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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
------------------------------------------------*
BRADLEY NIGH,
Plaintiff-Appellee,
v.
KOONS BUICK PONTIAC GMC,
INCORPORATED,No. 01-2201
Defendant-Appellant,
and
HOUSEHOLD AUTOMOTIVE FINANCE
CORPORATION,
Defendant.
------------------------------------------------*
------------------------------------------------*
BRADLEY NIGH,
Plaintiff-Appellant,
v.No. 01-2224
KOONS BUICK PONTIAC GMC,
INCORPORATED; HOUSEHOLD
AUTOMOTIVE FINANCE CORPORATION,
Defendants-Appellees.
------------------------------------------------*
Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (CA-00-1634-A)
Argued: October 28, 2002
Decided: February 4, 2003
Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.
____________________________________________________________
Affirmed by published opinion. Judge Luttig wrote the opinion for the
court. Judge Williams wrote an opinion concurring in part and con-
curring in the judgment in part. Judge Gregory wrote an opinion con-
curring in part and dissenting in part.
____________________________________________________________
COUNSEL
ARGUED: Arthur Mark Schwartzstein, ARTHUR M.
SCHWARTZSTEIN, P.C., McLean, Virginia, for Appellant. A. Hugo
Blankingship, III, BLANKINGSHIP & ASSOCIATES, P.C., Alexan-
dria, Virginia, for Appellee. ON BRIEF: Jack D. Lapidus,
MACLEAY, LYNCH, GREGG & LYNCH, P.C., Washington, D.C.,
for Appellant. Thomas Bryan Christiano, BLANKINGSHIP &
ASSOCIATES, P.C., Alexandria, Virginia, for Appellee.
____________________________________________________________
OPINION
LUTTIG, Circuit Judge:
Bradley Nigh sued Koons Buick Pontiac GMC, Inc. (Koons Buick)
for claims under the Truth In Lending Act (TILA), the Federal Odom-
eter Act (FOA), and the Virginia Consumer Protection Act (VCPA),
along with numerous claims sounding in contract, fraud, and conver-
sion, all in connection with his purchase from Koons Buick of a used
1997 Chevrolet Blazer. Koons Buick filed a counterclaim for breach
of contract and fraudulent and negligent misrepresentation. At sum-
mary judgment, the district court granted judgment on several claims
and all the counterclaims. Some of Nigh's TILA, FOA, and VCPA
claims survived for a jury trial and resulted in a verdict finding Koons
Buick liable for $24,192.80 under TILA, and for $4,000.00 under the
VCPA. Koons Buick appeals from the jury's verdict, as well as from
several of the court's orders. Nigh, in a cross-appeal, also challenges
several of the court's orders. Finding no error in the verdict or the
court's rulings, we affirm the judgment below.
I.
This case arose from Koons Buick's sale of a truck to Bradley
Nigh. The sale was not a simple cash-for-product exchange, but
2
involved a somewhat tortured effort by Koons Buick to provide Nigh
consumer financing. Nigh first went to Koons Buick on February 4,
2000. While there, he decided to trade in his prior vehicle and buy the
Blazer. To complete the sale, he executed a Buyer's Order, reflecting
the proposed purchase, and a "Retail Installment Sales Contract"
(RISC I), reflecting the proposed financing. The Buyer's Order and
RISC I both reflected that Nigh would pay $4,000 down, and trade
in his prior vehicle. Nigh received no price reduction for his trade-in
because he estimated its remaining loan balance to equal the price
Koons Buick gave him for it, but he also agreed to pay off any excess
balance over the estimate. Nigh, having signed the contracts and
turned them over to Koons Buick, was committed to the transaction
and obliged to perform upon counter-signature by Koons Buick.
Koons Buick did not counter-sign the documents as Nigh signed
them, but intended to sign only once a lender agreed to buy an assign-
ment of the installment payments owed under RISC I. The transac-
tion's closing and the completion of Nigh's purchase were thus left
within the dealership's unilateral control.
Nigh left the dealership in the Blazer, on the authority of a tempo-
rary certificate of ownership issued under Va. Code § 46.2-1542.
Nigh left his trade-in vehicle behind, in anticipation that a lender
would purchase assignment of the payments owed under RISC I and
the transaction would close. Koons Buick, however, was unable to
find a willing lender. Consequently, it restructured the deal to require
an additional $2,000 down payment. The dealership represented this
change to Nigh as a "better deal" at a lower rate, necessitating a new
RISC (RISC II). Nigh returned to the dealership on February 25 based
on this representation, but told Koons Buick he did not have an addi-
tional $2,000. He asked to return the new truck, retrieve his trade-in
vehicle, and walk away from the deal. Koons Buick, however, told
him he could not withdraw because it had sold his trade-in. Nigh,
unaware of this statement's falsity, and at a loss, signed RISC II and
a $2,000 Promissory Note to cover the added down payment.
Koons Buick, again unable to find a willing lender, called Nigh
back. Nigh alleged the dealership told him, via a message left with his
brother, that he had to come back to sign a new RISC (RISC III) or
it would report the Blazer as stolen. Afraid of arrest, Nigh returned
to the dealership on March 5, and under protest, signed RISC III with
3
a back-date of February 25. Koons Buick later closed the transaction
by executing the contract documents and selling assignment of RISC
III's installment payments to Household Automotive Finance Corpo-
ration (HAFC).
Afterwards, Nigh learned that his trade-in vehicle had been repos-
sessed from the Koons Buick lot by its note-holder because Nigh,
believing the vehicle to have earlier become property of Koons Buick,
failed to make required payments. Nigh also learned that one of the
reasons Koons Buick had been unable to get a lender to accept RISC
II was that it contained an unaccounted for charge, later determined
to be for a product whose sale to Nigh had not been properly docu-
mented, which Nigh did not recall seeing on the transaction docu-
ments, and which he never requested, agreed to accept, or received.
The product, a Silencer car alarm, was listed on the second Buyer's
Order and on RISC II at a price of $965. But absent from the transac-
tion documents was a Silencer "we owe" form, which is used in retail
car sales to document the sale of "after market" products in financed
transactions. Disgruntled by the whole affair, Nigh made no payments
on the truck and returned it to Koons Buick with a letter asserting a
right to rescission. HAFC repossessed the truck from the dealership's
lot because Nigh made no payments.
Nigh, claiming that Koons Buick defrauded him, brought this
action under the statutory authority of TILA, FOA, and the VCPA,
and under the common law. Koons Buick counterclaimed for breach
of contract. The district court granted summary judgment to Koons
Buick on its counterclaims and on many of Nigh's claims, but pre-
served for trial limited claims under TILA, FOA, and the VCPA. At
trial, Nigh prevailed on his TILA claim that Koons Buick intention-
ally included the charge for the Silencer on RISC II without a basis
for the charge, and on his VCPA claim that Koons Buick violated the
VCPA by telling him that he did not have valid possession of the
Blazer in order to induce him to sign RISC III. The court issued a
Supplemented and Final Judgment on August 15, 2001, three months
after trial, to clarify its summary judgment ruling on Koons Buick's
counterclaims. This order is the proceeding's final judgment, from
which appeal is now had.
4
II.
As a preliminary jurisdictional matter, Nigh contends that Koons
Buick did not timely file a notice of appeal. His objection was already
addressed by a motions panel of this court, and denied for lack of
merit. The district court filed a Supplemented and Final Judgment on
August 15, 2001, and it is against this date that the notice of appeal's
timeliness must be measured, irrespective of the fact that the court
had earlier filed a Final Judgment and had set a subsequent date at
which point notice of appeals tolling would end. Assessed in light of
the August 15, 2001, order, Koons Buick's notice was timely.
III.
The parties raise a variety of claims on appeal, none of which merit
reversing the district court's conclusions of law or the fact-finder's
determinations, but which we address in turn, beginning first with
Koons Buick's claims.
A.
Koons Buick attacks the district court's denial of summary judg-
ment on Nigh's claim that RISC II constituted a TILA violation on
several grounds. First, Koons Buick argues that because RISC II was
never counter-signed, it is an unfunded financing agreement and can-
not form the basis for TILA liability. Under what is commonly known
as Regulation Z, creditors operating under 15 U.S.C. § 1638(b)(1),
which governs this transaction, must "make [TILA] disclosures before
consummation of the transaction," 12 C.F.R. § 226.17(b) (emphasis
added); cf. 15 U.S.C. § 1638(b)(1) ("disclosures . . . shall be made
before the credit is extended" (emphasis added)). TILA liability, how-
ever, cannot accrue until a credit transaction is consummated, or put
another way, "until credit is in fact extended," Baxter v. Sparks Olds-
mobile, Inc., 579 F.2d 863 (4th Cir. 1978) (holding that a signed
buyer's order that contemplated an installment sales contract did not
constitute an extension of credit and so no TILA violation occurred),
since until credit is extended to a person in a particular transaction
there are no credit terms against which to assess a disclosure's accu-
racy. The pertinent legal question then is what consummation of a
credit transaction, or extension of credit, encompasses.
5
Regulation Z defines consummation as the "time that a consumer
becomes contractually obligated on a credit transaction." 12 C.F.R.
§ 226.2 (emphasis added). Under this regulation, a number of courts
have held that consummation, or extension of credit, can encompass
unfunded financing agreements. See, e.g., Johnson v. Steven Sims
Subaru, Inc., 1993 WL 761231 (N.D. Ill. 1993); Bryson v. Bank of
New York, 584 F. Supp. 1306 (S.D.N.Y. 1984); Madewell v. Marietta
Dodge, Inc., 506 F. Supp. 286 (N.D. Ga. 1980); Copley v. Rona
Enterprises, Inc., 423 F. Supp. 979 (S.D. Ohio 1976); see also Dryden
v. Lou Budke's Arrow Finance Co., 630 F.2d 641 (8th Cir. 1980)
(holding that an unenforceable transaction was an extension of credit).
We agree with this rule because the regulation expressly refers solely
to the consumer's commitment and because TILA's express purpose
of protecting consumers from receiving inadequate disclosures prior
to their entering into credit transactions could not otherwise be effec-
tuated. If consummation, or extension of credit, does not encompass
a consumer's commitment to a financing agreement that provides uni-
lateral power for the creditor to execute the agreement later, creditors
could intentionally provide faulty disclosures to consumers, obtain
their commitment, and then afterwards provide accurate disclosures
prior to closing the transaction, which if provided earlier might have
dissuaded the consumer from accepting the credit, all without incur-
ring TILA liability. As the Bryson court noted:
[T]he point at which the consumer . . . commits himself or
herself to the purchase of credit, without regard for the
degree of commitment of the lender . . . [is the point at
which] the consumer becomes vulnerable to actual damage
from the lender's inadequate or deceptive disclosures, for at
this time he or she can be contractually bound to the terms
of the lending contract at the option of the lender.
Bryson, 584 F. Supp. at 1317 (emphasis added). Consequently, we
conclude that consummation, or extension of credit, under § 1638
encompasses unfunded, financing agreement options to which con-
sumers contractually commit, and under which they can be bound at
the lender's sole discretion. Here, Nigh's signing of RISC II and his
giving over of the signed documents to Koons Buick worked his com-
mitment and constituted consummation, or an extension of credit.
Thus, the district court properly concluded that liability attached
6
"when Nigh made the choice and committed himself to the purchase
of credit," Nigh v. Koons Buick Pontiac GMC, Inc., 143 F. Supp. 2d
535, 549 (E.D. Va. 2001).
Koons Buick next attacks its TILA liability by arguing that, since
the second Buyer's Order Nigh signed has a line-item listing the
Silencer product for a price of $965, RISC II's disclosures were accu-
rate, and thus do not violate TILA. But, for several reasons this claim
also fails. First, the dealership conceded from the outset of this action
that the $965 charge was a mistake and thus, by necessary implica-
tion, that RISC II was inaccurate. See Field Affidavit, J.A. at 252
(owner and president of Koons Buick admitting that"[p]laintiff
should not have been charged for a silencer" and explaining that as
a result "a third [RISC] was prepared"); see also Defendant's
Responses to Plaintiff's First Set of Requests for Admissions, J.A. at
817 ("Admit that a charge of $965.00 was included on the second
Buyer's Order for a "silencer." Admitted that the charge was included
in error." (emphasis added)). Indeed, it was on the basis of these
admissions that Koons Buick argued on summary judgment that it
was due judgment under the affirmative defense of 15 U.S.C.
§ 1640(c), a bona fide error defense available to creditors who show
that their TILA error was not intentional, but was a good faith mistake.1
Koons Buick also argued on these admissions of error that if
§ 1640(c) did not apply, then § 1640(b) did, which provides an affir-
mative defense for lenders who have timely made corrections to their
TILA errors.2 Having conceded by affidavit, admission, and legal
argument that the Silencer line-item was in error, Koons Buick cannot
now contend that it was not in error and thus that RISC II was accu-
rate.
Second, Koons Buick waived the legal argument that the congru-
ence between the Buyer's Order and RISC II proves that RISC II
accurately disclosed the transaction by virtue of the fact that it makes
the argument for the first time here in the Court of Appeals. Though
Koons Buick asserts in its briefs that it raised this legal objection ear-
____________________________________________________________
1 The jury ultimately rejected this defense, finding that Koons Buick
"intentionally includ[ed]" the Silencer charge.
2 The district court correctly rejected this defense because Koons Buick
never notified Nigh of the error.
7
lier in the proceedings, its assertion is unsupported by the record. The
citation to which Koons Buick directs the court records its argument
at the start of trial, and after the summary judgment proceedings were
concluded. See J.A. at 317-20. And though that trial exchange con-
tains Koons Buick's assertion that RISC II accurately disclosed the
transaction by virtue of its congruence with the second Buyer's Order,
it noted this objection only in furtherance of its argument that the
error in RISC II was an innocent error:
When a mistake was discovered in the buyer's order
agreement, there was a new retail installment contract which
changed the APR and lowered the APR. That's the kind of
mathematical error, assuming this was a TILA violation to
start with that the correction of errors was designed to
address.
. . . .
So, to the extent to which it's a TILA violation - and I'm
not quite even [sure] it's a TILA violation because the first
- [RISC II] was accurate as to the deal that both parties
mistakenly agreed to. And certainly, Mr. Nigh having
signed it, is not in a position to later come back and say he
was unfairly taken advantage of.
So, your Honor, we believe that in ruling that we're not
entitled to the [§ 1640(b)] defense for correction of errors,
that the Court is incorrect.
(J.A. at 318-20).
Lastly, but equally fatal to Koons Buick's argument is the fact that
the jury, after being properly instructed on the law, rejected Koons
Buick's claim that the Buyer's Order provided a basis for RISC II's
Silencer charge. We do not speculate as to the substance of a jury's
factual determination, and only inquire whether sufficient evidence
supported the verdict.
The verdict form read as follows:
8
Do you find that Koons violated the Truth in Lending Act
by intentionally including a charge for a "Silencer" on the
Retail Installment Sales Contract signed on February 25,
2000 with knowledge that there was no basis for the charge?
(J.A. at 763) (emphasis added). The jury answered "Yes." Id. Having
evaluated the exhibits and the testimony, the jury decided that the
apparent congruity between the Buyer's Order and RISC II did not
constitute a basis for RISC II's Silencer line-item. The jury's conclu-
sion that there was no basis, from the Buyer's Order or any other doc-
ument, for RISC II's Silencer line-item could well have been based
on a determination that some portion of the transaction documents
were unreliable, a determination supported by the record's disclosure
that Nigh executed no "we owe" form for the Silencer and that HAFC
noticed this unusual absence, see J.A. at 769, and by Mr. Nigh's testi-
mony that he never noticed a charge for the Silencer when he signed
the second Buyer's Order and RISC II, see J.A. at 479-82. The jury's
finding of liability was sufficiently supported by this evidence.
Koons Buick's last challenge to the TILA judgment involves the
court's application of the statutory damages cap that 15 U.S.C.
§ 1640(a)(2)(A) establishes for TILA liability. Koons Buick contends
that the court erred in allowing statutory damages of twice the finance
charge in connection with the transaction, citing Mars v. Spartanburg
Chrysler Plymouth, 713 F.2d 65 (4th Cir. 1983) (summarily interpret-
ing § 1640(a)(2)(A) to cap TILA statutory damages in all individual
actions at $1,000). Koons Buick's reliance on Mars is misplaced.
In 1983, when Mars was decided, the act read as follows:
(a) . . . any [TILA violator] is liable to such person in an
amount equal to the sum of -
. . . .
(2)(A)(i) in the case of an individual action twice the
amount of any finance charge in connection with the trans-
action, or (ii) in the case of an individual action relating to
a consumer lease under part E of this subchapter, 25 per
9
centum of the total amount of monthly payments under the
lease, except that the liability under this subparagraph shall
not be less than $100 nor greater than $1,000[.]
§ 1640(a)(2)(A) (1980) (emphasis added). In 1995, however, Con-
gress amended the act to read as follows:
(a) . . . any [TILA violator] is liable to such person in an
amount equal to the sum of -
. . . .
(2)(A)(i) in the case of an individual action twice the
amount of any finance charge in connection with the trans-
action, (ii) in the case of an individual action relating to a
consumer lease under part E of this subchapter, 25 per cen-
tum of the total amount of monthly payments under the
lease, except that the liability under this subparagraph shall
not be less than $100 nor greater than $1,000, or (iii) in the
case of an individual action relating to a credit transaction
not under an open end credit plan that is secured by real
property or a dwelling, not less than $200 or greater than
$2,000[.]
§ 1640(a)(2)(A) (1995) (emphasis added).
The Mars decision plausibly interpreted the phrase "under this sub-
paragraph" to apply to the whole of subparagraph (A) in 1983. But
the 1995 amendment, by striking the "or" preceding (ii), and inserting
(iii) after the "under this subparagraph" phrase, rendered Mars' inter-
pretation defunct. Whereas in 1983 it was plausible to interpret the
maximum and minimum provision as coming at the end of subpara-
graph (A), and not exclusively within subparagraph (ii), the new pro-
vision clearly places that clause wholly within (ii). Of even greater
importance, the provision now expressly sets a statutory maximum
and minimum in subparagraph (iii) that is different from that provided
in the pre-existing maximum and minimum clause. The inclusion of
the new maximum and minimum in (iii) shows that the clause previ-
ously interpreted to apply to all of (A), can no longer apply to (A),
10
but must now apply solely to (ii), so as not to render meaningless the
maximum and minimum articulated in (iii). As a consequence of the
1995 amendment, the damages that may be awarded under subpara-
graph (i) are now simply "twice the amount of any finance charge in
connection with the transaction," and the court's instruction that if
Koons Buick violated TILA Nigh was "entitled to twice the [entire]
finance charge" was proper.
Judge Gregory's disagreement with this analysis is founded on the
mistaken conclusion that we must conclude that Congress abrogated
Mars in order to reach our decision here. See post at 17-18. Of course,
when a statute has been amended we interpret the new statute, not the
old, and any prior opinion interpreting the old statute is necessarily
brought before us for review so that we may ascertain whether the
logic of that prior interpretation still applies to the new statutory lan-
guage. Our responsibility is thus not to determine whether there is
evidence that "Congress intended to override the Fourth Circuit's"
precedent (or any circuit precedent for that matter), as Judge Gregory
believes. See post at 18. The questions before this court, and that
which we address above, are simply whether Congress amended the
statute in a way relevant to the prior interpretation, and if it did, what
does the amended statute mean.
Furthermore, though Judge Gregory thinks our analysis necessarily
implies that Congress "changed the meaning of the word `subpara-
graph,'" see post at 19, it does no such thing. As explained above,
Congress' amendment requires that the reference point of the "under
this subparagraph" clause be the subparagraph of § 1640(a)(2)(A)(ii),
and not the subparagraph of § 1640(a)(2)(A). Indeed, it is Judge
Gregory who would have this court change the meaning of the term
"subparagraph," as his analysis would ignore the plain reading of that
term and instead conclude that it was either meant in the plural, thus
referencing subparagraphs (i) and (ii), or that it was a term of art not
referencing a distinct subparagraph at all.
Judge Gregory's conclusion that our reading of the "under this sub-
paragraph" clause creates surplusage in the statute's construction and
"inconsistency" among its parts is equally flawed. See post at 19.
Indeed, if the "under this subparagraph" clause had been omitted from
the amended statute, Judge Gregory would have a much better case
11
for his interpretation. Had that occurred, he could argue that Congress
intended the maximum and minimum codified in (ii) to apply to both
(i) and (ii), using a comma preceding the maximum and minimum to
set it off from (ii) and to show its applicability to (i) and (ii), and not
using language that requires identifying a distinct subparagraph to
which to apply the maximum and minimum. Thus, rather than being
surplusage, the inclusion of the "under this subparagraph" clause not
only enables, but actually compels, the reading we give the statute by
applying the maximum and minimum limits to a distinct subpara-
graph.
Nor does the clause create "inconsistency" among the statute's
parts either. Just because Congress did not use the same terminology
to restrict the maximum and minimum in (iii) to that subparagraph as
it did to restrict the maximum and minimum in (ii) to that subpara-
graph, it does not follow that "Congress must have meant the statu-
tory caps . . . to have different applications," see post at 20. That fact
leads only to the conclusion that the plain language of each must be
interpreted individually to ascertain its meaning.
It could well be, as Judge Gregory concludes, that Congress did not
intend to alter the statutory cap applicable under subparagraph (A)(i)
when it amended the statute in 1995. However, the critical point of
law - and it is critical- is that we do not know what Congress
intended; all that we have before us is the amended statute from
which to determine intent. And, based upon that statute, the far better,
and indeed compelled, interpretation is that Congress did alter the
statutory cap regardless of its intent. It is the statute, not any inferen-
tial intent, that constitutes the law. Of course, it goes without saying,
if Congress enacted into law something different from what it
intended, then it can simply amend the statute to bring the statute in
line with congressional intent. In this way, and in this way only, are
the constitutional roles of the legislature and the courts respected.
Koons Buick's last substantive attack on the district court's rulings
involves the grant of summary judgment on its counterclaims. The
dealership argues that the court erred by reversing, post-trial, its pre-
trial grant of summary judgment with respect to installment payments
owed by Nigh under RISC III. But the court did not err in this regard,
because it did not reverse itself. As the court made clear, the Supple-
12
mented and Final Judgment, filed after trial, did not change the
court's pre-trial holding; it simply "clarifie [d]" it (J.A. at 894). Admit-
tedly, in granting summary judgment on the counterclaims, the court
held that Nigh breached his contractual obligations in three ways: 1)
failing to pay off the excess loan balance on his trade-in, which
exceeded his estimate; 2) failing to pay on the $2,000 Promissory
Note; and 3) failing to make installment payments. But the court cal-
culated damages to Koons Buick only for the first two. It found Koons
Buick entitled to $1,959.73 for the excess pay-off amount, and
$2,000.00 for the Promissory Note. The court never said Koons Buick
was entitled to the installment payments Nigh failed to make to
HAFC; it never calculated damages to Koons Buick from this breach;
and it never concluded that Koons Buick was entitled to any award
for it.
Koons Buick, meanwhile, asserts it is entitled to the $30,000 due
under RISC III since the court found that Nigh breached his install-
ment payment obligations, even though it sold those rights to HAFC
and HAFC repossessed the Blazer upon Nigh's breach. The dealer-
ship argues it is entitled to damages for the breach because it was the
assignor of the sales contract. See Carozza v. Boxley, 203 F. 673, 677
(4th Cir. 1913) (noting that either an assignor or an assignee can sue
on a defaulted contract). It further argues that even if it may not
recover under Carozza, it may recover on HAFC's rights in order to
preclude its own liability under Va. Code § 8.01-13, which allows
assignees to recover against assignors of defaulted writings.
Both contentions fail. Koons Buick's counterclaim pleading
nowhere refers to either installment payments or its status as an
assignor. See Koons Buick's Answer and Counterclaim (J.A. at 63).
Thus, Koons Buick did not put Nigh or the court on notice that it was
suing on the installment payments, or under any assignment based
theory, as would have been required for it to recover on the breach.
See Fed. R. Civ. P. 8; Labram v. Havel, 43 F.3d 918, 920 (4th Cir.
1995) (a "pleaded claim [must] afford the opposing party fair notice
of the nature and basis or grounds of the claim and a general indica-
tion of the type of litigation involved") (citations omitted)). Though
the court found that Nigh breached his RISC III payment obligations,
it made no award on this basis to Koons Buick, and Koons Buick,
13
having failed to plead on this basis, was due no award. The Supple-
mented and Final Judgment properly clarified this point.
Koons Buick also appeals the VCPA judgment. That judgment,
however, was supported by properly admitted evidence and was suffi-
cient to establish that Koons Buick made material misrepresentations
to Nigh. These misrepresentations were intended to deceive, did
deceive, and caused loss; and the jury's verdict may not be set aside.
Koons Buick lastly challenges the district court's rulings on both par-
ties' motions for costs and attorney fees. Its objections are without
merit; the court did not abuse its discretion in reaching cost and fee
determinations.
B.
Nigh contends on his cross-appeal that the district court erred in
granting summary judgment to Koons Buick on two claims. First, he
argues that the court should have allowed him to proceed to trial on
his TILA claims involving RISC III. Nigh submits that since RISC
III, though signed on March 5, was back-dated to February 25, it
resulted in interest being accrued as of February 25, and thus necessi-
tated that TILA disclosures also be given as of that date. Since Nigh
did not receive the disclosure documents for RISC III until March 5,
he reasons that Koons Buick violated TILA and did not deserve sum-
mary judgment on the claim. Nigh's argument, though superficially
clever, is without merit. While he was liable for monies calculated
from February 25 on, he did not become liable for, those monies until
March 5, by which point he had received the material disclosures. As
Nigh himself points out, "TILA required Koons to provide Nigh with
[the] disclosures . . . prior to the consummation of the transaction,"
Appellee's Br. at 44, and "the parties did not sign [RISC III] until
March 5, 2000," id. at 46.3
____________________________________________________________
3 Because Nigh only argued on appeal that the back-dating of RISC III
caused its accompanying disclosures to be untimely, we do not properly
have before us the related question, addressed by the district court in
Rucker v. Sheehy Alexandria, Inc., 2002 WL 31355142 (E.D. Va. Oct.
16, 2002), of whether such back-dating might affect the accuracy of the
accompanying disclosures.
14
Nigh also argues that the court erred by rejecting his claim to be
entitled to rescission under Va. Code § 46.2-1542 as a result of Koons
Buick's allegedly untimely transfer of title. Though Nigh was given
a temporary ownership certificate governed by § 46.2-1542 upon
signing RISC I, Nigh and Koons Buick executed a reassignment of
title within thirty days, validly transferring title before the statutory
deadline and depriving Nigh of a claim to rescission. See J.A. at 778
(DMV records establishing that the title transfer date for the Blazer
was February 25, 2000).
CONCLUSION
The judgment of the district court is affirmed.
AFFIRMED
WILLIAMS, Circuit Judge, concurring in part and concurring in the
judgment in part:
I concur in sections II and III.B of the majority opinion. I concur
in section III.A of the majority opinion with the exception of that part
of the majority opinion analyzing the issue of whether RISC II was
inaccurate, see ante at 7-9. I agree that "Koons Buick waived the legal
argument that the congruence between the Buyer's Order and RISC
II proves that RISC II accurately disclosed the transaction," ante at 7,
and thus, I concur in the judgment as to this part and would not reach
the analysis of this issue.
GREGORY, Circuit Judge, concurring in part and dissenting in part:
I.
I write separately to dissent solely from the Court's reading of 15
U.S.C. § 1640(a)(2)(A)(1998). I would find that Congress, with the
1995 amendments to TILA, did not change the application of the
$1,000 cap in § 1640(a)(2)(A)(ii). Because the cap still applies to
(2)(A)(i), I would find that the district court erred in granting Nigh
damages in excess of that statutory limit.
15
II.
On appeal, Koons argues that the district court improperly
instructed the jury on the measure of damages for Nigh's claim under
TILA. The district court informed the jury that, pursuant to TILA,
damages were to be equal to "twice the amount of any finance charge
in connection with the transaction." § 1640(a)(2)(A)(i); J.A. at 764.
Based on this instruction, the jury awarded Nigh $24,192.80 on his
TILA claim. Koons insists that the $1,000 statutory cap in
§ 1640(a)(2)(A)(ii) applies to the calculation of damages under
(2)(A)(i), and that the district judge should have reduced the award
accordingly.
Before the 1995 amendments to TILA, 15 U.S.C. § 1640(a) read,
in pertinent part, as follows:
Except as otherwise provided in this section, any creditor
who fails to comply with any requirement imposed under
this part . . . with respect to any person is liable to such per-
son in an amount equal to the sum of- . . .
(2)(A)(i) in the case of an individual action twice the
amount of any finance charge in connection with the trans-
action, or (ii) in the case of an individual action relating to
a consumer lease under part E of this subchapter, 25 per
centum of the total monthly payments under the lease,
except that the liability under this subparagraph shall not be
less than $100 nor greater than $1000; or
(B) in the case of a class action, such amount as the court
may allow, except that . . . the total recovery under this sub-
paragraph . . . shall not be more than the lesser of $500,000
or 1 per centum of the net worth of the creditor . . . .
15 U.S.C. § 1640(a)(1994) (emphasis added). That is, subparagraph
(A) concluded with the qualification that "liability under this subpara-
graph shall not be less than $100 nor greater than $1,000." Both par-
ties concede - and it is Fourth Circuit law - that this limitation
applied to the entire subparagraph, both subsections (2)(A)(i) and
16
(2)(A)(ii). See Mars v. Spartanburg Chrysler Plymouth, 713 F.2d 65,
67 (4th Cir. 1983). See also Strange v. Monogram Credit Card Bank
of Ga., 129 F.3d 943, 947 (7th Cir. 1997) (citing Mars).
This reading of the statute was buttressed by the use of the same
"under this subparagraph" language in § 1640(a)(2)(B), which stated
(and still states), "[T]he total recovery under this subparagraph . . .
shall not be more than the lesser of $500,000 or 1 per centum of the
net worth of the creditor." (Emphasis added). The plain reading of the
pre-1995 statute was that there was one statutory cap on damages
under subparagraph (B) and a separate cap under subparagraph (A).
The use of the phrase "under this subparagraph" in relation to both
limits made it clear that the caps were applicable to the whole of their
respective subparagraphs. This was the reading of the statute adopted
by the Mars Court, and it is an interpretation by which this panel is
still bound.
In 1995, however, Congress amended the statute to add (2)(A)(iii),
relating to real-estate transactions. The current statute reads, in rele-
vant part:
(2)(A)(i) in the case of an individual action twice the
amount of any finance charge in connection with the trans-
action, (ii) in the case of an individual action relating to a
consumer lease under part E of this subchapter, 25 per cen-
tum of the total monthly payments under the lease, except
that the liability under this subparagraph shall not be less
than $100 nor greater than $1000, or (iii) in the case of an
individual action relating to a credit transaction not under an
open end credit plan that is secured by real property or a
dwelling, not less than $200 or greater than $2000 . . . .
15 U.S.C. § 1640 (1998) (emphasis added). The 1995 amendments
did not include any wholesale changes to the statute; the newly
drafted third clause was simply tacked on to the end of the subpara-
graph. Still, with the addition of (2)(A)(iii), the phrase "under this
subparagraph" cannot apply to all of (2)(A) as Congress initially
intended, because it does not apply to (iii), which has its own cap of
$2,000. Thus, the question before this Court is whether Congress
meant to change the application of the statutory cap, and thus abro-
17
gate Mars v. Spartanburg Chrysler Plymouth by adding (2)(A)(iii) to
the statute.1
I would find that Mars is still good law because there is no evi-
dence that Congress intended to override the Fourth Circuit's long-
standing application of the $1,000 cap to both (2)(A)(i) and (2)(A)(ii).
The Seventh Circuit, the only Circuit outside of our own to interpret
the amended statute, has explained:
One could argue that § 1640(a)(2)(A)(i) and (ii) are separate
"subparagraphs," and that "liability under this subparagraph"
means only liability under § 1640(a)(2)(A)(ii). Although
that reading has a certain appeal . . . the history of this part
of the statute suggests that such a reading has its own prob-
lems. Until 1995, § 1640(a)(2)(A) had only two subsections,
the present (i) and (ii). Courts uniformly interpreted the final
clause, which established the $100 minimum and the $1,000
maximum, as applying to both (A)(i) and (A)(ii).
Strange, 129 F.3d at 947 (emphasis added).2
____________________________________________________________
1 The majority claims that its holding is supportable without concluding
that Mars has been abrogated because the 1995 amendments present this
Court with a "new statute" that was not before the Mars Court in 1983.
Ante, at 11. The Court explains, "The Mars decision plausibly interpreted
the phrase `under this subparagraph to apply to the whole of subpara-
graph (A) in 1983. But the 1995 amendment . . . rendered Mars' interpre-
tation defunct." Ante, at 10 (emphasis added). As a preliminary matter,
I have trouble understanding the material distinction between a congres-
sional act that renders a court's interpretation defunct and an act that
abrogates that same interpretation. Regardless, the amendments do not
create a new statute, but simply append a third clause to the original law.
Thus, to reach its result the majority must either: (1) overrule Mars
(which it cannot do); or (2) find that Mars has been abrogated. The
majority effectively recognizes this fact when it states that the "prior
[Mars] opinion . . . is necessarily brought before us for review so that we
may ascertain whether the logic of that prior interpretation still applies.
. . ." Ante, at 11.
2 Similarly, one scholar has observed:
[Congress] added the real estate limitation without changing the
word "subparagraph." That lapse should not lead to a restriction
18
Disregarding the Seventh Circuit's well-reasoned analysis, the
majority elects to create a circuit split, reasoning that the addition of
(2)(A)(iii) has changed the meaning of the word "subparagraph" in
(2)(A)(ii). Finding that a new reading of "subparagraph" is necessary,
the majority states, "The inclusion of the new maximum and mini-
mum in (iii) shows that the clause previously interpreted to apply to
all of (A), can no longer apply to (A), but must now apply solely to
(ii), so as not to render meaningless the maximum and minimum
articulated in (iii)." Ante, at 10-11.
If the $1,000 cap was intended to apply only to (ii), however, then
the inclusion of the phrase "under this subparagraph" would be super-
fluous; the meaning of (ii) would be unchanged by its deletion. It is,
of course, a well-recognized rule of statutory construction that courts
should "avoid a reading [of a statute] which renders some words alto-
gether redundant." Lane v. United States, 286 F.3d 723, 731 (4th Cir.
2002) (quoting Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995)).
Therefore, a reading of § 1640 making the phrase "under this subpara-
graph" meaningless should be disfavored.
Even more, to limit the $1,000 cap only to (2)(A)(ii) would create
an inconsistency within the statute. The $2,000 cap in (2)(A)(iii)
applies only to that individual clause, even though there is no phrase
limiting its effect to one "subparagraph." If Congress also intended to
limit the reach of the statutory cap in (ii), then it would have either
deleted the words, "under this subparagraph" from (ii), or included the
phrase in both (ii) and (iii). By declaring that the statutory cap in (ii)
should apply to claims "under this subparagraph," but not similarly
____________________________________________________________
of liability solely as to part (ii) because that would be a signifi-
cant change that would require the word "subparagraph" to be
applied only to part (ii), when that has always been applied to
everything included in subparagraph (A).
Elwin Griffith, Searching for Truth in Lending: Identifying Some Prob-
lems in the Truth in Lending Act and Regulation Z, 52 Baylor L. Rev.
265, 305 (2000). As a result, Professor Griffith concluded, "Congress did
not change its mind about the meaning of that word, but instead
neglected to make the necessary adjustment when it added a third part
to accommodate transactions secured by real estate." Id.
19
qualifying the cap in (iii), Congress must have meant the statutory
caps in those two clauses to have different applications.
This reading is made even more compelling when one considers
that the phrase "under this subparagraph" in § 1640(a)(2)(B) indispu-
tably applies to all of subparagraph (B). Similarly, the statutory cap
following (2)(A)(ii) applies to all claims under subparagraph (A),
with the exception of claims under (2)(A)(iii), which contains its own,
discrete limit. In short, the most logical interpretation of the statute is
to read the phrase "under this subparagraph" as applying generally to
an entire subparagraph, either (A) or (B), and to read (2)(A)(iii) as
creating a specific carve-out from that general rule for real-estate
transactions.
This is the reading that has been adopted by the Seventh Circuit:
[T]he 1995 amendment was designed simply to establish a
more generous minimum and maximum for certain secured
transactions, without changing the general rule on minimum
and maximum damage awards for the other two parts of
§ 1640(a)(2)(A). We therefore conclude that the "subpara-
graph" mentioned in § 1640(a)(2)(A)(ii) continues to
encompass what is now codified as subparts (A)(i) and
(A)(ii), and not just subpart (A)(ii).
Strange, 129 F.3d 943, 947 (7th Cir. 1997). When Congress added
§ 1640(a)(2)(A)(iii), it included a $2,000 cap specifically for (iii), but
left the older $1,000 cap unchanged. The qualifier, "under this sub-
paragraph," remained. Thus, I would hold that the addition of
(2)(A)(iii) did not alter the meaning of (2)(A)(i) or (2)(A)(ii). To hold
otherwise would be to dramatically increase creditors' liability expo-
sure under § 1640(a)(2)(A), without any explicit, statutory language
to support such an increase.
III.
In sum, I concur with the majority's assessment that Koons
engaged in a variety of scurrilous business practices that support the
jury's finding of liability under both TILA and the VCPA. However,
20
for the reasons articulated above, I believe that Koons' statutory lia-
bility for its TILA violation is capped at $1,000. Accordingly, I dis-
sent in part from the majority's judgment.
21