Jannette CARR, Plaintiff-Appellee-Cross-Appellant, v. BLAZER FINANCIAL SERVICES, INC. OF GEORGIA, Defendant-Appellant-Cross-Appellee.
No. 76-4396.
United States Court of Appeals, Fifth Circuit.
July 23, 1979.
598 F.2d 1368
The regulations provide that violations shall be punished under Chapter 25-3 of the Georgia Code. This section empowers the Commissioner only to sue and punish violations. Illegal loan agreements are rendered null and void not in Chapter 25-3 but in Chapter 25-99. Therefore the district court correctly held that violation of these regulations does not render the agreement void and properly entered judgment for defendant on the counterclaim.
The judgment of the district court is affirmed, except that the ruling of the district court setting off the attorney‘s fees against the counterclaim is reversed and remanded for an order not inconsistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
VANCE, Circuit Judge, dissenting in part and concurring in part.
The majority opinion contains a fair statement of the issue whether defendant‘s counterclaim is compulsory or permissive. I do not agree, however, that the pertinent portion of our opinion in Spartan Grain & Mill Co. v. Ayers, 581 F.2d 419 (5th Cir. 1978), is dictum. In any case I am of the view that it correctly held such counterclaims to be permissive. I therefore dissent from the majority‘s contrary holding.
In all other respects, I concur in the majority opinion.
Herman G. Okhuysen, Savannah, Ga., for plaintiff-appellee-cross-appellant.
Before MORGAN, RONEY and VANCE, Circuit Judges.
RONEY, Circuit Judge:
This truth-in-lending case raises questions similar to those decided in the companion case of Plant v. Blazer Financial Services, Inc., 598 F.2d 1357 (5th Cir. 1979), and its disposition is in large part based upon the Court‘s reasoning in Plant.
On March 18, 1974, plaintiff Jannette Carr co-signed a note in favor of defendant Blazer Financial Services, Inc. of Georgia in the principal sum of $1,800.00. The note included a security agreement containing the following after-acquired property clause:
To secure the payment of the above described loan and any future advances to the undersigned, Debtor(s) grant(s) a
security interest to the Secured Party in the following described property: *
*
*
*
*
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(4) All accessions to, substitutions for, replacements of and proceeds from the described collateral and all other after-acquired property of like nature.
Approximately one year later, the note being in default, plaintiff filed this civil action under the Truth-in-Lending Act,
The district court held that the after-acquired property clause violated the Act since it failed to disclose that state law limited defendant‘s security interest in after-acquired property to property acquired within ten days of the time that value was given. Plaintiff was awarded $688.56 damages and $400.00 in attorney‘s fees. The court then found that the note was in default and awarded defendant a judgment of $1,578.41 and $236.76 attorney‘s fees on the counterclaim. Plaintiff‘s damage recovery was setoff against the amount due on the counterclaim, leaving a net indebtedness in defendant‘s favor. The court specifically held, however, that the attorney‘s fees were to be awarded directly to plaintiff‘s counsel and were not subject to setoff. Defendant appeals plaintiff‘s judgment on the original claim and the direct award of attorney‘s fees. Plaintiff cross-appeals the amount of the fee award.
We affirm the district court‘s decision as to the truth-in-lending violation. Under a Federal Reserve Board regulation issued pursuant to the Truth-in-Lending Act,
The regulation provides:
If after-acquired property will be subject to the security 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.
No security interest attaches under an after-acquired property clause to consumer goods other than accessions (section 109A-9-314) when given as additional security unless the debtor acquires rights in them within 10 days after the secured party gives value.
A panel of this Court has already decided this issue in Pollock v. General Finance Corp., 535 F.2d 295 (5th Cir. 1976), petition for rehearing denied, 552 F.2d 1142, cert. denied, 434 U.S. 891, 98 S.Ct. 265, 54 L.Ed.2d 176 (1977), and we are bound by its decision. United States v. Lewis, 475 F.2d 571, 574 (5th Cir. 1972).
We also affirm the district court‘s decision that attorney‘s fees should not be subject to setoff for the reasons set forth in Plant v. Blazer Financial Services, Inc., supra. In that opinion, we indicated that the trial court would have discretion to develop an appropriate mechanism by which the attorney could be paid. The method chosen here, the direct payment of fees to plaintiff‘s attorney, does not constitute an abuse of discretion.
Plaintiff disputes the $400.00 award and claims $1,505.00 instead. This larger figure was evidently reached by multiplying the amount of time allegedly spent on this case by the attorney‘s usual fee of $50.00 per hour.
An award of attorney‘s fees will be modified only upon proof of an abuse of discretion. Thomas v. Myers-Dickson Furniture Co., 479 F.2d 740, 748 (5th Cir. 1973). The principles which should guide the district court in the exercise of its discretion are set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-719 (5th Cir. 1974). Although Johnson was
The record, however, provides no evidence upon which a review of the trial court‘s exercise of discretion may be based. The record reveals only that plaintiff‘s attorney informed the court of the number of hours spent and his regular fee in a discussion in open court. No fee application with an affidavit attached was presented. No testimony was proffered to justify the time spent on the case.
The burden rests on the party seeking an attorney‘s fee award to file a fee application and proffer proof going to the Johnson guidelines before the trial court. While a trial court should adhere to the Johnson standards, it is not to be expected, as plaintiff suggests, that the trial court must take the initiative in ferreting out the relevant facts. As is the case with any issue upon which plaintiff has the burden of proof, the failure of the district court to make Johnson findings due to the lack of sufficient evidence cannot be error. The attorney‘s fee award is therefore affirmed.
Plaintiff has prevailed upon appeal, however, and attorney‘s fees should be recalculated to award additional fees as compensation for work in connection with the appeal. Thomas v. Myers-Dickson Furniture Co., supra. We are sure that in determining the amount the able judge will take into account the fact that the plaintiff‘s attorney has represented his client well in this difficult and somewhat uncharted area of the law.
AFFIRMED AND REMANDED.
VANCE, Circuit Judge, dissenting in part and concurring in part.
For the reasons stated in my separate opinion in Plant v. Blazer Financial Services, Inc., 598 F.2d 1357, (5th Cir. 1979), I dissent from the implicit holding that defendant‘s counterclaim was compulsory. In all other respects, I concur in the majority opinion.
Notes
Regulation 120-1-10-.03(4) provides:Prohibition of Blank Agreements. Every agreement evidencing a consumer credit transaction shall be completed as to all essential provisions prior to the signing thereof by the parties. No creditor shall induce, encourage or otherwise permit the consumer to sign an agreement containing blank spaces. Blank spaces inapplicable to a transaction must be completed in a manner which reveals their inapplicability.
Rule 120-1-14-.09 provides:The licensee shall fill in all spaces on every document which the borrower is required to sign in obtaining a loan prior to the borrower affixing his signature thereto.
Any person who fails to comply with the requirements of this Regulation shall be subject to such penalties as may be appropriate under Chapter 25-3 of the Georgia Code Annotated and the Rules and Regulations promulgated hereunder.