Evidence presented by a borrower that he did not receive all of the required documents under the Truth-in-Lending Act (“TILA”) was sufficient to defeat summary judgment despite the fact that he did sign an acknowledgment that he had received all required documents.
On December 6, 2011, the United States Court of Appeals for the Seventh Circuit released its opinion in the case Marr v. Bank of America, N.A. In 2007, plaintiff-borrower (“Borrower”) decided to refinance his mortgage on his home in Wauwatosa, Wisconsin. Borrower subsequently sought to rescind the loan and recover his interest payments, statutory damages for failure to rescind, and attorney’s fees. Critical to the case was whether or not the Borrower had received two copies of a notice informing him of his right to rescind his loan within the three days (“Notice”), a requirement of the regulations implementing the TILA. If the Borrower received two copies, he had three days to rescind the loan and his action was barred; if he received one copy, he had three years to rescind the loan and the action could go forward.
The Bank moved for summary judgment. In support of its motion, the Bank cited an acknowledgment signed by the Borrower that he had been given two copies of the Notice (“Acknowledgment”). The Bank also submitted an affidavit signed by the closing agent in which she did not discuss specific events that took place at Borrower’s closing but provided information about her closing practices and procedures, including that agents are required to present and review the Notice with the borrower at the end of the closing and put at least two copies of the Notice in the borrower’s document pile. The agent was confident that she had given the Borrower two copies of the Notice because she stated she could not recall a time when she did not follow the above practices. The Borrower testified that at the closing he was given a folder in which to put the documents he was given, after the closing he put the folder in a filing cabinet, it was not disturbed for two years (Borrower lived alone), at which time his attorney inspected it and they discovered there was only one copy of the Notice in it. Borrower admitted that documents which post-dated the closing and which were unrelated to it had been added to the folder, but he was certain that none of the closing documents had been removed, even if other documents had been added. The Borrower also submitted an affidavit in which he stated that his closing did not follow the standard practices and procedures outlined in the agent’s affidavit – the agent did not review anything at the end of the closing and she did not present the Notice at the end but somewhere in the middle.
The District Court granted summary judgment to the Bank, primarily based on the rebuttable presumption that the Borrower had received two copies of the Notice created by the Borrower’s signing of the Acknowledgement. See 15 U.S.C. § 1635(c) . The District Court was worried about the possibility that the presumption of delivery could be rebutted by nothing more than the borrower’s say so. Accordingly, it ruled that the Borrower had not overcome the presumption primarily because of the Borrower’s inability to identify with any certainty which documents and how many of those documents he had received and the fact that the folder had been accessed following the closing contradicted the Borrower’s testimony that he had not removed documents from it.
The Court of Appeals reversed. It emphasized that for summary judgment purposes, the non-moving party does not bear the burden of proving their case; the opponent of summary judgment need only point to evidence that if believed by a fact-finder could support judgment in their favor. The Court of Appeals noted that the TILA states that a signed acknowledgment of receipt of two copies of the Notice “does no more than create a rebuttable presumption of delivery thereof” (15 U.S.C. § 1635(c); emphasis added), strongly suggesting that Congress was warning courts not to overrate the importance of the acknowledgment. Citing the Third Circuit Case Cappuccio v. Prime Capital Funding LLC, 649 F.3d 180, 189 (3rd Cir. 2011) , which described the borrower’s burden to overcome the presumption as “minimal,” the Court of Appeals concluded that Borrower’s own testimony that the envelope was undisturbed and that his closing experience differed from the agent’s standard procedures were sufficient to permit a reasonable jury to rule in his favor. The Court noted that it had previously held that, although the Borrower had more in this case, even “uncorroborated, self-serving testimony” can provide evidence of disputed facts and prevent summary judgment against the non-moving party and the TILA is remedial statute designed to protect borrowers which unequivocally demands that the borrower receive two copies of the notice of the right to rescind and within which there is no room for some kind of substantial compliance on the part of the lender.