                                            Filed:   July 21, 2000

                   UNITED STATES COURT OF APPEALS

                       FOR THE FOURTH CIRCUIT


                             No. 99-1944
                            (CA-98-61-4)



Rachel Alston,

                                               Plaintiff - Appellant,

          versus


Crown Auto, Incorporated,

                                                Defendant - Appellee.



                             O R D E R



     The court amends its opinion filed June 28, 2000, as follows:

     On the cover sheet, section 1 -- the status is changed from

“UNPUBLISHED” to “PUBLISHED.”

     On the cover sheet, section 6 -- the status line is corrected

to read “Affirmed by published per curiam opinion.”

     On page 2, section 1 -- the reference to use of unpublished

opinions as precedent is deleted.

                                         For the Court - By Direction



                                         /s/ Patricia S. Connor
                                                  Clerk
PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RACHEL ALSTON,
Plaintiff-Appellant,

v.                                                                   No. 99-1944

CROWN AUTO, INCORPORATED,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of Virginia, at Danville.
Norman K. Moon, District Judge.
(CA-98-61-4)

Argued: June 9, 2000

Decided: June 28, 2000

Before LUTTIG and KING, Circuit Judges, and
Richard L. WILLIAMS, Senior United States District Judge
for the Eastern District of Virginia, sitting by designation.

_________________________________________________________________

Affirmed by published per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Thomas Dean Domonoske, Chapel Hill, North Carolina,
for Appellant. James A.L. Daniel, DANIEL, VAUGHAN, MEDLEY
& SMITHERMAN, P.C., Danville, Virginia, for Appellee. ON
BRIEF: Elmer R. Woodard, Danville, Virginia, for Appellant. Robert
J. Smitherman, DANIEL, VAUGHAN, MEDLEY & SMITHER-
MAN, P.C., Danville, Virginia, for Appellee.

_________________________________________________________________
_________________________________________________________________

OPINION

PER CURIAM:

Rachel Alston sued Crown Auto, Inc., for various federal and state
law violations arising out of her purchase of a car from Crown Auto.
The district court granted Crown Auto's motion for summary judg-
ment on all of Alston's claims. For the reasons that follow, we affirm.

I.

On November 28, 1997, Alston entered into a Retail Installment
Sales Contract ("RISC") with Crown Auto, to purchase a 1987 Honda
Accord for $5,281.60. Under the RISC, Alston was required to pay
a ten-percent fee for any late payments. Alston made late payments
on several occasions and was charged a ten-percent late fee. It is
undisputed that under Virginia law, Crown Auto was not permitted to
charge Alston a late fee in excess of five percent. See Va. Code § 6.1-
330.80(A) ("Any lender or seller may impose a late charge for failure
to make timely payment of any installment due on a debt . . . provided
that such late charge does not exceed five percent of the amount of
such installment payment . . .

In September 1998, Crown Auto repossessed Alston's car because
she did not have required insurance. At that time, Crown Auto gave
Alston a check for the amount in excess of five percent that she paid
in late fees, plus interest. J.A. 41-42, 53.

Alston sued Crown Auto in federal district court under the federal
Truth-in-Lending Act ("TILA") and on various state law grounds. The
district court granted Crown Auto's motion for summary judgment on
all claims. Alston now appeals.

II.

Alston argues that the district court erred when it granted summary
judgment to Crown Auto on her TILA claim. Alston contends that

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Crown Auto violated TILA when it failed to designate as a "finance
charge" an $85.00 processing fee, as required under 15 U.S.C.
§ 1638(a)(3). Under TILA, a "finance charge" includes any charges
"imposed by the creditor as an incident to the extension of credit. The
finance charge does not include charges of a type payable in a compa-
rable cash transaction." 15 U.S.C. § 1605(a).

The district court found that Alston had produced no evidence to
prove that the $85.00 fee was incident to the extension of credit and
not charged in comparable cash transactions. The district court held
that the fee was not a "finance charge" and therefore that Crown Auto
did not violate TILA when it did not label it as such. We agree.

Crown Auto presented evidence that its general practice is to
charge both cash and credit customers an $85.00 processing fee.
Although Alston presented evidence that two cash customers negoti-
ated with Crown Auto not to pay the processing fee, she has presented
no evidence to refute Crown Auto's position that its general practice
is to charge the $85.00 fee to all customers, credit and cash alike.
Because Crown Auto's processing fee is payable in comparable cash
transactions, we cannot conclude that the district court erred in con-
cluding that the processing fee was not a "finance charge."1

III.

Alston also argues that the district court erred when it granted sum-
mary judgment to Crown Auto on her two state law claims, which we
address below.

A.

Alston argues that the district court erred when it concluded that
her loan from Crown Auto was not usurious. Under Virginia law, a
loan is usurious if the creditor charges an interest rate higher than that
_________________________________________________________________

1 Alston also argues that she was charged two $85.00 processing fees.
We agree with the district court, however, that the $85.00 processing fee
was itemized separately on the handwritten form used during negotia-
tions and was included in the sale price on the computer-generated form,
and she was, therefore, charged only one $85.00 processing fee.

                    3
rate disclosed in the contract.2 Alston maintains that, because Virginia
law permits Crown Auto to charge only a five-percent late fee, and
not the ten-percent late fee that it did charge, the excess late fee
charged should be considered additional undisclosed interest. There-
fore, she claims that Crown Auto actually charged her more than the
eighteen-percent interest, which it disclosed and to which she agreed.

The district court held that the late fee is a penalty that is not sub-
ject to usury, and that the Virginia statute that directly addresses
excess late fees provides the exclusive remedy under Virginia law.
We agree.

Under Virginia law, a loan that is not usurious when made cannot
be made usurious by subsequent events. See Ward's Adm'rs v. Cor-
nett, 22 S.E. 494, 495 (Va. 1895) ("A debt to be usurious, must be so
in the beginning. It cannot be made so by subsequent events. . . . If
the obligor had paid the debt when the bond became due, he would
not have incurred, even under the literal terms of the bond, any liabil-
ity to pay the illegal interest stipulated for after its maturity. Where
the debtor, by a punctual payment of the debt, may thus relieve him-
self and avoid the payment of the illegal interest stipulated for, it is
not usury."); see also Pollard v. Baylors, 1819 WL 897 (Va. Nov. 27)
("[A] penalty inserted in a contract, from which a party may deliver
himself, does not make the contract usurious."). Although Alston was
subject to an illegal excess late fee if she failed to make payments on
time, if she complied with her payment schedule she would not be
subject to any illegal charges or excess interest. Therefore, under Vir-
ginia law, the loan was not usurious.

Alston responds to this reasoning by quoting Garrison v. First
Federal Savings and Loan Assoc. of South Carolina, 402 S.E.2d 25
(Va. 1991), for the proposition that "any charge which cannot be attri-
buted to either principal or to an allowed charge for collateral services
_________________________________________________________________

2 Under Virginia law, a creditor cannot charge more than twelve-
percent interest, see Va. Code § 6.1-330.55, unless the seller and buyer
expressly agree to a different rate, see Va. Code § 6.1-330.77 ("Any
seller of goods or services who extends credit under a closed-end install-
ment credit plan or arrangement may impose finance charges at such rate
or rates as may be agreed upon by the seller and purchaser.").

                     4
is considered interest" for purposes of usury.3 Accord Byrd v. Sterling
Mortgage Corp., 1994 WL 1031124 (Va. Cir. Ct. April 6, 1994)
(unreported). That is, Alston argues that under Garrison, because the
excess late fee cannot be attributed to principal or to an allowed
charge, it is necessarily interest which exceeds the interest to which
Alston agreed. However, both Garrison and Byrd address the ques-
tion whether fees charged up front at the time the loan is made are
to be considered "interest" for purposes of usury. Neither case, nor
any other case Alston cites, stands for the relevant proposition that
any future disallowed fees that could come due based on events sub-
sequent to the signing of the loan could render the loan usurious. And,
we are further convinced that excessive late fees are not to be consid-
ered in the determination whether a loan is usurious when made,
because Virginia has a statute which directly addresses excessive late
fees. See Va. Code § 6.1-330.80(C) ("Any provision for late charges
in excess of the amount permitted in this section shall be void as to
such excess but shall not otherwise affect the validity of the obliga-
tion."). This provision makes clear that the exclusive remedy is to
void the amount in excess of the allowable fee but as well that no
other obligation, including the obligation to pay the allowable late fee,
is effected.

Here, Crown Auto did, as required under section 6.1-330.80, void
the excess late fee and reimburse Alston. And, because Alston could
have avoided any illegal late fee by making her payments on time, we
conclude that the loan was not usurious when made.

B.

Alston also argues that Crown Auto's charge of an excessive late
fee violated the Virginia Consumer Protection Act ("VCPA"), which
makes unlawful:
_________________________________________________________________

3 Alston also argues that Cornett and Pollard are too old to be applica-
ble to current usury statutes. However, she cites no cases or specific stat-
utory provisions that conflict with this understanding of Virginia usury
law. And Garrison itself borrows its understanding of what is interest at
the time the contract is made from general usury principles articulated in
a 1933 opinion.

                     5
          [u]sing in any contract . . . any . . . penalty clause . . . or
          attempting to collect any . . . penalties which are void or
          unenforceable under any otherwise applicable laws of this
          Commonwealth . . . .

Va. Code § 59.1-200(13). That is, Alston argues that Crown Auto
unlawfully collected the ten-percent late fee, because the amount in
excess of five percent was void or unenforceable under Virginia law,
see Va. Code § 6.1-330.80(A).

The district court held that Alston could not show a genuine issue
of material fact because there was no evidence to indicate that the ten-
percent fee was misrepresented or hidden. We agree with Alston that
there does not appear to be any requirement in section 59.1-200(13)
that the penalty be misrepresented or hidden. However, we cannot
conclude that the district court erred in granting Crown Auto's motion
for summary judgment on this claim, because Alston has presented no
evidence to indicate that she suffered a loss as a result of any viola-
tion of the VCPA.

Alston brought her VCPA claim for damages and attorneys fees
under section 59.1-204 of the statute, which reads:

          Any person who suffers loss as the result of a violation of
          this chapter shall be entitled to initiate an action to recover
          actual damages, or $500, whichever is greater.

Va. Code § 59.1-204(A) (emphasis added). Although Alston did pay
in excess of five percent for late fees, Crown Auto reimbursed her for
the excess late fees, plus interest. Alston has not shown that she suf-
fered a loss as the result of Crown Auto's violation of the VCPA, and
therefore, she is not entitled to initiate an action for damages under
this provision. Accordingly, we cannot conclude that the district court
erred in granting summary judgment to Crown Auto on this claim.

Alston contends that despite the plain text of the VCPA's damages
provision, under Valley Acceptance Corp. v. Glasby, 337 S.E.2d 291
(Va. 1985), she can still sue Crown Auto under the VCPA even if she
suffered no loss. In Glasby, the bank was not licensed to issue the

                     6
type of loan it issued to the borrowers, imposed impermissible fees
and charges, and unlawfully took an interest in the borrowers' real
estate. Rather than simply awarding the borrowers damages, the court
voided the entire contract. The court also awarded attorneys fees to
the borrowers under section 59.1-204(B), which reads: "[I]n addition
to any damages awarded, such person also may be awarded reason-
able attorney's fees and court costs." Although Glasby is a case in
which there were apparently no damages actually awarded, it is not
clear that the borrowers suffered no loss. The question in Glasby was
not whether a person who suffered no loss could sue for damages but
whether a mere "technical" violation of the VCPA was a sufficient
violation to support the award of attorneys fees. See id. at 297. In fact,
the Virginia Supreme Court specifically avoided the question whether
attorneys fees could be awarded when there are no actual damages
awarded. See id. at 297 n.4. Because Glasby does not directly address
the question whether someone who cannot show that they suffered
loss can initiate a suit for damages under the VCPA, we cannot over-
look the plain language of section 59.1-204, which clearly precludes
Alston from filing suit.

CONCLUSION

For the reasons above, we conclude that the district court did not
err when it granted Crown Auto's motion for summary judgment on
Alston's TILA and state law claims.

AFFIRMED

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