Truth in Lending Act / Real Estate Settlement
The panel reversed in part and vacated in part the district
court’s dismissal pursuant to Federal Rule of Civil Procedure
12(b)(6) of an action under the Truth in Lending Act and the
Real Estate Settlement Practices Act against Countrywide
Financial Corporation and various other defendants involved
in the plaintiffs’ residential mortgage.
The panel reversed the district court’s dismissal of the
plaintiffs’ TILA rescission claim for failure either to tender
the rescindable value of their loan prior to filing suit or to
allege ability to tender its value in their complaint. Declining
to extend Yamamoto v. Bank of New York, 329 F.3d 1167 (9th
Cir. 2003), the panel held that an allegation of tender or
ability to tender is not required. The panel held that only at
the summary judgment stage may a court order the statutory
* The Honorable William E. Smith, District Judge for the U.S. District
Court the District of Rhode Island, sitting by designation.
** This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
Case: 09-17678 07/16/2014 ID: 9170559 DktEntry: 129-1 Page: 2 of 38
MERRITT V. COUNTRYWIDE FINANCIAL CORP. 3
sequence altered and require tender before rescission, and
then only on a case-by-case basis, once the creditor has
established a potentially viable defense.
The panel vacated the district court’s dismissal of the
plaintiffs’ claims under § 8 of RESPA, which prohibits
kickbacks and unearned fees, as barred by the one-year
statute of limitations. The panel held that although the
RESPA statutory limitations period ordinarily runs from the
date of the alleged RESPA violation, the doctrine of equitable
tolling may, in appropriate circumstances, suspend the
limitations period until the borrower discovers or had
reasonable opportunity to discover the violation. The panel
declined to address two issues of first impression:
(1) whether, while straight overcharges are not actionable
under RESPA § 8(b), markups for services provided by a
third party are actionable; and (2) whether an inflated
appraisal qualifies as a “thing of value” under RESPA § 8(a).