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BATES v. PROVIDENT CONSUMER DISCOUNT CO.

November 19, 1979

FLOYD P. BATES and JANE O. BATES
v.
PROVIDENT CONSUMER DISCOUNT COMPANY



The opinion of the court was delivered by: VANARTSDALEN

MEMORANDUM OPINION AND ORDER

The parties have filed cross motions for summary judgment in Civil Action 79-1926 in which plaintiffs are seeking statutory damages for alleged violations of the Truth In Lending Act, 15 U.S.C. § 1601, et seq. There is no genuine issue as to any material fact. There has been no violation of the requirements of the Truth In Lending Act by the defendant. Judgment will be entered in favor of the defendant and against the plaintiffs.

 Plaintiffs, husband and wife, sought a loan from the defendant to satisfy a pre-existing judgment. *fn1" The documents for the loan were signed by plaintiffs on June 2, 1978. Copies of the documents were mailed by defendant to plaintiffs' attorney, David A. Scholl of Community Legal Services, with an accompanying letter requesting that defendant be advised if the documents did not meet with his approval. Plaintiffs, after consultation with their attorney, rescinded the transaction on June 5, 1978. No money had changed hands, no documents had been filed in any court; plaintiffs had paid nothing and defendant had disbursed no funds.

 Defendant heard nothing further from Mr. Scholl *fn2" or anyone else concerning this transaction, until this action was filed, in forma pauperis, by David A. Scholl on May 31, 1979, which would appear to be one day prior to the action being barred by the one year limitation period. *fn3"

 Plaintiffs' first claim of violation is that the note, security agreement, and disclosure statement include a $ 7.50 charge for "Optional Automobile Club Fee" (Exhibit A to complaint), which "plaintiffs do not recall purchasing and which they believe was improperly disclosed and improperly omitted from the Finance Charge."

 15 U.S.C. § 1605(d) provides:

 
(1) Fees and charges prescribed by law which actually are or will be paid to public officials for . . . perfecting . . . any security related to the credit transaction.

 12 C.F.R. § 226.4(8)(b) provides:

 
If itemized and disclosed to the customer, any charges of the following types need not be included in the finance charge:
 
(1) Fees and charges prescribed by law which actually are or will be paid to public officials for . . . perfecting . . . any security related to the credit transaction.

 An inspection of the statement reveals that the $ 7.50 charge was recorded opposite item 6, just above item 7 which relates to a "Mortgage Recording Fee."

 In defendant's answer to the complaint, it is averred that the $ 7.50 charge was "erroneously placed opposite item 6 of the aforesaid note, Security Agreement and Disclosure Statement, when in fact it should have been placed opposite item # 7 entitled "Mortgage Recording Fee.' "

 As to the alleged violation arising out of the charge of $ 7.50 inserted on the line "Optional Auto Club Fee" instead of the following line "Mortgage Recording Fee," it should be noted that in plaintiffs' petition to proceed in forma pauperis, plaintiffs aver that they do not own an automobile. It should also be noted that they signed a contract which provided for a mortgage and judgment note, and that the $ 7.50 charge had been written in one space above that which referred to "Mortgage Recording Fee," an obvious, inadvertent mistake, and one which in no way affected the total cost or charge to plaintiff as reflected by the ...


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