IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-20281

ANGELA LEA; DARREL LEA,

Plaintiffs – Appellants

v.

BUY DIRECT, L.L.C.,

Defendant – Appellee

Appeal from the United States District Court 

for the Southern District of Texas

Before JOLLY, SMITH, and SOUTHWICK, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

Angela Lea and Darrel Lea brought this action seeking statutory 

damages under the Truth in Lending Act. They claim that Buy Direct, L.L.C., 

doing business as Direct Buy of Houston North, failed to provide the dates that 

payments would be due on an installment contract for membership in Direct

Buy’s wholesale membership club. The district court granted summary 

judgment to Direct Buy. We REVERSE and REMAND for entry of judgment 

in favor of the Leas. 

FACTUAL AND PROCEDURAL BACKGROUND

On May 16, 2012, Angela and Darrel Lea attended an “Open House” 

event at the Direct Buy Houston North location. Direct Buy is a wholesale 

membership club which offers members the opportunity to purchase home 

United States Court of Appeals

Fifth Circuit

FILED

June 12, 2014

Lyle W. Cayce

Clerk

 Case: 13-20281 Document: 00512661228 Page: 1 Date Filed: 06/12/2014
No. 13-20281

furnishings and electronics at wholesale prices through Direct Buy’s vendor 

network. At the event, the Leas decided that they wished to join the Direct 

Buy membership club, at a cost of $3,995 for a three-year membership. Unable 

to make a required 10% down payment that day, the Leas agreed to pay $100 

on May 16, and then $295 on June 5. The parties executed a Membership 

Agreement and a Retail Installment Contract, both post-dated June 5, 2012. 

On the form, the blanks for the “day of each month” the installment payments

would be due and the “beginning” date of the Leas’ payments were left blank, 

to be determined based upon the date the down payment was fully paid. The 

Leas and Direct Buy also executed a Payment Agreement, authorizing Direct 

Buy to charge the Leas’ credit card for the $295 on June 5. At the Leas’ request, 

this date was moved to June 8. 

On June 8, Direct Buy attempted to charge the Leas’ credit card for the 

$295, but the charge was declined. Pursuant to a provision in the Payment 

Agreement, on June 9, Direct Buy successfully charged the Leas’ credit card 

for $100, leaving $195 of the down payment yet unpaid. On June 13, Direct 

Buy attempted to charge the Leas’ card for the remaining $195, but the charge 

was declined. Finally, on June 21, Direct Buy successfully but erroneously

charged the Leas’ credit card for $295. Within the next 40 minutes, Direct Buy

correctly refunded $100 to the Leas’ credit card but then incorrectly refunded 

another $100. This meant that the Leas still had not paid the full $395 for the 

down payment. Also on June 21, the Leas attempted to cancel their Direct Buy

membership in a telephone call to Direct Buy. On July 12, the Leas filed a 

chargeback request with their bank for the return of the $295 successfully 

charged to their credit card, citing the attempted cancellation from the June 

21 telephone call. Direct Buy responded to the chargeback request from the 

Leas’ bank with the Payment Agreement authorizing the charges and the 

Membership Agreement and Retail Installment Contract. Though the Leas’ 

2

 Case: 13-20281 Document: 00512661228 Page: 2 Date Filed: 06/12/2014
No. 13-20281

bank resolved the matter in Direct Buy’s favor, Direct Buy canceled the Leas’

membership on August 8 in accordance with the Leas’ request. On October 29,

the Leas sued in the United States District Court for the Southern District of 

Texas. On November 30, after the Leas filed a complaint with the Office of the 

Texas Attorney General, Direct Buy issued a check for $295 to the Leas, fully 

refunding all payments on their membership. 

The Leas’ suit alleged one cause of action: that Direct Buy had violated 

the Truth in Lending Act (“TILA”) and its implementing regulations by failing 

to include the starting date and subsequent monthly payment due dates. See 

15 U.S.C. § 1638(a)(6); 12 C.F.R. § 1026.18(g). Direct Buy moved to dismiss 

under Federal Rule of Civil Procedure 12(b)(6), which the district court later 

converted to a motion for summary judgment. The district court concluded 

that the contract was never “consummated” because the down payment was a 

condition precedent to the extension of credit, and the Leas never fully made 

their down payment. Thus, the district court concluded TILA did not apply 

and granted summary judgment in favor of Direct Buy. The Leas appeal.

DISCUSSION

“We review a grant of summary judgment de novo, applying the same 

legal standards as do the district courts.” Vuncannon v. United States, 711 

F.3d 536, 538 (5th Cir. 2013). Summary judgment is proper when viewing the 

evidence in the light most favorable to the non-movant, “there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a 

matter of law.” FED. R. CIV. P. 56(a).

Under TILA, “a creditor . . . shall disclose to the person who is obligated 

on a . . . consumer credit transaction the information required under this 

subchapter.” 15 U.S.C. § 1631(a). For a “consumer credit transaction other 

than an open end credit plan, the creditor shall disclose . . . [t]he number, 

amount, and due dates or period of payments scheduled to repay the total of 

3

 Case: 13-20281 Document: 00512661228 Page: 3 Date Filed: 06/12/2014
No. 13-20281

payments.” 15 U.S.C. § 1638(a)(6). Successful plaintiffs may recover statutory 

damages against violators of TILA. 15 U.S.C. § 1640(a)(2)(A). The disclosures 

required by TILA must be made “before consummation of the transaction.” 12 

C.F.R. § 226.17(b). “Consummation means the time that a consumer becomes 

contractually obligated on a credit transaction.” 12 C.F.R. 226.2(a)(13); see also

Davis v. Werne, 673 F.2d 866, 869 (5th Cir. 1982). 

Here, the Leas agreed on May 16, 2012, to make a down payment in two 

separate credit card charges, one that day and a second on June 5. They also 

signed a Membership Agreement and Retail Installment Contract post-dated

June 5. We first determine whether an agreement for the extension of credit 

was “consummated” on May 16 when the Leas signed the Membership 

Agreement, Payment Agreement, and paid the first $100 of their down 

payment. The district court analyzed the down payment as a condition 

precedent to the extension of credit. That is, Direct Buy was not obligated to 

extend the agreed-upon credit to the Leas until they made the down payment. 

Concluding that the Leas never fully paid the down payment, the district court 

reasoned that the condition precedent of the down payment was not met and 

the contract was never consummated. We disagree. 

Precedent on consummation of credit transactions for TILA is sparse. 

Nonetheless, we find Davis instructive. In Davis, a seller of storm doors and 

window guards entered into an installment sales contract with a consumer, 

with the consumer to pay for those fixtures over a 48-month period. Davis, 673 

F.2d at 868. When the seller-creditor was unable to assign the credit 

agreement, the agreement was rescinded and the parties arranged financing 

through another lender. Id. The district court there had concluded that 

because the parties mutually rescinded the contract later, it must not have 

been consummated for TILA purposes. Id. We rejected this conclusion, holding

that “post-consummation abandonment of a financing agreement generally 

4

 Case: 13-20281 Document: 00512661228 Page: 4 Date Filed: 06/12/2014
No. 13-20281

will have no effect upon a creditor’s TILA liability.” Id. at 870. This is because 

TILA “is a disclosure law” designed to protect consumers and does not 

implicate “the duty of subsequent performance” on the relevant contract or 

contracts. Id. 

We conclude that even though the Leas canceled their Direct Buy

membership and sought to rescind the contract for credit before they completed 

the down payment, the contract was consummated for the purposes of TILA. 

The agreement was consummated when the Leas signed the Membership 

Agreement, Retail Installment Contract, and Payment Agreement and paid 

the first $100 of their down payment. That is when their obligations became 

fixed even though their performance was far from complete. It is important 

that those obligations included the need to comply with terms for the extension 

of credit. “Consummation does not occur when the consumer becomes 

contractually committed to a sale transaction, unless the consumer also 

becomes legally obligated to accept a particular credit arrangement.” 12 C.F.R. 

§ 226.2(a)(13), Supplement I, Subpart A (emphasis added). 

In sum, a credit transaction occurred on May 16 when the Leas paid 

$100, agreed to pay the remaining $295, and signed the Membership 

Agreement and Retail Installment Contract. To comply with its TILA duties, 

Direct Buy at that time was required to disclose a payment schedule, 

specifically, “[t]he number, amount, and due dates or period of payments 

scheduled to repay the total of payments.” 15 U.S.C. § 1638(a)(6); see also 12 

C.F.R. § 1026.18(g). The contracts did not show the day of the month that 

payments were due or the beginning date of the installment payments. They 

were intentionally left blank by Direct Buy, to be completed upon the receipt 

of the Leas’ full down payment on an uncertain date. Neither the Membership 

Agreement nor Retail Installment Contract contained any language showing 

when the installment payments were to commence or at what interval they 

5

 Case: 13-20281 Document: 00512661228 Page: 5 Date Filed: 06/12/2014
No. 13-20281

would be due. See 15 U.S.C. § 1638(a)(6); 12 C.F.R. § 1026.18(g). TILA is a 

private attorneys general statute enacted to “penalize noncomplying creditors 

and deter future violations.” Davis, 673 F.2d at 869. Plaintiffs recover “even 

if they have not sustained any actual damages, or even if the creditors are 

guilty of only minute deviations from the requirements of TILA.” Id. 

Here, Direct Buy’s failure to include the starting date and interval, or, 

alternatively, the day of each month the Leas’ installment payments would be 

due, is a technical violation. Direct Buy’s decision to leave the contract blanks

unfilled was, at least in part, an accommodation to the Leas. A sister circuit 

suggested “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.” Streit v. Fireside Chrysler-Plymouth, Inc., 697 

F.2d 193, 196 (7th Cir. 1983). “We believe that Congress would not have 

intended to impose liability on a creditor for a technical violation where [the 

transaction disintegrated] because of the consumer's complete failure to fulfill 

his obligations.” Id. We acknowledge the equities but conclude that the 

statutory language is unqualified: a consumer is entitled to TILA disclosures 

prior to consummating a transaction. We find no basis in the statute to vary 

the application of TILA’s requirements due to equitable considerations. 

Though we may see no harm here and find acquiescence by the consumer for 

whose protection the TILA requirement exists, we are compelled to apply TILA 

as written. When the parties entered into this agreement on May 16, the Leas 

became contractually obligated to make the down payment and installment 

payments. Accordingly, they were entitled to and did not receive all required 

disclosures under TILA. 

Perhaps our reversal falls into the category of letting no good deed go 

unpunished. Another perspective, though, is that TILA provides an unvarying 

set of rules that protect consumers who might otherwise voluntarily waive 

6

 Case: 13-20281 Document: 00512661228 Page: 6 Date Filed: 06/12/2014
No. 13-20281

what they should not. We do not perceive any harm here, but harm is not a 

prerequisite for relief. See Davis, 673 F.2d at 869.

Direct Buy failed to make the required disclosures to the Leas, who 

therefore are entitled to damages. 15 U.S.C. § 1640(a)(2)(A). As Direct Buy is 

a “creditor who fail[ed] to comply with” the disclosure requirements of TILA, it 

shall be liable as described in that statute, despite that the Leas suffered no 

injury due to Direct Buy’s failure to provide the required disclosures. 

15 U.S.C. § 1640(a); (a)(2)(A)(i); see Davis, 673 F.2d at 869. On remand, the 

district court shall determine the amount of damages, costs, and attorney’s fees

in accordance with the statute and enter judgment against Direct Buy for that 

amount. 

REVERSED and REMANDED.

7

 Case: 13-20281 Document: 00512661228 Page: 7 Date Filed: 06/12/2014