Opinion ID: 3151871
Heading Depth: 3
Heading Rank: 1

Heading: Cause of Action Under the Dealers Act

Text: As a threshold matter, we find that Freeman pursued the proper course of action in seeking recovery for a closing fee violation under the Dealers Act. Although the Closing Fee Statute identifies the procedural requirements that must be met before a dealer can charge a closing fee, neither the Closing Fee Statute nor other provisions of the SCCPC provide any remedy for a consumer claiming a closing fee violation. As stated by this Court, [t]he purpose of the SCCPC is to clarify the law governing consumer credit and to protect consumer buyers against unfair practices by suppliers of consumer credit. Fanning v. Fritz's Pontiac-Cadillac-Buick, Inc., 322 S.C. 399, 401, 472 S.E.2d 242, 244 (1996) (citing section 37-1-102 of the SCCPC); see Davis v. NationsCredit Fin. Servs. Corp., 326 S.C. 83, 86, 484 S.E.2d 471, 472 (1997) (One of the primary purposes of the Consumer Protection Code is to 'protect consumer buyers, lessees, and borrowers against unfair practices by some suppliers of consumer credit, having due regard for the interests of legitimate and scrupulous creditors.'  (quoting section 37-1-102(2)(d))). Despite the well-defined purpose to protect against unfair practices involving consumer credit transactions, Hendrick identifies several provisions in the SCCPC as potential avenues for recovery.9 However, none of these are applicable to the type of claim brought by Freeman. A review of these code sections reveals that the remedies are directed at recovery for specifically identified acts involving lending transactions between creditors and debtors. Here, Freeman did not allege any unfair practice regarding the financing of her vehicle purchase. Rather, she claimed she was unfairly charged a closing fee that bore no relation to the actual expenses incurred by Hendrick. Given this claim did not involve an unfair consumer credit transaction between a creditor and a debtor, Freeman had no means of recovery under the SCCPC. Instead, Freeman's claim fell within the purview of the Dealers Act, which: (1) prohibits a motor vehicle dealer from engaging in any action which is arbitrary, in bad faith, or unconscionable and which causes damage to any of the parties or to the public; and (2) provides a 9 See S.C. Code Ann. § 37-5-202(2), (3), (8) (2015) (identifying effect of creditor's violations of the SCCPC on the rights of a consumer). remedy for a consumer that is damaged by this action. S.C. Code Ann. §§ 56-1540(1), -110(1), (2) (2006). Furthermore, because the Legislature enacted the SCCPC and the Dealers Act both for the purpose of consumer protection, the statutes cannot be read in isolation. See Tilley v. Pacesetter Corp., 355 S.C. 361, 378, 585 S.E.2d 292, 300 (2003) (The Consumer Protection Code and the Dealers Act share a common purpose: protection of the consumer.); see also Town of Mt. Pleasant v. Roberts, 393 S.C. 332, 342, 713 S.E.2d 278, 283 (2011) (A statute as a whole must receive practical, reasonable, and fair interpretation consonant with the purpose, design, and policy of lawmakers.). Considering this common purpose, we believe the Legislature intended for the statutes to be construed together as it expressly provided for the SCCPC to supplement remedies afforded to consumers in law and equity, which would necessarily include those provided in the Dealers Act. See S.C. Code Ann. § 37-1-103 (2015) (Unless displaced by the particular provisions of this title, the Uniform Commercial Code and the principles of law and equity, including the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause supplement its provisions. (emphasis added)). Consequently, in reconciling the two statutes, we find that the Closing Fee Statute sets forth the procedural requirements that a dealer must satisfy before charging a closing fee whereas the Dealers Act sets forth the remedy for an alleged closing fee violation. See Hodges v. Rainey, 341 S.C. 79, 88, 533 S.E.2d 578, 583 (2000) (Statutes dealing with the same subject matter must be reconciled, if possible, so as to render both operative.). Significantly, the Department's Administrative Interpretation, when read in full, supports this construction as it references provisions of the Dealers Act and indicates that the Closing Fee Statute was not intended to be a comprehensive remedy. The Administrative Interpretation states: The Supreme Court specifically indicated in its holding in Fanning that it did not imply such fees might not be actionable under other applicable law. 322 S.C. at 404, 472 S.E.2d at 245, N.8. Likewise, the General Assembly did not further clarify the issue other than to indicate the fees might be legally charged for Consumer Protection Code purposes if the requisite filing and disclosures are made. The Department is aware of nothing in the General Assembly's enactment that legitimizes a closing fee or any fee or charge if it is assessed through fraud or misrepresentation. Because the Department is charged with executing the Closing Fee Statute, we must give credence to its interpretation. See Faile v. S.C. Emp't Sec. Comm'n, 267 S.C. 536, 540, 230 S.E.2d 219, 221-22 (1976) (The construction of a statute by the agency charged with executing it is entitled to the most respectful consideration and should not be overruled without cogent reasons.). Finally, we note that our appellate courts have, in other contexts, rejected the assertion that the remedies found within the SCCPC are the exclusive remedy for a violation of consumer transactions. See Tilley v. Pacesetter Corp., 333 S.C. 33, 508 S.E.2d 16 (1998) (holding that consumers, who purchased home products secured by a mortgage on their homes, were not limited to the remedy under section 37-5-202 of the SCCPC because the Legislature did not specifically provide that this code section was the exclusive remedy). Our appellate courts have also implicitly approved proceeding under the Dealers Act for an alleged closing fee violation. See Gardner v. Newsome Chevrolet-Buick, Inc. 304 S.C. 328, 404 S.E.2d 200 (1991) (reversing, in a case pre-dating the enactment of the Closing Fee Statute, trial judge's denial of class certification for car buyers' suit alleging dealer committed an unfair act in charging a closing fee in violation of the Dealers Act). Accordingly, we conclude that Freeman properly pursued recovery under the Dealers Act.10