Opinion ID: 1796802
Heading Depth: 1
Heading Rank: 2

Heading: b. what the record says

Text: Having read the record, I conclude that the sales contract with Regency appears to have set forth the terms clearly. In the sales contract, under Federal Truth-In-Lending Disclosures, the block entitled Total of Payments contains the amount $20,742.00. In the block at the bottom left corner of the front page entitled Credit Life, taking up a space that is impossible for a reader to miss, the premiums are listed for both the credit life and the credit disability insurance $1,037.10 and $1,306.75. Beside the subblock listing the premium for the credit life insurance is another subblock with the words I want credit life insurance. Directly beside that subblock is another subblock with the signature of the buyer, Alan McCullar. The same signature and the same format appear with the disclosure of the credit disability insurance premium. This sales contract was entered into the record. The credit life insurance policy is also explicit. It states who should receive payment in the event the policy amount paid is greater than the debt owed. This is a distinct possibility because when the policy is written, no one knows if or when the debtor might die or become disabled. Therefore, there is no way to know exactly how much excess coverage might exist on the date the debtor dies. The policy clearly covers this contingency. First, the excess is paid to the debtor's secondary beneficiary. Of course, the creditor is the primary beneficiary of the policy because the amount owed is paid directly to the creditor to cover the debt. If there is no secondary beneficiary, then the excess is paid to the debtor/insured's estate. This raises the question of what damage the McCullars suffered as a result of purchasing this insurance. Cindy McCullar defaulted on the car payments. It is not clear how she could have made a claim upon a contract for insurance that is in default. The Motor Vehicle Installment Contract states that the 60 monthly payments will be the same each month, $345.70. The total amount of the payments, $20,742.00, is clearly listed on the contract. Therefore, this is an installment contract involving equal monthly installments. The interest rate and the amount of interest that would be paid over a 60-month period are clearly listed. This is a standard consumer motor vehicle sales contract. I know of no additional information needed to decide what statute and regulation governed this particular installment contract. I do not know what more would need to be disclosed to the McCullars in order for Regency to avoid the fraud claim. The opinion does not explain in what way these facts were not disclosed. Nor does it explain what additional information should have been disclosed to the customer in order for Regency to be successful on a summary judgment motion. Are dealers now required to give purchasers some type of lesson in financing and on what state law allows? If Regency had done so in this case, it would have told the McCullars that the total-of-payments method is an acceptable method of determining the necessary amount of life insurance to cover an add-on/precomputed interest contract.