Garcia v. Fannie Mae
794 F. Supp. 2d 1155
D. Or.2011Background
- Garcia and Marquez sue FNMA, BAC, and Abacus over a 2007 refinance, alleging TILA violations and a right to rescind.
- plaintiffs claim the Notice of Right to Cancel was defective, misdated, unsigned, and lacking a deadline for rescission.
- Defendants move to dismiss; plaintiffs move to strike Kaley F. Fendall’s declaration; stipulation withdraws objections to the Findings and Recommendations.
- Magistrate Judge Hubel recommends dismissing statutory damages and BAC claims, denying other claims, and granting the strike motion.
- This court adopts in part, denying the motion to dismiss remaining claims, and addressing whether signed Notices affect assignee liability.
- Key issue: whether plaintiffs can pursue rescission and related remedies against an assignee, and whether the Fendall declaration can be considered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can the court consider the alternative Notices? | Garcia argues notices are unauthenticated. | Defendants contend signatures on alternative Notices prove receipt. | The court cannot consider unauthenticated notices; strikes Fendall declaration; insufficient for dismissal at this stage. |
| Are assignees liable for statutory damages and fees? | Plaintiffs may recover statutory damages and fees against assignees for facially defective disclosures. | Assignee liability is limited to facially apparent violations; statutory damages/fees typically against the creditor. | Statutory damages against an assignee are dismissed; attorney's fees may be recoverable in a successful rescission action. |
| Should BAC be joined or dismissed as a party? | BAC may be appropriately sued; request dismissal without prejudice if later not an assignee. | BAC as servicer cannot be held liable for rescission or TILA damages. | BAC is dismissed without prejudice. |
| Can plaintiffs state a claim for rescission against an assignee? | Right to rescind extends to assignees, and plaintiffs may seek corresponding remedies. | Assignee liability is limited and may depend on facially apparent violations. | Plaintiffs state a claim for rescission against an assignee; denial of dismissal of remaining claims is warranted. |
Key Cases Cited
- Parrino v. FHP, Inc., 146 F.3d 699 (9th Cir. 1998) (decision on document adequacy and judicial notice in Rule 12(b)(6) contexts)
- Branch v. Tunnell, 14 F.3d 449 (9th Cir. 1994) (outside pleadings documents may be considered if unchallenged authenticity)
- Fairbanks Capital Corp. v. Jenkins, 225 F. Supp. 2d 910 (N.D. Ill. 2002) (assignee liability for rescission-related fees and damages under TILA)
- Brodo v. Bankers Trust Co., 847 F. Supp. 353 (E.D. Pa. 1994) (assignee liability and section 1641 limitations; focus on the creditor-versus-assignee liability)
- Zakarian v. Option One Mortg. Corp., 642 F. Supp. 2d 120 (D. Haw. 2009) (reaffirming interpretation of assignee liability under TILA)