Jesinoski Loses in Trial Court, proving Neil Garfield WRONG

Garfield Wrong – Jesinoski Loses, Big Time

Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 – Supreme Court 2015

JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016

Neil Garfield and his minions and fellow incompetent “Lawyers who get it” across America have ballyhooed the January 2015 SCOTUS decision that Larry and Cheryle Jesinoski did not have to sue for TILA rescission within the 3 year period of repose after loan consummation for violation of the Truth In Lending Act by failing to give the necessary disclosures of the right to rescind.  Well, the case went back to the US 8th Circuit Court of Appeals and thence back to the Minnesota District Court for trial of the question of rescission for the Jesinoskis.  A few days ago Judge Donovan Frank issued the below Order dashing Jesinoskis’ ill-founded hopes.  The order granted summary judgment to the creditor because Jesinoskis had signed an acknowledgment of receipt of the disclosures, and because they did not have the money to tender as required by TILA for a rescission.  It also denied statutory damages because no TILA violations occurred, even thought Jesinoskis claimed they spent $800,000, mostly in lawyer fees, prosecuting their case all the way up to the US Supreme Court and back.

It looks to me like they stupidly heeded some nonsense Garfield or one of his foreclosure pretense defense attorney buddies “who get it” had written.  Ever since the 2015 SCOTUS Jesinoski opinon, Garfield has insisted that every mortgage loan borrower should send a notice of TILA rescission to the creditor.  He has insisted that the creditor must terminate the lien immediately upon receipt of notice of rescission, AND tender return of what the borrower paid.  The Jesinoski opinion shows with crystal clarity why Garfield was dead wrong – many borrowers have no just reason to rescind, and creditors would be idiots to go through the rescission trouble without just cause.

WARNING to Home Loan Borrowers:

Listen to foreclosure pretense defense lawyers at your peril.  Most will not diligently look for injuries you have suffered in your loan (TILA violations is one kind, but many other kinds are typical), and most litigate ONLY to delay the ultimate loss of your home.  Both delay and non-diligence violate bar rules, so you should file a bar complaint against your attorney if he did that.  And you should get a competent professional to examine your loan transaction comprehensively to dig out the valid causes of action you have against the appraiser, mortgage broker, loan officer, title company, lender, servicer, creditor, or other scalawag involved in your loan process.  The mortgage exam will give you the evidence of your injuries to show the judge, AND it will give you the basis for suing your incompetent, negligent, scamming attorney for legal malpractice.

Note to Borrowers Hoping for a Favorable Yvanova Decision

 

Yvanova v. New Century Mortgage Corp., 365 P. 3d 845 – Cal: Supreme Court 2016

Forget about it.  The California Supreme Court ruled in the Yvanova case that the borrower has the right to challenge the right of a creditor to foreclose a loan that the borrower breached. Yvanova had lost her house to foreclosure, and sued for wrongful foreclosure because New Century, instead of its bankruptcy liquidation trustee, sold Yvanova’s loan to a securitization trust sponsor.  Yvanova claimed New Century did not have the right to do that.  Now her case heads back to trial court like Jesinoskis’ did.  She will get a similar result.  After she has blown all that money of her husband’s on pointless litigation, probably at Garfield’s urging, she will now learn the hard way that the foreclosure was legitimate because she has no right to challenge the validity of New Century’s sale of her loan because she was not a party to it, did not get injured by it, and had no beneficial interest in it.  She has told me that I don’t understand her case.  Oh, yes I do.  And she will lose it.

TRENDING:  Creditors make Foreclosed Borrowers Pay Legal Fees

I have seen several cases recently where the foreclosing creditor has asked the court to award legal fees, which the borrower must pay, for litigation related to the foreclosure.  Most borrowers do not put up a fight.  But look at the Jesinoski and Yvanova cases.  They have dragged on for years, stupidly.  Creditors have grown sick and tired of the frivolous efforts by borrowers to challenge righteous foreclosures.  Jesinoski said he spent nearly $800,000 on his legal fees.  I imagine he padded the bill, but I imagine the creditor padded theirs even more.  Maybe they will ask the court to award legal fees and costs.  In my opinion, they should.

I shudder to contemplate the damage Neil Garfield has done to borrowers across America by encouraging them to fight pointless battles (hiring him as a consultant or attorney, of course) to defeat foreclosure.  You cannot win with his ridiculous methods.

If you want to win, and I mean win MONEY or its equivalent, get your mortgage examined (call me for a recommendation), and go on the attack.
Get more info at http://mortgageattack.com.

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Mortgage Attack to Beat the Bank

JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016

 

Larry D. Jesinoski and Cheryle Jesinoski, individuals, Plaintiffs,
v.
Countrywide Home Loans, Inc., d/b/a America’s Wholesale Lender, subsidiary of Bank of America N.A.; BAC Home Loans Servicing, LP, a subsidiary of Bank of America, N.A., a Texas Limited Partnership f/k/a Countrywide Home Loans Servicing, LP; Mortgage Electronic Registration Systems, Inc., a Delaware Corporation; and John and Jane Does 1-10, Defendants.

Civil No. 11-474 (DWF/FLN).
United States District Court, D. Minnesota.
July 21, 2016.
Larry D. Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Cheryle Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Countrywide Home Loans, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

BAC Home Loans Servicing, LP, Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

Mortgage Electronic Registration Systems, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on a Motion for Summary Judgment brought by Defendants Countrywide Home Loans, Inc. (“Countrywide”), Bank of America, N.A. (“BANA”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (together, “Defendants”) (Doc. No. 51).[1] For the reasons set forth below, the Court grants Defendants’ motion.

BACKGROUND

I. Factual Background

This “Factual Background” section reiterates, in large part, the “Background” section included in the Court’s April 19, 2012 Memorandum Opinion and Order. (Doc. No. 23.)

On February 23, 2007, Plaintiffs Larry Jesinoski and Cheryle Jesinoski (collectively, “Plaintiffs”) refinanced their home in Eagan, Minnesota, by borrowing $611,000 from Countrywide, a predecessor-in-interest of BANA. (Doc. No. 7 (“Am. Compl.”) ¶¶ 7, 15, 16, 17; Doc. No. 55 (“Hanson Decl.”) ¶ 5, Ex. D (“L. Jesinoski Dep.”) at 125.) MERS also gained a mortgage interest in the property. (Am. Compl. ¶ 25.) Plaintiffs used the loan to pay off existing loan obligations on the property and other consumer debts. (L. Jesinoski Dep. at 114-15; Hanson Decl. ¶ 6, Ex. E (“C. Jesinoski Dep.”) at 49-50; Am. Compl. ¶ 22.)[2] The refinancing included an interest-only, adjustable-rate note. (L. Jesinoski Dep. at 137.) Plaintiffs wanted these terms because they intended to sell the property. (L. Jesinoski Dep. at 125-26, 137; C. Jesinoski Dep. at 38, 46-7.)

At the closing on February 23, 2007, Plaintiffs received and executed a Truth in Lending Act (“TILA”) Disclosure Statement and the Notice of Right to Cancel. (Doc. No. 56 (Jenkins Decl.) ¶¶ 5, 6, Exs. C & D; L. Jesinoski Dep. at 61, 67, 159; C. Jesinoski Dep. at 30-33; Hanson Decl. ¶¶ 2-3, Exs. A & B.) By signing the Notice of Right to Cancel, each Plaintiff acknowledged the “receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D.) Per the Notice of Right to Cancel, Plaintiffs had until midnight on February 27, 2007, to rescind. (Id.) Plaintiffs did not exercise their right to cancel, and the loan funded.

In February 2010, Plaintiffs paid $3,000 to a company named Modify My Loan USA to help them modify the loan. (L. Jesinoski Dep. at 79-81; C. Jesinoski Dep. at 94-95.) The company turned out to be a scam, and Plaintiffs lost $3,000. (L. Jesinoski Dep. at 79-81.) Plaintiffs then sought modification assistance from Mark Heinzman of Financial Integrity, who originally referred Plaintiffs to Modify My Loan USA. (Id. at 86.) Plaintiffs contend that Heinzman reviewed their loan file and told them that certain disclosure statements were missing from the closing documents, which entitled Plaintiffs to rescind the loan. (Id. at 88-91.)[3] Since then, and in connection with this litigation, Heinzman submitted a declaration stating that he has no documents relating to Plaintiffs and does not recall Plaintiffs’ file. (Hanson Decl. ¶ 4, Ex. C (“Heinzman Decl.”) ¶ 4.)[4]

On February 23, 2010, Plaintiffs purported to rescind the loan by mailing a letter to “all known parties in interest.” (Am. Compl. ¶ 30; L. Jesinoski Dep., Ex. 8.) On March 16, 2010, BANA denied Plaintiffs’ request to rescind because Plaintiffs had been provided the required disclosures, as evidenced by the acknowledgments Plaintiffs signed. (Am. Compl. ¶ 32; L. Jesinoski Dep., Ex. 9.)

II. Procedural Background

On February 24, 2011, Plaintiffs filed the present action. (Doc. No. 1.) By agreement of the parties, Plaintiffs filed their Amended Complaint, in which Plaintiffs assert four causes of action: Count 1—Truth in Lending Act, 15 U.S.C. § 1601, et seq.; Count 2—Rescission of Security Interest; Count 3—Servicing a Mortgage Loan in Violation of Standards of Conduct, Minn. Stat. § 58.13; and Count 4—Plaintiffs’ Cause of Action under Minn. Stat. § 8.31. At the heart of all of Plaintiffs’ claims is their request that the Court declare the mortgage transaction rescinded and order statutory damages related to Defendants’ purported failure to rescind.

Plaintiffs do not dispute that they had an opportunity to review the loan documents before closing. (L. Jesinoski Dep. at 152-58; C. Jesinoski Dep. at 56.) Although Plaintiffs each admit to signing the acknowledgement of receipt of two copies of the Notice of Right to Cancel, they now contend that they did not each receive the correct number of copies as required by TILA’s implementing regulation, Regulation Z. (Am. Compl. ¶ 47 (citing C.F.R. §§ 226.17(b) & (d), 226.23(b)).)

Earlier in this litigation, Defendants moved for judgment on the pleadings based on TILA’s three-year statute of repose. In April 2012, the Court issued an order granting Defendants’ motion, finding that TILA required a plaintiff to file a lawsuit within the 3-year repose period, and that Plaintiffs had filed this lawsuit outside of that period. (Doc. No. 23 at 6.) The Eighth Circuit affirmed. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013). The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period.Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants now move for summary judgment.

DISCUSSION

I. Summary Judgment Standard

Summary judgment is appropriate if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Weitz Co. v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). A party opposing a properly supported motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

II. TILA

Defendants move for summary judgment with respect to Plaintiffs’ claims, all of which stem from Defendants’ alleged violation of TILA—namely, failing to give Plaintiffs the required number of disclosures and rescission notices at the closing.

The purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit . . .” 15 U.S.C. § 1601(a). In transactions, like the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The three-day rescission period begins upon the consummation of the transaction or the delivery of the required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required disclosures must be made to “each consumer whose ownership interest is or will be subject to the security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. § 226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3).

If a consumer acknowledges in writing that he or she received a required disclosure or notice, a rebuttable presumption of delivery is created:

Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof.

15 U.S.C. §1635(c).

A. Number of Disclosure Statements

Plaintiffs claim that Defendants violated TILA by failing to provide them with a sufficient number of copies of the right to rescind and the disclosure statement at the closing of the loan. (Am. Compl. ¶ 47.) Defendants assert that Plaintiffs’ claims (both TILA and derivative state-law claims) fail as a matter of law because Plaintiffs signed an express acknowledgement that they received all required disclosures at closing, and they cannot rebut the legally controlling presumption of proper delivery of those disclosures.

It is undisputed that at the closing, each Plaintiff signed an acknowledgement that each received two copies of the Notice of Right to Cancel. Plaintiffs argue, however, that no presumption of proper delivery is created here because Plaintiffs acknowledged the receipt of two copies total, not the required four (two for each of the Plaintiffs). In particular, both Larry Jesinoski and Cheryle Jesinoski assert that they “read the acknowledgment . . . to mean that both” Larry and Cheryle “acknowledge receiving two notices total, not four.” (Doc. No. 60 (“L. Jesinoski Decl.”) ¶ 3; Doc. No. 61 (“C. Jesinoski Decl.”) ¶ 3.) Thus, Plaintiffs argue that they read the word “each” to mean “together,” and therefore that they collectively acknowledged the receipt of only two copies.

The Court finds this argument unavailing. The language in the Notice is unambiguous and clearly states that “[t]he undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D (italics added).) Plaintiffs’ asserted interpretation is inconsistent with the language of the acknowledgment. The Court instead finds that this acknowledgement gives rise to a rebuttable presumption of proper delivery of two copies of the notice to each Plaintiff. See, e.g., Kieran v. Home Cap., Inc., Civ. No. 10-4418, 2015 WL 5123258, at *1, 3 (D. Minn. Sept. 1, 2015) (finding the creation of a rebuttable presumption of proper delivery where each borrower signed an acknowledgment stating that they each received a copy of the disclosure statement—”each of [t]he undersigned acknowledge receipt of a complete copy of this disclosure”).[5]

The only evidence provided by Plaintiffs to rebut the presumption of receipt is their testimony that they did not receive the correct number of documents. As noted inKieran, this Court has consistently held that statements merely contradicting a prior signature are insufficient to overcome the presumption. Kieran, 2015 WL 5123258, at *3-4 (citing Gomez v. Market Home Mortg., LLC, Civ. No. 12-153, 2012 WL 1517260, at *3 (D. Minn. April 30, 2012) (agreeing with “the majority of courts that mere testimony to the contrary is insufficient to rebut the statutory presumption of proper delivery”)); see also Lee, 692 F.3d at 451 (explaining that a notice signed by both borrowers stating “[t]he undersigned each acknowledge receipt of two copies of [notice]” creates “a presumption of delivery that cannot be overcome without specific evidence demonstrating that the borrower did not receive the appropriate number of copies”); Golden v. Town & Country Credit, Civ. No. 02-3627, 2004 WL 229078, at *2 (D. Minn. Feb. 3, 2004) (finding deposition testimony insufficient to overcome presumption); Gaona v. Town & Country Credit, Civ. No. 01-44, 2001 WL 1640100, at *3 (D. Minn. Nov. 20, 2001)) (“[A]n allegation that the notices are now not contained in the closing folder is insufficient to rebut the presumption.”), aff’d in part, rev’d in part, 324 F.3d 1050 (8th Cir. 2003).

Plaintiffs, however, contend that their testimony is sufficient to rebut the presumption and create a factual issue for trial. Plaintiffs rely primarily on the Eighth Circuit’s decision in Bank of North America v. Peterson, 746 F.3d 357, 361 (8th Cir. 2014),cert. granted, judgment vacated, 135 S. Ct. 1153 (2015), and opinion vacated in part, reinstated in part, 782 F.3d 1049 (8th Cir. 2015). In Peterson, the plaintiffs acknowledged that they signed the TILA disclosure and rescission notice at their loan closing, but later submitted affidavit testimony that they had not received their TILA disclosure statements at closing. Peterson, 764 F.3d at 361. The Eighth Circuit determined that this testimony was sufficient to overcome the presumption of proper delivery. Id. The facts of this case, however, are distinguishable from those inPeterson. In particular, the plaintiffs in Peterson testified that at the closing, the agent took the documents after they had signed them and did not give them any copies. Id.Here, it is undisputed that Plaintiffs left with copies of their closing documents. (L. Jesinoski Dep. at 94-95.) In addition, Plaintiffs did not testify unequivocally that they did not each receive two copies of the rescission notice. Instead, they have testified that they do not know what they received. (See, e.g., id. at 161.) Moreover, Cheryle Jesinoski testified that she did not look through the closing documents at the time of closing, and therefore cannot attest to whether the required notices were included. (C. Jesinoski Dep. at 85.)[6]

Based on the evidence in the record, the Court determines that the facts of this case are more line with cases that have found that self-serving assertions of non-delivery do not defeat the presumption. Indeed, the Court agrees with the reasoning in Kieran,which granted summary judgment in favor of defendants under similar facts, and which was decided after the Eighth Circuit issued its decision in Peterson.Accordingly, Plaintiffs have not overcome the rebuttable presumption of proper delivery of TILA notices, and Defendants’ motion for summary judgment is granted as to the Plaintiffs’ TILA claims.

B. Ability to Tender

Defendants also argue that Plaintiffs’ claims fails as a matter of law on a second independent basis—Plaintiffs’ admission that they do not have the present ability to tender the amount of the loan proceeds. Rescission under TILA is conditioned on repayment of the amounts advanced by the lender. See Yamamoto v. Bank of N.Y.,329 F.3d 1167, 1170 (9th Cir. 2003). This Court has concluded that it is appropriate to dismiss rescission claims under TILA at the pleading stage based on a plaintiff’s failure to allege an ability to tender loan proceeds. See, e.g., Franz v. BAC Home Loans Servicing, LP, Civ. No. 10-2025, 2011 WL 846835, at *3 (D. Minn. Mar. 8, 2011); Hintz v. JP Morgan Chase Bank, Civ. No. 10-119, 2010 WL 4220486, at *4 (D. Minn. Oct. 20, 2010). In addition, courts have granted summary judgment in favor of defendants where the evidence shows that a TILA plaintiff cannot demonstrate an ability to tender the amount borrowed. See, e.g., Am. Mortg. Network, Inc. v. Shelton,486 F.3d 815, 822 (4th Cir. 2007) (affirming grant of summary judgment for defendants on TILA rescission claim “given the appellants’ inability to tender payment of the loan amount”); Taylor v. Deutsche Bank Nat’l Trust Co., Civ. No. 10-149, 2010 WL 4103305, at *5 (E.D. Va. Oct. 18, 2010) (granting summary judgment on TILA rescission claim where plaintiff could not show ability to tender funds aside from selling the house “as a last resort”).

Plaintiffs argue that the Supreme Court in Jesinoski eliminated tender as a requirement for rescission under TILA. The Court disagrees. In Jesinoski, the Supreme Court reached the narrow issue of whether Plaintiffs had to file a lawsuit to enforce a rescission under 15 U.S.C. § 1635, or merely deliver a rescission notice, within three years of the loan transaction. Jesinoski, 135 S. Ct. at 792-93. The Supreme Court determined that a borrower need only provide written notice to a lender in order to exercise a right to rescind. Id. The Court discerns nothing in the Supreme Court’s opinion that would override TILA’s tender requirement. Specifically, under 15 U.S.C. § 1635(b), a borrower must at some point tender the loan proceeds to the lender.[7] Plaintiffs testified that they do not presently have the ability to tender back the loan proceeds. (L. Jesinoski Dep. at 54, 202; C. Jesinoski Dep. at 118-119.) Because Plaintiffs have failed to point to evidence creating a genuine issue of fact that they could tender the unpaid balance of the loan in the event the Court granted them rescission, their TILA rescission claim fails as a matter of law on this additional ground.[8]

Plaintiffs argue that if the Court conditions rescission on Plaintiffs’ tender, the amount of tender would be exceeded, and therefore eliminated, by Plaintiffs’ damages. In particular, Plaintiffs claim over $800,000 in damages (namely, attorney fees), and contend that this amount would negate any amount tendered. Plaintiffs, however, have not cited to any legal authority that would allow Plaintiffs to rely on the potential recovery of fees to satisfy their tender obligation. Moreover, Plaintiffs’ argument presumes that they will prevail on their TILA claims, a presumption that this Order forecloses.

C. Damages

Next, Defendants argue that Plaintiffs are not entitled to TILA statutory damages allegedly flowing from Defendants’ decision not to rescind because there was no TILA violation in the first instance. Plaintiffs argue that their damages claim is separate and distinct from their TILA rescission claim.

For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan.

D. State-law Claims

Plaintiffs’ state-law claims under Minn. Stat. § 58.13 and Minnesota’s Private Attorney General statute, Minn. Stat. § 8.31, are derivative of Plaintiffs’ TILA rescission claim. Thus, because Plaintiffs’ TILA claim fails as a matter law, so do their state-law claims.

ORDER

Based upon the foregoing, IT IS HEREBY ORDERED that:

1. Defendants’ Motion for Summary Judgment (Doc. No. [51]) is GRANTED.

2. Plaintiffs’ Amended Complaint (Doc. No. [7]) is DISMISSED WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY.

[1] According to Defendants, Countrywide was acquired by BANA in 2008, and became BAC Home Loans Servicing, LP (“BACHLS”), and in July 2011, BACHLS merged with BANA. (Doc. No. 15 at 1 n.1.) Thus, the only two defendants in this case are BANA and MERS.

[2] Larry Jesinoski testified that he had been involved in about a half a dozen mortgage loan closings, at least three of which were refinancing loans, and that he is familiar with the loan closing process. (L. Jesinoski Dep. at 150-51.)

[3] Plaintiffs claim that upon leaving the loan closing they were given a copy of the closing documents, and then brought the documents straight home and placed them in L. Jesinoski’s unlocked file drawer, where they remained until they brought the documents to Heinzman.

[4] At oral argument, counsel for Plaintiffs requested leave to depose Heinzman in the event that the Court views his testimony as determinative. The Court denies the request for two reasons. First, it appears that Plaintiffs had ample opportunity to notice Heinzman’s deposition during the discovery period, but did not do so. Second, Heinzman’s testimony will not affect the outcome of the pending motion, and therefore, the request is moot.

[5] See also, e.g., Lee v. Countrywide Home Loans, Inc., 692 F.3d 442, 451 (6th Cir. 2012) (rebuttable presumption arose where each party signed an acknowledgement of receipt of two copies);Hendricksen v. Countrywide Home Loans, Civ. No. 09-82, 2010 WL 2553589, at *4 (W.D. Va. June 24, 2010) (rebuttable presumption of delivery of two copies of TILA disclosure arose where plaintiffs each signed disclosure stating “[t]he undersigned further acknowledge receipt of a copy of this Disclosure for keeping prior to consummation”).

[6] This case is also distinguishable from Stutzka v. McCarville, 420 F.3d 757, 762 (8th Cir. 2005), a case in which a borrower’s assertion of non-delivery was sufficient to overcome the statutory presumption. In Stutzka, the plaintiffs signed acknowledgements that they received required disclosures but left the closing without any documents. Stutzka, 420 F.3d at 776.

[7] TILA follows a statutorily prescribed sequence of events for rescission that specifically discusses the lender performing before the borrower. See § 1635(b). However, TILA also states that “[t]he procedures prescribed by this subsection shall apply except when otherwise ordered by a court.” Id.Considering the facts of this case, it is entirely appropriate to require Plaintiffs to tender the loan proceeds to Defendants before requiring Defendants to surrender their security interest in the loan.

[8] The Court acknowledges that there is disagreement in the District over whether a borrower asserting a rescission claim must tender, or allege an ability to tender, before seeking rescission. See, e.g. Tacheny v. M&I Marshall & Ilsley Bank, Civ. No. 10-2067, 2011 WL 1657877, at *4 (D. Minn. Apr. 29, 2011) (respectfully disagreeing with courts that have held that, in order to state a claim for rescission under TILA, a borrower must allege a present ability to tender). However, there is no dispute that to effect rescission under § 1635(b), a borrower must tender the loan proceeds. Here, the record demonstrates that Plaintiffs are unable to tender. Therefore, their rescission claim fails on summary judgment.

Author: Maven

This guy is a real whizbang

31 thoughts on “Jesinoski Loses in Trial Court, proving Neil Garfield WRONG”

  1. So SCOTUS states Jesinoski’s rescission was effective upon mailing and you think the lower court’s opinion (who already had to corrected once by SCOTUS) invalidates the SCOTUS opinion.

    You do know that SCOTUS is the highest court in the land, don’t you Bob?

    1. The issue before the court was whether Jesinoskis had to sue within the 3 year statute of repose. The SCOTUS said no because TILA requires the borrower to sue within 1 year and 20 days after mailing a VALID notice of rescission. The trial court therefore allowed Jesinoskis to sue the creditor. Then the trial court ruled against Jesinoskis, explaining that no TILA violation occurred, AND even if it had, Jesinoskis couldn’t tender.

      The sole principle that Jesinoski clarified was that the three year limitation on notice did not extend to the filing of a lawsuit. 135 S.Ct. at 793

      Brown v. Gorman, Dist. Court, ED Virginia 2016

      You don’t understand TILA rescission, do you?

      1. “You don’t understand TILA rescission, do you?”

        Yes, actually I do.

        “The issue before the court was whether Jesinoskis had to sue within the 3 year statute of repose.”

        That was only half the issue SCOTUS took up in Jesinoski.

        SCOTUS’ decision itself better states the issue presented for its review:

        “The question presented is whether a borrower exercises this right by providing written notice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.”

        And SCOTUS resolved that issue by determining Jesinoski’s TILA rescission of the loan was effective upon his mailing of the notice of rescission within the three years, which, when coupled with the fact that TILA’s plain wording does not require a borrower to sue at all to effectuate a TILA rescission, led SCOTUS to it’s holding.

        Thus, SCOTUS’ finding that Jesinoski’s mailing of the notice effectively rescinded his loan was part of its analysis and necessary to its holding.

        1. Yes, if a TILA violation occurred, then the borrower need only mail a rescission notice within the window of repose. But, you see, the SCOTUS did not address the question of whether a TILA violation had occurred to trigger the right to rescind. Courts across the land have already dealt with that question. No violation = no right of rescission. That’s where both you and Garfield sink and drown in the pool of common sense.

          In addition, the borrower must be able to tender. If he cannot, the creditor will refuse to tender or remove the lien, even if a violation occurred. Then the borrower must sue to enforce the rescission and obtain the assistance of the court in working out the borrower’s tender, such as through a periodic payment program. If the borrower fails to sue, the creditor will foreclose (because surely the borrower will have stopped making mortgage payments). Then the borrower may ask for the rescission or setoff from the debt in a defensive posture.

          Garfield does not appear to understand that either.

          1. “SCOTUS did not address the question of whether a TILA violation had occurred to trigger the right to rescind.”

            Right – yet SCOTUS found Jesinoski’s rescission to be effective, regardless.

            That’s why I say it is up to the lender to timely sue if they don’t believe there was a TILA violation, because, whether there was a right to do it or not, SCOTUS found Jesinoski’s rescission was effective.

            If proving a TILA violation were a condition precedent to an effective TILA rescission, SCOTUS would have said “Jesinoski effectively rescinded his loan, if it is proven at trial he had a right to do so.”

          2. Well, history has proven your theory of the law incorrect. Jesinoski’s case went back to the lower court which ruled that no TILA violation had occurred and denied the rescission. Jesinoskis both said they didn’t remember whether or not they had received the notices of right to cancel, and the creditor showed the court Jesinoskis’ signed acknowledgements of receipt of those notices. Thus, the outcome of the case proves that no rescission happens UNLESS a TILA violation occurred – the violation is a condition precedent to rescission.

        2. Actually you don’t. Nowhere within the holding of Jesinoski did the court state: “The issue before the court was whether Jesinoskis had to sue within the 3 year statute of repose.”

          There was 1 holding, and that was the borrower DOES NOT have to file a lawsuit within 3 years-PERIOD!!

          1. “The issue before the court was whether Jesinoskis had to sue within the 3 year statute of repose.”

            It was Maven who made the above statement, Amicusman, not me. That’s why I put it in quotes when I wrote my reply to him.

          2. The actual question was must the borrower also sue within the repose period IN ADDITION to mailing notice of rescission within the repose period. The SCOTUS answered NO.

            If that isn’t good enough for you, look again at the purpose of TILA as articulated in the trial court opinion:

            “The purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit . . .” 15 U.S.C. § 1601(a). In transactions, like the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The three-day rescission period begins upon the consummation of the transaction or the delivery of the required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required disclosures must be made to “each consumer whose ownership interest is or will be subject to the security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. § 226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3).

            If a consumer acknowledges in writing that he or she received a required disclosure or notice, a rebuttable presumption of delivery is created…”

        3. Here’s proof that your theory of TILA rescission, and of the SCOTUS Jesinoski opinion, is plain wrong. In 2018 the Jesinoski’s appealed the District Court ruling against them, and the appeals court held this:

          On remand, the district court[1] granted summary judgment, concluding the signed acknowledgment created a rebuttable presumption that the Jesinoskis had received the required number of copies. The court also concluded the Jesinoskis failed to generate a triable question of fact rebutting the presumption. We affirm.

          JESINOSKI v. Countrywide Home Loans, Inc., 883 F. 3d 1010 – Court of Appeals, 8th Circuit 2018

          You can interpret this to mean that a TILA violation is a condition precedent to TILA rescission. No violation = NO RESCISSION.

  2. Maven, you misunderstand what happened in this case if you think it proves Neil Garfield wrong.

    Jesinoski did not litigate his case in the manner espoused by Garfield – he might have had a chance to win if he did.

    Neil simply follows a literal reading of the TILA rescission statute, which was confirmed by SCOTUS.

    However, Jesinoski did not correctly litigate his case, if he was trying to follow Garfield’s views.

    Why?

    Because Jesinoski apparently thought his lender had to approve of the rescission. The 8th Circuit stated his whole lawsuit was based on that misunderstanding: “At the heart of all of Plaintiffs’ claims is their request that the Court declare the mortgage transaction rescinded and order statutory damages related to Defendants’ purported failure to rescind.”

    In order to avoid destroying his damages claim, Jesinoski contended his lender had a duty to rescind.

    The way I’m reading Garfield, he would have never done that because he believes the loan is completely rescinded upon mailing of the notice to rescind, whether the lender agrees to it or not. That’s what SCOTUS was saying in Jesinoski. However, due to him trying to get damages in the trial court from his lender’s “failure to rescind,” he effectively admitted that his rescission was not effective upon mailing – thus the loss in trial court – despite SCOTUS’ decision.

    What Jesinoski should have done was assert that his rescission was effective on mailing (like Garfield has said) and contended that his lender lacked standing to challenge the rescission. Also, Jesinoski should have only mailed notice of rescission to Countrywide (the originator on the DOT and note), and forced BANA to prove it was Countrywide’s successor in interest without being able to use the nullified deed of trust as evidence.

    Assuming the lender could show its standing vis a vis the loan and as successor in interest of Countrywide, THEN the court would be able to hear its defense and re-order the rescission procedures under TILA as it sees fit.

    1. Apparently TILA has flummoxed both You and Garfield. You don’t seem to grok the simple reality that ONLY a TILA violation triggers the right to rescind by mail within 3 years after loan consummation. Thus, the lack of a TILA violation bars a TILA rescission.

      The trial court made it clear that no TILA violation occurred. Jesinoskis claimed they did not remember receiving their notices of the right to cancel at closing. However, at closing they had signed an acknowledgement of receipt of the notices. The judge believed the signed acknowledgement, not the Jesinoskis’ faulty memory.

      That makes bilge of your argumentation above. The judge wrote:

      “Here, it is undisputed that Plaintiffs left with copies of their closing documents. (L. Jesinoski Dep. at 94-95.) In addition, Plaintiffs did not testify unequivocally that they did not each receive two copies of the rescission notice. Instead, they have testified that they do not know what they received… Based on the evidence in the record, the Court determines that the facts of this case are more line with cases that have found that self-serving assertions of non-delivery do not defeat the presumption”

      Jesinoski v. Countrywide Home Loans, Inc., 196 F. Supp. 3d 956 – Dist. Court, Minnesota 2016

      The Court rightly denied the Jesinoskis any and all damages:

      “For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan.”

      Ibid

    2. Wrong again. Jesinoski had no TILA violation in the 1st instance. The bank got lazy and should have made that argument which they failed to do, because it was much easier to follow the 8th cir. precedent that he failed to file a lawsuitsuit within the 3 year period.

      1. I agree, Amicusman, the bank should have made the argument but it really didn’t have to because the trial court was perfectly in its right to treat the whole thing as an equitable rescission claim – even after the SCOTUS reversal – because Jesinoski screwed up at the pleading stage, by, according to the 8th Circuit, suing “to rescind the loan.” In other words, the trial court was right to do what it did – despite TILA.

        1. We all know that the borrower may rescind within 3 days after consummation for no reason whatsoever. But that is not our sticking point.

          When SCOTUS granted certiorari, the trial court had not reached the question of whether a TILA violation had occurred. In hindsight it might seem that, had the trial court managed the issue properly, it would have dismissed the complaint under 12b6. But that might have been procedurally difficult because it would have required argument regarding evidence (Jesinoski’s written statement of not recalling whether they had received disclosures, and their earlier written acknowledgement of receipt of the disclosures). That argument did not occur until the SCOTUS opinion made its way back to trial.

          SO, as I have written, SCOTUS simply addressed the question before it without considering whether or not a TILA violation had occurred because the SCOTUS, in delivering their holding, answered as though it had because the petitioner asked as though it had. SCOTUS wrote “… the court below erred in dismissing the complaint. Accordingly, we reverse the judgment of the Eighth Circuit and remand the case for further proceedings consistent with this opinion.” And that is precisely what the trial court did, summarizing the issue as follows:

          “In April 2012, the Court issued an order granting Defendants’ motion, finding that TILA required a plaintiff to file a lawsuit within the 3-year repose period, and that Plaintiffs had filed this lawsuit outside of that period. (Doc. No. 23 at 6.) The Eighth Circuit affirmed. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir.2013). The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period. Jesinoski v. Countrywide Home Loans, Inc., ___ U.S. ___, 135 S.Ct. 790, 792, 190 L.Ed.2d 650 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants 959*959 now move for summary judgment.”

          Jesinoski v. Countrywide Home Loans, Inc., 196 F. Supp. 3d 956 – Dist. Court, Minnesota 2016

  3. You don’t seem to understand that SCOTUS’ opinion in Jesinoski serves as precedent for borrowers to rescind their loan by written notice – regardless of whether they have a right to do so.

    You don’t seem to understand that TILA rescission is a procedural tool that the legislature drafted to keep lenders honest and diligent with their lending and that if they are not honest enough to actually be the person entitled to enforce the note or diligent enough to timely sue after a homeowner has rescinded, then they deserve losing their security interest in the property.

    1. Actually, the SCOTUS opinion does not mean what you wrote above, for the matter before the court was only whether the borrower must sue within the repose window in order to get the trial court to enforce the rescission. AND that happened in Jesinoskis’ case. They went back to trial court with their lawsuit, and LOST because NO TILA VIOLATION had occurred and even if it had, they could not tender. The court denied their rescission effort and denied their damage claim.

      1. “…the matter before the court was only whether the borrower must sue within the repose window in order to get the trial court to enforce the rescission.”

        Again, Maven, you left out the other matter before the court (if the court you are referencing is SCOTUS) – whether mailing of the notice rescinded the loan – which SCOTUS answered in the affirmative. That is the reason why SCOTUS ruled as it did; it ruled that way because TILA rescission is just a mechanical mailing of a notice.

        TILA does not create a condition precedent that must be satisfied before a borrower may mail a notice. A borrower can mail out the TILA rescission notice whether they have suffered a TILA violation or not, and, when the borrower does, their loan is effectively rescinded.

        The right to rescind does not become relevant to the validity of the rescission until the lender challenges it post-rescission.

        1. Once again, you have no idea what you’re talking about. The lender doesn’t have to do anything if there is no TILA violation. You and that scammer Garfield need to learn how to read law, because its strikingly obvious you don’t understand what you’re reading!

          1. Until the TILA statute is re-written, they have to do what I said.

            Some trial courts will still do the wrong thing, but sooner or later SCOTUS will straighten them out.

            It’s not just me saying it, Amicusman, the biggest title companies in this country agree with me.

    2. I thought you were just a legal illiterate, like Garfield, but now you’re making a moronic statement by stating there is rescission whether or not a borrower has a TILA violation. Total niwittery!

      1. Amicusman, the legislature wrote it that way, not me. That’s just the way it is. Then SCOTUS confirmed a literal reading. The borrower doesn’t have to prove a TILA violation to anyone or ask anyone’s permission before mailing out a TILA rescission notice.

        If the lender can prove there was no basis for it, the lender can collaterally attack any judgment the borrower gets, but until then, the rescission is effective upon mailing.

        If you don’t like it you can save some of your energy from attacking me and use that energy instead to urge the legislature to change the law to make it more to your liking.

        1. That’s not what the statute, regulations state, or the SCOTUS held. This is why homeowners that listen to legal illiterates like you and Garfield lose their homes. There have been a couple hundred post Jesinoski cases that back up my comments, none that back up yours or the other scammer Garfield. You to loons need to understand what your reading before you continue to make yourselves look like idiots making such stupid comments.
          Just because someone sends a letter to a bank stating that they are rescinding their contract, doesn’t rescind the contract, a third grader can understand that premise. It defied logic!

          1. “Just because someone sends a letter to a bank stating that they are rescinding their contract, doesn’t rescind the contract, a third grader can understand that premise.”

            You are right – with regard to equitable rescission. However, you fail to recognize that TILA created an entirely different kind of rescission that was neither dependent upon nor informed by equitable rescission.

            If the contract you are referring is of the type noted in 15 U.S.C. 1635(a), and is not excepted in other parts of section 1635, you are wrong – rescission is both initiated and concluded by the consumer by his mailing of the rescission notice – no action, consent or even knowledge of the rescission by the lender is required for the consumer’s rescission to be complete upon mailing, nor is such a consumer’s right to rescind under TILA dependent upon any violation of TILA’s provisions by the lender, except to the extent that such right is limited by certain timing requirements.

            Morever, SCOTUS didn’t buy your argument, which was also made by the Jesinoskis’ lender, and, at this point, no one but a third grader would continue to make such an argument in the wake of the SCOTUS Jesinoski opinion which stated:

            “The Jesinoskis mailed respondents written notice of their intention to rescind within three years of their loan’s consummation. Because this is all that a borrower must do in order to exercise his right to rescind under the Act, the court below erred in dismissing the complaint.”

        2. 12 C.F.R. §1026.23 “… If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first. ”

          As you can see from the explanation of Regulation Z above, the right to rescind extends beyond 3 days ONLY IF the required notice or material disclosures are not delivered.

          Fail to deliver required disclosures is a TILA VIOLATION, and that triggers the right to rescind beyond 3 days after consummation. Thus, after 3 days, NO TILA VIOLATION = NO RESCISSION.

          1. Maven and Amicusman –

            You (and any courts who make the same contentions) are misapprehending what creates the TILA rescission right.

            The type of transaction that includes a TILA rescission right by operation of law is simply and unambiguously set forth in 15 U.S.C. 1635(a): “…in the case of any consumer credit transaction…in which a security interest…is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind…” <— That is what creates the TILA right to extend – not a TILA violation.

            The language concerning consummation of the transaction and delivery of rescission notices by the lender is only relevant in the context of TILA rescission to whether the consumer's rescission was timely or not – it has nothing to do with the creation of the consumer's right to rescind – notwithstanding any regulations or non-SCOTUS court opinions to the contrary.

      2. I deal with every major title company in the country, and none of them are that stupid to make such a comment, nor would they ever have reason to. Total B.S.!

  4. Scalia, if your butt buddy Garfield knows so much about TILA, how come he’s never won one, or any other case dealing with foreclosure. I don’t know who the bigger fool is, Garfield, or anyone who would believe his schizophrenic arguments.

  5. It appears that Scalia doesn’t understand what it means “to rescind.”

    The unilateral notification of cancellation does not automatically void the loan contract. Otherwise, a borrower could get out from under a secured loan simply by claiming TILA violations, whether or not the lender had actually committed any. You’re conflating the issue of whether a borrower has exercised their right to rescind with the issue of whether the rescission has, in fact, been completed and the contract voided. The former is the concern of § 1635(f) and Regulation Z, and a borrower exercises her right of rescission by merely communicating in writing to her creditor her intention to rescind. To complete the rescission and void the contract, however, more is required. Either the creditor must acknowledge that the right of rescission is available and the parties must unwind the transaction amongst themselves, or the borrower must file a lawsuit so that the court may enforce the right to rescind.

  6. “…the creditor must acknowledge that the right of rescission is available and the parties must unwind the transaction amongst themselves, or the borrower must file a lawsuit so that the court may enforce the right to rescind.”

    The only problem is that a unanimous SCOTUS disagrees with your quote above, as you can see from these quotes made by SCOTUS in its Jesinoski opinion.

    First, to reach its holding, SCOTUS had to analyze and dispose of the creditor’s contention that a lawsuit must be filed to effect rescission within the three year period if the parties dispute the adequacy of TILA disclosures:

    “Respondents do not dispute that §1635(a) requires only
    written notice of rescission. Indeed, they concede that
    written notice suffices to rescind a loan within the first
    three days after the transaction is consummated. They
    further concede that written notice suffices after that
    period if the parties agree that the lender failed to make
    the required disclosures. Respondents argue, however,
    that if the parties dispute the adequacy of the disclo-
    sures—and thus the continued availability of the right to
    rescind—then written notice does not suffice.”

    “The clear import of §1635(a) is that a borrower need only
    provide written notice to a lender in order to exercise his
    right to rescind. To the extent §1635(b) alters the tradi-
    tional process for unwinding such a unilaterally rescinded
    transaction, this is simply a case in which statutory law
    modifies common-law practice. ”

    and:

    “The Jesinoskis mailed respondents written notice of
    their intention to rescind within three years of their loan’s
    consummation. Because this is all that a borrower must
    do in order to exercise his right to rescind under the Act,
    the court below erred in dismissing the complaint.”

    I know you will erroneously call this “dicta,” and accord in no weight whatsoever.

    But, that is only because you clearly do not understand that a
    court’s analysis that is necessary to its holding is NOT dicta.

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