664 F.3d 787
9th Cir.2011Background
- Balderases are immigrants allegedly rooked by a bank that offered unaffordable loans on disputed terms.
- A mortgage broker allegedly cold-called and pressured them to refinance to a fixed-rate loan with $50,000 cash out.
- Countrywide Bank allegedly had a “duly authorized agent” fill out a URLA in English and pressure them to sign.
- The URLA was English-only and overestimated income by over $40,000; signing occurred after six hours of pressure.
- The Balderases conducted rescission attempts within the TILA window but were told by broker and bank that it was too late, despite a three-day window.
- The district court dismissed under Rule 12(b)(6); the court of appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Balderases state a viable TILA rescission claim | Balderases allege defective notices and lack of delivery | Countrywide argues the signed notice creates a presumption of delivery | Yes; complaint alleges lack of proper delivery and notice must be litigated at trial. |
| Whether two-copy delivery requirement was satisfied | Exhibit 14 shows two copies were acknowledged | Delivery is satisfied by signing a notice in bank’s possession | Not at pleadings stage; presumptions are rebuttable by evidence at trial. |
| Whether the signed notice creates a conclusive presumption of delivery | Presumption could be rebutted if notices were defective | Presumption binds unless rebutted by evidence | Presumption is rebuttable; at pleadings stage, burden remains on plaintiff to show defect. |
| Whether timing issues of signing affect TILA rescission period | Dates suggest signing after midnight; rescission could extend to 29th | Notice dated 25th governs; signing timing unclear | Potential factual dispute; if signing occurred on the 26th, rescission may extend under TILA. |
Key Cases Cited
- Semar v. Platte Valley Fed. Sav. & Loan Ass’n, 791 F.2d 699 (9th Cir. 1986) (if expiration date is omitted, borrower may rescind within three years)
- Cooper v. First Gov’t Mortg. & Investors Corp., 238 F.Supp.2d 50 (D.D.C. 2002) (pleading-stage sufficiency for TILA notice claims)
- Williams v. First Gov’t Mortg. & Investors Corp., 225 F.3d 738 (D.C.Cir. 2000) (presumption of delivery; competing evidence issues)
- Rowland v. Novus Financial Corp., 949 F.Supp. 1447 (D.Haw. 1996) (triable issues where conflicting notices exist)
- In re Gilead Sciences Securities Litigation, 536 F.3d 1049 (9th Cir. 2008) (skepticism reserved for later stages; not at pleadings stage)