Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

contractdamagestrialforeclosure

contractdamagesattorneytrialtestimonywillleaseregulationrescission

Related Cases

Johnson v. Thomas, 342 Ill.App.3d 382, 794 N.E.2d 919, 276 Ill.Dec. 669, 51 UCC Rep.Serv.2d 769

Facts

Kathy Thomas entered into a retail installment contract for home improvement work with Marvin Bilfeld, who represented Davenport Construction Company. During the signing, Thomas was not provided with complete documentation, and key terms were altered without her consent after she signed. Following dissatisfaction with the work, Thomas invoked her right to rescind the contract, leading to a foreclosure action by Iver Johnson, who had acquired the contract from Bilfeld. The trial court found multiple TILA violations and awarded damages to Thomas.

At trial, Thomas testified that she met with Marvin Bilfeld, d/b/a Davenport Construction Company, at her home in Matteson, Illinois, on July 18, 1995, to discuss a home remodeling contract. During the meeting, Bilfeld obtained Thomas' signature on five documents: (1) a proposal specifying that the remodeling work would total $15,000 with payments to be made in 120 monthly installments of $300; (2) a blank retail installment contract (RIC), which displayed empty boxes entitled “annual percentage rate,” “finance charge,” “amount financed,” “total of payments,” “total sale price” and “payment schedule”; (3) a blank mortgage document; (4) a notice of right to cancel, which contained the name and address of Davenport Construction Company as the party to contact in the event of cancellation and displayed a blank line following the instructions “If you cancel by mail or telegram, you must send the notice no later than midnight of”; and (5) a blank wage assignment.

Issue

The main legal issues were whether Iver Johnson was a 'creditor' under TILA, whether he was liable for TILA violations as an assignee, and whether Thomas's right to rescind the contract was valid.

The Appellate Court, Gordon, P.J., held that: (1) assignee was not a “creditor” under TILA; (2) assignee was liable under TILA for failure to properly disclose credit terms; (3) mortgagor's election of right to rescind contract was timely due to failure to properly disclose rescission rights; (4) mortgagor was not precluded from exercising right to rescind even though she lacked funds to tender payment for work completed; (5) mortgagor was entitled to costs and fees; (6) computer legal research was recoverable as cost or attorney's fee; and (7) whether fees awarded were reasonable and necessary required remand.

Rule

The Truth in Lending Act requires creditors to disclose certain information upon extending credit to a consumer, and an assignee can be held liable for a creditor's failure to provide required disclosures if the violation is apparent on the face of the disclosure statement.

The purpose of the Truth in Lending Act and its regulations, issued by the Federal Reserve System (Regulation Z) ( 12 C.F.R. § 226.1 et seq. (1995) ), is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.”

Analysis

The court determined that Johnson was not a creditor under TILA because the retail installment contract identified Bilfeld as the creditor. However, Johnson was found liable as an assignee for TILA violations because alterations made to the contract were visible and unapproved by Thomas, constituting a violation that was apparent on the face of the document.

The trial court found Thomas to be a credible witness and “in no way” believed Bilfeld's testimony. The court concluded that three TILA violations had occurred—one each on July 18 and August 1, 1995, when Bilfeld failed to make the required TILA disclosures and failed to provide Thomas with copies of the signed documents, and the third when Johnson refused to release the lien on Thomas' home after receiving notice of her election to rescind.

Conclusion

The court affirmed the trial court's judgment in part, reversed it in part regarding the number of TILA violations, and modified the damages awarded to Thomas, remanding the case for further proceedings.

Affirmed in part, reversed in part, and damages modified; cause remanded.

Who won?

Kathy Thomas prevailed in the case due to the court's findings of TILA violations against Iver Johnson, who was deemed liable as an assignee for failing to ensure proper disclosures were made.

The trial court found Thomas to be a credible witness and “in no way” believed Bilfeld's testimony.

You must be

Log In to Casey

Sign Up to Casey

Reset Your Password

Keywords

Related Cases

Northern Indiana Public Service Co. v. Carbon County Coal Co., 799 F.2d 265, 1 UCC Rep.Serv.2d 1505

LaHood v. Couri, 236 Ill.App.3d 641, 603 N.E.2d 1165, 177 Ill.Dec. 791

Gregori v. Bank of America, 207 Cal.App.3d 291, 254 Cal.Rptr. 853, 57 USLW 2481

Allen v. Lefkoff, Duncan, Grimes & Dermer, P.C., 265 Ga. 374, 453 S.E.2d 719, 50 A.L.R.5th 839

People v. Frierson, 25 Cal.3d 142, 599 P.2d 587, 158 Cal.Rptr. 281