Court Opinion

ID: 9575959
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:18:57.246832+00
Date Added: 2024-06-11T12:52:10.196097
License: Public Domain

*320Guy, J.
(dissenting) — The majority holds that the agreements the Zachmans and Crosslers signed with Whirlpool are not valid revolving charge agreements under the terms of the retail installment sales act (RISA). I disagree.
The majority's principal reason for its holding is what it calls a "definitional problem" with recognizing the Whirlpool agreements as revolving charge agreements. Majority opinion, at 311. According to the majority, the statutory definition of a revolving charge agreement in RCW 63.14.010(10) requires that such agreements be between a retail buyer and a retad seller. The majority then reasons that because Whirlpool is not a retail seller, Whirlpool cannot, by definition, enter into revolving charge agreements. The error in the majority's reasoning is that it is confusing who may enter into a retail installment transaction with who may enter into a revolving charge agreement. Consider closely the definition in RCW 63.14.010(10):
"[R]evolving charge agreement," . . . means an agreement . . . prescribing the terms of retail installment transactions which may be made thereunder from time to time . . ..
The crucial question is whether under this definition the party providing the financing, the creditor, must be the retail seder in the underlying retail installment transactions. I would answer yes if "revolving charge agreement" were defined to be an agreement between a consumer and a retail seller prescribing the terms of any present or future retad installment transactions between them. That is not the way "revolving charge agreement" is defined in RCW 63.14.010(10). One must keep clearly in view that revolving charge agreements are fundamentally financing agreements; they prescribe the financing terms for retail instadment transactions. The creditor under RCW 63.14.010(10) is simply the party providing the consumer with the needed financing to make retail installment transactions. In other words, under RCW 63.14.010(10), "revolving charge agreement" means an agreement between a consumer and a creditor prescribing the terms under which the creditor wdl *321provide financing to the consumer for any present or future retail installment transactions between the consumer and retail sellers. There is no requirement in RCW 63.14-.010(10) that the creditor under the revolving charge agreement must be the retail seller in the retail installment transactions that are made possible by the financing provided under the agreement. The creditor may be the retail seller, but the statute does not require that. Again, the statute leaves entirely open the possibility that a retail buyer, B, may enter into a revolving charge agreement with a creditor, C, under which C finances B's purchases from a retail seller, S, and where C and S are not the same person.
Thus, contrary to the majority's assertions, the statutoiy definition of "revolving charge agreement" does not require that only retail sellers may act as creditors under revolving charge agreements. The majority's interpretation is contradicted by other points as well. The majority's argument, in essence, is that because the definition of "revolving charge agreement" in RCW 63.14.010(10) incorporates the definition of "retail installment transaction", only retail sellers may enter into revolving charge agreements. This interpretation is contradicted by the point that the definition of "[ljender credit card agreement" in RCW 63.14.010(3) also incorporates the definition of retail installment transactions. One cannot infer from this that only retail sellers may enter into lender credit card agreements.4 Indeed, the issuer of a lender credit card agreement may not be principally a retail seller. RCW 63.14.010(3).
The majority attempts to address this deficiency in its position by underscoring the fact that RCW 63.14.010(3) specifically authorizes the third party creditor's purchase, with *322the buyer's consent, of the buyer's indebtedness to the retail seller. Majority opinion, at 311. The majority regards this as showing that when the Legislature intended that a third party creditor be involved, it so provided. This argument misses the point, which is that the majority's reasoning relative to the statutory definition of "revolving charge agreement" leads to a manifestly false conclusion when applied to the corresponding definition of "lender credit card agreement". Moreover, the majority's argument reduces to the proposition that because the definition of "revolving charge agreement" does not explicitly allow that the creditor may be someone other than the retail seller, it follows that only retail sellers may act as creditors; in short, what is not allowed is forbidden. The contrary view seems to me more appropriate. The statute does not prohibit nonretail sellers from providing financing under revolving charge agreements; ergo, they are permitted to enter into such agreements.
There is a further problem with the majority's position. Prior to 1967, RCW 63.14.180 provided that "[a]ny seller who enters into any contract or agreement which does not comply with the provisions of this chapter or who violates any provision of this chapter except as a result of an accidental or bona fide error" shall be barred from the recovery of fees under the agreement. (Italics mine.) Former RCW 63.14.180.5 The Legislature amended the quoted phrase in 1967 by, inter alia, replacing the word "seller" with the word "person". Laws of 1967, ch. 234, § 10. I see no other way to interpret this amendment than as indicating the Legislature's intention that persons other than retail sellers may enter into retail installment contracts or revolving charge agreements. It is noteworthy that the Washington State Attorney General interpreted the significance of the 1967 amendment in this way in a 1968 opinion. AGO 6, at 5, 9 (1968) (addressing whether RISA applied to bank card purchases). The majority fails to consider the 1967 amendment. *323It is an important point, however, and one that squarely contradicts the majority's position.
The majority purports to state an "alternate ground" on which its holding is based. The majority rests this "alternate ground" on the premise that RCW 63.14.010(10) defines a revolving charge agreement in the singular as one financing agreement applying to many retail installment transactions. Majority opinion, at 311. The majority reasons that because of this, Whirlpool would have had to have been a party to the original agreement executed by the Crosslers, which it was not since it received the agreement by assignment from Enterprize Mart. Majority opinion, at 312. In fact, if one looks past the form of the original transaction and considers its substance, Whirlpool clearly was a party to the original transaction because it was in reality Whirlpool, not Enterprize Mart, that was extending the credit to the Crosslers. Ignoring this, however, and adopting the fiction that Enterprize Mart was really the original creditor and Whirlpool received the agreement by assignment, there is no reason to regard this as inconsistent with the fact that RCW 63.14.010(10) defines "revolving charge agreement" in the singular. "An assignment does not change the scope of the contract or agreement on which it is based." Walton v. Severson, 100 Wn.2d 446, 455, 670 P.2d 639 (1983). Rather, an assignment of full title and interest places the assignee in the shoes of the assignor, giving the assignee whatever rights the assignee had under the agreement. Walton, at 455. Therefore, the assignment from Enterprize Mart to Whirlpool simply placed Whirlpool in Enterprize Mart's shoes. The agreement remained the same. Repeat transactions made possible by the agreement were no less possible under that same agreement once it had been assigned to Whirlpool.
As regards the Zachmans' agreement, the majority asserts that it is consistent with the definition of a lender credit card agreement and inconsistent with the definition of a revolving charge agreement because it made Whirlpool's extension of credit to the Zachmans contingent upon Whirlpool's *324approval. Majority opinion, at 312. It may be that the Whirlpool agreement is consistent in some respects with the statutory definition of a lender credit card agreement, but that in itself is no reason not to regard it as also consistent with the statutoiy definition of a revolving charge agreement. The majority's concern over Whirlpool retaining the right to approve future extensions of credit is also unfounded. A creditor may reasonably condition future extensions of credit upon approval in order to enable itself to confirm on those future occasions that the borrower is staying within the originally agreed upon credit limit and maintaining a satisfactory credit history. Requiring such approval is fully compatible with an agreement being a revolving charge agreement. There is evidence in the present case that Whirlpool's right to approve future credit amounted to nothing more than such routine credit checking. For example, the Zachmans' attorneys' secretary stated in a memorandum for her employer's file that she had entered into a revolving charge agreement with Whirlpool, and that she had made a second purchase under her Whirlpool account after giving the retailer only her name, address, and Social Security number. She said the retailer simply called Whirlpool on the telephone and received an authorization number. Unrebutted evidence such as this in the record establishes that subsequent purchases under Whirlpool revolving charge agreements are both common and routine.
Finally, I comment upon the majority's scholarly but anachronistic discussion of the history of installment sales regulation. Quoting mostly commentators writing in the 1950's and 1960's, the majority argues that, historically, major appliances were commonly purchased using retail installment contracts. Majority opinion, at 308-10. Although the majority does not make this explicit, it appears the majority intends to predispose us to view the Whirlpool agreements as retail installment contracts because they were used to make purchases of household appliances. It is no doubt true that in 1963, when RISA was enacted, major appliances *325were widely regarded as suitably purchased under retail installment contracts rather than revolving charge agreements. The way retail installment contracts and revolving charge accounts were used 30 years ago, however, should not limit the ways in which they may be used today.
In summary, I see no positive basis for the majority's view that the Whirlpool agreements are not revolving charge agreements, a view which is directly contradicted by the 1967 amendment to RCW 63.14.180.1 therefore must respectfully dissent.
Because the trial court's grant of summary judgment against Whirlpool was based on its acceptance of the erroneous view that only retail sellers may enter into revolving charge agreements, and because there is no genuine issue as to any relevant material fact, I would remand the case and order the trial court to dismiss all of the plaintiffs' claims which depend on that assertion. Whatever claims the plaintiffs have raised which do not depend upon that assertion have not been the subject of this appeal and could be addressed by the trial court upon remand.
Dolliver, J., concurs with Guy, J.

A lender credit card agreement is defined as an agreement "prescribing the terms of retail installment transactions pursuant to which the issuer may, with the buyer's consent, purchase or acquire one or more retail sellers' indebtedness of the buyer under a sales slip or memorandum evidencing the purchase, lease, loan, or otherwise to be paid in accordance with the agreement.” RCW 63.14-.010(3).

 References to lender credit card agreements, such as appear in the present statute, were added in 1984. Laws of 1984, ch. 280, § 12.