Opinion ID: 2277130
Heading Depth: 1
Heading Rank: 2

Heading: Count IRegulation Z of the Truth in Lending Act[6]

Text: Count I in Bell's petition claims Famous Barr violated 15 U.S.C. sections 1666(b)(3) & 1666a (1994) by reporting him delinquent to various credit reporting agencies after receiving notice of a billing error and prior to resolving that error. Count I also claims Famous Barr violated 15 U.S.C. sections 1666(b)(3) & (d) by restricting and closing his Famous Barr account after receiving notice of a billing error and prior to resolving that error. [7] 12 C.F.R. section 226.13(a)(3) defines a billing error as a reflection on or with a periodic statement of an extension of credit for property or services not accepted by the consumer or the consumer's designee, or not delivered to the consumer or the consumer's designee as agreed. [8] Famous Barr argues the billing error alleged by Bell and essential to his claim did not occur because Bell accepted the fan. We apply state law to resolve whether Bell accepted it. [9] In Missouri, Article 2 of the Uniform Commercial Code governs the acceptance of goods. [10] Acceptance occurs when the buyer: 1) after an opportunity to inspect the goods, informs the seller that the goods are conforming or that he will keep them despite their nonconformity; 2) fails to make an effective rejection; or 3) does any act inconsistent with the seller's ownership. [11] Famous Barr argues Bell accepted the fan because he did not reject it. For an effective rejection, the buyer must notify the seller in accordance with the contract or within a reasonable time if the contract is silent. [12] The statute does not require written notice. [13] What constitutes a reasonable time for rejecting defective goods is a jury question when fair-minded persons could disagree. [14] Actions of the parties, such as assurances from the seller, also may affect what constitutes a reasonable time. [15] If the buyer does not use the goods as his own, but rescinds the contract and holds the merchandise as bailee for the seller, the buyer is not liable for the sale price (assuming the rejection was justified). [16] A reasonable jury could find Bell did not accept the fan. He properly notified Famous Barr and Famous Barr duly received notice of the defective fan. Bell's rejection of the fan within three months of purchase was reasonable, especially since Bell did not install it until some weeks after he bought it and tried to fix it. Bell also notified Famous Barr of his rejection within the sixty-day period prescribed by both 12 C.F.R. section 226.13(b)(1) and Famous Barr's own billing statement. In addition, Bell did not commit acts inconsistent with Famous Barr's ownership of the rejected fan. Bell neither used the fan, nor prevented Famous Barr from removing it. Famous Barr even encouraged Bell to retain it pending replacement. Also contrary to the decision of the trial court, summary judgment is improper because a reasonable jury could find Bell attempted to resolve his dispute with Famous Barr in good faith. [17] Bell claimed he long awaited the availability of a replacement fan and the parties dispute when they first agreed Bell would pay for it. If a reasonable jury finds Bell did not accept the fan, and acted in good faith, then it can find a billing error existed. If a billing error existed, Famous Barr violated the Federal Truth in Lending Act by closing Bell's account and reporting him to credit agencies. The decision of the trial court granting Famous Barr's motion for summary judgment on Count I is reversed.