Alan G. Keiran; Mary Jane Keiran Plaintiffs - Appellants
Home Capital, Inc.; BAC Home Loans Servicing, L.P.; Bank of New York Mellon, as Trustee for the Holders of CWABS, Inc., Asset-Backed Certificates, Series 2007-6; John and Jane Does 1-10 Defendants - Appellees
Submitted: March 7, 2017
from United States District Court for the District of
Minnesota - Minneapolis
BENTON, BEAM, and MURPHY, Circuit Judges.
Truth in Lending Act (TILA), 15 U.S.C. §§
1601-1667f, case is before our court on the Keirans'
attempt to rescind their 2006 mortgage. The Keirans appeal
the district court's grant of summary judgment in favor of a
lending bank and its loan servicer (collectively, the bank).
December 30, 2006, the Keirans and Home Capital,
executed a promissory note in the amount of $404, 000 in
exchange for a mortgage upon real property located in
Lakeville, Minnesota. The Keirans stopped making payments on
the note in November 2008. On October 8, 2009, the Keirans
sent rescission notices to the bank alleging that the Keirans
did not receive sufficient copies of disclosures required by
the TILA at the December 2006 closing. On January 7, 2010,
the bank informed the Keirans that no basis for rescission
existed. On October 29, 2010, the Keirans filed the current
action seeking rescission of the mortgage loan, money damages
and a declaratory judgment voiding the bank's security
interest in the Keirans' mortgage loan.
bank moved for summary judgment, which the district court
granted, holding that the claims for money damages for TILA
deficiencies were barred by a one-year statute of
limitations; that the claim for rescission was barred by the
three-year statute of repose; and that the claim for money
damages for refusal to rescind failed because there were no
evidently deficient TILA notices in the Keirans'
paperwork at closing. We affirmed, holding in relevant part
that the Keirans were required to actually file suit for
rescission within three years, rather than just giving notice
of their intent to rescind. Keiran v. Home Capital,
Inc., 720 F.3d 721, 728-29 (8th Cir. 2013),
vacated, 135 S.Ct. 1152 (2015) (mem.). We also
upheld the district court's decision on money damages,
finding that the Keirans were not entitled to money damages
because any alleged defects were not apparent on the face of
the loan documents, thus absolving the assignee banks from
any defects which occurred at the original closing.
Id. at 730. The Supreme Court granted certiorari in
a similar case to resolve a split in the circuits over
whether notice or the actual filing of a lawsuit was required
to effect rescission within the three-year statute of repose.
The Court decided that notice of rescission, rather than
filing suit, is all that is required. Jesinoski v.
Countrywide Home Loans, Inc., 135 S.Ct. 790 (2015).
Thereafter, the Court granted the Keirans' petition for
certiorari, vacated our opinion and remanded in light of its
Jesinoski decision. 135 S.Ct. 1152. On the Supreme
Court's remand, we remanded to the district court for
the district court, both parties again moved for summary
judgment. The Keirans argued that they were entitled to
rescission because (1) the bank did not provide them with the
required amount of TILA disclosure statements; (2) the
disclosure statements contained material inaccuracies
regarding finance charges associated with the loan; and (3)
the bank did not timely and adequately respond to their
October 2009 notice of rescission. The district court again
granted summary judgment for the bank, holding that the
Keirans did not rebut the presumption in 15 U.S.C. §
1635(c) (stating that if a consumer acknowledges in writing
that he has received the required disclosures, "a
rebuttable presumption of delivery" arises) that they
received all of the disclosures required by law. The court
found that the Keirans' self-serving affidavits to the
contrary were not adequate to rebut the presumption. The
district court also rejected the argument that the disclosure
statements were materially inaccurate. Finally, the district
court held that because no violations of the TILA occurred,
the bank was not required to respond to the notice of
rescission-the right of rescission expired three days after
closing in December 2006 (instead of three years later)
because no violation occurred. Id. § 1635(a),
(f). The Keirans appeal.
enacted the TILA "to assure a meaningful disclosure of
credit terms so that the consumer will be able to compare
more readily the various credit terms available to him and
avoid the uninformed use of credit." Id. §
1601(a). Courts broadly construe the TILA in favor of
consumers. Rand Corp. v. Yer Song Moua, 559 F.3d
842, 845 (8th Cir. 2009). In transactions secured by a
principal dwelling, the TILA gives borrowers an unconditional
three-day right to rescind. 15 U.S.C. §§ 1635(a)
(rescission as to original lenders); 1641(c) (extending
rescission to assignees). The three-day rescission period
begins upon the consummation of the transaction or the
delivery of the required rescission notices and disclosures,
whichever occurs last. Id. § 1635(a). Required
disclosures must be made to "each consumer whose
ownership interest is or will be subject to the security
interest" and must include two copies of a notice of the
right to rescind, see 12 C.F.R. § 1026.23(a),
(b)(1), and a TILA disclosure statement, outlining:
the annual percentage rate, the method of determining the
finance charge and the balance upon which a finance charge
will be imposed, the amount of the finance charge, the amount
to be financed, the total of payments, the number and amount
of payments, [and] the due dates or periods of payments
scheduled to repay the indebtedness.
15 U.S.C. § 1602(u). These disclosures must be made
"clearly and conspicuously in writing, in a form that
the consumer may keep." 12 C.F.R. § 1026.17(a)(1).
If the creditor fails to make the required disclosures or
rescission notices, the borrower's "right of
rescission shall expire three years after the date of
consummation of the transaction." 15 U.S.C. §
1635(f); see 12 C.F.R. § 1026.23(a)(3)(i).
However, and importantly in this case, if no disclosure
violation occurs, "the right to rescind is not extended
for three years and instead ends at the close of the
three-day window following consummation of the loan
transaction." Keiran, 720 F.3d at 730 n.8. If
the Keirans can establish that their TILA rights at closing
were violated, their right of rescission expired December 30,
2009, and their October 8, 2009, notice of rescission to the
bank was timely. If they cannot establish a violation, their
right of rescission expired in early January 2007, three days
after the December 30, 2006, closing.
A.Number of Disclosure ...