FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T APR 14, 2011 J OHN L EY CL ERK [DO NOT PUBLISH] IN THE U

NITED STATE S COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 15 51 7 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 1 :1 0- CV-0 25 24 -MHS

BKC No . 10 -0 60 22 In Re: VERNA L. D IXON, Deb to r.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ _ VERNA L. D IXON, Pl ai nt iff -Ap pe ll an t,
ve rs us FREEMAN FINANCE, Defen dn at -Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co ur t forth e Nor th ern Dis tri ctof Ge or gi a

__ __ __ __ __ __ __ __ __ __ __ __ (Ap ril 14 , 20 11 )Befo re TJ OFLAT, CARNES andKRAVITCH, Cir cu itJu dg es .

PER CURI AM: As pa rt o f he r ba nk rupt cy pro ceed in gs , Vern a Dix on fil edanadve rs ary
co m pl ai ntag ai ns t Fr eem an Fin an ce (F reem an ) fo r vi ol at io ns of t he Trut h- In
Len di ng Act (TILA), 1 5 U.S.C. § 16 01 , et seq , all eg in g tha t 1 ) Free m an ’s in cl us io n o f th e Si ng le Int eres t Veh ic le Ins ur an ce (VSI ) pr em iu m in th e am ou ntof a lo an fin an cedby Freem anwas i m pr op er an d 2 ) Free m an fai le d t o wai ve all of i ts rig ht s o f subr og at io n a s re qu ire d b y th e st atut e. The b an krup tc y co ur t g ran te d
su m m ary jud gm en t i n fa vo r of Free m an an d t he di st ric t co ur t af firm ed . This is Dix on ’s app eal
. I. Dix on sec ur eda lo anfro m Free m an us in g h er v eh ic le as c ol la te ral . The lo an requi redth atDix on m ai nt ai n p ro pe rty ins ur an ce o n h er v eh ic le an d s he op te d to sec ur e th e in su ran ce fr om Free m an . By

si gn in g t he cred itdi sc lo su re s ta te m en t, Dix on ackno wled ge d t ha t Fr eem an ha d afin an ci al in te res t i n the sal e o f th e in su ran ce b ecau se iteit he r ret ai ne d apo rti on of t he pre m iu m or r ecei ve d a
co m m is si on if the po li cy

was p as se d o nt o a no th er i ns ur an ce co m pa ny. T he co stof th e VSI was $3 76 .00 ; Fr eem an rece iv eda 50 % co m m is si on on th e p rem iu m

2be cau se itrem it te d i t t o a n u na ffi li at edin su ran ce co m pa ny. Free m an it em iz edth e VSI p rem iu m

as p artof the am ou ntfin an cedin th e cre di t d is cl os ur e st at em en t. Dix on was a ls o g iv en anin su red ’s cop y of t he term s an d c on di ti on s ap pl ic ab le to th e in su ran ce p ol ic y . The p ol ic y pro vi de d, “ W ai ve r of

Subr og at io n: Exc ep t i n t he cas e o f frau du le ntact io ns of t he Ins ur edCred it oror I ns ur edDebt or , th e Co m pa ny waiv es an y

rig htto subr og at io n a ga in stth e In su redCred it oror In su redDebt or .” In he r ba nk rupt cy

pro ceed in g, Di xo n fi le d aco m pl ai ntag ai ns t Fr eem an al le gi ng vi ol at io ns of TILA. Free m an m ov edforsu m m ary jud gm en t, wh ic h t he ba nk rupt cy

co urt g ran te d. Di xo n app eal edto th e d is tri ctco ur t an d i t af firm edth e de ci si on of t he ba nkrupt cy co urt. II. W e rev ie w th e b an krup tc y co urt’s g ran t o f su m

m ary jud gm en t de no vo , ap pl y in g t he same leg al st an da rd s u se d b y th e b an krup tc y

co ur t. In re De lc o Oi l , In c. , 59 9 F .3d12 55 , 12 57 (11 th Cir . 20 10 ). III. TILA was en act edto pro te ctco ns um ers an d a ss is t t he m inm ak in g i nf

orm ed cred itde ci si on s. For d Mo to r C re di t Co . v. Milho ll in , 44 4 U.S. 5 55 , 55 9 (1 98 0) (“ [TILA] ha s the bro adpu rp os e o f pr om ot in g t he in fo rm edus e o f cre di t b y 3as su rin g m ean in gf ul di sc lo su re o f cre di t t erm s t o c on su m ers .”) (i nt ern al qu ot at io n
m ark s an d c it at io n o m it te d) . TILA is i m pl em en te d b y

“ Reg ul at io n Z,” 1 2 C .F.R. § 22 6, an d § 22 6.4 go ve rn s fi na nc e ch arg es . Sect io n 2 26 .4 (d ) req ui res , (2 ) Prem iu m s fo r in s u r a n c e a g ai ns t lo ss of or da m ag e to pr op ert y or ag ai ns t li ab il it y ari si ng ou t of th e own ers hi p of pr op ert y , in cl ud in g si ng le in te res t in su ran ce if th e in su rer w a i v e s al l rig ht of subr og at io n ag ai ns t th e co ns um er, m ay be ex cl ud ed fro m th e fin an ce c h a r g e if th e fo ll owi ng co nd it io ns are m et , (i) The in su ran ce co ve rag e m ay be ob ta in ed fro m a pe rs on of th e co ns um er’s ch oi ce, an d thi s fa ctis di sc lo se d, (ii ) If th e co ve rag e is ob ta in ed fro m or th ro u g h th e cred it or , th e pr em iu m forth e in it ia l t erm

of i ns ur an ce s ha ll be di sc lo se d . . . .
12 C.F.R. § 22 6.4 (d )(2 ). ForFree m an to ha ve sat is fie d t he requi rem en ts un de r Reg ul at io n Z, itm

us t h av e 1 ) di sc lo se d t o Di xo n tha t s he co ul d c ho os e who pr ov id edhe r VSI i ns ur an ce, 2 ) di sc lo se d t o Di xo n t he pre m iu m forth e in su ran ce, if p ro vi de d b y

Free m an , and3) wa iv edall subr og at io n ri gh ts ag ai ns t Di xo n. The pa rti es do no t d is pu te th atFree m anpro pe rly dis cl os edto Dix on th e
am ou ntof t he pre m iu m , th atitha d afin an ci al in te res t i n the in su ran ce s he pu rch as ed , andth atitm ig htret ai n apo rti on of t he pre m iu m or r ecei ve a
co m m is si on . ButDix on arg ue s t ha t Fr eem anvi ol at edTILA when ittre at edth e $3 76 pre m iu m

forth e VSI as pa rt o f th e am ou ntfin an ced , in st eadof a s p artof t he

4fin an ce ch arg e. Insupp ort o f he r arg um en t, Di xo n p oi nt s t o t he lan gu ag e o f 12

C.F.R. § 22 6.1 8( c)(i ii ), whi chread s, (c) It em iz at io n o f am ou ntfin an ced
. (1 ) A writ te n i te m iz at io n o f th e am ou ntfin an ced , in cl ud in g: (i) The a m ou ntof a ny pro ceed s d is tri bu te d d ire ct ly to t he co ns um er. (ii ) The am ou ntcred it edto th e co ns um er’s acc ou ntwit h the cred it or . (ii i) An y am ou nt s p ai d t o o th er p ers on s b y th e cre di to r on th e co ns um er’s b eh al f. The cr ed it orsh al l i de nt ify the se pe rs on s. 1 As t he di stric t co urt co rrec tl y ob se rv ed , th ere i s n ot hi ng in §2 26 .18 (c) t ha t requi res a co m

m is si on rece iv edby a cred it orto be rem ov edfro m th e am ou nt fin an cedan d a dd edto th e fi na nc e ch arg e. Fu rth erm or e, Dix on di d n otpa y Free m an ’s comm is si on ; t he reco rdsh ows th atDix on ’s ent ire pre m iu m was p ai d t o th e th irdpa rty ins ur er. The refo re, we co nc lu de th atFree m an di d n otvi ol at e TILA
orReg ul at io n Z i n i ts ha nd li ng of t he co m m is si on fro m

Dix on ’s VSI in su ran ce. Seco nd , Dix on arg ue s t ha t Fr eem an fai le d t o wai ve all it s ri gh ts to
subr og at io n a ga in sthe r as requi redby § 22 6.4 (d ). Dix on arg ue s t ha t t he qu al ifyin g l an gu ag e u se d b y Free m an , “ ex cep t i n a ll cas es of f rau du le ntact io ns of th e In su redCred it orof I ns ur edDebt or ,” fai ls to waiv e “ al l ri gh t o f subr og at io n” as requi redby § 22 6.4 (d )(2 ). Alt ho ug h Di xo n i s co rrec t t ha t t he lan gu ag e d oe s requi re a wai ve r of

all rig ht s, t he qu al ifyin g l an gu ag e d oe s n otvi ol at e TILA.
This includes amounts paid to insurance companies on be half of the consumer. 1 5As n ot edby bot h the bank rupt cy an d d is tri ctco ur ts , TILA is a d is cl os ur e st atut e th atdo es no t af

fectth e p art ie s’ subs ta nt iv e ri gh ts un de r st at e o r fed eral law. 15 U.S.C. § § 16 01 , 16 10 (d ). Und er t he laws of Ge or gi a, “ [Waiv er o f
subr og at io n] claus es are i nt en de d t o [a ll ow] th e p art ie s t o e xc ul pa te each ot he r fro m pe rs on al li ab il it y

in th e ev en t o f pr op ert y

lo ss . . . . Excu lp at ory

claus es are
va li d a ndbi nd in g . . . [h]owe ve r, [th ey ] do no t re li ev e a p art y fro m li ab il it y or f or act s o f gr os s n eg li ge nc e o r wil fu l o r wan to n c on du ct .” Co lo ni al Pro ps . Real ty Ltd. P’s hi p v . Low de r C

on tr . Co. , 56 7 S .E.2d38 9, 3 93 (Ga. Ct . App . 20 02 ) (in te rn al qu ot at io n m ark s an d c it at io ns om it te d) ; se e a ls o O.C.G.A. § 13 -4 -6 0 (“ A
co nt ractm ay

be res ci nd edat t he in st an ce o f a p art y de frau de d. . . .”). Thu s, t he effe ctof t he subr og at io n wai ve r is no t ch an ge d b y th e in cl us io n o f th e fraud
ex cep ti on be cau se Free m an di d n otret ai n a ny add it io na l ri gh ts th atitot he rwis e
wou ldno t h av e h adun de r Geo rg ialaw. Bec au se we co nc lu de th atFree m an di d n otvi ol at e TILA, we affi rm th e di st ric t co urt’s o rd er af

firm in g t he bank rupt cy

co ur t. AFFIRMED.

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