Court Opinion

ID: 9516662
Source: CourtListenerOpinion
Date Created: 2023-08-06 23:48:29.112835+00
Date Added: 2024-06-11T09:38:28.706818
License: Public Domain

STEINMETZ, J.
(concurring). I disagree with the majority’s assertion that the federal case law interpreting the Truth-In-Lending Act is persuasive authority for the issue in this case. The legislative history of the Wisconsin Consumer Act indicates that the narrow federal definition of “bona fide error” should not apply in Wisconsin. When the Consumer Act was first introduced, it contained no bona fide error section at all. A revised version contained a bona fide error provision, but it was only to apply to limited, specific violations of the act. As finally adopted, the bona fide error exemption was extended to virtually every violation of the act, including violations of sec. 425.206, Stats., regarding nonjudicial enforcement.
In the Truth-In-Lending Act, Congress was concerned only with the narrow subject of disclosure. It was only in that limited context that the bona fide error exemption arose. Unlike the Truth-In-Lending Act, the Wisconsin Consumer Act covers the entire subject of creditor/consumer relations. Since the Consumer Act contemplates a wider range of violations than the Truth-In-Lending Act, a broader interpretation of bona fide error is warranted. Indeed, it is difficult, if not impossible, to envision a clerical error in the context of the repossession of a vehicle. I would hold as did the trial court: “We do not believe it was the intent of the legislature to limit the bona fide error defense to simple clerical errors in disclosures.”
There are two elements to a creditor’s bona fide error defense: (1) the violation must not have been intentional, *543and (2) the violation must have resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid the error. The trial court held that First Wisconsin’s violation of the Consumer Act was unintentional and I agree.
As to the second requirement of the defense, the record displays that First Wisconsin consulted the foremost banking and consumer law experts in the state to ascertain and comply with the requirements of the Consumer Act and its provisions. This consultation appears to have been in the form of attendance at seminars and banker association conferences where the act was explained. It does not appear that direct legal advice as to the repossession procedures applicable to the contract involved was obtained.
The form contract used in the sale of this vehicle contained language indicating the “validity, construction and enforcement” of the contract would be governed by “the internal laws of Wisconsin.” Also, the contract stated that the debtor had a right to a court hearing on the issue of default before any repossession of collateral could take place. The bank, based on its consultations, understood that the law of the state in which the collateral was located would apply to a repossession in that state. This position is not consistent with the second part of the bona fide error defense. In light of the contract’s express language, it cannot be stated that the bank’s error was a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error. The very contract at issue stated that the law of Wisconsin would govern and that the debtor was entitled to a court hearing on the issue of default before repossession of the collateral could take place. A mere reading of the contract and applying its clear language would have prevented this error from occurring. The bank’s procedure was not reasonably adapted to avoid error.