# Appendix — Ford Motor Credit Co. v. Milhollin > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0089%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1980 - **Citation:** 444 U.S. 555 ## Text 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 —, 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 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. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0089%3A03. Public record. Not legal advice.