Opinion ID: 1757379
Heading Depth: 1
Heading Rank: 2

Heading: Texas Consumer Credit Code

Text: The Smails have appealed the decision of the Court of Civil Appeals that the retail installment contract does not violate the provisions of the Texas Consumer Credit Code. Their first contention is that the retail installment contract does not satisfy the standard set out in article 5069-7.02(3). That article requires: [a] retail installment contract shall also contain, in a size equal to at least ten-point bold type, a specific statement that liability insurance coverage for bodily injury and property damage caused to others is not included, if that is the case. That contract states in bold type: LIABILITY INSURANCE FOR BODILY INJURY AND PROPERTY DAMAGE TO OTHERS IS NOT INCLUDED UNLESS SUCH COVERAGE IS PART OF A MOBILE HOMEOWNER'S POLICY PURCHASED HEREUNDER. The remainder of the contract clearly shows that no MOBILE HOMEOWNERS POLICY was purchased. The box next to it was not checked, and there was no charge entered for such coverage. The contract obviously shows that liability insurance is not included. The Smails also allege a violation of article 5069-7.02(6)(b), which states: (6) The retail installment contract shall specifically set out the following items: (b) The amount of the buyer's down payment, if any, specifying the amounts paid in money and in goods traded in; [16] In the blank provided for the disclosure of the cash down payment the amount of $950.00 was written. All parties agree that the actual down payment was only $300.00, but the amount was inflated by Crawford and the Smails in order to get the necessary financing from General Electric. The $650.00 difference was deducted from the purchase price. It is undisputed that without a down payment of at least $950.00 (which was ten percent of the purchase price), General Electric would have refused to finance the Smails' home. The Smails were in no way deceived and were in fact active participants in deceiving General Electric. The jury found that the Smails knew that the statement was false and that they knew the contract was to be assigned to General Electric; yet Mr. Smail signed the contract and took advantage of the deception. We, therefore, agree with the court below that under the facts of this case, the Smails were in pari delicto with the defendants and the award of damages would amount to an unjustifiable windfall. The Smails further complain that the contractual insurance clause violates article 5069-7.06(3) which requires: (3) When insurance is required in connection with such a contract or agreement made under this Chapter, the seller or holder shall furnish the borrower a statement which shall clearly and conspicuously state that insurance is requested or required in connection with the contract, and that the buyer shall have the option of furnishing the required insurance either through existing policies of insurance owned or controlled by him or of procuring and furnishing equivalent insurance coverages through any insurance company authorized to transact business in Texas. In addition when any requested or required insurance is sold or procured by the seller or holder at a premium or rate of charge not fixed or approved by the State Board of Insurance, the seller or holder shall include such fact in the foregoing statement, and the buyer shall have the option for a period of five days from the date of the contract or agreement of furnishing the required insurance coverage either through existing policies of insurance owned or controlled by him or of procuring and furnishing equivalent insurance coverages through any insurance company authorized to transact business in Texas. Such statement or statements may be made in conjunction with or as part of the retail installment contract required by Article 7.02. The Smails argue that the contract does not satisfactorily specify the fact that insurance is required for the full term of the contract, and that the contract does not clearly and conspicuously disclose the price. Article 5069-7.06(3) does not specifically require disclosures of either type of which the Smails now complain. It basically requires disclosures that: 1) insurance is requested or required; 2) the buyer has the option of where to obtain the insurance; and 3) the charge made to the buyer by the seller is not approved or fixed by the State Board of Insurance, if that is the case. The contract in question complies with the first two requirements, and no complaint is made that the amount charged did not comply with the rate approved by the State Board of Insurance. [17] We find no violations of either the Federal or the Texas Act in the case before us. We, therefore, reverse the judgment of the court below awarding the one-thousand dollar (1,000.00) penalty for a violation of the Federal Act, and further reverse its decision to remand part of the case for a factual determination of legal fees. We affirm the take-nothing judgment of the trial court. Concurring opinion by JOHNSON, J., in which SPEARS, J., joins.