Sobieniak v. Bac Home Loans Servicing, LP
835 F. Supp. 2d 705
D. Minnesota2011Background
- Sobieniak and McKinney refinanced a mortgage with Countrywide in 2007; note principal about $562,600 with 5.875% APR, secured by their Wayzata, MN residence.
- At closing, plaintiffs signed two copies of a notice of right to cancel and acknowledged receiving TILA disclosures.
- On January 15, 2010, plaintiffs sent rescission notices to Countrywide and BAC; BAC denied rescission and closed the matter.
- Plaintiffs filed suit pro se on January 14, 2011, later filing an amended and second amended complaint seeking rescission, damages, and a declaration that the mortgage is void.
- Defendants moved to dismiss for failure to state a claim; the court treated the motion as one for summary judgment under Rule 12(d) after considering outside evidence.
- The court granted summary judgment, holding that (i) the monetary-damages claim was time-barred and (ii) the rescission claim was barred by the three-year repose period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether damages under TILA are timely. | Sobieniak argues violations occurred within a year. | BAC/MERS claim the one-year limit has lapsed. | Monetary-damages claim barred by the one-year period. |
| Whether the rescission claim is barred by TILA's three-year repose. | Rescission requested within three years of closing. | Rescission must be filed within three years regardless of notice. | Rescission claim barred by the three-year repose period. |
| Whether assignee liability under §1641(a) survives challenges to disclosures. | Asignee BAC could be liable for face-disclosure defects. | No facial violation appears on the disclosure statements; §1641(a) applies. | Summary judgment warranted on §1641(a) grounds. |
Key Cases Cited
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (1998) (three-year rescission repose governs litigation)
- Williams v. Wells Fargo Home Mortg., Inc., 410 Fed.Appx. 495 (3d Cir. 2011) (timeliness of rescission-related actions)
- Stutzka v. McCarville (Stutzka I), 420 F.3d 757 (8th Cir. 2005) (affidavits and presumptions on receipt of disclosures)
- Geraghty v. BAC Home Loans Servicing LP, 2011 WL 3920248 (D.Minn. 2011) (court aligns with majority on three-year repose)