Unpublished Disposition, 937 F.2d 613 (9th Cir. 1987)

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U.S. Court of Appeals for the Ninth Circuit - 937 F.2d 613 (9th Cir. 1987)

Warren Hiromi MIJO, Roy Yeiko Mijo, Kay Kimie Mijo,Plaintiffs-Appellants,v.AVCO FINANCIAL SERVICES OF HAWAII, INC., Defendant-Appellee.

No. 90-16688.

United States Court of Appeals, Ninth Circuit.

Submitted June 27, 1991.* Decided July 1, 1991.

Before SCHROEDER, FLETCHER and LEAVY, Circuit Judges.


Warren H. Mijo, Roy Y. Mijo, and Kay K. Mijo appeal pro se the district court's summary judgment in favor of Avco Financial Services of Hawaii, Inc. ("Avco").1  In their Truth in Lending Act ("TILA"), 15 U.S.C. § 1501 et seq., action against Avco, the Mijos sought to rescind a consumer loan Avco made to them, and to recover damages. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.


The Mijos brought this action under the TILA, 15 U.S.C. § 1635(a) & (b), for rescission of a consumer loan Avco made to them on June 29, 1986. As security for the loan, the Mijos gave Avco a mortgage on their home. On April 3, 1987, the Mijos refinanced the loan with another institution, and all sums due under the loan agreement were paid. Thus, Avco has no further rights against the Mijos, and no security interest in their home. Two years after the Mijos refinanced the loan, they sent Avco a notice of cancellation of the loan, which Avco admits it received.

When the Mijos refinanced their loan prior to attempting to rescind the loan, their right of rescission under 15 U.S.C. § 1635(f) was extinguished. See King v. California, 784 F.2d 910, 913 (9th Cir. 1986), cert. denied, 484 U.S. (1987). Simply stated, the loan cannot be rescinded because there is nothing to rescind. See id. Therefore, the district court did not err in dismissing the Mijos' action to rescind the loan. See id.



The Mijos also claimed damages under 15 U.S.C. § 1640(e) for Avco's failure to respond to the Mijos' rescission letter.2  Section 1635(b) requires a lender to respond to the borrowers' notice of rescission within twenty days. See 15 U.S.C. § 1635(b). Failure to respond by the lender within the prescribed time may subject the lender to liability under section 1640. See 15 U.S.C. § 1640(a).

However, the Mijos' right to recover damages for Avco's alleged failure to respond to the notice of rescission depends on whether the Mijos and Avco had a creditor-obligor relationship when the Mijos sought to rescind. See 15 U.S.C. 1635(b). Because at the time the Mijos sought to rescind, Avco was no longer a creditor of the Mijos, section 1635(b) is inapplicable. See id.; accord In Re Smith, 737 F.2d 1549, 1552 (11th Cir. 1984). Because the Mijos did not have a right to rescind, the district court did not err in granting Avco's summary judgment motion on the Mijos' claim for damages.3 



The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a); 9th Cir.R. 34-4


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3


The district court dismissed the Mijos' rescission claim for lack of subject matter jurisdiction based on its ruling that the action was statutorily time barred. The district court based its holding on Jamerson v. Miles, 421 F. Supp. 107, 111 (N.D. Tex. 1976). Alternatively, the district court held that the Avco was entitled to summary judgment because the Mijos refinanced their loan prior to attempting to rescind it. Because we affirm the district court on the grounds that the Mijos were not entitled to rescission, we decline to reach the merits of the statute of limitations issue. See Golden Nugget, Inc. v. American Stock Exchange, Inc., 828 F.2d 586, 590 (9th Cir. 1987) (court of appeals may affirm on any basis adequately supported by the record)


To the extent that the Mijos are seeking damages for Avco's actions at the consummation of the loan, these claims are time barred by 15 U.S.C. § 1640(e)


We decline to award attorneys fees to Avco on appeal