897 F. Supp. 2d 706
N.D. Ill.2012Background
- Plaintiffs initiated a pro se suit naming Standard Bank & Trust Co., GMAC Mortgage, LLC, and MERS, alleging RICO and fraud.
- Court dismissed the original complaint without prejudice and allowed repleading.
- Plaintiffs filed an amended complaint dropping RICO/fraud and asserting TILA claims.
- GMAC stayed due to bankruptcy; MERS and Standard moved to dismiss; motions granted with prejudice.
- Amended complaint alleges two TILA violations (missing two notices and misdisclosed finance charge) and seeks rescission and damages; timing issues govern rescission and damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of TILA rescission | Amended complaint relates back to original filing. | Relation back does not save rescission timing; extended period expired. | Rescission demanduntimely; extended period extinguished Aug 25, 2011. |
| Relation back under Rule 15(c) for rescission | Relation back applies to rescission claim. | Relation back does not apply to TILA rescission timing. | Relation back inapplicable; rescission timing controls. |
| Notice timing under 12 C.F.R. § 226.23(a)(2) | Original complaint served timely or amended notice suffices. | Notice not timely; service after period; not delivered to creditor. | |
| Notice was too late; timing not satisfied. | |||
| TILA damages statute of limitations | Damages claimed within three-year window via §1635(g). | Damages must be filed within one year under §1640(e). | Damages claim time-barred (filed May 31, 2012). |
| Propriety of dismissal with prejudice | Leave to amend could cure defects. | Defects cannot be cured; failure to request leave to replead. | Dismissal with prejudice proper. |
Key Cases Cited
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (U.S. 1998) (timing of rescission rights under §1635(f))
- Marr v. Bank of Am., N.A., 662 F.3d 963 (7th Cir. 2011) (meaning of disclosure/three-day right to cancel under TILA)
- Dye v. Ameriquest Mortg. Co., 289 F.App’x 941 (7th Cir. 2008) (written notice under TILA; notice timing)
- Jones v. Saxon Mortg., Inc., 537 F.3d 320 (4th Cir. 2008) (sufficiency of notice where rescission sought)
- Bonte v. U.S. Bank, N.A., 624 F.3d 461 (7th Cir. 2010) (timing/notice requirements under TILA)
- Taylor v. Domestic Remodeling, Inc., 97 F.3d 96 (5th Cir. 1996) (notice of rescission not tied to service timing)
- Hamm v. Ameriquest Mortg. Co., 506 F.3d 525 (7th Cir. 2007) (disclosures under TILA; accuracy standards)