Thorns v. Sundance Properties, CV-R-82-116-ECR to CV-R-82-118-ECR.
Decision Date | 10 May 1983 |
Docket Number | No. CV-R-82-116-ECR to CV-R-82-118-ECR.,CV-R-82-116-ECR to CV-R-82-118-ECR. |
Citation | 562 F. Supp. 882 |
Parties | Curtis THORNS, et al., Plaintiffs, v. SUNDANCE PROPERTIES, a Nevada Partnership, et al., Defendants. Cordelia P. TATUM, Plaintiff, v. Francis B. HEADLEY, et al., Defendants. Jay WYNKOOP, et al., Plaintiffs, v. Francis B. HEADLEY, et al., Defendants. |
Court | U.S. District Court — District of Nevada |
Roger H. Elton, Ltd. by Douglas M. Edwards, Reno, Nev., for all plaintiffs.
Patrick James Martin, Reno, Nev., for Sundance Properties.
No appearance for defendants William Amick, H. Glenn Jack, Valley Title and Escrow Co., Francis C. Headley, Marjorie C. Headley or Manitou Mortg. Co.
These three cases are now before the Court upon motion for summary judgment brought by the defendant lenders in each of the related actions. Subsequent to denial by this Court of plaintiffs' motion for preliminary injunction, an interlocutory appeal was taken by the plaintiffs to the Ninth Circuit Court of Appeals, 696 F.2d 1004 (1982); 696 F.2d 1005 (1982), which affirmed this Court's order. The same issue which was critical in the plaintiffs' requests for an injunction is also dispositive of the instant motions.
Each of these actions were brought under the Federal Truth in Lending Act (hereafter TILA), 15 U.S.C. § 1601 et seq. All of the plaintiffs in these cases obtained loans secured by a deed of trust on their personal residences to invest in the same limited partnership formed in order to purchase an apartment building. The complaint in each case is identical and seeks relief based upon the defendants' failure to inform the plaintiff-borrowers of their respective right of rescission provided by 15 U.S.C. § 1635(a). In the memorandum tendered by the Ninth Circuit on December 2, 1982, the court instructed that upon trial on the merits in these cases
Because the record is not sufficiently developed and because the facts and circumstances vary as to the various defendant lenders in each case the Court is not prepared to rule on the threshold issue stated above. However, circumstances are such that a determination upon the question of whether the loans at issue were made for a "business purpose" and thus exempt from coverage under TILA is appropriate. Of course, if the loan transactions which are the subject of these cases are exempt from coverage under the Act, there remains no need to decide whether the defendants are "creditors" or "arrangers of credit" within the meaning of TILA.
Summary judgment in a case similar to the instant actions, "... is, of course, appropriate only when there are no disputed issues of `fact,' and only `legal' issues remain to be decided." Eby v. Reb Realty, Inc., 495 F.2d 646 (9th Cir.1974). Numerous other courts have successfully dealt with the issue of whether a particular loan transaction is exempt from coverage under TILA upon summary judgment motion. See e.g., Adema v. Great Northern Development Co., 374 F.Supp. 318 (N.D.Ga.1973); Weingarten v. First Mortgage Company of Pa., 466 F.Supp. 349 (E.D.Pa.1979); Tower v. Moss, 625 F.2d 1161 (5th Cir.1980). In these cases all of the relevant material facts regarding whether the loans involved were issued for a business purpose within the meaning of TILA as a matter of law have been well presented in the pleadings and testimony provided at the consolidated hearing on motions for a preliminary injunction.
The purpose of TILA is to assure that the consumer debtor is fully aware of the cost of his credit. Redhowe v. Quality Ford Sales, Inc., 511 F.2d 230 (10th Cir. 1975); W.T. Grant Company v. Commissioner of Internal Revenue Service, 483 F.2d 1115 (2d Cir.1973). TILA requires that certain disclosures be made in consumer transactions and provides legal remedies where disclosures are not made in accordance with the Act. Pursuant to 15 U.S.C. § 1603 among those transactions exempted from the provisions of TILA are:
"(1) Credit transactions involving extensions of credit for business or commercial purposes; ... or to organization."
In determining whether a transaction is primarily consumer or commercial in nature it is necessary to look to the transaction as a whole and the purpose for which credit is extended. Tower v. Moss, supra, 625 F.2d at 1166; Gallegos v. Stokes, 593 F.2d 372, 375 (10th Cir.1979). There is no question in each of these actions but that the plaintiffs used the loan proceeds to invest in a limited partnership formed in order to purchase an apartment building.
Plaintiffs here have been creative and resourceful in opposing this motion and contending that the purpose of the loans at issue are actually "personal" in nature and thus not exempted from coverage under TILA. The Court earlier rejected application of a new regulation promulgated by the ...
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In re Almendinger
...F.Supp. 871 (E.D.La.1971), aff'd 450 F.2d 941 (5th Cir.), cert. den. 406 U.S. 920, 92 S.Ct. 1775, 32 L.Ed.2d 120; Thorns v. Sundance Properties, 562 F.Supp. 882 (D.Nev. 1983), rev'd on other grounds 726 F.2d 1417 (9th Cir.); and Puckett v. Georgia Homes, Inc., 369 F.Supp. 614 Based upon the......
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Thorns v. Sundance Properties
...in an action brought under the provisions of the Truth In Lending Act (TILA), 15 U.S.C. Sec. 1601, et seq. The district court, 562 F.Supp. 882, held that the transaction at issue was exempt from Truth in Lending disclosure. We reverse and remand because there exist triable issues of fact in......