Kennedy v. Plaza Pontiac, Inc.

589 F.2d 161, 1979 U.S. App. LEXIS 17160

• Court: Court of Appeals for the Fifth Circuit
• Decided: February 1, 1979
• Docket: Nos. 75-4397, 75-4408 and 76-1158
• Status: Published

Opinion

PER CURIAM:

At the time of our decision herein, we overlooked the fact that the law of this circuit was represented by the then recent decision in Martin v. Commercial Securities Co., 539 F.2d .521 (5th Cir. 1976). The rule of that case is that neither an acceleration clause nor the lender’s rebate policy upon acceleration are required disclosures under the Truth in Lending Act. Our affirmance of the judgments below in these cases, judgments which grounded liability in the lenders for failure to disclose these matters, was therefore erroneous and must be set aside.¹

In the second of these cases, No. 75-4408, Reed v. Lewis Welch Oldsmobile, Inc., et al., various claims of violations were made in addition to failure to disclose the right to accelerate. All these were correctly decided against the borrower, we conclude, and liability was grounded solely on a failure adequately to disclose the right to accelerate the unpaid balance upon default. We therefore reverse that judgment and here render judgment for the defendants in that case.

In the other two cases, additional claims of inadequate disclosure were made which the courts below did not reach in view of their determinations that the failures to disclose the right to accelerate sufficed for liability. We conclude that these cases must be remanded for consideration by the district court of these other claims, since liability in those cases cannot be founded on the lenders’ failure to disclose the right to accelerate upon default.

It is so ORDERED.

1 . Since our decision, the Martin rule has been modified by our court en banc to require disclosure of rebate provisions on acceleration where the creditor does not rebate unearned finance charges in accordance with disclosed provisions for rebate upon prepayment. McDaniel v. Fulton National Bank, 571 F.2d 948 (5th 1978). And though the McDaniel decision en banc was made generally prospective, the ef-feet on these litigants appears to be the same under our present disposition as under the McDaniel rule since the rebate policy on prepayment was properly disclosed and is applied in the event of acceleration.