A plaintiff had Article III standing to bring a Truth in Lending Act (“TILA”) claim against a home improvement financer, based on a theory that a heating and air conditioning contractor company acted as agent for the financer. Walters v. Fast AC, Ltd. Liab. Co., 60 F.4th 642 (11th Cir. 2023)
Gary Walters, a 70-year-old army veteran suffering from Parkinson’s and other health issues, was contacted by Fast AC, LLC for a free inspection and cleaning of his home’s air conditioning unit. Fast AC deployed an employee to Walters’s house who informed Walters that his unit’s ductwork was “shot” and needed to be replaced “real soon” for a cost of $5,500. Walters could not afford that price, and Fast AC’s employee falsely told Walters he could pay $50 a month through financing with a company called FTL Capital Partners, LLC (“FTL”). Walters agreed, but did not himself fill out FTL’s credit application or even see any of the loan paperwork. Instead, Fast AC’s employee completed, e-signed, and submitted the loan application in Walters’s name from Walters’s computer.
Then, before Fast AC began the ductwork repair, Walters decided to cancel the job. But to cancel the financing agreement, Fast AC’s representative told him that Walters would have to “call the finance company” directly, and after a series of telephone calls, FTL did not release Walters from the loan. FTL sent Walters demand letters, bills, and past-due notices for the ductwork repair job that Fast AC never performed, and reported negative payment activity on Walters’s credit report. Walters never paid FTL.
Walters sued Fast AC and FTL in the U.S. District Court for the Middle District of Florida. Walters’s one federal claim was a Truth in Lending Act claim against FTL. The district court granted summary judgment against Walters, finding that he lacked standing to bring the TILA claim against FTL.
On appeal to the Eleventh Circuit, the sole question before the court was whether Walters had Article III standing to bring his TILA claim against FTL Capital. In an opinion written by Judge Andrew Brasher, the court walked through the elements of standing, finding that Walters had clearly met the requirement of “injury in fact” by, among other things, having suffered wasted time; and the requirement of “redressability,” because a favorable outcome would award Walters damages for his concrete injuries.
The more difficult question was “traceability,” which the court ultimately found Walters had shown. The court rejected Walters’ first theory of traceability, that both Fast AC’s concealment of FTL’s loan documents and FTL’s inadequate disclosures in those documents caused injuries to Walters. The summary judgment evidence established, on the other hand, that Walters never viewed the disclosures in FTL’s loan documents because Fast AC’s employee prevented Walters from seeing them. Therefore, FTL’s alleged omission of the correct TILA disclosures in the loan documentation could not have been a factual cause of Walters’s decision to take out the loan.
However, the court accepted Walters’s second theory of traceability, that Fast AC’s employee who concealed the loan documents from Walters was acting as FTL’s agent for the purpose of providing the disclosures. Although the district court concluded that Walters failed to properly allege this agency theory in his complaint, and therefore declined to address the argument below, the Eleventh Circuit concluded that while the court considers all the evidence in the record when addressing a factual challenge to standing on summary judgment, the determination as to what claims the plaintiff has actually raised and what claims he has standing to raise is bound by the contents of the pleadings, citing Bochese v. Town of Ponce Inlet, 405 F.3d 964 (11th Cir. 2005). The court held that Walters sufficiently pleaded that Fast AC was acting as FTL’s agent in his complaint and had raised a TILA claim based on an agency relationship. The court further noted, however, that it expressed no opinion on the merits of the claim, nor “whether or under what circumstances a creditor may be held liable under TILA for the actions of an agent.” The court found only that Walters had Article III standing to bring the claim in federal court.