Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01280/USCOURTS-caed-2_07-cv-01280-9/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 12:1703 Default of HUD Loan

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 This matter is deemed to be suitable for decision without oral *

argument. E.D. Cal. R. 230(g).

 In an order dated September 10, 2009, the court ordered that 1

Defendants file a motion for summary judgment by October 2, 2009.

Defendant’s filing on October 6 was, therefore, untimely. Nonetheless,

in the interest of judicial economy, Defendant’s motion will be

considered and decided.

 Value also argues it is entitled to summary judgment on 2

Plaintiff’s claim under the Real Estate Settlement Procedures Act

(“RESPA”). However, Plaintiff’s RESPA claim was dismissed at the

hearing held on July 28, 2009. (Hearing Transcript 12:5-6.)

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

CLIFF JOHNSTON )

)

Plaintiff, ) 2:07-cv-01280-GEB-EFB

)

v. ) ORDER GRANTING DEFENDANT’S

) MOTION FOR SUMMARY JUDGMENT*

CHARLENE LINDAUR, AKA CHARLENE )

MACALUSO; G & R MORTGAGE GROUP; )

VALUE HOME LOAN; AMERICAN MORTGAGE;)

and Does 1-10, Inclusive, )

)

Defendants. )

)

On October 6, 2009, Defendant Value Home Loan (“Value”) filed a 1

motion under Federal Rule of Civil Procedure 56(c) seeking summary

judgment on Plaintiff’s remaining federal claims under the Truth in

Lending Act (“TILA”) and the Homeowner Equity Protection Act

(“HOEPA”). Value argues summary judgment is warranted on these 2

claims since “there is no genuine issue as to any material fact . . .

Case 2:07-cv-01280-GEB-EFB Document 98 Filed 01/12/10 Page 1 of 10
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 On August 3, 2009, Plaintiff filed a document entitled “Motion 3

or Request to Review Original Loan Documents.” Plaintiff’s request is

treated as a motion to compel production of documents. Discovery in

this case, however, closed on November 11, 2008. As Plaintiff has not

demonstrated good cause for amending the discovery deadline, Plaintiff’s

motion is denied.

 On December 3, 2009, after this matter had been submitted, 4

(continued...)

2

.” (Not. of Mot. for Summ. J. 1.) Plaintiff filed no admissible

evidence in opposition to the motion. For the reasons stated below,

Value’s motion is GRANTED.3

I. LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(c), the party moving for

summary judgment bears the initial burden of demonstrating the absence

of a genuine issue of material fact for trial. Celotex Corp. v.

Catrett, 477 U.S., 317, 323 (1986). If the moving party satisfies

this burden, “the non-moving party must set forth, by affidavit or as

otherwise provided in Rule 56, specific facts showing that there is a

genuine issue for trial.” T.W. Elec. Serv., Inc. v. Pacific Elec.

Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987)(quotations and

citation omitted)(emphasis omitted). When deciding a summary judgment

motion, all reasonable inferences that can be drawn from the evidence

“must be drawn in favor of the non-moving party.” Bryan v. McPherson,

--- F.3d ----, 2009 WL 5064477, at *2 (9th Cir. 2009). However, only

“admissible evidence” may be considered. Orr v. Bank of America, NT &

SA, 285 F.3d 764, 773 (9th Cir. 2002).

II. BACKGROUND

The summary judgment evidentiary record in this case is created

by Value’s statement of undisputed facts since Plaintiff failed to

provide any admissible evidence in support of his opposition. In 4

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(...continued) 4

Plaintiff filed a “motion to amend his opposition for summary judgment.”

Plaintiff’s filing, however, was untimely. Further, Plaintiff’s

additional filing does not provide any admissible evidence.

3

1981, Plaintiff purchased a house at 3721 Orangerie Road in

Carmichael, California (the “Property”). (Statement of Undisputed

Facts (“SUF”) ¶ 2.) Plaintiff owned the Property continuously until

February 2008, when Value foreclosed on the Property. 

In January 2007, Plaintiff looked into refinancing his home

mortgage. (Id. ¶ 6.) Plaintiff went through the phone book and

called several mortgage brokers, including G & R Mortgage Company (“G

& R”)(Id.) At G& R, Plaintiff worked with Paul Mixter to secure a

refinancing loan. (Id. ¶ 7; Johnston Depo. 70-71.) Initially, Mixter

tried to arrange a loan with World Savings; however, Plaintiff’s loan

application was denied. (Id. ¶ 7; Johnston Depo. 73:22-23.) Mixter

then told Plaintiff Value was another potential lender. (Id. ¶ 8;

Johnston Depo. 75:8-25.) In January 2007, Mixter sent Value

Plaintiff’s application for a loan. (Id. ¶ 11.) Mixter then informed

Plaintiff that to receive a loan, Value would require that Plaintiff

obtain both a first deed of trust loan as well as a home equity line

of credit. (Id. ¶ 13.)

On January 26, 2007, at G & R’s office, Plaintiff signed a

written application for a first deed of trust loan and a home equity

line of credit from Value. (Id. ¶ 15.) Plaintiff admits he initialed

each page of the application and signed and dated the last page of the

application. (Id.) Value then sent the following documents to G & R:

an $155,000 adjustable rate note, a first deed of trust, two copies of

the notice of right to cancel the first deed of trust, two copies of

the Regulation Z disclosure statement for the first deed of trust

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 It is not clear from Plaintiff’s complaint what provisions of 5

TILA he alleges Value has violated. Value has characterized Plaintiff’s

allegations as a claim for failure to provide the statutorily required

disclosures and notices. Plaintiff does not seem to contest this

characterization of his TILA claims.

4

loan, a home equity credit line revolving loan agreement, an important

terms memo, a second deed of trust for the home equity line of credit

and two copies of a notice of right to cancel the second deed of

trust. (Id. 18; Exs. 2-9.) Plaintiff testified that he signed the

note, first deed of trust, the notice of right to cancel the first

deed of trust and that “it’s possible” or it “could be” his signature

on the Regulation Z disclosure statement, the home equity credit line

revolving loan agreement, and the notice of right to cancel the second

deed of trust. (Id. ¶ 20.) Upon receipt of these executed documents,

Value funded both loans on February 8, 2007. (Id. ¶ 22.) However, in

February 2008, Value foreclosed on its second deed of trust and the

Property was sold to a third party. (Id. ¶ 27.) 

On June 26, 2007, Plaintiff filed a complaint in this federal

court against Defendants, alleging twenty-four claims under federal

and state law relating to his loans secured by his home. At this

time, however, only Plaintiff’s federal claims brought under TILA and

HOEPA remain. In an order filed January 5, 2009, Plaintiff’s

attorney’s motion to withdraw was granted; since that date, Plaintiff

has been proceeding pro se.

III. DISCUSSION

A. Plaintiff’s Claims under TILA5

Value argues it is entitled to summary judgment on Plaintiff’s

claims under TILA for three reasons: “[First,] Plaintiff admits he

received the Disclosure Statements; [second,] the uncontradicted

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 Plaintiff argues his signature on both “Depo Exhibit 16, 6

Modification of Note & Deed of Trust and Depo Exhibit 17, Notice of

Acknowledgment of Non-Rescission” was forged. (Opp’n. 2:2-3.) However,

Plaintiff has not provided these documents nor do they appear to be

otherwise in the record. Further, Plaintiff has not explained how

forgery of these documents would give rise to a claim under TILA.

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evidence shows Plaintiff did in fact receive both the [d]isclosure

[s]tatements and the [n]otices of right to [c]ancel for both loans;

and [third,] Plaintiff’s claim[] [that] he did not fully understand

those documents is unavailing . . . .” (Mot. for Summ. J. 4:1-6.) 

Plaintiff rejoins, arguing his signature on two loan documents was

forged and he therefore “believe[s] there are other signatures of

[his] that could have been forged or ‘copy and pasted.’” (Opp’n. 2:2- 6

6.)

1. Regulation Z Disclosures

Value first argues that the summary judgment record demonstrates

Plaintiff received the required Regulation Z disclosures and

Plaintiff, therefore, cannot maintain a TILA claim for failure to

provide such disclosures. TILA’s implementing regulation, Regulation

Z, 12 C.F.R. § 226, sets out TILA’s disclosure requirements. See

Fimbres v. Chapel Mortg. Corp., No. 09-CV-0886-IEG (POR), 2009 WL

4163332, at *8 (S.D. Cal. 2009). However, disclosure requirements

mandated by TILA and Regulation Z depend upon “whether the loan in

question is an ‘open-end credit’ transaction or a ‘closed-end credit’

transaction.” Demarest v. Quick Loan Funding, Inc., No. CV09-01687

MMM (Ssx), 2009 WL 940377, at *3 (C.D. Cal. Apr. 6, 2009)(citation

omitted). “TILA defines an open-end credit plan as a plan under which

the creditor reasonably contemplates repeated transactions, which

prescribes the terms of such transactions, and which provides for a

finance charge which may be computed from time to time on the

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outstanding unpaid balance.” Id. (quoting 15 U.S.C. § 1602(i)). In

contrast, “[c]losed-end credit” is defined as “consumer credit other

than ‘open-end credit.’” 12 C.F.R. § 226.2(a)(10). 

The first deed of trust loan was a “closed-end credit”

transaction since the note provided for a single loan advance of

$155,000 rather than repeated extensions of credit. (Def.’s Ex. 2.) 

For a closed-end credit transaction, Regulation Z requires that a

creditor make certain disclosures “clearly and conspicuously in

writing, in a form that the consumer may keep.” 12 C.F.R. §

226.17(a)(1). Further, the required disclosures are to “be made

before the credit is extended.” 12 C.F.R. § 226.17(b).

The uncontroverted evidence in the summary judgment record

demonstrates Plaintiff received the required Regulation Z disclosures

before consummation of the loan transaction. Value provided a copy of

a Regulation Z disclosure statement bearing a signature of Plaintiff’s

name and dated January 26, 2007. (Def.’s Ex. 5.) The disclosure

statement includes all of the required information in the proper

format. (Id.) Plaintiff admitted in his deposition testimony that

“it’s possible” that the signature on the Regulation Z disclosure

statement is his. (SUF ¶ 20.) Based on this testimony, it can be

inferred that the signature is Plaintiff’s and he received the

Regulation Z disclosure document. See Lynch v. RKS Mortg. Inc., 588

F. Supp. 2d 1254, 1258 (E.D. Cal. 2008)(stating that “[w]ritten

acknowledgment of receipt by Plaintiff[] is conclusive proof of the

delivery of . . . [the TILA] disclosure statement[].”); see also 15

U.S.C. § 1641(b)(codifying that written acknowledgment is conclusive

proof of delivery). Therefore, Value’s motion for summary judgment on

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Plaintiff’s claim that Value failed to provide him with the Regulation

Z disclosures for the first deed of trust loan is granted.

 The home equity line of credit agreement is an “open-end credit”

transaction because the loan agreement provided for repeated

extensions of credit. (Def.’s Ex. 6.) 12 C.F.R. § 226.5b prescribes

the disclosure requirements under TILA for such an “open-end credit

plan[] secured by the consumer’s dwelling.” These disclosures must be

given to the consumer at the time the loan application is provided. 

12 C.F.R. § 226.5b(b). 

The summary judgment record demonstrates Plaintiff signed 

a copy of a document entitled the “Important Terms of our Home Equity

Revolving Credit Line” on January 26, 2007, the date he received his

loan application. (Def.’s Ex. 7.) The document bears the signature

of Plaintiff’s name and provides the disclosures mandated by TILA. 

(Id.) Plaintiff admitted in his deposition testimony that the

signature on the Important Terms document “could be” his. (SUF ¶ 20.) 

Based on this testimony, it can be inferred the signature is

Plaintiff’s and he received the required disclosures for the home

equity line of credit loan. See Lynch, 588 F. Supp. 2d at 1258

(written acknowledgment is conclusive proof of delivery). Therefore,

Value’s motion for summary judgment on this claim is granted. 

2. Notice of Right to Cancel

Value also argues Plaintiff cannot prevail on a TILA claim

premised upon failure to receive notice of the right to rescind for

either of his two loans. Under 12 C.F.R. § 226.23(b)(5), “TILA’s

‘buyer’s remorse’ provision[,] . . . borrowers [are given] three

business days to rescind, without penalty, a consumer loan that uses

their principal dwelling as security.” Semar v. Platte Valley Federal

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Sav. & Loan Ass’n., 791 F.2d 699, 701 (9th Cir. 1986). Lenders are

required to “provide [borrowers with] a form stating the specific date

on which the three-day rescission period expires.” Id. (citing 12

C.F.R. § 226.23(b)(5)). This form is referred to as the “notice of

right to cancel.” See Balderas v. Countrywide Bank, N.A., No.

09cv564-MMA(JMA), 2009 WL 4783142, at *3 (S.D. Cal. Dec. 10, 2009).

The summary judgment record reveals Plaintiff received a notice

of right to cancel that included the statutorily required information

for each of his loans. (Def.’s Exs. 4, 9.) Both notices bear the

signature of Plaintiff’s name and are dated January 26, 2007. (Id.) 

Plaintiff gave deposition testimony that he signed the notice of right

to cancel for the first deed of trust loan; however, he testified that

the signature on the notice of right to cancel the home equity line of

credit “could be” his. (SUF ¶ 20.) Based on this testimony, it can

be inferred that the signatures on the notices to cancel are

Plaintiff’s and he received notices to cancel for both of his loans. 

See Lynch, 588 F. Supp. 2d at 1258 (written acknowledgment is

conclusive proof of delivery). Therefore, Value’s motion for summary

judgment on Plaintiff’s claims under TILA for failure to provide the

notice of right to cancel is granted.

3. Plaintiff’s Claim That He Did Not Understand the TILA Disclosures

Lastly, Value argues Plaintiff’s contention that he did not

understand the terms of the disclosure document or the right to cancel

cannot give rise to a TILA claim. Plaintiff has provided no authority

suggesting that a lack of understanding can give rise to a claim under

TILA. Indeed, the case law and statute itself indicate that such a

claim cannot be maintained. See Lynch, 588 F. Supp. 2d at 1258

(dismissing plaintiff’s TILA claim that lender’s TILA disclosures for

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 Value also argues Plaintiff abandoned his HOEPA claims at the 7

July 28 hearing. Although Plaintiff indicated at the hearing he was

unprepared to pursue his claim under HOEPA, his claim was not dismissed

and will be addressed.

9

two different loans were “confusing and unclear”). Therefore,

Defendant’s motion for summary judgment on this claim is granted. 

B. Plaintiff’s HOEPA Claim

Value argues it is also entitled to summary judgment on

Plaintiff’s claim under HOEPA “because the undisputed facts show Value

did not violate HOEPA.” Specifically, Value argues HOEPA does not 7

apply to either of Plaintiff’s loans. (Mot. for Summ. J. 11:2-3.) 

HOEPA applies only to “a special class of regulated loans that

are made at higher interest rates or with excessive costs and fees.” 

Lynch, 588 F. Supp. at 1260(quotations and citations omitted). “In

order to be subject to the protections afforded by HOEPA, one of two

factors has to be established. Either the annual percentage rate of

the loan at consummation must exceed by more than [8] percent the

applicable yield on treasury securities, or the total points and fees

payable by the consumer at or before the closing has to be greater

than 8 percent of the total loan amount, or $400.00.” Lynch, 588 F.

Supp. 2d at 1260; see also 12 C.F.R. § 226.32(a)(1)(i)(stating that

the annual percentage rate may not exceed the yield on treasury

securities by more than “8 percentage points for first-lien loans, or

by more than 10 percentage points for subordinate lien loans.”). 

Value has demonstrated that neither the first deed of trust

loan’s annual percentage rate nor the total points and fees payable

trigger application of HOEPA. Under Federal Rule of Evidence 201,

judicial notice is taken sua sponte of the Federal Reserve Selected

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 Value requested that judicial notice be taken of Federal Reserve 8

Selected Interest Rates for December 26, 2006. However, under the

statute, December 15, 2006 is the relevant date. See 15 U.S.C. §

1602(aa)(1)(A)(stating the yield on treasury securities is measured on

“the fifteenth day of the month immediately preceding the month in which

the application for the extension of credit is received by the

creditor.”)(emphasis added). Accordingly, Value’s request for judicial

notice is denied.

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Interest Rates for December 15, 2006. On December 15, 2006, the 8

yield on treasury securities was 4.72 percent. For HOEPA to apply,

the annual percentage rate on Plaintiff’s first deed of trust loan

would have to exceed 12.72 percent. However, the annual percentage

rate on Plaintiff’s first deed of trust loan was only 11.64 percent. 

(Def.’s Ex. 5.) To trigger HOEPA under the costs and fees prong,

Plaintiff’s fees and costs would have to exceed $12,400 - eight

percent of the face value of the loan of $155,000. However,

Plaintiff’s fees and costs totaled only $8,725. (Def.’s Ex. 10.) 

HOEPA’s additional regulations, therefore, do not apply to Plaintiff’s

first deed of trust loan. Further, HOEPA does not apply to “open-end

credit” transactions, including Plaintiff’s home equity line of

credit. 12 C.F.R. § 226.32(a)(2)(iii). Therefore, Plaintiff cannot

prevail on his HOEPA claims and Value’s motion for summary judgment on

these claims is granted.

IV. CONCLUSION

For the stated reasons, Value’s motion for summary judgment is

GRANTED.

Dated: January 11, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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