In Muñoz v. JLO Auto., Inc., No. 3:19-cv-01793 (MPS), 2020 U.S. Dist. LEXIS 136552 (D. Conn. July 31, 2020), Judge Shea refused to enter a default judgment against a car dealer based on the consumer’s claim that she was falsely told that GAP was required as part of the transaction.
Just below this language is the cost ($752), the term of coverage (54 months), and the name of the insurer (Phoenix American Administrators Inc.). Immediately below that are Muñoz’s signature and the date. This succinct paragraph states in bold text that GAP protection is “not required to obtain credit” and thus fulfills TILA’s requirement of a “clear and conspicuous” disclosure. It also fulfills the three requirements for excluding “GAP insurance” from the finance charge, i.e., it discloses that GAP insurance is not required, it discloses the fee for the initial term of coverage, and Muñoz signed the affirmative written request for coverage right beneath these disclosures. ECF No. 11-5 at 2 (“If You want GAP protection, sign below.”). Muñoz does not claim that the written disclosure was unclear, inconspicuous, or incomplete. Instead, she asserts that the salesperson’s oral statement that GAP insurance was required to obtain credit via the “low income” program negated the written disclosure. But Muñoz cites no authority suggesting that compliance with the written disclosure requirements of TILA is insufficient to forestall TILA liability when the defendant makes an oral statement contradicting the written TILA disclosures. And there is substantial authority to the contrary, albeit none I could find within the Second Circuit. See, e.g., Anthony v. Cmty. Loan and Inv. Corp., 559 F.2d 1363, 1369-70 (5th Cir. 1977) (where disclosure that credit and disability insurance was not required to obtain loan was adequate to satisfy TILA, plaintiff’s assertion that she never requested insurance and signed the documents only because she was told to do so was “insufficient to vary the terms of the contract or to negate the creditor’s full compliance with the disclosure requirements of Regulation Z,” quoting guidance from the Federal Trade Commission stating that “[c]onsumers must learn to inspect disclosure statements before signing a contract, otherwise the purpose of the Act and Regulation Z will be frustrated.”); Nieskens v. Peter, 2010 U.S. Dist. LEXIS 39319, 2010 WL 1626902, at *3 (D. Minn. April 21, 2010) (holding that TILA does not permit rescission based on theory that oral statements of broker subverted plain language of disclosures); Citibank v. Dalessio, 756 F. Supp. 2d 1361, 1367 (M.D. Fla. 2010) (holding that mortgagor was not entitled to a TILA affirmative defense where mortgagor relied on oral misrepresentations that contradicted the express terms of loan documents); Ford v. Am. Home Mortg. Corp., No. 2:10-CV-53, 2012 U.S. Dist. LEXIS 83548, 2012 WL 2120724, at *3 (E.D. Tenn. May 21, 2012) (“Fatal to plaintiffs’ claim … is that TILA applies to written disclosures and does not provide relief based solely on oral representations.”). . . . In the end, however, I need not decide whether the contract is fully integrated and thus whether the parol evidence rule technically applies here, because the issue is not what the terms of the contract were. Instead, the issue is whether the oral statement by the sales representative about GAP coverage being mandatory makes the GAP charge a finance charge, and thus creates TILA liability, even though Executive Kia’s clear written disclosures about GAP fully comply with TILA’s exclusion for debt cancellation coverage. I conclude that it would be inconsistent with TILA’s [*13] emphasis on written disclosures to promote the “informed use of credit” to allow a consumer to ignore the clear, conspicuous written terms of a disclosure by proceeding with a claim based solely on oral statements that contradict the disclosure. Therefore, because the GAP insurance charge meets the criteria set forth in 12 C.F.R. § 226.4(d)(3) to be excluded as a finance charge, and because Muñoz’s TILA claim is premised on the notion that the GAP charge is a finance charge, I deny her motion for default judgment as to her TILA claim.