Keiran, et al. v. Home Capital, Inc., et al., No. 11-3878 (8th Cir. 2013)
Annotate this CasePlaintiffs in these consolidated appeals brought claims under the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., related to their mortgage transactions. The court held that to accomplish rescission within the meaning of section 1635(f), the obligor must file a rescission action in court. Because neither plaintiffs accomplished rescission in this way within three years of their respective transactions, their right to rescind expired and the district court correctly entered summary judgment on these claims. Further, plaintiffs were not entitled, as a matter of law, to money damages for the banks' refusal to rescind, although their claim was cognizable, where the violation - that each set of plaintiffs were given one, rather than two TILA disclosures - was not facially apparent on the loan documents as set forth in section 1641.
Court Description: Civil case - Truth in Lending Act. In actions seeking rescission and money damages from lenders based on claims that the plaintiffs failed to receive the correct number of TILA disclosures at closing, the district court did not err in granting defendants summary judgment; recognizing a circuit split on the issue, the court adopts the Tenth Circuit's view that a plaintiff seeking rescission must file suit, as opposed to merely giving the bank notice, within three years in order to preserve the right of rescission under Sec. 1635(f) of the Act; under this analysis, plaintiffs' right to rescind had expired, and the court was correct to enter summary judgment on the rescission claims; while plaintiffs' claim for money damages for the banks' wrongful failure to rescind was cognizable, the banks were entitled to summary judgment because the alleged violation of TILA - that each plaintiff was given one, rather than two TILA disclosures - was not facially apparent on the loan documents as required by Sec. 1641 of the Act; as such, the banks were entitled under the Section to rely on the documents they received on assignment of the loans and, as those documents appeared complete and accurate, the borrowers had no basis for a monetary claim against the assignee banks. Judge Murphy, concurring in part and dissenting in part.
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