In Williams v. Delamar Car Co., 2011 WL 1811061 (W.D. Mich. 2011), Judge Quist entered a default judgment against an automobile dealer for TILA violations, but rejected Plaintiff’s ‘spot-delivery’ claim:

Plaintiff asserts that Defendant committed a second TILA violation by failing to disclose a hidden finance charge—the fee based on Plaintiff’s credit risk—that would not have been charged in a compa-rable cash sale. Such fees are hidden finance charges, the nondisclosure of which violates the TILA. See Kilbourn v. Candy Ford–Mercury, Inc., 209 F.R.D. 121, 128–29 (W.D.Mich.2002). Although the Court has some concerns about the validity of the first alleged TILA violation,FN2 Plaintiff has adequately established a TILA violation based upon her hidden finance charge claim. The TILA permits a court to award statutory damages, in the case of an individual, of twice the amount of any finance charge up to $1,000. 15 U.S.C. § 1640(a)(2)(A)(i). The Court concludes that a statutory award of $1,000 is appropriate.


In a footnote, Judge Quist commented on Plaintiff’s spot delivery argument:

FN2. Patton, which Plaintiff cites for her argument that Defendant’s disclosure was rendered illusory, involved the use of a Spot Delivery agreement. See 608 F.Supp.2d at 909, 913–15. Although Plaintiff alleges that this case involves an illegal “spot delivery” or “yo yo sale,” (Compl. 1), there is no indication that Plaintiff signed a Spot Delivery agreement. In other words, it appears from the allegations that the sale was final be-cause there was no indication that it was contingent upon financing. Although the Patton court held that the use of the separate Spot Delivery agreement violated the TILA, other courts have held that spot delivery transactions are valid. See Anderson v. Frederick Ford Mercury, Inc., 694 F.Supp.2d 324, 329 (D.Del.2010); Chastain v. N.S.S. Acquisition Corp., No. 08–81260–CIV, 2009 WL 1971621, at *4 (S.D.Fla. July 8, 2009). Moreover, the Ninth Circuit has held that “a creditor’s undisclosed intent to act in-consistent with its disclosures is irrelevant in determining the sufficiency of those disclosures under sections 226.5, 226.6, and 226.9 of Regulation Z.” Hauk v. JP Morgan Chase Bank USA, 552 F.3d 1114, 1122 (9th Cir.2009). In addition, the Court tends to disagree with Plaintiff that Defendant’s disclosures were estimates. See Janikowski v. Lynch Ford, Inc., 210 F.3d 765, 768 (7th cir.2000) (“If the financing condition had been satisfied, Janikowski would be able and obligated to purchase the car at 5.9%. However, when Janikowski did not receive approval of financing at 5.9%, she could have canceled the contract and refused to purchase the Escort. Either way, the dis-closed rate was a set rate, not an estimate.”).