Hegrenes v. MGC Mortgage, Inc. et al

Filing 44

OPINION and ORDER: Denying Defendants' Motion for Rule 11 Sanctions 30 ; Denying Plaintiff's Motion for Leave to File Amended Complaint/Petition 39 ; Granting Defendants' Motion for Summary Judgment 16 . Signed on 03/03/2011 by Chief Judge Ann L. Aiken. (lg)

Hegrenes v. MGC Mortgage, Inc. et al

Doc. 44

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF

CRAIG HEGRENES, Plaintiff,

No. 10-422-AA OPINION AND ORDER

v.
MGC MORTGAGE, INC., a Texas corporation; and LNV CORPORATION, a Nevada corporation, Defendant.

Terrance J. Slomins David W. Venables 7150 SW Hampton, Suite 201 T rd, OR 97223 Attorneys for plaintiff William L. Larkins, Jr. Hoesly Vacura, LLP SW Morrison St., Su e 1450 Portland, OR 97205 Attorneys for defendants AIKEN, Chief Judge: Plaintiff filed suit see rescission of a residential loan

1 - OPINION AND ORDER

Dockets.Justia.com

based pia

on

the

lender's

alleged

failure ,to

provide

h two copies of a "Notice

Right to Cancel" form
§

of the Truth in Lending Act (TILA), 15 U.S.C. s . De s move for summary j plaintiff presen'ts no

1601, et

on plaintiff's claims, evidence to rebut

arguing pia

iff's signed acknowledgment that

received such notice.

Defendants' motion is granted . .FACTS In Janua with United signed the Pacific Northwest Tit the closing
2007, plaintiff refinanced his 1 Mortgage Corp.

through a loan

On January 25, 2007 plaintiff ce of During tie to the

and the deed of trust at of Oregon, Inc. (Paci c Title). at Pacific to

ss, it was standard pract

have the borrower sign all the loan documents

borrower a complete copy of the entire loan file to take home, including all of Four Notices of plaintiff's loan file documents which the borrower had signed. ght to Cancel (Notices) are conta and all that
s

in

produced by Pacific Tit

Notices contain a signed statement at the bottom acknowl plaintiff had rece appears immediately signature is On all four Notices, the words "CRAIG A. The Notices

HEGRENES" are s

dated "1-25-07."

stating that the borrower within three days from: 1)

s the right to cancel the transaction of the transaction, 2) t e

2 - OPINION AND ORDER

of

TILA

s

osures, or 3) the date of receipt of De shave s of the

Notice. Notices of

Hoesly Decl., Ex. F. Right to Cancel si PI 2007. iff now He

by plaintiff

their own loan file as well. 25,

ts that he signed the documents on s Decl.,
~

3.
ies of the T dated 2007. sed

fic Title and defendants also possess in-Lending Dis acknowledgments

osure Statements which contain signed of rece by pIa iff on Janua 25,

Hoesly Declo, Ex. F. s

Plaintiff asserts that

signed a

osure statement on January 29, 2007. In 2007, In Financial
r 2008

s Decl., Ex. 4. led ., Inc. (MGC)

Mortgage MGC

ban

came the loan servicer for defendant LNV Corporation

intiff's loan, and in January 2009 acquired Fi Mort

Corp.'s interest in the loan. On or about January 22, 2010, plaintiff mailed MGC a notice of rescission attempt to rescind his loan. s court. In iled to s "any therefore,

On April 16, 2010, plaintiff filed suit laint, pIa copies of iff alleges notice of defendants

right to rescind,"

plaintiff had three

s from the

of the loan to exercise his

of rescission. Compl., p. 3. STANDARD Summary judgment is appropriate "if - eadings,

3

OPINION AND ORDER

scovery and disclosure materials on file~ and that re is no genuine issue as to any mater

affidavits show 1 fact and that the,
Fed. R.

moving party is entitl Civ. P.
56 (c).

to judgment as a matter of law." of a ct is

rna teriali ty

ermined by the

substantive law on the issue.
Contractors Ass'n., 809 F.2d 6, 630 Cir. 1987).
evidence is
the

authenticity of a such nonmoving 248 (1986):
moving a

spute is jury

termined by whether could retGrn a

reasonable

verdict

y.

~~~~~~~~~~~~~~~~~,

477 U.S. 242,

has t

burden of establis
1 fact.

the

sence of 477

a genuine issue of mater U.S. 317, 323 (1986).

~~~~~~~~~~~~~~,

If the moving party shows t , the nonmoving

absence of a y must go beyond r

genuine issue of material

pleadings and identify facts which show a genuine issue trial. at 324. court must reso all reasonable doubts as to

the

stence of issues of material fact against construe all i s drawn the

moving rlying
s

y and in t

light most favorable to the nonmoving at 630. However, the Circu only evi has refus

T.W. Elec., 809 F.2d to find a genuine

issue of fact where t and sel

presented is "uncorrobora Inc., 90 F.3d

serving" testimony.

Kennedy v. Applause,

1477, 1481 (9th Cir. 1996).

4 - OPINION AND

DISCUSSION
In his Complaint,

a

iff alleges

he did not receive

copies of the Notices, and

refore his rescission rights er consummation 12 C.F.R. ground
§

not expire until late January 2010, three years a of his loan transaction. 226.23. See 15 U. S. c.
§

35(f);

Defendants move for summary judgment on t le s

aintiff can present no Not and therefore,

of non-receipt of the signed acknowledgment of

in light of

receipt, plaintiff's claim fails as a matter of law. The purpose of the disclosure of c TILA is to consumers "meaningful

terms" and c

tions and to "encourage the
§

informed use of credit." TILAallows
J

15 U.S.C. to rescind

1601 (a).

Further, c t

borrowers

certain

consumer

trans

ions in which a se

ty interest is acquired in property lling. 15 U.S.C.
§

used as the borrower's principal s, in tion to

1635(a).
r

sclosure of the borrow's obligations r two

the transactions, creditors must "del of C.F.R.

s of the notice to res
,

right to rescind to each consumer ent
§

"

12

226.23(b)

(1).

Borrowers may seek rescission of midnight of the third transaction, 2) del ry of ss day" a

loan transaction "until er 1) consummat of the al

required documents and ' mat

disclosures, or 3) receipt of the notice of the ri whi r event occurs er. 15 U.S.C.
§

to rescind, "If the

1635(a).

5 - OPINION AND ORDER

required notice right to resc transactionJ."

or material shall re 3

sclosures are

not delivered,

the

rs after consummation [of the
§

12 C.F.R. § 226.23(a) (3); 15 U.S.C.

1635(f).

A borrower's written acknowledgment of receiving notice of the right to rescind creates "a 15 U.S.C. present
§

table presumption of delivery." this presumption, borrowers must

1635(c).

To

of non-rece

Williams v. First Gov't Morta. (presumption

=-~~~~~-=~~,

225 F.3d 738, 751 (D.C. Cir. 2000)

of del presumption) . Here, of del signed "mult The Notices p Rat

res borrower to come forward with evidence to meet

i

sents no evidence to rebut the presumption , pIa iff admits that on January 25, 2007, Hegrenes Decl.,
~

e Notice of Right to Cancel."

3.

You are entering a transaction that will result a mort ,lien or security interest on or in your home. You a 1 right under federal law to cancel transaction, without cost, within three business from whichever of the following events occurs last:
1.

date of the transaction, which ·is JANUARY 25, 2007; or 2. date you receive your ng Truth ures; or s 3. date you receive this notice of r to cancel.
f

Hoesly Decl.

Ex. F, p. 2.

The Notices

r

"[iJf no later

you cancel by mail or telegram, you must send the not midnight of 1/29/07 (or midnight of the

business day

lowing the latest of the three events lis 6 - OPINION AND ORDER

.) "

Thus,

the Not

s identify

third business day after advise pia ss iff

transaction his right to

as January 29, 2007 and aga cancel expires t bus

after the transaction or

latest of the events enumerat All four Notices contain pia es, and e of iff's initials next to both iff's signature and which THE

1 of the Notices contain pia under OF the

"1/25/07" that "EACH (2)

"ACKNOWLEDGMENT OF ,RECEIPT" HEREBY

states

THE

UNDERSIGNED

ACKNOWLEDGES

RECEIPT OF TWO CANCEL." Id.

COMPLETED COPIES OF THIS NOTICE OF RIGHT TO

Notably,

in his Declaration

iff does not assert nonsigned

receipt of the Notices.

Instead, plaintiff admits that

dated the Notices,Hegrenes Decl., , 3, and also that he "was given loan documents and took them home." 1. While plaintiff admits that loan documents, pi
"bel

Hoesly Decl., Ex. C., p.
[s ]
II

"re that he "has

some"

copies

iff asserts Ie."

unable to locate his original loan I find that plaintiff's not rebut the

Hegrenes Decl., , 13. his set of es does

ility to f rece

sumption that dence by

s of the Notice of

Right to Cancel as on January 25, 2007. F. Supp. 2d 608,

s signed acknowledgment of receipt

See Jackson v. New Century Mortg. Corp., 320 (E.D. to Mich. 2004) with (evidence any insu that the

611 12 "unable

plaintiffs

were

identify

certainty

which

documents they received at closing" he

ent to rebut

7 - OPINION AND ORDER

presumption created by signed acknowledgment'of receipt); 2 0 1 0 WL 715 61 7 , at * 4 ( 0 . N. J . Mar. 1, 2010) (borrowers' testimony and they sclosure not remember he

receiving "insuffic M r t a. Co., 0

rescission to

notices

statements

this presumption"); 0 1 ana I Am v. Nat' 1 City Feb. 1 7, 2 0 1 0 )
( aft e r

2 0 10 WL 5 7 1 93 6 , at * 5 ( 0 . Haw.

the plaintiff asserted under penalty of perjury that rescission notices were presented to she was uncerta during closing, later testimony t such notices "doom[
J

whether she rece

any

to overcome the presumption of receipt") . In response to defendant's mot claim that the Notice is defi of res ssion pI ntiff asserts a new e it contains red. the

incorrect date on which his

}\ccording

to plaintiff, he returned to Pacific sign new copies of his loan appl to correct ntains were s stakes in the

tIe on January 29, 2007 to ion and disclosure statements closing costs. Plaintiff

stated

because new his loan

sclosure forms

other documents

transaction "consummated" on January 29, ified the Not as t transaction,

2007, and the dates "JANUARY 25,

2007," and three days after the transaction, "1-29

07," were incorrect and in violation of the TILA. Notably, intiff did not allege s theo or
s

supporting it in his Complaint, even though pIa he was in possess of es of his loan

iff asserts that in early 2009, over

8 - OPINION AND ORDER

one year before he filed suit against defendants. Dec!.,
'.Il

See Hegrenes

14.

In their reply,

defendants argue that the court

should not consider such allegations, given that they are untimely, prejudicial, and futile. complaint. 1 I delay am not inclined to grant such leave on grounds of undue and prejudice, particularly in light of the fact that Plaintiff now seeks leave to amend his

plaintiff admittedly possessed the loan documents underlying his new allegations in early 2009, well before he filed suit. Decl., '.Il 14. them futile. Hegrenes

Even if I considered plaintiff's amendments, I find Nunes v. Ashcroft, 375 F.3d'805, 808 (9th Cir. 2004). offers no authority or evidence that his loan

Plaintiff

transaction did not consummate on January 25,

plaintiff may have signed revised disclosure statements on January 29, 2007, the fact remains that he signed the loan agreement and deed of trust on January 25, obligated on the loan. dates on the Notices 2007 and thus became contractually
§

.

2007.

Even though

12 C.F.R. correctly

226.2 (a) (13). the

I find that the of the loan

indicate

date

transaction and three days thereafter.

Regardless,

the Notices

clearly state that plaintiff's right to rescind expires three days after the loan transaction, the date he received disclosure

lAI though plaintiff complains of confusing disclosure statements in his response to defendants' -motion, he does not seek to amend his complaint to allege a cause of action on such grounds. Therefore, I do not consider these allegations. 9 - OPINION AND ORDER

statements, or the date he received the Notice, whichever occurs later. Therefore, I find that the Notices accurately informed Accordingly, defendants'

plaintiff of his right of rescission. motion for summary judgment is granted.

Defendants also move for sanctions pursuant to Federal Rule of Civil Procedure 11. Defendants maintain that plaintiff
~nd

counsel

were notified of the deficiencies in the Complaint and failed to correct or investigate them, and then altered the theory of

plaintiff's case after defendants moved for summary judgment. I can appreciate defendants' position and agree that plaintiff changed judgment. his theory Although only a after close defendants question, I moved cannot for summary that

find

plaintiff's Complaint was so legally and factually baseless as to warrant sanctions, 1127 (9th Cir. that see Christian v. MatteI, given not plaintiff's copies Inc., 286 F.3d 1118, and initial (an

2002) , he did

apparent of the

assertion

receive

Notices

assertion not repeated in his Declaration) and case law finding that a borrower's testimony of non-receipt can create a material fact. *4 question of

Jobe v. Argent Mortg. Co., LLC, 2008 WL 450432, at (citing cases).

(M.D. Pa. Feb. 15, 2008)

III III III III
10 - OPINION AND ORDER

"

CONCLUSION
De s' motion for summary j s' Motion for Rule 11 Sanct pI ntiff's Motion for Leave to File (doc. 16) is GRANTED, . 30) is DENIED, and Complaint (doc. 39) is

DENIED. IT IS SO ORDERED. s

~ay

of March, 2011.

Ann Aiken United States District

11 - OPINION AND ORDER