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Missouri Credit Union v. Diaz

Court of Appeals of Missouri, Western District, Third Division

February 6, 2018

MISSOURI CREDIT UNION, Respondent,
v.
NICOLE DIAZ and MATTHEW WEIR, Appellants.

         Appeal from the Circuit Court of Boone County The Honorable Michael W. Bradley, Judge

          Before: Lisa White Hardwick, P.J., and Victor C. Howard and Alok Ahuja, JJ.

          Alok Ahuja, Judge

         Missouri Credit Union sued Nicole Diaz and Matthew Weir in the Circuit Court of Boone County, to recover a deficiency balance owed on a Retail Installment Sale Contract. The contract governed Diaz and Weir's purchase of a used 2013 Kia Optima from Head Motor Company in Columbia. The Credit Union filed its lawsuit after repossessing and selling the car through a private auction.

         Diaz and Weir counterclaimed, alleging that the Credit Union had failed to send them the pre-sale and post-disposition notices required by Missouri statutes. Following a brief bench trial, the circuit court entered judgment for the Credit Union. It awarded the Credit Union total damages of $11, 600.19.

         Diaz and Weir appeal. Because we conclude that the Credit Union failed to comply with the Missouri statutes specifying the pre- and post-sale notices to which Diaz and Weir were entitled, we reverse the circuit court's judgment, and remand the case to the circuit court for further proceedings on Diaz and Weir's counterclaim.

         Factual Background

         On March 12, 2015, Diaz and Weir jointly purchased a used 2013 Kia Optima automobile from Head Motor Company in Columbia. As part of the transaction they signed a Retail Installment Sale Contract, which identified them as the Buyers, and Head Motor Company as the "Seller-Creditor." Under the contract, Diaz and Weir were to make 78 monthly payments of $447.80 for the vehicle, in addition to their $400.00 cash down payment, and a trade-in allowance of $1, 500.00 they were given by Head Motor. With fees and interest, the contract listed the Total Sale Price for the vehicle to be $36, 828.40. The Credit Union financed the purchase of the vehicle, and Head Motor Company assigned its rights under the Retail Installment Sale Contract to the Credit Union.

         Diaz and Weir made their initial monthly payment on the contract on April 18, 2015. When it did not receive the next monthly payment, the Credit Union sent Diaz and Weir a First Notice of Right to Cure Default on June 11, 2015. The notice advised Diaz and Weir that, if they made their regular monthly payment of $447.80 by July 1, 2015, the contract would continue without penalty. Diaz and Weir made a second $447.80 payment on June 25, 2015. They made no further payments on the loan.

         On July 13, 2015, the Credit Union sent Diaz and Weir a Second Notice of Right to Cure Default, which was largely similar to the first notice. The second notice included the following information:

         SECOND NOTICE OF RIGHT TO CURE DEFAULT

         Account Information:

Account Number

*******607-0010

Payoff Amount

$30, 920.92

Loan Amount

$30, 719.73

Payoff as of

07/13/2015

Date of Loan

03/20/2015

Past Due Amount

$489.05

Payment Amount

$447.80

Last Day for Payment

08/02/2015

Frequency

Monthly

         Below this information, the notice stated: "You are late in making your payment(s). If you pay the Current Due Amount (above) by the Last Day for Payment (above), you may continue with the contract as though you were not late."

         Because Diaz and Weir failed to cure the second default, the Credit Union repossessed their vehicle on September 7, 2015. The following day, the Credit Union sent Diaz and Weir a written notice of its intent to sell the collateral, and on October 9, 2015, it sold the car for $19, 500.00 at a private auction. On October 14, 2015, the Credit Union notified Diaz and Weir of the sale, and advised them that they remained liable for a deficiency balance of $11, 833.49 on the Retail Installment Sale Contract. The October 14 notice also advised Diaz and Weir that "interest will continue to accrue on that balance at a rate of $1.27 per day until the loan is paid in full."

         On November 3, 2015, the Credit Union filed its petition in the circuit court to recover the deficiency balance. Although the circuit court initially entered a default judgment against Diaz and Weir, it later granted their motion to set the default aside. Diaz and Weir then filed their answer and a counterclaim, which alleged that the Credit Union had failed to provide them with the pre- and post-sale notices required by statute. Diaz and Weir sought compensatory and punitive damages, as well as attorney's fees, on their counterclaim.

         On December 2, 2016, the circuit court held a bench trial on the parties' respective claims. On December 8, 2016, the court entered a judgment for the Credit Union. On its affirmative claim, the circuit court awarded the Credit Union the total amount of $11, 600.19: $8, 991.08 in unpaid principal; $510.51 in accrued interest at the contract rate; and $2, 098.60 in attorney's fees and costs. The judgment ordered that Diaz and Weir take nothing on their counterclaim.

         Diaz and Weir appeal.

         Standard of Review

         In this bench-tried case, "the decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law." Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Issues of law are reviewed de novo. Am. Eagle Waste Indus., LLC v. St. Louis Cnty., 379 S.W.3d 813, 823 (Mo. banc 2012).

         Discussion

         I.

         In their first Point, Diaz and Weir claim that the Credit Union's second right-to-cure notice failed to clearly ...


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