Timothy Barnes v. Chase Home Finance, LLC
701 F. App'x 673
| 9th Cir. | 2017Background
- Barnes mailed notice of rescission under TILA to his creditor (Chase Bank USA, N.A. — CBUSA) and servicers (Chase Home Finance, LLC — CHF; later IBM LBPS) after alleged TILA disclosure failures.
- The letter to CBUSA was returned undelivered; Barnes’s notice to the servicer(s) was mailed to the address they provided for payments.
- The loan was not rescinded; Barnes sued for rescission, damages, declaratory and injunctive relief under TILA against CBUSA, CHF, LBPS, and later Fannie Mae (added as assignee).
- The district court granted summary judgment to defendants; Barnes appealed.
- The Ninth Circuit held Barnes’s notice to the servicer could constitute notice to the creditor where the creditor failed to provide a designated address for rescission, and identified genuine disputes of material fact on failure-to-rescind and servicer/assignee liability, vacating and remanding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice to servicer sufficed as notice to creditor when creditor’s designated address did not receive mail | Barnes: notice to servicer (payment address) satisfied Regulation Z and TILA | Defendants: returned mail to creditor means no proper notice to creditor | Held: Notice to servicer satisfies notice to creditor where creditor failed to provide a functioning designated address (Regulation Z commentary applies) |
| Whether failure to effect rescission after timely notice gives rise to damages and equitable relief | Barnes: timely notice triggered §1635(b) duties; failure to rescind entitles him to relief under §1640(a) | Defendants: disputed compliance and lack of liability | Held: Timely notice was established; material factual disputes remain about defendants’ compliance, so summary judgment for defendants on these claims was improper |
| Whether servicers (CHF, LBPS) are liable as assignees for failure to rescind | Barnes: servicers acted as assignees or otherwise liable for failure to rescind | Defendants: servicers not assignees / not liable | Held: Record unclear on servicer/assignee relationship; genuine dispute of material fact prevents summary judgment |
| Whether servicers failed to provide creditor identification pursuant to §1641(f)(2) | Barnes: requested creditor contact info from servicers and did not receive it; servicers liable under §1640(a) if they failed to respond | Defendants: dispute that they failed to provide the information | Held: Fact issue exists whether servicers complied; summary judgment on this claim was improper |
Key Cases Cited
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (rescission is effected when borrower notifies creditor of intent to rescind)