James Riggs, Trustee in Bankruptcy v. Government Employees Financial Corporation, Etc.

Riggs, in his capacity as bankruptcy trustee for John and Gloria Ferguson, brought suit against Government Employees Financial Corporation (GEFCO) for violating the Truth-in-Lending Act (Act), 15 U.S.C. § 1601 et seq., in a 1975 loan to the Fergu-sons. The district judge granted Riggs’ motion for summary judgment and awarded $2,000 in damages and $2,500 in attorney’s fees to the bankrupt estate pursuant to 15 U.S.C. § 1640 (a). GEFCO appeals, claiming that the district court erred in permitting the bankruptcy trustee to sue for a Truth-in-Lending violation while denying GEFCO’s counterclaim that the award be set off against the debt owed to GEFCO by the Fergusons. GEFCO also contends that the district court erred in granting a separate $1,000 recovery for each of the two debtors involved. We affirm the bankruptcy trustee’s right to sue and the denial of the setoff, but reverse the grant of two $1,000 recoveries.

I.

GEFCO does not contest the district court’s finding of a Truth-in-Lending violation in its loan to the Fergusons, nor does it contest the grant of $2,500 in attorney’s fees. Rather, GEFCO contends that the district judge’s ruling that the Fergusons’ Truth-in-Lending…