In Pannetta v. Milford Chrysler Sales Inc., 2015 WL 1296736 (E.D.Pa. 2015), Judge Pappert found no TILA liability against a holder of a vehicle RISC, despite the egregious facts pleaded.  The facts alleged were as follows.

The events giving rise to this suit began when Pannetta received a mail solicitation from Milford and MOA. (FAC ¶ 14.) The solicitation stated that Pannetta could “win a new car.” ( Id. Ex. A.) It invited her to go to Milford to try a key that was attached to the mailer. ( Id. Ex. A.) A scratch off area of the solicitation revealed that Pannetta was a “winner” of one of several listed prizes “valued at up to $1000.” ( Id.)   Pannetta drove her car, a 2008 Suzuki, to Milford to see what she had won. ( Id.¶ 15.) Upon arriving, Pannetta was greeted by Defendants Jane and John Doe, MOA employees acting as sales agents for Milford. ( Id.¶¶ 9, 10, 16.) Jane and John Doe ignored Pannetta’s questions about the advertised prizes and convinced her to consider buying a car. ( Id.¶ 19.) They showed Pannetta a used 2011 Volkswagen Tiguan (the “Volkswagen”), which would cost her approximately $350 per month. ( Id.¶¶ 21, 23.) Pannetta said that she could not afford that payment because she only had $100 of disposable monthly income. ( Id.¶¶ 20, 24.)  John Doe proposed a solution. Milford would pay Pannetta $5,600 for her Suzuki. ( Id. ¶¶ 25.) Pannetta could use those funds to pay off her credit card debt and help with the monthly payments on the Volkswagen. ( Id.) After ten months, she could return to Milford to refinance the balance of the loan. ( Id.) John and Jane Doe then turned Pannetta over to a Milford employee. ( Id. ¶ 28.)  Pannetta was shown a Retail Installment Sales Contract (“RISC”) reflecting the financing arrangement for the purchase of the Volkswagen. ( Id. Ex. B.) The itemization of the amount financed on the RISC showed a $5,600 gross trade-in allowance for Pannetta’s Suzuki. ( Id.) This allowance was reduced, however, by the $5,600 payment made to Pannetta by Milford. ( Id.) Therefore, Pannetta’s trade-in did not reduce the $22,777.01 purchase price of the Volkswagen listed on the RISC. ( Id.) Milford, however, did reduce the purchase price of the Volkswagen on the Pennsylvania MV–4ST form for purposes of calculating the amount of sales tax due to the Commonwealth. ( Id. ¶ 37.) With the addition of other itemized fees, the RISC listed the total sale price of the Volkswagen as $26,008.01. ( Id. Ex. B.)  *2 The TILA disclosure on the RISC listed the full sale price of $26,008.01 as the amount financed. ( Id.) It showed an annual percentage rate (“APR”) of 5.74%, a finance charge of $5,710.39, and a total of payments of $31,718.40. ( Id.) This amount was to be paid in 84 monthly installments of $377.60. ( Id.) Pannetta signed the RISC and drove away in the Volkswagen. ( Id. ¶ 30.) Pannetta, concerned over the affordability of the monthly payments, returned to Milford later that day. ( Id. ¶ 32.) She spoke with Milford General Manager John Fournier (“Fournier”). ( Id. ¶ 33.) Fournier told Pannetta that she would not be able to refinance the Volkswagen and would have to find a way to keep up with her payments. ( Id.) When Pannetta informed Fournier that Jane and John Doe had told her that she would be able to refinance, Fournier replied that Milford had never made such a promise before and if Pannetta could not afford her monthly payments, she should not have signed the RISC. ( Id. ¶ 34.) Pannetta received a $5,600 check from Milford the next day. ( See id. Ex. C.) Milford later assigned the RISC to FNB. ( Id. ¶ 36.)  Pannetta subsequently discovered that the Volkswagen had frame damage that Milford had not disclosed at the time of the sale. ( Id. ¶ 62.) This damage was evident from a 3/8? gap and offset between the front and rear right side doors and should have been easily identifiable to anyone experienced in automobile sales. ( Id. ¶¶ 64, 66.) Because of the undisclosed damage, the Volkswagen’s retail value is substantially less than what Pannetta paid for it, and Pannetta would not have purchased the Volkswagen if she knew that it had frame damage. ( Id. ¶¶ 65, 67.)

The District Court found no TILA liability pleaded against the Holder of the RISC.

Pannetta does not allege a violation that is apparent from the face of the disclosure statement. Rather, Pannetta alleges that the value of her trade-in should have reduced the purchase price of the Volkswagen. (FAC ¶ 76.) On the disclosure statement, the trade-in value did not reduce the purchase price because it was completely offset by the payment made to Pannetta by Milford. There is nothing on the face of the disclosure to alert FNB that this payment was a “fictitious payoff” or “fabricated by Milford” as Pannetta alleges. ( Id.) The disclosure statement speaks for itself and conclusively shows that there is no TILA violation apparent on its face.  Pannetta argues that the facial defect on the disclosure is that it listed a $5,600 “Pay Off Made By Seller” but did not state to whom this payoff was made. Regulation Z requires that the itemization of the amount financed include the names of persons to whom amounts are paid by the creditor on the consumer’s behalf. 12 C.F.R. § 226.18(c). In this case, those charges are included in line 4 of the itemization. There was no requirement to identify to whom the $5,600 payment was made, however, because it was made to Pannetta directly. See id.  Pannetta also argues that the TILA violation is obvious because the purchase price of the Volkswagen was reduced by the $5,600 trade-in on the MV–4ST form used to calculate the sales tax for the transaction. (FAC ¶ 37.) This argument, however, necessarily looks beyond the disclosure form, and therefore cannot form the basis of a TILA claim against FNB. See Ramadan, 229 F.3d at 199 (“That Congress meant to exclude resort to outside documents in defining assignee liability under TILA is clear both from the changes Congress made in its 1980 amendments to § 1641(a) and from the subsequent addition of a related subsection.”).  Finally, Pannetta argues that for purposes of deciding a motion to dismiss, the Court must accept as true Pannetta’s allegation that the $5,600 was a down payment that should have reduced the purchase price of the Volkswagen. As described above, however, FNB’s TILA liability must be based on the contents of the disclosure statement. Pannetta cannot create a factual dispute simply by contradicting what appears on the face of the disclosure. See ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 n. 8 (3d Cir.1994) (“Where there is a disparity between a written instrument annexed to a pleading and an allegation in the pleading based thereon, the written instrument will control.”); see also N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 454 (7th Cir.1998) (“It is a well-settled rule that when a written instrument contradicts allegations in the complaint to which it is attached, the exhibit trumps the allegations.”).