672 F.Supp.3d 155
W.D. Va.2023Background:
- On Oct. 30–31, 2021 James bought a used 2001 Dodge Caravan from Delta Motors; paperwork also referenced Austin’s Auto Service and contained inconsistent terms and an incorrect $800 down payment (actual $1,000).
- James received temporary tags; DMV later refused to issue clear title because the Buyer’s Order, RISC, and Contract for Sale conflicted and listed different sellers and lienholders.
- Austin’s later provided a title showing a lien in its name; James paid the loan off in March 2022 but still could not obtain a clear title from the DMV.
- James revoked acceptance, demanded return of payments, and sued under TILA, UCC § 2-312 (warranty of title), the Virginia Consumer Protection Act (VCPA), and Virginia usury law; both defendants were served but did not defend.
- Clerk entered default; after a Rule 55(b)(2) hearing the court found liability on all claims, held defendants jointly and severally liable, and awarded actual damages $5,268.98, statutory damages $13,492.96, and attorney’s fees $9,336.00 (post-judgment interest at 4.72%).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Delta/Austin’s are creditors who violated TILA disclosure rules | James: both extended consumer credit and failed to make required disclosures (down payment, amount financed, finance charge, APR, total payments) | Defendants: (no defense raised; would contest TILA applicability/accuracy) | Court: Allegations deemed admitted on default; TILA liability established for both defendants |
| Whether sellers breached UCC warranty of title and whether James could revoke acceptance | James: sellers warranted good title; defects/contradictory docs prevented obtaining title; she timely revoked and seeks return of payments | Defendants: (no response) | Court: Breach of warranty found; revocation valid; James may recover payments paid but must surrender vehicle/title documents |
| Whether defendants violated VCPA by fraudulent omissions/misrepresentations | James: they sold vehicle while not holding title and omitted that material fact; other alleged misrepresentations related to sale | Defendants: (no response) | Court: VCPA claims grounded in financing disclosures preempted by TILA except omission that defendants lacked title; that omission pleaded with Rule 9(b) particularity and supports VCPA liability |
| Whether interest/finance charges were usurious under Virginia law | James: true finance charge was higher than disclosed (actual APR ~29.69%), exceeding agreed or statutory maximums, so recoverable as usury | Defendants: (no response) | Court: Usury liability established against both; statutory damages awarded (twice interest paid) |
| Relief: scope and amount of damages and fees | James: seeks actual damages, statutory damages under TILA/VCPA/usury, and attorney’s fees | Defendants: (no response) | Court: Awards actual damages capped at total paid $5,268.98; statutory damages $13,492.96 (TILA twice finance charge; VCPA treble; usury twice interest); attorney’s fees $9,336.00 |
Key Cases Cited
- United States v. Moradi, 673 F.2d 725 (4th Cir.) (default judgment standards)
- Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200 (5th Cir. 1975) (complaint must provide sufficient basis for judgment)
- Ryan v. Homecomings Fin. Network, 253 F.3d 778 (4th Cir.) (court examines well-pleaded allegations when entering default judgment)
- Hummel v. Hall, 868 F. Supp. 2d 543 (W.D. Va.) (TILA disclosure discussion and rule 55 procedure)
- Rodriguez v. Auto Sales, Inc., 477 F. Supp. 2d 477 (D. Conn.) (TILA liability established in default context)
- Silvey v. Johnston, 193 Va. 677 (Va. 1952) (breach of warranty of title supports buyer’s claim when title defective)
- Hodges v. Koons Buick Pontiac GMC, Inc., 180 F. Supp. 2d 786 (E.D. Va.) (scope of VCPA preemption by federal consumer credit law)
- Blum v. Stenson, 465 U.S. 886 (U.S.) (lodestar presumption for reasonable attorney’s fees)
- Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183 (4th Cir.) (TILA mandates award of costs and reasonable fees to successful plaintiffs)
- Skinner v. Cen-Pen Corp., 243 Va. 279 (Va. 1992) (usury remedies permit recovery of twice the interest paid)