CUDAHY, Circuit Judge.
This case concerns rescission procedures and the calculation of attorneys' fees under the Truth in Lending Act (TILA). On November 16, 2006, appellant Wilson Iroanyah closed on two separately documented loans. Appellee Taylor Bean & Whitaker Mortgage Corporation (TBW) loaned Wilson $192,000 (first loan) and $36,000 (second loan). Wilson and his wife, appellant Joan Iroanyah, own a home in Streamwood, IL, which they used to secure both loans. As is often the case in mortgage procedures, TBW assigned the loans to banks. The first loan went to Bank of New York Mellon (BNY)
Wilson signed and received a number of documents at closing as part of the Truth in Lending Disclosures, including at least one Notice of Right to Cancel under TILA for each loan. TILA requires two notices per loan. The Iroanyahs contend that
Unable to afford payments according to the terms of the loan any longer, the Iroanyahs stopped making the required payments on the second loan in April of 2008 and stopped making payments on the first loan the following month. Roughly four months later, TBW initiated foreclosure proceedings in state court, to which the Iroanyahs responded by sending a rescission notice to TBW for the first loan, citing deficient disclosure statements in violation of TILA as the basis for rescission. While TBW denied that the disclosure statements violated TILA, it agreed to rescind the loan if the Iroanyahs first tendered $169,015.30. The Iroanyahs refused this offer and sent rescission notices to TBW and BOA for the second loan, to which neither of the parties responded.
The Iroanyahs then filed a complaint alleging defects in both of the mortgage loans, seeking rescission, statutory damages and fees and costs. Specifically, the Iroanyahs asserted that the loan documents violated TILA (1) by failing to adequately disclose the frequency of payments because they did not specifically include the word "monthly" in the payment schedule; and (2) by failing to supply the correct number of copies of the notice of right to cancel the loans. In addition to these defects with the mortgages themselves, the Iroanyahs alleged that the Defendants violated TILA by failing to properly respond to the initial demand for rescission.
At the close of discovery, all parties moved for summary judgment. The Defendants also moved in the alternative, requesting the court to set reasonable rescission procedures. All motions were granted in part and denied in part. The Iroanyahs prevailed on the question whether the disclosure statements violated TILA. This meant that their right of rescission — which would have been limited to three days in the absence of a TILA violation — extended to three years, and the action was therefore timely. However, the Iroanyahs' claim for statutory damages stemming from the disclosure violations was denied because TILA imposes a one year limitation period on that claim, which had run. The Iroanyahs also prevailed on the question whether the Defendants' failure to respond to their rescission notices itself violated TILA. This resulted in an award of statutory damages for the failure to respond and actual damages for the attorneys' fees they incurred while defending against the state court foreclosure action.
The court then rejected the Iroanyahs' proposal that they be allowed to repay in installments over the life of the original loans, reasoning that this repayment plan would effectively reform the loans into zero interest loans, which would be inequitable to the Defendants. Alternatively, the Iroanyahs asked for six months to obtain financing in order to make tender, conceding that they could not currently make tender. The Defendants requested instead that the court give the Iroanyahs thirty days to tender. The court split the difference, giving the Iroanyahs ninety days to make tender. The court stated that if the Iroanyahs succeeded in obtaining financing, it would order a rescission, but if they could not find alternative financing, it would give judgment to the Defendants on the rescission claims.
The Iroanyahs then filed a petition seeking an award of $38,812 in attorneys' fees and costs against BNY and $33,849 against BOA. The Defendants challenged these amounts on the basis that a majority of the fees were incurred while arguing claims on which the Iroanyahs failed — namely, on their proposed rescission procedures and on their time-barred claims for damages. As a result, the district court awarded fees and costs in the amount of $16,433 against BNY and $13,433 against BOA.
Ultimately the Iroanyahs were unable to make tender in the timeframe the court established. Therefore, the court entered judgment for the Defendants on the rescission claims. The Iroanyahs now appeal the district court's ability to condition rescission on tender, its rejection of their proposed installment plan and imposition of the ninety day repayment term and its award of attorneys' fees.
The default procedures under TILA § 1635(b) and Regulation Z require the creditor to release its security interest and return all money paid in connection with the transaction before the borrower is required to tender full repayment. 15 U.S.C. § 1635(b); 12 C.F.R. § 226.23(d)(4). However, courts also retain discretion to change the order of the procedure as long as the change does not interfere with the borrower's substantive right to rescind. Thus, the question here is whether the district court was within its discretion to require tender before the security interests were released and interest payments returned, and whether in light of the failure to tender repayment dismissal of the rescission action was appropriate. The Iroanyahs contend that TILA bars any court from conditioning rescission upon repayment. As this is a question of statutory interpretation, we review the district court's decision in this regard de novo. Because rescission is an equitable remedy involving mutual obligations, we affirm the district court in rejecting the Iroanyahs' interpretation of TILA.
The Iroanyahs put forth two mutually incongruous propositions to support their
At oral argument the Iroanyahs abruptly changed direction, claiming they were not challenging the district court's refusal to void the security interest without repayment of principal (and, rather disingenuously, that they never had). Instead, they argued that despite the inability to repay, the Iroanyahs are entitled to the other key benefit of rescission — the reduction of the original loan amount by interest and fees paid. Consequently, they claim that the district court was not permitted to dismiss their rescission claim because they were automatically entitled to this benefit of rescission, even though they expressly conceded that the primary benefit of rescission — voiding the security interest — is not available without repayment. Thus, the Iroanyahs essentially argue that they deserve one aspect of TILA's rescission remedy (reduction of interest and fees) even though they concede that they are not entitled to the other aspect of TILA rescission (security interest termination) and also concede that they cannot satisfy their tender obligations. It is ultimately unimportant which of these incongruous arguments the Iroanyahs wish to stand on, since both evince a flawed conception of rescission.
The Iroanyahs rely on a flawed interpretation of TILA and its implementing regulations and commentary to conclude that they have fully unconditional right to rescission. Their basis for this argument lies in the language of the official interpretations to Regulation Z, which state:
Based on this language, the Iroanyahs repeat over and over that the procedures, which can be modified by the district court, cannot affect the borrower's right to rescind. In other words, they contend that once a court determines rescission under TILA is available, it is fully unconditional whether or not principal is repaid.
What the Iroanyahs misunderstand is that rescission is a process involving two parties, each with their own obligations. See, e.g., Andrews v. Chevy Chase Bank, 545 F.3d 570, 573-74 (7th Cir.2008); Yamamoto v. Bank of New York, 329 F.3d 1167, 1173 (9th Cir.2003) ("[R]escission under § 1635(b) is an on-going process consisting of a number of steps"). It is an equitable remedy that, in the absence of court intervention, would ordinarily require the consent of both parties to accept certain obligations. Andrews, 545 F.3d at 573-74.
The Iroanyahs also challenge the district court's rejection of their 26-year, interest-free installment plan. We review the district court's rejection of the Iroanyahs' proposed installment plan and its imposition of a ninety day repayment period for abuse of discretion. See Yamamoto, 329 F.3d at 1173.
In mounting their challenge to the ninety day period imposed by the district court, the Iroanyahs misinterpret the district court order. They argue that the court erroneously believed that TILA generally does not permit tender installment plans, and that the district court's decision was infected by that misunderstanding. Thus, the Iroanyahs cited cases only support the unchallenged position that installment plans may be considered under TILA. See, e.g., Coleman v. Crossroads Lending Grp., No. 09-CV-0221, 2010 WL 4676984 (D.Minn.2010); In re Sterten, 352 B.R. 380 (Bankr.E.D.Pa.2006). Nothing in the district court's opinion suggests it believed TILA barred all installment plans. Instead, the district court made a discretionary determination that this installment plan would be inequitable. We agree.
There are several factors supporting the district court's rejection of this installment plan. First, the Defendants here are not the wrongdoers. They are subject to liability as assignees, but they were not the ones responsible for the deficiencies in the disclosures giving rise to the Iroanyahs' claims. Second, these TILA violations were hyper-technical disclosure deficiencies, which Iroanyahs' admitted caused no actual harm. Third, since they remained in their home despite not making mortgage payments since 2008, the Iroanyahs have actually benefitted from the lengthy
At oral argument, the Iroanyahs claimed, without support, that if the district court was unsatisfied with the Iroanyahs' installment plan, then it should have imposed another more equitable installment plan. Again, the Iroanyahs direct our attention to many cases where courts have imposed installment plans. While these cases suggest that an installment plan may be within the court's discretion to impose, they in no way hold that not implementing an installment plan is an abuse of discretion. See, e.g., Coleman, 2010 WL 4676984, at *8-9; Sterten, 352 B.R. at 389-90. The district court was not required to create an installment plan — a judge's discretion to amend rescission procedures is not so limited. Cf. Yamamoto, 329 F.3d at 1173.
Finally, the Iroanyahs complain that the ninety day repayment plan was "unworkable," and thus an abuse of discretion. However, the Iroanyahs are entitled to an equitable plan, but not necessarily one that circumstances will accommodate. Here, as with their primary contentions discussed above, the Iroanyahs misunderstand the nature of rescission. Even the powerful right to rescind under TILA does not guarantee that the Iroanyahs can actually comply with the terms of rescission. See Marr, 662 F.3d at 968. Here, it is clear that the Iroanyahs are simply not financially able to take advantage of rescission. As the district court noted, courts have imposed repayment periods ranging from less than one month to more than a year. See e.g., Shelton, 486 F.3d at 821 (requiring immediate tender); Hughes, 938 F.2d at 890 (requiring tender within a year). The Iroanyahs requested six months to repay, while the Defendants requested that they be given only one month to repay — neither party provided a compelling reason for their proposal. Ultimately the district court set the repayment period at ninety days, determining that "thirty days would be too short for most borrowers [to obtain financing], while six months would be too long, for if the Iroanyahs cannot obtain refinancing in three months, it is unlikely they could do so in six." The Iroanyahs never actually attempted to secure financing, nor did they submit evidence showing that the court's chosen procedure would render any attempt to secure financing impossible.
Therefore, considering the broad discretion the district court had to set these rescission procedures, and the wide range of time periods other courts have found reasonable, we find nothing about the district court's ninety day period to suggest an abuse of discretion.
In the final issue on appeal the Iroanyahs challenge the amount of attorneys' fees awarded by the district court. In general, we are deferential to a court's determination of attorneys' fees. E.g., Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir.2011). Nothing in the record suggests that the district court abused that discretion in either reducing the lodestar for the Iroanyahs' fee request based on their limited success or in reducing the hourly rate for the Iroanyahs' lead counsel.
The Iroanyahs do not challenge the amount by which the district court reduced the lodestar (50%). Instead, they challenge whether any reduction was reasonable. Their argument is premised upon the alleged error the district court made in conditioning rescission upon repayment. As we have discussed, the district court made no such error. The Iroanyahs sought damages and rescission under TILA — they succeeded only in being awarded damages. Therefore, the Iroanyahs' theory of the case was not, as they argue, fully vindicated, and the district court was well within its discretion in reducing the lodestar.
The Iroanyahs also asserted three grounds to support a fee of $500 per hour for their lead counsel, Mr. Brooks: the Laffey Matrix, a list of 56 cases Mr. Brooks litigated in the Northern District of Illinois and other TILA cases in the Northern District of Illinois where hourly rates awarded were between $450 and $475. The district court addressed each of these grounds. The Laffey Matrix is a chart of hourly rates in the Washington, D.C. area. However, the district court correctly noted that it is not determinative, or even persuasive, evidence of a reasonable hourly rate in the Northern District of Illinois. See Pickett, 664 F.3d at 649-50 (noting the varying degree of skepticism with which courts view the Laffey Matrix, especially outside of the D.C. Circuit). The district court did not find the list of Mr. Brooks' cases in the Northern District of Illinois persuasive because that list did not identify which cases were similar to this one, giving no basis for the comparison. Finally, the district court rejected evidence of other attorneys' fee awards for TILA cases in the Northern District, because that evidence shows only that some attorneys in the Northern District of Illinois merited an hourly award higher than $350 in TILA actions, but not why Mr. Brooks would be entitled to a similar rate.
Instead, the district court relied upon Mr. Brooks' $350 hourly rate in a 2009 TILA case he litigated in this district, which the court raised to $375 to match the unchallenged hourly rate of his junior counsel. The court noted that "the $350 hourly rate recently approved in one of Brooks' other TILA cases is better evidence of his market rate than the rates approved for other attorneys." Thus, the district court, contrary to Iroanyahs' assertions, adequately addressed each of the grounds upon which they based their fee award, and finding them unpersuasive, reduced the fee. There is nothing in the district court's opinion which would suggest it abused its discretion in reducing the hourly rate.
We affirm.