Bradley NIGH, Plaintiff–Appellee, v. KOONS BUICK PONTIAC GMC, INCORPORATED, Defendant–Appellant, and Household Automotive Finance Corporation, Defendant. Bradley Nigh, Plaintiff–Appellant, v. Koons Buick Pontiac GMC, Incorporated; Household Automotive Finance Corporation, Defendants–Appellees.
Nos. 01-2201, 01-2224
United States Court of Appeals, Fourth Circuit
Argued Oct. 28, 2002. Decided Feb. 4, 2003.
319 F.3d 119
Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.
Affirmed by published opinion. Judge LUTTIG wrote the opinion for the court. Judge WILLIAMS wrote an opinion concurring in part and concurring in the judgment in part. Judge GREGORY wrote an opinion concurring in part and dissenting in part.
OPINION
LUTTIG, Circuit Judge.
Bradley Nigh sued Koons Buick Pontiac GMC, Inc. (Koons Buick) for claims under the Truth In Lending Act (TILA), the Federal Odometer Act (FOA), and the Virginia Consumer Protection Act (VCPA), along with numerous claims sounding in contract, fraud, and conversion, all in connection with his purchase from Koons Buick of a used 1997 Chevrolet Blazer. Koons Buick filed a counterclaim for breach of contract and fraudulent and negligent misrepresentation. At summary judgment, the district court granted judgment on several claims and all the counterclaims. Some of Nigh‘s TILA, FOA, and VCPA claims survived for a jury trial and resulted in a verdict finding Koons Buick liable for $24,192.80 under TILA, and for $4,000.00 under the VCPA. Koons Buick appeals from the jury‘s verdict, as well as from several of the court‘s orders. Nigh, in a cross-appeal, also challenges several of the court‘s orders. Finding no error in the verdict or the court‘s rulings, we affirm the judgment below.
This case arose from Koons Buick‘s sale of a truck to Bradley Nigh. The sale was not a simple cash-for-product exchange, but involved a somewhat tortured effort by Koons Buick to provide Nigh consumer financing. Nigh first went to Koons Buick on February 4, 2000. While there, he decided to trade in his prior vehicle and buy the Blazer. To complete the sale, he executed a Buyer‘s Order, reflecting the proposed purchase, and a “Retail Installment Sales Contract” (RISC I), reflecting the proposed financing. The Buyer‘s Order and RISC I both reflected that Nigh would pay $4,000 down, and trade in his prior vehicle. Nigh received no price reduction for his trade-in because he estimated its remaining loan balance to equal the price Koons Buick gave him for it, but he also agreed to pay off any excess balance over the estimate. Nigh, having signed the contracts and turned them over to Koons Buick, was committed to the transaction and obliged to perform upon counter-signature by Koons Buick. Koons Buick did not counter-sign the documents as Nigh signed them, but intended to sign only once a lender agreed to buy an assignment of the installment payments owed under RISC I. The transaction‘s closing and the completion of Nigh‘s purchase were thus left within the dealership‘s unilateral control.
Nigh left the dealership in the Blazer, on the authority of a temporary certificate of ownership issued under
Koons Buick, again unable to find a willing lender, called Nigh back. Nigh alleged the dealership told him, via a message left with his brother, that he had to come back to sign a new RISC (RISC III) or it would report the Blazer as stolen. Afraid of arrest, Nigh returned to the dealership on March 5, and under protest, signed RISC III with a back-date of February 25. Koons Buick later closed the transaction by executing the contract documents and selling assignment of RISC III‘s installment payments to Household Automotive Finance Corporation (HAFC).
Afterwards, Nigh learned that his trade-in vehicle had been repossessed from the Koons Buick lot by its note-holder because Nigh, believing the vehicle to have earlier become property of Koons Buick, failed to make required payments. Nigh also learned that one of the reasons Koons Buick had been unable to get a lender to accept RISC II was that it contained an unaccounted for charge, later determined to be for a product whose sale to Nigh had not been properly documented, which Nigh did not recall seeing on the transaction documents, and which he never requested, agreed to accept, or received. The product, a Silencer car alarm, was listed on the second Buyer‘s Order and on RISC II at a price of $965. But absent from the trans
Nigh, claiming that Koons Buick defrauded him, brought this action under the statutory authority of TILA, FOA, and the VCPA, and under the common law. Koons Buick counterclaimed for breach of contract. The district court granted summary judgment to Koons Buick on its counterclaims and on many of Nigh‘s claims, but preserved for trial limited claims under TILA, FOA, and the VCPA. At trial, Nigh prevailed on his TILA claim that Koons Buick intentionally included the charge for the Silencer on RISC II without a basis for the charge, and on his VCPA claim that Koons Buick violated the VCPA by telling him that he did not have valid possession of the Blazer in order to induce him to sign RISC III. The court issued a Supplemented and Final Judgment on August 15, 2001, three months after trial, to clarify its summary judgment ruling on Koons Buick‘s counterclaims. This order is the proceeding‘s final judgment, from which appeal is now had.
II.
As a preliminary jurisdictional matter, Nigh contends that Koons Buick did not timely file a notice of appeal. His objection was already addressed by a motions panel of this court, and denied for lack of merit. The district court filed a Supplemented and Final Judgment on August 15, 2001, and it is against this date that the notice of appeal‘s timeliness must be measured, irrespective of the fact that the court had earlier filed a Final Judgment and had set a subsequent date at which point notice of appeals tolling would end. Assessed in light of the August 15, 2001, order, Koons Buick‘s notice was timely.
III.
The parties raise a variety of claims on appeal, none of which merit reversing the district court‘s conclusions of law or the fact-finder‘s determinations, but which we address in turn, beginning first with Koons Buick‘s claims.
A.
Koons Buick attacks the district court‘s denial of summary judgment on Nigh‘s claim that RISC II constituted a TILA violation on several grounds. First, Koons Buick argues that because RISC II was never counter-signed, it is an unfunded financing agreement and cannot form the basis for TILA liability. Under what is commonly known as Regulation Z, creditors operating under
Regulation Z defines consummation as the “time that a consumer becomes contractually obligated on a credit transaction.”
[T]he point at which the consumer commits himself or herself to the purchase of credit, without regard for the degree of commitment of the lender ... [is the point at which] the consumer becomes vulnerable to actual damage from the lender‘s inadequate or deceptive disclosures, for at this time he or she can be contractually bound to the terms of the lending contract at the option of the lender.
Bryson, 584 F.Supp. at 1317 (emphasis added). Consequently, we conclude that consummation, or extension of credit, under
Koons Buick next attacks its TILA liability by arguing that, since the second Buyer‘s Order Nigh signed has a line-item listing the Silencer product for a price of $965, RISC II‘s disclosures were accurate, and thus do not violate TILA. But, for several reasons this claim also fails. First, the dealership conceded from the outset of this action that the $965 charge was a mistake and thus, by necessary implication, that RISC II was inaccurate. See Field Affidavit, J.A. at 252 (owner and president of Koons Buick admitting that “[p]laintiff should not have been charged for a silencer” and explaining that as a result “a third [RISC] was prepared“); see also Defendant‘s Responses to Plaintiff‘s First Set of Requests for Admissions, J.A. at 817 (“Admit that a charge of $965.00 was included on the second Buyer‘s Order for a “silencer.” Admitted that the charge was included in error.” (emphasis added)). Indeed, it was on the basis of these admissions that Koons Buick
Second, Koons Buick waived the legal argument that the congruence between the Buyer‘s Order and RISC II proves that RISC II accurately disclosed the transaction by virtue of the fact that it makes the argument for the first time here in the Court of Appeals. Though Koons Buick asserts in its briefs that it raised this legal objection earlier in the proceedings, its assertion is unsupported by the record. The citation to which Koons Buick directs the court records its argument at the start of trial, and after the summary judgment proceedings were concluded. See J.A. at 317-20. And though that trial exchange contains Koons Buick‘s assertion that RISC II accurately disclosed the transaction by virtue of its congruence with the second Buyer‘s Order, it noted this objection only in furtherance of its argument that the error in RISC II was an innocent error:
When a mistake was discovered in the buyer‘s order agreement, there was a new retail installment contract which changed the APR and lowered the APR. That‘s the kind of mathematical error, assuming this was a TILA violation to start with that the correction of errors was designed to address.
. . . .
So, to the extent to which it‘s a TILA violation—and I‘m not quite even [sure] it‘s a TILA violation because the first—[RISC II] was accurate as to the deal that both parties mistakenly agreed to. And certainly, Mr. Nigh having signed it, is not in a position to later come back and say he was unfairly taken advantage of.
So, your Honor, we believe that in ruling that we‘re not entitled to the [§ 1640(b)] defense for correction of errors, that the Court is incorrect.
(J.A. at 318-20).
Lastly, but equally fatal to Koons Buick‘s argument is the fact that the jury, after being properly instructed on the law, rejected Koons Buick‘s claim that the Buyer‘s Order provided a basis for RISC II‘s Silencer charge. We do not speculate as to the substance of a jury‘s factual determination, and only inquire whether sufficient evidence supported the verdict.
The verdict form read as follows:
Do you find that Koons violated the Truth in Lending Act by intentionally including a charge for a “Silencer” on the Retail Installment Sales Contract signed on February 25, 2000 with knowledge that there was no basis for the charge?
(J.A. at 763) (emphasis added). The jury answered “Yes.” Id. Having evaluated the exhibits and the testimony, the jury decided that the apparent congruity between
Koons Buick‘s last challenge to the TILA judgment involves the court‘s application of the statutory damages cap that
In 1983, when Mars was decided, the act read as follows:
(a) ... any [TILA violator] is liable to such person in an amount equal to the sum of—
....
(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, or (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000[.]
(a) ... any [TILA violator] is liable to such person in an amount equal to the sum of—
....
(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000, or (iii) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $200 or greater than $2,000[.]
The Mars decision plausibly interpreted the phrase “under this subparagraph” to apply to the whole of subparagraph (A) in 1983. But the 1995 amendment, by striking the “or” preceding (ii), and inserting (iii) after the “under this subparagraph” phrase, rendered Mars’ interpretation defunct. Whereas in 1983 it was plausible to interpret the maximum and minimum provision as coming at the end of subparagraph (A), and not exclusively within subparagraph (ii), the new provision clearly places that clause wholly within (ii). Of even greater importance, the provision now expressly sets a statutory maximum and minimum in subparagraph (iii) that is different from that provided in the pre-
Judge Gregory‘s disagreement with this analysis is founded on the mistaken conclusion that we must conclude that Congress abrogated Mars in order to reach our decision here. See post at 131. Of course, when a statute has been amended we interpret the new statute, not the old, and any prior opinion interpreting the old statute is necessarily brought before us for review so that we may ascertain whether the logic of that prior interpretation still applies to the new statutory language. Our responsibility is thus not to determine whether there is evidence that “Congress intended to override the Fourth Circuit‘s” precedent (or any circuit precedent for that matter), as Judge Gregory believes. See post at 131. The questions before this court, and that which we address above, are simply whether Congress amended the statute in a way relevant to the prior interpretation, and if it did, what does the amended statute mean.
Furthermore, though Judge Gregory thinks our analysis necessarily implies that Congress “changed the meaning of the word ‘subparagraph,‘” see post at 132, it does no such thing. As explained above, Congress’ amendment requires that the reference point of the “under this subparagraph” clause be the subparagraph of
Judge Gregory‘s conclusion that our reading of the “under this subparagraph” clause creates surplusage in the statute‘s construction and “inconsistency” among its parts is equally flawed. See post at 132. Indeed, if the “under this subparagraph” clause had been omitted from the amended statute, Judge Gregory would have a much better case for his interpretation. Had that occurred, he could argue that Congress intended the maximum and minimum codified in (ii) to apply to both (i) and (ii), using a comma preceding the maximum and minimum to set it off from (ii) and to show its applicability to (i) and (ii), and not using language that requires identifying a distinct subparagraph to which to apply the maximum and minimum. Thus, rather than being surplusage, the inclusion of the “under this subparagraph” clause not only enables, but actually compels, the reading we give the statute by applying the maximum and minimum limits to a distinct subparagraph.
Nor does the clause create “inconsistency” among the statute‘s parts either. Just because Congress did not use the same terminology to restrict the maximum and minimum in (iii) to that subparagraph as it did to restrict the maximum and minimum in (ii) to that subparagraph, it does not follow that “Congress must have meant the statutory caps ... to have different applications,” see post at 132. That fact leads only to the conclusion that the plain
It could well be, as Judge Gregory concludes, that Congress did not intend to alter the statutory cap applicable under subparagraph (A)(i) when it amended the statute in 1995. However, the critical point of law—and it is critical—is that we do not know what Congress intended; all that we have before us is the amended statute from which to determine intent. And, based upon that statute, the far better, and indeed compelled, interpretation is that Congress did alter the statutory cap regardless of its intent. It is the statute, not any inferential intent, that constitutes the law. Of course, it goes without saying, if Congress enacted into law something different from what it intended, then it can simply amend the statute to bring the statute in line with congressional intent. In this way, and in this way only, are the constitutional roles of the legislature and the courts respected.
Koons Buick‘s last substantive attack on the district court‘s rulings involves the grant of summary judgment on its counterclaims. The dealership argues that the court erred by reversing, post-trial, its pre-trial grant of summary judgment with respect to installment payments owed by Nigh under RISC III. But the court did not err in this regard, because it did not reverse itself. As the court made clear, the Supplemented and Final Judgment, filed after trial, did not change the court‘s pre-trial holding; it simply “clarifie[d]” it (J.A. at 894). Admittedly, in granting summary judgment on the counterclaims, the court held that Nigh breached his contractual obligations in three ways: 1) failing to pay off the excess loan balance on his trade-in, which exceeded his estimate; 2) failing to pay on the $2,000 Promissory Note; and 3) failing to make installment payments. But the court calculated damages to Koons Buick only for the first two. It found Koons Buick entitled to $1,959.73 for the excess pay-off amount, and $2,000.00 for the Promissory Note. The court never said Koons Buick was entitled to the installment payments Nigh failed to make to HAFC; it never calculated damages to Koons Buick from this breach; and it never concluded that Koons Buick was entitled to any award for it.
Koons Buick, meanwhile, asserts it is entitled to the $30,000 due under RISC III since the court found that Nigh breached his installment payment obligations, even though it sold those rights to HAFC and HAFC repossessed the Blazer upon Nigh‘s breach. The dealership argues it is entitled to damages for the breach because it was the assignor of the sales contract. See Carozza v. Boxley, 203 F. 673, 677 (4th Cir.1913) (noting that either an assignor or an assignee can sue on a defaulted contract). It further argues that even if it may not recover under Carozza, it may recover on HAFC‘s rights in order to preclude its own liability under
Both contentions fail. Koons Buick‘s counterclaim pleading nowhere refers to either installment payments or its status as an assignor. See Koons Buick‘s Answer and Counterclaim (J.A. at 63). Thus, Koons Buick did not put Nigh or the court on notice that it was suing on the installment payments, or under any assignment based theory, as would have been required for it to recover on the breach. See
Koons Buick also appeals the VCPA judgment. That judgment, however, was supported by properly admitted evidence and was sufficient to establish that Koons Buick made material misrepresentations to Nigh. These misrepresentations were intended to deceive, did deceive, and caused loss; and the jury‘s verdict may not be set aside. Koons Buick lastly challenges the district court‘s rulings on both parties’ motions for costs and attorney fees. Its objections are without merit; the court did not abuse its discretion in reaching cost and fee determinations.
B.
Nigh contends on his cross-appeal that the district court erred in granting summary judgment to Koons Buick on two claims. First, he argues that the court should have allowed him to proceed to trial on his TILA claims involving RISC III. Nigh submits that since RISC III, though signed on March 5, was back-dated to February 25, it resulted in interest being accrued as of February 25, and thus necessitated that TILA disclosures also be given as of that date. Since Nigh did not receive the disclosure documents for RISC III until March 5, he reasons that Koons Buick violated TILA and did not deserve summary judgment on the claim. Nigh‘s argument, though superficially clever, is without merit. While he was liable for monies calculated from February 25 on, he did not become liable for, those monies until March 5, by which point he had received the material disclosures. As Nigh himself points out, “TILA required Koons to provide Nigh with [the] disclosures ... prior to the consummation of the transaction,” Appellee‘s Br. at 44, and “the parties did not sign [RISC III] until March 5, 2000,” id. at 46.3
Nigh also argues that the court erred by rejecting his claim to be entitled to rescission under
CONCLUSION
The judgment of the district court is affirmed.
AFFIRMED.
WILLIAMS, Circuit Judge, concurring in part and concurring in the judgment in part.
I concur in sections II and III.B of the majority opinion. I concur in section III.A of the majority opinion with the exception of that part of the majority opinion analyzing the issue of whether RISC II was inaccurate, see ante at 124–126. I agree that “Koons Buick waived the legal argu
GREGORY, Circuit Judge, concurring in part and dissenting in part.
I.
I write separately to dissent solely from the Court‘s reading of
II.
On appeal, Koons argues that the district court improperly instructed the jury on the measure of damages for Nigh‘s claim under TILA. The district court informed the jury that, pursuant to TILA, damages were to be equal to “twice the amount of any finance charge in connection with the transaction.”
Before the 1995 amendments to TILA,
Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part ... with respect to any person is liable to such person in an amount equal to the sum of—
....
(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, or (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1000;
or
(B) in the case of a class action, such amount as the court may allow, except that ... the total recovery under this subparagraph ... shall not be more than the lesser of $500,000 or 1 per centum of the net worth of the creditor....
This reading of the statute was buttressed by the use of the same “under this subparagraph” language in
In 1995, however, Congress amended the statute to add (2)(A)(iii), relating to real estate transactions. The current statute reads, in relevant part:
(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000, or (iii) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $200 or greater than $2000....
I would find that Mars is still good law because there is no evidence that Congress intended to override the Fourth Circuit‘s long-standing application of the $1,000 cap to both (2)(A)(i) and (2)(A)(ii). The Seventh Circuit, the only Circuit outside of our own to interpret the amended statute, has explained:
One could argue that § 1640(a)(2)(A)(i) and (ii) are separate “subparagraphs,” and that “liability under this subparagraph” means only liability under § 1640(a)(2)(A)(ii). Although that reading has a certain appeal ... the history of this part of the statute suggests that such a reading has its own problems. Until 1995, § 1640(a)(2)(A) had only two subsections, the present (i) and (ii). Courts uniformly interpreted the final clause, which established the $100 minimum and the $1,000 maximum, as applying to both (A)(i) and (A)(ii).
Strange, 129 F.3d at 947 (emphasis added).2
If the $1,000 cap was intended to apply only to (ii), however, then the inclusion of the phrase “under this subparagraph” would be superfluous; the meaning of (ii) would be unchanged by its deletion. It is, of course, a well-recognized rule of statutory construction that courts should “avoid a reading [of a statute] which renders some words altogether redundant.” Lane v. United States, 286 F.3d 723, 731 (4th Cir.2002) (quoting Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995)). Therefore, a reading of
Even more, to limit the $1,000 cap only to (2)(A)(ii) would create an inconsistency within the statute. The $2,000 cap in (2)(A)(iii) applies only to that individual clause, even though there is no phrase limiting its effect to one “subparagraph.” If Congress also intended to limit the reach of the statutory cap in (ii), then it would have either deleted the words, “under this subparagraph” from (ii), or included the phrase in both (ii) and (iii). By declaring that the statutory cap in (ii) should apply to claims “under this subparagraph,” but not similarly qualifying the cap in (iii), Congress must have meant the statutory caps in those two clauses to have different applications.
This reading is made even more compelling when one considers that the phrase “under this subparagraph” in
This is the reading that has been adopted by the Seventh Circuit:
[T]he 1995 amendment was designed simply to establish a more generous minimum and maximum for certain secured transactions, without changing the general rule on minimum and maximum damage awards for the other two parts of § 1640(a)(2)(A). We therefore conclude that the “subparagraph” mentioned in § 1640(a)(2)(A)(ii) continues to encompass what is now codified as sub-
parts (A)(i) and (A)(ii), and not just subpart (A)(ii).
Strange, 129 F.3d at 947. When Congress added
III.
In sum, I concur with the majority‘s assessment that Koons engaged in a variety of scurrilous business practices that support the jury‘s finding of liability under both TILA and the VCPA. However, for the reasons articulated above, I believe that Koons’ statutory liability for its TILA violation is capped at $1,000. Accordingly, I dissent in part from the majority‘s judgment.