Richardson et al v. American Equity Mortgage, Incorporated et al
Filing
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OPINION AND ORDER granting 11 Motion for Summary Judgment. Signed by District Judge John Corbett O'Meara. (WBar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JAMES RICHARDSON and BEVERLY
RICHARDSON,
Case No. 10-13183
Plaintiffs,
Honorable John Corbett O’Meara
v.
AMERICAN EQUITY MORTGAGE, INC., et.
al.,
Defendants.
/
OPINION AND ORDER GRANTING
DEFENDANT’S FEBRUARY 24, 2011 MOTION FOR SUMMARY JUDGMENT
This matter came before the court on defendant Deutsche Bank National Trust Company’s
February 24, 2011 motion for summary judgment. Plaintiffs filed a response March 17, 2011; and
Deutsche Bank filed a reply March 31, 2011. Oral argument was heard April 14, 2011. For the
reasons set forth below, the court will grant the motion.
BACKGROUND FACTS
Plaintiffs James and Beverly Richardson secured a home loan from defendant American
Equity Mortgage in the amount of $183,000 on a house in Oak Park, Michigan, on August 16, 2005.
After various assignments, the note was held by defendant Deutsche Bank. Plaintiffs stopped
making payments in August 2009; and the property was eventually sold at a foreclosure sale on
August 17, 2010. Plaintiffs then had six months to redeem the property. That period expired
February 17, 2011; and Plaintiffs failed to redeem it.
Plaintiffs filed this action August 11, 2010, alleging 17 causes of action. This court
subsequently dismissed the state claims. Only two federal claims remain: Count I, alleging
violations of the Truth in Lending Act (“TILA”), and Count VIII, alleging a violation of the
Racketeer Influenced Corrupt Organization Act (“RICO”).
LAW AND ANALYSIS
In Count I, Plaintiffs allege that Defendant failed to properly make disclosures under the
TILA, including a disclosure of the Plaintiffs’ right to cancel the mortgage. However, the Notice
of Right to Cancel was signed by the Richardsons at about the same time they closed on their
mortgage. Defendant’s Ex. 11. Furthermore, there is a rebuttable presumption of the delivery of
required TILA disclosures when there is a written acknowledgment of the receipt of any disclosures
required by a person to whom a statement is required to be given. Williams v. GM Mortgage Corp.,
2004 WL 3704081 (E.D. Mich. 2004). The borrowers’ self-serving denial of the receipt of the TILA
documents was not enough to overcome this statutory presumption in light of the borrowers’ written
acknowledgment of a receipt of such disclosure. Id. at 9.
Moreover, Plaintiffs’ TILA claims are time-barred. A party may assert a claim for rescission
under 15 U.S.C. § 1635 or for monetary damages under 15 U.S.C. § 1640 for a TILA violation.
However, a borrower’s right of rescission expires three years after the date of the consummation of
the transaction under § 1635(f). El-Fil v. Countrywide Home Loans, Inc., 2009 WL 4946259 (E.D.
Mich. 2009). For rescission claims, the United States Supreme Court has held that the three-year
extended rescission period is not a statute of limitations subject to tolling; instead, it is a three-year
statute of repose. Beach v. Ocwen Federal Bank, 523 U.S. 410, 417-18 (1998).
In this case Plaintiffs entered into the subject transaction on August 16, 2005, but did not file
this complaint until August 2010–more than five years after the loan closing. Therefore, even if they
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were validly extended to three years, their rescission claims expired in August 2008 and are time-barred.
In Count VIII, Plaintiffs allege violations of RICO. Defendant Deutsche Bank, however, was
not involved in the origination of the loan nor was it present at the time of consummation of the
initial loan in August 2005. Deutsche Bank is merely a subsequent holder of the promissory note
and assignee of the mortgage. There are no facts alleged by Plaintiffs to show any relationship
between any acts or omissions of Deutsche Bank as trustee, nor do Plaintiffs plead any facts to
suggest the threat of future criminal conduct by Deutsche Bank. Rule 9(b) of the Federal Rules of
Civil Procedure requires that allegations of fraud be pleaded with particularity–the time, place and
manner of each act of fraud, as well as the role of each defendant in each scheme. No such
specificity has been pleaded in this case. Accordingly, defendant Deutsche Bank is entitled to
summary judgment on Count VIII.
Plaintiffs’ response fails to address the issues presented in Defendant’s motion. Instead,
Plaintiffs complain that “many of the documents offered in Defendant’s Motion for Summary
Judgment have not been verified or validated in any manner to constitute their legality which is
crucial to these proceedings.” Plaintiffs’ resp. br. at 5. The documents, however, are irrelevant to
Plaintiffs’ federal claims, though they may be relevant in the state court proceedings.
In addition, Plaintiffs seek a four-month extension of time to complete discovery. Granting
an extension, though, would be futile in this case. The TILA claims are clearly time-barred; and
RICO allegations, as alleged, are frivolous.
At oral argument Plaintiffs’ counsel asserted that Count XVIII of the complaint is in this court.
For the reasons set forth on the record, Defendant is entitled to summary judgment on that claim as
well.
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ORDER
It is hereby ORDERED that defendant Deutsche Bank National Trust Company’s February
24, 2011 motion for summary judgment is GRANTED.
s/John Corbett O'Meara
United States District Judge
Date: April 19, 2011
I hereby certify that a copy of the foregoing document was served upon counsel of record on
this date, April 19, 2011, using the ECF system.
s/William Barkholz
Case Manager
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