TILA's Rebuttable Presumption Is Easily Overcome
MARR v. BANK OF AMERICA (December 6, 2011)
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In 2007, Richard Marr refinanced his home mortgage with Countrywide Bank. Summit Title closed the loan in February. Marr signed an acknowledgment at that time that he had been given two copies of the right to rescind notice, as required by the Truth in Lending Act. The closing agent gave Marr the closing documents, which he alleges he put in a folder and kept in a filing cabinet in his home. Two years later, his attorney inspected the folder in connection with an unrelated matter and discovered only one copy of the notice to rescind. Marr brought suit to rescind, relying on the statutory three-year rescission period when a lender fails to provide two copies of the notice. He testified that he removed nothing from the closing folder between the time he received it and the time he turned it over to his lawyer. The closing agent testified regarding the standard procedures for closing, which included providing the borrower with two copies of the notice. Marr testified that the February closing did not follow the standard procedures outlined in the agent’s affidavit. Judge Stadtmueller (E.D. Wis.) granted summary judgment to the defendants based on the rebuttable presumption created by Marr’s signed acknowledgment. The court ruled that his testimony was not enough to overcome the presumption. Marr appeals.
In their opinion, Seventh Circuit Judges Wood, Tinder, and Hamilton reversed and remanded. The Court first noted that the Act does create a rebuttable presumption but that it does so by saying that it "does no more than" create the presumption. The Court interpreted this language as a warning to courts to not overvalue the presumption. The Third Circuit has recently ruled that the borrowers testimony by itself is sufficient to overcome the presumption. The Court declined to adopt that extreme a position because Marr presented more than that: the folder contained only one copy of the notice, he testified that he removed nothing from the folder, and he testified that the closing agent did not follow standard operating procedures during closing. A reasonable jury could believe that he received only one copy of the notice.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select