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Olinde Hardware & Supply Co. v. London
Citations: 387 So. 2d 1246; 1980 La. App. LEXIS 4305Docket: No. 13376
Court: Louisiana Court of Appeal; June 9, 1980; Louisiana; State Appellate Court
On October 22, 1976, Ivory B. London purchased furniture from Olinde Hardware and Supply Co. Inc. for $1,314.19, with an added finance charge of $353.36, totaling $1,667.55. On November 2, 1976, Mr. London and Esther Selena Davis bought a refrigerator for $315.88, which, when combined with the prior invoice, totaled $2,068.08, with a finance charge of $438.01. Both signed a sale and chattel mortgage and a promissory note, which were not notarized or properly identified. Olinde filed a suit against them for a balance of $1,815.15. While Mr. London was not served, Ms. Davis denied the allegations and filed a counterclaim against Olinde for violations of the Consumer Credit Protection Act and Regulation Z, claiming offsets against the main demand. After a trial on stipulated facts, the court ruled in favor of Olinde, but Ms. Davis appealed, asserting that Olinde failed to provide proper disclosures required by the Act. The court found deficiencies in the disclosure document, including the absence of a required notice and insufficient clarity in property identification. Consequently, the court held that Olinde violated the Consumer Credit Protection Act and is liable for civil penalties totaling $876.02, along with a $500 attorney’s fee for Ms. Davis. Plaintiff asserts it was not obligated to disclose information to Ms. Davis, as she was secondarily liable rather than a primary purchaser. The purchase documents identify Ivory London as the buyer, with Ms. Davis acting as a cosigner. Relevant statutes, 15 U.S.C. 1631(b) and 12 C.F.R. 226.6(e), indicate that creditors need only provide disclosures to one obligor if there are multiple parties, excluding endorsers or similar roles. The plaintiff argues that these regulations exempt it from disclosing to Ms. Davis. However, federal cases have established that while creditors are only required to disclose to the primary obligor, this does not limit recovery rights for faulty disclosures, allowing both primary and secondary obligors to seek penalties without division between them. Past cases have been criticized for their treatment of joint obligors, suggesting different outcomes for individual obligors. Courts acknowledge that having multiple obligors provides creditors with increased security. The ruling affirms judgment against Ms. Davis on the main claim but grants her a set-off of $876.02 and a $500 attorney’s fee. Costs of the appeal will be borne by the plaintiff, while trial costs will be shared equally. The judgment is affirmed in part, amended in part, and rendered.