## Facts

- An automobile dealer advertised a 1988 Ford Escort Pony for $7,826 with example financing terms of 60 months at 11% APR and stated monthly payments.
- The buyer sought to purchase on the advertised financing terms, but financing companies declined due to her limited credit history.
- A finance company agreed to lend under a special program for limited or poor credit at 13.75% APR and required a cosigner.
- The dealer prepared a retail installment contract reflecting the cash price, financed optional items, a higher amount financed, and 60 monthly payments at 13.75% APR; the buyer signed and her father cosigned.
- The dealer assigned the contract to the finance company; the contract allowed acceleration and repossession upon default.
- After default, the finance company provided notices, repossessed the vehicle, notified the borrowers of the right to redeem, and sold the vehicle at a wholesale dealers’ auction for $2,200.
- The finance company sued for a deficiency; the borrowers counterclaimed and also sued the dealer, alleging breach of contract, statutory consumer-credit violations, deceptive advertising (“bait and switch”), and that the resale was not commercially reasonable.
- The district court granted summary judgment to the finance company on the deficiency claim and against the borrowers’ claims, and granted summary judgment to the dealer on the third-party complaint.

## Issues

1. Whether the dealer’s newspaper advertisement constituted a binding offer creating a contract right to financing at 11% APR.
2. Whether the dealer or finance company violated the Minnesota Motor Vehicle Retail Installment Sales Act, the Truth in Lending Act, or the Equal Credit Opportunity Act by the transaction’s terms, later partial prepayment, or cosigner requirement.
3. Whether the creditor’s disposition of the repossessed vehicle at a wholesale auction was commercially reasonable so as to support a deficiency judgment.
4. Whether the advertising and later financing terms supported a deceptive “bait and switch” claim.
5. Whether any claim raised a genuine issue of material fact sufficient to defeat summary judgment.

## Decision

- The Minnesota Court of Appeals affirmed summary judgment for the finance company and the dealer on all claims.
- The advertisement was not an offer because it was not clear and definite enough to leave nothing open for negotiation; the written contract governed the accepted financing terms.
- No breach of contract and no violations of the cited consumer-credit statutes were shown, including no requirement for new TILA disclosures after a partial prepayment and no ECOA violation based on a cosigner requirement tied to credit history.
- The auction sale was presumed commercially reasonable because the creditor complied with the statutory disposition framework; assertions that a different method might have produced a higher price did not create a material fact dispute.
- The “bait and switch” theory failed because the dealer offered the advertised terms to qualified buyers and the buyer received different credit terms due to credit qualifications, not intent not to sell as advertised.

## Legal Principles

- An advertisement to the general public is not an offer unless it is clear, definite, explicit, and leaves nothing open for negotiation.
- Partial prepayment of principal under an existing credit transaction does not, by itself, require new Truth in Lending disclosures.
- Requiring a cosigner and charging a higher interest rate based on limited credit history does not violate the Equal Credit Opportunity Act absent proof of discrimination on a prohibited basis.
- A secured party’s disposition of collateral that complies with the governing statutory requirements is presumed commercially reasonable; to avoid summary judgment, a debtor must present specific evidence of unreasonableness and resulting loss, not merely that a better price might have been obtained by another method.
- Summary judgment is proper when the nonmoving party fails to produce evidence creating a genuine issue of material fact on essential elements of the claim.

## Conclusion

The court upheld the deficiency judgment and rejected the borrowers’ contract and consumer-protection theories, holding that the advertisement was not a binding offer, the creditor and dealer committed no TILA, ECOA, or state installment-sales violations on the record presented, and the wholesale auction sale was presumed commercially reasonable and was not rebutted by speculative claims of a higher possible resale price.


Ford Motor Credit Co. v. Russell, 519 N.W.2d 460 (Minn. Ct. App. 1994)