O.C.G.A. § 10-1-38 (2019)

Annotations

Law reviews. For article, “Nonjudicial Foreclosures in

Georgia Revisited,” see 24 Ga. St. B. J. 43 (1987).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION PENALTIES General Consideration Construction of “any person” and “the person committing the violation.” - In pari materia with O.C.G.A. § 10-1-33, the language “any person” and “the person committing the violation” found in subsections (a) and (c) of O.C.G.A. § 10-1-38 refers only to the seller or holder and was not intended to expand the class of persons liable for usury violations. This is emphasized by subsection (d), which provides that if a

violation is corrected within ten days after execution of the contract, “neither the seller nor the holder is subject to any penalty under this Code section.” Tollett v. Green Tree Acceptance, Inc., 190 Ga. App. 295, 379 S.E.2d 2, 1989 Ga. App. LEXIS 216 (1989). Insurance costs and other authorized charges are properly included in the “unpaid balance” and are properly subject to the finance charge; therefore, if included, there is no violation of Ga. L. 1970, p. 101, § 3 and no resultant

General Consideration (Cont’d) forfeiture of interest. Busby v. Sea Island Bank, 151 Ga. App. 412, 260 S.E.2d 485, 1979 Ga. App. LEXIS 2550 (1979). Retroactivity of 1983 amendment to § 7-4-3(a). - The 1983 amendment to O.C.G.A. § 7-4-3(a), which provides that O.C.G.A. § 10-1-33 shall not apply to retail installment contracts pertaining to any manufactured home with a cash sales price of more than $3,000.00 does not operate retroactively so as to eliminate any cause of action a manufactured home purchaser may have acquired under O.C.G.A. § 10-1-38 by a transaction prior to the 1983 act’s effective date. Southern Guar. Corp. v. Doyle, 256 Ga. 790, 353 S.E.2d 510, 1987 Ga. LEXIS 657 (1987). No civil remedy for inadvertent failure to disclose. - It being uncontroverted that the seller’s failure to meet the disclosure requirements of O.C.G.A. § 10-1-32 was inadvertent rather than intentional, subsection (c) of O.C.G.A. § 10-1-38 did not provide a civil remedy. Vickery v. Mobile Home Indus., Inc., 171 Ga. App. 566, 320 S.E.2d 633, 1984 Ga. App. LEXIS 2274 (1984). Subsection (c) of O.C.G.A. § 10-1-38 does not provide a civil remedy for nonwillful violations of the relevant statutory provisions. Ogletree v. Brokers S., Inc., 192 Ga. App. 53, 383 S.E.2d 900, 1989 Ga. App. LEXIS 869 (1989). Acceleration clauses are not per se unenforceable. Barrett v. Vernie Jones Ford, Inc., 395 F. Supp. 904, 1975 U.S. Dist. LEXIS 13508 (N.D. Ga. 1975). Collection of unearned interest is not per se improper under Georgia law. Barrett v. Vernie Jones Ford, Inc., 395 F. Supp. 904, 1975 U.S. Dist. LEXIS 13508 (N.D. Ga. 1975). Acceleration clause not bad unless usurious. - An acceleration clause is bad only if it attempts to accelerate unearned interest and enforcement of the clause would cause the note to become usurious. McDaniel v. Fulton Nat’l Bank, 395 F. Supp. 422, 1974 U.S. Dist. LEXIS 11532 (N.D. Ga. 1974), rev’d, 543 F.2d 568, 1976 U.S. App. LEXIS 5962 (5th Cir. 1976). Excess finance charge alone does not show willfulness. - A finding of

willfulness is not authorized merely because it has been established that a finance charge exceeds the legal limit set forth in subsection (a) of Ga. L. 1970, p. 101, § 3. Lee v. National Bank & Trust Co., 153 Ga. App. 656, 266 S.E.2d 315, 1980 Ga. App. LEXIS 1937 (1980). Award of attorneys’ fees. - In determining appropriate award of attorneys’ fees, contingency nature of fee arrangement should be considered. Stokes v. Fidelity Acceptance Corp., 644 F.2d 355, 1981 U.S. App. LEXIS 13845 (5th Cir. 1981). When the jury was asked to indicate the jury’s finding as to whether there had been any “willful and intentional violation” on the part of the plaintiff, by striking out this language on the verdict form, the jury obviously found that there had not been such a violation and, therefore, the verdict showed, on the verdict’s face, that there was no predicate for any recovery of attorney’s fees. First Union Nat’l Bank v. Big John’s Auto Sales, Inc., 203 Ga. App. 797, 417 S.E.2d 416, 1992 Ga. App. LEXIS 626 (1992). O.C.G.A. § 10-1-38 permits a recoupment of attorney’s fees previously paid to a seller who had willfully violated the Motor Vehicle State Finance Act, O.C.G.A. § 10-1-30 et seq., but it does not permit a recovery of any attorney’s fees incurred in litigating the seller’s willful violation of that statute. First Union Nat’l Bank v. Big John’s Auto Sales, Inc., 203 Ga. App. 797, 417 S.E.2d 416, 1992 Ga. App. LEXIS 626 (1992). Evidence held to support findings as to usury. - When less than $100.00 of the total $540.96 finance charge was refunded upon acceleration of one note prior to the half-way point in the contract and no interest was refunded to the promisor upon acceleration of the second note, there was ample evidence to support the trial court’s finding usurious both contracts which were the basis for the bank’s counterclaim. Adamson v. Trust Co. Bank, 155 Ga. App. 646, 271 S.E.2d 899, 1980 Ga. App. LEXIS 2718 (1980). Penalties Minimum penalty. - Assembly did not intend

General by the

SELLING/OTHER TRADE PRACTICES

legislature’s language in O.C.G.A. § 10-1-38 to allow courts to choose the $100.00 penalty in cases involving willful violations; rather, the $100.00 minimum was meant to apply only in cases when the illegal finance charge amounted to less than $50.00. Stokes v. Fidelity Acceptance Corp., 644 F.2d 355, 1981 U.S. App. LEXIS 13845 (5th Cir. 1981). No provision as to degree of overcharge or penalty. - There is no provision in O.C.G.A. § 10-1-38 for degrees of overcharging or degrees of penalty. The penalty for overcharging is forfeiture of any finance charge, delinquency, or collection charge on the contract. The language used is absolute and the trial court is without authority to decline to apply the language. Kelly v. Sylvan Motors, Inc., 160 Ga. App. 420, 287 S.E.2d 359, 1981 Ga. App. LEXIS 3139 (1981). Forfeiture of finance charge. - O.C.G.A. § 10-1-38 provides for forfeiture of finance charge as a consequence of any violation of O.C.G.A. Art. 2, Ch. 1, T. 10, regardless of the violation’s character. Stokes v. Fidelity Acceptance Corp., 644 F.2d 355, 1981 U.S. App. LEXIS 13845 (5th Cir. 1981). Usury violation bars recovery of charges. - If an acceleration of unearned interest caused a note to become usurious, then there was a violation of the

usury provision of Ga. L. 1970, p. 101, § 3 and, thus, under former Code 1933, § 96-1008, the creditor was barred from recovering any finance charge, delinquency, or collection charge on the contract. McDaniel v. Fulton Nat’l Bank, 395 F. Supp. 422, 1974 U.S. Dist. LEXIS 11532 (N.D. Ga. 1974), rev’d, 543 F.2d 568, 1976 U.S. App. LEXIS 5962 (5th Cir. 1976). When the interest refund in a suit for a deficiency balance resulting from a sale under an installment contract, calculated using the “Rule of 78,” results in interest totaling two-thirds of the total amount being charged for a period of less than half the time of the note, this is in excess of the maximum allowable on the unpaid balance to finance. Hence, a violation of subsection (a) of Ga. L. 1970, p. 101, § 3 is shown by the evidence. Under Ga. L. 1967, p. 674, § 8 this bars recovery of any finance charge, delinquency, or collection charge on the contract. Cook v. First Nat’l Bank, 130 Ga. App. 587, 203 S.E.2d 870, 1974 Ga. App. LEXIS 1191 (1974). Principal may be collected. - Once the court has determined that the creditor is in fact attempting to extort usurious interest, under this article the lender is allowed to collect the principal, but the lender loses at least all unearned interest. Barrett v. Vernie Jones Ford, Inc., 395 F. Supp. 904, 1975 U.S. Dist. LEXIS 13508 (N.D. Ga. 1975).

RESEARCH REFERENCES ALR. Right to private action under state consumer protection Act, 62 A.L.R.3d 169.