Kedzior v. Norwest Bank Minnesota, National Ass'n

OPINION KALITOWSKI, Presiding Judge. Appellant Ruth Seelen, on behalf of Richard Kedzior, seeks review of the district court’s judgment granting respondent’s motion to dismiss for failure to state a claim. Appellants contend the district court erred in construing the term “collect” in Minn.Stat. § 168.74 (1990) of the Motor Vehicle Retail Installment Sales Act (MVRISA), as requiring actual receipt of an excessive deferral fee to constitute a violation under the statute. FACTS In 1987, Richard Kedzior entered into a motor vehicle retail installment contract with the Bloomington Chrysler Plymouth Company for the purchase of a Chrysler LeBaron. This contract was to be assigned to respondent Norwest Bank. The installment contract called for 60 payments at $313.93 including a $4,424.92 finance charge, totalling a contract price of $18,835.80. In 1990, respondent granted Kedzior’s request for a two-month deferral in the payment of his remaining 24 installments, and charged him a $143.00 deferral fee. The deferral refinancing agreement stated that the deferral charge could be “added to balance of loan” and “can be paid end of contract.” When Kedzior failed to make the payments on his installment contract, respondent filed a complaint against him seeking possession of the motor vehicle. After Kedzior failed to timely answer respondent’s complaint, the district court entered a default judgment in favor of respondent. This judgment was later vacated because the district court found respondent failed to properly serve the complaint upon Kedzior. Kedzior filed a complaint against respondent, which he amended twice, such that it eventually alleged respondent violated Minn. Stat. § 168.74 when it computed Kedzior’s deferral charge at $143.00. Respondent has admitted that the fee it charged is $14.17 more than the amount authorized by Minn. Stat. § 168.74. It is undisputed that the fee did not violate the usury provisions of MVRI-SA. Kedzior’s complaint stated that he was bringing a class action consisting of all buyers of motor vehicles who had had “illegal additional charges in excess of that authorized by Minn.Stat. § 168.74” imposed on them by respondent. Respondent’s original claim against Kedzior seeking possession of the motor vehicle was consolidated with this claim. In January of 1993 Kedzior died. The district court granted appellant Ruth Seelen, Kedzior’s daughter, authorization to act as Kedzior’s personal representative and to succeed him in this cause of action. The district court granted respondent’s motion to dismiss for failure to state a claim, concluding respondent had extended a payment schedule and attempted to charge, but never actually collected, “a fee in excess of [121] that permitted by Minn.Stat. § 168.74.” The district court later dismissed respondent’s counterclaim without prejudice. ISSUE Did the district court err in concluding the term “collect” in Minn.Stat. § 168.74 requires the actual receipt of an excessive deferral fee to constitute a violation under the statute? ANALYSIS Appellants contend the district court erred in concluding the term “collect” in Minn.Stat. § 168.74 (1990) requires actual receipt of the excessive deferral fee for a violation under the statute. We disagree. In reviewing cases dismissed for failure to state a claim on which relief can be granted, the only question before the reviewing court is whether the complaint sets forth a legally sufficient claim for relief. Elzie v. Comm’r of Pub. Safety, 298 N.W.2d 29, 32 (Minn.1980) (quoting Royal Realty Co. v. Levin, 244 Minn. 288, 290, 69 N.W.2d 667, 670 (1955)). The construction of a statute is clearly a question of law and is subject to de novo review on appeal. Kronebusch v. MVBA Harvestore Sys., 488 N.W.2d 490, 494, pet. for rev. denied (Minn. Oct. 20, 1992). Absent ambiguity in the words of a law, the letter of the law shall not be disregarded under the pretext of pursuing the spirit. Minn.Stat. § 645.16 (1992). Minn. Stat. § 168.74 governs the extension of schedules and payments on contracts and states: The holder of a precomputed retail installment contract may, upon written agreement with the retail buyer, extend the scheduled due date, or defer the scheduled payment of all or part of any installment payment or payments, or renew the balance of such contract. In any such case the holder may restate the amount of the installments and the time schedule therefor, and collect as a refinance charge for such extension, deferment or renewal, a flat service fee not to exceed $5 and a total additional charge not exceeding the simple interest annual percentage rate under the original retail installment contract calculated on the respective descending balances computed from the date of such extension, deferment or renewal. (Emphasis added.) The plain language of Minn.Stat. § 168.74 sets the limit that respondent can “collect” as a deferral fee. Minn.Stat. § 645.08(1) (1992) mandates that words and phrases be construed “according to their common and approved usage.” Black’s Law Dictionary defines the word “collect” as: To gather together; to bring scattered things (assets, accounts, articles of property) into one mass or fund; to assemble. To receive payment. To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings. Black’s Law Dictionary 238 (5th ed. 1979). Appellants argue for a more expansive definition of the word “collect” that would include “contracting for” or “reserving” payment. We note, however, that the legislature used broader language in describing prohibited conduct in another section of MVRISA. See Minn.Stat. § 168.72, subd. 1(c) (1990) (“no fee, commission, expense * * * may be taken, received, reserved or contracted for”). Because the legislature used this more expansive language in Minn.Stat. § 168.72, but used only the term “collect” in Minn.Stat. § 168.74, we will not infer a broader definition of “collect.” See State v. Bolsinger, 221 Minn. 154, 21 N.W.2d 480, 486-87 (1946) (“the distinctions made in different statutes as manifested by the difference of terminology used should be observed”). In its order dismissing appellants’ claim, the district court stated: [I]t is agreed that Norwest extended the payment schedule and attempted to charge, but did not collect from Kedzior, a fee in excess of that permitted by Minn. Stat. § 168.74. The district court then found Kedzior failed to state a claim where “usury is not present, and ⅜ ⅝ * Plaintiff was merely charged, but did not pay the excessive extension fee.” Based on our reading of the plain language of Minn.Stat. § 168.74, we affirm the district court’s interpretation of the statute. [122] Finally, because we affirm the district court’s conclusion that under these facts respondent did not violate Minn.Stat. § 168.74, we do not address respondent’s additional argument that the remedy provisions in Minn.Stat. § 168.75 that appellants are attempting to invoke, are, by their plain language, inapplicable to a violation of Minn. Stat. § 168.74. DECISION The district court did not err in dismissing appellants’ claim where it found no violation of Minn.Stat. § 168.74 because appellants did not pay and respondent did not collect an excessive deferral fee. Affirmed.