Court Opinion

ID: 620028
Source: CourtListenerOpinion
Date Created: 2011-12-30 01:01:43+00
Date Added: 2024-06-11T17:50:50.557555
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                DEC 29 2011

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

WILLIE J. CAUSEY, JR.,                           No. 10-56021

              Plaintiff - Appellant,             D.C. No. 2:08-cv-03460-JHN-CW

    v.
                                                 MEMORANDUM*
U.S. BANK NATIONAL
ASSOCIATION, Trustee for Lehman
Brothers-Structured Asset Investment
Loan Trust Sail 2006-BNC3,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                  Jacqueline H. Nguyen, District Judge, Presiding

                     Argued and Submitted December 7, 2011
                              Pasadena, California

Before: B. FLETCHER, SILVERMAN, and WARDLAW, Circuit Judges.

      Willie J. Causey, Jr. appeals the district court’s grant of summary judgment

for defendant U.S. Bank National Association on his Truth in Lending Act claim to

rescind his mortgage refinancing loan with the defendant. Reviewing de novo, we

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                         -2-

reverse and remand. See Blue Lake Rancheria v. United States, 653 F.3d 1112,

1115 (9th Cir. 2011).

      It is undisputed that the plaintiff effectively invoked his absolute right to

rescind the transaction within three business days of the loan closing. It is also

undisputed that the lender ignored the plaintiff’s rescission notice and proceeded to

fund the loan. The district court erred in ruling that the plaintiff was required to

tender the borrowed funds to the defendant before the defendant was obligated to

release its lien. In an uncontested rescission as here, the default sequence under the

Act requires the creditor to release its lien before the consumer must tender. See

15 U.S.C. § 1635(b); 12 C.F.R. § 226.23(d)(2)–(3).

      Although the district court is authorized to modify the default sequence, that

authority ends once rescission is accomplished. 15 U.S.C. § 1635(b); 12 C.F.R.

§ 226.23(d)(4). In a case where the creditor disputes the consumer’s asserted

ground for rescission, rescission is not accomplished until a court determines that

the consumer had the right to rescind. See Yamamoto v. Bank of N.Y., 329 F.3d

1167, 1172 (9th Cir. 2003). But in a case where the creditor acquiesces in the

consumer’s notice of rescission or fails to respond within the 20-day response

period, rescission is accomplished automatically. See id.
                                        -3-

      Here, the undisputed facts show that the plaintiff timely mailed his

rescission notice, and the defendant failed to dispute it within 20 days — thus

accomplishing rescission automatically and triggering the default sequence under

the regulations.

      On remand, the district court should order that the defendant release its lien

on the plaintiff’s home and determine the amount that the plaintiff must then tender

to the defendant. Also, the plaintiff may present evidence to support his assertion

that he attempted to tender in 2006 but the defendant did not timely take

possession of the tender he offered.

      REVERSED AND REMANDED.