Marr v. Bank of America, N.A.

• Decision Date: 06 December 2011
• Docket Number: No. 11–1424.,11–1424.
• Citation: 662 F.3d 963
• Parties: Richard G. MARR, Plaintiff–Appellant, v. BANK OF AMERICA, N.A., Defendant, Third–Party Plaintiff–Appellee, v. Summit Title Services, LLC, Third–Party Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

662 F.3d 963

Richard G. MARR, Plaintiff–Appellant,

v.BANK OF AMERICA, N.A., Defendant, Third–Party Plaintiff–Appellee,

v.Summit Title Services, LLC, Third–Party Defendant–Appellee.

No. 11–1424.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 14, 2011.Decided Dec. 6, 2011.

John D. Blythin (argued), Ademi & O'Reilly, Cudahy, WI, for Plaintiff–Appellant.

David P. Muth (argued), Quarles & Brady, Milwaukee, WI, for Defendant, Third–Party Plaintiff–Appellee.

Terry E. Johnson, Peterson, Johnson & Murray SC, Milwaukee, WI, for Third–Party Defendant–Appellee.

Before WOOD, TINDER, and HAMILTON, Circuit Judges.

WOOD, Circuit Judge.

In the world of the Truth–in–Lending Act (TILA), 15 U.S.C. §§ 1601 et seq., it often seems that no detail is too insignificant to matter. We have called TILA “hypertechnical” in the past, see, e.g., Brown v. Payday Check Advance, Inc., 202 F.3d 987, 989 (7th Cir.2000), and this case provides yet another opportunity to see this level of precision in operation. The case before us involves a borrower who alleges that he did not receive all of the documents to which he was entitled when he refinanced his mortgage. If he is correct, then he had not a measly three days, but a more generous three years in which to rescind the transaction. The district court ruled for the bank, but we conclude that the borrower presented enough evidence to defeat summary judgment, and so we reverse and remand for further proceedings.

I

One provision of TILA requires the creditor to provide the consumer with “clear[ ] and conspicuous[ ]” notice of his right to rescind this type of loan within three business days following the transaction. 15 U.S.C. § 1635(a); 12 C.F.R. § 226.23(b)(1). Regulation Z, issued by the Federal Reserve Board to implement TILA, elaborates on this rule by requiring the lender to give the consumer two copies of the notice of his three-day right to cancel at closing. (The parties refer to this document as the NORTC, but in the interest of keeping the English language alive, we refer to it here as simply the Notice; no other notice is at issue in Marr's case.) 12 C.F.R. § 226.23(b)(1). If the lender fails to comply with this rule, as we have said, the time to rescind is extended from three days to three years. 12 C.F.R. § 226.23(a)(3). This case turns on whether the plaintiff, Richard G. Marr, received the obligatory two copies of his Notice, or if he received just one; the answer to that question dictates whether his effort to rescind a loan was timely.

In 2007, Marr decided to refinance his mortgage with Countrywide Bank, the predecessor in interest to defendant Bank of America, N.A. (For simplicity, we refer to the bank by the name it had at the time of Marr's transaction.) Marr's story is depressingly familiar in the wake of the 2007 financial crisis. Marr, now a retired auto mechanic, purchased a home in Wauwatosa, Wisconsin, in 1973, using funds secured by a mortgage. He has refinanced that loan several times since then to help pay the bills. In early 2007, a mortgage broker called Alpine Financial contacted Marr about refinancing his mortgage. Marr decided that this was a good idea, and so he applied in February 2007 for a new loan to help with his credit card bills. Countrywide accepted Marr's application. Summit Title, the title insurance company that provided closing services for Countrywide, closed the loan with Marr on February 23, 2007.

The focus of this litigation is on what exactly happened at that closing. Marr testified that the closing agent put a duplicate of every document he signed in a pile next to him, but he did not have time to review them. One of those documents, which Marr signed, was an acknowledgment that he had been given the required two copies of the Notice. At the end of the closing, Summit's agent gave Marr a folder in which to put the documents. The agent stuffed everything into the folder, and then Marr left. When he returned home, Marr put the folder in a filing cabinet in his dining room where he keeps all of his important documents. As he put it, “I live by myself, so there's [ sic ] no children or anything there that would mess with [the filing cabinet] ... and that's where it stayed.” He maintained that he did not disturb the folder until two years later when his attorney inspected it in connection with an unrelated lawsuit. Only then, Marr testified, did they “discover[ ] that there was only one copy of that right to cancel in there.” During the deposition, Marr admitted that there were a few documents inside his loan folder that post-dated the February 23 closing. When asked why his loan folder had been disturbed, Marr stated, “I don't know. That may have been when I refinanced again and I dropped those in the envelope thinking that that was the envelope for ... the August [refinancing].” He was certain, however, that none of the February 23 loan documents had been removed, even if other documents were later added.

Debora Ann Smith, a Summit closing agent, submitted an affidavit stating that she was Marr's closing agent. She did not discuss the specific events that took place at Marr's closing, but she provided information on Summit's closing practices and procedures. Summit required its closing agents to review closing instructions and checklists with the borrower; to discuss all closing documents with the borrower to confirm the borrower's understanding of them; to present and review the Notice with the borrower at the end of the closing to ensure the borrower's understanding of his rights; and to put at least two copies of the Notice in the borrower's document pile. Smith was confident that she must have given Marr two copies of the Notice, because she could not recall a time when she did not follow these practices.

Marr submitted an affidavit in response to Smith's statement. He asserted that his closing did not follow the standard practices and procedures outlined by Smith in her affidavit. Instead, he said, “the closing agent did not review anything at the end of the closing.” She “did not look through my documents, her documents, or anything else between the time when I finished signing the closing documents and when I left Summit Title's office.” He also stated that Smith did not present the Notice at the end of the closing; rather, she presented it “somewhere near the beginning or in the middle of the closing.”

Based on this record, the district court concluded that Countryside and Summit were entitled to summary judgment. Marr's signed acknowledgment that he had received two copies of the Notice created a rebuttable presumption that this was true. See 15 U.S.C. § 1635(c). The court believed that Marr's testimony that he received only one copy, which he placed in the envelope furnished by Summit, and that he never withdrew anything from that envelope (even if he might have added an item or two) was not enough to rebut that presumption. Marr challenges those conclusions on appeal.

II

The standard of review from a grant of summary judgment is well known, but it is worth emphasizing that the non-moving party does not bear the burden of proving his case; the opponent of summary judgment need only point to evidence that can be put in an admissible form at trial, and that, if believed by the fact-finder, could support judgment in his favor. Our role, applying what is usually called de novo review, is to see if the opponent has identified such evidence in the record; in so doing, we draw all reasonable inferences and view all facts in favor of the non-moving party. Sutherland v. Wal–Mart Stores, Inc., 632 F.3d 990, 993 (7th Cir.2011). The question in this case is whether Marr's testimony and affidavit is sufficient to allow a reasonable jury to find that Marr received only one copy of the Notice.

TILA was intended to ensure that consumers are given “meaningful disclosure of credit terms” and to protect consumers from unfair credit practices. 15 U.S.C. § 1601(a). Regulation Z enforces these goals in a variety of ways, notably for this case by requiring lenders to give consumers two copies of the Notice at closing. 12 C.F.R. § 226.23(b)(1). If Marr can show that he did not receive two copies, his effort to rescind the loan has been brought in time, and he may be entitled to that relief.

Rescission is far from a cure-all in most mortgage refinance situations: it is “a process in which the creditor terminates its security interest and returns any payments made by the debtor in exchange for the debtor's return of all funds or property received from the creditor.” Andrews v. Chevy Chase Bank, 545 F.3d 570, 573 (7th Cir.2008); see also 15 U.S.C. § 1635(b). The rescinding borrower must return the loan...