REDDEN, District Judge:
On May 11, 2011, Magistrate Judge Dennis Hubel filed his Findings and Recommendation (doc. 39) that the court dismiss plaintiffs' claim for statutory damages and their claims against defendant BAC Home Loans Servicing, but denying defendants' motion to dismiss plaintiffs' remaining claims. Magistrate Judge Hubel also recommended the court grant plaintiffs' motion to strike the Declaration of Kaley F. Fendall.
The matter is now before this court. 28 U.S.C. § 636(b)(1)(A); Fed. R.Civ.P. 72(b). Although plaintiffs' timely filed partial objections, the parties subsequently stipulated to plaintiffs' withdrawal of those objections "so that the court [may] review the Findings and Recommendation as not having been objected to by either party." Stipulated Withdrawal of Plaintiffs' Partial Objection, at 2 (doc. 43). This relieves me of my obligation to review Magistrate Judge Hubel's factual findings de novo. 28 U.S.C. § 636(b)(1)(C); see also Thomas v. Arn, 474 U.S. 140, 149-50, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir.2003). Having reviewed the legal principles de novo, I find no error.
Accordingly, I ADOPT Magistrate Judge Hubel's Findings and Recommendation (doc. 39) as my own opinion. I GRANT in part, and DENY in part defendants' motion to dismiss (doc. 16) as follows. I GRANT defendants' motion to dismiss plaintiffs' claim for statutory damages. I GRANT the motion to dismiss plaintiffs' claims against defendant BAC Home Loans Servicing, and DISMISS the claims against BAC Home Loan Servicing without prejudice. I DENY the motion to dismiss plaintiffs' remaining claims, including their claim for attorney fees and costs. Finally, I GRANT plaintiffs' motion to strike the Declaration of Kaley F. Fendall.
IT IS SO ORDERED.
HUBEL, United States Magistrate Judge.
On August 26, 2010, the plaintiffs Jorge Cazarez Garcia and his wife, Miriam M. Marquez, filed a Complaint against the defendants Fannie Mae (the commonlyused nickname for the Federal National Mortgage Association) ("FNMA"), BAC Home Loans Servicing ("BAC"), and Abacus Mortgage, Inc. ("Abacus"), alleging violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), in connection with the plaintiffs' 2007 refinance of their home. Dkt. # 1.
In their Complaint, the plaintiffs allege they refinanced their home with Abacus on August 27, 2007.
The plaintiffs allege Abacus violated the TILA in two specific respects. First, they assert that the "Notice of Right to Cancel" (the "Notice") given to them at the time of the transaction failed to comply with the Act because it omitted the date on which the rescission period expired. Dkt. # 1, ¶ 15 & Ex. A. Second, they claim the Notice violated the TILA in misstating the date of the transaction as August 24, 2007, when the "actual date of the transaction was August 27, 2007." Id. The plaintiffs argue these defects in the Notice were material, extending the time within which they could rescind the transaction from three days to three years following consummation of the transaction. Id., ¶ 17 (citing 15 U.S.C. § 1635(f)
The plaintiffs claim they tendered a notice of rescission to all three defendants by certified mail on August 2, 2010. Their notice also "explained that plaintiffs had arranged financing to permit them to tender back the principal owing after their rescission of this loan was honored." Id., 1118. According to the plaintiffs, BAC expressly denied their attempted rescission by letter dated August 18, 2010. They further claim that their notice of rescission mailed to Abacus at the address set forth on the Notice was returned as undeliverable. Id., ¶ 19.
The plaintiffs allege the defendants have failed to comply with their obligations under the TILA and its implementing regulations. They assert that they have prequalified to refinance their home at a 4.712% APR, and they will consummate that transaction once the defendants have complied with their obligations under 15
On December 30, 2010, FNMA and BAC jointly filed a Motion to Dismiss, a supporting brief, and a Declaration of Kaley F. Fendall, one of the defendants' attorneys.
Chief Judge Aiken of this court recently set forth the standard for the court's consideration of a motion to dismiss in Gambee v. Cornelius, No. 10-CV-6265-AA, 2011 WL 1311782 (D.Or. Apr. 1, 2011) (Aiken, C.J.). Judge Aiken observed:
Id. at *2.
The plaintiffs attach to their Complaint unsigned and incomplete copies of the Notice of Right to Cancel which they claim to have received at the time the transaction was consummated. See Dkt. # 1, Ex. A. The Notices attached to the plaintiffs' Complaint misstate the transaction date as August 24, 2007 (the transaction actually was consummated on August 27, 2007); do not contain the deadline by which the plaintiffs could exercise their right to cancel; and are not signed by the plaintiffs. Id.
Attached to the Fendall declaration are completed copies of the Notice (the "alternative Notices"). Dkt. # 18, Ex. 1, pp. 2 & 3. On the alternative Notices, the date has been corrected to August 27, 2007; the deadline for cancellation has been filled in as August 30, 2007; and both of these dates appear to have been initialed by the plaintiffs. In addition, it appears each of the plaintiffs signed an Acknowledgment of Receipt stating, "Each of the undersigned hereby acknowledges the receipt of two (2) completed copies of this notice of right to cancel." Id.
The defendants argue the plaintiffs' signatures on the alternative Notices, whereby the plaintiffs "expressly acknowledg[ed] receipt of two complete copies of the [alternative Notice]," obviate their claim that the Notice was defective. Dkt. # 16, p. 4 (emphasis in original). They further assert the plaintiffs are attempting to "take grave advantage of the consumer protection afforded by TILA," arguing the plaintiffs are simply attempting "to take advantage of a more favorable interest rate . . . after entering into a loan agreement." Id., p. 2.
The plaintiffs move to strike the Fendall declaration, arguing the alternative Notices attached to the declaration have not been authenticated properly, they are evidence outside the pleadings that should not be considered on a motion to dismiss, and even if the court considers the alternative Notices submitted by the defendants, the case still is not appropriate for dismissal.
Because it appears the propriety of the court's consideration of the alternative Notices could be dispositive of both the defendants' motion and, indeed, of the plaintiffs' case, the court will address that issue first.
The plaintiffs argue the alternative Notices have not been authenticated properly. They claim Ms. Fendall does not have "personal knowledge of the facts" as she claims in paragraph 1 of her declaration. Id. Ms. Fendall conceded this at oral
In support of their argument, the plaintiffs rely on Blount v. Connecticut General Life Insurance Co., No. 01-CV-1341-BR, slip op., 2002 WL 31974405 (D.Or. July 2, 2002) (Brown, J.). In Blount, Judge Brown considered a situation almost identical to the present one, in the context of a motion for summary judgment.
In support of their motion for summary judgment, the Blount defendants submitted the affidavit of their attorney with attached exhibits. The plaintiff moved to strike the affidavit because it was not based on the attorney's personal knowledge, and failed to lay a proper foundation for admissibility of the exhibits. The court's discussion of the issue is directly on point in the present inquiry:
"Evidence that is not properly authenticated will not be considered by the court when reviewing a motion for summary judgment. Orr v. Bank of America, 285 F.3d 764, 773 (9th Cir.2002)." Kesey, LLC v. Francis, No. 06-CV-540-AC, slip op., 2009 WL 909530, at *2 (D.Or. Apr. 3, 2009) (Acosta, M.J.) (noting that "judges in this district have cited Orr on numerous occasions and have, for the most part, applied and enforced the authentication requirements set forth therein[,]" and cataloguing cases). The same is true when the court considers evidence outside the pleadings that is submitted in support of a motion to dismiss. See id.; Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir.1996) (motion to dismiss must be treated as one for summary judgment if court relies on materials outside the pleadings submitted in support of or opposition to the motion to dismiss); Fed.R.Civ.P. 12(d).
The defendants, however, argue the court should consider the alternative Notices because they were "partially generated by plaintiffs themselves, as [they] contain [] plaintiffs' own signatures and acknowledgement." Dkt. # 35, pp. 2-3. They argue the plaintiffs should not be allowed to defeat the motion to dismiss "by deliberately omitting references to documents upon which their claims are based." Id. (citing Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998)).
"As a general matter, a district court may not consider any material outside of the pleadings when ruling on a Rule 12(b)(6) motion. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001)." O'Connell-Babcock v. Multnomah County, Oregon, No. 08-CV-459-AC, slip op., 2009 WL 1139441 at *4 (D.Or. Apr. 24, 2009) (King, J.). However, the Ninth Circuit recognizes an exception to this rule that allows consideration of documents "`whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading.' Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994)." Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir.1998), superseded by statute on other grounds as recognized in Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 681 (9th Cir.2006). The purpose of the exception is to "[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based[.]" Parrino, 146 F.3d at 706 (citing Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir.1993)).
The Parrino court held "that a district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff's complaint necessarily relies." Id. The court further observed:
The defendants note that nowhere have the plaintiffs disputed that the alternative Notices contain their signatures, nor do the plaintiffs deny that the dates were inserted at the time they initialed and signed the alternative Notices. Nevertheless, the plaintiff's failure to dispute the authenticity of the alternative Notices does not amount to their admission that the alternative Notices are authentic or that they were provided with complete copies of the alternative Notices at closing. Thus, one of the prerequisites to the court's consideration of the alternative Notices—i.e., that the authenticity of the documents not be contested—is absent here, with the result that the court cannot consider the unauthenticated documents in connection with the defendants' motion to dismiss. See, e.g., Newsom v. Countrywide Home Loans, Inc., 714 F.Supp.2d 1000, 1009 (N.D.Cal.2010) (plaintiffs disputed they received copies of completed forms bearing their signature; court could not resolve the issue on motion to dismiss, holding the determination was "more appropriately made by way of a motion for summary judgment").
Accordingly, the Fendall declaration and its attached exhibits should be stricken.
Relying, then, only on the defective Notices attached to the plaintiffs' Complaint, it is clear the plaintiffs have stated a claim upon which relief could be granted. Accepting, for purposes of the defendants' motion to dismiss, that the facts as alleged by the plaintiffs in their Complaint are true, the plaintiff received incomplete Notices at closing, which would form the basis for the plaintiffs' claim that the defendants failed to comply with the TILA disclosure requirements. Therefore, the motion to dismiss should be denied.
However, should the District Judge disagree with my conclusion that the Fendall declaration and exhibits should be stricken, then the court must address the effect of those documents on the defendants' motion to dismiss.
The defendants argue that the plaintiffs' signatures on the alternative Notices conclusively prove the plaintiffs received complete copies of the alternative Notices, and preclude the plaintiffs' action against not only FNMA, but any assignee of the plaintiff's loan. The plaintiffs disagree. Both parties' arguments are based on various courts' interpretations of two sections of the TILA.
Section 1641, entitled "Liability of assignees," provides in pertinent part as follows:
15 U.S.C. § 1641(b).
Section 1635(c), referred to in section 1641(b), entitled "Rebuttable presumption of delivery of required disclosures," provides:
15 U.S.C. § 1635(c).
The defendants argue the "rebuttable presumption" standard found in section 1635(c) only applies to original creditors, not to subsequent assignees. They maintain the "conclusive proof" standard of section 1641(b) should be applied to subsequent assignees of the original creditor when the borrower signed an acknowledgement of receipt of the required disclosures. Dkt. # 17, pp. 6-9 & n. 2.
The plaintiffs disagree, based on a plain reading of the statutes and because they argue it would be inappropriate to apply the presumption standard on a motion to dismiss. Dkt. # 23, pp. 10-11. In support of this second argument, the plaintiffs rely on Morris v. Bank of America, No. C09-2849-SBA, slip op., 2010 WL 761318 (N.D.Cal. Mar. 3, 2010). In Morris, the court was faced with facts nearly identical to those the court faces here. The plaintiffs alleged they had not received copies of the rescission notice as required by the TILA. The defendants (which included FNMA and BAC) filed a motion to dismiss, attaching what purported to be copies of the rescission notices bearing both of the plaintiffs' signatures. The defendants urged the court to apply the rebuttable presumption under section 1635(c). The court held as follows:
Morris, 2010 WL 761318 *4.
In the present case, both the plaintiffs and the defendants recognize that courts across the country conflict in their interpretations of whether or not to apply the "rebuttable presumption" standard or the "conclusive proof" standard to rescission claims brought against an assignee. Cases cited by the defendants in support of their position include Chernik v. Bank of America Home Loans, No. 2:09-cv-02746, slip op., 2010 WL 3269797, at *2 (E.D.Cal. Aug. 18, 2010) (on motion to dismiss, applying "rebuttable presumption" standard to defeat plaintiffs' TILA claim against mortgage assignee); Hughes v. Equity Plus Financial, No. 09cv2927, slip op., 2010 WL 2836828, at **6-7 (S.D.Cal. Jul. 19, 2010) (on motion to dismiss, court held attempted rescission was precluded where plaintiff signed acknowledgement of receipt of Notice of Right to Cancel and did not challenge the document's authenticity); Johnston v. Lindaur, No. 2:07-cv-1280, slip op., 2010 WL
Besides Morris, discussed above, cases cited by the plaintiffs in support of their position include Newsom v. Countrywide Home Loans, Inc., 714 F.Supp.2d 1000, 1009 (N.D.Cal.2010) (where plaintiffs disputed they received complete copies of notices allegedly bearing their signatures, court could not consider documents on motion to dismiss) (citing Olivera v. American Home Mortg. Serv., Inc., 689 F.Supp.2d 1218, 1222 (N.D.Cal.2010); Woods v. Greenpoint Mortg. Funding, Inc., 2010 WL 1729711, at *2 (E.D.Cal. Apr. 28, 2010); Burch v. GMAC Mortg., LLC, 2010 WL 934088, at *2 (N.D.Cal. Mar.15, 2010)); Botelho v. U.S. Bank, N.A., 692 F.Supp.2d 1174, 1177-78 (N.D.Cal.2010) (same); Pearce v. Bank of America Home Loans, No. C 09-3988, 2010 WL 689798 at *3 (N.D.Cal. Feb. 23, 2010) (same; noting that even if document were properly considered, written acknowledgement would do no more than create a rebuttable presumption of delivery, and "written acknowledgment of the disclosure does not require dismissal of the claim"); Gifford v. Bank of America, No. 09-CV-639, slip op., 2010 WL 3199946, at *5 (D.Or. Jul. 9, 2010) (Papak, M.J.) ("plaintiffs may rescind against an assignee to the full extent they could against an original creditor") (citing Rowland v. Novus Fin. Corp., 949 F.Supp. 1447, 1458-59 (D.Haw.1996)), adopted, 2010 WL 3219537 (D.Or. Aug. 10, 2010) (King, J.); Delaney
The plaintiffs argue cases cited by the defendant are distinguishable. They note that in Balderas, the notices considered by the court were attached to the plaintiff's complaint, not the defendant's motion. They assert that Henderson and Johnston "do apply the conclusive proof standard, but neither case addresses § 1641(b)'s exemption of § 1635(c)." Dkt. # 10, p. 10 n. 2. They further assert that Hughes "cites no law in support of its holding." Id.
As the defendants acknowledge, the undersigned recently considered a motion to dismiss in a case similar to the one at issue here. In Bakker v. Wells Fargo Home Mortgage, No. CV-10-82, slip op., 2011 WL 1124041 (D.Or. Feb. 28, 2011), I declined to consider versions of a notice of right to cancel submitted by the defendants with their motion to dismiss, noting that the standard for deciding a motion to dismiss requires less of a plaintiff than the standard for deciding a motion for summary judgment. I further held that the signed notices proffered by the defendants did "not create a presumption the plaintiff must rebut." Id., 2011 WL 1124041, at *7. The defendants here argue that Bakker is distinguishable because in Bakker, the borrower had only acknowledged receiving two copies of the notice, not "completed" copies, while in the present case, the signed acknowledgment proffered by the defendants indicates the plaintiffs received "complete" copies of the notice. Dkt. # 35, pp. 7-8. The defendants' argument misses the point. While it may be possible (thought not conclusively so) that the notices proffered by the defendants could defeat the plaintiffs' case on summary judgment, at the stage of a motion to dismiss, I find the plaintiffs' allegation that they received incomplete notices of their right to cancel is sufficient to state a claim. I therefore recommend the defendants' motion to dismiss the plaintiff's claim for violation of the TILA be denied.
The defendants argue the plaintiffs "have failed to state a claim for statutory damages and attorneys' fees for the additional reason that the imposition of statutory damages and attorneys' fees upon assignees is improper where the TILA violation is not evident on the face of the loan documents." Dkt. # 17, p. 10. The defendants assert that only the original creditor can be held liable for a monetary penalty or an award of attorney's fees. Id. (citing 12 C.F.R. § 226.2(a)(17); 15 U.S.C. § 1640(a)). The defendants rely on 15 U.S.C. § 1641(a), which provides as follows:
The defendants argue section 1641(a) limits assignee liability "[b]ecause `Congress did not wish to impose liability for damages and attorneys' fees on an assignee who was not responsible for and who has no notice of TILA disclosure violations at the time of assignment[.]'" Dkt. # 17, p. 10 (quoting Bushong v. Paramount Equity Mortgage, Inc., No. 09-1080-AC, slip op., 2010 WL 3945256 (D.Or. Oct. 6, 2010) (Haggerty, J.)). In support of their argument, the defendants rely on Russell v. Mortgage Solutions Management, Inc., No. CV 08-1092-PK, slip op., 2010 WL 3945117, at **8-9 (D.Or. Apr. 6, 2010) (Papak, M.J.) (holding "statutory damages and attorney fees are not available under TILA against assignees except where the underlying TILA violation was facially discernable from the disclosure statement containing the violation"; expressly disagreeing with the opposite conclusion reached by the court in Fairbanks Capital Corp. v. Jenkins, 225 F.Supp.2d 910 (N.D.Ill.2002)) (citations omitted); Brunat v. Indymac Federal Bank, No. CV-09-1796, slip op., 2010 WL 2197545, at *1 (D.Ariz. May 26, 2010) (reaching same conclusion); Fullmer v. JPMorgan Chase Bank, N.A., No. 2:09-cv-1037, 2010 WL 95206, at *3 (E.D.Cal. Jan. 6, 2010) (same); Kane v. Equity One, Inc., No. 03-3931, 2003 WL 22939377, at *4, 6 (E.D.Pa. Nov. 21, 2003) (same).
The plaintiffs contend the decisions in Bushong and Russell, upon which the defendants heavily rely, ignore the introductory language of section 1641(a), which limits assignee liability "[e]xcept as otherwise specifically provided in this subchapter." The plaintiffs rely on Fairbanks Capital Corp. v. Jenkins, 225 F.Supp.2d 910 (N.D.Ill.2002), a case with which my colleagues, Judges Papak, Acosta, and Haggerty, have expressly disagreed. In Fairbanks, the court held that "attorney's fees, at least, are available from an assignee, and not just from the originating creditor, for violating a consumer's right to rescind." Id., 225 F.Supp.2d at 916-17. In so holding, the court construed section 1640(a) of the TILA, which provides:
The Fairbanks court explained its interpretation of section 1640(a) as follows:
Fairbanks, 225 F.Supp.2d at 917.
In Russell, Judge Papak found that "[a]lthough the Fairbanks court's reasoning appears plausible at first blush, analysis of the statutory language at issue indicates that Fairbanks was wrongly decided." 2010 WL 3945117, at *8. Judge Papak analyzed the applicable statutory scheme in detail and concluded that the Fairbanks court had "incorrectly characterized" and construed the statutes. Id. Although he agreed that the policy interests underlying the TILA "would be well served by permitting rescission plaintiffs to seek attorney fees against assignees," he disagreed that a failure to do so would undermine those policy interests or discourage consumers from enforcing their right to rescission. Id., 2010 WL 3945117, at *9. He concluded that "[w]hile assignee liability for attorney fees and statutory damages is contemplated, see Section 1641(e)(1), such liability is expressly conditioned on the facial discernability of the underlying TILA violation, see Section 1641(e)." Id.
In Bushong v. Paramount Equity Mortgage, Inc., No. CV 09-1080, slip op., 2010 WL 3945410 (D.Or. May 24, 2010), Judge Acosta noted that this issue has not been addressed by the Ninth Circuit Court of Appeals, and other courts have reached varying conclusions. He found more persuasive the court's analysis in Brodo v. Bankers Trust Co., 847 F.Supp. 353, 359 (E.D.Pa.1994). Judge Acosta explained the Brodo court's holding as follows:
Bushong, 2010 WL 3945410, at **7-8.
Judge Acosta expressly disagreed with the Fairbanks court's statutory interpretation, observing:
Id., at *8.
Adopting Judge Acosta's recommendation, Judge Haggerty of this court observed, "The Senate Report cited in Taylor clarifies that assignees are liable only where a disclosure is inaccurate or incomplete based on the statement or other documents involved, and where incorrect terminology is used on the face of the disclosure statement." 2010 WL 3945256, at *5 (citing S.Rep. No. 96-368 at 32-33, 1980 U.S.C.C.A.N. 236, 238 (1980)). Judge Haggerty also noted that this conclusion is "consistent with a number of well-reasoned decisions throughout the country." Id. (citing 2010 decisions from the Districts of Kansas, Pennsylvania, Michigan, and Virginia).
The plaintiffs in the present case maintain that the passage of the congressional history upon which Judge Haggerty, and the Taylor court, relied does not stand for the proposition "`that assignees are liable only' for facial violations." Dkt. # 23, p. 14 (quoting Bushong, 2010 WL 3945256, at *5). The plaintiffs insist:
Id. The plaintiffs misunderstand Judge Haggerty's ruling. None of my distinguished colleagues has held that a consumer may not rescind as against an assignee; rather, they have held that even when rescission is available, the consumer may not recover attorneys' fees from an assignee.
The 1979 amendments to the Truth in Lending Act were intended, among other things, to "limit[] creditor civil liability for statutory penalties to only significant violations," S.Rep. No. 96-368 (1980), reprinted in 1980 U.S.C.C.A.N. 236, at 253. With regard to rescission, the legislative history described the amendments to the TILA as follows:
Id., 1980 U.S.C.C.A.N. at 264, 268.
The statutory scheme makes it clear that a consumer may sue an assignee to enforce the right of rescission. It also is clear that when an assignee accepts the assignment of a loan containing a disclosure violation that is clear on the face of the applicable document, the assignee also is accepting liability for statutory damages,
Carried to a logical conclusion, then, it also would seem both appropriate, and clear from the statutory scheme, that an assignee who makes the decision regarding whether or not to honor a consumer's rescission notice also should be liable for the attorneys' fees and costs associated with the consumer's successful action to enforce the rescission. The original creditor, in such a case, has no further right to take any action with regard to the loan. As Judge Papak recently observed in Dexter v. Homecoming Financial, L.L.C., No. CV 09-493-PK, Dkt. # 70, at pp. 24-26, when a consumer seeks rescission of a loan that has been assigned by the original lender to another holder, "the court obviously cannot require the original lender to terminate a security interest that it no longer possesses," nor can the original lender grant rescission or cancel the loan. Id. (citing Zakarian v. Option One Mortg. Corp., 642 F.Supp.2d 1206 (D.Haw.2009); James v. Bridge Capital Corp., No. 08-CV-397-BR, 2011 WL 309692, at *10 (D.Or. Jan. 25, 2011)). It is the assignee that may be required to cancel the loan or refund money to the borrower.
Notwithstanding other courts' interpretations, I find that a common sense reading of the legislative history as a whole, together with the statutory language, results in the conclusion that (1) a consumer may bring a civil action against an assignee for rescission; (2) in a successful rescission action, the consumer is entitled to recover attorneys' fees and costs; but (3) statutory damages are available against an assignee only when disclosure violations are apparent on the face of the applicable document. Accordingly, I recommend that the defendants' motion to dismiss be granted as to the plaintiffs' claim for statutory damages, but denied as to their claim for attorneys' fees and costs.
The defendants argue BAC is an improper party defendant because as "a mere servicer of plaintiffs' loan, BAC cannot be held liable for rescission or statutory damages claims brought under TILA." Dkt. # 17, p. 2. The plaintiffs "do not oppose dismissing BAC," but request that BAC be dismissed without prejudice so that if FNMA establishes it is not the current assignee of the loan, then the plaintiffs could reassert their "claim against BAC under the final sentence of 15 U.S.C. § 1641(f)(2)."
The undersigned recommends BAC be dismissed without prejudice.
For the reasons set forth above, the plaintiffs' motion to strike the Fendall declaration is
Further, the undersigned respectfully recommends that the defendants' motion to dismiss be denied.
These Findings and Recommendation will be referred to a district judge. Objections, if any, are due by
IT IS SO ORDERED.
Dated this 10th day of May 11, 2011.
15 U.S.C. § 1635(b).
The cited Regulation Z section provides: "Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest." 12 C.F.R. § 226.23(d)(2).
In addition, the defendants cite Gaona v. Town & Country Credit, 324 F.3d 1050, 1054 (8th Cir.2003), for the proposition that "mere allegations that disclosures were not provided are insufficient to rebut presumption of delivery." Dkt. # 35, p. 6. The Gaona court made no such finding, and the case is irrelevant to the present motion.
