Lafferty

This case involves claims by the buyer of an allegedly defective motor home against a lender to whom the installment sale contract was assigned by the dealer. At the heart of the controversy is a question that has divided courts in several jurisdictions: What is the meaning of the contract provision required by title 16, part 433.2, of the Code of Federal Regulations *550 (2012)? 1 Commonly referred to as the “Holder Rule,” it is required by the Federal Trade Commission (FTC) for every consumer installment sale contract that is assigned to a lender. The Holder Rule requires the following language in 10-point (or larger) and bold typeface: “NOTICE [I] ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” (§ 433.2(a) (2012).)

Here, Patrick and Mary Lafferty (the Laffertys) bought a motor home from Geweke Auto & RV Group (Geweke) that was financed with an installment contract. Shortly after the sale, Geweke assigned the contract to Wells…