890 F.2d 118 (9th Cir. 1989), 87-2801, Jackson v. Grant

Docket Nº:87-2801.
Citation:890 F.2d 118
Party Name:Edna JACKSON, Plaintiff-Appellant, v. Syd GRANT, Belle G. Grant, Defendants-Appellees.
Case Date:May 31, 1989
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 118

890 F.2d 118 (9th Cir. 1989)

Edna JACKSON, Plaintiff-Appellant,

v.

Syd GRANT, Belle G. Grant, Defendants-Appellees.

No. 87-2801.

United States Court of Appeals, Ninth Circuit

May 31, 1989

Argued and Submitted Sept. 15, 1988.

As Amended Nov. 22, 1989.

Robert A. Goldstein, Oakland, Cal., for plaintiff-appellant.

Dave M. McGraw, Walnut Creek, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before CHOY, CANBY, and TROTT, Circuit Judges.

CANBY, Circuit Judge:

Edna Jackson appeals the district court's judgment denying her rescission under the Federal Truth in Lending Act, ("TILA"), 15 U.S.C. Sec. 1601 et seq. Jackson seeks to rescind a loan transaction entered into with

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Union Home Loans ("Union"), a real estate loan broker. She contends that notice of her right to cancel the loan was not properly given and that other payment terms were insufficiently disclosed on the TILA Disclosure Statement. Reviewing the denial of rescission de novo, Semar v. Platte Valley Fed. Sav. & Loan Ass'n, 791 F.2d 699, 703 (9th Cir.1986), we reverse the judgment of the district court.

BACKGROUND

In June of 1982, Union instituted foreclosure proceedings on a $26,000 loan made to Jackson in 1981. The loan was secured by a deed of trust recorded against Jackson's residence in Richmond, California. A trustee's sale was scheduled for February 9, 1983. In January of 1983, Jackson and Union discussed takeout financing to avoid the pending foreclosure. Union loan officer, Dennis Moore, ordered an appraisal of Jackson's property and foreclosure was postponed.

On February 18, 1983, Jackson received, read and executed the following documents:

(1) TILA Disclosure Statement;

(2) Mortgage Loan Disclosure Statement;

(3) Summary and Acknowledgment of the Terms of the Loan Transaction (hereinafter "Summary of Loan Terms");

(4) Deed of Trust;

(5) Promissory Note;

(6) Notice of Right to Cancel.

The TILA Disclosure Statement listed the annual percentage rate, the finance charge, the amount financed, the total payments, and the payment schedule for the loan. 1 The Mortgage Loan Disclosure Statement and the Statement of Loan Terms informed Jackson that Union will not be the lender, that the lender is presently not known and that Jackson was not guaranteed a loan. The name of the lender was left blank on the Promissory Note and Deed of Trust. The Notice of Right to Cancel specified March 1, 1983 as the last date for cancellation.

Unable to find another lender, on April 28, 1983, Union sent a letter to Jackson advising her that the "loan will be made with funds owned or controlled by Union Home Loans." The terms of the loan were set out in the note and deed of trust executed, and the Disclosure Statement presented, on February 18, 1983, except that Jackson was required to pay an additional $700.00 and to delete credit life insurance from the loan. Jackson agreed to these changes and the loan closed on April 29, 1983.

On February 7, 1986, Jackson notified Syd and Belle G. Grant, assignees of the loan made by Union, of her election to cancel the loan transaction pursuant to the TILA. She filed a complaint seeking rescission on February 10, 1986. First, Jackson argued that the loan transaction was not "consummated" until April of 1983 and that she therefore did not receive proper notice of her right to cancel the transaction within three business days following consummation. 2 Second, Jackson contended that the payment schedule for the loan as set forth in the TILA Disclosure Statement is insufficient. The district court made no findings with regard to the first contention but after a bench trial apparently stated on the record that the loan transaction had been consummated in February and therefore the Notice of Right to Cancel was properly given. In its order of November 26, 1986, denying the parties' cross-motions for summary judgment prior to trial, the district court held that the failure of the TILA Disclosure Statement to specify the exact payment due dates was not a material nondisclosure.

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DISCUSSION

The TILA was enacted by Congress to "avoid the uninformed use of credit." Mourning v. Family Publications Serv. Inc., 411 U.S. 356, 377, 93 S.Ct. 1652, 1664, 36 L.Ed.2d 318 (1973) (quoting 15 U.S.C. Sec. 1601). In order to effectuate this purpose, the TILA has been liberally construed in this circuit. Eby v. Reb Realty, Inc., 495 F.2d 646, 650 (9th Cir.1974). Even technical or minor violations of the TILA impose liability on the creditor. Semar v. Platte Valley Fed. Sav. & Loan Ass'n, 791 F.2d 699, 704 (9th Cir.1986). " 'To insure that the consumer is protected ... [the TILA and accompanying regulations must] be absolutely complied with and strictly...

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