Ernest Sharlow v. Wally McCarthy

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 98-4051
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Ernest P. Sharlow; *
Jodi M. Sharlow, *
*
Appellants, * Appeal from the United States
* District Court for the
v. * District of Minnesota.
*
Wally McCarthy Pontiac-GMC * [UNPUBLISHED]
Trucks-Hyundai, Inc., a Minnesota *
corporation, *
*
Appellee. *

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Submitted: June 14, 1999
Filed: July 6, 2000
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Before HANSEN and MAGILL, Circuit Judges, and JONES,1 District Judge.
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HANSEN, Circuit Judge.

1
The Honorable John B. Jones, United States District Judge for the District of
South Dakota, sitting by designation.
 Ernest P. Sharlow and Jodi M. Sharlow (the Sharlows) appeal the district court's2
grant of summary judgment in favor of Wally McCarthy's Pontiac-GMC Trucks-
Hyundai, Inc. (McCarthy) in this suit involving an alleged violation of the Minnesota
Motor Vehicle Retail Installment Sales Act, Minn. Stat. § 168.66-77. We affirm.

I.

The Sharlows, citizens of Wisconsin, visited McCarthy in White Bear Lake,
Minnesota, on or about January 3, 1995, and expressed an interest in trading in their
current vehicle and purchasing a used GMC Sierra Truck. On January 7, 1995, the
Sharlows and McCarthy executed a purchase agreement, a motor vehicle retail
installment contract, and a financing addendum to both the purchase agreement and the
retail installment contract. The financing addendum stated that it was "incorporated by
reference to the vehicle purchase contract and the motor vehicle retail installment
contract . . . In the event that the seller/dealer fails to arrange the subject financing and
assign all of its interest . . . to a lending institution . . . the vehicle purchase contract and
retail installment contract shall become null and void." (Appellants' App. at 100).
Thereafter, McCarthy informed the Sharlows that it was unable to arrange financing
with Firstar Bank according to the terms set out in the retail installment contract, in part
due to the fact that Mr. Sharlow did not work at the place of employment identified in
his credit application. McCarthy, however, was able to arrange financing through
Metropolitan Federal. On January 17, 1995, the Sharlows and McCarthy executed a
second purchase agreement and a second retail installment contract, which identified
Metropolitan Federal as the assignee and contained less favorable terms for the
Sharlows.

2
The Honorable John R. Tunheim, United States District Judge for the District
of Minnesota.
2
 After making several payments, the Sharlows defaulted, and McCarthy
repossessed the truck on November 13, 1995. The Sharlows filed for bankruptcy in
July 1996, in the Western District of Wisconsin, and their outstanding installment debt
on the truck was discharged. On January 6, 1997, the Sharlows brought suit against
McCarthy and Firstar Bank of Minnesota.3 The Sharlows alleged a breach of contract
claim as well as violations of various provisions of the Equal Credit Opportunity Act,
15 U.S.C § 1691, the Motor Vehicle Retail Installment Sales Act, Minn. Stat. §
168.66-77, the Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43-48, and
the Prevention of Consumer Fraud Act, Minn. Stat. § 325F.68-70. The district court
adopted the magistrate judge's report and recommendation, granted McCarthy's motion
for partial summary judgment, and dismissed with prejudice the federal claim based on
the Equal Credit Opportunity Act. The court retained jurisdiction over the remaining
state law claims on the basis of supplemental jurisdiction authorized by 28 U.S.C. §
1367. On the four Minnesota state law claims, the district court later adopted the
magistrate judge's subsequent report and recommendation and granted summary
judgment to McCarthy on all four Minnesota state law claims. The Sharlows appeal
the grant of summary judgment only on the Minnesota Motor Vehicle Retail Installment
Sales Act claim.

II.

We review the grant of summary judgment de novo. Coplin v. Fairfield Pub.
Access Television Comm., 111 F.3d 1395, 1401 (8th Cir. 1997). In conducting our
review, we evaluate the record in the light most favorable to the nonmoving party. Id.
Summary judgment is appropriate only when there is "no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a matter of law." Id.
(quoting Fed. R. Civ. P. 56(c)).

2
The Sharlows settled with Firstar Bank, and their claims against Firstar Bank
were dismissed with prejudice.
3
 On appeal, the Sharlows assert that the financing addendum violated the
Minnesota Motor Vehicle Retail Installment Sales Act (MMVRISA) because the
MMVRISA requires that "[e]very retail installment contract . . . shall contain all the
agreements of the parties," Minn. Stat. Ann. § 168.71(a)(1), and the financing
addendum was not a part of the retail installment contract. Additionally, the Sharlows
contend that the transaction was completed at the time that the first retail installment
contract was signed, and therefore, McCarthy should be bound to its terms.

In a case with virtually identical facts, the Minnesota Supreme Court, sitting en
banc, held that the MMVRISA is not violated by a conditional delivery agreement that
is not included in the retail installment contract despite the language of the act. See
Scott v. Forest Lake Chrysler-Plymouth-Dodge, No. C4-99-161, 2000 WL 768539, at
*4-5 (Minn. June 15, 2000). "The plain purpose of the MMVRISA is to require
disclosure to consumers of the cost of credit extended to them . . . The 'agreement of
the parties' clause serves to prohibit dealers from relying on separate agreements
containing additional or contradictory financing terms." Id. at *5 (quoting Sharlow v.
Wally McCarthy Pontiac-GMC Trucks-Hyundai, Inc., No. 97-20 (D.Minn. Sept. 28,
1998)). The MMVRISA does not require "every agreement to a condition precedent
to be contained in the" retail installment contract. Id.

Like the Sharlows' financing addendum, the conditional delivery agreement
contained language that the retail installment contract would become null and void if
financing was not approved. Id. at *2. The Minnesota Supreme Court concluded that
the failure to attain financing prevented the first retail installment contract from
becoming a contract and that it was not until financing was attained that Mr. Scott
entered into a contract with the dealership. Id. at *5. Because the second retail
installment contract fully disclosed the credit terms, it complied with the MMVRISA.
Id. In accordance with the Minnesota Supreme Court, we conclude that the Sharlows'
financing addendum did not violate the MMVRISA and that the second retail
installment contract complied with the terms of the statute.

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 III.

Accordingly, we affirm the judgment of the district court, and we deny all
pending motions as moot.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT

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