16-1504
Franco v. A Better Way Wholesale Autos, Inc.

                           UNITED STATES COURT OF APPEALS
                               FOR THE SECOND CIRCUIT

                                         SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
18th day of May, two thousand seventeen.

Present:
            JOHN M. WALKER, JR.,
            DEBRA ANN LIVINGSTON,
            GERARD E. LYNCH,
                  Circuit Judges.
_____________________________________

ELISA FRANCO,

                         Plaintiff-Appellee,

                 v.                                                 16-1504

A BETTER WAY WHOLESALE AUTOS, INC.,
BCI FINANCIAL CORP.,

                  Defendants-Appellants.
_____________________________________

For Plaintiff-Appellee:                        BRIAN L. BROMBERG (Jonathan A. R. Miller, on the
                                               brief), Bromberg Law Office, P.C., New York, NY

                                               Daniel S. Blinn, Consumer Law Group, LLC, Rocky
                                               Hill, CT

For Defendants-Appellants:                     KENNETH A. VOTRE, Votre & Associates, P.C.,
                                               Ridgefield, CT


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       Appeal from a judgment and order of the United States District Court for the District of

Connecticut (Bryant, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment and order of the district court is AFFIRMED.

       Defendants-Appellants A Better Way Wholesale Autos, Inc. and BCI Financial Corp.

(“Defendants”) appeal from a judgment of the district court entered May 12, 2016, granting

summary judgment to Plaintiff-Appellee Elisa Franco (“Franco”) on her claim brought under the

Truth in Lending Act, 15 U.S.C. § 1601, et seq. (“TILA”), and awarding her $2,000 in statutory

damages, and from a May 31, 2016 order of the district court awarding $15,358.43 in costs and

attorney’s fees.   We assume the parties’ familiarity with the underlying facts, the procedural

history of the case, and the issues on appeal.

       We review the grant of summary judgment de novo, construing the facts in the light most

favorable to the non-moving party, and resolving all ambiguities—and drawing all reasonable

inferences—against the movant. Aulicino v. N.Y.C. Dep’t of Homeless Servs., 580 F.3d 73, 79–

80 (2d Cir. 2009).   In so doing, we ask “not whether the evidence unmistakably favors one side

or the other[,] but whether a fair-minded jury could return a verdict for the [non-moving party]

on the evidence presented.” Rojas v. Roman Catholic Diocese of Rochester, 660 F.3d 98, 104

(2d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)).    We review

the award of costs and attorney’s fees, by contrast, for abuse of discretion. 16 Casa Duse, LLC

v. Merkin, 791 F.3d 247, 254 (2d Cir. 2015).

       The TILA requires that property insurance charges and premiums be disclosed to the

borrower as part of the “finance charge,” 15 U.S.C. § 1605(a), i.e., “the cost of consumer credit,”

12 C.F.R. § 226.4(a), as opposed to the total amount financed, i.e., the amount of credit available


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for “actual use,” 15 U.S.C. § 1638(a)(2)(A); see also Bragg v. Bill Heard Chevrolet, Inc., 374

F.3d 1060, 1065 (11th Cir. 2004); Hicks v. Star Imps., Inc., 5 F. App’x 222, 224 (4th Cir. 2001).

The requirement does not apply, however, where the creditor provides (1) “a clear and specific

statement in writing,” which (2) “set[s] forth the cost of the insurance if obtained from or

through the creditor,” and (3) “stat[es] that the person to whom the credit is extended may

choose the person through which the insurance is to be obtained.”    15 U.S.C. § 1605(c).   Here,

the parties do not contest that these requirements apply to the vendor’s single interest (“VSI”)

insurance premium at issue here, and that the premium is listed as part of the amount financed,

rather than as a finance charge, in Franco’s financing agreement (the “Agreement”).

       Defendants’ principal argument on appeal is that the district court improperly resolved an

issue of material fact when it concluded that the Agreement did not provide notice of the

premium sufficient to render it compliant with the TILA. This contention is meritless.          The

provision of the Agreement that Defendants allege provides the required notice—a provision that

is enclosed in a box separate from the remainder of the Agreement—is entitled “Vendor’s Single

Interest Insurance (VSI Insurance).”   App’x at 32.    The first sentence of the provision states:

“If the preceding box is checked, we require VSI insurance for the initial term of the contract to

protect us for loss or damages to the vehicle (collision, fire, theft).” Id. The checkbox is not

checked. While there is a “XX” indicator in the same general vicinity of the provision, see id.,

it is insufficiently close to the checkbox for a reasonable juror to conclude that the “XX”

indicated that the provision was in force. And, even if a reasonable juror could conclude that it

was ambiguous whether the “XX” referred to the checkbox at issue, the provision would still, in

that case, not constitute the “clear and specific statement in writing” required by the TILA.    15

U.S.C. § 1605(c) (emphasis added); cf. Household Credit Servs., Inc. v. Pfennig, 541 U.S. 232,


                                                3
235 (2004) (noting that “TILA’s disclosure provisions seek to ensure ‘meaningful disclosure of

credit terms’” (quoting 15 U.S.C. § 1601(a)).

       Defendants nonetheless maintain that, even if unchecked, the provision provides

sufficient notice under the TILA because it clearly indicates that VSI insurance is required, the

premium amount, and that Franco can “choose the insurance company through which the VSI

insurance is obtained.” App’x at 32.      As an initial matter, it is unreasonable to assume that a

borrower would read the unchecked provision of the Agreement, such that the provision’s

contents can be deemed clear notice. In any event, the first clause of the provision provides that

“[i]f this preceding box is checked, we require VSI insurance,” id., strongly suggesting that the

remainder of the provision—which only describes aspects of the VSI insurance referenced in the

first clause—is similarly conditioned.1   Accordingly, the district court properly determined that

no reasonable juror could conclude that the provision at issue provides sufficient notice under the

TILA, such that summary judgment was warranted.

       As to the district court’s award of $15,358.43 in costs and attorney’s fees, Defendants

argue—for the first time on appeal—that the extent of their violation of the TILA remains an

issue of material fact, implying that the district court also improperly awarded $2000 in statutory

damages.    Defendants do not explain, however, given that Franco prevailed on summary

judgment, how her TILA claim was not “entirely successful,” id. at 111, such that the fee award




1
  Even if Franco was aware that she was required to purchase VSI insurance by virtue of its
inclusion in the itemized amount financed, it does not follow that the provision itself provided
clear written notice of her right to, for example, purchase the insurance elsewhere given both the
conditional language of the provision and the fact that it cannot reasonably be assumed that a
borrower in Franco’s circumstances would read an unchecked provision.


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amount was improper,2 see Hensley v. Eckerhart, 461 U.S. 424, 436 (1983) (explaining that “the

most critical factor” in the award of attorney’s fees “is the degree of success obtained”).

Further, the award of $2,000 in statutory damages was appropriate given the TILA authorizes the

recovery of double the finance charge, up to $2,000, see 15 U.S.C. § 1640(a)(2)(A)(i) (2015);

Koons Buick Pontiac GMC, Inc. v. Nigh, 543 US. 50, 59–60 (2004), and the parties do not

dispute that the finance charge in the Agreement was $3,394.47.       We accordingly affirm the

district court’s award of costs and attorney’s fees.

                                          *       *      *

       We have considered Defendants’ remaining arguments and find them to be without merit.

Accordingly, we AFFIRM the judgment and order of the district court.

                                                       FOR THE COURT:
                                                       Catherine O’Hagan Wolfe, Clerk




2
  Defendants have abandoned their contention that the attorney’s fees are excessive and
improperly reflect time spent on claims that have been voluntarily withdrawn. See LNC Invs.,
Inc. v. Nat’l Westminster Bank, 308 F.3d 169, 176 n.8 (2d Cir. 2002).


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