Union Sav. Bank v. Schaefer
2013 Ohio 5704
Ohio Ct. App.2013Background
- David and Tracy Schaefer refinanced their home loan with Union Savings Bank in April 2009; the new promissory note was for $98,000 and both executed the mortgage. Default and foreclosure followed; Union Savings Bank sought foreclosure in February 2011.
- David (after initially not answering) filed an answer and counterclaim asserting TILA violations: failure to provide two copies of the notice of right to rescind and refusal to honor a rescission sent May 26, 2011; he sought rescission, damages, and other relief.
- Procedural history: multiple mediations; summary-judgment motions filed (Bank’s motion filed after the dispositive-motion deadline); trial court denied Schaefer’s motion to strike the late-filed bank motion, sua sponte granted the bank leave to file, and granted the bank summary judgment; Schaefer appealed.
- Discovery dispute: Schaefer served extensive discovery; the bank objected to most requests and provided limited responses; the trial court denied (or left unresolved) motions to compel; on appeal Schaefer argued the court abused discretion by not compelling more complete responses.
- Key substantive legal dispute: whether the TILA rescission period expanded from three days to three years because the bank allegedly failed to deliver two copies of the rescission notice, and whether any TILA damages claims survive statute-of-limitations and other defenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred by granting Union Savings Bank summary judgment on TILA rescission and damages claims | Schaefer: he received only one copy of rescission notice, so TILA’s delivery requirement was violated and rescission period extends to three years; therefore his May 26, 2011 rescission was timely and damages available | Bank: either timely notice was provided (three-day window) or the refinancing exemption applies; the bank also challenged procedural defects | Court reversed summary judgment because Schaefer was not given time to respond to the bank’s late-filed motion; on merits the court held one copy does not trigger three-year extension so rescission untimely and damages claim time-barred by 1-year statute of limitations |
| Whether Schaefer was entitled to partial summary judgment on his TILA claims | Schaefer: overwhelming evidence that he received only one copy, so no genuine issue and he is entitled to rescission and damages | Bank: factual disputes and legal defenses (timeliness, refinancing rules) preclude summary judgment for Schaefer | Denied: court concluded issue of partial rescission/new-money only and statute bars damages; summary judgment for Schaefer was inappropriate |
| Whether the trial court violated due process by ruling on the bank’s untimely summary-judgment motion without giving Schaefer an opportunity to respond after denying his motion to strike | Schaefer: after denial of his motion to strike, local rule gave him 14 days to respond and the court failed to afford that chance | Bank: argued leave to file was permissible and court could rule | Held for Schaefer: court must give nonmoving party time to file response; trial court deprived Schaefer of his opportunity and appellate court sustained this assignment of error |
| Whether the trial court abused its discretion by denying Schaefer’s motion to compel discovery | Schaefer: many requests sought relevant information (standing/holder status, certified-mail receipts, loan charge documents) and the bank’s objections were unsupported | Bank: discovery was harassing and some requests overbroad or irrelevant | Court: partly sustained Schaefer’s challenge — compelled answers to interrogatories 10,11,13,14 (holder/standing-related) and production of request No. 26 (return receipts); other discovery denials were upheld or moot |
Key Cases Cited
- Cheap Escape Co., Inc. v. Tri-State Constr., L.L.C., 173 Ohio App.3d 683 (10th Dist. 2007) (trial court must give nonmoving party time to respond after permitting late summary-judgment filing)
- Hooten v. Safe Auto Ins. Co., 100 Ohio St.3d 8 (Ohio 2003) (procedural due process requires opportunity to respond to summary-judgment motion)
- Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., 67 Ohio St.3d 274 (Ohio 1993) (reviewing courts may decide legal issues not raised below when implicit and necessary to resolve raised issues)
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (U.S. 1998) (explains TILA’s disclosure purposes and remedies)
- In re Porter, 961 F.2d 1066 (3d Cir. 1992) (rule that refinance by same creditor gives right to rescind only as to new-money portion)
- Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54 (Ohio 2010) (standards for summary judgment)
- McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207 (1st Cir.) (analysis that one copy of rescission notice satisfies the singular “notice” trigger for TILA’s timing provision)