This case deserves proper airing on the Living Lies blog as well as on this Living Lies The Truth blog, Neil Garfield posted this commentary on 21 October 2015.
Garfield seemed to approve some seminar notes indicating that bank lawyers should not ignore rescission. The Keiran v Home Capital opinion proves the spurious, fallacious, WRONG nature of those notes, and of Garfield’s echo.
Keiran v Home Capital, a TILA Rescission case, went from trial to the 8th Circuit, to SCOTUS for a Jesinoski adjustment, and back to trial, where the USDC utterly destroyed Garfield’s and Keiran’s sophomoric contention that a notice of rescission voids the creditor’s security interest (lien). The opinion also proves the proper meaning of Jesinoski, and shows what borrowers must NOT do (rely upon their effete affidavit) to challenge their own written acknowledgement of receipt of TILA right-to-rescind disclosures. I provide the highlights below.
Keiran v Home Capital, Inc, Dist. Court, Minnesota 2015
The Keirans filed a complaint on October 29, 2010, seeking rescission of their mortgage loan, a declaratory judgment voiding defendants’ security interest in the loan, and money damages. The court granted summary judgment in favor of defendants on November 30, 2011. ECF No. 39. The court denied the claims for monetary damages because (1) the suit was commenced more than one year after defendants allegedly failed to provide a sufficient number of TILA disclosure statements to the Keirans, and (2) the alleged TILA violations were not present on the face of the loan documents. Id. at 5, 8. The court also held that the rescission claim was untimely because the Keirans did not file suit within three years of the December 2006 closing. Id. at 12.
The Keirans appealed, and the Eighth Circuit affirmed. See Keiran v. Home Capital, Inc., 720 F.3d 721 (8th Cir. 2013). The Keirans then petitioned the United States Supreme Court for a writ of certiorari. See Keiran v. Home Capital, Inc., No. 13-705, 2013 WL 6513778 (Dec. 9, 2013). The petition addressed only the timeliness of the rescission claim, and did not appeal the denial of the claims for monetary damages. Id. at *i. The Supreme Court reversed, finding that a consumer may exercise a right to rescind simply by providing written notice to the lender, rather than file suit, within three years of the loan transaction. See Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015). The Eighth Circuit remanded to this court, and the parties now cross-move for summary judgment.
…The court finds that the Keirans have failed to rebut the presumption in favor of proper delivery under § 1635(c). This court has consistently held that statements merely contradicting a prior signature are insufficient to overcome the presumption. See Gomez v. Marketplace Home Mortg. LLC, No. 12-153, 2012 WL 1517260, at *3 (agreeing with “the majority of courts that mere testimony to the contrary is insufficient to rebut the statutory presumption of proper delivery”); Sobienak v. BAC Home Loans Servicing, LP, 835 F. Supp. 2d 705, 710 (D. Minn. 2011); Golden v. Town & Country Credit, No. 02-3627, 2004 WL 229078, at *2 (D. Minn. Feb. 3, 2004) (finding deposition testimony insufficient to overcome presumption). The documents procured from defendants’ title company also do nothing to contradict the Keirans’ signed acknowledgment, because they simply mirror the documents already on file with BAC. Under these circumstances, the court finds the presumption of proper delivery has not been overcome.
… the record here is devoid of any evidence — apart from self-serving affidavit testimony — that the defendants failed to provide the required number of disclosure statements or otherwise comply with TILA.
Lastly, the Keirans argue that defendants’ security interest is void because they failed to adequately and timely respond to their notice of rescission. When a borrower exercises a right to rescind, the lender must return to the borrower “any money or property given” to the lender within twenty days. 15 U.S.C. § 1635(c). The Keirans argue that, because the defendants did not adequately respond to their notice within twenty days, the rescission took effect twenty days from defendants’ receipt of the notice. As explained, however, the Keirans have not shown that the defendants violated the TILA. As a result, their right to rescind did not extend beyond the three-day period under § 1635(a). The defendants therefore did not have an obligation to rescind within twenty days, let alone respond to the notice, and summary judgment is warranted.
Read the whole opinion here: