                Filed 3/15/19 by Clerk of Supreme Court
                       IN THE SUPREME COURT
                     STATE OF NORTH DAKOTA


                                   2019 ND 82


Darilyn Baker, individually, and on behalf
of all persons similarly situated,                         Plaintiff and Appellant

      v.

Autos, Inc., a North Dakota Corporation,
d/b/a Global Auto; RW Enterprises Inc.,
a North Dakota Corporation; Randy Westby,
an individual, James Hendershot, an individual,
and Robert Opperude, an individual,                     Defendants and Appellees


                                  No. 20180238


       Appeal from the District Court of Ward County, North Central Judicial
District, the Honorable Gary H. Lee, Judge.

      REVERSED AND REMANDED.

      Opinion of the Court by VandeWalle, Chief Justice.

      Larry M. Baer (argued), West Des Moines, IA, and Robert G. Ackre (on brief),
Cando, ND, for plaintiff and appellant.

      Bryan L. Van Grinsven, Minot, ND, for defendants and appellees RW
Enterprises, Inc. and Randy Westby.

      Sean F. Marrin (argued) and Kraig A. Wilson (on brief), Grand Forks, ND, for
defendants and appellees Autos, Inc. d/b/a Global Auto, Robert Opperude and James
Hendershot.
                                Baker v. Autos, Inc.
                                    No. 20180238


       VandeWalle, Chief Justice.
[¶1]   Darilyn Baker, individually and on behalf of a class of more than 500 persons
similarly situated, appealed from a judgment dismissing her class action against
Autos, Inc., doing business as Global Autos, Robert Opperude, James Hendershot,
RW Enterprises, Inc., and Randy Westby for claimed violations of the North Dakota
Retail Installment Sales Act, N.D.C.C. ch. 51-13, and state usury laws and from an
order denying her motion to amend the judgment. Baker argues the retail sellers
failed to make required disclosures of certain finance charges and late fees in retail
installment contracts and they lost their regulated lender status and were subject to
state usury laws. We conclude the retail installment contracts failed to disclose loan
fees as finance charges, and we reverse and remand.


                                           I
[¶2]   In 2007, Baker purchased a used vehicle from Global Autos by trading in her
vehicle and financing the balance due through Global Autos, a company owned by
Opperude and Hendershot. In conjunction with the purchase, Baker executed two
documents, a “buyer’s order” and a “retail installment contract and security
agreement.” The buyer’s order included a right hand column that, from top to bottom,
identified a cash price of $6990, a trade allowance of $3500, a difference of $3490,
a motor vehicle excise tax of $174.50, a line for license and title fees that was blank,
a document administration fee of $195, an amount owing on trade of $1411.44, a loan
fee of $200, and a total balance of $5470.94. The buyer’s order identified the buyer
as Baker, the vehicle purchased, and the date of the purchase, and was signed twice
by Baker. One signature was for an odometer disclosure statement and the other
signature was under a statement that “[t]he front and back of this Order compromise
the entire agreement affecting this purchase and no other agreement or understanding

                                           1
of any nature concerning same has been made or entered into, or will be recognized.
I hereby certify that no credit has been extended to me for the purchase of this motor
vehicle except as appears in writing on the face of this agreement. I have read the
matter printed on the back hereof and agree to it as part of the order the same as if it
were printed above my signature.”
[¶3]   The “Retail Installment Contract and Security Agreement” included a
statement identifying the purchased vehicle as collateral for installment payments and
a heading in the middle of the page for “truth in lending disclosures.” Immediately
below that heading were five boxes from left to right identifying an annual percentage
rate of 25%, a finance charge of $1941.61, the amount financed of $5470.94, the total
payments of $7412.55, and the total sale price of $7412.55. The amount financed was
described as “[t]he amount of credit provided to you or on your behalf” and was the
same amount as the total balance from the buyer’s order, which included amounts for
the “loan fee” and the “document administration fee.” Immediately below the truth
in lending disclosures were boxes stating the number of monthly payments as 30, the
amount of each monthly installment payment as $247.08, the due date for each
monthly payment as the first of each month, and a late charge of $25 for payments
more than 10 days late.
[¶4]   Baker was late in making some of her required monthly payments under the
retail installment contract and her vehicle was repossessed. Before Baker defaulted
on her loan, Global Autos assigned her retail installment contract to RW Enterprises,
which was owned by Westby. After the car was repossessed, Baker sued Global
Autos, RW Enterprises, and their individual owners, alleging they violated state
statutory requirements for retail installment contracts and charged usurious interest
rates. Baker alleged a willful violation of the Retail Installment Sales Act in failing
to accurately disclose the annual percentage rate and the finance charges incident to
investigating and contracting for the extension of credit. Baker also alleged a willful
violation of the Retail Installment Sales Act by contracting to charge a late fee in
excess of the statutory maximum of $10.

                                           2
[¶5]   Baker moved for class action certification for all purchasers who, subject to the
applicable statute of limitations, may have been injured as a result of the defendants’
business practices. The district court denied Baker’s motion for class certification,
and a majority of this Court reversed the denial and remanded for reconsideration of
her motion. Baker v. Autos, Inc., 2015 ND 57, 860 N.W.2d 788.
[¶6]   The district court subsequently granted class certification consisting of more
than 500 retail installment buyers, and Baker thereafter moved for partial summary
judgment on multiple issues. The court granted the motion in part, and denied it in
part. The court rejected Baker’s assertion she was entitled to judgment as a matter of
law on her claim involving the failure to disclose the document administration fee and
loan fee as finance charges. The court concluded the “buyer’s order” and the “retail
installment contract and security agreement” must be construed together as one retail
installment contract and, reading those documents together, the court declined to
conclude as a matter of law that Global Autos failed to disclose either fee. The court
ruled all class members who were charged and paid a $25 late fee on any delinquent
installment payment due under their retail installment contracts were entitled to a
refund because the amount of that late fee exceeded the maximum allowable late fee
of $10 authorized by N.D.C.C. § 51-13-02(2)(e). The court decided the excessive late
fee was not an additional finance charge and did not deprive the defendants of
protection as a regulated lender under the state’s usury laws in N.D.C.C. ch. 47-14.
The court said N.D.C.C. § 51-13-07 provided the remedy for a violation of the
excessive late fee requirement and denied Baker’s motion for partial summary
judgment on that issue. The court reserved ruling on which defendant was liable for
repayment of any excessive late fees actually paid by any buyers.
[¶7]   The parties thereafter stipulated to certain legal and factual issues and for
certification under N.D.R.Civ.P. 54(b). The district court adopted the stipulation and
certified the partial summary judgment as final under N.D.R.Civ.P. 54(b). The
stipulated partial summary judgment determined the imposition of a $25 late fee
violated state law and all class members who were actually assessed and paid a late

                                           3
fee in excess of the statutory maximum of $10 were entitled to a refund of all late fees
paid. The judgment identified issues remaining to be determined as: (1) the identity
of class members entitled to recover; (2) the individual liability of Hendershot and
Opperude; and (3) the potential liability of RW Enterprises and Westby. The court’s
partial summary judgment dismissed all of Baker’s other claims. On appeal we held
the Rule 54(b) certification was improvidently granted and dismissed Baker’s appeal
from the partial summary judgment. Baker v. Autos, Inc., 2017 ND 229, 902 N.W.2d
508.
[¶8]   Baker, individually and on behalf of the class, thereafter waived the right to
recover any and all sums charged and collected in excess of the $10 statutory
maximum late fee on delinquent payments. The district court entered judgment
dismissing with prejudice all of Baker’s claims. The court thereafter denied Baker’s
motion to amend the judgment under N.D.R.Civ.P. 59.


                                           II
[¶9]   Baker argues the retail installment contracts did not disclose the “document
administration fee” and the “loan fee” as finance charges and did not comply with the
finance charge disclosure requirements mandated by the Retail Installment Sales Act
in N.D.C.C. § 51-13-02. Baker argues that because the retail sellers failed to satisfy
those disclosure requirements, they are not entitled to regulated lender status under
N.D.C.C. § 51-13-03(1) and are subject to state usury laws in N.D.C.C. § 47-14-09.
Baker argues that omitting known costs of obtaining credit from the disclosed amount
of finance charges in a retail installment contract and that contracting to charge and
collect an excessive late fee are willful violations of the Retail Installment Sales Act.
[¶10] Our analysis of Baker’s arguments requires review of the statutory provisions
for retail installment contracts in N.D.C.C. ch. 51-13. Statutory interpretation is a
question of law, fully reviewable on appeal. Zajac v. Traill Cty. Water Res. Dist.,
2016 ND 134, ¶ 6, 881 N.W.2d 666. The primary objective in interpreting a statute
is to determine the intention of the legislation. Id. Words in a statute are given their

                                           4
plain, ordinary, and commonly understood meaning, unless defined by statute or
unless a contrary intention plainly appears. N.D.C.C. § 1-02-02. Statutes are
construed as a whole and are harmonized to give meaning to related provisions.
N.D.C.C. § 1-02-07. If the language of a statute is clear and unambiguous, that
language is not to be disregarded under the pretext of pursuing its spirit. N.D.C.C. §
1-02-05. The language of a statute must be interpreted in context and according to
rules of grammar, giving meaning and effect to every word, phrase, and sentence.
N.D.C.C. §§ 1-02-03 and 1-02-38(2). We construe statutes to give effect to all of
their provisions, so that no part of the statute is rendered inoperative or superfluous.
N.D.C.C. § 1-02-38(2) and (4).
[¶11] Chapter 51-13, N.D.C.C., is North Dakota’s codification of the Retail
Installment Sales Act. Section 51-13-01(10), N.D.C.C., defines a “retail installment
contract” as:
       an agreement, entered into in this state, pursuant to which the title to or
       a lien upon the personal property, which is the subject matter of a retail
       installment sale, is retained or taken by a retail seller from a retail buyer
       as security, in whole or in part, for the buyer’s obligation, or a contract
       for the bailment or leasing of personal property by which the bailee or
       lessee contracts to pay as compensation for its use a sum substantially
       equivalent to or in excess of its value and by which it is agreed that the
       bailee or lessee is bound to become, or has the option of becoming, the
       owner of the personal property upon full compliance with the terms of
       the contract.
[¶12] Section 51-13-02, N.D.C.C., describes the requirements for a retail installment
contract and specifies that the “contract must contain the amount of the finance
charge, if any.” N.D.C.C. § 51-13-02(2)(c)(8). Under N.D.C.C. § 51-13-02(2)(e), a
retail installment contract may provide for payments by a buyer of a delinquency and
collection charge on each installment payment more than 10 days late in an amount
equal to the lesser of 10 percent of the delinquent installment payment or 10 dollars.
[¶13] A finance charge is defined to mean the amount the buyer contracts to pay or
pays for the privilege of purchasing personal property to be paid in installments and
does not include amounts charged for insurance premiums, delinquency charges,

                                            5
attorney’s fees, court costs, collection expenses, or official fees. N.D.C.C. § 51-13-
01(4). Section 51-13-03(2) and (4), N.D.C.C., describe limitations on finance charges
and provide:
       2.      The finance charge must be computed on the amount financed
               as determined under subdivision c of subsection 2 of section 51-
               13-02. This finance charge may be precomputed on the amount
               financed calculated on the assumption that all scheduled
               payments will be paid when due and the effect of prepayment is
               governed by the provisions on rebate upon prepayment.

       4.      The finance charge must be inclusive of all charges incident to
               investigating and making the contract, and for the extension of
               the credit provided for in the contract and no fee, expense, or
               other charge whatsoever may be taken, received, reserved, or
               contracted for except as provided in this section and in
               subdivision e of subsection 2 of section 51-13-02 and for those
               items expressly provided for in the retail installment contract as
               set forth in subdivision c of subsection 2 of section 51-13-02.
[¶14] In a retail installment contract, the “amount financed” means the cash price of
the personal property subject to the sale, plus the amounts, if any, included in the sale
for insurance and official fees, minus the buyer’s downpayment in money or goods.
N.D.C.C. § 51-13-01(1). “Official fees” are defined to mean the filing or other fees
required by law to be paid to public offices to perfect the lien retained by the seller
and to file or record a release, satisfaction, or discharge of the contract, and license,
certificate of title, and registration fees imposed by law. N.D.C.C. § 51-13-01(7).
[¶15] Under N.D.C.C. § 51-13-03(1), a retail seller who complies with the disclosure
provisions of N.D.C.C. ch. 51-13 is deemed a regulated lender under N.D.C.C. § 47-
14-09, and the usury provisions of that section do not apply to loans by a lending
institution that is regulated or funded by a state or federal agency. N.D.C.C. § 47-14-




                                           6
09(2)(e). At the time of Baker’s retail installment contract,1 N.D.C.C. § 51-13-07
described penalties under the Retail Installment Sales Act and provided:
                 Any person who willfully violates this chapter is guilty of a class
          A misdemeanor. A willful violation of section 51-13-02 or 51-13-03
          by any person bars that person’s recovery of any finance charge or
          delinquency or collection charge on the retail installment contract
          involved.
[¶16] Here, the district court concluded the disclosure requirements of the Retail
Installment Sales Act were not violated. The court said the “buyer’s order” and the
“retail       installment   contract   and    security   agreement”      were    executed
contemporaneously and those documents, when read together, included the
“document administration fee” and the “loan fee.” The court thus determined the loan
fee and the document administration fee were disclosed in the retail installment
contract.
[¶17] The document administration fee and loan fee were disclosed as part of the
principal balance for the amount financed when the contemporaneously executed
buyer’s order and retail installment contract and security agreement are construed
together. Nichols v. Goughnour, 2012 ND 178, ¶ 13, 820 N.W.2d 740 (stating
contemporaneously executed documents by the same parties in the course of the same



          1
        Section 51-13-07, N.D.C.C., was amended in 2015 N.D. Sess. Laws ch. 351,
§ 2, and now provides:

                 Any person who willfully violates this chapter is guilty of a class
          A misdemeanor. A willful violation of section 51-13-02 or 51-13-03
          by any person bars that person’s recovery of any finance charge or
          delinquency or collection charge on the retail installment contract
          involved. A state’s attorney or the attorney general may enforce this
          chapter. The attorney general in enforcing this chapter has all the
          powers provided in this chapter and chapter 51-15 and may seek all
          remedies in this chapter and chapter 51-15. A violation of this chapter
          constitutes a violation of chapter 51-15. The remedies, duties,
          prohibitions, and penalties of this chapter are not exclusive and are in
          addition to all other causes of action, remedies, and penalties in chapter
          51-15, or otherwise provided by law.
                                              7
transaction and concerning the same subject matter may be construed together). See
N.D.C.C. § 9-07-07 (stating several contracts relating to the same matters between the
same parties and made as part of substantially one transaction are to be taken
together). Baker nevertheless argues those two fees are finance charges for securing
credit for the sale but were identified in the documents as part of the amount financed
for the sale and were not included in the amount of the finance charge of $1941.61.
Baker argues those charges were misidentified or mislabeled on the relevant
documents and those charges are really hidden finance charges that are paid by buyers
purchasing on credit but are not paid by buyers purchasing for cash. Baker claims the
amounts for those fees were not included in the total for finance charges on the retail
installment contract.
[¶18] When the provisions of N.D.C.C. §§ 51-13-01(4) and 51-13-03 are construed
together, those provisions explain that finance charges are computed on the amount
financed but that finance charges include all charges incident to investigating, making,
and extending credit for a retail installment sale, as opposed to a cash sale. Under
those provisions, finance charges do not include a delinquency and collection charge,
or official fees for license, certificate of title, and registration fees imposed by law.
Although delinquency and collection charges for installment payments must be stated
in a retail installment contract and a contract charging more than the statutory
maximum for those fees violates N.D.C.C. ch. 51-13, those delinquency and
collection charges are not finance charges and need not be disclosed as such.
[¶19] Here, the parties do not dispute that the loan fee is a finance charge under
N.D.C.C. ch. 51-13. According to Opperude, license and title transfer fees were
factored into the document administration fee. License and title transfer fees are
official fees within the meaning of N.D.C.C. § 51-13-01(7). They are not included
in the definition of finance charges under N.D.C.C. § 51-13-01(4) or the inclusive
language of N.D.C.C. § 51-13-03(4) and may be included in the amount financed
under N.D.C.C. § 51-13-01(1). It is not clear what, if any, other charges were
factored into that $195 “document administration fee” for Baker. For purposes of our

                                           8
decision in this case, however, it is sufficient that the parties do not dispute that the
“loan fee” is a finance charge under the language of N.D.C.C. §§ 51-13-01(4) and 51-
13-03(4). Although the amount of the loan fee was stated on the “buyer’s order,” it
was included in the total balance due on that document and transferred to the “retail
installment contract and security agreement” under the category for the “amount
financed.” The loan fee was not included in the category for the amount of “finance
charges” and was not disclosed as a finance charge in the amount identified as
“finance charges.” The retail installment contracts did not disclose the loan fee as a
finance charge and did not comply with the disclosure requirements of N.D.C.C. § 51-
13-02(2)(c)(8).
[¶20] We conclude the district court erred in determining the retail installment
contracts complied with the disclosure requirements for finance charges. Because the
district court erroneously concluded the retail installment contracts complied with the
disclosure requirements of N.D.C.C. ch. 51-13, the court did not address issues about
a willful violation of the statute and the remedies available for noncompliance with
those disclosure requirements.        We reverse the judgment and remand for
consideration of those issues.


                                           III
[¶21] We reverse the judgment dismissing Baker’s claims and remand for further
proceedings.
[¶22] Gerald W. VandeWalle, C.J.
      Lisa Fair McEvers
      Daniel J. Crothers
      Jon J. Jensen
      Jerod E. Tufte




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