TILA & Fraud
Jury Instructions-IL > Intentional Torts > Fraud & Truth In Lending (TILA) – Draft > TILA & Fraud
TRUTH IN LENDING ACT and FRAUD SUIT
(Draft only)
This was an action for Fraud and violation of the Truth In Lending Act (TILA) which settled just before trial. It is important to know that these were preliminary instruction which were never finalized due to settlement.
IPI 1.01 – Modified by the court to be read at end of case, and updated by IPI Committee in 2009 to include old IPI 3.01 language)
Now that the evidence has concluded, I will further instruct you as to the law and your duties. The law regarding this case is contained in the instructions I will give to you. You must consider the Court’s instructions as a whole, not picking out some instructions and disregarding others.
It is your duty to resolve this case by determining the facts and following the law given in the instructions. Your verdict must not be based upon speculation, prejudice, or sympathy. [Each party, whether a ________________________ or (i.e., corporation, partnership, etc.) an individual, should receive your same fair consideration.]
I have not meant to indicate any opinion as to the facts of this case by any of my rulings, remarks, or instructions.
You will decide what facts have been proven. Facts may be proven by evidence or reasonable inferences drawn from the evidence. Evidence consists of the testimony of witnesses and of exhibits admitted by the court. You should consider all the evidence without regard to which party produced it. You may use common sense gained from your experiences in life in evaluating what you see and hear during trial.
You are the only judges of the credibility of the witnesses. You will decide the weight to be given to the testimony of each of them. In evaluating the credibility of a witness you may consider that witness’ ability and opportunity to observe, memory, manner, interest, bias, qualifications, experience, and any previous inconsistent statement or act by the witness concerning an issue important to the case.
The use of cell phones, text messaging, Internet postings and Internet access devices in connection with your deliberations violates the rules of evidence and you are prohibited from using them
You must make your decision based on what you recall of the evidence. You will not receive a written transcript of the testimony when you retire to the jury room.
An opening statement is what an attorney expects the evidence will be. A closing argument is given at the conclusion of the case and is a summary of what an attorney contends the evidence has shown. If any statement or argument of an attorney is not supported by the law or the evidence you should disregard that statement.
PI 3.02 Witness Who Has Been Interviewed by Attorney
An attorney may, if a witness agrees, interview a witness to learn what testimony will be given. Such an interview, by itself, does not reflect adversely on the truth of the testimony of the witness.
IPI 3.04 Circumstantial Evidence
A fact may be proved by circumstantial evidence. Circumstantial evidence consists of the proof of facts or circumstances which leads to a reasonable inference of the existence of other facts sought to be established.
50.11 A Corporation Acts Through Its Employees
The Plaintiff in this case is : Mary Smith
The Defendant in this case is: ACME MOTORS
The defendant, ACME MOTORS, is a corporation and can act only through its officers and employees. Any act or omission of an officer or employee within the scope of his employment is the action or omission of the defendant corporation.
IPI 21.01 – BURDEN OF PROOF
When I say that a party has the burden of proof on any proposition, or use the expression “if you find,” or “if you decide,” I mean you must be persuaded, considering all the evidence in the case, that the proposition on which he has the burden of proof is
more probably true than not true.
However, there may be some instances in this case where a party’s burden of proof on certain proposition is proof by clear and convincing evidence.
NON-IPI and IPI Instructions on Cook County TILA and Fraud Case
There are two claims submitted to the jury in this case:
- Plaintiff’s claim of fraud and misrepresentation
- Plaintiff’s claim of Violation of the Truth In Lending Act
800.01 Fraud and Deceit—Fraudulent Misrepresentation—Issues Made by the Pleadings—Fraud—One Defendant [Court rejects need to define “reckless disregard” below as not indicated in IPI 800 and essentially self-evidence here”]
As to the Fraud and Misrepresentation claim, the plaintiff claims that the defendant made the following statements:
- Misrepresented that the financing company had given Ms. Smith an annual percentage rate of 16.25%;
- Misrepresented that ACME MOTORS would give Ms. Smith the lowest possible interest rate from the financing company;
The plaintiff further claims that the statements were false statements of material facts.
The plaintiff further claims that the defendant knew the statements were false or believed the statements to be false or made the statements in reckless disregard of whether they were true or false.
The plaintiff further claims that the defendant made the statements with the intent to induce the plaintiff to buy a car.
The plaintiff further claims that she reasonably believed the statements and bought the car in justifiable reliance on the truth of the statements.
The plaintiff further claims that he sustained damages as the result of his reliance.
The defendant denies that he made false statement of facts,] denies that any claimed statements were material, denies that he knew or believed the claimed statements to be false, denies that any claimed statements were made in reckless disregard of the statement’s truth or falsity, denies that he intended to induce the plaintiff to buy the car,
denies that the plaintiff reasonably believed the claimed statements or that she bought the car in justifiable reliance on the truth of the statements, and denies that damage resulted to the plaintiff from his reliance.
800.02A Fraud and Deceit—Burden of Proof on the Issues—Alternative One—Fraudulent Misrepresentation—One Plaintiff and One Defendant—Clear and Convincing Evidence Only as to Certain Elements [Adopted by the Court in deference to 800.02B in this case]
The plaintiff has the burden of proving each of the following propositions by clear and convincing evidence:
First, the defendant made false statements of material facts;
Second, the defendant knew or believed the statements were false or the defendant made the statements in reckless disregard of whether they were true or false.
The plaintiff has the burden of proving that each of the following propositions are more probably true than not true:
Third, the defendant made the statements with the intent to induce the plaintiff to buy a car;
Fourth, the plaintiff reasonably believed the statements and bought the car in justifiable reliance on the truth of the statements;
Fifth, the plaintiff’s damages resulted from his reliance.
If you find from your consideration of all the evidence that propositions First and Second have been proved by clear and convincing evidence and that propositions Third, Fourth, and Fifth are more probably true than not true, then your verdict should be for the plaintiff.
On the other hand, if you find from your consideration of all the evidence that any of these propositions has not been proved as required in this instruction, then your verdict should be for the defendant.
800.04 Fraud and Deceit—Material Fact—Definition [must be used in every case of fraudulent misrepresentation]
When I use the word “material” I mean the misrepresented facts must have been an essential element to the transaction, and that had the plaintiff been aware of the truth, she would have acted differently.
800.05 Fraud and Deceit—Measure of Damages
If you decide for the plaintiff on the question of liability under the fraud and misrepresentation claim, you must then fix the amount of money which will reasonably and fairly compensate him for any of the following elements of damages proved by the evidence to have resulted from the conduct of the defendant.
Loan finance charges;
Emotional Distress experienced as a result fraud
Compensation for actual financial losses;
Punitive damages as defined in these instructions
Whether any of these elements of damages has been proved by the evidence is for you to determine.
800.06 Fraud and Deceit—Punitive/Exemplary Damages—Willful and Wanton Conduct—Malicious and Willful Conduct—Violation of Trust and Confidence
If you find for the plaintiff and if you find the defendant’s conduct under the fraud and misrepresentation claim was willful and wanton and caused damage to the plaintiff, and if you believe that justice and the public good require it, you may, in addition to any other damages to which you find the plaintiff entitled, award an amount which will serve to punish the defendant and to deter the defendant and others from similar conduct.
800.07 Fraud and Deceit—Punitive/Exemplary Damages—Liability of Corporate Principal for the Act of an Agent
The defendant, ACME MOTORS, is a corporation and can act only through its officers and employees.
As to plaintiff’s claim for compensatory damages against the defendant, any act or omission of an officer or employee within the scope of his employment is the action or omission of the defendant ACME MOTORS.
As to plaintiff’s claim for punitive damages against the defendant, a different rule applies.
Punitive damages name of corporate defendant may be awarded against ACME MOTORS only if
(1) if you find in favor of the plaintiff and against ACME MOTORS under the fraud and misrepresentation claim; and
(2) if you find the officer’s or employee’s conduct was willful and wanton;, and
(3) if you find that, as to the acts or omissions giving rise to liability under the fraud and misrepresentation claim, one or more of the following conditions is are met:
- The corporation, through its management, authorized the doing and the manner of the act or omission; or
(b) The employee responsible for the act or omission was unfit, and the corporation was reckless in employing him; or
- The act or omission was that of a managerial employee who was acting in the scope of his employment; or
- The corporation, through its management or a managerial employee, ratified or approved the act or omission.
If you find for the plaintiff and against the defendant under the fraud and misrepresentation claim, and if you further find that the officer’s or employee’s conduct was willful and wanton, and if you further find that one or more of the above conditions is met, and if you further believe that justice and the public good require it, you may, in addition to any other damages to which you find the plaintiff entitled, award an amount which will serve to punish ACME MOTORS and to deter ACME MOTORS and others from similar conduct.
IPI.36.01 In Absence of Liability—No Occasion to Consider Damages FRAUD
If you decide for the defendant on the question of liability, you will have no occasion to consider the question of damages.
NON-IPI Duty under TILA, See 15 USCS § 1601 & 1602
As to the claim under the Truth In Lending Act, the defendant, ACME MOTORS, had a duty to clearly disclose to the plaintiff, Mary Smith, before the purchase of the car certain credit terms in the loan agreement, including (1) the annual percentage rate, (2) the method of determining the finance charge and the balance upon which a finance charge will be imposed, (3) the amount of the finance charge, (4) the amount to be financed, the total of payments, (5) the number of and amount of payments, and (6) the due dates or periods of payments scheduled to repay the indebtedness
Non IPI TILA Modification of 700.18 Contracts—Breach of Contract—Issues Made by Pleadings—One Defendant—No Dispute as to Contract Formation or Jury Finding in Favor of Contract Formation
The plaintiff, Mary Smith, and defendant, ACME MOTORS, entered into a loan agreement before the purchase of a car. The Plaintiff claims that before finalization of her purchase of a car, the defendant failed properly disclose:
(1) the annual percentage rate,
(2) the method of determining the finance charge and the balance upon which a finance charge will be imposed,
(3) the amount of the finance charge,
(4) the amount to be financed, the total of payments,
(5) the number of and amount of payments,
(6) the due dates or periods of payments scheduled to repay the indebtedness
The plaintiff further claims that one or more of the foregoing violations of the Truth In Lending Act caused her to suffer actual damages.
In addition to actual damages, any violation of the act also entitled the plaintiff to recovery of statutory damages as defined later in this instructions.
The defendant denies he did any of the things claimed by the plaintiff and denies that the plaintiff suffered actual damages.
The defendant also sets up the following affirmative defenses:
That any violation of the Truth In Lending Act was the result of defendant’s unintentional clerical, calculation, computer malfunction and programming, and printing errors.
That any violation was unintentional
That ACME MOTORS maintains procedures reasonably adapted to avoid any such error.
NON-IPI TILA BURDEN INSTRUCTION
As to the Truth In Lending Claim, the plaintiff has the burden of proving each of the following propositions:
First, that the defendant failed to make disclosures required under Truth In Lending Act; and
Second, that the defendant suffered actual damages as a result of the violations;
If you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the defendant.
On the other hand, if you find from your consideration of all the evidence that each of these propositions has been proved, then you must consider the defendant’s affirmative defenses:
In this case defendant has asserted certain affirmative defenses:
That any violation of the Truth In Lending Act was the result of defendant’s unintentional clerical, calculation, computer malfunction and programming, and printing errors;
That any violation was unintentional;
That ACME MOTORS maintains procedures reasonably adapted to avoid any such error.
The defendant has the burden of proving these defenses.
If you find from your consideration of all the evidence that each of the propositions required of the plaintiff under the Truth In Lending claim has been proved and that none of the defendant’s affirmative defenses has been proved, then your verdict should be for the Plaintiff.
If, on the other hand, you find from your consideration of all the evidence, that any one of the propositions the plaintiff is required to prove under the Truth In Lending claim has not been proved, or that any one of the defendant’s affirmative defenses has been proved, then your verdict should be for the defendant.
800.05 TILA—Measure of Damages
If you decide for the plaintiff on the question of liability under the Truth In Lending claim, you must then fix the amount of money provided by statute and, in addition to that, the actual damages to have resulted from the conduct of the defendant, including
Statutory damages no less that $100.00 and greater than $1000.00 dollars;
Actual damages determined by the economic loss to the plaintiff as shown by the evidence.
Whether any of these elements of damages has been proved by the evidence is for you to determine.
IPI.36.01 In Absence of Liability—No Occasion to Consider Damages TILA
Again, if you decide for the defendant on the question of liability, you will have no occasion to consider the question of damages.
B45.01 – FORMS OF VERDICT – NO COMPARATIVE
When you retire to the jury room you will first select a foreperson. He or she will preside during your deliberations.
Your verdict must be unanimous.
Forms of verdicts are supplied with these instructions. After you have reached your verdict, fill in and sign the appropriate form of verdict and return it to the court. Your verdict must be signed by each of you. You should not write or mark upon this or any of the other instructions given to you by the court.
As to the Plaintiff, Mary Smith’s’ claim of damages resulting from fraud and misrepresentation against the Defendant, ACME MOTORS,
If you find for the Plaintiff and against the Defendant then you should use Verdict Form A.
If you find for the Defendant and against the Plaintiff then you should use Verdict Form B.
As to the Plaintiff, Mary Smith’s claim resulting violation of the Truth In Lending Act against the Defendant, ACME MOTORS,
If you find for the Plaintiff and against the Defendant then you should use Verdict Form C
If you find for the Defendant and against the Plaintiff then you should use Verdict Form D
IPI B45.01.A – VERDICT FORM A
VERDICT FORM A
As to the Fraud and Misrepresentation Claim, we, the jury, find for the Plaintiff, Mary Smith, and against the Defendant, ACME MOTORS. We assess the damages in the sum of $_____________, itemized as follows
Emotional Distress experienced as a result of the injuries $_________________
Compensation for actual financial losses $_________________
Loan Finance Charges $_________________
Punitive damages as defined in these instructions $________________
[Signature Lines ]—————————————————– —————————————————-
(Foreperson)
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**B45.01.B Verdict Form B- COMPARATIVE
VERDICT FORM B
As to the Fraud and Misrepresentation Claim, we, the jury, find for the Defendant, ACME MOTORS, and against the Plaintiff, Mary Smith.
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(Foreperson)
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IPI B45.01.A – VERDICT FORM A
VERDICT FORM C
As to the Plaintiff’s claim for violation of the Truth In Lending, , we, the jury, find for the Plaintiff, Mary Smith, and against the Defendant, ACME MOTORS. We assess the damages in the sum of $_____________, itemized as follows
Statutory damages between $100.00 and $1000.00 $_________________
Compensation for actual financial losses $_________________
[Signature Lines ]—————————————————– —————————————————-
(Foreperson)
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**B45.01.B Verdict Form B- COMPARATIVE
VERDICT FORM D
As to the Plaintiff’s claim for violation of the Truth In Lending, we the jury find
for the Defendant, ACME MOTORS, and against the Plaintiff, Mary Smith.
[Signature Lines ]—————————————————– —————————————————-
(Foreperson)
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*IPI 60.01 Violation of Statute, Ordinance, or Administrative Regulation
There was in force in the Untied States and the State of Illinois at the time of the occurrence in question a certain statute which provided that:
If you decide that a party violated the statute on the occasion in question, then you may consider that fact together with all the other facts and circumstances in evidence in determining whether and to what extent, if any, a party was willful and wanton before and at the time of the occurrence.
EXCERPTS FROM TRUTH IN LENDING STATUTE THAT MAY OR MAY NOT BE USED IF THE ISSUE ARISES
15 USCS § 1601
1601. Congressional findings and declaration of purpose
The Truth In Lending Act assures a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate credit billing.
15 USCS § 1602
- Definitions and rules of construction
(u) The term “material disclosures” means the disclosure, as required by this title [15 USCS §§ 1601 et seq.], of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number of and amount of payments, the due dates or periods of payments scheduled to repay the indebtedness, and the disclosures required by section 129(a) [15 USCS § 1639(a)].
Unintentional violations; bona fide errors. A creditor or assignee may not be held liable in any action brought under this section or section 125 [15 USCS § 1635] for a violation of this title [15 USCS §§ 1601 et seq.] if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person’s obligations under this title [15 USCS §§ 1601 et seq.] is not a bona fide error.
- 1631. Disclosure requirements
- Duty of creditor or lessor respecting one or more than one obligor. Subject to subsection (b), a creditor or lessor shall disclose to the person who is obligated on a consumer lease or a consumer credit transaction the information required under this title [15 USCS §§ 1601 et seq.].
- 1604. Rules and regulations
(a) Promulgation, contents, etc., of regulations. The Board shall prescribe regulations to carry out the purposes of this title [15 USCS §§ 1601 et seq.]. Except in the case of a mortgage referred to in section 103(aa) [15 USCS § 1602(aa)], these regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of this title [15 USCS §§ 1601 et seq.], to prevent circumvention or evasion thereof, or to facilitate compliance therewith.
(b) Model disclosure forms and clauses; publication, criteria, compliance, etc. The Board shall publish model disclosure forms and clauses for common transactions to facilitate compliance with the disclosure requirements of this title [15 USCS §§ 1601 et seq.] and to aid the borrower or lessee in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising such forms, the Board shall consider the use by creditors or lessors of data processing or similar automated equipment. Nothing in this title [15 USCS §§ 1601 et seq.] may be construed to require a creditor or lessor to use any such model form or clause prescribed by the Board under this section. A creditor or lessor shall be deemed to be in compliance with the disclosure provisions of this title [15 USCS §§ 1601 et seq.] with respect to other than numerical disclosures if the creditor or lessor (1) uses any appropriate model form or clause as published by the Board, or (2) uses any such model form or clause and changes it by (A) deleting any information which is not required by this title [15 USCS §§ 1601 et seq.], or (B) rearranging the format, if in making such deletion or rearranging the format, the creditor or lessor does not affect the substance, clarity, or meaningful sequence of the disclosure.
(c) Procedures applicable to adoption of model forms and clauses. Model disclosure forms and clauses shall be adopted by the Board after notice duly given in the Federal Register and an opportunity for public comment in accordance with section 553 of title 5, United States Code.
(d) Effective dates of regulations containing new disclosure requirements. Any regulation of the Board, or any amendment or interpretation thereof, requiring any disclosure which differs from the disclosures previously required by this chapter, chapter 4, or chapter 5 [15 USCS §§ 1601 et seq., 1666 et seq., or 1667 et seq.], or by any regulation of the Board promulgated thereunder shall have an effective date of that October 1 which follows by at least six months the date of promulgation, except that the Board may at its discretion take interim action by regulation, amendment, or interpretation to lengthen the period of time permitted for creditors or lessors to adjust their forms to accommodate new requirements or shorten the length of time for creditors or lessors to make such adjustments when it makes a specific finding that such action is necessary to comply with the findings of a court or to prevent unfair or deceptive disclosure practices. Notwithstanding the previous sentence, any creditor or lessor may comply with any such newly promulgated disclosure requirements prior to the effective date of the requirements.
(e) [Not enacted]
(f) Exemption authority.
(1) In general. The Board may exempt, by regulation, from all or part of this title [15 USCS §§ 1601 et seq.] any class of transactions, other than transactions involving any mortgage described in section 103(aa), for which, in the determination of the Board, coverage under all or part of this title [15 USCS §§ 1601 et seq.] does not provide a meaningful benefit to consumers in the form of useful information or protection.
(2) Factors for consideration. In determining which classes of transactions to exempt in whole or in part under paragraph (1), the Board shall consider the following factors and publish its rationale at the time a proposed exemption is published for comment:
(A) The amount of the loan and whether the disclosures, right of rescission, and other provisions provide a benefit to the consumers who are parties to such transactions, as determined by the Board.
(B) The extent to which the requirements of this title [15 USCS §§ 1601 et seq.] complicate, hinder, or make more expensive the credit process for the class of transactions.
(C) The status of the borrower, including–
(i) any related financial arrangements of the borrower, as determined by the Board;
(ii) the financial sophistication of the borrower relative to the type of transaction; and
(iii) the importance to the borrower of the credit, related supporting property, and coverage under this title, as determined by the Board;
(D) whether the loan is secured by the principal residence of the consumer; and
(E) whether the goal of consumer protection would be undermined by such an exemption.
(g) Waiver for certain borrowers.
(1) In general. The Board, by regulation, may exempt from the requirements of this title [15 USCS §§ 1601 et seq.] certain credit transactions if–
(A) the transaction involves a consumer–
(i) with an annual earned income of more than $ 200,000; or
(ii) having net assets in excess of $ 1,000,000 at the time of the transaction; and
(B) a waiver that is handwritten, signed, and dated by the consumer is first obtained from the consumer.
(2) Adjustments by the Board. The Board, at its discretion, may adjust the annual earned income and net asset requirements of paragraph (1) for inflation