158 F. Supp. 3d 91
D. Conn.2016Background
- Smith seeks to enforce TILA rescission and damages for Wells Fargo's refusal to honor rescission and seeks CUTPA damages.
- Mortgage Kit was sent March 9, 2012; documents signed March 13, 2012; rescission right expired March 29, 2012 absent inadequate notice.
- Wells Fargo notified Smith of loan approval March 30, 2012; Smith alleges excess amounts financed included recording fee and interest; escrow figures differ pre- and post-refinance.
- Smith gave October 21, 2014 notice of rescission; Wells Fargo denied rescission; Smith filed SAC January 21, 2015.
- Court adopts Rule 12(b)(6) standard; grants motion to dismiss for failure to plead timely rescission and CUTPA claims, and preemption effects.
- Court concludes the loan was consummated before March 29, 2012, giving proper notice and limiting rescission to 3 days; October 2014 rescission was untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Smith validly exercised rescission under TILA | Smith argues extended rescission due to inadequate notice. | Wells Fargo argues proper notice and timely rescission window; consummation in CT fixed period. | Smith's rescission right expired March 29, 2012; October 2014 rescission untimely. |
| Whether Count II survives if Count I fails | Damages follow from failure to honor timely rescission. | No damages without a valid rescission right. | Count II fails as Count I fails. |
| Whether CUTPA claim is viable given alleged no-fee promise and disclosures | No closing costs/hidden fees misrepresentation violated CUTPA. | No deceptive act; preemption by TILA/RESPA/NBA for disclosures. | CUTPA claim fails for lack of deception; preempted where it seeks extra disclosures. |
| Whether CUTPA is preempted by TILA, RESPA, and NBA | NBA may not preempt general consumer protections like CUTPA. | TILA/RESPA preempt state disclosure requirements; NBA preempts related claims. | CUTPA preempted to the extent it seeks disclosures beyond federal requirements. |
Key Cases Cited
- Murphy v. Empire of Am., FSA, 746 F.2d 931 (2d Cir.1984) (consummation and TILA timing defined; signing contracts binds parties)
- Hinchliffe v. Am. Motors Corp., 184 Conn. 607 (1981) (require pleading CUTPA reliance; deception inquiry)
- Caldor, Inc. v. Heslin, 215 Conn. 590 (1990) (CIGARETTE RULE factors for unfairness)
- Sicaras v. City of Hartford, 44 Conn.App. 771 (1997) (illusory/promissory issues; contract validity restraints)
- Harris v. Bradley Memorial Hospital & Health Center, Inc., 296 Conn. 315 (2010) (unfairness/deception framework under CUTPA)
- Bank of New York v. Conway, 50 Conn.Supp. 189 (2006) (consummation under Connecticut law; contract formation timing)