The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.
I. Truth in Lending Claims
Plaintiffs brought this action alleging that LaSalle engaged in deceptive practices in connection with the financing of home improvement transactions. In Count I, Plaintiffs Richard and Elyse Mount ("Mounts"), Ruth Cronk ("Cronk"), and Wayne Kleinfelder ("Kleinfelder") allege violations of the Truth-in-Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. LaSalle moves to dismiss the Mounts' claims under Count I contending that they are barred by TILA's one year statute of limitations.
On a motion to dismiss, all well-pleaded factual allegations are presumed to be true. Johnson v. Martin, 943 F.2d 15, 16 (7th Cir. 1991); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The court must view those allegations in the light most favorable to the plaintiff, Gomez v. Illinois State Board of Educ., 811 F.2d 1030, 1039 (7th Cir. 1987), and all reasonable inferences to be drawn from those allegations are also accepted as true. Meriwether v. Faulkner, 821 F.2d 408, 410 (7th Cir. 1987). The complaint need not specify the correct legal theory nor point to the right statute to survive a Rule 12(b) motion to dismiss, Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (1992); however, the complaint will be dismissed if the plaintiff can prove no set of facts upon which relief can be granted. Ross v. Creighton Univ., 957 F.2d 410, 413 (7th Cir. 1992).
There are two statute of limitations regarding TILA claims that come into play in this case. Actions for statutory and actual damages brought under § 1640 must be brought within one year from the date of the violation. 15 U.S.C. § 1640(e). A credit transaction is consummated for the purposes of TILA when the consumer becomes contractually obligated on a credit transaction. 12 C.F.R. § 226.2(a)(13); Streit v. Fireside Chrysler-Plymouth, Inc., 697 F.2d 193, 196 (7th Cir. 1983); Rowland v. Magna Millikin Bank of Decatur, N.A., 812 F. Supp. 875, 879 (C.D. Ill. 1992). The Mounts filed their claim more than one year after the transaction was consummated. Therefore, LaSalle argues that their claims to any damages under § 1640 are time barred and must be dismissed.
Notwithstanding the above, § 1635 allows a consumer to rescind the contract, under certain circumstances, up to three years after the date the transaction was consummated. 15 U.S.C. § 1635(f). A lender's failure to rescind is a separate violation of TILA which gives rise to claims for statutory and actual damages. Elliott v. ITT Corp., 764 F. Supp. 102, 106 (N.D. Ill. 1991); Malfa v. Household Bank, F.S.B., 825 F. Supp. 1018, 1020 (S.D. Fla. 1993). The Mounts allege that they attempted to rescind the contract by letter and by filing this lawsuit on August 21, 1992, and LaSalle has not rescinded the contract. Therefore, they may have a right to damages under § 1640 resulting from LaSalle's refusal to rescind. Id.
LaSalle asserts that Rowland v. Magna Millikin Bank of Decatur, N.A., 812 F. Supp. 875, mandates dismissal. However, its reliance on Rowland is misplaced. In Rowland, the plaintiffs' complaint did not seek damages resulting from the defendant's failure to allow rescission, but only sought damages for violations of TILA which occurred on the date of consummation. Because the transaction was consummated more than a year before the complaint was filed, the court held that any claim for damages pursuant to Section 1640 was time barred. Id. at 881-82.
This is not the situation at bar. The Complaint, liberally construed, asserts a claim for damages arising out of the failure to rescind. (See Compl. PP 27, 108, 112.) Thus, the Mounts may be entitled to damages under § 1640 as a result of the refusal to rescind. However, to the extent the Mounts are asserting claims for damages arising from violations of TILA on the date of consummation, they are time barred, and are, therefore, dismissed.
Patricia Murphy and Mildred Dennis consummated their loan contracts in 1987, and they have not asserted that LaSalle has refused to allow rescission. Therefore, any claims they might have under TILA for damages under § 1640 or § 1635 are time barred and are dismissed.
II. Illinois Consumer Fraud Act Claims
LaSalle contends that the claims of Bruce Heard ("Heard"), Robert and Laurice McMurtry (the "McMurtrys"), Patricia Murphy ("Murphy"), and Mildred Dennis ("Dennis") under the Illinois Consumer Fraud Act ("CFA") are barred by the three year statute of limitations. The McMurtrys executed their financing contract on July 6, 1988. Heard executed his financing contract on April 30, 1988. Murphy and Dennis executed their financing contracts in 1987. This case was filed on August 21, 1992. Consequently, their claims were not filed within three years of the transaction.
Plaintiffs contend that the limitation period should be tolled under a continuing wrong theory. Under this theory, the statute of limitations does not begin to run until the final overt act constituting the fraud. See, e.g., Dudley Enterprises, Inc. v. Palmer Corp., 822 F. Supp. 496, 505 (N.D. Ill. 1993). The doctrine was recently described by the Illinois Appellate Court:
Where a tort involves continuing or repeated injury, however, the statute of limitations does not begin to run until the date of the last injury or when the tortious acts cease. A continuing violation, however, is occasioned by continuing unlawful acts and conduct, not by continual ill effects from an initial violation. Moreover, where there is but one overt act from which subsequent damages may flow, it is held that the statute begins to run on the date the defendant invaded the plaintiff's interest and inflicted injury, and this is so despite the continuing nature of the injury.