Spearman v. Tom Wood Pontiac-GMC, Incorporated
Customer bought a used car and financed it through the dealership. The salesman presented the contract, with all required Reg Z disclosures, to the customer in quadruplicate for review and signature. None of the copies indicated for whom they were intended. The customer signed the documents and handed them back to the salesman. He then handed back one of the copies of the contract. Subsequently, the customer sued, alleging the dealership violated Reg Z by failing to provide the necessary TILA disclosures in writing, in a form the consumer may keep, prior to consummation of the transaction. Spearman's argument was that she was deprived of the opportunity to shop around for a better deal with Tom Wood's deal in hand for comparison. The federal district court originally ruled in favor of the car buyer, then reversed itself upon reconsideration and granted judgment for the car dealer. In a December 3, 2002 opinion, the 7th Circuit Court of Appeals affirmed the judgment in favor of the car dealer. In doing so, the court carefully considered the wording of the relevant language in Reg Z, which reads "The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep." The Court viewed the two requirements as being separate; i.e., the disclosures must be made (1) before consummation and (2) in a form the consumer may keep. Although the plaintiff contended that the disclosures were not in a form she could keep until after she signed the Contract and her copy was separated out, the Court didn't buy that argument. The Court noted there was no evidence to indicate the car salesman would have precluded her from taking the unsigned document, or taking a copy of it. The Court says:
"Although Spearman testified that she did not know she could keep this document (or any part of it) and that she felt some discomfort over tearing out a page, the only evidence in the record demonstrates that her reluctance to keep the document given to her was idiosyncratic. TILA does not require a creditor to explain a borrower's rights in this situation. Under Spearman's view of the evidence, the salesman would have been required to hand over the disclosures and then say, for example, 'This is yours to keep.' TILA imposes no such obligation."