Gaona v. Town & Country Credit

• Decision Date: 31 March 2003
• Docket Number: No. 02-1066.,02-1066.
• Parties: Peter M. GAONA; Annah M. Gaona, Plaintiffs-Appellants, v. TOWN & COUNTRY CREDIT; The Chase Manhattan Bank, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

324 F.3d 1050

Peter M. GAONA; Annah M. Gaona, Plaintiffs-Appellants, v. TOWN & COUNTRY CREDIT; The Chase Manhattan Bank, Defendants-Appellees.

No. 02-1066.

United States Court of Appeals, Eighth Circuit.

Submitted: October 7, 2002.

Filed: March 31, 2003.

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John M. Tancabel, argued, St. Paul, MN, for appellant.

Andre Hanson, argued, Minneapolis, MN (James K. Langdon II and Anna E. Shimanek, on the brief), for appellee.

Before MURPHY, JOHN R. GIBSON, and MELLOY, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Appellants Peter and Annah Gaona appeal an order of the district court granting Town & Country Credit and Chase Manhattan Bank summary judgment on all claims. The Gaonas first argue that the district court erred in granting summary judgment on their Truth in Lending Act claim. They contend that their loan was not consummated on January 26, 1999, that Town & Country listed the incorrect final date for rescission on the notice of right to cancel form, and that because this notice was inaccurate, they are entitled to an extended three-year period to rescind. Second, they claim that the district court erred in borrowing the one-year statute of limitations from the Minnesota Human Rights Act and applying it to the Gaonas' Title III Americans with Disabilities Act claim. They argue that the court should have instead borrowed the Minnesota six-year statute of limitations for personal injury actions. Finally, the Gaonas claim that the district court erred in concluding that section 3605 of the Fair Housing Act and related regulations do not require a lender to provide reasonable accommodations to disabled borrowers. See 42 U.S.C. § 3605 (2000); 24 C.F.R. § 100.120(b) (2002). We affirm the district court's grant of summary judgment on the Truth in Lending Act and Fair Housing Act claims, but reverse its entry of summary judgment against the Gaonas on their Americans with Disabilities Act claim.

The plaintiffs in this case, Annah and Peter Gaona, are married and live in Coon Rapids, Minnesota, a suburb of the Twin Cities. The Gaonas are both deaf, and their primary method of communicating is through American Sign Language. In January 1999, the Gaonas met with loan officer Johnna Giguere at Town & Country's branch office in New Brighton, Minnesota to apply for a residential mortgage loan. The Gaonas contend that during this first meeting, they asked, in writing, for an interpreter and that none was provided. Instead, the Gaonas communicated with Ms. Giguera and others at Town & Country primarily through written notes back and forth. The Gaonas met again with Giguere and with Richard Perkins, another bank official, at the New Brighton branch on January 26, 1999 and signed the loan documents, including the mortgage agreement, promissory note, loan program disclosure, borrower's acknowledgment of final terms, notice of the right to cancel, and acknowledgment of conditional loan consummation. The loan was funded and the money was disbursed on February 1, 1999. Town & Country then assigned the mortgage to Chase Bank of Texas on February 18, 1999. The Gaonas defaulted on the loan sometime during 2000, and in November 2000, Chase attempted to foreclose on the Gaonas' house. The Gaonas then sent Chase notice of their intent to rescind the mortgage on November 6, 2000. Town & Country responded that the Gaonas had received all of the required notices and declined to rescind. The Gaonas then brought suit in Ramsey County, Minnesota. The state court enjoined the foreclosure pending resolution of the Gaonas' claims, and defendants removed the case to federal court. In their first amended complaint, the Gaonas alleged that Town & Country and Chase violated the Truth in Lending Act (TILA), the Americans with Disabilities Act (ADA), and the Fair Housing Act (FHA) among other claims. The district court granted summary judgment in favor of Town & Country and Chase on all claims.

I.

The Gaonas argue that Town & Country violated the rescission provision of the Truth in Lending Act. They claim that their mortgage loan was not "consummated" on the closing date of January 26, 1999 because the loan was conditioned on an appraisal review and the terms of the agreement were indefinite.¹ They further contend that if the loan was not "consummated" on January 26, 1999, then the notice of the right to rescind listed an incorrect date of January 29, 1999 as the last day for rescission, a defect which the Gaonas claim should give them an extended three-year right to rescind.

We review the grant of summary judgment de novo, using the same standards that the district court used in its consideration of the summary judgment motion. Reich v. ConAgra, Inc., 987 F.2d 1357, 1359 (8th Cir.1993). We must examine the record in the light most favorable to the non-moving party, giving that party the benefit of all reasonable inferences to be drawn from the facts. Id. Summary judgment is appropriate if there is no genuine issue of material fact and the non-moving party is entitled to judgment as a matter of law. Id. Fed.R.Civ.P. 56(c).

The Truth in Lending Act provides the borrower with the right to rescind within a limited time frame. It states, "The [borrower] shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section ... whichever is later..." 15 U.S.C. § 1635(a) (2000). The lender must provide each customer entitled to rescind with two copies of the notice of the right to rescind. 12 C.F.R. § 226.15(b) (2002). This notice should include the date that the rescission period ends. 12 C.F.R. § 226.15(b)(5).

If the required notice or material disclosures are not delivered, the right to rescind is extended to as much as three years from the consummation of the loan. 12 C.F.R. § 226.15(a)(3). Consummation occurs on the date "that a consumer becomes contractually obligated on a credit transaction." 12 C.F.R. § 226.2(a)(13) (2002). The borrower's obligations are defined by the terms of the contract with reference to state law. 12 C.F.R. § 226.2(b)(3).

The Gaonas argue first that they did not participate in a closing² on January 26, 1999 because, according to a document titled "Acknowledgment of Conditional Loan Consummation," the loan was conditioned on a satisfactory appraisal review. Since this appraisal did not take place until January 29, 1999, the Gaonas claim that the rescission period should have expired three days after that date.

As mentioned above, the applicable regulations define consummation as the point at which "the consumer becomes contractually obligated." 12 C.F.R. § 226.2(a)(13). We agree with the district court that a "condition precedent to the lender's performance does not affect the [consumer's] obligation, and indeed, such a condition precedent also does not mean that the lender is not contractually obligated." Gaona v. Town & Country Credit, No. 01-44-PAM/RLE, 2001 WL 1640100, at *2 (D.Minn. Nov.20, 2001). The document relied upon by the Gaonas clearly informed them that despite this condition, the loan was "consummated." The appraisal review notwithstanding, the Gaonas became contractually obligated when the loan documents were executed on January 26, 1999.³

Second, the Gaonas contend that the terms of the loan remained indefinite and point to the document titled "Interest Rate Disclosure" which states: "The interest rate and terms of your loan are not `locked in'; the interest rate and terms applicable to your loan remain subject to change until the date the loan is actually funded." However, this form was dated January 12, 1999, two weeks before the mortgage documents were executed; it remained unsigned by the Gaonas; and there is no evidence that Town & Country attempted to change the interest rate or terms of the loan prior to funding. When the Gaonas executed the promissory note on January 26, 1999, the interest rate and other terms of the loan were specified and definite. We conclude that the district court did not err in granting summary judgment to Town & Country on the Truth in Lending Act claim.

II.

The Gaonas also claim that the district court erred in applying the one-year statute of limitations from the Minnesota Human Rights Act (MHRA) to their ADA claim. The Gaonas contend that the district court should have instead borrowed the Minnesota six-year statute of limitations for personal injury cases.

"When a federal law has no statute of limitations, courts may borrow the most closely analogous state statute of limitations, unless doing so would frustrate the policy embodied in the federal law." Birmingham v. Omaha Sch. Dist., 220 F.3d 850, 854 (8th Cir.2000). The district court held that the public discrimination provisions of the MHRA, Minn.Stat. § 363.03, Subd. 3 (2002), were almost identical to those of Title III of the ADA, 42 U.S.C. § 12182(b)(2)(A) (2000). Thus, it applied the one-year statute of limitations under the MHRA and found the Gaonas' claim untimely. See Minn.Stat. § 363.06, Subd. 3 (2002). We review de novo the district court's decision to borrow a particular state statute of limitations. Birmingham, 220 F.3d at 854.

In Wilson v. Garcia, 471 U.S. 261, 268, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), the Supreme Court addressed the question of how to select "the most appropriate" or "most analogous" state statute of limitations to apply to a 42 U.S.C. § 1983 claim. The Court held first, that the federal interest in uniformity and the interest in having "firmly defined, easily applied rules" made the selection of the appropriate statute of limitations a question of federal law, id. at 270, 105 S.Ct. 1938; second, that "a simple, broad characterization of all § 1983 claims best fits the statute's remedial purposes," id. at 272, 105 S.Ct. 1938; and third, that § 1983 claims are best characterized as tort claims for...