Bank of America, N.A. v. Peterson
2014 U.S. App. LEXIS 5313
| 8th Cir. | 2014Background
- Petersons refinanced their home loan with Bank of America on December 13, 2006, for $840,000 secured by a mortgage on their Minnesota home.
- They signed a Truth in Lending Disclosure Statement and a Notice of Right to Cancel, but allege they never received copies.
- Bank sent two January 2007 letters: one correcting the TIL disclosure (with a $7,860 check) but no copies of the disclosure were provided, the other correcting the Right to Cancel timing, with no evidence of receipt.
- The Petersons began monthly payments in February 2007 and continued until about June 2009.
- Bank later discovered the original mortgage was lost and never properly recorded; it asked for a duplicate mortgage in October 2009, which the Petersons refused, instead seeking rescission.
- Bank filed suit September 3, 2010; Petersons counterclaimed for TILA rescission, statutory damages, and declaratory relief; district court granted summary judgment dismissing rescission as time-barred and also concluded damages were time-barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether rescission is time-barred under §1635(f). | Petersons argue they invoked rescission within three years, not just provided notice. | Bank of America argues suit was required within three years to preserve rescission rights. | Yes; rescission claim barred by §1635(f) as no suit within three years. |
| Whether failure-to-rescind damages survive despite rescission being time-barred. | Even with untimely rescission, damages for failure to rescind should be cognizable. | If rescission is time-barred, damages claim also fails. | Remains cognizable under Keiran; accrual date found and timely filed under §1640(e). |
| Whether there is a genuine dispute regarding delivery of required disclosures, justifying remand. | Borrowers did not receive copies; presumption of delivery is rebutted. | Evidence supports delivery or sufficient proof; no material fact dispute. | Yes; remand warranted to resolve delivery/notice issues. |
Key Cases Cited
- Keiran v. Home Capital, Inc., 720 F.3d 721 (8th Cir. 2013) (rescission suit within three years required to preserve §1635(f))
- Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013) (discussion of notice vs. suit timing for rescission rights)
- Hartman v. Smith, 734 F.3d 752 (8th Cir. 2013) (timing of rescission rights under TILA discussed)
- In re Smith, 737 F.2d 1549 (11th Cir. 1984) (failure to rescind violates TILA; damages may be cognizable)
- Stutzka v. McCarville, 420 F.3d 757 (8th Cir. 2005) (presumption of delivery rebutted by borrower testimony)
- Cappuccio v. Prime Capital Funding LLC, 649 F.3d 180 (3d Cir. 2011) (borrower testimony can overcome TILA delivery presumption)