Marr v Bank of America (Fed)

Summary: Under the Truth in Lending Act (T.I.L.A), a signature on an acknowledgement of receipt of documents creates a presumption the person received the documents, but it does not shift the burden of persuasion.

Marr v Bank of America, 662 F3d 963 (7th Cir., 2011).

Facts: On February 23, 2007, Richard Marr (Marr) refinanced his mortgage with Countrywide Bank, the predecessor to Bank of America, N.A (Countrywide).  Marr testified that during the closing, the closing agent put a duplicate of every document he signed in a pile next to him, but that he did not have time to review that documents.  Marr then signed a document stating that he had received two copies of a Notice of Right to Cancel (Notice).  At the end of this meeting all of the documents were put into a folder.  This folder was immediately put into Marr’s cabinet where he claimed it was not disturbed.

While looking through this folder for litigation separate from the present case, Marr’s attorney noticed that he had only received one Notice.  The present action arose from Marr’s attempt to rescind his mortgage based upon Countrywide’s failure to provide two Notices, in violation of the Truth in Lending Act’s requirements as embodied in the regulations at 12 CFR § 226.23(b)(1).

Debora Ann Smith (Smith), the closing agent, testified that she did not remember the specific events of the closing, but that she always followed the company’s practices and procedures.  These procedures include reviewing the closing instructions and checklists with the debtor, discuss and ensure the borrower understands the closing documents, at the end of closing to present the Notice to the borrower and ensure that they understand their rights, and to put to copies of the Notice in the borrower’s document pile.

Marr filed an affidavit in response to Smith’s affidavit stating that she did not follow the closing procedures, namely that she didn’t review anything at the end of closing, look through the documents, and she presented the Notice in the beginning or near the middle of the closing.  Based upon the facts the trial court found that Countrywide and Summit were entitled to summary judgment.  Marr’s signature that he received two Notices created a rebuttable presumption that this was true, and that his testimony about only finding one in his folder and Smith not following the procedure was not sufficient to overcome the presumption.   

Holding: Reversed and remanded for further proceedings.  The Court of Appeals found that while Marr’s signature created a presumption of truth under 15 U.S.C. § 1635(c), that it does not shift the burden of persuasion. This meant that Marr needed to produce only enough evidence so that a reasonable jury could find that he only received one copy.  The Court of Appeals held that Marr’s evidence that the folder remained undisturbed, despite the fact that it contained documents from a later date, and that his experience of the closing deviated from procedure was enough for a reasonable jury to find in his favor, and therefore summary judgment was inappropriate.

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By: ATG Underwriting Department | Posted on: Fri, 05/25/2012 - 1:43pm