Steed v. First Union National Bank

WELLS, Judge. The portions of the Retail Installment Sales Act pertinent to this appeal are as follows: § 25A-29. Default charges. If any installment is past due for 10 days or more according to the original terms of the consumer credit installment sale contract, a default charge may be made in an amount not to exceed five percent (5%) of the installment past due or six dollars ($6.00), whichever is the lesser. A default charge may be imposed only one time for each default. If a default charge is deducted from a payment made on the contract and such deduction results in a subsequent default on a subsequent payment, no default charge may be imposed for such default. If a default charge has been once imposed with respect to a particular default in payment, no default charge shall be imposed with respect to any future payments which would not have been in default except for the previous default. A default charge for any particular default shall be deemed to have been waived by the seller unless, within 45 days following the default, (i) the charge is collected or (ii) written notice of the charge is sent to the buyer. § 25A-44. Remedies and penalties. In addition to remedies hereinbefore provided, the following remedies shall apply to consumer credit sales: (3) In the event the seller or an assignee of the seller (i) shall fail to make any rebate required by G.S. 25A-32 or G.S. 25A-36, (ii) shall charge and receive fees or charges in excess of those specifically authorized by this Chapter, or (iii) shall charge and receive sums not authorized by this Chapter, the buyer shall be entitled to demand and receive the rebate due and excessive or unauthorized charges. Ten days after receiving written request therefor, the seller shall be liable to the buyer for an amount [192] equal to three times the sum of any rebate due and all improper charges which have not been rebated or refunded within the 10-day period. (4) The knowing and willful violation of any provision of this Chapter shall constitute an unfair trade practice under G.S. 75-1.1. I. Defendant’s Appeal The essence of defendant’s argument is that G.S. 25A-29 allows the imposition of a default charge for each period a single installment payment remains in default. The essence of plaintiffs’ argument is that the statute allows the imposition of but one default charge for any one installment payment in default, no matter how long that payment may remain in default. The record before us indicates, however, that it is not necessary for us to reach the merits of these arguments. While the record shows that defendant charged plaintiffs with the contested default charges, plaintiffs never paid those charges to defendant. The statute requires both the charging and receiving of unauthorized default charges as a basis for recovery. While we have found no cases on point interpreting this aspect of G.S. 25A-29, our Supreme Court has held or stated in a number of cases under the usury statutes, see Chapter 24 of our General Statutes, that usurious interest must first be paid before any recovery may be had by the borrower. Kessing v. Mortgage Corp., 278 N.C. 523, 180 S.E. 2d 823 (1971); Clark v. Bank, 200 N.C. 635, 158 S.E. 96 (1931); Ripple v. Mortgage Corp., 193 N.C. 422, 137 S.E. 156 (1927). Accord, Equilease Corp. v. Hotel Corp., 42 N.C. App. 436, 256 S.E. 2d 836 (1979); disc. rev. denied, 298 N.C. 568, 261 S.E. 2d 121 (1979). The materials before the trial court show that plaintiffs were not entitled to summary judgment, and that judgment dismissing plaintiffs’ claim was required. II. Plaintiffs’ Appeal The trial court properly dismissed the class action which plaintiffs attempted to assert. Plaintiffs having suffered no injury, they cannot, ipso facto, assert injury on behalf of others similarly situated. See Hall v. Beals, 396 U.S. 45, 24 L.Ed. 2d 214, 90 S.Ct. 200 (1969); Shuford, N.C. Civil Practice and Procedure, § 23-4 (2d ed. 1981). [193] The results are that summary judgment for plaintiffs must be reversed; judgment dismissing plaintiffs’ class action is affirmed; and the case must be remanded for judgment dismissing plaintiffs’ action. Reversed in part; Affirmed in part; Remanded. Judges Hedrick and Arnold concur.