Beneficial Illinois, Inc. v. Parker
2016 IL App (1st) 160186
| Ill. App. Ct. | 2017Background
- In July 2007 Randall Parker obtained a mortgage from Beneficial Illinois; payments began August 2007.
- Parker defaulted in October 2008; Beneficial filed foreclosure in October 2009.
- On June 16, 2010 Parker (through counsel) mailed a notice purporting to rescind the loan under TILA and requested a loan history; Beneficial did not respond and continued foreclosure.
- Parker filed an answer, affirmative defense (rescission), and two counterclaims on September 1, 2010: (1) damages for Beneficial’s failure to honor rescission; (2) damages for improper TILA disclosures at closing.
- Beneficial moved to dismiss as time‑barred; the trial court dismissed Parker’s rescission defense and both counterclaims. Beneficial later voluntarily dismissed the foreclosure; Parker appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mailing a rescission notice alone effectuates rescission under TILA §1635 | Parker’s rescission defense is untimely because he did not file a lawsuit within 3 years | A mailed notice within 3 years suffices to rescind under Jesinoski | Reversed: mailing the notice within 3 years timely effected rescission under Jesinoski |
| Whether Parker’s damages claim for creditor’s failure to honor rescission is time‑barred (TILA §1640) | Claim barred by §1640(e) one‑year limitations | Claim filed within one year of creditor’s failure to act after rescission notice (20 days under §1635(b)) | Reversed: Parker’s damages counterclaim for failure to honor rescission was timely |
| Whether Parker’s TILA damages claim for improper disclosures at closing is saved as defensive recoupment under Illinois law (735 ILCS 5/13-207) | Claim can be saved as defensive recoupment despite being filed after one year | Claim is time‑barred because it was already untimely when foreclosure action arose, so §13‑207 cannot save it | Affirmed: disclosure claim is time‑barred and not saved by §13‑207 |
| Applicability of Illinois §13‑207 to revive otherwise time‑barred TILA counterclaims | §13‑207 provides independent basis to save untimely TILA claims | §1640(e) permits defensive recoupment only insofar as state law allows; §13‑207 only saves claims that were not already barred when the plaintiff’s cause arose | Court rejects Parker’s broader reading; §13‑207 applies only when the counterclaim was not already time‑barred when the primary complaint accrued |
Key Cases Cited
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (TILA rescission is effected by timely notice to creditor; no lawsuit required within three years)
- U.S. Bank Nat’l Ass’n v. Manzo, 2011 IL App (1st) 103115 (Ill. App.) (permitting TILA counterclaim under state saving statute where claim not yet time‑barred when foreclosure arose)
- Barragan v. Casco Design Corp., 216 Ill. 2d 435 (2005) (discussing §13‑207 saving provision and timing of ownership of the claim)
- Doe‑3 v. McLean County Unit Dist. No. 5 Bd. of Directors, 2012 IL 112479 (Ill.) (standard of review for section 2‑615 motions is de novo)