United States District Court, D. Montana, Billings Division
TIMOTHY'J. CAVAN UNITED STATES MAGISTRATE JUDGE.
William Allen (“Allen”) brought this action under
the Truth in Lending Act seeking an offset in debt and an
award of finance charges and fees he paid under a contract
and security agreement with Defendant RJC Investment, Inc.
(“RJC”). (Doc.1.) Allen also seeks a declaratory
judgment that RJC cannot judicially enforce the contract
because RJC violated the Montana Mortgage Act's licensing
requirements. (Doc. 1.) RJC has filed a counterclaim against
Allen, seeking damages for breach of contract and
attorney's fees. (Doc. 6.)
is Allen's motion for summary judgment as to all counts
in his complaint. (Docs. 19.) The motion is fully briefed and
ripe for decision. Having considered the parties'
arguments and for the following reasons, the Court orders
that Plaintiffs' motion is GRANTED in
part and DENIED in part.
21, 2013, Allen entered into an installment sale contract and
security agreement with Cherry Creek Development, Inc. for
the purchase of a mobile home. (Doc. 24 at ¶1.) Allen
also executed a promissory note to pay Cherry Creek $69, 900
in accordance with the terms of the contract. (Doc. 1-2.)
Cherry Creek subsequently assigned its interest in the
contract and promissory note to RJC. (Doc. 24 at ¶¶
3, 4.) Allen's monthly payment obligation under the
contract was $711.00. (Doc. 14-2.) The contract also provided
that a late fee of $50.00 would be assessed on any payment
made five days past the due date. (Docs. 14-2, 24 at ¶
5.) After executing the contract, Allen defaulted on his
payment obligations multiple times. (Doc. 24 at ¶6.) As
a result, he was charged numerous late fees in the amount of
$50.00 each. (Docs. 20-1, 24 at ¶ 6.)
December 22, 2017, Allen brought this action against RJC
asserting violations of the Truth in Lending Act (“TIL
Act”). (Doc. 1.) He claims RJC violated the TIL Act by
assessing premature and excessive late fees under the
contract (Count I), and by failing to make required
disclosures when the contract was executed (Count II). Allen
also alleges the contract is not enforceable because RJC was
not a licensed lender as required by the Montana Mortgage Act
(Count III). Allen requests that the Court grant him recovery
of all finance charges and fees paid on the contract, declare
that he may offset any amount owed to RJC by the statutory
damages limit of $4, 000, and declare the contract judicially
unenforceable. (Doc. 1 at 6.)
filed its answer and counterclaim against Allen on February
26, 2018. (Doc. 5.) RJC denies Allen's allegations in its
answer, and asserts three causes of actions against him in a
counterclaim: breach of contract, breach of the implied
covenant of good faith and fair dealing, and attorney's
fees. Id. RJC also raises a variety of affirmative
August 10, 2018, Allen filed a motion for summary judgment.
(Doc. 17, 19.). Allen does not specify in his motion the
claim(s) on which summary judgment is sought, but generally
“moves the Court . . . to enter summary judgment in
this matter.” (Doc. 17.) Fed.R.Civ.P. 56(a) provides
that “[a] party may move for summary judgment,
identifying each claim or defense - or the part of each claim
or defense - on which summary judgment is sought.”
Nevertheless, the Court will construe the motion as a
requesting summary judgment as to all counts in Allen's
will grant summary judgment if the movant can show
“there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). The moving party has the
initial burden to submit evidence demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986).
facts are those which may affect the outcome of the case.
Anderson, 477 U.S. 242, 248 (1986). A dispute as to
a material fact is genuine if there is sufficient evidence
for a reasonable fact-finder to return a verdict for the
nonmoving party. Id. If the movant meets its initial
responsibility, the burden shifts to the nonmoving party to
establish a genuine issue of material fact exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986).
Truth in Lending Act
enacted the TIL Act to promote and achieve “the
informed use of credit, ” which “results from an
awareness of the costs thereof by consumers.” 15 U.S.C.
§ 1601. It encourages fair and transparent credit
extension practices by requiring credit term disclosures and
prohibiting lending abuses. Eby v. Reb Realty, Inc.,
495 F.2d 646, 647 (9th Cir. 1974); 15 U.S.C. § 1601(a).
Courts should liberally construe the Act in favor of
consumers to implement its purpose. In re Ramsey v. Vista
Mortgage Group, 176 B.R. 183, 187 (9th Cir. 1994)
(citing Eby, 495 F.2d at 650).
it was enacted in 1968, the TIL Act has been amended multiple
times. In re Ramsey, 176 B.R. at 186. Many of the
modifications to the application of the Act are reflected in
“Regulation Z” and the Home Ownership and Equity
Protection Act (“HOEPA”). 12 C.F.R. Pt. 226;
15 U.S.C. § 1639. HOEPA amended the TIL Act to require
additional disclosures for certain high-cost mortgages. 15
U.S.C. § 1639. Regulation Z was promulgated by the Board
of Governors of the Federal Reserve System, the entity
charged with prescribing regulations to implement the TIL
Act. In re Ramsey, 176 B.R. at 186; 15 U.S.C. §
1604. The Board also published Official Staff Commentary to
supplement Regulation Z and aid in its interpretation.
Id. The Supreme ...