James Pierro, III v. Spiegel Development, Inc.

FILED
NOT FOR PUBLICATION DEC 13 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
JAMES C. PIERRO, III, No. 10-55968
Plaintiff - Appellant, D.C. No. 2:09-cv-02312-CAS-
PLA
v.
SPIEGEL DEVELOPMENT, INC.; et al., MEMORANDUM *
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted December 7, 2011
Pasadena, California
Before: B. FLETCHER, SILVERMAN, and WARDLAW, Circuit Judges.
Plaintiff James Pierro appeals the district court’s dismissal of his claims
under the Truth in Lending Act, 15 U.S.C. § 1635, for rescission of his mortgage
loan with the defendants and for monetary damages. Reviewing de novo, see
Cafasso ex rel. U.S. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1053–54 & n.4
(9th Cir. 2011), we reverse and remand.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
-2-
The district court’s ruling that the plaintiff failed to state a rescission claim
under the Truth in Lending Act for failure to allege tender or intent to tender is
incorrect. Paragraph 9 of the complaint’s prayer for relief specifically asks the
district court to:
[o]rder that, because the Defendants failed to respond to the Plaintiff’s
notice of rescission, the Plaintiff has no duty to tender, but in the
alternative, if tender is required, determine the amount of the tender
obligation in light of all of the Plaintiff’s claims, and offsets under his
agreements with defendants, and order the Defendants to accept
tender on reasonable terms and over a reasonable period of time if any
money is due defendants.
Giving the plaintiff all reasonable inferences, the plaintiff’s request that the district
court determine how much he was required to tender, and to order the defendants
to accept his tender, fairly indicates that he intended to comply with his duty to
tender.
On remand, the district court should consider whether the plaintiff’s
November 7, 2008 letter, which the defendants failed to answer within 20 days,
effected a rescission, thus triggering the default rescission sequence under the
regulations and depriving the district court of the authority to modify that
sequence. See 12 C.F.R. § 226.23(d)(1)–(4); see also Yamamoto v. Bank of N.Y.,
329 F.3d 1167, 1172 (9th Cir. 2003). If not, the district court may also consider
-3-
under Yamamoto whether to reorder the default rescission sequence, in which the
creditor must release its lien before the consumer must tender. See id. at 1173.
Additionally, the district court erred in dismissing the plaintiff’s monetary
damages claim as time-barred. The district court is correct that the original loan
transaction occurred in July 2007, more than one year before the plaintiff filed his
complaint in April 2009. See 15 U.S.C. § 1640(e). But the complaint also pled a
damages claim based on the defendants’ subsequent failure to comply with the
Act’s rescission procedures following his November 7, 2008 letter — events
occurring less than one year prior to the filing of this complaint. If on remand the
district court concludes that the November 7, 2008 letter effected a rescission, that
claim would be timely.
REVERSED AND REMANDED.