GMACM’S MOTION FOR SUMMARY JUDGMENT - 1 BISHOP, WHITE & MARSHALL, P.S. 

720 OLIVE WAY, SUITE 1300 

SEATTLE, WASHINGTON 98101-1801 

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 HONORABLE RONALD LEIGHTON 

UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 

AT TACOMA 

TONY S. and CAROL HENDERSON, 

 Plaintiffs, 

 v. 

GMAC MORTGAGE CORPORATION; and 

FIRST MORTGAGE LOAN SERVICING, 

 Defendants. 

Case No. 05-cv-05781 

GMACM’S MOTION FOR 

SUMMARY JUDGMENT 

NOTE ON MOTION CALENDAR: 

FEBRUARY 29, 2008 

I. MOTION 

Pursuant to Fed. R. Civ. P. 56, defendants GMAC Mortgage Corporation and First 

Mortgage Loan Servicing (collectively “GMACM”) move this court for an order granting 

summary judgment dismissing Tony and Carol Henderson’s claims against GMACM for 

breach of contract, emotional distress damages, wrongful foreclosure, violations of the Truth in 

Lending Act, the Fair Credit Reporting Act and Washington’s Consumer Protection Act. 

II. BACKGROUND AND FACTS 

On November 18, 2002, plaintiffs Tony and Carol Henderson (collectively referred to 

herein as “Henderson” or “the Hendersons”) entered into a loan agreement with Greater 

Acceptance Mortgage Corporation (“Greater Acceptance”). The loan was memorialized by a 

Note (the “Note”) with a principal balance of $77,000.00.1 The Note was secured by a Deed of 

 

1

 Affidavit of Scott Zeitz at ¶2, Exhibit A (“Note”). 

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Trust that described certain real property commonly known as 111 Oklahoma Road, Cook, 

Washington.2

 In addition to other loan documents and disclosures, the Hendersons also signed 

a Federal Truth in Lending Disclosure Statement, a Notice of Right to Cancel, and a HUD -1 

Settlement Statement.3

 On November 25, 2002, GMACM completed its acquisition of the Hendersons’ loan 

from Greater Acceptance by way of purchase and assignment.4

 This assignment is evidenced 

by a Corporate Assignment of the Deed of Trust.5

 GMACM paid Greater Acceptance to 

acquire the loan.6 Prior to completing the purchase and assignment, GMACM reviewed the 

Hendersons’ loan documents and the required Truth in Lending disclosures and determined 

that they were accurate.7

 The Hendersons made on time payments for approximately a year and a half. Payments 

were due on the first day of each month.8 They then failed to make a payment in August 

2004.9

 In his deposition, Mr. Henderson testified that they were unable to make their August 

payment because he had started a new business and that business was slow starting out.10 

Rather than calling GMACM to let it know of their financial hardship, the Hendersons claim to 

have started accumulating payments to get caught up.11 Once they had the funds necessary to 

catch the account up, Mr. Henderson testified he called GMACM and made an arrangement to 

bring the account current: 

 

2

 Affidavit of Scott Zeitz at ¶3, Exhibit B (“Deed of Trust”). 3

 Affidavit of Scott Zeitz at ¶3, Exhibit C (“signed Notice of Right to Cancel”). 

4

 Affidavit of Scott Zeitz at ¶4. 

5

 Affidavit of Scott Zeitz at ¶4, Exhibit D (“Corporate Assignment”). 

6

 Affidavit of Scott Zeitz at ¶5. 

7

 Affidavit of Scott Zeitz at ¶5. 

8

 Affidavit of Scott Zeitz at ¶6. 

9

 Affidavit of Scott Zeitz at ¶6. 

10 Deposition of T. Henderson at p. 47, lines 20-24 (Excerpts from the Deposition of Tony Henderson are attached 

to the Declaration of Erin M. Stines at Exhibit A). 

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...we were just accumulating what we could in the bank to get 

caught up. And then I called them and made the arrangements to 

get caught up and started to get caught up because I was doing real 

well at the time.12 

Mr. Henderson conceded that at that point they were two months behind in payments as they 

had not made their August or September payments and their October payment would be due on 

October 1, 2004.13

 GMACM account notes reflect GMACM, not Mr. Henderson, initiated a call on 

September 14, 2004, to the Hendersons to inquire about the past due amounts.14 In the call, 

Mr. Henderson promised to bring the account current within one week.15 The 

contemporaneous account note on September 14, 2004, reflects Mr. Henderson’s promise: 

MR STATED THAT WILL HAVE BOTH PMNTS MAILED WEEK 

RFD HAS PERSONAL PROBLEMS 09/14/04 22:45:48 PP 

 Whenever a borrower promises to make a payment by a certain date, GMACM will 

complete a promise to pay on the system, like the one entered on the Hendersons’ account.16 

Noting the account serves the purpose of tracking the promise made, and bypasses collection 

calls between the time the promise is made and the date of the anticipated receipt.17 If a 

borrower subsequently fails to remit the funds by the promised date, a promise broken note 

writes to the system and normal servicing and collection activity resumes.18 

 The Hendersons broke their promise and failed to remit full payment within the time 

frame promised. The account was noted “PROMISE BROKEN” on September 24, 2005.19 On 

October 1, 2004, the date the October payment was due, GMACM again called the Hendersons 

 

11 Deposition of T. Henderson at p. 48, lines 8-14. 

12 Deposition of T. Henderson at p. 48, lines 8-14. 

13 Deposition of T. Henderson at p. 48, lines 18-24. 

14 Affidavit of Scott Zeitz at ¶7. 

15 Affidavit of Scott Zeitz at ¶7, Exhibit E (“GMACM Contemporaneous Account Notes”). 

16 Affidavit of Scott Zeitz at ¶8, Exhibit E. 

17 Affidavit of Scott Zeitz at ¶8. 

18 Affidavit of Scott Zeitz at ¶8. 

19 Affidavit of Scott Zeitz at ¶9. 

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to discuss repayment options but the Hendersons did not answer the call.20 On October 4, 

2004, GMACM called again and the Hendersons hung up on GMACM.21 By October 5, 2007, 

when GMACM had not received payments as promised and were unable to contact the 

Hendersons, GMAMC noted the account “RESTRICTING ACCOUNT TO TAD OR UNTIL 

ARRANGEMENTS” which means they would not accept anything less than the total amount 

due.22 GMACM continued, without success, to attempt to contact the Hendersons to discuss 

repayment.23 

 The Hendersons contend in their complaint that they promised to make three payments 

in thirty days and that they mailed the first payment on October 18, 2004, and the other on 

October 19, 2004.24 They claim that they would have sent the third payment within the three 

week time frame but the first two were returned before they put the third payment in the mail.25 

 GMACM records reflect that the Hendersons did send in two money orders to 

GMACM each in the amount of $915.25.26 Each money order was equal to one monthly 

payment.27 However, as each payment was received after the promised time frame and the 

checks were insufficient to bring the account current, the checks were individually returned to 

the Hendersons on October 22, 2004, and October 27, 2004. Along with each of the checks 

GMACM sent a letter advising: 

This represents one of three installments due at this time. Your account is 

due for 08/01/04. There may be alternatives available to help you resolve 

the delinquency on your home. Please complete the enclosed financial 

form and return it to our office for call 800-850-4622.28 

 

20 Affidavit of Scott Zeitz at ¶10, Exhibit E. 

21 Affidavit of Scott Zeitz at ¶10, Exhibit E. 

22 Affidavit of Scott Zeitz at ¶11, Exhibit E. 

23 Affidavit of Scott Zeitz at ¶11, Exhibit E. 

24 Complaint p. 4, ¶3.6. 

25 Complaint p. 4, ¶3.6. 

26 Affidavit of Scott Zeitz at ¶12. 

27 Affidavit of Scott Zeitz at ¶12. 

28 Affidavit of Scott Zeitz at ¶12, Exhibits F and G (“GMACM letters dated October 22, 2004 and October 27, 

2004”). 

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 Despite the Hendersons’ failure to keep their promise, GMACM continued to reach out 

to the Hendersons in an attempt to discuss repayment. The last date GMACM attempted to 

contact the Hendersons directly for this purpose was on December 15, 2004.29 On December 

15, 2004, the Hendersons did not answer the phone and GMACM left a message. GMACM’s 

call was not returned. Despite GMACM’s contemporaneous account notes, Mr. Henderson 

claims they “never got any phone calls from them at all.”30

 GMACM ultimately initiated foreclosure and a sale date was set for April 29, 2005.31 

On April 4, 2005, GMACM received a letter from the Henderson’s attempting to “rescind the 

transaction.”32 Despite the allegation in the complaint that GMACM did not respond to this 

letter, GMACM did respond by letter dated April 6, 2005, stating that the Hendersons’ right to 

rescind “expired midnight of November 21, 2002.”33 On April 27, 2005, two days before the 

foreclosure sale, the Hendersons filed for bankruptcy. On October 13, 2005, the Hendersons 

filed this lawsuit in Skamania County Superior Court. 

 The matter was later removed to Federal Court on December 2, 2005. By this court’s 

order dated October 27, 2006, the case was stayed due to the bankruptcy. On November 6, 

2006, the bankruptcy court entered an Order allowing the bankruptcy trustee to abandon any 

interest in the subject property and an order lifting the stay was entered November 11, 2006. 

 The Hendersons make a variety of claims in this lawsuit: 1) breach of contract; 2) 

damages for emotional distress; 3) illegal foreclosure; 4) violations of the Truth in Lending 

Act; 5) violations of the Fair Credit Reporting Act; and 6) a violation of the Consumer 

Protection Act. 

 

29 Affidavit of Scott Zeitz at ¶13. 

30 Deposition of T. Henderson at p. 49, lines 3-11. 

31 Affidavit of Scott Zeitz at ¶15. 

32 Affidavit of Scott Zeitz at ¶14. 

33 Affidavit of Scott Zeitz at ¶14, Exhibit H (“GMACM letter dated April 6, 2005, responding to rescission 

request.” 

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 Allegations in the Hendersons’ complaint are inconsistent with their deposition 

testimony. For example, in their complaint, the Hendersons allege they promised GMACM to 

make up three payments in “thirty days” but in answers to discovery and in his deposition, Mr. 

Henderson claims the promise was to make up payments in “3 weeks” from the date of the 

call.34 The Hendersons allege in their complaint that they refinanced their loan with Greater 

Acceptance. However, at this deposition, Mr. Henderson testified they had settled with GMAC 

because “we thought they were stable and the rates were -- they were reasonable.”35 In their 

complaint, they allege that the two payments were sent on different days, October 18, 2004 and 

October 19, 2004, but at his deposition Mr. Henderson alleges he mailed the “two payments the 

same day.”36 In their complaint they allege GMACM violated the FCRA by reporting 

“negative marks against the creditors.” However, when asked in their depositions about credit 

reports, Mrs. Henderson stated she had never seen a credit report and Mr. Henderson stated “I -

- I've never looked at it prior to all of this” and further stated he had never disputed the 

reporting with any credit bureau.37 

 The Hendersons’ claims are likewise inconsistent with claims they made before the 

bankruptcy court. While in bankruptcy, the Hendersons objected to the bankruptcy trustee’s 

motion to sell the property by arguing because “[t]he Debtors have been pre-approved for a 

refinance; there, there should be no chapter 7.”38 The Hendersons claim in this lawsuit they 

have been denied loans because of their problems with GMACM and have suffered actual 

damages as a result of not being able to get a loan.39 

 

34 Deposition of T. Henderson at p. 50-51, lines 19-10; see also Stines Declaration Exhibit B, Plaintiffs’ 

Responses to Defendant’s First Interrogatories and Requests for Production of Documents to Plaintiff Tony 

Henderson at p. 17-18. 

35 Deposition of T. Henderson at p. 15, lines 17-22. 

36 Complaint p. 4 at ¶3.6; see also Deposition of T. Henderson at p. 50, lines 9-11. 

37 Deposition of C. Henderson at p.23 lines 10-17 (Excerpts from the Deposition of Carol Henderson are attached 

to the Stines Declaration at Exhibit C); see also Deposition of T. Henderson at pp. 78-79, lines 25-13 and pp. 108-

109 lines 10-3. 

38 Stines Declaration Exhibit D, Objection to Trustee’s Motion to Sell Property, p. 2 at ¶3. 

39 Deposition of T. Henderson at pp. 74-77. 

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 The Hendersons rely on the “expert opinion” of Mr. Henderson’s brother TJ Henderson 

to support their TILA claims. TJ Henderson claims to be the “primary Auditor for Co3m, 

Premier Mortgage 1 Auditing, Consumer Guardian and Advocates for Justice.”40 TJ 

Henderson has never testified as an expert at trial or in a deposition and despite having never 

obtained a college degree or attended law school claims to have served as a “Counselor of 

Law” in a DUI matter in the District Court of Skamania County and at a hearing in a juvenile 

matter in Klickitat County Superior Court.41 He specifically states that “Judge Ronald Rainer 

took him under his wing and allowed TJ to practice law within his Court.” TJ Henderson is not 

a lawyer and he is not qualified as an expert. Irregardless, any “expert opinion” of TJ 

Henderson is irrelevant as the facts of this case do not support a TILA violation. 

 The Hendersons’ claims of emotional distress are likewise unsupported. First, in 

discovery requests, neither Tony nor Carol Henderson identifies any medical expert they 

anticipate calling at trial. And when asked to describe each and every item of damage they 

claim was caused by GMACM the Hendersons responded: 

Because of this, the Plaintiffs had to initiate legal action to stop the 

foreclosure against their home of more than 13 years, which forced the 

Plaintiffs to undergo additional financial and emotional distress. 42

 The Hendersons attach pages of Mr. Henderson’s medical records to their responses. 

The records do not contain a medical diagnosis of emotional distress. The records do suggest 

that Mr. Henderson suffers stomach problems related to Gastroesophageal Reflux Disease and 

was prescribed Prilosec for this problem.43 No information supporting Carol Henderson’s 

claim for emotional distress is included. 

 

40 Stines Declaration Exhibit E, TJ Henderson’s Answers and Objections to Defendant’s Interrogatories and 

Requests for Production to Plaintiffs Concerning Plaintiffs’ Expert TJ Henderson, p. 8. 

41 Stines Declaration Exhibit E, TJ Henderson’s Answers and Objections to Defendant’s Interrogatories and 

Requests for Production to Plaintiffs Concerning Plaintiffs’ Expert TJ Henderson, pp. 3-6. 

42 Stines Declaration Exhibit B, Plaintiffs’ Responses to Defendant’s First Interrogatories and Requests for 

Production of Documents to Plaintiff Tony Henderson at p. 16. 

43 Stines Declaration Exhibit B, medical records attached to Plaintiffs’ Responses to Defendant’s First 

Interrogatories and Requests for Production of Documents to Plaintiff Tony Henderson were produced 

unnumbered and attached to the back of the answers; See also Stines Declaration Exhibit F, page printed from 

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 As there is no issue of material fact for trial GMACM is entitled to an order dismissing 

the Henderson’s lawsuit in its entirety. 

III. STATEMENT OF ISSUES 

1. Have the Hendersons failed to establish a breach of contract claim where 

Mr. Henderson’s promise to pay did not form the basis of an enforceable 

contract and the Hendersons failed to keep their promise to GMACM? 

2. Have the Hendersons failed to establish a claim for emotional distress 

damages where they have not provided any medical diagnosis of an 

emotional disorder? 

3. Have the Hendersons failed to establish a claim for “illegal foreclosure” 

where there was no foreclosure and they cannot establish any damages 

resulting from an attempted foreclosure? 

4. Have the Hendersons failed to establish a claim under the Truth in 

Lending Act (TILA) where GMACM was an assignee of the Hendersons’ 

loan, where there are no apparent defects on the face of the disclosures and 

loan documents, and where GMACM timely responded to the 

Hendersons’ Notice of Rescission? 

5. Have the Hendersons failed to establish a claim under the Fair Credit 

Reporting Act (FCRA) where the Hendersons failed to follow FCRA 

Requirements? 

6. Have the Hendersons failed to establish a claim under Washington’s 

Consumer Protection Act (CPA) where the Hendersons cannot prove any 

element of a CPA claim? 

IV. EVIDENCE RELIED UPON 

 The evidence supporting this motion consists of the following: 

1. The Declaration of Erin M. Stines and attached exhibits; 

2. The Affidavit of Scott Zeitz and attached exhibits; and 

3. The documents already on file with the Court. 

 

Prilosec website (according to the Prilosec web site, Prilosec is an over the counter medication used to treat 

“frequent heartburn”). 

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V. LEGAL AUTHORITY 

 The law of summary judgment under Federal Rule of Civil Procedure 56 is well settled 

and familiar. FRCP 56(c) provides in relevant part, that “[t]he judgment sought shall be 

rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on 

file, together with affidavits, if any, show that there is no genuine issue of material fact and that 

the moving party is entitled to a judgment as a matter of law.” See also Celotex Corp. v. 

Catrett, 477 U.S. 317, 322 (1986). 

 A genuine issue of material fact does not exist where there is insufficient evidence for a 

reasonable fact-finder to find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 

U.S. 242, 248 (1986). In order to defeat a motion for summary judgment, the non-moving 

party bears the burden of making more than conclusory allegations, speculation or 

argumentative assertions that material facts are in dispute. Wallis v. J.R. Simplot Co., 26 F.3d 

885, 890 (9th Cir. 1994). 

 Summary judgment is appropriate here as there are no material facts in dispute and 

GMACM is entitled to judgment as a matter of law. 

A. The Hendersons’ Breach of Contract Claim Should be Dismissed as 

Mr. Henderson’s Unilateral Promise to Pay did not Form the Basis of 

a Contract and the Hendersons Failed to Keep their Promise to 

GMACM 

The Hendersons seek damages for breach of an alleged contract they claim was formed 

in a telephone call with GMACM. However, no separate contract was formed and even if the 

court could find a contract was formed Mr. Henderson breached the contract in failing to bring 

the account current in one week. 

 An action for damages for a breach of contract must be based on a valid contract. 

Lehrer v. Dep't of Soc. & Health Servs., 101 Wn. App. 509, 516, 5 P.3d 722 (2000). The 

burden of proving the existence of a contract is on the party asserting its existence. Siekawitch 

v. Wash. Beef Producers, Inc., 58 Wn. App. 454, 461, 793 P.2d 994 (1990). The elements of a 

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contract are the subject matter, the parties, the promise, the terms and conditions, and the price 

or consideration. DePhillips v. Zolt Constr. Co., 136 Wn.2d 26, 31, 959 P.2d 1104 (1998). 

Neither the performance of a preexisting duty nor the promise to perform will constitute 

consideration. See 1A A. Corbin, Contracts Sec. 181, at 138 (1963). Whether the essential 

elements of a contract are present is a question of law. See, e.g.,Underwood v. Sterner, 63 

Wn.2d 360, 364, 387 P.2d 366 (1963). And the existence of a meeting of the minds is a 

question of fact. Sea-Van, 125 Wn.2d at 126. 

 Here, the essential elements of a contract are missing. The Hendersons were already 

obligated under the Note and Deed of Trust to make on time monthly payments to GMACM. 

The parties neither negotiated a separate agreement, nor did either party provide separate 

consideration. Mr. Henderson concedes that in the call he simply advised he would bring his 

account current within a certain time frame. GMACM acknowledged the advice and tracked 

this information in the computer. No contract was formed. The Hendersons were already 

under an obligation under the Note and Deed of trust to make their payments on time to 

GMACM. 

 The Hendersons’ two versions of events do not even make sense in light of their own 

admissions. Version one, provided in the complaint is that the Hendersons would catch up the 

August, September and Octobers payment within “30 days” of the call. The Hendersons do not 

state in the complaint or elsewhere the date Mr. Henderson had the conversation with 

GMACM. However, contemporaneous account notes maintained by GMACM document that 

the call took place on September 14, 2004. Thus, according to this version of events the 

Hendersons would have had until October 14, 2004, to bring the account current. However, 

the Hendersons admit in their complaint that they did not begin mailing payments until 

October 18, 2004, and October 19, 2004, several days after the deadline to bring the account 

current. 

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 The Hendersons’ other version of events, the version explained in discovery and at Mr. 

Henderson’s deposition, that they would make the payments up in three weeks, makes even 

less sense. Under this scenario, all three payments were due by October 5, 2004, 

approximately two weeks before they admit to having sent in payments. 

 According to GMACM’s contemporaneous account notes which document the 

Hendersons’ promise to bring the account current within one week – by September 24, 2004. 

By the Hendersons’ own admissions, they did not mail the payments until October 18, 2004, 

and October 19, 2004. As those two payments were received after the promised time frame 

and were insufficient to bring the account current, the payments were returned to the 

Hendersons by letters dated October 22, 2004, and October 27, 2004. 

 As no separate contract was formed the Hendersons’ breach of contract claim should be 

dismissed. Even if the court could find a contract was formed, the Hendersons, by their own 

admissions, concede that they breached that contract. This claim should be dismissed. 

B. The Hendersons’ Claim for Emotional Distress Damages Should be 

Dismissed Because Emotional Distress Damages Cannot be Recovered 

Absent a Medical Diagnosis of an Emotional Disorder 

The law regarding recovery of emotional distress damages pursuant to negligent 

infliction of emotional distress is settled. The court in Hegel v. McMahon, 136 Wn.2d 122, 

135, 960 P.2d 424 (1998), held that to satisfy the “objective symptomatology requirement” 

established in Hunsley v. Giard, 87 Wn.2d 424, 553 P.2d 1096 (1976), a plaintiff’s emotional 

distress must be susceptible to medical diagnosis and proved through medical evidence. 

The Hegel court further held that in order for symptoms such as nightmares, sleep 

disorders, intrusive memories, fear and anger to be sufficient for recovery under such a theory, 

they must constitute a diagnosable emotional disorder. Hunsley, 87 Wn.2d at 424. The court 

noted that examples of such emotional distress would include neuroses, psychoses, chronic 

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depression, phobia, shock, posttraumatic stress disorder, or another disabling mental condition. 

Hunsley, 87 Wn.2d at 424. 

In the present case, Tony and Carol Henderson do not, and did not suffer from, 

diagnosable emotional disorders. Mrs. Henderson provides no medical information and Mr. 

Henderson’s medical records discussing treatment for Gastroesophageal Reflux Disease are 

insufficient to satisfy the “objective symptomatology requirement” requirement established in 

Hunsley. As the Hendersons fail to provide any evidence of a diagnosable emotional disorder 

these claims should be dismissed. 

C. The Hendersons’ “Illegal Foreclosure” Claim Should be Dismissed as 

GMACM Never Foreclosed and they Cannot Establish any Damages 

Resulting from an Attempted Foreclosure 

GMACM never completed a foreclosure of the Hendersons’ property. For this reason 

alone the Hendersons’ “illegal foreclosure” claim should be dismissed. 

 RCW 61.24.040 sets out Washington’s nonjudicial foreclosure procedure. The three 

goals of the Washington deed of trust act are: (1) that the nonjudicial foreclosure process 

should be efficient and inexpensive, (2) that the process should result in interested parties 

having an adequate opportunity to prevent wrongful foreclosure, and (3) that the process 

should promote stability of land titles. Cox v. Helenius, 103 Wn.2d 383, 387, 693 P.2d 683 

(1985). 

 As GMACM never completed a foreclosure the Hendersons’ only claim here could be 

that GMACM attempted to wrongfully foreclose. However, as already explained, at the point 

GMACM initiated foreclosure, the Hendersons had fallen at least three months behind in 

payments, the Hendersons had failed to keep their promise to catch the account up and they 

regularly ignored GMACM’s calls or hung up on GMACM. Despite GMACM’s attempts, it 

could not reach a resolution with the Hendersons. It was only after months of attempting to 

make arrangements with the Hendersons that GMACM initiated foreclosure. 

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 Furthermore, as the parties’ relationship was governed by contract – namely a Note and 

Deed of Trust – any tort claim based on that loss is precluded under the economic loss rule. 

Alejandre v. Bull, 159 Wn. 2d 674, 678 (2007). The economic loss rule applies to hold parties 

to their contract remedies when a loss potentially implicates both tort and contract relief. 

Alejandre, 159 Wn. 2d at 681. The rule “prohibits plaintiffs from recovering in tort economic 

losses to which their entitlement flows only from a contract” because “tort law is not intended 

to compensate parties for losses suffered as a result of a breach of duties assumed only by 

agreement.’” Factory Mkt., Inc. v. Schuller Int'l, Inc., 987 F. Supp. 387, 395 (E.D. Pa. 1997). 

 Furthermore, the Hendersons admit their bankruptcy pleadings that they have not been 

damaged by GMACM’s attempted foreclosure. In their objection to the bankruptcy trustee’s 

motion to sell the property they admit that because “[t]he Debtors have been pre-approved for 

a refinance; there, there should be no chapter 7.” This statement undermines statements in the 

discovery responses and deposition testimony that they cannot refinance their loan because of 

the problems on their account.44 By their own admission, the Hendersons were not damaged. 

 For these reasons, the “illegal foreclosure” claim should be dismissed. 

D. The Hendersons’ TILA Claims Should be Dismissed Because as an 

Assignee of the Hendersons’ Loan GMACM Has No Liability When 

There are No Apparent Defects on the Face of the Disclosures, the All 

Required Disclosures were Provided, and GMACM Timely 

Responded to the Hendersons’ Notice of Rescission 

1. GMACM is Not Liable For Damages Under TILA Because There 

are No Defects Apparent on the Face of the Loan Documents

 As a general rule, an assignee of a mortgage is liable for damages only if the violation 

is apparent on the face of the disclosure statement and the other documents assigned: 

§ 1641. Liability of assignees 

 

44 Stines Declaration Exhibit D, Hendersons’ Objection to Trustee’s Motion to Sell Property, p. 2 at ¶3; see also 

Deposition of T. Henderson at pp. 74-77. 

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(a) Prerequisites. Except as otherwise specifically provided in 

this title [15 USCS §§ 1601 et seq.], any civil action for a 

violation of this title [15 USCS §§ 1601 et seq.] or proceeding 

under section 108 [15 USCS § 1607] which may be brought 

against a creditor may be maintained against any assignee of 

such creditor only if the violation for which such action or 

proceeding is brought is apparent on the face of the disclosure 

statement, except where the assignment was involuntary. For the 

purpose of this section, a violation apparent on the face of the 

disclosure statement includes, but is not limited to (1) a 

disclosure which can be determined to be incomplete or 

inaccurate from the face of the disclosure statement or other 

documents assigned, or (2) a disclosure which does not use the 

terms required to be used by this title [15 USCS §§ 1601 et seq.]. 

15 USCS § 1641(a) (emphasis added). 

 Several circuit courts have held, that “’apparent on the face’ means exactly that--for an 

assignee to be liable under TILA, the violation must be apparent on the face of the assigned 

disclosure documents.” Ramadan v. Chase Manhattan Corp., 229 F.3d 194, 198 (3rd Cir. 

2000). 15 USC § 1641(a) does not impose a duty of additional inquiry on assignees; only 

violations that a reasonable person can spot on the face of a disclosure statement or other 

assigned documents will make assignee liable under TILA. Taylor v Quality Hyundai (1998, 

CA7 Ill) 150 F3d 689, rehearing denied (1998, CA7 Ill) 1998 US App LEXIS 21348; 15 USCS 

§ 1641. 

 Recent court decisions make it clear that the recent amendments to TILA have 

narrowed the scope of assignee liability. Compare 15 U.S.C. § 1641 (1979), with section 

1641(a) (1980); Ramadan v. Chase Manhattan Corp., 229 F.3d 194, 200 (3rd Cir. 2000) (citing 

the legislative history at S.Rep. No. 96-73, at 2-3, 96th Cong. 1st Sess. (1979), reprinted in 

1980 U.S.Code Cong. & Admin.News 280, 281). It was this 1980 amendment that limited the 

liability of voluntary assignees to violations “apparent on the face of the disclosure statement.” 

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15 U.S.C. § 1641(a); Phillips v. Lithia Motors, Inc., 2006 U.S. Dist. LEXIS 25607, 51-52 (D. 

Or. 2006). 

 In a closed-end credit transaction, the five material disclosures that must be given are 

the annual percentage rate, the finance charge, the amount financed, the total payments, and the 

payment schedule. 12 CFR 226.23. Prior to completing the purchase and assignment of the 

Henderson loan, GMACM reviewed the material disclosures and loan documents and 

determined that they were accurate and there were no defects apparent on the face of these 

documents.45 

 There is no evidence to suggest the loan file was defective or that the defects were 

apparent on the face of the loan documents. This claim should be dismissed. 

2. The Hendersons Reviewed, Signed and Received a Notice of Right 

to Rescind Their Loan

 The Hendersons’ Complaint specifically alleges they only received “one copy of the 

notice of right to cancel, with both names attached at the bottom and no dates filled in.” The 

Hendersons cite the disclosure requirements outlined in the TILA, 15 USC 1601 et seq. The 

Hendersons do not cite the notice requirements outlined in 12 C.F.R Sec. 226.23(b) which also 

governs a lender’s obligation to provide borrowers with a notice of their right to cancel certain 

loans. 12 C.F.R Sec. 226.23(b)(1) specifically provides, 

Notice of right to rescind. In a transaction subject to rescission, a 

creditor shall deliver two copies of the notice of the right to 

rescind to each consumer entitled to rescind (one copy to each if 

the notice is delivered by electronic communication as provided 

in § 226.36(b)). The notice shall be on a separate document that 

identifies the transaction and shall clearly and conspicuously 

disclose the following: 

 

45 Affidavit of Scott Zeitz at ¶3, Exhibit C. 

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(i) The retention or acquisition of a security interest in the 

consumer's principal dwelling. 

(ii) The consumer's right to rescind the transaction. 

(iii) How to exercise the right to rescind, with a form for that 

purpose, designating the address of the creditor's place of business. 

(iv) The effects of rescission, as described in paragraph (d) of this 

section. 

(v) The date the rescission period expires. 

The Henderson’s claim under 15 U.S.C 1635(a) and 12 C.F.R Sec. 226. 23(b)(1) lacks 

merit because the Hendersons reviewed and signed a Notice that included the date the 

rescission period expires. The Notice clearly states as follows, 

If you cancel by mail or telegram, you must send a notice no later 

than midnight of 11-21-02 (or midnight of the third business day 

following the latest of the three events listed above.) If you send 

or deliver your written notice to cancel some other way, it must 

be delivered to the above address no later than that time.46

 They signed a copy of the Notice on November 18, 2002, and in doing so, 

acknowledged that they had received two copies of the Notice. Plaintiffs’ claim under 15 USC 

1635(a) and 12 CFR Sec. 226. 23(b)(1)(v) should be dismissed. Further, they concede in their 

depositions that they received and signed the Notice at closing.47 

 

46 Affidavit of Scott Zeitz at ¶3, Exhibit C. 

47 Deposition of C. Henderson at p. 39, lines 18-21: 

 Q. And did you receive this document the day you signed all the paperwork to get the loan? 

 A. Did we receive this? 

 Q. Yes. 

Deposition of T. Henderson at p. 41-42 lines 10-2: 

Q. And we established earlier that it was likely, in fact, November 18th, 2002 that you signed these 

documents. Does that date appear under -- 

A. It sure does. 

Q. -- paragraph 1? 

A. (Witness nods head.) 

Q. And right above the language, I wish to cancel, there's a paragraph there that says, If you cancel by 

mail or telegram, you must send a notice no later than midnight of November 21, 2002. Do you see that? 

A. Yes. 

Q. And is that your signature at the bottom of the page? 

A. It sure looks like it. 

Q. And you're not claiming that someone else signed your name here? 

A. Nope. 

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 To the extent they claim that after signing the Notice they were not provided signed 

copies of the Notice, there is no such requirement under 15 U.S.C 1635(a) or 12 C.F.R Sec. 

226.23(b) that GMACM return signed copies of the Notice once Notice was provided. Such a 

technical requirement does not exist under TILA. 

 Even if the Hendersons could establish some technical violation of TILA technical 

violations do not entitle debtors to relief under 15 U.S.C § 1635, as nondisclosure must be 

material. 15 U.S.C 1635(a). For example, even when borrowers receive the wrong form, notice 

is not defective as long as the form informs borrowers of their right to cancel within a threeday period. Mills v Equicredit Corp., 294 F Supp. 2d 903 (2003). As the Hendersons concede 

they received the Notice and that they were informed of their right to cancel they cannot 

establish a TILA violation. 

 Furthermore, generally, a borrower’s signature on a Notice of Right to Rescind creates 

a rebuttable presumption that the notices were given.48 However, in the case of an assignee, 

such as GMACM who acquired its interest in the loan by virtue of an assignment from Greater 

Acceptance, such signature is conclusive proof the notices were given. 

Except as provided in section 125(c) [15 USC 1635(c)], in any 

action or proceeding by or against any subsequent assignee of the 

original creditor without knowledge to the contrary by the assignee 

when he acquires the obligation, written acknowledgement of 

receipt by a person to whom a statement is required to be given 

pursuant to this title [15 USCS §§ 1601 et seq.] shall be conclusive 

proof of the delivery thereof and, except as provided in subsection 

(a), of compliance with this chapter [15 USC §§ 1631 et seq.]. This 

section does not affect the rights of the obligor in any action against 

the original creditor. 

15 USC § 1641(b) (emphasis added). 

 

48 “Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under 

this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this 

section does not more than create a rebuttable presumption of delivery thereof.” 15 USC 1635(c). 

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 This claim should be dismissed because the Hendersons received a Notice of Right to 

Rescind that includes the date the rescission period expired. Further, their signatures are 

conclusive proof this requirement was met as to GMACM. 

 Any attempted claim regarding GMACM’s alleged failure to respond to the Henderson’s 

notice of rescission received by GMACM on April 4, 2006, is likewise without merit. The 

Hendersons’ right to rescind expired on November 21, 2002. The Hendersons did not seek to 

rescind the transaction until approximately three years after the rescission deadline expired. 

Despite their allegations to the contrary, GMACM promptly supplied a written response two days 

after the letter requesting rescission was received stating that the rescission was not timely. This 

claim should be dismissed. 

E. The Hendersons’ Fair Credit Reporting Act Claim Should be 

Dismissed Because the Hendersons Failed to Follow Fair Credit 

Reporting Act Requirements 

 The Hendersons’ Complaint alleges GMACM negligently and willfully violated the 

requirements of the Fair Credit Reporting Act (“FCRA”) by reporting “negative marks 

against the creditors.” 

Under the FCRA, the duties of a furnisher of information are set forth in 15 U.S.C. 

§1681s-2.49 The FCRA imposes two duties on furnishers of information, codified at 15 

U.S.C. §§ 1681s-2 (a) and (b). The category of duties in subsection (a) relates to the 

furnishers’ duty to report accurate information and their ongoing duty to correct inaccurate 

information. Section 1681s-2(a) provides in relevant part as follows: 

A person shall not furnish any information relating to a consumer 

to any consumer reporting agency if the person knows or 

consciously avoids knowing that the information is inaccurate. A 

 

49 GMACM concedes it is a “furnisher of information” within the definition provided under the FCRA. 

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person shall not furnish information relating to a consumer to any 

consumer reporting agency if (i) the person has been notified by 

the consumer . . . that specific information is inaccurate; and (ii) 

the information is, in fact, inaccurate. A person who . . . has 

furnished to a consumer reporting agency information that the 

person determines is not complete or accurate, shall promptly 

notify the consumer reporting agency of that determination and 

provide to the agency any corrections to that information, or any 

additional information, that is necessary to make the information 

provided by the person to the agency complete and accurate, and 

shall not thereafter furnish to the agency any of the information 

that remains not complete or accurate. 

15 U.S.C. §§ 1681s-2(a)(1) and (2). 

However it is clear there is no private cause of action under Section 1681s-2(a), for 

the FCRA limits the enforcement of this subsection to government agencies and officials. 15 

U.S.C. § 1681s-2(d); Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1059 (9th 

Cir. 2002). 

 The statute explicitly excludes a private right of action for furnishing inaccurate 

information, and here GMACM is not the government body charged with enforcing 

violations of 15 U.S.C. §§ 1681s-2(a). For these reasons, even if GMACM did furnish 

inaccurate information to credit reporting agencies, the Hendersons cannot successfully 

allege causes of actions against GMACM under 15 U.S.C. §§ 1681s-2(a) of the FCRA. 

A furnisher of information has specific duties only once the furnisher has been 

notified by a credit reporting agency that a consumer is disputing information on his or her 

credit report. 15 U.S.C. § 1681s-2(b). 

The procedure for a consumer who disputes information is set forth in 15 U.S.C. 

§1681i. The consumer must notify the credit reporting agency directly of the dispute, and the 

agency is then required to conduct a reasonable investigation, including notifying the 

furnisher of information about the dispute. 15 U.S.C. §1681i(a)(1), (2). Once the furnisher 

of information has received notice of the dispute from the credit reporting agency, the 

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furnisher must then conduct an investigation, review the information and provide a response 

to the credit reporting agency pursuant to 15 U.S.C. §1681s-2(b). Accordingly, in order to 

impose liability on a furnisher of information to the credit reporting agencies, there must first 

be a dispute by the consumer. 15 U.S.C. § 1681(i). Such notice is necessary to trigger 

GMACM’s duties under 15 U.S.C. §§ 1681s-2(b). 

Advising the furnisher of information directly, without also advising the credit 

reporting agencies of a dispute, is insufficient to establish a cause of action under the 

FCRA.50 In Peasley v. Verizon Wireless (VAW) LLC, 364 F.Supp.2d 1198 (S.D. Cal. 2005), 

the court dismissed plaintiff’s FCRA claim for failure to state a claim upon which relief 

could be granted because in order for the duty of a furnisher of information to be triggered, 

the furnisher must first have received notice of the dispute from the credit reporting agency, 

not directly from the consumer as was the situation in Peasley. 

To the extent that the Hendersons allege a FCRA violation for reporting late 

payments, they are first required to establish that they disputed the reporting with the credit 

bureaus directly. The Hendersons cannot satisfy this requirement as they concede they never 

notified a credit reporting agency of their dispute.51 The FCRA should be dismissed. 

 

50 The FCRA notice requirements make sense considering credit reporting is not within the complete control of 

the furnisher. Credit reporting agencies can make errors in reporting. Congress has explained that the purpose of 

the FCRA is “to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of 

commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and 

equitable to the consumer.” 15 U.S.C. § 1681(b). Thus, credit reporting agencies have their own duty to 

investigate disputes. See 15 U.S.C. §1681i. Only once the agency has been notified of a dispute can it be required 

to conduct its own “reasonable investigation, including notifying the furnisher of the information about the 

dispute.” 15 U.S.C. §1681i(a)(1), (2). Unless the agency is notified of a dispute it cannot take appropriate action 

to investigate or correct its own reporting. GMACM is not responsible for the mistaken reporting of the credit 

reporting agencies. 

51 Deposition of C. Henderson at p.23 lines 10-17; see also Deposition of T. Henderson at pp. 78-79, lines 25-13 

and pp. 108-109 lines 10-3. 

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F. The Hendersons’ Consumer Protection Act Claim Should Be 

Dismissed Because the Hendersons Cannot Prove any Element of a 

Consumer Protection Act Claim 

The Hendersons have failed to allege any violation of the Consumer Protection Act 

(“CPA”) and their claim should dismiss as a matter of law. 

To prevail on a CPA claim, the Hendersons must prove: (1) an unfair or deceptive act 

or practice, (2) in trade or commerce, (3) that impacts the public interest, (4) which causes 

injury to the party in his business or property, and (5) which injury is causally linked to the 

unfair or deceptive act. Industrial Indem. Co. v. Kallevig, 114 Wn.2d 907, 920-21, 792 P.2d 

520 (1990) (citing Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 

778, 784-85, 719 P.2d 531 (1986)). 

In their complaint, the Hendersons allege GMACM has “engaged in a pattern of unfair 

practices mentioned in the facts above.” The Hendersons do not cite any independent facts to 

support a CPA claim. As the Hendersons have failed to establish any breach of contract or any 

violation of either TILA or the FCRA the Hendersons’ cannot satisfy even the first element of 

a CPA violation much less the other four elements. As no unfair or deceptive act or practice 

exists summary judgment should be granted as to the Hendersons’ CPA claim. 

VI. CONCLUSION

For all of the reasons above, GMACM respectfully requests that its motion for summary 

judgment be granted, and that all of the Hendersons’ claims be dismissed. 

Dated this 5th day of February, 2008. 

 BISHOP, WHITE, & MARSHALL, P.S. 

 

 /s/Erin M. Stines____________________ 

 Erin M. Stines, WSBA No. 31501 

 David A. Weibel, WSBA No. 24031 

 Attorneys for GMACM 

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