IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

SANDRA E. WAIT and HAILEY E. 

CROWLEY,

)

)

)

)

Plaintiffs, )

)

vs. ) CIVIL ACTION NO. 15-00285-CG-M

)

ROUNDTREE MOBILE, LLC, et al., )

)

)

Defendants. )

ORDER

This matter is before the Court on the Motion for Summary Judgment (Doc. 

22) and Memorandum in Support (Doc. 23) filed by BMW Financial Services NA, 

LLC (“BMW”), the Response in Opposition and Motion for Summary Judgment 

(Doc. 25) filed by Sandra E. Wait (“Wait”) and Hailey E. Crowley (“Crowley”) 

(collectively, “Plaintiffs”), BMW’s Motion to Deny or Continue Plaintiffs’ Motion for 

Summary Judgment (Doc. 28), BMW’s reply to Plaintiffs’ response (Doc. 30), BMW’s 

Response in Opposition to Plaintiffs’ Motion for Summary Judgment (Doc. 31), and 

Plaintiffs’ reply to BMW’s response (Doc. 32). For the reasons set forth herein, 

BMW’s motion for summary judgment is due to be GRANTED IN PART and 

DENIED IN PART, Plaintiffs’ motion for summary judgment is due to be 

DENIED, and BMW’s motion to deny or continue Plaintiffs’ motion for summary 

judgment is due to be GRANTED.

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I. BACKGROUND

This case was removed from the Circuit Court of Mobile County, Alabama, to 

this Court pursuant to diversity jurisdiction. (Doc. 2). Plaintiffs allege that Wait 

purchased a vehicle from Roundtree Mobile, LLC (“Roundtree”), a “dealer of new 

and used cars.” (Doc. 2-1, pp. 3-4). The vehicle was manufactured by FCA US, LLC 

(“FCA” or “Chrysler”), and allegedly covered by a manufacturer’s warranty. Id.

Roundtree assigned the sales contract to BMW. Id. at 4. Plaintiffs allege that Wait 

informed Roundtree that she needed the vehicle to travel locally and also for 

Crowley to travel to Miami, Florida. Id. Plaintiffs claim that the vehicle began 

suffering “serious defects” in just over a month after the purchase, including the 

failure of the vehicle’s power steering. Id. Plaintiffs allege that the vehicle was 

taken to authorized dealers for repairs several times to no avail. Id. at 4-5. Plaintiffs 

assert that Wait informed BMW about the issues, but BMW only repossessed the 

vehicle. (Doc. 2-1, p. 6). Plaintiffs subsequently sued Roundtree, FCA, and BMW on 

various claims. The claims levied against BMW are breach of warranty, breach of 

contract, and violation of the Truth in Lending Act. Id. at 8-9. BMW filed a 

counterclaim against Wait, alleging that she ceased making payments on the 

vehicle shortly after purchase and therefore breached the contract. (Doc. 6, p. 19).

BMW filed a motion for summary judgment. (Doc. 22). In its supporting 

memorandum, BMW requests judgment in its favor on claims asserted by Plaintiffs 

of breach of warranties, breach of contract, Magnuson-Moss Warranty Act 

violations, and Truth in Lending Act violations. (Doc. 23). BMW also requests the 

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Court to limit any damages awarded to Plaintiffs under the Federal Trade 

Commission’s Holder Rule. Id. at 11-13. In their response, Plaintiffs filed a motion 

for summary judgment, asking the Court to rule that Wait no longer owes BMW the 

balance on the vehicle because of the vehicle’s defects. (Doc. 25-1, pp. 4-5). Both 

parties submitted a joint stipulation of facts, consisting of the sales contract and a 

service contract entered into by Wait. (Doc. 26). BMW filed a motion for the Court to 

deny or continue Plaintiffs’ motion for summary judgment. (Doc. 28). The parties 

then traded replies and responses to the motions for summary judgment. (Docs. 30, 

31, 32).

II. ANALYSIS

A. The Summary Judgment Standard

Federal Rule of Civil Procedure 56(a) instructs that “[t]he court shall grant 

summary judgment if the movant shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.” The trial 

court’s mission is to “determine whether there is a genuine issue for trial” and not 

to “weigh the evidence.” See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 

(1986).

The burden is on the moving party to show that there is no genuine dispute 

as to any material fact. Id. at 256. In conducting its summary judgment analysis, 

the Court must construe all evidence “in the light most favorable to the party 

opposing the motion.” United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

After the movant meets its burden, the burden shifts to the nonmoving party 

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“to make a showing sufficient to establish the existence of an element essential to 

that party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the 

nonmoving party fails to do so, the “complete failure of proof concerning an essential 

element of the nonmoving party’s case necessarily renders all other facts 

immaterial.” Id. at 323. Further, Rule 56 “requires the nonmoving party to go 

beyond the pleadings and by her own affidavits, or by the depositions, answers to 

interrogatories, and admissions on file, designate specific facts showing that there is 

a genuine issue for trial.” Id. at 324 (internal quotation marks omitted). There is no 

genuine issue for trial “[w]here the record taken as a whole could not lead a rational 

trier of fact to find for the non-moving party.” Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 587 (1986).

B. Breach of Warranty

1. Express Warranty

In the complaint, Plaintiffs claim that “Roundtree was bound by the express 

warranty provided by Chrysler on all Chrysler vehicles sold by Roundtree.” (Doc. 2-

1, p. 7). Plaintiffs did not address the express warranty in their response (Doc. 25-1) 

or reply (Doc. 32). Plaintiffs argue in the complaint that BMW is liable for 

Roundtree’s breach of the express warranty because the sales contract was assigned 

to BMW. (Doc. 2-1, p. 8).

BMW argues in its motion for summary judgment that there was no breach of 

an express warranty because neither BMW nor Roundtree provided a warranty to 

Plaintiffs. (Doc. 23, p. 3). BMW asserts that Plaintiffs are attempting to impose the 

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manufacturer’s warranty on BMW and Roundtree, which is prohibited under state 

law according to Dairyland Ins. Co. v. Gen. Motors Corp., 549 So. 2d 44 (Ala. 1989). 

BMW claims that Roundtree “specifically disclaimed the [manufacturer’s] 

warranty.” (Doc. 23, p. 3).

Express warranties are created and governed by statute, found in Alabama’s 

version of the Uniform Commercial Code:

(1) Express warranties by the seller are created as follows:

(a) Any affirmation of fact or promise made by the seller to the 

buyer which relates to the goods and becomes part of the basis of 

the bargain creates an express warranty that the goods shall 

conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis 

of the bargain creates an express warranty that the goods shall 

conform to the description.

(c) Any sample or model which is made part of the basis of the 

bargain creates an express warranty that the whole of the goods 

shall conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the 

seller use formal words such as “warrant” or “guarantee” or that he 

have a specific intention to make a warranty, but an affirmation 

merely of the value of the goods or a statement purporting to be merely 

the seller’s opinion or commendation of the goods does not create a 

warranty. 

Ala. Code § 7-2-313 (LexisNexis 2006).

The first logical step in proving a breach of express warranty claim is 

showing the existence of an express warranty. The only assertion that Plaintiffs 

make in their complaint regarding the presence of an express warranty in the sales 

contract with Roundtree is that Roundtree is bound by the manufacturer’s 

warranty. BMW’s counterargument that Roundtree provided no express warranty 

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to Plaintiffs is persuasive. Alabama courts have held “that unless a dealer 

specifically adopts the warranty of the manufacturer then he is not bound thereby.” 

Courtesy Ford Sales, Inc. v. Farrior, 298 So. 2d 26, 31 (Ala. Civ. App. 1974), 

superseded by rule on other grounds, Arnold v. Campbell, 398 So. 2d 301 (Ala. Civ. 

App. 1981); see also Dairyland Ins. Co., 549 So. 2d at 47. The sales contract does not 

make any statement about adopting the manufacturer’s warranty, and, in fact, the 

contract disclaims all warranties. (Docs. 23-2, 26-1). The Court finds that Roundtree 

did not adopt the manufacturer’s warranty, and no evidence has been presented as 

to any other form of express warranty. Because Plaintiffs’ breach of express 

warranty claim against BMW hinges on Roundtree’s liability for the same, 

summary judgment is due to be granted to BMW on this claim.

2. Implied Warranties

Plaintiffs claim in the complaint that Roundtree breached the implied 

warranties of merchantability and fitness for a particular purpose. (Doc. 2-1, pp. 6-

7). Specifically, Plaintiffs argue that “[a]n implied warranty that the Vehicle was 

merchantable arose by operation of law as part of the sale” and that “Roundtree 

breached the implied warranty of merchantability by delivering goods that were not 

in merchantable condition when sold or at any time thereafter.” Id. at 6. Plaintiffs 

further state that “Roundtree breached the implied warranty of merchantability by 

delivering goods that were not fit for the ordinary purposes for which automobiles 

are used (safe, reliable transportation on public roads).” Id. at 7. Plaintiffs also 

claim that they informed Roundtree that Crowley would use the vehicle to travel 

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between Mobile, Alabama, and Miami, Florida. Id. Since the vehicle’s defects made 

the car “unsafe,” rendering the car useless for Crowley’s need to travel, Roundtree 

violated the implied warranty of fitness for a particular purpose. Id. Finally, 

Plaintiffs claim that BMW is liable for Roundtree’s breach because the sales

contract was assigned to BMW. Id. at 8.

In the motion for summary judgment, BMW disputes the existence of the 

implied warranties by asserting that the terms of the contract disclaim all implied 

warranties. (Doc. 23, p. 4). BMW claims that the disclaimer meets the visibility and 

language requirements of the Alabama Commercial Code. Id. at 4-5. Plaintiffs 

counter that the disclaimer is not conspicuous. (Doc. 25-1, p. 2). Specifically, 

Plaintiffs argue that the disclaimer lacks conspicuity because it is on the back of the 

contract instead of the front, stating, “A reasonable person in [Wait’s] position 

would not have noticed the disclaimer, because nothing on the face of the document 

she signed indicated that the reverse side of the document contained any warranty 

information or disclaimers of her warranty rights.” Id. Plaintiffs further argue that 

the disclaimer is ambiguous because of language regarding a sales contract and the 

manufacturer’s warranty. Id. at 2-3.

Like express warranties, implied warranties in Alabama are created and 

governed by statute. The statute for the implied warranty of merchantability states:

(1) Unless excluded or modified (Section 7-2-316), a warranty that the 

goods shall be merchantable is implied in a contract for their sale if the 

seller is a merchant with respect to goods of that kind.

Ala. Code § 7-2-314(1) (LexisNexis 2006). The statute for the implied warranty of 

fitness for a particular purpose states:

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Where the seller at the time of contracting has reason to know any 

particular purpose for which the goods are required and that the buyer 

is relying on the seller’s skill or judgment to select or furnish suitable 

goods, there is unless excluded or modified under Section 7-2-316 an 

implied warranty that the goods shall be fit for such purpose.

Ala. Code § 7-2-315 (LexisNexis 2006). Finally, Alabama provides the merchant an 

option to exclude implied warranties from the contract:

(2) Subject to subsection (3), to exclude or modify the implied warranty 

of merchantability or any part of it the language must mention 

merchantability and in case of a writing must be conspicuous, and to 

exclude or modify any implied warranty of fitness the exclusion must 

be by a writing and conspicuous. Language to exclude all implied 

warranties of fitness is sufficient if it states, for example, that “There 

are no warranties which extend beyond the description on the face 

hereof.”

Ala. Code § 7-2-316(2) (LexisNexis 2006). Alabama’s Commercial Code also defines 

“conspicuous.”

(10) “Conspicuous,” with reference to a term, means so written, 

displayed, or presented that a reasonable person against which it is to 

operate ought to have noticed it. Whether a term is “conspicuous” or 

not is a decision for the court. Conspicuous terms include the following:

(A) A heading in capitals equal to or greater in size than the 

surrounding text, or in contrasting type, font, or color to the 

surrounding text of the same or lesser size; and

(B) Language in the body of a record or display in larger type 

than the surrounding text, or in contrasting type, font, or color 

to the surrounding text of the same size, or set off from 

surrounding text of the same size by symbols or other marks 

that call attention to the language.

Ala. Code § 7-1-201(b)(10) (LexisNexis 2006).

a. Position of the Disclaimer on the Back of the Contract

Plaintiffs cite two cases that are not binding on this Court in support for their 

argument that the disclaimer’s position on the back of the contract renders it 

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inconspicuous: Moorer v. Hartz Seed Co., 120 F. Supp. 2d 1283 (M.D. Ala. 2000), 

and Massey-Ferguson, Inc. v. Utley, 439 S.W.2d 57 (Ky. 1969). The disclaimer here

meets the standard set forth in Moorer, and this case is distinguishable from 

Massey-Ferguson.

In Moorer, the front of the contract stated “ADDITIONAL TERMS, 

CONDITIONS, AND LIMITED WARRANTY ON BACK.” Moorer, 120 F. Supp. 2d 

at 1291. The back of the contract contained the disclaimer. Id. The district court 

found that “[t]he bold language on the front of the invoices informs the reader that 

terms and conditions dealing with limitation of warranties can be found on the back 

of the invoice” and went on to hold that the Alabama disclaimer statute had been 

satisfied. Id. The Court does not read Moorer so narrow as to require specific 

language instructing the purchaser that warranty information is on the reverse 

side. The front of the contract in the current case states, “You acknowledge that you 

have read both sides of this contract . . . before signing below.” (Doc. 23-2, p. 1). This 

statement is in larger type than much of the contract and also in bold, meeting the 

definition of “conspicuous.” The front of the contract also states, “See back for other 

important agreements.” Id. While in a smaller size font, the statement is printed in

bold, also meeting the definition of “conspicuous.” The contract states in regular 

type, “By signing this contract, you choose to buy the vehicle on credit under the 

agreements on the front and back of this contract.” Id. Perhaps clairvoyantly, the 

contract states just above the signature line in all caps and bold print the following: 

“CAUTION – IT IS IMPORTANT THAT YOU THOROUGHLY READ THE 

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CONTRACT BEFORE YOU SIGN IT.” Id. These provisions are sufficient to alert a 

reasonable person to the existence of another side to the contract.

In Massey-Ferguson, the location of the disclaimer on the back of the contract 

was only one of several grounds the Kentucky court used to find a lack of 

conspicuity. See Massey-Ferguson, 439 S.W.2d at 59. The court stated, “Besides 

being in ordinary type, the exclusion was on the back of the instrument, with 

nothing on the front, except some words likewise in ordinary type, to direct 

attention to it.” Id. The contract here is distinguishable. As discussed above, two of 

the three statements referring to the back of the document meet Alabama’s 

definition of “conspicuous.”

The Court of Civil Appeals of Alabama has found a disclaimer similar to the 

one here sufficient for the conspicuous requirement. See Morgan Bldg. & Spas, Inc. 

v. Gillett, 762 So. 2d 366, 371-72 (Ala. Civ. App. 2000). The disclaimer was on the 

back of that contract, “printed in all capital letters, in bold print, and in a print that 

was larger than the print used in the body of the contract.” Id. at 372. The contract 

had language in bold and all caps instructing the purchaser that there were 

additional contract terms on the reverse side. Id. at 371. Here, there are three 

places on the front of the contract that refer to the back of the contract, as discussed 

above. The disclaimer is also in bold type, with the heading “WARRANTIES 

SELLER DISCLAIMS” in all caps. (Doc. 23-2, p. 2).

The Court finds as a matter of law that the position of the disclaimer on the 

back of the contract does not support Plaintiffs’ argument that the disclaimer is 

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inconspicuous.

b. Whether the Language of the Disclaimer Is Ambiguous

The sales contract for the vehicle states the following about warranties:

4. WARRANTIES SELLER DISCLAIMS

Unless the Seller makes a written warranty, or enters into a service 

contract within 90 days from the date of this contract, the Seller makes 

no warranties, express or implied, on the vehicle, and there will be no 

implied warranties of merchantability or of fitness for a particular 

purpose.

This provision does not affect any warranties covering the vehicle that 

the vehicle manufacturer may provide.

(Doc. 23-2, p. 2). Plaintiffs argue that the disclaimer is ambiguous because it 

references a service contract, and Wait entered into a service contract at the time of 

the sale. (Doc. 25-1, pp. 2-3). BMW responds that, while Wait did enter into a 

service contract, Roundtree was not a party to the service contract. (Doc. 30, p. 3).

The Court does not find Plaintiffs’ argument persuasive. The provision 

disclaims all warranties “[u]nless the Seller . . . enters into a service contract.” (Doc. 

23-2, p. 2). The first page of the service contract clearly indicates that Wait entered 

into the service contract with “Fidelity Warranty Services, Inc.” (Doc. 26-2, p. 1). In 

fact, the name of the company is typed in bold font, all caps, and larger type than 

any other word on the page. Id. Further, on the top of the second page, the contract 

states that the “parties to this service contract” are the customer and Fidelity 

Warranty Services, Inc. Id. at 2. Even the front of the sales contract identifies 

“FIDELITY W.S. INC.” as the entity with whom Wait entered into the “SVC 

CONTRACT.” (Doc. 23-2, p. 1). The mere mention of a service contract within the 

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disclaimer provision does not support Plaintiffs’ contention.

Plaintiffs also suggest the last line of the disclaimer supports a finding of 

ambiguity, claiming, “A reasonable buyer reading this language could easily believe 

that the disclaimer was not something to worry about because all new cars come 

with a manufacturer’s warranty.” (Doc. 25-1, p. 3). Even if that clause provided 

some sort of peace of mind to the purchaser, the Court fails to see how this directs a 

finding that the disclaimer is ambiguous. The Court is unaware of any law or 

precedent that requires it to find this provision ambiguous because Plaintiffs chose 

to rely solely on the manufacturer’s warranty rather than hedge their bets and 

bargain for express or implied warranties from the seller.

The Court finds that Roundtree properly disclaimed all warranties, and thus 

summary judgment is due to be granted to BMW on this claim.

C. The Magnuson-Moss Warranty Act

In the complaint, Plaintiffs contend that the federal Magnuson-Moss 

Warranty Act “prohibits merchants from disclaiming implied warranties.” (Doc. 2-1, 

p. 6). Specifically, Plaintiffs contend that the Act “prohibits a disclaimer of implied 

warranties when the seller enters into a service contract with the buyer.” (Doc. 25-1, 

p. 3). The Magnuson-Moss Warranty Act states in relevant part:

(a) Restrictions on disclaimers or modifications

No supplier may disclaim or modify . . . any implied warranty to a 

consumer with respect to such consumer product if (1) such supplier 

makes any written warranty to the consumer with respect to such 

consumer product, or (2) at the time of sale, or within 90 days 

thereafter, such supplier enters into a service contract with the 

consumer which applies to such consumer product.

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15 U.S.C. § 2308(a) (2012).

By the plain language of the statute, a supplier cannot disclaim an implied 

warranty if the supplier makes a written warranty to the consumer or enters into a 

service contract with the consumer. Plaintiffs rest their argument only on the latter. 

However, as discussed above, Roundtree never entered into a service contract with 

Plaintiffs. Rather, the parties to the service contract were Wait and Fidelity 

Warranty Services, Inc., rendering Roundtree’s disclaimer valid. See, e.g., Priebe v. 

Autobarn, Ltd., 240 F.3d 584, 588 (7th Cir. 2001) (holding that “the service contract 

with [the third-party company] is not sufficient to prevent [the dealer] from 

disclaiming implied warranties”); Whitehead v. John Bleakley RV Center, Inc., Civ. 

Action File No. 1:09-CV-468-TWT, 2010 WL 925091, at *6 (N.D. Ga. Mar. 8, 2010) 

(finding that the Act did not prevent the disclaimer of warranties because the 

plaintiff entered into a service contract with a third party and not the sellerdefendant). Because the Court finds Roundtree properly disclaimed all warranties, 

the disclaimer also works to BMW’s benefit by virtue of the contract assignment. 

Thus, summary judgment for BMW is warranted as a matter of law on this claim.

D. Breach of Contract

Both parties filed motions for summary judgment pertaining to this claim. In 

their complaint, Plaintiffs argue that “Roundtree breached the contract by failing to 

deliver the goods that were promised.” (Doc. 2-1, p. 8). Plaintiffs assert that BMW is 

responsible for the breach as assignee of the contract. Id. Plaintiffs claim that the 

vehicle “was seriously defective” and that there was proper revocation. (Doc. 2-1, pp.

8-9; Doc. 25-1, pp. 3-4). According to Plaintiffs, the refusal of BMW “to provide 

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Plaintiffs a full refund” constituted a breach. (Doc. 2-1, p. 9). Further, in their

motion for summary judgment, Plaintiffs request the Court to rule that “Wait 

clearly cannot be held liable to BMW for any alleged balance due on the contract.” 

(Doc. 25-1, p. 4).

In its motion for summary judgment, BMW contends that it did not breach 

the contract but that Wait breached by failing to make the required payments. (Doc. 

23, p. 9). BMW also argues that revocation of acceptance is not proper grounds for 

excusing Plaintiffs’ breach of the contract. (Doc. 30, p. 5). BMW claims that 

Alabama law only contemplates revocation with the seller, and that the buyer’s 

duty to the financing company who was assigned the contract remains intact, even 

if proper revocation takes place. Id. BMW cites no authority for this premise, other 

than arguing that, because the revocation statute only refers to the seller, the 

statute is limited to the seller. Id.

Under Alabama law, the claimant must prove the following elements of a 

breach of contract claim: “(1) the existence of a valid contract binding the parties in 

the action, (2) his own performance under the contract, (3) the defendant’s 

nonperformance, and (4) damages.” S. Med. Health Sys., Inc. v. Vaughn, 669 So. 2d 

98, 99 (Ala. 1995). The parties agree that the first element has been met. They 

differ on the remainder. Revocation of acceptance in Alabama is provided by 

statute:

(1) The buyer may revoke his acceptance of a lot or commercial unit 

whose nonconformity substantially impairs its value to him if he has 

accepted it:

(a) On the reasonable assumption that its nonconformity would 

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be cured and it has not been seasonably cured; or

(b) Without discovery of such nonconformity if his acceptance 

was reasonably induced either by the difficulty of discovery 

before acceptance or by the seller’s assurances.

(2) Revocation of acceptance must occur within a reasonable time after 

the buyer discovers or should have discovered the ground for it and 

before any substantial change in condition of the goods which is not 

caused by their own defects. It is not effective until the buyer notifies 

the seller of it.

(3) A buyer who so revokes has the same rights and duties with regard 

to the goods involved as if he had rejected them.

Ala. Code § 7-2-608 (LexisNexis 2006).

The crux of this dispute seems to hinge on whether the vehicle was defective. 

The evidence presented by the parties that tends to prove or disprove the defective 

nature consists of dueling affidavits. (Docs. 25-2, 31-1). Wait’s affidavit states that 

the power steering system failed multiple times, which “made the vehicle nearly 

impossible to drive.” (Doc. 25-2, p. 1). The affidavit of a BMW employee counters 

that the car was driven over 9,000 miles and that “the vehicle was of standard 

condition, without any major nonconformities.” (Doc. 31-1, pp. 2-3). BMW also 

submitted a “Vehicle Condition Report” prepared for the sale of the repossessed 

vehicle at auction, which lists several issues with the vehicle but nothing about the 

power steering. (Docs. 31-3, 31-5).

The Court finds that a genuine dispute of material fact exists as to whether 

the car was defective. Resolution of this issue will likely determine which party 

breached the contract and whether Plaintiffs’ revocation was warranted. The Court 

does not, however, address whether Plaintiffs followed proper procedure in revoking

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the contract. To the extent that BMW argues that revocation has no affect on 

Plaintiffs’ duty to BMW because, although it was assigned the contract, it is a 

financing company and not a seller, the Court finds that BMW’s position is contrary 

to the FTC Holder Rule, which is discussed in more detail below. See 16 C.F.R. § 

433.2 (2015) (providing that “[a]ny holder of this consumer credit contract is subject 

to all claims and defenses which the debtor could assert against the seller”)

(emphasis added). The Court holds that a grant of summary judgment on this claim 

to either Plaintiffs or BMW would be premature, and therefore the motions must be 

denied.

E. The Truth in Lending Act

In the complaint, Plaintiffs assert that Roundtree “unilaterally and secretly 

altered the cash price [of the vehicle], inexplicably increasing it by approximately 

$1,821.70.” (Doc. 2-1, p. 9). Plaintiffs further argue that “Roundtree then designed 

its Truth in Lending disclosures around this inflated figure,” in violation of the 

Truth in Lending Act. Id.

In its motion for summary judgment, BMW argues that it “cannot be held 

liable under the Truth in Lending Act, however, because [it] was the assignee of the 

loan, and because the alleged violation was not apparent on the face of the 

disclosure statement.” (Doc. 23, pp. 9-10). Plaintiffs did not respond to BMW’s 

argument.

The Truth in Lending Act seeks to better inform consumers when purchasing 

on credit, requiring lenders to provide certain disclosures to the purchaser. See 15 

U.S.C. § 1631 (2012). For a sales contract, BMW points out that an action that “may 

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be brought against a creditor may be maintained against any assignee of such 

creditor only if the violation for which such action or proceeding is brought is 

apparent on the face of the disclosure statement.” Id. § 1641(a). The statute goes on 

to provide examples:

For the purpose of this section, a violation apparent on the face of the 

disclosure statement includes, but is not limited to (1) a disclosure 

which can be determined to be incomplete or inaccurate from the face 

of the disclosure statement or other documents assigned, or (2) a 

disclosure which does not use the terms required to be used by this 

subchapter.

Id. BMW also directs the Court to an Eleventh Circuit case that treated a financing 

company as an assignee, even though the assignment was executed simultaneously 

with the sale of the vehicle. See generally Ellis v. Gen. Motors Acceptance Corp., 

160 F.3d 703 (11th Cir. 1998).

Roundtree clearly assigned the sales contract to BMW. (Doc. 23-2, p. 1). In 

any event, Plaintiffs argue that the contract was assigned to BMW, as discussed 

above, so the parties are in agreement on this point. The Court does not find 

anything on the face of the contract that would lead an observer to believe that the 

Truth in Lending disclosures are invalid. As in Ellis, to find a discrepancy here, the 

Court “would need to resort to evidence or documents extraneous to the disclosure 

statement,” which “the plain language of the statute forbids us to do.” Ellis, 160 

F.3d at 709. Regardless, Plaintiffs have abandoned this claim. See, e.g., Ryan v. Int’l 

Union of Operating Eng’rs, Local 675, 794 F.2d 641, 643 (11th Cir. 1986) (holding 

that “a party may not rely on his pleadings to avoid judgment against him”); 

Shamburger v. City of Mobile, Civ. Action No. 06-0838-CG-M, 2008 WL 2874363, at 

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*1 (S.D. Ala. July 23, 2008) (deeming abandoned claims asserted in a complaint but 

not argued in response to a motion for summary judgment). The Court finds that 

BMW is entitled to summary judgment on this claim.

F. The Federal Trade Commission’s Holder Rule

In the motion for summary judgment, BMW claims that “[b]oth the FTC 

Holder Rule as well as the explicit terms of the Contract provide that recovery by 

the Debtor shall not exceed amounts paid by the Debtor.” (Doc. 23, p. 11). Thus, “if 

the Plaintiffs’ claims survive, . . . the Plaintiffs’ right to recover must be limited to 

the amounts paid by the Plaintiffs under the contract, or in this case, $900.00.” Id.

An employee for BMW asserted in an affidavit that Plaintiffs made only $900.00 in 

payments. (Doc. 23-1, p. 2). Plaintiffs seemingly concede, stating, “As a fallback 

position, BMW asks the Court to limit its liability to the $900 which they claim was 

actually paid to them by the Plaintiffs. This is only appropriate inasmuch as the 

Plaintiffs seek affirmative recovery from BMW for breach of contract.” (Doc. 25-1, p. 

4).

The FTC Holder Rule states the following:

In connection with any sale or lease of goods or services to consumers, 

in or affecting commerce . . . , it is an unfair or deceptive act or practice 

. . . for a seller, directly or indirectly, to:

(a) Take or receive a consumer credit contract which fails to contain 

the following provision in at least ten point, bold face, type:

NOTICE

ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS 

SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE 

DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR 

SERVICES OBTAINED PURSUANT HERETO OR WITH THE 

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PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR 

SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR 

HEREUNDER.

16 C.F.R. § 433.2(a) (2015). The sales contract repeats this paragraph word-forword, in all caps and bold font. (Doc. 23-2, p. 2). While it is difficult to determine by 

the filings whether the paragraph uses the required font size, Plaintiffs have not 

argued to the contrary. BMW also cites to an FTC Holder Rule case from our sister 

court in the Middle District of Alabama holding that buyers could not recover more 

than they had paid to the financing company. See Eachen v. Scott Hous. Sys., Inc., 

630 F. Supp. 162, 166 (M.D. Ala. 1986). BMW’s arguments are well taken.

The Court finds that summary judgment should be granted to BMW on this 

claim. To the extent that Plaintiffs are entitled to damages pursuant to a claim 

under the FTC Holder Rule, the recovery is limited to the amount paid by Plaintiffs 

on the contract. This ruling does not prevent Plaintiffs from pursuing alternative 

remedies, should they be warranted.

CONCLUSION

BMW’s motion for summary judgment is hereby GRANTED IN PART and 

DENIED IN PART, Plaintiffs’ motion for summary judgment is DENIED, and 

BMW’s motion to deny or continue Plaintiffs’ motion for summary judgment is 

GRANTED.

DONE and ORDEREED this 10th day of November, 2015.

/s/ Callie V. S. Granade 

UNITED STATES DISTRICT JUDGE

Case 1:15-cv-00285-CG-M Document 35 Filed 11/10/15 Page 19 of 19