Court Opinion

ID: 9493276
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:03:09.843961+00
Date Added: 2024-06-11T17:55:44.997087
License: Public Domain

HEANEY, Circuit Judge,
dissenting.
This is an important case, as it concerns whether consumers have a remedy when merchants mislead them about where their money is going. Correy Peters had a right to know that nearly half of his insurance payment went to the car dealer rather than the insurer. He must have a remedy as well.
Of the $414.64 that Peters paid Lupient for credit life and disability insurance, only $231.34 — less than 60% — was actually paid to the insurer for Peters’ premium. The remainder was returned to Lupient as a commission. Nevertheless, Lupient represented to Peters that - the entire amount would be paid to the insurer on his behalf. Through this surreptitious payment scheme, Lupient has committed fraud and violated TILA. See Gibson v. Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 285-87 (7th Cir.1997).
The majority relies on Anderson v. Rizza Chevrolet, Inc., 9 F .Supp.2d 908, 913 (N.D.Ill.1998), for the proposition' that in order to prove damage, Peters must show he would have sought a lower price on the service and could have obtained one. The majority incorrectly states that Peters concedes that Anderson provides the proper framework for determining actual damages. While Peters cites Anderson’s analysis in his brief, he argues it is inapplicable and that he should not be required to show he could have obtained a better deal on the insurance from a different source. Peters does not concede to Anderson’s analysis simply by citing it. Moreover, Anderson was wrongly decided because it is inconsistent with the Seventh Circuit’s decision in Gibson.
In Gibson, Judge Richard Posner made it crystal clear that a TILA plaintiff need not show he would have sought and could have obtained a lower price on the, dealer-offered service in order to state a claim. See Gibson, 112 F.3d at 287. The plaintiff need only allege that the dealer’s disclosure statement misrepresented that the dealer was applying the full payment toward the service when in actuality the dealer was keeping a substantial portion of the payment for itself. To put the matter simply, a dealer violates TILA and harms the consumer when it fails to disclose it retained a part of the consumer’s payment as a commission:
The consumer would have a greater incentive to shop around for [services], rather than take the one offered by the dealer, if he realized that the dealer was *918charging ... a “commission,” and apparently a very sizable one, for its efforts in procuring the [service] from a third party. Or. the consumer might be more prone to haggle ... [o]r he might go to another dealer in search of lower markups on third-party charges.
Id. at 286.
A deceptive business practice, in and of itself, inflicts damage upon the consumer because it limite the consumer’s ability to make informed choices. Thus, granting summary judgment in favor of Lupient on the ground that Peters has not been harmed was improper. See Jones v. Bill Heard Chevrolet, Inc., 212 F.3d 1356, 1363 n. 7 (11th Cir.2000) (recognizing that TILA liability is based on misrepresentation, not detrimental reliance upon that misrepresentation).
Having established that Peters was harmed by Lupient’s conduct, the question remains how to measure his damage. TILA is a remedial statute, enacted in part “to protect the consumer against inaccurate and unfair credit billing,” 15 U.S.C. § 1601(a)(2000), and should be interpreted broadly to effectuate its stated purpose. A number of reported decisions support the proposition that actual damages in TILA claims may be measured by the amount of the violator’s misrepresentation. See In Re Russell, 72 B.R. 855, 863 (Bankr.E.D.Pa.1987); see also In Re Murray, 239 B.R. 728, 734 (Bankr.E.D.Pa.1999) (determining TILA violation triggers actual damages for amount of improperly disclosed charges); cf. Lopez v. Orlor, Inc., 176 F.R.D. 35, 40 (D.Conn.1997) (certifying TILA plaintiffs as class for analysis of actual damages despite no showing by class that it could have obtained similar insurance for less than insurance sold by car dealership at inflated price).
These decisions accurately reflect the actual harm the consumer suffers as a result of the dealer’s misrepresentation. In this case, the only evidence before the district court on this point was that Lu-pient received $183.30 of Peters’ insurance payment as its commission. Absent further evidence, judgment should be entered for Peters in that amount.
Because the majority’s opinion is inconsistent with the Truth in Lending Act and with the decisions of the Seventh and Eleventh Circuits, I respectfully dissent.