The opinion of the court was delivered by: McDADE, District Judge.
Before the Court are cross motions for summary judgment filed
by Plaintiffs, John and Carol Rowland; and Defendant, Magna
Bank of Central Illinois. Plaintiffs' complaint is in two
counts alleging violations of the Truth in Lending Act,
15 U.S.C. § 1601 et seq (TILA), on the part of Defendant. This
Court has jurisdiction of this case pursuant to 15 U.S.C. § 1640(e)
and 28 U.S.C. § 1331. In Count I, Plaintiffs seek
rescission of a Retail Installment Contract entered into
between Plaintiffs and Defendant. 15 U.S.C. § 1635. In Count
II, Plaintiffs seek civil liability against Defendant for
failing to comply with the provisions of the TILA. 15 U.S.C. § 1640.
For the reasons stated herein, the Court GRANTS in part
and DENIES in part Plaintiffs' Motion for Summary Judgment on
Count I, and DENIES Plaintiffs' Motion for Summary Judgment on
Count II. (# 12 & # 15). Additionally, the Court GRANTS in part
and DENIES in part Defendant's Motion for Summary Judgment on
Count I and GRANTS Defendant's Motion for Summary Judgment on
Count II. (# 12 & # 15).
According to the deposition of John Funk, Defendant's
Assistant Vice President in the Retail Lending Department, Nu
View Window of Illinois, Inc. (Nu View) presents about 400
contracts a year to Defendant for the financing of window sales
to Nu View customers. The total amount of home improvement
business which Defendant and Nu View transact each year amounts
to approximately $1,000,000.00 (one million dollars). (Funk
deposition, pp. 8-9). What follows is a chronological series of
events involving Plaintiffs, Defendant, and Nu View.
On December 5, 1988, Plaintiffs met with a sales
representative from Nu View and agreed to buy six windows for
$4,364.00 (four thousand three hundred sixty-four dollars). (J.
Rowland Deposition pp. 9-10,
Defendant's deposition exhibit # 1). On that date, Plaintiffs
and the sales representative also partially completed a Retail
Installment Contract (Plaintiffs' exhibit # 1),*fn1 and a
Notice of Right of Rescission. (Plaintiffs' exhibit # 6), The
Rescission Notice stated that the date of the transaction was
December 5, 1988, and that Plaintiffs had until midnight of
December 8, 1988, to exercise their rescission rights.
Id. On December 13, 1988, Plaintiffs mortgaged their home to
Defendant to secure payment of a note in the amount of
$4,364.00 (four thousand three hundred sixty-four dollars).
(Plaintiffs' exhibit # 7). On December 14, 1988, Defendant
notified Plaintiffs that their credit was satisfactory for the
amount of $4364.00 (four thousand three hundred 64 dollars) for
60 months. On January 18, 1989, Defendant dated its copy of the
Retail Installment Contract. (Unmarked exhibit attached to
Defendant's brief, Doc # 15; Funk Dep. p. 20, see Plaintiffs'
exhibit # 5). On January 25, 1989, the Plaintiffs' mortgage of
their home to Defendant was recorded. (Plaintiffs' exhibit #
7). On February 5, 1991, Plaintiffs, by letter to Defendant,
rescinded the transaction and demanded release of their
mortgage on their residence. (Plaintiffs' Exhibit # 2). On
February 12, 1991, Defendant refused to terminate the
transaction or release the mortgage. The instant action was
filed on March 26, 1991, and on June 13, 1991, Defendant
released the mortgage.
Of key significance to the present action are the differences
between the Plaintiffs' copy of the Retail Installment Contract
and the Defendant's copy of the Installment Contract. The
following is a discussion of those differences.
Attached to Plaintiffs' Complaint as Plaintiffs' Exhibit # 1
is the original buyer's copy of the Retail Installment
Contract. This copy was the one which Plaintiffs' kept in their
possession. Most notably, Plaintiffs' copy of the contract is
almost completely illegible. For instance, in the box marked
"TRUTH IN LENDING DISCLOSURES," (federal box) it is impossible
to accurately determine the finance charge and the total of
payments, and the total sale price is too blurred to attempt to
make an accurate reading. The contract states that payments are
due "45 days after installation," but no specific date is
given. Additionally, the contract is not dated and bears only
the signature of John Rowland.
Another copy of the contract which was submitted by Defendant
but not marked as an exhibit (this copy of the contract is the
same as Plaintiffs' # 5) contains some significant differences
from Plaintiffs' copy of the contract. This copy of the
contract is completely legible. Furthermore, the contract bears
not only the signature of John Rowland, but also the signatures
of Carol Rowland and Tamela Huff, the Office Manager of Nu
View, Inc. Additionally, the contract bears the date "1-18-89"
in the upper right hand corner. Most importantly, the federal
box clearly shows the finance charge, total of payments, and
total sale price. Moreover, the federal box not only states
that payments are due "45 days after installation," but also
gives the date 3-4-89." Several other differences exist between
the two contracts but need not be discussed here.
"A motion for summary judgment is not an appropriate occasion
for weighing the evidence; rather, the inquiry is limited to
determining if there is a genuine issue for trial." Lohorn v.
Michal, 913 F.2d 327, 331 (7th Cir. 1990); see Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510,
91 L.Ed.2d 202 (1986). This Court must "view the record and all
inferences drawn from it in the light most favorable to the
party opposing the motion." Holland v. Jefferson National Life
Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989). When faced with
a motion for summary judgment, the non-moving party may not
rest on its pleadings. Rather, it is necessary
for the non-moving party to demonstrate, through specific
evidence, that there remains a genuine issue of triable fact.
See, Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct.
2548, 2553, 91 L.Ed.2d 265 (1986); Bank Leumi Le-Israel, B.M.
v. Lee, 928 F.2d 232, 236 (7th Cir. 1991).
Initially, the Court notes that TILA "must be liberally
construed in favor of the consumer." Davis v. Werne,
673 F.2d 866, 869 (5th Cir. 1982). Furthermore, "TILA requirements are
enforced by imposing a sort of strict liability in favor of
consumers who have secured financing through transactions not
in compliance with the terms of the Act. `It is strict
liability in the sense that absolute compliance is required and
even technical violations will form the basis for liability.'"
Shepeard v. Quality Siding & Window Factory, Inc., 730 F. Supp. 1295,
1299 (D.Del. 1990) (citations omitted). In Smith v. No.
2. Galesburg Crown Finance Corp., 615 F.2d 407 (7th Cir. 1980),
the Seventh Circuit provided the Court with clear guidelines
for evaluating complaints of violations of the Act. Smith
It is not sufficient to attempt to comply with
the spirit of TILA in order to avoid liability.
Rather, strict compliance with the required
disclosures and terminology is required. Many
violations of TILA involve technical violations
without egregious conduct of any kind on the part
of the creditor. However, congress did not intend
that the creditors should escape liability for
merely technical violations. Thus, while it may be
true, in some sense . . . that the terminological
violations here are inconsequential, the fact
remains that they are violations. Any misgivings
which creditors may have about the technical
nature of the requirements should be addressed to
Congress or to the Federal Reserve Board, not to
the courts. . . . We will therefore require strict
adherence to the required terminology under the
statute and regulations, and we will not
countenance deviations from those requirements,
however minor they may be in some abstract sense.
Id. at 416-417. (citations omitted).
In the case at bar, Plaintiffs seek to rescind the
transaction into which they entered. A right of rescission
exists "[i]n a credit transaction in which a security interest
is or will be retained or acquired in a consumer's principal
dwelling. . . ." 12 C.F.R. § 226.23(a). A security interest was
retained in the case at bar, giving Plaintiffs a right to
In its Motion for Summary Judgment, Defendant argues that
Count I is time-barred because Plaintiffs failed to exercise
their right to rescind within the applicable statute of