Contract ......................-.....+- 9
Answer of Ford Motor Credit Co. .........................- 11
Answer of Defendant Dee Thomason Ford Co. ax Oe
Ford Motor Credit Co.’s Answers to Interrogatories
seus slceiedicntahiaipaatatinannia iat Diet ta ate ia 15
Exhibit B to Ford Motor Credit Co.’s Answers
to Interrogatories ....... Rithicbnckibiininedadhartanniscnetdaédias 19
Affidavit (Dennis Millhollin and Michelle Millhol- .
FE ik ndcesiitiinietecegnplltabatitintitenicaaleiiiiinaiiied 20
Beart. (1... Bh. PPRBGBE) . acncnesenensceenserareresvoichiiictsle 22
AGMGaett (Peter J. DeceeB) 2... ascccccncccnsciceesces 23
Recommendation and Order ..................2....-00000-ee00e- 26
Order (denying defendants’ motions to modify and/
REE ES ere me eee ae ea eae 38
Order (setting attorney’s fees) ........................:eeec00ee- 40
OR mE 41
Opinion (United States Court of Appeals, Ninth
PRED” iclintnsniccncceccnastllicinnibesbcp atlas ccnbe biniseiltiaaaiaie 42
Page
FORD MOTOR CREDIT COMPANY
v.
DONNA M. EATON
Relevant Docket Entries ................---------eceesseeeeeeeees 55
Amended Complaint to Enforce Civil Liability
Under Truth in Lending Act ..............2.---..:----000++ 56
Notice of Voluntary Dismissal ........................-------- 60
Answer of Ford Motor Credit Company to Plain-
tiff’s Amended Complaint .................-.-----000-+----+0+ 61
Exhibit A to Answer—Oregon Automobile Retail
Instalment Contract ..................-::ccceseseeeeersneeees 65
Testimony of William F. Bellisario .................-...---.- 67
IN i iain cenenianrtnporinenvtipoctentonitvonnppertgcensancncene 69
Findings of Fact and Conclusions of Law .............. 72
JUAQUMONE onsen ccsnnsenniscnceecccccscvccsensssoncceescsnenceesencessese 74
Opinion (United States Court of Appeals, Ninth
CID vcecicvensevsevaivorsoncnohesitbscelachbabasidioosesevelveietees 75
FORD MOTOR CREDIT COMPANY and DEE
THOMASON FORD v. DENNIS MILHOLLIN
and MICHELLE MILHOLLIN
RELEVANT DOCKET ENTRIES
April 15, 1975 Complaint filed
June 13, 1975 Answer of Ford Motor Credit Co.
filed
June 16, 1975 Answer of Dee Thomason Ford
Co. filed
August 8, 1975 Ford Motor Credit Co.’s Answers
to Interrogatories filed
October 20, 1975 Motion of Plaintiffs for Summary
Judgment filed
October 20, 1975 Affidavit of Dennis Millhollin and
Michelle Millhollin filed
November 21, 1975 Motion of Ford Motor Credit Co.
for Summary Judgment filed
November 21, 1975 Affidavit of L. B. Plummer filed
- December 5, 1975 Motion of Dee Thomason Ford
Co. for Summary Judgment filed
December 15, 1975 Record of hearing on Plaintiffs’
Motion for Summary Judgment
and Ford Motor Credit Co.’s
Motion for Summary Judgment;
Order taking under advisement
December 19, 1975 Affidavit of Peter J. Deckers filed
December 22, 1975 Record of hearing on Dee Thoma-
son Ford Co.’s Motion for Sum-
mary Judgment; Order: taking
under advisement
April 7, 1976 Recommendation and Order,
denying Defendants’ Motions for
Summary Judgment and granting
April 14, 1976
April 19, 1976
May 3, 1976
May 24, 1976
June 25, 1976
June 25, 1976
June 25, 1976
July 21, 1976
August 3, 1976
March 29, 1978
December 28, 1978
June 26, 1979
soni
Plaintiffs’ Motion for Summary
Judgment, filed
Motion of Ford Motor Credit
Co. for Reconsideration filed
Motion of Dee Thomason Ford
Co. for Reconsideration filed
Record of hearing on Ford Mo-
tor Credit Co.’s Motion for Re-
consideration; Order taking under
advisement
Record of hearing on Dee Thoma-
son Ford Co.’s Motion for Re-
consideration; Order taking under
advisement
Order denying Defendants’ mo-
tions to modify and/or vacate
judgment filed and entered
Summary Judgment for Plaintiffs
in sum of $1,000.00 general dam-
ages and $750.00 attorney’s fees
filed and entered
Order setting Plaintiffs’ attorney’s
fees at $750.00 filed and entered
Notice of Appeal by Defendants
filed
Notice of Cross Appeal by Plain-
tiffs filed
Order consolidating appeals filed
Opinion filed and Judgment filed
and entered
Supreme Court Order of June 18,
1979 granting certiorari filed
=
COMPLAINT TO ENFORCE CIVIL LIABILITY
UNDER TRUTH IN LENDING ACT
(Filed April 15, 1975)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DENNIS MILLHOLLIN and MICHELLE MILLHOL-
LIN,
Plaintiffs,
Vs.
FORD MOTOR CREDIT CO., a corporation, and
DEE THOMASON FORD, a corporation,
Defendants.
CIVIL ACTION NO. 75-334
COMPLAINT
COUNT I
1. This is an action for money damages. This com-
plaint is filed and these proceedings are instituted under
the Truth in Lending Act, 15 U.S.C.A. Section 1601
et seq (hereinafter called “Act”) to recover statutory
damages, reasonable attorney’s fees, and costs of suit
by reason of the defendants’ violation of the Act and
Federal Reserve Regulation Z, 12 C.F.R. Section 226
(hereinafter called “Regulation Z”), adopted by the
Board of Governors of the Federal Reserve System
pursuant thereto. The jurisdiction of this Court is in-
voked pursuant to Section 130(e) of the Act, 15
U.S.C.A., Section 1640(e), and 28 U.S.C.A. Section
1337.
2. The plaintiffs; DENNIS MILLHOLLIN and
MICHELLE MILLHOLLIN, are natural persons, both
residing at 3727 S.E. 162nd., Portland, Oregon 97236.
cabins
3. The defendant, FORD MOTOR CREDIT CO.,
is a foreign corporation engaged in the business of
financing automobile purchases at 4309 N.E. Tilla-
mook, P.O. Box 13070, Portland, Oregon. At all times
relevant hereto, defendant FORD MOTOR CREDIT
CO. in the ordinary course of its business, regularly
extended, offered to extend, arranged and offered to
arrange the extension of consumer credit, for which
a finance charge is or may be imposed, or which
is payable in more than four (4) installments.
4. The defendant, DEE THOMASON FORD, is an
Oregon corporation engaged in the business of selling
automobiles at 309 South State Street, Lake Oswego,
Oregon. At all times relevant hereto, the Defendant
DEE THOMASON FOOD [sic] in the ordinary course
of its business, regularly extended, offered to extend, ar-
ranged and offered to arrange the extension of consumer
credit, for which a finance charge is or may be imposed,
or which is payable in more than four (4) installments.
5. On or about July 12, 1974, Plaintiff DENNIS
MILLHOLLIN entered into a consumer credit trans-
action with Defendants, which transaction consisted
of the purchase from Defendant DEE THOMASON
FORD of a 1973 Ford Pinto Wagon, for a cash price of ©
$3,098.00, a finance charge of $711.84, a total of
payments of $3,084.64, and a deferred payment price
of $3,984.64. This purchase was financed in the regular
course of business by Defendant FORD MOTOR
CREDIT CO., and the contract evidencing this pur-
chase was assigned to Defendant FORD MOTOR
CREDIT CO. in the regular course of business.
6. A true and accurate copy of the contract evi-
dencing this purchase is attached hereto, marked “Plain-
—
tiffs’ Exhibit A,” and by this reference is incorporated
herein.
7. In the course of this transaction, Defendants
violated the provisions of §121 of the Act, 15 U.S.C.A.
§1631, and §226.8 and §226.6 of Regulation Z, in
the following respects:
a) By failing to clearly identify on the front of
the contract FORD MOTOR CREDIT CO. as a credi-
tor in the transaction, as required by §226.6(d) and
§226.8(a) of Regulation Z.
b) By failing to disclose on the front of the contract
that the Defendants had the option of declaring the
entire unpaid balance of the contract immediately due
and payable in the event of a default or late payment
by the Plaintiffs, as required by §128(a)(9) of the
Act, 15 U.S.C.A. §1638(a)(9), and §226.8(a) and
§226.8(b) (4) of Regulation Z.
c) By failing to disclose clearly and conspicuously
and in a manner which did not mislead, confuse or
contradict, that Plaintiffs were required to obtain Physi-
cal Damage Insurance, as required by 15 U.S.C.A.
§1631(a) and §226.4(a)(6), §226.6(a) and §226.6
(c) of Regulation Z.
d) By failing to describe or identify the type of
security interest retained or acquired by Defendant
FORD MOTOR CREDIT CO., as required by §128
(a)(10) of the Act, 15 U.S.C.A. §1638(a)(10) and
§226.8(b)(5) of Regulation Z.
8. As a result of the aforesaid violations of the
Act, the Defendants are liable to Plaintiff DENNIS
MILLHOLLIN in the sum of $1,000.00, plus costs
and reasonable attorney’s fees, as provided by Section
130(a) of the Act, 15 U.S.C.A. §1640(a).
cull
COUNT Ii
9. Plaintiffs incorporate the allegations in para-
graphs 1, 2, 3, 4, 6 and 7 above, with the same
force and effect as if herein set forth.
10. On or about July 12, 1974, Plaintiff MI-
CHELLE MILLHOLLIN entered into a consumer cred-
it transaction with Defendants, which transaction con-
sisted of the purchase of a 1973 Ford Pinto Wagon
from Defendant DEE THOMASON FORD for a cash
price of $3,098.00, a finance charge of $711.84, a
total of payments of $3,084.64, and a deferred payment
price of $3,984.64. This purchase was financed in
the regular course of business by Defendant FORD
MOTOR CREDIT CO., and the contract evidencing
this purchase was assigned to Defendant FORD MO-
TOR CREDIT CO. in the regular course of business.
11. As a result of the aforesaid violations of the
Act, the Defendants are liable to Plaintiff MICHELLE
MILLHOLLIN in the sum of $1,000.00, plus costs
and a reasonable attorney’s fee, as provided by Section
130(a) of the Act, 15 U.S.C.A. §1640(a).
WHEREFORE, Plaintiffs pray as follows:
a) that in regard to Plaintiff DENNIS MILLHOL-
LIN, pursuant to §130(a) of the Truth in Lending
Act, judgment be entered in his favor and against
the Defendants, and each of them, in the sum of
$1,000.00; .
b) that in regard to Plaintiff MICHELLE MILL-
HOLLIN, pursuant to §130(a) of the Truth in Lend-
ing Act, judgment be entered in her favor and against
the Defendants, and each of them, in the sum of
$1,000.00; and
_ re
por
c) for reasonable attorney’s fees as provided for
under §130(a) of the Truth in Lending Act; for costs;
and for such other and further relief as may be just
and proper.
LEGAL AID SERVICE—Multnomah
Bar Association, Inc.
By: /s/ Richard A. Slottee
RICHARD A. SLOTTEE
Of Attorneys for Plaintiffs
——_
$— 7
/
gO: ON AUTOMOBILE 227.538 INSTAL! SET SONTRACT cu 7S 7
9 8.4 79%. Buyer) - Name ond A: "ons (Inchude ~~ amity end Zip Code)
ters AMS shin \
fegeo SE Aldzee -
ACCOUNT NO —
309 %
delivery whe
rnb y Yeor ond Mahe Series pe cy colony, ‘peultuane “lear
{_} Personal
hat | /975 Prk Pak Wag ud BRIAK (4OTSTI | arsinen 5 eo
. 7 -
Power
DO Sen 0) Windows C)
DETAILS OF TRANSACTION
(1) Cosh Price
Trode In (See Opposite) $_.SQQSE
by
in accordonce with the seporate ’
Notice, Certificete or Policy delivered to
er this date.
Da mete 7 sere
the term of this Contract.
" femored Persea)
, by _
Ronee Comicon or Poy da > $ ff 227%)
(@) Other Optional Insereace 5 all
Provided by
for a term of months
Totel Cost of Optional leserence .....:...cccceseeeeeees sL72F2 |
| NOTICE 10 BUYER: (1) You ore net required to obtain the Credit Lite ond/or
Credit Accident ond Health o: Disability Insurance for which @ charge is indi-
ated above end such is not @ foctor in the Seller's approval of this credit.
(2) You heve the right te choose the person through whom the Physucel
Bemoge lnsurence required under this contrac is to be obtained. ACKNOWL.
EDGING the foregoing. BUYER requests end quthorizes SELLER to obtein each
lnsuronce coverage for h on omovat ts inceded above.
t
vee
(2) Tete! Down Payment 3. Fo Pf
(3) Unpaid Bolonce of Cosh Price
(Ditterence between items 1 & 2) sAt Pp Rrte
(4) Other Charges
Optional Insurance pa
(See Opposite) s_/72.29
Official Fees $ ba
Taxes (Not included a. was
in Cash Price) Pr eh cael Mile. eR
License, Title &
Registration Fees = be
~~ (5) Unpaid Baloace - Amount Financed $ mF:
(6) FINANCE CHARGE 5 a :
(7) ANNUAL PERCENTAGE RATEZ7. £2 a)
(8) Total of Payments (Sum of tem: 5 & 6) sone gual
(9) Deferred Payment Price (Sum of hems 1, 48 6) & A A,
(18) Payment Schedule: Buyer hereby agrees to pay to Seller the Jotol
Payments (hem 8 above) ina monthly instolments of $ 8S:
each and one final instalment of $ on the like day of
each month commencing — > 1 , or, ina
dote is specified, one month otter the date of this controct, plus
@ pickyp pa i selbo & —op which
fa re EL | aT
wa \ pe
(11) Batloon Payments) $200 ~ ond 12° Ms on! ar
(Insert amount of each payment thot is more thon twice the amount
of any otherwise regularly scheduled equal poy )
A balloon payment may be refinonced only vpan such terms and com
ditons as the then parties to this contract may ogree as of its due date.
(12) Delinquency Charges: Buyer hereby agrees to pay a delinquveny
: charge on each instalment in default for more than 10 doys in the
amount of 5% thereof or $5.00, whichever is less. plus such ex-
penses incurred by Seller in effecting collection hereunder as may
be ollowed by low.
(13) Security Interest: Seller shall have o security interest under the Uniforns
Commercial Code in the Property (described above) and in the pro-
ceeds thereol to secure the payment in cash of the Total of Pay-
ments and all other amounts due or to become due hereunder.
(14) Prepoyment Rebste. Buyer may prepay his obligations under this con
tract in tull at any time prior to maturity of the final instalment
hereunder, and, if he does so, shall receive a rebote of the uneorm-
ed portion of the Finance Charge computed under the sum of the
digits method after first deducting an acquisition fee of $15.00.
Kalt.-4 vwrane te te. mivded ont, HW signed by ec ' '-~-—1 Bure ond doted)
LIABILITY INSURANCE COVERAGE FOR BODILY INJURY AND
PROPERTY DAMAGE CAUSED TO OTHERS IS WOT INCLUDED.
No rebate will be made if the amount is less then $1.00.
(1S) Additonal le:ms eno Conditions. The additonal terms ond conditions
set forth on the +~verse wee hereol ore o port of this -ontroct and
ony blunk space except that if delivery of the vehicle is to be
made to you afte: this contract is signed, the serial number
or ether identifying information and the due date of the first
instalment may be filled in at the time of delivery.
Yeu are entitled to a copy of this contract
‘The foregoing contract hereby 1 accepted by the Seller and assigned to
; Ford Motor Credit C y in accord with the terms of the Assign.
r
ment set forth on thyreverse side hereof
gery Lee Pomarm yo
PE Clem —10m 22750:
AOE
You hove the right to pay off in advance the full emeun
due and to obtain a partial refund of the finance :
Buyer acknowledges receipt of a true and com ats
in copy of this egies
RE t VRSTALMENT CONT Ag)’.
VfL nde fetal tin
\Ne_ ph, ee
Totel Other Charges ae =i
Cosh Down Payment ee TE
are ineorroroted herem by reference
| AVE TA the Rives >
De net sign this contract belore you read it o: if it conterns
. . . “ 4
) etary ee : R np = eit
sess ka “ose ae >
Ayah mpdon 98S Vd vee ‘AN
P ADDITIONAL TERMS AND CONDITIONS
6 ASSIGNMENT Boyer assigns te Seller amy monies payuble wader soch insil-
The eorigincl Soller moy essign this comtred .ond his essignes ea bree samaet nicked eerily
quire of of bis interest in this comtred end the Property and hereby is euthonzed on beholl of both Buyer ond Seller te
j Koenig te ofthe igh ond et Seller hereunder. receive or collect some, to endorse checks or drofts in payment there-
{ recelves netie ef any 4 Se of, te cancel such imsuronce or te relecse or settle any doim with
ye Be Ey ms and sumed Govste, Tao presends from toch innumme, by stoner ob
ogent of, Ran « A + teised, epped towerd replecsmedt. a poymest
ments or otherwise sholl - net wr
yt hy BAe fF -- Stes masbedece Mnrewnter n't te axreton of fakes
19. DEFAULT
17. USE OF PROPERTY - WARRANTIES Time is of the essence of this contract. In the event Buyer defeults
Buyer shall keep Property foe from oll cncombrentes, end sx So as Bh be © ae SS ee ae
ervount that moy be paid by Seller in relecse or drschorge 4: comply any ether Sto
‘paid - by fe aller loth demand with interest ot the ee prog bankruptcy, receivership of
- rate. buyer not wie the Bogally, by of Buyer or his property, or Seller deems the Property
‘ for hire (onless sated herein) ond shal the in donger of misuse. or confiscation, or Seller otherwhe recsoncbly
soa af Me Neeutafien, goemiiee 69 , Oxpress or the right te decloce all amounts due or te become due hereunder te
bean anke wth sopout to the ardeuhilie, sotuniioy be immodiciely dve and poyuble and Seller sholl have off the rights
— the end remedies of « Secured Party under the Uniform (Commercial Code,
| oe for purpose of the Property or otherwise unless the same is lededing the right to repossess the Property wherever the some my
| instrument signed by the Seller. Buyer will settle Grectly ot public or private sale. Upon request, Buyer shall deliver the
with the originol Seller ofl coacerning the Property & oe te Seller at ¢ place designoted by Seller. Seller shal have
Ot operstion. “
a So im ‘orem note fie ponte ad Bee
: \ shell remeia liable for any deficiency te extest permitted by lew.
in or attached te the Property when repossessed may be bold by
V8. G1SK OF LOSS - INSURANCE lichity oad Buyer shall be doomed te hove waived any cele
me Cape Ont Seo tae Oh Soe 08 ee mt ob. thereto unless written demand by certified mad bs mode open Soler within
fain ot bes owe expense for so long os any remairs vapad } ge we A Beyer rd > aa
berevader insereace pretediag the laterets of end Seller feos (15% ogress fe pay
egciest los, domoge 01 do we ite a wa . omg AR
ame lee dl on ee be 6 ae ee tomedees ere in edition to ony given by lew end may be
attortrns Soller to ctionpt te ebtela, the requested covereges on eatorced suconssively of concurrently by Seller of ay detect
bohett en 4 a yp — co shall net be doomed « waiver of ony other default.
+e ebteln tequested for term (adkoted fer ° = eo dns
qmoqet lncieded herein, Seller may i obtain mach for
term, © eny, @s the te whom shall We trensier, reaewel, extension ox essignmest of this contred or ony
riot wide Ty sah no) elt to oe eee ot Se 6 = Gants da &
@ @ cherwim required by lew. contract constitutes the qgreneat terseen Ge pertes endo
f Beyer Vets te cbtcin or meintoin sch leserone, or foils modification hereof shell be veld in ony event, ond Buyer exprenly
eich satislectory evidence thereof spon request, Seller may, woives the right to rely thereon, unless mode in writing by
- be roqared te, ond wither pretedce fo Us rights hereender i Seller oy provision of this conteed prohibited we
i: a sholl be te the extet of sock protsbiticn tavobée-
Buyer So ee, 6 oe 8 eo fing other prevnce of this costrod. Ths ceatrad del be
egrees te PG F forthwith spos demand by the lows of the state in which the ongiecl Seller is
‘ together interest thereon @ the lawful costrect rete. @s shown on the foe of ths comet
| GUARANTY
Von ined jointly roversity, ond unepad} poyment and dis-
! Faroe 9 "5 - See op eo et event pw am pot wood abhgovoms . £2,P2Y upon
MH A ° a fogethe : ) gfe (3% of mount due, or if p
| med by w) if placed with an attorney for series The | not lected by ony extennon renewal or other cl in
Ko cone of doymees of id contract, of any in the » pice or payment thereof, or se, settlement or or
| ith any porty liable for payment thereof, or the ity thereunder. The of the within controct not
ache oh pp a om et as aceite cp :
protest and notices o fon-poyment @ » Sad any other nohices requi by low, and wolves of soto! counterclaims.
| Gvorantoc an
; Gvorant Add:
‘
}
Seller nomed is controct sells, ‘ transfers Motor Credit (hereinofter called “Ford Credit”) his, its or their entire
: pny title ond iereat mand fo the sgn contrac and th Bre ee Se ae ord Cred ip do every oct ond ting necasory fo calla
and dischorge opigetions arising out of or incident to tn order to induce Ford Credit to accept assign’ the controct,
Seller warrants thot: the contract, and guaranty if J ond enforceable ond arose from the sole of so:d Property; said Property is
@3 represented to the Buyer no in who was fed both o ice ond o lesser cash price; the within contract was complete in all re-
spects and Seller made all disclosures required by low prior to the execution by the is not q minor, has capacity to ind the down
fhe’ best of ‘the Salers ‘inowiedpe ond Seliet ond the Seller Sof ony toct thot ALT ETS LD 23
" - Hf fi . : ‘oct;
Property so etre n, enconbranes tor the borate of bord Teshoon ar oat Be oppked tor former if perenns bn tow.” trove te emp
each of any of the foregoing worranties, wi regard to the Sel or lack of kno with respect thereto or Ford Credit’s reliance
the Seller y agrees unconditionally to purchose said contract from Ford , upon demand, for full omount then unpaid wh said a]
then be. or not be, in defauli. Seller further eyrens Hat in greep Buyer or person mokes o claim against Ford Credit alleging fost which, if true
mstitute o breach of any of the tor ng warranties, ¢ shall assume such claim and sholl indemnity and save Ford Credit hormiess ror
fox. cont and expenses arising therefrom. in addition, this osqnment includes Ce proviions of the poragraph imitioied by the Seller below proved
if none paragraphs below hos been initaled by er, thes assignment include the provisions of the paragraph below oa
“Repurchose.” habilty of the Seller shall not be affected by any extension, renewal or other change in the time of poyment of the said controct, or
any change in the manner, ploce or terms of payment there! or , or compromne ot of with any party liable for payment thereof or
the release of non-pertechon of any security thereurmter Ford (rect «hall not be bound to exhousf its recourse inst super @ a GS persion or ony
security Ford Credit may @ ony tine hose beter Bes entethent a yh Ro mS - monn sence ° S acc nonce of this
ignment - mone contr other ces 6 iw o worves ssvolt o coyrter-
coime. La! ow sat shall be Some effective vpn of within contract to Ford Credit er unan fad Credit’: Poymenk Of He purchane pre Merwhes
wettoner Wwe See, aesesicipttitagainen icciaiannicihiaama
ee SATHORN? OFOCHIRSE The ve of wed «rue wet hall be oe * + ~« » + + the Seller. except o« otherwie provided by the
invic! tem of the ford Mote Cred ny “eta! Plan in efter? of Me Here Mee GaMyi et mm cep tou Bi a Pes
Pa “RE PURC SE" I> ones em ad om awn m3 QUMProLt, Unc nf! tet) ote ode in
s conten ry Pee Neunde re vy “ bag ” . Pree Sapa” i RE ra yy a ‘ a 4 Pres
* sone 8 Wot Creda Comgeany Re. tut ae ee ree ee -
e See guoronnes SPT e het under contract. ond VENAN, detouh
Pw piytntms pond srolmene #- mace the oh wane in Pred rads ao cncept os imerwise provided
terms of the Ford motor Credit ‘ompany Retail Plon in ©) tha Gene tan Ctuyrmnms mo oxcepin provided. moto ek Guyer won
Bree Sage 0s cchbrst ise provided by tee terms of the Pat rot os ty Metont fon wn etect ot the nme Ths Oragnenent 1s Ox 4
“PARTIAL GUARANTY” Notwi nq the terms of the Ford Meter Credit Company Retoil Pion, the Seller unconditionally 9 Poy
ment ‘omount wing unpoid under said cpatract ogress perchare, word oct from Ford Credit demond tor the
Ame ef id whether on egos oe be, oF not nm fo . proaded. howeee ot the hme of amy wt saree oblgonon, ond
wach exten tha seognanen’ of tad contract ty withona recourse Sgt he re RN econdad by the vorme Mor
il Plan in effect at time this Assignment is ; Sea elie _
* * Notwithstanding the terms of the Ford Motor Credit Company Retail Plon, the Seller unconditionally quaranties payment
0 rut p= ee pl ne + pm Pages ontract, ond eprese purchose soid tract ford Credit, upon . tov the omourt
Initio! } tye wheter sau ‘contract shall then be, oF not gry © Any bie ap
gtk See PR Pere —, Fe.
|
OE EE EEE Eee eT
| sano Yan
ANSWER OF FORD MOTOR CREDIT CO.
(Filed June 13, 1975)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
: (Title Omitted in Printing)
COUNT I
1. Admits that this action purports to be for money
damages and purports to be filed under the Truth
in Lending Act, 15 USCA, Section 1601 et seq., pur-
portedly to recover statutory damages, reasonable at-
torney’s fees and costs by reason of alleged violations of
the Act and Federal Reserve Regulation Z, 12 CFR Sec-
tion 226; and admits the jurisdiction of the court pur-
ports to be invoked pursuant to Section 130(e) of the
Act, 15 USCA, Section 1640(e), and 28 USCA, Sec-
tion 1337.
2. Admits paragraph 2.
3. Admits that defendant Ford Motor Credit Co.
is a foreign corporation and that it maintains an office
at 4309 N. E. Tillamook, P. O. Box 13070, Portland,
Oregon; and denies the remainder of paragraph 3.
4. Admits that defendant Dee Thomason Ford is
an. Oregon corporation engaged in the business of selling
automobiles at 309 S. State Street, Lake Oswego, Ore-
gon; and denies the remainder of paragraph 4.
5. Admits that on or about July 12, 1974 plaintiff
Dennis Millhollin purchased from defendant Dee Thom-
ason Ford a 1973 Ford Pinto Wagon with cash price
of $3,098, a finance charge of $711.84, a total of
payments of $3,084.64 and deferred payment price
of $3,984.64; and admits that the contract evidencing
the purchase was assigned by defendant Ford Motor
a)
Credit Co. in the regular course of business; and denies
the remainder of paragraph 5.
6. Admits paragraph 6.
7. Denies paragraph 7.
8. Denies paragraph 8.
COUNT II
9. Except as admitted hereinabove, denies each
and every allegation of paragraphs 9, 10 and 11.
FIRST DEFENSE
10. Plaintiffs’ Complaint fails to state facts suffi-
cient to constitute a claim for which relief can be
granted.
/s/ Dezendorf, Spears, Lubersky & Campbell
Herbert H. Anderson
John M. Berman
DEZENDORF, SPEARS, LUBERSKY
& CAMPBELL
Herbert H. Anderson
John M. Berman
Attorneys for Defendant
Ford Motor Credit Co.
(Affidavit of Mailing Omitted in Printing)
=
ANSWER OF DEFENDANT
DEE THOMASON FORD CO.
(Filed June 16, 1975)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
Defendant, Dee Thomason Ford Co., for its answer
alleges:
I.
Admits paragraph II and paragraph VI; and admits
that the defendant, Ford Motor Credit Co., is a foreign
corporation and that it maintains an office at 4309
N.E. Tillamook, Post Office Box 13070, Portland, Ore-
gon; that defendant Dee Thomason Ford Co. is an
Oregon corporation engaged in the business of selling
automobiles at 390 South State Street, Lake Oswego,
Oregon, and that on or about July 12, 1974 plaintiff
Dennis Milhollin and plaintiff Michelle Milhollin pur-
chased a 1973 Pinto Wagon pursuant to a retail install-
ment contract of the same date, a true copy of which
is attached as Exhibit “A” to plaintiff's complaint.
II.
Except as expressly admitted herein, Defendant Dee
Thomason Ford Co. denies each and every other allega-
tion contained in plaintiffs’ complaint and the whole
thereof.
ey —15—
FIRST DEFENSE. FORD MOTOR CREDIT CO’S ANSWERS
L TO INTERROGATORIES
Plaintiffs’ complaint fails to state facts sufficient (Filed August 8, 1975)
to constitute a claim for which relief can be granted. IN THE UNITED STATES DISTRICT COURT
KEANE, HAESSLER, HARPER, PEARL- FOR THE DISTRICT OF OREGON
MAN and COPELAND (Title Omitted in Printing )
By /s/ Michael J. Esler Defendant Ford Motor Credit Co. answers the inter-
Michael J. Esler , rogatories served upon it by plaintiffs as follows:
Of Attorneys for Defendant, Dee * *¢
Thomason Ford Co. INTERROGATORY NO. 4: Has any contract
(Certificate of Mailing Omitted in Printing) signed by either plaintiff been assigned to you?
a. Please state the date of assignment of each
| contract.
b. Please state the name and address of each as-
signor and each assignee on each contract.
c. Please state the consideration for each assign-
ment on each contract.
d. Please state the name and address of the present
custodian of the assignment of each contract.
e. Please describe any agreement between you and
any other person pursuant to which any contract
signed by either plaintiff was assigned.
ANSWER TO INTERROGATORY NO. 4: Yes.
a. July 12, 1974 (only known account)
b. Assignor: Dee Thomason Ford
309 South State Street
Lake Oswego, Oregon
Assignee: Ford Motor Credit Company
Portland, Oregon
c. Sight draft dated July 15, 1974—$2,572.80
d. Dee Thomason Ford
oscilla
e. Dee Thomason Ford assigns contracts to this
defendant pursuant to the terms set forth in
the booklet entitled “Automotive Finance Plans
For Ford Motor Credit Dealers” and supple-
mental operations bulletins. Copies are available
for inspection and copying at plaintiffs’ conven-
ience upon reasonable notice.
INTERROGATORY NO. 5: Please itemize all pay-
ments paid on the contracts involved in the transaction,
whether paid to you or to any assignor, and state
the date of each payment, the amount of each payment,
the person who made the payment, and the person
or firm that received the payment.
ANSWER TO INTERROGATORY NO. 5: At-
tached hereto as Exhibit B is a payment summary of
those payments payments received by Ford Credit. Ford
Credit’s records do not reflect who made each contract
payment. According to the contract, a $400 cash down-
payment was made at the signing of the contract, and
$300 was allowed for a trade-in. An additional $200
downpayment was to be made on or before August 12,
1974, and was made on August 12, 1974. Ford Credit
was paid $200 by the dealer on that date.
* * *
INTERROGATORY NO. 14: Please state whether
the automobile purchased by plaintiffs was repossessed.
If so:
a. Please identify the name and address of the
person or Company who repossessed the auto-
mobile.
b. Please identify the name and address of the
person who authorized the repossession.
c. Please state the date of the repossession.
—
ANSWER TO INTERROGATORY NO. 14: Yes.
a. Ford Motor Credit Company, 2309 N. E. Tilla-
mook, Portland, Oregon
b. Same as subparagraph “a” above.
c. February 21, 1975
INTERROGATORY NO. 15: If the answer to. the
previous Interrogatory is yes, please indicate the term
of the contract authorizing the repossession.
a. Please state the reasons for the repossession..
ANSWER TO INTERROGATORY NO. 15: Section
19 of Additional Terms and Conditions of the Contract.
a. Default in payment of instalments due under
' the contract; failure to supply evidence of. in-
surance; Ford Credit deemed the indebtedness
and the property insecure.
* * *
INTERROGATORY NO. 20: Subsequent to the date
of the repossession, did either plaintiff contact FORD
MOTOR CREDIT and offer to pay the delinquency
payments under the contract for return of the automo-
bile. If so: |
a. Please state the date of such contact.
b. Please identify who was contacted.
c. Please state the substance of the response of
-FORD MOTOR CREDIT to such offer. .
ANSWER TO INTERROGATORY NO. 20. By
letter dated February 21, 1975, Richard A. Slottee, on
behalf of plaintiffs, stated that he spoke with Mr. Peter
Deckers on February 21, 1975 and offered on their be-
half to pay the delinquent amount, which he stated was
—
$171.36. To the best of this defendant’s present knowl-
edge, that is correct. According to Mr. Slottee’s letter,
Mr. Deckers advised that the balance owing had been
accelerated and that plaintiffs should immediately at-
tempt to refinance the vehicle. To the best of this
defendant’s present knowledge, that is correct. A similar
conversation occurred between Mr. Slottee and Mr.
Ted Haines at about the same time.
INTERROGATORY NO. 21: Please state the
amount FORD MOTOR CREDIT required plaintiffs to
pay to obtain possession of the automobile, subsequent
to the date of the repossession.
a. Please itemize the components of such amount.
b. Please identify any other action required of
the plaintiffs prior to obtaining possession of
the automobile.
ANSWER TO INTERROGATORY NO. 21: The
balance owing to pay off the contract was $2,440.42
and payment of that sum was the only condition to
obtain possession of the vehicle. That sum was com-
posed of unpaid principal balance of $2,406.19; late
charges of $9.73; and repossession expense of $24.50.
* * *
STATE OF OREGON, County of Multnomah—ss.
I, L. B. PLUMMER, being first duly sworn, depose
and say that I am the Branch Manager of Ford Motor
Credit Co.; that I have read the foregoing Answers
—
to Interrogatories; and that the contents thereof are
true and correct as I verily believe.
/s/ L.B. Plummer
L. B. Plummer
(Jurat Omitted in Printing)
/s/ Dezendorf, Spears, Lubersky &
Campbell,
Herbert H. Anderson
John M. Berman
DEZENDORF, SPEARS, LUBERSKY &
CAMPBELL
Herbert H. Anderson
John M. Berman
Attorneys for Defendant
Ford Motor Credit Company
(Exhibit A to Ford Motor Credit Co.’s Answers to
Interrogatories Omitted in Printing)
Exhibit B to Ford Motor Credit Co.’s Answers
to Interrogatories
DATE
PAYMENT
RECEIVED . AMOUNT
8/12/74 $200.00
8/26/74 85.68
11/19/74 85.68
12/ 2/74 85.68
12/16/74 85.68
(Certificate of Mailing Omitted in Printing)
=
AFFIDAVIT
(Filed October 20, 1975)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
STATE OF OREGON, County of Multnomah—ss.
DENNIS MILLHOLLIN and MICHELLE MILL-
HOLLIN, each being first duly sworn, depose and
say: sir
That DENNIS MILLHOLLIN and MICHELLE
MILLHOLLIN are presently husband and wife, and
were husband and wife at the time the purchase of
the automobile was made as alleged in the complaint
on file herein.
That on July 12, 1974 we purchased a 1973 Ford
Pinto automobile from DEE THOMASON FORD. That
pursuant to this purchase, we signed a retail installment
contract, a true copy of which was attached to the
complaint filed herein. We were both present at the
time of the purchase and at the time of signing the
contract.
That the automobile purchased from DEE THOMA-
SON FORD was purchased for our personal use and
for non-business purposes.
That we made payments on said contract of $200.00
on August 12, 1974, $85.68 on August 26, 1974,
$85.68 on November 19, 1974, $85.68 on December
2, 1974, and $85.68 on December 16, 1974. That
we did not purchase physical damage insurance for
the automobile, nor were we notified that such insurance
must be purchased. |
a
That on February 21, 1975 the automobile which
we purchased from DEE THOMASON FORD was
repossessed. That on February 21, 1975 we contacted
defendant FORD MOTOR CREDIT CO. and offered
to pay the delinquent amount of $171.36. That we
were informed that the balance owing on the contract
had been accelerated and that the autombile would
be released only upon payment of the sum of $2,440.42.
/s/ Dennis Millhollin
Dennis Millhollin
/s/ Michelle Millhollin
Michelle Millhollin
(Jurat Omitted in Printing)
(Certificate of Mailing Omitted in Printing)
— =
AFFIDAVIT
(Filed November 21, 1975)
» IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
STATE OF OREGON, County of ..........-.-;.--——SS.
I, L. B. Plummer, being duly sworn depose and
say:
1. Iam the Branch Manager of the Portland branch
of defendant Ford Motor Credit Company.
2. In the event Ford Motor Credit Company de-
cides to accelerate the balance owed as a result of
the default of a contract purchaser, it always computes
the interest rebate the same as it would compute it
if the contract purchaser voluntarily prepaid the con-
tract, as set forth in paragraph 14 on the face of
the contract.
/s/ L. B. Plummer
L. B. Plummer
(Jurat Omitted in Printing)
(Affidavit of Mailing Omitted in Printing)
=o
AFFIDAVIT
(Filed December 19, 1975)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
STATE OF OREGON, County of Multnomah—ss.
I, Peter J. Deckers, being duly sworn depose and
Say:
1. I am an employee of Ford Motor Credit Co.
and was responsible for the account of Dennis and
Michelle Milhollin.
2. Prior to the execution of the Retail Installment
Contract, Michelle Milhollin completed a Customer
Statement to Ford Motor Credit Co. The purpose of
that statement was to cause Ford Credit to purchase
the Retail Installment Contract from Dee Thomason
Ford. Attached hereto as Exhibit A is a true and
correct copy of that Customer Statement.
3. As noted on the Customer Statement and on
the Retail Installment Contract, the Milhollins elected
to obtain their own insurance.
4. By letter dated 7-15-74, Ford Credit asked plain-
tiffs to supply certain information concerning their phys-
ical damage insurance. Attached hereto as Exhibit
B is a true and correct copy of that letter.
5. On or about 7-17-74, Ford Credit attempted
to verify that the Milhollins had obtained insurance
through Elite Insurance. It was advised that Elite In-
surance only insured motorcycles. Ford Credit was
then advised that insurance would be obtained through
Farmers Insurance Group. Attached hereto as Exhibit
— oe
C is a true and correct copy of the record of Ford
Credit so indicating.
6..° Thereafter a follow-up letter was sent requesting
information concerning said insurance. Attached hereto
as Exhibit D is a true and correct copy of that letter.
7, On or about 9-25-74, Ford Credit again at-
tempted to confirm that plaintiffs had obtained in-
surance. Attached hereto as Exhibit E is a true and
correct copy of the Company’s records indicating that
such verification could not be obtained.
8. On or about 10-4-74 Ford Credit obtained single
interest insurance to protect its own interest. By letter
dated 10-4-74 it so notified plaintiffs. Attached hereto
as Exhibit F is a true and correct copy of that letter.
9. From the date the second payment was due,
9-29-74, plaintiffs were in default on their payments.
The last payment received was received on 12-16-
74.
10.. On. 10-23-74 Ford Credit was advised that
plaintiffs had separated and Mrs. Milhollin was in
Wisconsin with the vehicle. Upon further investigation,
Ford Credit was advised that plaintiffs were not separat-
ing and that Mrs. Milhollin would return to Portland.
11. On at least 10 separate dates, employees of
Ford Credit attempted by telephone to contact plaintiffs
both in Portland and in Milwaukee, Wisconsin, in
order to obtain payment to bring the contract current
and to determine whether or not insurance had been
obtained. So far as I recall, the Milhollins did not
initiate any contacts with Ford Credit to explain their
default or to advise how they intended to cure same.
ee
12. On 2-20-75, Ford Credit again attempted to
verify the insurance coverage claimed to have been
obtained by plaintiffs. Ford Credit was advised that
there was no insurance coverage because the premiums
had never been paid. Attached hereto as Exhibit G
is a true and correct copy of Ford Credit’s records
so indicating.
13. The decision to accelerate the balance owing
and not to reinstate the contract was based on the
history of extensive collection efforts involved, and
the fact that plaintiffs appeared to be unable or un-
willing to make the contract payments or to purchase
insurance to protect the public, themselves or Ford
Credit.
14. To the best of my knowledge, at no time
did plaintiffs ever express any surprise that Ford Credit
had purchased their contract, or that they were no
longer dealing with Dee Thomason Ford. Plaintiffs
made the monthly payments which they actually made,
directly to Ford Credit.
/s/ Peter J. Deckers
Peter J. Deckers
(Jurat Omitted in Printing)
(All Exhibits to Affidavit Omitted in Printing)
(Affidavit of Mailing Omitted in Printing)
a
RECOMMENDATION AND ORDER
(Filed April 7, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DENNIS MILHOLLIN and
MICHELLE MILHOLLIN,
Plaintiffs,
vs.
FORD MOTOR CREDIT CoO., a
corporation, and DEE THOMASON
FORD, a corporation,
Defendants.
Civil No. 75-334
‘~ This is an action for money damages brought under
the Truth in Lending section of the Consumer Credit
Protection Act, 15 U.S.C. § 1601, et seq., for alleged
violations of the Truth in Lending Act (“Act”), and
Federal Reserve Board Regulation Z (“Reg. Z”), 12
C.F.R. § 226, et seq. Jurisdiction is conferred by 15
U.S.C. § 1640(e).
In July of 1974, plaintiffs, Dennis and Michelle
Milhollin, purchased a 1973 Ford Pinto automobile
from defendant Dee Thomason Ford on a deferred
payment plan. The purchase ‘price was $3,098.00 and
the deferred payment price $3,983.64. Plaintiffs put
down a cash payment of $400.00 and were allowed
a $300.00 trade-in allowance on their old automobile.
Additionally, a $200.00 balloon payment to be made
August 12, 1974, further increased the down payment
to a total of $900.00. The sum of $2,372.80 was
financed at an annual percentage rate of 17.91%.
= =
After the $200.00 balloon payment, plaintiffs were
to pay 35 monthly installments of $85.68 each and
one final installment of $85.84 commencing on August
29, 1974. Because plaintiffs did not maintain property
damage insurance on the automobile, the assignee of
the purchase contract, defendant Ford Motor Credit
Company (“FMCC”), obtained this insurance and
added the premium to the principal. This resulted in
the payments due being increased to $94.61 per month
beginning with the December 29, 1974, payment.
FMCC, without notification to the plaintiffs, repos-
sessed the automobile on February 21, 1975. FMCC
gives as reasons for repossession: (a) default in payment
of installments due under the contract (two payments
were overdue); (b) failure to supply evidence of insur-
ance; and (c) FMCC deemed the indebtedness and
property “insecure.” FMCC’s answer to plaintiffs’ inter-
rogatory 15.
By letter dated the same day as the repossession,
February 21, 1975, plaintiffs, through their attorney,
offered to pay the delinquent amount. FMCC responded
that it had elected to accelerate the amount due. This
acceleration had the effect of forcing plaintiffs to pay
$2,440.42 rather than the overdue amount in order
to redeem the automobile. Plaintiffs were not able
to make the payment, and the Pinto was re-sold.
Plaintiffs allege that the contract violated the Act
and Reg. Z in four particulars:
(1) Failure to disclose the acceleration clause on
the face of the contract;
(2) Failure to disclose clearly and conspicuously
that plaintiffs were required to obtain physical damage
insurance on the automobile;
—
(3) Failure to clearly identify FMCC as a creditor
on the face of the contract;
(4) Failure to describe or identify the type of secu-
rity interest retained or acquired by FMCC. Each plain-
tiff seeks the maximum allowable damages of
$1,000.00.
All parties move for summary judgment. Fed. R.
Civ. P. 56. I find that there is no genuine and material
issue of fact in dispute.’ Therefore, this matter is
ripe for summary judgment.
I. WAS FMCC A “CREDITOR”?
FMCC contends that it is not subject to the Act
or Reg. Z for any violations contained in the contract
in that, with regard to this transaction, it is not a
“creditor” within the meaning of the statute and regula-
tions. It maintains that assignees were not specifically
made subject to the Act until October 28, 1974 (after
the contract in issue was executed). Act of Oct. 28,
1974, Pub. L. 93-495, Title IV, § 413(a), 88 Stat.
1520, adding 15 U.S.C. § 1614. Therefore, FMCC’s
argument continues, it could not have been subject
to the Act prior to the enactment of § 1614.
1Dee Thomason contends that its attempted good faith com-
pliance with the Act and Reg. Z is a valid defense here,
and, in any event, the factual issues of good faith and alleged
oral disclosures made to the plaintiff preclude summary judg-
ment. A recent 10th Circuit case, Redhouse v. Quality Ford
Sales, Inc., 511 F.2d 230 (10th Cir. 1975), is cited by
Dee Thomason for the proposition that damages are improper
in Truth in Lending Act cases where the debtor is supplied
with full disclosure, be it on the face of the contract or
oral. Insofar as Redhouse can be read as holding good faith,
oral disclosure, or lack of damage causation to be defenses
to violations of the Act or Reg. Z, I respectfully must disagree.
I find nothing in the statute or its legislative history which
suggests that any standard other than strict liability should
be applied.
—
Plaintiffs counter with the assertion that FMCC was
the true creditor in this transaction, and Dee Thomason
was merely a “conduit.” Thus, FMCC would have
been subject to the Act as a “creditor” even before
the enactment of § 1614.
I agree with the plaintiffs. The conduit approach
has been applied in many analogous situations before
the enactment of § 1614.” Here, at the same time as
the sale of the automobile, and in the same transaction,
Dee Thomason arranged for the extension of credit
by FMCC, and assigned the purchase contract to
FMCC. The transaction involving Dee Thomason and
FMCC was undertaken pursuant to the usual business
practices of defendants in regularly arranging for the
extension of credit to consumers. That this was the
usual business practice of Dee Thomason and FMCC
is evidenced by the following facts: (a) The contract
was printed by defendant FMCC, naming FMCC as
the assignee; (b) In 1974, Dee Thomason assigned
345 such contracts to FMCC; (c) FMCC financed
substantially all of the retail installment contracts signed
with Dee Thomason; and (d) The assignments were
made pursuant to instructions contained in a booklet
issued by FMCC. FMCC’s answers to plaintiffs’ inter-
rogatories 4, 26 and 27.
Additionally, it should be noted that the terms of
the Act itself would seem to apply to FMCC here,
*See, e.g., Johnson v. Johnson, IV CCH Consumer Credit
Guide 4 98,556, II Poverty Law { 21,220 (M.D. Ga. 1975);
Meyers v. Clearview Dodge Sales, Inc., 384 F. Supp. 722
(E.D. La. 1974); Philbeck v. Timmers Chevrolet, Inc., 361
F. Supp. 1255 (N.D. Ga. 1973), rev’d on other grounds,
499 F.2d 971 (Sth Cir. 1974); Garza v. Chicago Health
Clubs, Inc., 347 F. Supp. 955 (N.D. Ill. 1972); Joseph
v. Norman's Health Club, Inc., 336 F. Supp. 307 (E.D.
Mo. 1971).
ae
even without the judicially engrafted “conduit theory.”
Section 103(f) of the Act, 15 U.S.C. § 1601(f) defines
a creditor as one who:
[R]egularly extend[s], or arrange[s] for the ex-
tension of, credit for which the payment of a
finance charge is required, whether in connection
with loans, sales of property or services, or other-
wise. The provisions of this subchapter apply to
any such creditor, irrespective of his or its status
as a natural person or any type of organization.
I conclude, therefore, that, with respect to the trans-
action at issue here, FMCC is a creditor within the
meaning of the Act.°
II. DISCLOSURE OF
THE ACCELERATION CLAUSZ
The Act requires that the creditor must disclose
“the default, delinquency, or similar charges payable
in the event of late payments.” 15 U.S.C. § 1639(a)
(7). Plaintiffs contend that the right of acceleration
constitutes a “charge” within the meaning of section
1639(a)(7), and must be disclosed on the face of
the contract.
Plaintiffs and FMCC have both provided excellent
briefs to the court on this issue. Ample authority sup-
ports the position that an acceleration clause is a
“charge.” Ample authority also supports the position
that where, as here, only accrued interest becomes due
in case of acceleration, the acceleration clause is not
a “charge.” I feel compelled both by stare decisis and
logic to follow Judge Skopil’s ruling in Woods v. Benefi-
cial Finance Co. of Eugene, 395 F. Supp. 9 (D.Or.
®This holding is, of course, limited to the facts of this case.
— *
1975). The duty to disciose and fully explain any
right of acceleration was made clear in Woods. That
duty, however, is prospective in this District from the
date of the Woods decision, February 14, 1975. 395
F. Supp. at 16. Since the transaction in issue took
place before Woods, there was no duty at that time
upon either Dee Thomason or FMCC to disclose the
acceleration clause.‘
III. DISCLOSURE OF THE |
INSURANCE REQUIREMENT
Plaintiffs maintain that since failure to obtain prop-
erty damage insurance on the automobile can result
in default and acceleration, it also constitutes a “charge”
under section 1639(a)(7), and must be disclosed.
Although plaintiffs’ argument is somewhat plausible,
it is rejected for two reasons:
(1) 12 C.F.R. § 226.4(a)(6), which sets forth
the physical damage insurance disclosure requirements
(these being in conjunction with disclosures for the
determination of the finance charge), has been complied
with. Just above the buyer’s signature by which Mr.
Milhollin acknowledged his desire to obtain life and
disability insurance in connection with the contract
appears the notice:
(2) You have the right to choose the person
through whom the Physical Damage Insurance
required under this contract is to be obtained.
(Emphasis added).
(2) No authority is cited in support of the proposi-
tion that FMCC’s decision to take out insurance on
‘Plaintiffs’ suggestion that the defendants’ duty after the
Woods decision was to change those contracts previously entered
into is, to say the least, unrealistic.
— “a
the automobile because of plaintiffs’ failure to do so
constitutes a “charge” within the meaning of 15 U.S.C.
§ 1639(a)(7).
IV. CLEAR IDENTIFICATION OF FMCC
Section 226.6(b) of Reg. Z provides:
If there is more than one creditor in a transaction,
each creditor shall be clearly identified and shall
be responsible for making only those disclosures
required by this part which are within his knowl-
edge and purview of his relationship with the
customer. (Emphasis added).
Section 226.8(a) provides:
All of the disclosures shall be made together on
either
(1) the note or other instrument evidencing
the obligation on the same side of the page and
above or adjacent to the place for the customer’s
signature; or
(2) one side of a separate statement which
identifies the transaction.
The only reference to FMCC on the face of the contract
is one sentence in quite small type just above the
place for the seller's signature. This sentence states:
“The foregoing contract hereby is accepted by the
Seller and assigned to Ford Motor Credit Company
in accordance with the terms of the Assignment set
forth on the reverse side hereof.” Dee Thomason Ford,
on the other hand, is identified at the top of the
face of the contract in rather large writing.
FMCC has not been identified clearly within the
meaning of Reg. Z. In a situation such as this where
the true creditor is a credit company, that entity should
be clearly identified so that the debtor knows whom
a
or what he is doing business with. I must assume
that the only reason for placing FMCC’s name in
small type on the face of the contract in an obscure
place is that, hopefully at least, the debtor will fail
to read this provision. It is not too much. to ask
that the true creditor be identified in the same manner
the seller is.
V. DESCRIPTION OF SECURITY INTEREST
By virtue of the terms of the purchase contract,
FMCC took a security interest in the Pinto automobile
when the contract was executed. This security interest
was perfected the same date as the sale by notation
on the certificate of title. ORS 79.3020(1)(d). The
disclosure with regard to this security interest states
the following:
(13) Security Interest: Seller shall have a securi-
ty interest under the Uniform Commercial Code
in the Property (described above) and in the
proceeds thereof to secure the payment in cash
of the Toiai of Payments and all other amounts
due or to become due hereunder.
Section 226.8(b)(5) provides that the required dis-
closures must include:
A description or identification of the type of any
security interest held or to be retained or acquired
by the creditor in connection with the extension
of credit, and a clear identification of the property
to which the security interest relates or, if such
property is not identifiable, an explanation of the
manner in which the creditor retains or may ac-
quire a security interest in such property which
the creditor is unable to identify. . . . If after-
acquired property will be subject to the security
ae" oe
interest, or if other or future indebtedness is or
may be secured by any such property, this fact
shall be clearly set forth in conjunction with the
description or identification of the type of security
interest held, retained or acquired.
The defendants’ disclosure of their security interests
fail to comply with Reg. Z. First, there is no indication
that any security interest is held by FMCC.
Secondly, the “description” of the type of security
interest held by FMCC and Dee Thomason amounts
to little more than a statement that “a security interest
under Oregon law” is retained by the seller. (The
Uniform Commercial Code is codified at ORS 71.1020,
et seq.). It should be noted that Woods held that
the incorrect disclosure that the security interest in-
volved covered after-acquired consumer goods was a
violation of Reg. Z. At the least, defendants should
have disclosed the type of security interest retained
under the UCC.* Otherwise, a consumer might easily
be misled as to his rights in the collateral.
Thirdly, the language “and all other amounts due
or to become due hereunder” is, as was the language
in Woods, surplusage which could be confusing not
only to a consumer, but to an attorney as well. Is
this meant to be cross-collateral clause, or merely
5This is not to require, as FMCC suggests, that an index
of the ge and qualities of different security interests ible
under UCC must be disclosed. Something more than the
brief statement that “a security interest under the Uniform
Commercial Code” is required, however.
‘For an ae of this type of financing arrangement, see
Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C.
Cir. 1965).
It is doubtful that a cross-collateral clause was intended
in this transaction where only a single automobile was purchased.
The language which describes the security interest does not,
however, alleviate the confusion.
oe
a statement that add-ons (such as the insurance pre-
miums in this case) also shall become secured? The
generality of the language produces uncertainty.
FMCC would be wise to heed the recent statement
of Judge Solomon with regard to language used by
insurance companies in their policies:
Insurance companies could prepare policies in
clear, simple and precise language which would
inform insureds of the limits of their coverage.
Insurance companies could avoid the risk of
ambiguity if they use short and precise words
and short and simple sentences to express their
intent clearly. In spite of continued admonitions
of the courts to get rid of such language, insurance
companies continue to issue such policies using
insurance jargon and verbose and meaningless gen-
eralities, all of which result in ambiguities.
Champion International Corp. v. Continental Casualty
Co., 400 F. Supp. 978, 981 (S.D.N.Y. 1975).
Again, I must assume that the generality and obscure
nature of the language are intended to either confuse
the consumer or hide something from him.
VI. DAMAGES
Section 130 of the Act, 15 U.S.C. § 1640(a)(1),
sets the damages recoverable as twice the finance charge
“in connection with the transaction, except that the
liability under this paragraph shall not be less than
$100 nor greater than $1,000.” 15 U.S.C. § 1640(a)
(2) also provides for the recovery of attorney’s fees
and costs for the successful plaintiff.
Plaintiffs contend that under the Act, joint borrowers
are entitled to recover twice the amount of the damages
a"
specified thereunder. This argument is based on the
proposition that both debtors are required to receive
the disclosures required by the Act and that each
is therefore entitled to damages. This contention fails
for two reasons.
First, the language of section 1640 itself is directed
at the “transaction” involved, not the parties involved.
Secondly, the congressional intent to limit the recov-
ery in a single credit transaction to $1,000.00 despite
the number of borrowers is quite clear. The House
Banking and Currency Committee Report, 1968 US.
Code Cong. & Admin. News at 1976, states the purpose
of the civil liability section as follows:
While the primary enforcement of the bill would
be accomplished under the administrative enforce-
ment section . . . further provision is made for
the institution of any civil action by an aggrieved
debtor. Any creditor failing to disclose required
information would be subject to civil suit with
a penalty equal to twice the finance charge, with
a minimum penalty of $100 and a maximum
penalty of $1,000 on any individual credit trans-
action. .. . (Emphasis added).
The plaintiffs, therefore, are entitled to $1,000.00,
costs and attorney’s fees.
Dated this 6th day of April, 1976.
/s/ George E. Juba
United States Magistrate
a.
After review of the file and record in this case,
I approve the foregoing recommendation.
IT IS ORDERED that defendants’ motions for sum-
mary judgment are denied.
IT IS FURTHER ORDERED that plaintiffs’ motion
for summary judgment is granted. Plaintiffs shall re-
cover from the defendants the sum of $1,000.00. At
a subsequent hearing attorney’s fees shall be determined.
Dated this 6th day of April, 1976.
/s/ Robert C. Belloni
United States District Judge
=_
ORDER
(Filed and Entered June 25, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DENNIS MILHOLLIN and MICHELLE
MILHOLLIN,
Plaintiffs,
v.
FORD MOTOR CREDIT CO., a corporation, and
DEE THOMASON FORD, a corporation,
Defendants.
CIVIL NO. 75-334
This is an action for money damages brought under
the Truth in Lending section of the Consumer Credit
Protection Act, 15 U.S.C. §1601, et seq., for alleged
violations of the Truth in Lending Act, and Federal
Reserve Board Regulation Z (Reg. Z), 12 C.F.R.
§226, et seq. Jurisdiction is conferred by 15 U.S.C.
§1640(e).
The undisputed facts of this case are set out in
the attached Recommendation and Order dated April
6, 1976. On that date, I reviewed the record, approved
Magistrate Juba’s recommendation, denied defendants’
Motions for Summary Judgment, granted plaintiffs’ Mo-
tion for Summary Judgment and ordered that plaintiffs
recover judgment against the defendants in the sum
of $1,000.
The defendants asked for and received a rehearing.
I have studied their additional memoranda and have
heard oral argument on the rehearing. Nothing con-
tained in either, however, convinces me that any change
in the original opinion should be made.
—_—
A recent case out of the Western District of Pennsyl-
vania deserves some comment, however. Virginia Jones
Main v. Faller Ford, Inc. et al., Civil No. 74-337
(W.D.Penn. 1976). In that case, the judge believed
that the contract adequately identified FMCC as a
creditor. I have not seen the coatract in the Main
case. Its wording seems to be identical to the one
in the case at hand. The contract in question has,
as its only reference on the face of the contract to
FMCC as a creditor, one sentence in small type above
the place for the seller's signature. Dee Thomason
Ford, on the other hand, is identified at the top of
the face of the contract in rather large writing. FMCC
has not been identified clearly within the meaning
of Reg. Z.
Defendants ask this court to make this opinion ef-
fective only prospectively from the date of this opinion.
They have presented no authority, however, which
would give this court the power to reach such a result.
That request is denied.
IT IS ORDERED that the defendants’ motions to
modify and/or vacate are denied.
Dated this 25 day of June, 1976.
/s/ Robert C. Belloni
United States District Court
sini
ORDER
(Filed and Entered June 25, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DENNIS MILHOLLIN and MICHELLE MILHOL-
LIN,
Plaintiffs,
vs.
FORD MOTOR CREDIT CO., a corporation, and
DEE THOMASON FORD, a corporation,
| Defendants.
CIVIL NO. 75-334
Plaintiffs’ attorneys fees are set at $750.00.
Dated this 25 day of June, 1976.
/s/ Robert C. Belloni
United States District Judge
onli
SUMMARY JUDGMENT
(Filed and Entered June 25, 1976)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DENNIS MILHOLLIN and MICHELLE MILHOL-
LIN,
Plaintiffs,
v.
FORD MOTOR CREDIT CO., and DEE THOMAS-
ON FORD,
Defendants.
Civil No. 75-334
Based on the record,
IT IS ORDERED AND ADJUDGED that plaintiffs
recover from the defendants the sum of $1,000.00
general damages and the sum of $750.00 attorneys
fees.
Dated: June 25, 1976.
/s/ Robert M. Christ
Clerk of Court
a | van
OPINION
United States Court of Appeals,
Ninth Circuit
(Decided December 28, 1978; Reported
at 588 F.2d 753)
Dennis MILHOLLIN and Michelle Milhollin,
Plaintiffs-Appellees,
v.
FORD MOTOR CREDIT CO., a corporation, and
Dee Thomason Ford, a corporation,
Defendants-Appellants.
Dennis MILHOLLIN and Michelle Milhollin,
Plaintiffs-Cross Appellants,
v.
FORD MOTOR CREDIT. CO., a corporation, and
Dee Thomason Ford, a corporation,
Defendants-Cross Appellees.
Donna M. EATON,
Plaintiff-Appellee,
v.
FORD MOTOR CREDIT CO., a corporation,
Defendant-Appellant,
Bud Meadows Mazda, Inc.,
Defendant.
Darrell MESSINGER,
Plaintiff-Appellee,
wn
FORD MOTOR CREDIT CO., a corporation, and
Marv Tonkin Ford Sales, Inc., a corporation,
Defendants-Appellants.
=
David P. ANDRESEN,
Plaintiff-Appellee,
v.
FORD MOTOR CREDIT CO., a corporation, and
Webster-Wolfard Ford, Inc., a corporation,
Defendants-Appellants,
and
The California Loan and Finance Association,
Amicus Curiae.
Nos. 76-2914, 76-3217, .77-3084, 77-3584 and 77-
3569.
Herbert H. Anderson, Richard A. Slotte, Portland,
Ore., for plaintiffs-appellees and defendants-appellants.
Appeal from the United States District Court for
the District of Oregon.
Before WRIGHT and GOODWIN, Circuit —
and JAMESON,* District Judge.
EUGENE A. WRIGHT, Circuit Judge:
In these consolidated cases, Ford Motor Credit Cor-
poration (Ford Credit) and several Ford dealers appeal
from adverse judgments finding that they violated provi-
sions of the Truth in Lending Act, 15 U.S.C. §§
1601 et seq. (1976) (Act) and the regulations promul-
gated thereunder, 12 C.F.R. § 226.1 et seq. (1978)
(Regulation Z).’ Milhollin cross appeals from a limi-
tation of Ford Credit’s liability.
Although plaintiffs below (Consumers) allege a num-
ber of violations, we need to decide only two issues
*Senior District Judge, District of Montana.
1Sections of Regulation Z cited here have remained the
same in all relevant respects since these actions arose.
pr a
common to the above cases and one issue raised by
the Milhollins:
(1) Whether Ford Credit was clearly identified as
a creditor on the face of the contract;
(2) Whether it is necessary to disclose an accelera-
tion clause on the face of the contract; and
(3) Whether an inadequate disclosure made to a
husband and wife as joint obligors results in a multiple
recovery.
I.
FACTS?
Ford Credit, wholly owned by the Ford Motor Com-
pany, provides financing for Ford dealers by extending
operating and inventory loans and by purchasing retail
installment contracts for the sale of automobiles by
dealers.
A Ford Credit booklet explains its program to dealers
and gives guidelines for drafting contracts it is willing
to purchase. It also provides forms of credit applica-
tions, contracts and rate charts for calculating finance
charges. Use of the supplied forms is not mandatory,
and Ford Credit purchases contracts on other agreement
forms. Many dealers disregard the suggested rate charts
and develop their own finance charges.
Dealers negotiate all terms of contracts directly with
customers, including the interest rate. Contracts are
typically assigned shortly after sales are consummated.
Although Ford Credit normally is unaware of any spe-
cific sale until the contract is proffered for assignment,
*These are the facts common to all above cases. Facts
unique to a single case are presented later in the text, as
necessary.
—
dealers may get prior approval for customers with mar-
ginal credit ratings.
Ford Credit is not obligated to purchase any contracts
from dealers, but usually rejects only a small percentage
of those offered. It pays dealers cash for the contracts
less its discount.
Each delaer here has assigned the great majority
of its contracts to Ford Credit.* Shortly after each
sale Ford Credit purchased the contract, notified the
buyer, and provided him a payment book. Consumers
made subsequent payments to Ford Credit.
II
DISCLOSURE OF FORD CREDIT
AS A CREDITOR
In each of these cases, the district court found that
Ford Credit was not clearly identified as a creditor
on the face of the contract, and that this nondisclosure
violated the Act and Regulation Z. To uphold the
district court, we must conclude that (a) the identity
of each creditor is a required disclosure under the
Act or Regulation Z; (b) Ford Credit is a creditor
in these transactions within the meaning of the Act;
and (c) Ford Credit’s status as a creditor was not
adequately disclosed on the face of the contract.
Consumers maintain that Regulation Z requires the
disclosure of each creditor to a transaction on the
5In Messinger, of 600 to 700 contracts assigned six months
prior to and six months after the transaction with the plaintiff,
the dealer assigned all but 100 to Ford Credit. The dealer
in Andresen assigned 90% of its contracts to Ford Credit.
a
face of the contract.‘ A number of courts have agreed.°
Consumers also interpret a Federal Reserve Board Offi-
cial Staff Interpretation of Regulation Z to require
disclosure fo each creditor. Ford Credit reads the
*Regulation Z provides:
“General rule. Any creditor when extending credit other
than open end credit shall, in accordance with § 226.6
and to the extent applicable, make the disclosures re-
quired by this section with respect to any transaction
consummated on or after July 1, 1969. . . . [S]juch
disclosures shall be made before the transaction is con-
summated. At the time disclosures are made, the creditor
shall furnish the customer with a duplicate of the instru-
ment or a statement by which the required disclosures
are made and on which the creditor is identified.”
12 C.F.R. § 226.8(a) (1978) (emphasis added).
“Multiple creditors or lessors; joint disclosure. If there
is more than one creditor or lessor in a transaction,
each creditor or lessor shall be clearly identified and
shall be responsible for making only those disclosures
required by this Part which are within his knowledge
and the purview of his relationship with the customer
or lessee. If two or more creditors or lessors make a
joint disclosure, each creditor or lessor shall be clearly
identified.”
Id. at § 226.6(d) (emphasis added).
SE. g., Lauletta v. Valley Buick, Inc., 421 F.Supp. 1036,
1039 (W.D.Pa. 1976); Pedro v. Pacific Plan of California,
393 F.Supp. 315, 319-20 (N.D.Cal. 1975).
Although this court has not addressed this precise issue,
it intimated that the identification of each creditor is required
by invalidating a disclosure statement that did not identify
one of two joint creditors in its description of that element
of the finance charge going to that creditor. Lijepava v. M. L.
S. C. Properties, Inc., 511 F.2d 935, 942 (9th Cir. 1975)
(citing 12 C.F.R. §§ 226.6(d), 226.8(d)(3) (1974)).
*In 1976 the Federal Reserve Board was asked whether
a disclosure statement in which the finance charge, annual
percentage rate, and name of the creditor were printed in
the same size ty satisfied the requirements of 12 C.F.R.
§ 226.6(a) (197 . oa states that the terms “finance charge”
and “annual percentage rate” “shall be printed more conspic-
uously than other terminology required by this part.”
The Board’s response, issued pursuant to the authority granted
by 12 C.F.R. § 226.1(d) (1978), stated: “Although the
—. in
Official Interpretation narrowly to reach an opposite
result."
Consumers allege that Ford Credit is a creditor within
the meaning of the Act*® because it extended credit
directly to them, using the dealers merely as a means
to arrange for the credit. Ford Credit argues that it
was a subsequent assignee of the retail installment
contract, extending only commercial credit to the deal-
ers. It cites the apparently different treatment accorded
an “original creditor” and a “subsequent assignee”
in various sections of the Act as evidence that Congress
did not intend subsequent assignees to be subject to
the same disclosure requirements as creditors.’ Con-
identification of a creditor is a required disclosure under § 226.8
(a), this disclosure does not constitute required ‘terminology.’ ”
Official Staff Interpretation of Regulation Z, 41 Fed.Reg. 41908
(1976) (Emphasis added).
We have held that “[g]reat deference is especially due
the Federal Reserve Board’s construction of its own Regulation
Z because of the important interpretative and enforcement
pero granted this agency by Congress under the Truth in
ing Act.” Bone v. Hibernia Bank, 493 F.2d 135, 139
(9th . 1974). See also Anthony v. Community Loan &
Investment Corp., 559. F.2d 1363, 1367 (Sth Cir. 1977);
Johnson v. McCrackin-Sturman Ford, Inc., 527 F.2d 257, 267
n.23 (3d Cir. 1975).
TFord Credit relies on the strained reading given 12 C.F.R.
§ 226.8(a) (1978) and the Official Staff terpretation in
Grey vy. European Health Spas, Inc., 428 F.Supp. 841, 843
(D.Conn. i977).
*Regulation Z detines “creditor” as
a person who in the ordinary course of business regularly
extends or arranges for the extension of consumer credit,
or offers to extend or arrange for the extension of such
credit, which is payable by agreement in more than four
instalmenis, or for which the payment of a finance charge
is or may be required, whether in connection with loans,
sales of property or services, or otherwise.
12 C.F.R. § 226.2(s) (1978).
See, €. g., 15 USC. §§ 1614, 1640(d), 1641 (1976).
— oe
sumers respond by citing cases that, in certain circum-
stances, equate subsequent assignees with creditors for
disclosure purposes.”°
For our purposes it is unnecessary to decide whether
the identification of each creditor is a required disclo-
sure or if Ford Credit is a creditor of Consumers.
Assuming an affirmative answer to these questions,
we conclude that the status of Ford Credit, even if
it is as a creditor, was adequately disclosed.
On the face of each contract, opposite the signature
of Consumers, appears the following disclosure:
The foregoing contract hereby is accepted by
the Seller and assigned to Ford Motor Credit
Company in accordance with the terms of the
assignment set forth on the reverse side hereof.
EPR eR, ATER Maree Bas <Pametar ep Ome evn
Consumers argue that the terms of 12 C.F.R.
§ 226.6(d) (1978), which provide that “each creditor
. shall be clearly identified,” are not met by disclos-
ing that Ford Credit would be an assignee of the con-
tract. They appatently argue that, because the precise
Meyers v. Clearview Dodge Sales, Inc., 539 F.2d 511,
514-16 (5th Cir. 1976); Mirabal v. General Motors Acceptance
Corp., 537 F.2d 871, 874 n.1 (7th Cir. 1976); Joseph v.
Norman’s Health Club, Inc., 532 F.2d 86, 91-92 (8th Cir.
1976); Bird v. Goddards Discount Furniture, 443 F.Su p.
422, 423-24 (S.D.Ill. 1978); Poirrier v. Charlie’s Chevrolet,
Inc., 442 F.Supp. 894, 895-96 (E.D.Mo. 1978); Cenance
v. Bohn Ford, Inc., 430 F.Supp. 1064, 1068-69 (E.D.La.
1977); Lauletta v. Valley Buick, Inc., 421 F.Supp. 1036,
1039 (W.D.Pa. 1976); Starks v. Orleans Motors, , 372
F.Supp. 928, 930 (E.D.La. 1974), aff'd, 500 F.2d "1182
(5th Cir. 1974); Kriger v. European Health Spas, Inc., of
Milwaukee, Wisconsin, 363 F.Supp. 334, 336 (ED Wis. 1973);
Garza v. Chicago Health Clubs, Inc., 347 F.Supp. 955, 963-
64 (N.D.II. 1972).
—
word “creditor” was not used in describing Ford Credit’s
prospective involvement in the transaction, the Act
was violated. We disagree. Nowhere does Regulation
Z require use of the word “creditor.” Here, the exact
role that Ford Credit ultimately played in each transac-
tion was clearly disclosed. Requiring Ford Credit to
use the word “creditor” would not have given Con-
sumers additional information nor better served the
purposes of the Act.
In Main v. Faller Ford, Inc., Civil Action No. 74-
337 (W.D.Pa. Apr. 22, 1976), the court held that
an identical statement satisfied the creditor disclosure
requirements of Regulation Z:
Whether Ford Credit may be described as the
term is used in [12 C.F.R.] § 226.6(d) need
not be decided in this factual context because
to require such a disclosure by Ford Credit on
a separate piece of paper would not be a mean-
ingful disclosure nor would it further the goals
of the Truth-In-Lending Act. Ford Credit was
accurately described in the contract as the assignee
and it is undisputed that plaintiff personally under-
stood that Ford Credit would actually extend her
credit and consequently be the recipient of her
monthly installment payments. . . . To require
Ford Credit to also disclose to plaintiff ‘that it
was also a “creditor” within the Act would be
a meaningless and needless exercise providing
plaintiff with duplicative information, and such
duplication cannot be justified by the Act’s pur-
pose nor by the practical considerations of these
circumstances.
Accord, Sharp v. Ford Motor Credit Co., 452 F.Supp.
465 (S.D.Ill. 1978) (appeal pending); Antonio v. Can-
—
al Motors, Inc., Civil Action No. 74-3163 (E.D.La.
Nov. 18, 1977) (appeal pending); Augusta v. Marshall
Motor Co., 453 F.Supp. 912 (N.D.Ohio 1977) (appeal
pending ).
We agree with the reasoning in Main and hold
that the district court erred in finding that Ford Credit
was not adequately identified as a creditor on the
face of the contract.”
Il.
DISCLOSURE OF AN ACCELERATION
CLAUSE
The reverse side of each contract contained an ac-
celeration clause that did not explain the effect of
acceleration on unearned interest. Ford Credit maintains
that its uniform practice, although not explicitly dis-
closed, is to rebate unearned interest to the customer
upon acceleration in the same manner as that following
a voluntary prepayment.
This court faced a similar situation in St. Germaine
v. Bank of Hawaii, 573 F.2d 572 (9th Cir. 1977).
We held there that
[t]he creditor must disclose whether a rebate of
unearned interest will be made upon acceleration
and also disclose the method by which the amount
of unearned interest will be computed if the debt
is accelerated.
Id. at 577. Failure to make these disclosures is a
violation of the Act.
In Milhollin, the district court concluded on different
grounds than those stated in St. Germaine that failure
11§ince we conclude that Ford Credit’s disclosure of its
status was adequate, we need not consider the sufficiency
of additional disclosures attached to the contract in Andresen.
—
to disclose the acceleration clause on the face of the
contract was a violation of the Act. The court
held, however, that it would result in liability only
after the decision in Woods v. Beneficiai Finance Co.
of Eugene, 395 F.Supp. 9 (D.Or. 1975), the first
Oregon case recognizing this nondisclosure as a viola-
tion. In so holding, the district court exceeded its
authority because “[t]he application of doctrines limit-
ing the retroactivity of judicial decisions is restricted
to appellate courts.” Kessler v. Associates Financial
Service Co., 573 F.2d 577, 579 (9th Cir. 1977).
We hold on the basis of St. Germaine that Ford
Credit is liable to the Milhollins for failure to disclose
the acceleration clause and its effect on unearned in-
terest on the face of the contract.
IV.
RECOVERY FOR INADEQUATE DIS-
CLOSURE BY JOINT OBLIGORS
At the time of the transaction in Milhollin, plaintiffs
were husband and wife. Both signed the retail insiall-
ment contract, making them jointly and severally liable
for the full debt under Oregon law. They allege that
the district court erred in limiting them as joint obligors
to one recovery for violations under the Act.
The Act provides:
[A]ny creditor who fails to comply with any
requirement imposed under this part . . . with
respect to any person is liable to such person
in an amount equal to the sum of—
(2)(A)(i) in the case of an individual action
twice the amount of any finance charge in connec-
— om
| tion with the transaction . . ., except that the
liability under this subparagraph shall not be less
than $100 nor greater than $1,000... .
15 U.S.C. § 1640(a)(1976). The first quoted words
emphasized, “any person” and “such person,” suggest
that each joint obligor is entitled to a separate recovery.
The emphasized words in the second paragraph, how-
ever, suggest that the liability for any single transaction
is limited to $1,000.
The circuits have split ‘on this issue. The Fifth and
Seventh Circuits have concluded that a husband and
wife as joint obligors are entitled to separate recoveries.
Davis v. United Companies Mortgage & Inv. of Gretna,
Inc., 551 F.2d 971 (Sth Cir. 1977); Mirabal v. General
Motors Acceptance Corp., 537 F.2d 871, 881-83 (7th
Cir. 1976); Allen v. Beneficial Finance Co. of Gary,
531 F.2d 797, 805-06 (7th Cir.), cert. denied, 429
U.S. 885, 97 S.Ct. 237, 50 L.Ed.2d 166 (1976).
The Fourth Circuit reached the opposite result in
Powers v. Sims and Levin, 542 F.2d 1216, 1219-
20 (4th Cir. 1976), in which the court limited the
recovery of husband and wife as joint obligors to
one penalty.
We believe that the Fourth Circuit’s approach more
closely reflects the intent of Congress. The applicable
legislative history states:
Any creditor failing to disclose required informa-
tion would be subject to a civil suit with a penalty
equal to twice the finance charge, with a minimum
penalty of $100 and a maximum penalty not
to exceed $1,000 on any individual credit trans-
action.
—
H.R.Rep.No. 1040, 90th Cong., 2d Sess., [1968] U.S.
Code Cong. & Admin. News, pp. 1962, 1976 (emphasis
added). The Milhollins, although joint obligors, entered
into one credit transaction with the dealer and Ford
Credit. They are entitled to one recovery.
IV.
CONCLUSION
Because the district court in Andresen and Messinger
concluded Ford Credit violated the Act only on the
basis of an inadequate disclosure of its creditor status,
a conclusion we reject, we remand those cases for
a consideration of other alleged violations of the Act
not treated by the court.
Although the district court in Milhollin found liability
on the ground used in Andresen and Messinger, it
also concluded Ford Credit violated the Act by failing
to disclose an acceleration clause on the face of the
contract. In light of St. Germaine, we disagree with
the rationale used by the court, but hold on other
grounds that Ford Credit violated the Act by failing
to disclose an acceleration clause and its effect on
unearned interest. We also disagree with the court’s
prospective application of Woods, and hold that Ford
Credit is liable to the Milhollins for its nondisclosure.
As joint obligors, they are entitled to only one recovery.
We affirm the holding of the district court in Eaton,
again under a different rationale,” on the basis of
12Noting that it would be “a waste of judicial time and
effort” to set forth the reasons for its decisions in light
of the thorough discussion in Méilhollin, then on appeal to
this court, the district court in Eaton merely ted the
rationale of Milhollin. We agree with the conclusion in Milhollin
that failure to disclose an acceleration clause on the face
of a contract is a violation of the Act, but do so on different
grounds.
° nee ee ree eS Se
a
Ford Credit’s failure to disclose an acceleration clause
and its effect on unearned interest on the
the contract.”
face of
' AFFIRMED IN PART AND _ REVERSED
IN PART.
8Since multiple violations of the Act in any si
sale transaction result in only ome recovery, 15
1640(g) (1976), it is ummecessary to consider
alleged violations in Milhollin and Eaton.
June 24, 1976
August 18, 1976
September 15, 1976
October 12, 1976
October 12, 1976
October 12, 1976
October 27, 1976
May 24, 1977
June 16, 1977
July 5, 1977
August 12, 1977
August 12, 1977
September 7, 1977
March 29, 1978
December 28, 1978
June 26, 1979
ee
FORD MOTOR CREDIT COMPANY
RELEVANT DOCKET ENTRIES
Complaint filed
Answer of Ford Motor Credit
Company filed
Answer of Bud Meadows Ford
Inc. filed
Stipulation filed permitting Plain-
tiff to amend complaint to sub-
stitute Bud Meadows Mazda, Inc.
for Bud Meadows Ford, Inc.
Amended Complaint filed
Notice of Voluntary Dismissal as
to Bud Meadows I srd, Inc. filed
Answer of Ford Motor Credit
Company to Plaintiff's Amended
Complaint filed
Record of court trial; Order tak-
ing case under advisement
Opinion filed
Testimony of William F. Belli-
sario (admitted into record on
May 24, 1977) filed
Findings of Fact and Conclusions
of Law filed
Judgment awarding Plaintiff $1,-
300.00 filed and entered
Notice of Appeal filed
Order consolidating appeals filed
Opinion filed and Judgment filed
and entered
Supreme Court Order of June 18,
1979 granting certiorari filed
a’
AMENDED COMPLAINT TO ENFORCE CIVIL
LIABILITY UNDER TRUTH IN LENDING ACT
(Filed October 12, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DONNA M. EATON,
Plaintiff,
| vs
FORD MOTOR CREDIT COMPANY, a corporation,
ide Defendant.
CIVIL. NO. 76-575
. COMPLAINT
COUNT I
1. This is an action for money damages. This com-
plaint is filed and these proceedings are instituted under
the Truth In Lending Act, 15 U.S.C.A. §1601 et
seq (hereinafter called “Act”) to recover statutory dam-
ages, reasonable attorney’s fees, and costs of suit by
reason -of the defendant’s violation of the Act and
Federal Reserve Regulation Z, 12 C.F.R. §226.1 et
seq (hereinafter called Regulation Z), adopted by
the Board of Governors of the Federal Reserve System
pursuant thereto. The jurisdiction of this court is in-
voked pursuant to §130(e) of the Act, 15 U.S.C.A.
§1640(e), and 28 U.S.C.A. §1337.
2. The plaintiff is a natural person residing in
Portland, Oregon.
3. The defendant, Ford Motor Company, is a for-
eign corporation engaged in the business of financing
automobile purchaes at 4309 N.E. Tillamook, PO Box
13070, Portland, Oregon. At all times relevant hereto,
defendant Ford Motor Credit Company, in the ordinary
course of business, regularly extended, offered to extend,
arranged and offered to arrange the extension of con-
a
sumer credit, for which a finance charge is or may
be imposed, or which is payable in more than four
installments.
4. Bud Meadows Mazda is an Oregon corporation
engaged in the business of selling automobiles at 1818
S.E. 82nd Avenue, Portland, Oregon. At all times
relevant hereto, Bud Meadows Mazda, Inc., in the
ordinary course of its business, regularly extended, of-
fered to extend, arranged and offered to arrange the
extension of consumer credit, for which a finance charge
is or may be imposed, or which is payable in more
than four installments.
5. On or about June 28, 1975, plaintiff entered
into a consumer credit transaction with Bud Meadows
Mazda, Inc. and defendant herein, which transaction
consisted of the purchase from defendant of a 1973
Chevrolet Camaro automobile, for a cash price of
$3,515, a finance charge of $722.10, a total of pay-
ments of $3,731.04, and a deferred payment price
of $4,448.04. This purchase was financed in the regular
course of business by defendant Ford Motor Credit
Company, and the contract evidencing this purchase
was assigned to defendant Ford Motor Credit Company
in the regular course of business.
6. A true and accurate copy of the contract evidenc-
ing this purchase is attached hereto, marked “Plain-
tiffs Exhibit A”, and by this reference is incorporated
herein.
7. In the course of this transaction, defendant vio-
lated the provisions of §121 of the Act, 15 U.S.C.A.
§1631, and §226.8 and §226.6 of Regulation Z, in
the following respects:
(a) By failing to clearly identify on the front
of the contract Ford Motor Credit Company as
itll
a creditor in the transaction, as required by §226.6
(d), §226.6(a), and §226.8(a) of Regulation Z.
(b) By failing to disclose on the front of the
contract that the defendant had the option of
declaring the entire unpaid balance of the contract
immediately due and payable in the event of a
default or late payment by the plaintiff, as
required by §128(a)(9) of the Act, 15 U.S.C.A.
§1638(a)(9), and §226.8(a), §226.6(a), and
§226.8(b) (4) of Regulation Z.
(c) By failing to describe or identify the type
of security interest retained or acquired by defend-
ant Ford Motor Credit Company, as required by
§128(a)(10) of the Act, 15 U.S.C.A. §1638(a)
(10) and §226.8(b)(5) of Regulation Z.
(d) By failing to describe or identify the type
of security interest retained or acquired by defend-
ant Ford Motor Credit Company in the automo-
bile purchased by plaintiff, as required by §128(a)
(10) of the Act, 15 U.S.C.A. §1638(a)(10), and
§226.8(b) (5) of Regulation Z.
(e) By failing to describe or identify the type
of security interest retained or acquired by de-
fendants in the amounts due or to become due
under the contract, as required by §128(a)(10)
of the Act, 15 U.S.C.A. §1638(a)(10), and §§
226.8(b)(5) and 226.6(a) of Regulation Z.
(f) By failing to clearly disclose on the face
of the contract that in the event of default the
defendant had the right to collect attorney’s fees
in the amount of fifteen percent, as required by
§§226.8(b) (4), and 226.8(a), and §226.6(a) of
Regulation Z.
8.
Act,
— =
(g) By failing to disclose on the face of the
contract a description of each amount included in
the finance charge, as required by §226.8(c)(8)
(i) of Regulation Z.
(h) By failing to clearly identify or disclose on
the front of the contract Bud Meadows Mazda,
Inc. as a creditor in the transaction, as required
by §226.6(d), §226.6(a) and §226.8(a) of Regu-
lation Z.
(i) By failure to furnish the plaintiff with a dupli-
cate of the original contract, in that the contract
furnished to the plaintiff does not reflect the
name and address of Bud Meadows Mazda, Inc.
as a creditor, as required by §226.8(a) of Regu-
lation Z.
As a result of the aforesaid violations of the
the defendant is liable to plaintiff in the sum
of $1,000, plus costs and reasonable attorney’s fees,
as provided by §130(a) of the Act, 15 U.S.C.A. §1640
(a).
WHEREFORE, plaintiff prays as follows:
1.
Act,
Pursuant to §130(a) of the Truth In Lending
judgment be entered in plaintiff's favor and against
the defendant in the sum of $1,000;
2.
For reasonable attorney’s fees as provided for
in §130(a) of the Truth In Lending Act;
Dp
4.
For costs;
For such other relief as may be just and proper.
/s/ Richard A. Slottee
RICHARD A. SLOTTEE
Of Attorneys for Plaintiff
(“Plaintiff's Exhibit A” Not Attached to Amended
Complaint Contained in Record)
(Certificate of Mailing Omitted in Printing)
—
NOTICE OF VOLUNTARY DISMISSAL
(Filed October 12, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
Plaintiff herein voluntarily dismisses the within action
as to defendant Bud Meadows Ford, Inc., only.
IT IS SO STIPULATED:
/s/ Richard A. Slottee
RICHARD A. SLOTTEE
Of Attorneys for Plaintiff
Date: 10/6/76
/s/ John Berman
JOHN BERMAN
Attorney for Defendant
Ford Motor Credit Company
Date: 10/6/76
/s/ Stephen S. Smith
STEPHEN S. SMITH
Attorney for Defendant
Bud Meadows Ford, Inc.
Date: 10/6/76
= EEE ——
a
TRUTH-iIN-LENDING
ANSWER OF FORD MOTOR CREDIT COMPANY
TO PLAINTIFFS AMENDED COMPLAINT
(Filed October 27, 1976)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
(Title Omitted in Printing)
For answer to plaintiff's Amended Complaint, defend-
ant Ford Motor Credit Company admits and denies
as follows:
1. Admits that plaintiff's Amended Complaint pur-
ports to be an action for money damages filed and
instituted under the Truth-in-Lending Act, 15 USC
§ 1601 et seq. to recover statutory damages, reasonable
attorney’s fees, and costs of suit by reason of purported
violations of said Act and Federal Reserve Regulation
Z, 12 CFR § 226.1 et seq. adopted by the Board
of Governors of the Federal Reserve Board pursuant
thereto; that the jurisdiction of the Court purports
to be invoked pursuant to § 130(e) of the Act, 15
USC § 1340(e) and 28 USC § 1337, and except
as so admitted, denies plaintiff's paragraph 1.
2. Admits paragraph 2.
3. Admits that defendant Ford Motor Credit Com-
pany is a foreign corporation engaged in business at
4309 N. E. Tillamook, P. O. Box 13070, Portland,
Oregon, and except as so admitted, denies the remainder
of paragraph 3.
4. Admits that defendant Bud Meadows Mazda
is an Oregon corporation engaged in the business of
selling automobiles at 1818 S. E. 82nd Avenue, Port-
a Se
land, Oregon, and except as so admitted, denies the
remainder of paragraph 4.
5. Admits that the contract evidencing plaintiff's
purchase of a 1973 Chevrolet Camaro automobile for
a cash price of $3,515.00, finance charge of $722.10,
a total payment of $3,731.04 and a deferred payment
price of $4,448.04 was assigned to defendant Ford
Motor Credit Company at sometime after the sale of
said vehicle by Bud Meadows Mazda to plaintiff, and
except as so admitted, denies the remainder of para-
graph 5.
6. Admits that Exhibit A, attached to plaintiff's
Complaint, is a substantial copy of plaintiff's copy
of her contract with Bud Meadows Mazda evidencing
her purchase, and except as so admitted, denies
the remainder of paragraph 6.
7. Denies paragraph 7.
8. Denies paragraph 8.
FIRST DEFENSE
9. Plaintiffs Amended Complaint fails to state facts
sufficient to constitute a claim upon which relief can
be granted.
SECOND DEFENSE
10. The original contract delivered and assigned to
Ford Credit contained the name and address of the
seller and buyer when so delivered and assigned. A
true and correct copy is attached hereto as Exhibit
A. Plaintiff acknowledged in writing on said contract
that she had received a true and completely filled in
copy of the contract. Ford Credit did not know to
the contrary when it acquired the obligation.
wo
WHEREFORE, defendant Ford Motor Credit Com-
pany prays that plaintiff's Complaint be dismissed and
it have and recover judgment for its costs and disburse-
ments incurred herein.
/s/ Dezendorf, Spears, Lubersky & Campbell
Herbert H. Anderson
John M. Berman
DEZENDORF, SPEARS,
LUBERSKY & CAMPBELL
Herbert H. Anderson
John B. Berman
Attorneys for Defendant
Ford Motor Credit Company
(Affidavit of Mailing Omitted in Printing)
.
’
age 1 - BXHIBIT A
wy
"_OWEGON AUTOMOBILE RET
)
TAUMENT CONTRACT oor L722 L- 2
Buyer fond Co Buyer) - Meme and Address (inchade - County ond Tip Code)
Donna M, Eaton
239 S.E, Ankeny Circle
Portlend, oregon 97233
ee a ?
ACCOUniT NO. ‘
Sefer - Nome ond Address Bud Meadows Mande
1818 SE, 62
Portland, Oregon 97213
price hereby
Beyer ond Co Buyer, jeinth and severetty) having been quoted beth « delerred peyment price and «@ bese: smut
berth ee Aedes me
eee
erty (herwinetier called the “Preperty”) end encptence of which in goed evder hereby are extnowledged by Guyer.
Body Mo. © Yeoh Mondor ors Use Fer Whe
Pay Voor ond thats Serene tye “I n horse! Mvember Perchoned
e Re et Ne < tees
Useo| 1993 CHElvRoes CoIAKE ClO MISE IH3B W/V Saainons 6
DESCRIPTION OF TRADE i
(Voor and tate)
DETAILS OF TRANSACTION . bd
Oa
WOTICE TO BUYER: (1) You cre net required to obtein the Credit Life ond/er
Creda Accident ond Heolth or Driebility tmswrence fer which « cherge is mdi-
Gated chove cad such is net o focter ia the Seller's approval of this cred.
(2) You hove the right te cheese the person throegh whem the Physical
Bomege laserence required onder this coctred is te be ebteined. ACKNOWL-
EDGING the foregeing, BUYER requests ond authorizes SELLER fo oltaia each
fasereace coveroge for which as emoont & induded shove.
pide moat PAL: sex tiles 25 pox
Rew of erence he maleded only eyed by opch rewed Faye: amd dared)
UIABILITY INSURANCE COVERAGE FOK BODILY INJURY AND
PROPERTY DAMAGE CAUSED TO OTHERS 15 NOT INCLUDED.
pnd (1) Cosh Price crop a
| (exh Down Peymont , = NY Fee Hy l Oyen
(Sore! Nemes) (Amowed (meng) Trede a (See Oppose) ed ae once
OPTIONAL INSURANCE (2) lotel Dows Peyment e
ee = (3) Unpod Balonce of Cash Price =
) Domege lmereace: Coverages checked below for o term of (Difterence between thems 1 & 2) OF Wr Fs” |
g ra a yh ph AT Br hes
wil pr lor ) Optioee
the dote hereof i sdental physical demage to the
a rar nr we
Emits poyoble to Buyer or Seller 0s interests moy appear: Officiel Fees
‘ ~— e
0 0 fens’ peewee (——""77}
tense, Title &
legietion fess «2 6 ek oS Ow.
‘DOs See 0's ¢ Total Other Chorpes pA LO
@) Credit Lile taserence on the lite of (5) Uapeid Bolonce - Amovat Fieenced 6.22 md
pay so pe wer ae + (6) FINANCE CHARGE s I55,° 2.
Provided d ee | (7) ANNUAL PERCENTAGE rare Z7-- Se = &
O ponr’s Group Pater Me, 2200 In econ (8) Totet of Poyments (Sum of toms 5 & 6) $_ sfc
below. 442] (9) Delerred Payment Price (Sum of toms 1, 4& 6) &
Buyer's Age + — %) ait see, | oth mdr to |
a roaaed Ara Poyments (hem 8 obove) monthly iritolmenty of $
Le} donce with the sepor cock end one fal instolmert of 3 << _on doy of
a och month ding __ Y= $7 — 19.25 | or, tne
: date is specified, one month after dove of this comtrect, phe
‘@ aioe ent Gate @ Castiity Cammene co spon pores tL LOS is
= Zs for the term of the Comtrod. finence charge is oueued, due on > —, a9
[ieered Perron) oe nN
) S| (0) pateen Poymests) S200 oe DEL 7
in occordance with the seporote Application, Pw Le | Mca (Insert omount of eoch poyment that a more thon twice the emovnt
Notice, C 0 Buyer RE A AF aps AE EP peyment)
eae —_ yor doe n alien ooh torus ond
poywerd may veo wwe Co
eeaar 4 by divon os the then parkes to the contract! may ogres a: of ih due dota
Ger © term of month. (12) Delinquency Charges: Buyer hereby ogress to pey @ delinquency
cherge on eoch inetolment in detouh for more ther 10 doy: im the
emovat of 5% thereot or $5.00, whichever is lev, pls avch om
pores incurred by Selher m sthecnng coftectson herewnder es mary
be ollowed by low.
(13) Security lalerest: Sefer dhol have © security interest under the Unitern
Commercial Code in the Property (devcotbed above) end in the >
coeds tarecl to secure the poymant in cash of the Total of Poy-
ments ond off ther amount due er to become dve hereunder.
tract in full et omy time prior to maturity of the final marobment
hereunder, ond, # he does so, tholl receive o rebate of the eneorw
4
ee ee oe as cstnd Octaien
Ferd Moto Compony in occordonce with the term: of the Auiga-
tment set forth on the reverse wide hereol.
OE YO Te BER
in this contract before you read it or Uf it conteins
any bionk space, except thot if delivery of the vebicle is to be
made to you alter this contract is signed, the serial number
or other identitying information end the due dete of the first
instalment muy be filed in at the time of delivery.
You ore entitled te @ copy of this conirect.
You heve the right te poy off in advonce the full emevnt
dve ond te ebtein o portiol refund of the finance chorge.
———
RETAIL, TRSTALMENT CONTRACT
tar Pe
EDs
ey mae ’
FOR SELLER'S USE OtrY
OUBUBANCE COVIBAGE (TO Bf COMPLLTLO, F PIITSICAL DAMAGE INSURANCE [3 UT INCIUDED IN Tht ABOVE CONTRACT)
2 Actin ™O.
ADOGLSS OF POWURANCE ACAMT —
" Munand OF DESUBANTE COMmPareT PoucY MO.
care COweenes
DC) conpretensie — oR eS (rem Rew wr type Meme)
aay ee -_~ CONSUMER PAPER
SASS 11296 oem Nesom [* | | it j
6Y-65
(14) Prepeyment Rebate. Buyer may prepoy hii obbyotion: ender this com :
83
a A me oe
——_
.o<—~-
ee ee ee ee
me
_—_
- ee oe ore ee ee Oe
ee
(emons
Buyer ergs to Soler woabet ate wht oo
ery enign hh cored aod bs auignee hel on | ebteined, fe = & or emsereed
feresate ST op Se Sta He cn ie Sete 3 eotnent we bal ota Ope end Se
bes ewnder gat “te “taller "teed i“ tte vad oS oe ons Pa = iy aE
; Teron be haope ol the belie a taramanes a tao, Set, te eyted trond pine of ee, Pa = peyeent
py AF oT — Se lier of the mndebiodness berevades the wl ducrunee
R. sau
Be | boreurder, or fos to comply with ony other oe
thet may be poid t le selves @ dichorge Uy SF a
CCA to Soler — a Gonent Lt. vy epohy, Sica by er eyes or bet property, or Seller deem the
ay A FA Pe be Ie daoyer ol eine et tonincmien, er Selon Gihorwne
|. =~ 404 A HR doom tha ledebieduens, er the Property or, seh to
jem the county of bis weudene wirad the wriee permis yh - fi f+ - FP —¥ - “4
Sneed tes boon wae with conse t the mardamresibny, soiusliey be, trnetately tas sal “pree ‘ates Sa toe atte
al for porpese of the Property o: otherwise unless the same is ond temedes of @ Porty ender the Underm (ommerad (eda,
- (edudeng the right te ropemen the Property wherever the tame
Coaesment tenet bp Op exigent Seiee. Cane ok mm Guay @ pute o sole. Uren requed, Guyer shell deliver the
wth the orig of dems concermag ts Property or ome te Selle: ot @ place devgneted by Seller, Seller shall hove
. fe _ritea oi peroeen mate miet te mpourmce ead
shell remera Lobe for ony defnency to wted pervened by lew.
u OF LOSS - memeenct in or etioched to the Property whee vepessetied moy be belé
iy thal be at Rover's Beyer thet ohtcle ond male. eat oot Daas, OS > Senay © Dae wee ae
re A eS OB th 2 eC Tt frecete ealess writen by certhed med is made open Soller wubia
el ge a Rg
piles % see” Ye Ske fi —f aR} —h
- ony seule, ie : rewedes we ts obtten te tow ond
; nae tee Se 6 ewe bee 6 oo Oe = eatorced Solel ty, tua at
izes Seller te te cite, the rooted coverages 00 seccesuvely of concurrently. 7
eT hemp ee crt pane a Snir ew thal cat bo doomed © aver of ay Giher
qmecnt iieded herein, Seller moy (i) ebtow sich for
form, Hf cay, 05 the imwrene te when | fe tenslor, ronvecl, extenden or cuignmat df Gh aated or
wil provide oe cao, 1 1 oot pe Date, oa oe omy deep denim ot x Be
| ay Ay hereunder ts levers matenty Frege isSo bes cbbgetions bereucder.
Hy 4 wr th t f+ EA BF
: si cers" evel ape oes Sle a Yer the tet te ely trees, onlne made, ones
be - che” sh FF, rac — tHe 3 a ve hokee =e a wo oy
Seller or the imterests of Seller only. ch event, ether prevrues contred. waned
SAN Reet Dp Oe oo
GUARANTY
| ond peyment, pertormense ond d-
:
(
:
ne
i
tf
fF
Me
$ i
ir
'
;
Ht
i
o c ’ oct,
omg ta arr bor ep Fabs Lae
PERI Se fl A
BE te oy
Soe Sepa rere eer
pon ceirvery of me withen contract to Creun or upon ') poyment price ;
Bea a re nar oe erie cere Te av a tne ee
Trrobeans RercondesfS"Say wa |"* em fm par ere Cred oan, desand,scept & Charwi proned By a ts
Man in effect
vorc-nes poyrent of the bull omount remain. papeld ender said canteen, ond a
igitolment heveveyn eBay ia Wil encour then ord we Ford red.!, upon |, eacept os
Credit Company Retod Plo- in ot the tne Gugnmem is occ pr |, thot
imic sent cor J tre within cunt act, y Co) thereohter be fete une
provided the egnement t
” at the tere thes on
” ot
Sister ctnes SOS i earchaeprovand oy os ont tel
tee “> a’. *
re terms of the Ford Motor Credit Cc Retod | the Setter uncendinanely
a eg ap Sey eee
’ wine © , emcopt
™ Reto:
purcos
ra ins ante
Page 2 - EXHIBIT A
Page 5 - ANSWER OF FORD MOTOR CREDIT COMPANY TO PLAINTIFF'S
AMENDED COMPLAINT
4
“é@.-
‘BEST
COPY AVAILABLE
ee anes
84
ee rents + ee
_—
TESTIMONY OF WILLIAM F. BELLISARIO
(Admitted into Record on May 24, 1977—Tran-
script at 19; Filed July 5, 1977)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
He is the branch manager of the Portland branch
of Ford Motor Credit Company. He has been with
Ford Credit for fifteen years, in virtually every position
involved at the branch level.
Ford Credit supplies financing to various automobile
| dealers. It does so by making capital loans and inven-
tory loans, and by purchasing contracts from such
| dealers, or any combination of the three.
| With respect to the purchase of contracts from deal-
| ers, Ford Credit has procedures for purchasing con-
| tracts. It advises the dealers as to the standards for
acceptable contracts, but it reserves the right to refuse
any particular contract. In fact, Ford Credit refuses
a substantial number of contracts, although the percent-
| age is not generally very large. In any month it rejects
outright between three and eight percent of the contracts
tendered to it for purchase.
All the negotiable terms of this transaction were
determined totally independent of Ford Credit. Those
terms are the price, down payment, interest rate, length
of contract, amount of monthly payment, insurance,
and the like. According to Ford Credit’s files, Ford
Credit had no knowledge of this transaction until the
contract was tendered after it was executed by the
dealer and plaintiff.
Although most of the contracts purchased by Ford
Credit are on contract forms prepared and supplied
ET One, EL
— ————a> —-- Apes °
—_— ae
by Ford Credit to the dealers with whom it has a
continuing business relationship, on occasion it buys
contracts on forms supplied to the dealer by other
financing institutions. Along with the tendered contract
a credit statement is required, and Ford Credit supplies
forms for obtaining the requested information to the
dealer also. However, some dealers use their own forms
regardless, and some dealers use multiple forms. Not
infrequently, forms not supplied by Ford Credit are
tendered with the contract.
The contract in this case was not purchased by
Ford Credit until July 7, 1975, which is nine days
after the date of the contract. Prior to that, Ford
Credit had no rights and no obligations. As shown
on the contract, the contract at that time had the
name and address of the seller in the upper right-
hand corner. If the copy given to plaintiff was not
complete, Ford Credit had no knowledge of its incom-
pleteness.
In the normal course, within a week after a contract
is purchased, Ford Credit sends to the purchaser a
payment book together with a letter advising the pur-
chaser of its purchase of the contract. Also, at the
time of purchase Ford Credit reviews the contract
to determine if it complies with Truth-in-Lending. A
correction notice was sent to Donna Eaton on July
8, 1975, the day after Ford Credit purchased her
contract.
Whenever Ford Credit is prepaid, whether the pre-
payment is instigated by the customer or results from
an acceleration by Ford Credit, the interest rebate
is calculated and allowed in the exact same manner.
i‘ PO
|
eile
OPINION
(Filed June 16, 1977)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DONNA M. EATON,
Plaintiff,
vs.
FORD MOTOR CREDIT COMPANY,
a corporation,
Defendant.
Civil No. 76-575
Richard A. Slottee
Legal Aid Service
1100 Board of Trade Building
Portland, Or. 97204,
Attorneys for Plaintiff.
Herbert H. Anderson, John M. Berman
Dezendorf, Spears, Lubersky & Campbell
800 Pacific Building
Portland, Or. 97204,
Attorneys for Defendant.
SOLOMON, Judge:
Plaintiff filed an action for $607.84 and for reason-
able attorneys’ fees against the defendant, Ford Motor
Credit Company (Ford), asserting that Ford violated
the provisions of the Truth in Lending Act and Federal
Reserve Board Regulations.
An action raising many of the same issues was
decided by Judge Belloni in Milhollin v. Dee Thomason
Ford and Ford Motor Credit Co., Inc., Civil No.
75-334 (D.Or., filed April 7, 1976). The Magistrate
had found that Ford Motor Credit Co., Inc. was a
— wa
creditor of the plaintiff, rather than an assignee of
the automobile dealer, and that the transaction was
governed by the provisions of the Act dealing with
creditors. The Magistrate also found that Ford Motor
Credit Co., Inc. failed to comply with other provisions
of the Act. He therefore denied Ford Motor Credit
Co., Inc.’s motion for summary judgment, and he rec-
ommended that plaintiff have a judgment against Ford
Motor Credit Co., Inc. Judge Belloni reviewed the
file and the record, and he granted plaintiff a judgment
in accordance with the recommendations of the Magis-
trate. Thereafter, Ford Motor Credit Co., Inc., filed
a motion to modify or vacate the judgment; and, after
a hearing, Judge Belloni denied the motion.
It has been the policy and practice of this Court
to respect a fully considered opinion of another Judge
of this Court and to follow it unless it appears that
an obvious mistake has been made. I have examined
the recommendations and order of the Magistrate and
the opinion of Judge Belloni in Milhollin v. Dee Thoma-
son Ford and Ford Motor Credit Co., Inc., supra,
and I have also carefully considered the memorandum
of law submitted by counsel in this case, and I find
that the conclusions reached by Judge Belloni in Mil-
hollin are in accord with other federal court decisions
in other jurisdictions. They also are in accord with
the opinion of Judge Skopil in Woods v. Beneficial
Finance Co. of Eugene, 395 F.Supp 9 (D.Or. 1975).
Judge Belloni’s holding has been appealed and is
now pending in the Ninth Circuit Court of Appeals.
Because of all these facts, it would be a waste of
judicial time and effort for me to set forth in detail
the reasons why I believe the conclusions reached by
Judge Belloni should govern this case.
ste
There is no merit in the contention that plaintiff
did not purchase the automobile primarily for personal
use, nor is there any merit to the other defenses asserted
by Ford.
I therefore find that plaintiff is entitled to a judgment
against Ford for $607.84 and for reasonable attorneys’
fees of $300.00.
Dated this 16th day of June, 1975.
/s/ Gus J. Solomon
United States District Judge
a
FINDINGS OF FACT AND CONCLUSIONS
OF LAW
(Filed August 12, 1977)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DONNA M. EATON,
Plaintiff,
vs
FORD MOTOR CREDIT COMPANY, a corporation,
Defendant.
CIVIL NO. 76-575
FINDINGS OF FACT
1. This action was brought under the provisions of
the Truth In Lending Act, 15 U.S.C. $1601 et seq.,
to recover statutory damages and attorney fees because
of the defendant’s violations of the Act and Federal
Reserve Board Regulation Z, 12 C.F.R. §226.1 et
seq. The court has jurisdiction of the action pursuant
to §130(e) of the Act, 15 U.S.C. §1640(e).
2. Bud Meadows Mazda is in the business of selling
automobiles and arranged for Ford Motor Credit Com-
pany to extend consumer credit to its customers to
finance the purchase of automobiles.
3. Ford Motor Credit Company is a corporation
engaged in the business of financing automobile pur-
chases.
4. Plaintiff purchased an automobile from Bud
Meadows Mazda for personal, non-business purposes.
5. The purchase contract was assigned by Bud
Meadows Mazda to Ford Motor Credit Company si-
multaneously with execution, and did not:
ee a a
a
(a) clearly identify Ford Motor Credit Company
as a creditor on the face of the contract;
(b) disclose an acceleration clause on the face of
the contract;
(c) clearly describe or identify the type of security
interest retained; and
(d) provide the plaintiff with a duplicate of the
contract.
CONCLUSIONS OF LAW
1. Ford Motor Credit Company violated the pro-
visions of the Truth In Lending Act, 15 U.S.C. §1601
et seq., and Federal Reserve Board Regulation Z, 12
C.F.R. §226.1 et seq.
2. Plaintiff is entitled to damages from Ford Motor
Credit Company of $1,000 and reasonable attorney
fees of $300.
3. The Court has jurisdiction of the action pur-
suant to §130(e) of the Act, 15 U.S.C. §1640(e).
Dated August 12, 1977.
/s/ Gus J. Solomon
United States District Judge
kee ne ae
SS
—Ihow
JUDGMENT
(Filed and Entered August 12, 1977)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DONNA M. EATON,
Plaintiff,
vs
FORD MOTOR CREDIT COMPANY, a corporation,
Defendant.
CIVIL NO. 76-575
Based upon the record,
IT Is ADJUDGED AND ORDERED that plaintiff
Donna M. Eaton have and recover from defendant
Ford Motor Credit Company the sum of $1,300.
DATED this 12th day of August, 1977.
/s/ Gus J. Solomon
Judge U.S. District Court
i a
es aed
OPINION
United States Court of Appeals, Ninth Circuit
(Decided December 28, 1978;
Reported at 588 F.2d 753)
Printed at page 42 of this Joint Appendix.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.