# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 2- 25 08

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Ban k o f Am eri ca, N.A.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.
Gary R. Pet ers on ; Sa ll y

L. Peter so n

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el la nt

s

JP Mo rg an Ch as e Ban k, N.A., and it s s uc ces so rs an d a ss ig ns ; Hor iz on Ban k, Nat io na l As so ci at io n; Cle ar & C lo se Tit le Agen cy , Ltd
., al so all he irs an d d ev is ees of a ny of th e ab ov e-n am ed pe rs on s wh o are d ecea se d; an d a ll ot he r pe rs on s o r en ti ti es cla im in g a ny rig ht
, ti tl e, es ta te , li en or i nt eres t i n re al est at e d es cri be d i n t he Su m m on s

an d C om pl ai nt he rei n

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

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Su bm it te d: Marc h 1 2, 2 01 3 Fil ed : M arch 21 , 20 14

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Befo re WOL LMAN, BYE, and COLLOTON, Cir cu it Ju dg es

.

__ __ __ __ __ __W OLLMAN, Circ ui t J ud ge

.

Gary an d Sal ly Pet ers on (co ll ect iv el y , t he Pet ers on s) ap pe al fro m th e d is tri ct

co ur t’s or de r gr an ti ng Ban k of Am eri ca, N.A.’ s (Ban k o f A merica ’s) m ot io n fo r

su m m ary jud gm en t on th ei r co un te rcl ai m s fo r res ci ss io n an d st at ut or y da m ag es un de r th e fed eral Trut h in Len di ng Act (TILA), 15 U.S.C. § 16 01 e t se q

. W e affi rm in pa rt,

va cat e th e gr an t of su m

m ary jud gm en t wit h res pe ct to th e Pet ers on s’ co un te rcl ai m fo r
st at ut or y da m ag es , and rem an d fo r fu rth er p ro ceed in gs

.

I. Back gr ou nd

O n D e c em

be r 13
, 20 06
, th e Pet ers on s cl os ed on a ho m e m or tg ag e refi n a n c e lo an wit h Ban k of Am eri ca. The pr in ci pa l am ou nt of th e lo an was $8 40 ,00 0, whi ch

was se cu red by a m or tg ag e on th e Pet ers on s’ pr im ary res id en ce in Bl ai ne , Mi nn es ot a. In co nn ect io n wit h th e lo an , th e Pet ers on s ex ecu te d a Not ic e of Ri gh t to Can cel an d

a Trut h in Len di ng Dis cl os ur e St at em en t, as req ui red by TILA. Alt ho ug h th ey ad m it

to ex ecu ti ng th es e do cu m en ts , th e Pet ers on s al le ge th at th ey ne ve r rece iv ed co pi es of
th em , as req ui red by TILA’ s im pl em en ti ng reg ul at io n, Reg ul at io n Z. See 12 C.F.R. §§ 22 6.1 7( a)(1 ), 22 6.2 3( b) (1 ).

Sal ly Pet ers on cal le d Ban k of Am eri ca in Ja nu ary 20 07 to req ue st co pi es of th e cl os in g do cu m en ts

. Ban k of Am eri ca se nt two le tt ers , da te d Ja nu ary 31
, 20 07
, to th e Pet ers on s. One le tt er was se nt by Caro lyn Tho m ps on an d in fo rm ed th e Pet ers on s th at th e Trut h in Len di ng Dis cl os ur e St at em en t di d no t accu rat el y refl ect th e APR an d/ or th e fin an ce ch arg e rel at ed to th e i r l o a n

. A ch eck in th e am ou nt of $7 ,86 0 was

en cl os ed wit h th e le tt er to co rrec t th e erro r—wh ic h th e Pet ers on s cas he d— bu t co pi es

o f th e si gn ed Trut h in Len di ng Dis cl os ur e St at em en t were no t. Ban k of Am eri c a ’s

reco rd s co nt ai n a rece ip t co nf irmatio n in di cat in g th at th e Pet ers on s ha d rece iv ed th is le tt er. The ot he r le tt er was se nt by Mi ay sh a Hut ch in so n an d in fo rm ed th e Pet ers on s th at th e or ig in al Not ic e of Ri gh t to Can cel ha d fai le d to pr ov id e th em wit h th e co rrec t

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-ti m e fram e wit hi n whi ch to can cel th e lo an

. Thi s le tt er co nt ai ne d two ne w co pi es of

th e Not ic e of Ri gh t to Can cel fo rm wit h th e co rrec t ti m e fram e an d req ue st ed th at th e Pet ers on s ex ecu te th e no ti ces an d ret ur n a si gn ed co py to Ban k of Am eri c a

. Th e Pet ers on s bo th te st ifi ed th at th ey di d no t re call ev er rece iv in g Ms

. Hut ch in so n’s le tt er. Thi s le tt er was no t se nt w i th a rece ip t co nf irmatio n an d Ban k of Am eri ca’s reco rd s do no t co nt ai n a ny evi de nc e th at th e Pet ers on s h ad in fact rece iv ed th is let te r.

The Pet ers on s be ga n m ak in g th ei r m on th ly pa y m en ts in acco rd an ce wit h th e lo an in Feb ru ary 20 07
, an d th ey co nt in ue d m ak in g th os e pa y m en ts un ti l t h e y fel l be hi nd on th e m or tg ag e in ap pr ox im at el y Ju ne 20 09

. So m et im e th erea fte r, Ban k of
Am eri ca di sc ov ered th at th e or ig in al m or tg ag e ex ecu te d on Decem be r 13
, 20 06
, ha d be en lo st or m is pl aced an d th us w a s n e v e r pr op erl y reco rd ed

. In a le tt er da te d
Octo be r 16
, 20 09
, Ban k of Am eri ca as ke d th e Pet ers on s to ex ecu te a du pl ic at e

or ig in al m or tg ag e to be reco rd ed in Ano ka Co un ty, Mi nn es ot a. The Pet ers on s refu se d to ex ecu te th e du pl ic at e or ig in al m or tg ag e an d in st ead
, by le tt er da te d
Octo b e r 27
, 20 09
, req ue st ed res ci ss io n of th e lo an be cau se of Ban k of Am eri ca’s al le ge d fa il ur e to pro vi de th e d is cl os ur es req ui red un de r TILA.

Ban k of Am eri ca co m

m en ced th is act io n on Sep te m be r 3, 20 10
, se ek in g,

am on g ot he r th in gs , a de cl arat or y jud gm en t th at it s li en was va li d an d su pe rio r to th e rig ht
, ti tl e, an d in te res t of al l ot he rs cl ai m in g an in te res t in t he Pet ers on s’ ho m e, as well as a de cl arat or y jud gm en t t h at it ha d fu ll y co m pl ie d wit h it s ob li ga ti on s un de r TILA. The Pet ers on s an swe red t h e c om pl ai nt an d co un te rcl ai m ed
, se ek in g

en fo rcem en t of th ei r req ue st ed TILA res ci ss io n, st at ut or y da m ag es un de r TILA, an d

a de cl arat or y jud gm en t th at th ei r ho m e was un en cu m be red by an y se cu rit y in te res t in fav or of B an k o f Am eri ca.

Ban k of Am eri ca m ov ed to di sm is s th e Pet ers on s’ co un te rcl ai m s un de r Fed eral
Ru le of Ci vi l Pro ced ur e 1 2 ( b ) ( 6 ) fo r fai lu re to al le ge th e ab il it y to te nd er ba ck

pa y m en t of th e lo an

. The di st ric t co ur t gr an te d th at m ot io n, bu t st ay ed th e di sm is sa l

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-fo r fo rty-fiv e da y s to al lo w t he Pet ers on s to am en d t he ir co un te rcl ai m s. See D. C t.

Ord er of Mar

. 4, 20 11

. The Pet ers on s fil ed th ei r am en de d an swe r an d co un te rcl ai m s

on A p r i l 4
, 20 11
, an d Ban k of Am eri ca th erea fte r fil ed a m ot io n fo r su m m ary jud gm en t. The di st ric t co ur t gr an te d su m m ary jud gm en t to Ban k of Am eri ca,

co nc lu di ng th at th e Pet ers on s’ res ci ss io n cl ai m wa s ti m e-b arre d un de r 15 U.S.C. §
16 35 (f). See D. Ct. Ord er of A ug

. 23
, 20 12
, at 8. The di st ric t cou rt c on cl ud ed als o th at “ [b ]eca u s e th e Pet ers on s’ res ci ss io n cl ai m is ti m e-b arre d, th ei r cl ai m ag ai ns t [Ban k of Am eri ca] fo r st at ut or y da m ag es fo r fai li ng to res ci nd ne ces sa ril y fai ls as well .” Id

. a t 11

. Alt ern at iv el y , th e di st ric t co ur t fo un d th at th e st at ut or y da m ag es cl ai m was t im e-b arre d u nd er § 16 40 (e). Id

.

II. Dis cu ss io n

W e re v i e w de no vo th e di st ric t co ur t’s gr an t of su m m ary jud gm en t an d m ay affi rm t h e ju dg m en t on an y ba si s su pp or te d by t he reco rd

. St . M art in v. Ci ty o f St

. Pau l, 68 0 F.3 d 10 27
, 10 32 (8 th Ci r. 20 12 ). Su m m ary jud gm en t is ap pr op ria te if th ere

are no ge nu in e di sp ut es of m at eri al fact an d th e m ov in g pa rty is en ti tl ed to jud gm en t

as a m at te r of

law. Fed . R. Civ . P. 56

.

A. Clai m for Res ci ss io n

“ In tra ns a ct io ns se cu red by a pr in ci pa l dwe ll in g, TILA gi ve s bo rro wers an

un co nd it io na l th ree- da y rig ht to res ci nd

. The th ree- da y res ci ss io n pe rio d be gi ns up on th e co ns um m at io n of th e tra ns act io n or th e de li ve ry of th e req ui red res ci ss io n no ti ces

an d di sc lo su res , whi ch ev er oc cu rs la st .” Keir an v. Hom e Cap it al
, In c., 72 0 F.3 d 72 1,
72 5 (8 th Cir . 20 13 ) (i nt ern al ci ta ti on s om it te d)
, pe ti ti on fo r cert . fil ed , 82 U.S.L.W

. 33 83 (U.S. Dec. 9, 20 13 ) (No

. 13 -7 05 ). “ If t h e c r ed it or fai ls to m ak e th e req ui red di sc lo su res or res ci ss io n no ti ces , th e bo rro wer m ay res ci nd be y on d th e un co nd it io na l
th ree- da y pe rio d, bu t th at ‘righ t of res ci ss io n sh al l ex pi re th ree y ears aft er th e da te of

co ns um m at io n o f th e tr an sa ct io n.’” Id. at 72 6 (q uo ti ng 15 U.S.C. § 1 63 5( f)).

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-The Pet ers on s arg ue th at th e di st ric t co ur t erre d by co nc lu di ng th at 15 U.S.C.

§ 16 35 (f) t im e-b arre d t he ir c la im fo r res ci ss io n un de r TILA be cau se of th ei r fai lu re
to fil e a la w s u i t w i t h in th ree y ears of th e tra ns act io n wit h Ban k of Am eri ca. The
Pet ers on s co nt en d th at TILA an d Reg ul at io n Z req ui re on ly th at th e bo rro wer gi ve th e le nd er no ti ce by m ai l, tel eg ram , or ot he r m ean s of writt en co m m un ic at io n th at he is
in vo ki ng th e ri gh t t o re sc is si on wit hi n t hr ee years o f th e tr an sa ct io n.

The Pet ers on s’ arg um en t i s f or ecl os ed by ou r de ci si on in Keir an v. Hom e Cap it al
, In c., in whi ch we he ld “ th at a pl ai nt iff se ek in g res ci ss io n mu s t fil e su it
, as
op po se d to m erel y gi vi ng th e ba nk no ti ce, wit hi n th ree y ears in or de r to pr es erv e th at rig ht pu rs ua nt to § 16 35 (f).” 72 0 F.3 d at 72 8. Alt ho ug h th e bo rro wers in Keir an ha d gi ve n no ti ce wit hi n th e th ree- y ear pe rio d, th ey ha d no t fil ed th ei r la wsu it wit hi n th os e th ree y ears

. Thu s, we he ld th at th ei r res ci ss io n cl ai m s ha d ex pi red un de r § 16 35 (f)

an d th at su m

m ary jud gm en t in fav or of th e le nd ers was ap pr op ria te

. See id .; acco rd
Je si no sk i v. Co un trywide Hom e Loa ns , In c., 72 9 F.3d 10 92 (8 th Ci r. 20 13 ) pe ti ti on fo r cert

. fil ed
, 82 U.S.L.W

. 33 66 (U.S. Dec. 6, 20 13 ) (No

. 13 -6 84 ); Hart m an v. Sm it h,
73 4 F.3 d 75 2 (8 th Ci r. 20 13 ). Si m il arl y in th is cas e, be cau se th e Pet ers on s no ti fie d
Ban k of Am eri ca of th ei r in te nt to res ci nd bu t fai le d to fil e a la wsu it wit hi n th e th reey ear pe rio d, th e di st ric t co ur t di d no t e r r in de te rm in in g th at th e Pet ers on s’ rig ht to

r e s c i s s i on ha d ex pi red an d th at th ei r res ci ss io n cl ai m was ti m e-b arre d un de r § 1 63 5( f).

B. Fai lu re-t o- Res ci nd Cla im

The Pet ers on s co nt en d fu rth er th at th e di st ric t co ur t erre d by gr an ti ng Ban k of
Am eri ca su m

m ary jud gm en t on th ei r fai lu re-t o- res ci nd cl ai m

. Tit le 15
, Uni te d St at es Co de
, Sect io n 16 40 (a) pr ov id es th at “ an y cred it or who fai ls to c o mp l y w it h an y
req ui rem en t im

po se d un de r

. . . § 16 35

. . . is li ab le ” fo r st at ut or y da m ag es as well as
at to rn ey ’s fees

. The di st ric t co ur t co nc lu de d th at “ [b ]ecaus e th e Pet ers on s’ res ci ss io n cl ai m is ti m e-b arre d, th ei r cl ai m ag ai ns t [Ban k of Am eri ca] fo r st at ut or y da m ag es fo r

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-fai li ng to res ci nd ne ces sa ril y fai l s a s w e l l

. ” D. Ct

. Ord er of Aug

. 23
, 20 12
, at 11

.

Alt er nati ve ly, th e di st ric t co ur t co nc lu de d th at th e Pet ers on s’ st at ut or y da m ag es cl ai m

was ti m e-b arre d be cau se it was fil ed m or e th an on e y ear aft er th e al le ge dl y de fect iv e cl os in g of th e m or tg ag e. Id .; se e al so 15 U.S.C. § 16 40 (e) ( e s ta bl is hi ng a on e-year
st at ut e o f li m it at io ns th at accr ue s fr om th e d at e o f th e o ccu rren ce o f th e v io la ti on ).

“ The fai lu re t o re sc in d wh en a de bt or is en ti tl ed to res ci ss io n . . . vi ol at es th e Act.” In re Sm it h, 73 7 F.2d 15 49
, 15 52 (11 th Cir

. 19 84 ); see al so Keir an , 72 0 F.3d

at 72 9 (“ TILA al lo ws for actu al da m ag es an d att or ne y fees when a cred it or vi ol at es th e st at ut e (wh ic h pre su m ab ly in cl ud es an al le ge d vi ol at io n of the co ns um er’s righ t
to res ci nd )[.]”). In Keir an , we reject ed th e p r e mi s e t ha t a fai lu re-t o- res ci nd cl ai m

ne ces sa ril y

fai ls when th e res ci ss io n c la im it se lf ex pi res un de r § 1 63 5( f). 72 0 F .3d

at 72 9. W e co nc lu de d th at al th ou gh th e pl ai nt iff s’ res ci ss io n cl ai m it se lf was ba rred
,

“ § 16 35 (f)’s st at us as a st at ut e of rep os e m ean s th at th e rig ht was ex ti ng ui sh ed aft er th ree y ears , no t th at th e rig ht ne ve r ex is te d.” Id

. Thu s, “ ev en th ou gh [th e pl ai nt iff s’] cl ai m fo r act ua l res ci ss io n [was ] no t ti m el y

. . . [th ei r] cl ai m s fo r m on ey da m ag es ba se d up on th e b a n k s ’ fai lu re to res ci nd [was ], at th e ve ry le as t, co gn iz ab le .” Id

. Acco rd in gl y , th at th e Pet ers on s’ res ci ss io n cl ai m fai le d as a m at te r o f l a w u n de r §
16 35 (f) do es no t m an da te th e co nc lu si on tha t the ir fa ilu re -t o- re sc ind cl ai m ne ces sa ril y fai ls as we ll

.

Nor was th e fai lu re-to-r es ci nd cl ai m tim e-b arre d un de r § 16 40 (e). “ The fai lu reto -res ci nd cau se of act io n accr ue [s ] whe n pl ai nt iff s reques t[ ] re sc iss ion an d th e ba nk [] de ni e[s ] th e req ue st .” Keir an , 72 0 F.3 d at 72 9. The Pet ers on s ga ve Ban k of Am eri ca th ei r no ti ce of res ci ss io n on Octo be r 27 , 2 00 9. Und er § 16 35 (b ), Ba n k of Am eri ca ha d twen t y d a ys to ta ke act io n on th e Pet ers on s’ no ti ce of res ci ss io n, bu t to ok no
act io n at al l. The Pet ers on s’ fai lu re-t o- res ci nd cl ai m th us accr ue d on Nov em be r 16
, 20 09 —t wen ty da y s aft er Ban k of Am eri ca rece iv ed th e no ti ce of res ci ss io n. Bec au se th e Pet ers on s fil ed th ei r fai lu re-t o- res ci nd cl ai m on Nov em be r 3, 20 10
, th at cl ai m was ti m el y un de r § 1 64 0( e)’s o ne -y ear s ta tu te of l im it at io ns

.

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-Ban k of Am e r i c a arg ue s in th e al te rn at iv e th at su m m ary jud gm en t on th e Pet ers on s’ fai lu re-t o- res ci nd cl ai m was pr op er be cau se t h e r e w e re no ge nu in e dis pu te s of m at eri al fact whe th er a di sc lo su re vi ol at io n oc cu rred pe rm it ti ng res ci ssi on

un de r TILA or whe th er the Pet ers on s were ab le to te nd er back pa y m en t of the lo an

.

The Pet ers on s arg ue th at th ere is a ge nu in e is su e of m at eri al fact whe th er Ban k

o f A mer i c a de li ve red to th em an y TILA di sc lo su res or no ti ces

. Alt ho ug h th e y ack no wled ge th at th ey si gn e d th e Trut h in Len di ng Dis cl os ur e St at em en t an d th e Not ic e of Ri gh t to Can cel
, t h e y t es ti fie d th at th ey di d no t rece iv e co pi es of th es e do cu m en ts

. Reg ul at io n Z req ui res a cred it or to de li ve r to each bo rro wer a co py of al l

m at eri al di sc lo su res an d two co pi es of th e no t i c e o f t h e r i gh t to res ci nd

. 12 C.F.R. § 22 6.2 3 ( a)(3 ), (b )(1 ). If th e cred it or fai ls to do so , th e bo rro wer m ay ex erci se th e rig ht to res ci nd

. 12 C.F.R. § 22 6.2 3( a)(3 ). W rit te n ack no wled gm en t of rece ip t of th e di sc lo su res crea te s a reb ut ta bl e pr es um pt io n th at th e di sc lo su res were de li ve red to th e bo rro wers

. 15 U.S.C. § 16 35 (c). The Pet ers on s, ho wev er, ha ve of fere d ev id en ce th at Ban k of Am eri ca fai le d to de l i v e r t h e req ui red do cu m en ts

. The y te st ifi ed th at th e cl os in g ag en t to ok th e do cu m en ts af t e r th ey ha d si gn ed th em an d di d no t th erea fte r gi ve th em co pi es . Taki ng th e ev id en ce in th e li gh t m os t favo rab le to th e Pet ers on s, th ei r te st im on y reb ut s t h e p r e s u mpti on of de li ve ry an d crea te s a ge nu in e is su e of

mat e r i a l fact fo r tri al

. See St ut zk a v. McC arv il le
, 42 0 F.3 d 75 7, 76 2- 63 (8 th Ci r

. 20 05 ) (co nc lu di ng th at th e pr es um pt io n of de li ve ry was reb ut te d ba se d on th e bo rro wer’s affi da vi t th at sh e di d n ot rece iv e th e do cu m en ts ); se e al so Cap pu cci o v. Pri m e Cap it al Fu nd in g LLC, 64 9 F.3 d 18 0, 18 9- 90 (3 d Ci r. 20 11 ) (“ [W] e ho ld th at th e te st im on y of

a bo rro wer al on e is su ffi ci en t t o o ve rco m e TILA’ s p res um pt io n o f

rece ip t.”)

. Acco rd in gl y , th e cas e m us t be rem an de d to th e d i s t r ic t co ur t fo r fu rth er
pr oc eed in gs , in cl ud in g a rul in g o n B an k o f Am eri ca’s al te rn at iv e arg um en ts

.

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-III. Co nc lu si on

W e affi rm th e gr an t of su m mar y ju dg m en t to Ban k of Am eri ca on th e Pet ers on s’ co un te rcl ai m fo r res ci ss io n, va cat e th e gr an t of sum m ar y j udgm en t to Ban k of Am eri ca on th e P e t e r s o n s ’ co un te rcl ai m fo r st at ut or y da m ag es , an d rem an d fo r fu rth er p ro ceed in gs co ns is te nt wit h t hi s o pi ni on

.

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