District Court (Pa.) Says Spot-Delivery Situation With Multiple Contractual Re-Writes Did Not Violate TILA

In Brogan v. Fred Beans Motors of Doylestown, Inc., No. 17-5628, 2020 U.S. Dist. LEXIS 58863, at *35-37 (E.D. Pa. Apr. 3, 2020), Judge Kenney found that an automobile transaction that involved multiple RISC re-writes and multiple lender declinations did not violate TILA.

In Count IV, Plaintiff alleges that the “Federal Truth in Lending Disclosures in the retail sales installment contracts were false and misleading as, among other reasons, the dealership repeatedly miscalculated financing terms in its favor in order to generate further revenue from automobile sales” and that “Defendant had no intention to honor the financing terms contained in its retail sales installment contracts, which were subject to Defendant’s unilateral determination.” ECF No. 27 at ¶¶ 89 & 90.  Defendant contends that Count IV should be denied as a matter of law because Plaintiff “can offer no set of facts where the initial disclosure prior to entering the obligation (RISC #1) failed to fully apprise [Plaintiff] of the entirety of the obligation. If anything, [Defendant] only eased the obligation by amending the parties’ agreement.” ECF No. 73-1 at p. 23. Defendant also points out that Plaintiff has yet again failed  to set forth with specificity how Defendant’s calculations violate TILA, much less put forth any evidence to support his claim and show that there is a genuine issue of material fact related to this claim barring the Court from entering judgment as a matter of law. In response, Plaintiff makes three sweepingly general claims about how Defendant “violated TILA.” ECF No. 81 at p. 24. First, Plaintiff claims that because Defendant “always retained the unilateral right to change the financing terms for a transaction,” the terms were illusory. Id. In other words, because the credit in RISC #1 never “actually existed, as Fifth Third [Bank] never approved the financing,” “it is clear that Fred Beans violated TILA.” Id. Second, Plaintiff claims that Defendant further violated TILA “because it intentionally misstated the finance charges within the RISCs.” Id. And third, Plaintiff claims Defendant “repeatedly miscalculated the financing terms of the RISCs in its favor in order to generate further revenue from automobile sales.” Id.  As discussed at length previously, Plaintiff’s inability at this late stage in litigation to articulate how Defendant’s conduct violated specific provisions of a statute upon which he sought not only to state a claim for himself but also for an entire class of allegedly harmed consumers is insufficient. Defendant has painstakingly explained how its calculations complied with TILA and in response Plaintiff only merely reiterates the allegations he made in the Second Amended Complaint. As to Plaintiff’s first allegation that the terms of the RISCs were illusory, the Court has already found that Defendant signed RISC #1 with the understanding that financing was in fact secured by Fifth Third Bank. The Court further found that RISC #3 was a proper novation of RISC #1 and thus, the terms of neither agreement were “illusory.” Indeed, RISC #3 is still operative and both parties continue to perform pursuant to the terms of RISC #3. As to Plaintiff’s second and third allegations, that Defendant intentionally misstated the finance charges and intentionally miscalculated the finance terms, the Court has already found that neither of these allegations has proven to be true. Accordingly, Count IV will be denied as a matter of law.