Sharif v. Thorp Credit Inc. (In re Sharif)

23 B.R. 519, 1982 U.S. Dist. LEXIS 14587
CourtDistrict Court, N.D. Georgia
DecidedSeptember 10, 1982
DocketBankruptcy No. 81-03052A; Adv. No. 81-1585A; Civ. A. No. 82-1218A
StatusPublished
Cited by1 cases

This text of 23 B.R. 519 (Sharif v. Thorp Credit Inc. (In re Sharif)) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sharif v. Thorp Credit Inc. (In re Sharif), 23 B.R. 519, 1982 U.S. Dist. LEXIS 14587 (N.D. Ga. 1982).

Opinion

ORDER

MOYE, Chief Judge.

Presently before the Court in the above-styled action is an appeal of a United States Bankruptcy Court decision granting summary judgment in favor of defendant after concluding that there had been no violation of the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and Regulation Z of the Federal Reserve Board, 12 C.F.R. § 226.1 et seq. The bankruptcy court determined that defendant’s disclosure of the “CASH ADVANCE” was clear and conspicuous and therefore not a violation of 15 U.S.C. § 1639(a)(1) and that defendant’s disclosure as to post-maturity interest was not a violation of Regulation Z, 12 C.F.R. § 226.6. This Court agrees with the conclusions of the bankruptcy court and therefore affirms the court’s granting of summary judgment in favor of defendant, Thorp Credit, Inc. of Maryland.

The facts are not in dispute, and the law has been well briefed by the parties. Plaintiff Gerald Wali Sharif entered into a loan agreement, dated September 29, 1980, with defendant Thorp Credit, Inc. of Maryland. Plaintiff, subsequently, filed a petition for relief under Chapter 7 of the Bankruptcy Code on July 24, 1981. In his petition, plaintiff listed as exempt property the TILA chose in action that is now before the Court. No objection to the claimed exemption was made, and on August 26, 1981, the case was brought before the bankruptcy court. The bankruptcy court granted summary judgment in favor of defendant, and the case is presently before this Court on appeal.

Disclosure of “CASH ADVANCE” Pursuant to 15 U.S.C. § 1639(a)(1)

A lender, pursuant to 15 U.S.C. § 1639(a)(1), must reveal the amount of the cash advanced by a description that the borrower can recognize as the amount of cash given to him, the borrower. Sage v. Freedom Mortgage Co., 675 F.2d 1208, 1211 (11th Cir. 1982). Furthermore, Regulation Z, 12 C.F.R. § 226.6(a), generally requires that disclosures be made clearly and conspicuously. The standard is well established that there must be strict compliance with the technical requirements of TILA so that consumers can make meaningful comparisons of available credit alternatives. Smith v. Chapman, 614 F.2d 968 (5th Cir. 1980). There is no question that defendant provided a designated and identified space for the “CASH ADVANCE” figure on the standardized “Combined Note and Disclosure Statement,” hereinafter “disclosure statement.” The issue before the Court is whether the disclosure is clear and conspicuous.

Plaintiff claims that the “CASH ADVANCE” figure of 2001.04 is not disclosed properly under Regulation Z, 12 C.F.R. § 226.6(a), because the figure was typed partially in a darkened area and slightly [521]*521outside of the box provided for the “CASH ADVANCE.” The plaintiff brings to the attention of the Court a seventh circuit case involving a blurred or obscured disclosure. Smith v. No. 2 Galesburg Crown Finance Corp., 615 F.2d 407 (7th Cir. 1980). The Court in Smith, supra, at 418, observed:

Nothing can be more central to the entire scheme of TILA than the notion that disclosures made must be legible. The required disclosures become meaningless if the consumer is unable to decipher them. In this case, the disclosure of the $168.4130 finance charge is obscured behind lines and words printed on the form itself so as to be, in our opinion, unreadable ....

The court went on to reverse the trial court on the basis that the court of appeals was in as good a position as the trial court to determine whether the figure is legible, noting that the finding of fact on the question does not carry the same weight as findings involving credibility determinations. Id. at 418 n.31, see Jurek v. Estelle, 623 F.2d 929, 932 (5th Cir. 1980). The Smith court pointed out that the figure was so blurred and obscured that both parties to the litigation and the district court had misread the finance charge by a difference of $20. Id. at 418 n.30. The facts in Smith are distinguishable from the case at bar because the “CASH ADVANCE” figure in the present ease is readable, although typed off center of the box provided. Plaintiff contends that the figure is illegible; however, the defendant, the bankruptcy court, and this Court agree that the 2001.04 figure is readable. Therefore, the Court finds the disclosure to be clear, conspicuous and in accordance with Regulation Z. Accord, Howard v. Century Finance Co. of East Point, Inc., 81-663A (N.D.Ga. July 29, 1981) (Dougherty, M.).

The Court points out that in addition to the required disclosure on the disclosure statement, the defendant provided plaintiff with the exact same “CASH ADVANCE” figure reproduced and clearly labeled on the loan voucher, received, signed, and dated by the plaintiff on the same date as found on the disclosure statement. Consequently, the defendant clearly and conspicuously disclosed the same “CASH ADVANCE” figure on the disclosure statement and on the loan voucher. Customer copies of both documents were given to the plaintiff.1 Therefore, even if plaintiff had any difficulty in reading the figure on the disclosure statement, the plaintiff had a crystal clear carbon copy of exactly the same figure with the exact same label on the loan voucher, see Reardon v. G. L. J. Enterprises, Inc., C80-1895A (N.D.Ga. March 30, 1982) (Hall, J.).

Assuming, arguendo, that the disclosure were not clear and conspicuous, the Court finds persuasive defendant’s good faith defense pursuant to 15 U.S.C. § 1640(c). Title 15 U.S.C. § 1640(c) provides as follows:

A creditor may not be held liable in any action brought under this section for a violation of this subchapter if the creditor shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid such error.

It has been firmly established that the bona fide error defense is limited to clerical errors, such as the typing error in the present case, rather than expanding the defense to include errors in legal judgment.

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Bluebook (online)
23 B.R. 519, 1982 U.S. Dist. LEXIS 14587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sharif-v-thorp-credit-inc-in-re-sharif-gand-1982.