disclosures--was far more egregious than simply failing to give the customer a duplicate copy of
a contract that he admittedly read and understood, as in Streit. The purpose of the TILA is to
“assure a meaningful disclosure of credit terms so that the consumer will be able to compare
more readily the various credit terms available and avoid the uninformed use of credit.” 15
U.S.C. § 1601(a). To achieve this purpose, the Act requires creditors to disclose the details of a
credit transaction to the consumer before the transaction is consummated. 15 U.S.C. § 1638(a).
Far from a mere “technical violation” of the TILA, William Chrysler’s action is a direct violation
of the central provision of the Act and should not be excused because Lacey failed to fulfill her
obligations under the contract. The court grants Lacey’s motion for summary judgment as to
Count IIL.
III. Count IV: The Credit Repair Organization Act

In Count IV, Lacey contends that Greathouse violated § 1679b of the CROA when he
instructed Lacey to tell any finance company that called that her monthly income was $3200 and
that she had made a $500 down payment on the Plymouth Voyager. Section 1679b(a)(1)(B)(ii)
States, “No person may—

(1) make any statement, or counsel or advise any consumer to make any statement, which

is untrue or misleading (or which, upon the exercise of reasonable care, should be known

by the credit repair organization, officer, employee, agent, or other person to be untrue or

misleading) with respect to any consumer’s credit worthiness, credit standing, or credit

capacity to—

(B)any person-
i) to whom the consumer has applied or is applying for an extension of credit.

William Chrysler moves for summary judgment on Count IV, arguing that Greathouse cannot be

held liable under the CROA because he was not in the business of credit improvement.

13


qualify to purchase the vehicle because she had a recently discharged bankruptcy. (/d.; Pl. L:R.
56.114.) Hester did not give Lacey a written notification of why she did not qualify to
purchase the vehicle. (Pl. L.R. 56.1. 4 15.)

Lacey claims that she then informed Hester that the car she was currently driving, the
1997 Pontiac Transport, was not included in her bankruptcy proceedings. Because she needed
the car to get to work and to transport her family, she had reaffirmed that debt and was going to
continue making payments on it. (/d. 4 16.) However, Lacey also states that Hester was under the
impression that the debt on the Transport was discharged in bankruptcy. (Lacey Dep. at 39; Def.
LR. 56.1] 14.)

Hester then told Lacey that she could qualify for a less expensive vehicle, a Plymouth
Voyager minivan, priced around $19,000. He told her that she could get the Voyager for a $750
cash down payment.’ (Pl. L.R. 56.1 415.) Lacey did not have the money for the down payment

at the time, so she returned to her house and gathered her check stubs, her bankruptcy discharge,

3Defendants state that Lacey “chose not to attempt financing for the Plymouth Town & Country.” (Def. L.R.
56.194.) In support of this statement, defendants cite to the affidavit of Greathouse dated July 21, 2003. Lacey has
moved to strike the Greathouse affidavit, arguing tbat the affidavit fails to lay the proper foundation as to why
Greathouse is competent to testify about William Chrysler’s business practices. Lacey also points out that the
affidavit contains two paragraphs 6. The first paragraph 6 states that “Plaintiff could not obtain financing for the
Plymouth Town & Country,” while the second states that “Plaintiff chose not to attempt financing for the Plymouth
Town & Country.” The court denies Lacey’s motion to strike the entire affidavit, but strikes both paragraphs 6.
First, the paragraphs are inconsistent. More importantly, Lacey states, and defendants admit, that Hester, not
Greathouse, told her that “because of her credit history she did not qualify to purchase the Town & Country.” (Def.
Resp. to Pl. L.R. 56.19 14.) The affidavit does not establish how Greathouse knew that Lacey. “chose not to attempt
financing.” Thus, both paragraphs 6 lack foundation. The court accepts as true Lacey's statement that Hester told
her that “she did not qualify to purchase the Town & Country.”

SLacey first states that Hester told her she could get the Voyager for a $750 down payment. (Lacey Dep. at
34.) Lacey then states that the defendants asked for a down payment of $1500. (/d. at 36-37.) Defendants do nat
dispute either amount. Based on the context of each statement, it appears that the parties agreed to a down payment
of $750 cash and a post-dated check for $750.


The ECOA defines “adverse action” in relevant part as “a denial or revocation of credit.”
15 U.S.C. § 1691(d)(6). Regulation B, the ECOA’s implementing regulation, further defines
adverse action as “‘a refusal to grant credit in substantially the amount or on substantially the
terms requested in an application... .” 12 C.F.R. § 202.2(c)(1)(i). William Chrysler argues that
it did not take an adverse action against Lacey because, at her direction, it never submitted her
credit application to a lender. To take an adverse action, “a dealership must actually submit a
credit application to a lending institution with” the authority to extend or deny credit to the
applicant. (Def. Resp. to Pl. Mot. for Summ. J., at 3.) The court disagrees.

First, William Chrysler’s contention that Lacey directed it not to submit her credit
application to a lender is not supported by the record. The undisputed facts only establish that
Hester told Lacey that “she did not qualify to purchase” the Town & Country. (PL. L.R. 56.1
14.) As discussed above, Greathouse’s statement that Lacey “chose not to attempt financing”
both lacks foundation and is inconsistent with another statement in the same affidavit. See supra
note 3,

Second, excusing a car dealership from complying with the ECOA’s notice requirements
because it did not submit a customer’s credit application to a lender would undercut the purpose
of the Act. The purpose of the ECOA is to prohibit credit discrimination in America. See
Brothers v. First Leasing, 724 F.2d 789 (9" Cir. 1984). To this end, the ECOA prohibits credit
discrimination by “any person who regularly extends, renews or continues credit” as well as “any
person who regularly arranges for the extension, renewal or continuation of credit.” 15 U.S.C.

§ 1691a(e). This language clearly contemplates that a “person who regularly arranges for the

extension . . . of credit” may engage in discrimination apart from any action by a lender. For


Lacey then drove away in the Plymouth Voyager and left her Pontiac Transport at
William Chrysler. (7d. 424.) She claims that Hester explicitly told her that she could trade in the
Transport. (Jd. | 25.) However, Greathouse claims that Williams Chrysler never agreed to accept
the Transport as a trade in. (Greathouse Dep., July 21, 2003 § 10.)

Lacey and her children returned to William Chrysler the following Monday, June 10,
2002, with the $400 she still owed on her down payment, (Pl. L.R. 56.1926.) Hester brought
the Pontiac Transport from the lot, and Lacey and her children cleaned out their belongings from
the Transport and transferred them to the Plymouth Voyager. The license plates from the
Transport were transferred to the Voyager. (/d. 127.) Lacey then gave $400 to Greathouse, who
told her that he would have her financed by Tuesday or Wednesday. Lacey did not receive any
additional paperwork from William Chrysler at this point. (/d. J 28.)

Lacey called Greathouse on Wednesday, June 12, 2002, to see if financing had been
arranged. Greathouse replied that he still had not heard anything regarding financing and told her
that she would receive her paperwork in the mail once financing was arranged. (Id. 29.)
Around June 20, 2002, Lacey was approved for financing by Drive Financial. (RIC) Lacey
teceived the paperwork around June 25 or 26. The documents did not reflect credit for a trade in.
(id. $30.) Lacey then returned to William Chrysler to inquire as to why no trade in was reflected
in the paperwork she received. (Jd. 431.) She spoke with Hester, who was “at a loss to explain
what happened.” (Jd. 432.) Lacey returned to William Chrysler again in late June. William
Chrysler was unable to locate the Transport. Hester told her that ‘the keys were there, but the

van was gone” or words to that effect. (Id. ] 34.)


and her reaffirmation papers. She then went to her father’s house and borrowed $350 cash. (Id. J 18.)

Lacey returned to William Chrysler that day and gave the money and paperwork to
Hester. Hester reviewed the paperwork and then took it to Greathouse, a finance manager.
Greathouse examined the paperwork and asked Lacey when she could deliver the remaining $400
of the down payment. (/d. J 19.) Lacey replied that she could deliver the remaining $400 the
following Monday morning. Greathouse told Lacey to leave a check post-dated to July 13, 2002,
for $750, the balance of the $1500 down payment. (Id. { 20.) Lacey claims that at the time she
wrote the check, she knew that she did not have sufficient funds in her bank account to cover the
check. However, she claims that she anticipated returning to work and was expecting sufficient
funds to be deposited to her account on July 7, 2002. (Lacey Dep. at 79.)

Lacey claims that Greathouse gave her a piece of paper directing her to tell any finance
company that called that her monthly income was $3200 and that she had put $500 down. (Pl.
LR. 56.121.) Greathouse denies this. (Greathouse Aff. of July 21, 2003 | 12.) Greathouse
then had Lacey sign a blank retail installment contract (“RIC”).5 He told her that he would try to
get her a monthly payment right around what she was paying for her Pontiac Transport. (P1. L.R.
56.1. 4 22.) Other than the receipt for her $350 down payment, Lacey received no paperwork on

that day.° (Id. 4 23.)

5Defendants deny this but fail to cite to any portion of the record which contradicts the assertion. (Def.
Resp. to Pl. Statement of Uncontested Facts 22.) Defendants argue that Lacey’s statement is not credible because
she has failed to produce a copy of the blank RIC. The court fails to see how Lacey's failure to produce a copy of
the blank contract, which she claims she signed and left with Greathouse, has any relevance to the truth or falsity of
her statement.

“Defendants deny this but fail to cite to any portion of the record which contradicts the assertion. (Def.
Resp. to Pl. Statement of Uncontested Facts 23.)



Lacey had not made any payments on the Voyager at that point. (Jd. 4 5.) Lacey’s $750 check for
the down payment on the Voyager was returned unpaid. The returned check has the words “Not
Paid” and “Irregular Signature” stamped on its face, (/d. { 27; Pl. Resp. to Def. L.R. 56.1 J 27.)
DISCUSSION
I, Count I; Equal Credit Opportunity Act
In Count I, Lacey alleges that William Chrysler violated the ECOA, 15 U.S.C. § 1691, by
failing to give her a written statement of the reasons that she was denied financing for the
purchase of the Town & Country. The ECOA provides that “each applicant against whom
adverse action is taken shall be entitled to a statement of reasons for such action from the
creditor.” A creditor satisfies this obligation by
(A) providing statements of reasons in writing as a matter of course to applicants against
whom adverse action is taken; or
(B) giving written notification of adverse action which discloses (i) the applicant's right to
a statement of reasons within thirty days after receipt by the creditor of a request made
within sixty days after such notification, and (ii) the identity of the person or office from
which such statement may be obtained. Such statement may be given orally if the written
notification advises the applicant of his right to have the statement of reasons confirmed
in writing on written request.
15 U.S.C. §1691(d)(2)(emphases added). William Chrysler does not deny that it did not give
Lacey a written statement of the reasons she did not qualify for credit for the purchase of the
Town & Country. However, William Chrysler contends that it did not violate § 1691(d)(2)

because it did not take an adverse action against Lacey.’ Both parties move for summary

judgment on Count 1.

William Chrysler also argues that it “gave [Lacey] oral notification, which absolves William of liability
under the act.” (Def. Resp. to Pl. Mot. for Summ. J., at 7.) This is clearly incorrect. Written notice is only excused
if the applicant is applying for business credit, 12 C.F.R. § 202.9(a)(3) or if the creditor acts on less than 150
applications per year, 15 U.S.C. § 1691(d)(5). Neither exception applies here.

8


|= Migute Order Form (06/97)

United States District Court, Northern District of Dlinois

qi)

Nor Magee Judge Joan H. Lefkow “han Angned Judge

CASE NUMBER 02 C7113 DATE 2/20/2004

CASE Lacey vs. William Chrysler Plymouth, Inc., et al.

TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
qd oO Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due__—.
(3) a Answer brief to motion due___. Reply to answer briefdue__.
(4) Oo Ruling/Hearing on setfor_ at
(5) 0 Status hearing[held/continued to] [set for/re-set for]on__setfor__—_at
()] o Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor_— at.
(7) Qa Trial[set for/re-set for]on__at
(8) q [Bench/Jury trial] [Hearing] held/continued to__at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) O Local Rule 41.1 OFRCP41(a\(1) O FRCP41(a)(2).

ao) [Other docket entry] | Enter Memorandum Opinion and Order. Plaintiff's motion for partial

summary judgment is granted as to Counts I and IH and denied as to Counts V and VL William
Chrysler’s motion for summary judgment is denied. Because plaintiff failed to answer or otherwise
respond to defendants’ counterclaim, default judgment is entered on liability in favor of defendants on
the counterclaim, with damages to be proven at trial. Final pretrial materials are to be submitted to
chambers by 2/26/04. Pretrial conference is set for 2/27/04.

[For further detail see order attached to the original minute order.]

No notices required, advised in open court.
No notices required.

Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices,

Mail AO 450 form.

44na3 LONLSI0 sn

Md ls

Copy to judge/magistrate judge.
Oe +4 "Wd 02 63s 8u
courtroom enc
MD deputy’s Oi G3-Gs id
Date/time received in
central Clerk’s Office



consumer certain details of the terms of the financing agreement. 15 U.S.C. § 1638(a). For
instance, the creditor must disclose the amount of money financed, the borrower’s right to obtain

a written itemization of the amount financed, and the finance charge. Id. Under the TILA and its
implementing regulation, Regulation Z, 12 C.F.R. § 226.11, these disclosures must be made
sth hy

“clearly and conspicuously in writing, in a form the ¢ sumer may keep,” and the disclosure

Hi i
must take place “before the consummation of the transac’ ion,” 12 C.F.R. § 226.17(a) and (b).

¢ the required disclosures, but argues that
i

William Chrysler does not dispute that it failed to wl
Lacey cannot maintain a cause of action under the TI . because she never made any payments
under the RIC and thus suffered no damages. Both parties move for summary judgment on
Count I.

William Chrysler relies on Streit v. Fireside Chrysler-Plymouth, 697 F.2d 193 (7" Cir.
1983). In Streit, a car buyer brought a TILA claim against a car dealership because the dealership
failed to provide the buyer with a duplicate copy of the retail installment contract at the time the
parties entered into the credit transaction. The Seventh Circuit held that the dealership was not
liable for “technical violations” of the TILA because the buyer was not misled nor financially
harmed and the consumer unilaterally breached the contract almost immediately after it was
entered. Jd. at 197. The court noted that it had previously held creditors liable for “merely
technical violations” of the TILA. Jd. at 196. In Smith v. No. 2 Galesburg Crown Finance Corp.,
615 F.2d 407, 416 (7" Cir. 1980), for instance, the court stated that “Congress did not intend that
creditors should escape liability for merely technical violations” and held that arguably
inconsequential terminological deviations from the TILA’s required language were violations.

Similarly, in Brown v. Marquette Savings & Loan Assoc., 686 F.2d 608, 614 (7" Cir. 1982), the

ll


example, if a person who regularly arranges for the extension of credit refuses to submit credit
applications from women to third party lenders, that person violates the Act. The notification
requirements of § 1691(d)(6) help prevent discrimination of this sort: “only if creditors know
they must explain their decisions will they effectively be discouraged from discriminatory
practices.” See S. Rep. No. 589, 94" Cong., 2d Sess. (1976), repr. in 1976 U.S.C.C.AN. 403,
406. Thus, to discourage those who regularly arrange for the extension of credit from engaging
in discrimination, the ECOA requires them to provide the reasons for their decisions to the credit
applicant in writing. William Chrysler did not submit Lacey's credit application to a lender and
failed to provide her with a written explanation of the reasons for that decision. Therefore,
William Chrysler violated § 1691(d)(6).

None of the cases cited by William Chrysler supports a contrary conclusion. It is true that
in each of the cases the defendant car dealership submitted the credit application to a lending
institution. See Najieb v. William Chrysler Plymouth, No. 01 C 8295, 2002 WL 31906466, at 4
(NLD. Ill. Dec. 31, 2002); Mungia v. Tony Rizza Oldsmobile, Inc., No. 01 C 460, 2002 WL
554504 (N.D. Ill. April 15, 2002); Burns v. Elmhurst Auto Mall, Inc., No. 00 C 5732, 2001 WL
521840 (N.D.IIl. May 16, 2001). However, none of these cases holds that a dealership must
submit a credit application to a lender to trigger the ECOA’s notice requirements. Thus, the
court grants Lacey’s motion for summary judgment as to Count I.

II. Count Ill: Truth in Lending Act

In Count II, Lacey alleges that William Chrysler violated the TILA by having her sign a

blank retail installment contract to purchase a Plymouth Voyager on June 8, 2002. The TILA

requires, among other things, that a creditor in a consumer credit transaction disclose to the

10


By the end of June, Lacey realized that she would not be returning to work as she had
expected. (Lacey Dep. at 58.) On July 13, 2002, Lacey returned to William Chrysler and
attempted to return the Plymouth Voyager and get her Pontiac Transport back. (/d. at 64.) Hester
again told Lacey that the Transport was not at the dealership and that he did not know what
happened to it. He stated that William Chrysler had contacted the police to locate the van.’ (Id.
35.) Neither party knows what happened to the Pontiac Transport that Lacey left at William
Chrysler on June 8, 2002.

Lacey filed a consumer complaint with the Illinois Attorney General’s office on July 16,
2002. (Pl. L.R. 56.1 § 38.) Greathouse responded with a letter to the Attorney General’s office
received on August 6, 2002. (Def. Ex. 7.)

On January 29, 2603, Household Automotive Finance, which had financed Lacey’s
purchase of the 1997 Pontiac Transport, filed a complaint in detinue in the Circuit Court of Cook
County against Lacey claiming that it had been unable to secure the Pontiac Transport and
seeking either a return of the vehicle or its monetary value. The case is still pending. (PI. L.R.
56.1 4 39.)

Lacey had possession of the Plymouth Voyager from June 12, 2002, through January,

2003. William Chrysler repossessed the Voyager on January 11, 2003. (Def. L.R. 56.1 4 37.)

"Defendants deny this, but fail to cite to any portion of the record which contradicts the assertion. (Def.
Resp. to Pi. Statement of Uncontested Facts ] 35.) Defendants also contend that the Hester’s statement is
inadmissible hearsay. (/d.) The statement is an admission by a party-opponent and thus is not hearsay. See Federal
Rule of Evidence 801(d)(2). However, the statements allegedly made to Lacey by Sergeant Chambliss of the
Chicago Police Department (PI. L.R. 56.1. 4 36-37) are hearsay and will not be considered by the court. See
Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7* Cir. 1997)(“Hearsay is inadmissible in summary judgment
proceedings to the same extent that it is inadmissible in a trial.”).

5Defendants repeatedly cite this letter as evidence contradicting Lacey’s statements. However, this letter is
hearsay and cannot be used to prove the truth of the matters asserted therein. Eisenstadt, 113 F.3d at 742.

7


favorable to the non-moving party as well as view all reasonable inferences in that party’s favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
FACTS

William Chrysler is a car dealership in Chicago, Illinois. William Chrysler is involved in
credit evaluation, negotiation of credit terms and the sale of credit contracts to third parties in the
secondary market. (Pl. L.R. 56.1 1 42.) However, William Chrysler does not make any ultimate
decisions regarding who is accepted and rejected by credit lenders. (Def. Resp. to Pl. L.R. 56.1
4/42.) William Chrysler handles more than 150 credit applications for consumers per year. (Pl.
LR. 56.1 9 41.)

On Saturday, June 8, 2002, Lacey received in the mail an advertisement from William
Chrysler that promised a prize of between $10 and $10,000 simply for going to William
Chrysler. (Pl. L.R. 56.1 46.) In response to the advertisement, Lacey went to William Chrysler
that day. She drove to William Chrysler in her 1997 Pontiac Transport. (/d. ] 6.) When Lacey
arrived, she saw two women sitting at a table. She asked them for her prize and received an
envelope containing $10. (/d. J 8.) The women at the table introduced Lacey to a salesman, Jay
Hester. (/d. § 10.) Hester proceeded to show Lacey a Chrysler Town & Country minivan, priced
around $25,000. (/d. 12.) Lacey test drove the Town & Country, liked it, and inquired about
purchasing it. (Jd. { 13.) After Hester explained to Lacey what she needed to purchase the
vehicle, Lacey filled out and signed a credit application. (Lacey Dep. at 31.) Hester then pulled

Lacey’s credit report. (/d.) Soon thereafter, Hester came back and told Lacey that she did not


being given credit for her trade-in vehicle when in fact she was not. However, the record
contains no indication that Lacey’s credit application was rejected. Furthermore, there is a
genuine issue of material fact as to whether Lacey traded-in her Pontiac Transport. Thus, the
court denies Lacey’s motion for summary judgment as to Count V.

In Count VI, Lacey alleges that Greathouse violated the ICFA when he violated the Credit
Repair Organizations Act by counseling Lacey to make false and misleading statements, when he
had Lacey sign a blank RIC, when he represented to Lacey that she would be given credit for her
trade-in vehicle, and when he made misrepresentations to the Illinois attorney general about the

transaction. Again, there are genuine issues of material fact as to whether Greathouse counseled
Lacey to make false and misleading statements, whether he told her she would be given credit for
her trade-in vehicle, and whether Greathouse made any misrepresentations in his letter to the

attorney general. Thus, the court denies Lacey’s motion for summary judgment as to Count VL

ORDER

For the reasons set forth above, Lacey’s Motion for Partial Summary Judgment is granted
as to Counts J and III and denied as to Counts V and VI. William Chrysler’s Motion for
Summary Judgment is denied. However, because Lacey has failed to answer or otherwise
respond to defendants’ counterclaim, the court enters default judgment on liability in favor of
defendants on the counterclaim, with damages to be proven at trial. Final pretrial materials shall
be submitted to chambers not later than Thursday, February 26, 2004. A pretrial conference is
set for Friday, February 27, 2004, at 2:30 p.m. In the meantime, parties are directed to meet in a

sincere effort to resolve this case before trial.

Enter: ears NA eer

GOAN HUMPHREY LEFKOW
Date: February 20, 2004 United States District Judge

15



Defendants have filed a Motion for Summary Judgment on Counts I, II], and IV and also seek
entry of default judgment on their counter-complaint. This court has jurisdiction over Counts I-
IV pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over the remaining counts and
counterclaims pursuant to 28 U.S.C. § 1367(a). For the reasons stated below, Lacey’s Motion for
Partial Summary Judgment is granted as to Counts I and Il and denied as to Counts V and VI.
William Chrysler’s Motion for Summary Judgment is denied. However, because Lacey has
failed to answer or otherwise respond to defendants counterclaims, the court enters default
judgment on liability in favor of defendants on those counterclaims,
SUMMARY JUDGMENT STANDARDS

Summary judgment obviates the need for a trial where there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c). To determine whether any genuine fact exists, the court must pierce the pleadings and
assess the proof as presented in depositions, answers to interrogatories, admissions, and
affidavits that are part of the record. Fed R. Civ. P. 56(c) Advisory Committee’s notes. The
party seeking summary judgment bears the initial burden of proving there is no genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving
party cannot rest on bare pleadings alone but must use the evidentiary tools listed above to
designate specific material facts showing that there is a genuine issue for trial. /d. at 324;
Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7 Cir. 2000). A material fact must be outcome
determinative under the governing law. Insolia, 216 F.3d at 598-599. Although a bare
contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v.

Quanex Corp., 200 F.3d 485, 492 (7" Cir. 2000), the court must construe all facts in a light most


D -
UNITED STATES DISTRICT COURT OCKEI ED
FOR THE NORTHERN DISTRICT OF ILLINOIS FEB 93 2004

EASTERN DIVISION
MICHELLE LACEY, )
)
Plaintiff, )
)
v. ) No. 02 C 7113

) Judge Joan H. Lefkow
WILLIAM CHRYSLER PLYMOUTHINC. +)
and DAVID GREATHOUSE, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff, Michelle Lacey (“Lacey”), has filed a six-count complaint against defendants,
William Chrysler Plymouth (“William Chrysler”), an automobile dealership, and David
Greathouse (“Greathouse”), alleging violations of the Equal Credit Opportunity Act (“ECOA”),
15 U.S.C. § 1691 et seg. (Count I), the Fair Credit Reporting Act (“FCRA”)', 15 U.S.C. § 1681
et seq. (Count I), the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 ef seq. (Count Ii), the
Credit Repair Organization Act (“CROA”), 15 U.S.C. § 1679 et seg. (Count IV), and the Hlinois
Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/1 et seq.
(Counts V and VI). Defendants have filed a counterclaim alleging that Lacey breached her
contract with William Chrysler and delivered a bad check in violation of 720 ILCS 5/17-1a and
5/17-1(B)(d). Lacey has not answered or otherwise responded to the counterclaim. Lacey has

filed a Motion for Partial Summary Judgment on Liability on Counts J, IM, V and VI?

"Lacey has informed the court that she will dismiss her FCRA claim. Thus, the court will not address that
claim.

Lacey has withdrawn her Motion for Summary Judgment on Count IV. (PI. Memo. in Resp. to Def. Motion
for Summ. J., at note 1.)


court stated that it is no defense that the consumer was neither misled nor harmed by the
violation. Nevertheless, the court in Streit held that

it is not necessary or appropriate to hold creditors absolutely liable for every non-

compliance and to disregard completely the factual situation out of which the claim has

arisen. We believe that Congress would not have intended to impose liability on a

creditor for a technical violation where there never was a transaction (beyond entering

into the financing agreement) because of the consumer’s complete failure to fulfill his
obligations under the contract. In addition, Streit substantially misstated relevant
financial information (the payments outstanding on his trade-in) at the time the credit
agreement was entered into. The consumer’s acts were far more improper than anything

the creditor did.

697 F.2d at 196. According to William Chrysler, the same is true in the instant case. Lacey
suffered no damages and her failure to make payments “were far more improper than anything
[William] did.” (Def. Reply in Supp. of Mot. for Summ. J., at 8.)

The court disagrees. The court in Streit noted that its departure from the general rule that
“arguably inconsequential terminological deviations from the TILA’s required language [are]
violations” was justified by the combination of multiple factors specific to the case:

It would be unfair to hold Fireside liable when Streit understood the terms of the

financing agreement, signed his name about a quarter of an inch below a prominent two-

line sentence reciting that he received a copy of the document, and, furthermore, where he
misstated the amount of money he owed on his trade-in. Although these factors by
themselves would not be sufficient to absolve a creditor from liability, they do have some
significance when combined with the consumer's complete failure to fulfill his part of the
bargain between the parties.
697 F.2d at 196 (emphasis added). In the instant case, there is no such combination of factors.
True, Lacey failed to make payments under the RIC. However, she clearly did not understand the
terms of the financing agreement, as those terms had not yet been determined when she signed
the RIC. Nor does the record indicate that Lacey misstated anything to William Chrysler. More

importantly, William Chrysler’s conduct--asking Lacey to sign a blank contract with no

12