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Briscoe v. Deutsche Bank National Trust Co.

November 7, 2008

MARIETTA BRISCOE, ON BEHALF OF HERSELF AND OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR NEW CENTURY NCHET 2005-C, N.A. DEFENDANTS.



The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

I. BACKGROUND

Deutsche Bank National Trust Company ("DBNTC"), and Deutsche Bank National Trust Company, as trustee for New Century NCHET 2005-C, N.A. ("DBNTC, as trustee"), seek dismissal of a lawsuit by a mortgagor, Marietta Briscoe ("Briscoe"), alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601-1667. Although DBNTC was not the original mortgagee, ownership rights to Briscoe's mortgage were assigned to DBNTC, as trustee. New Century, the original mortgagee, has since filed for bankruptcy.

There are two counts. The first is an individual recision claim based on a failure to disclose the frequency of payments and a failure to provide two copies of the federal Notice of Right to Cancel. On this count, Plaintiff also seeks statutory damages for the underlying disclosure violations. The second count is a class claim also based on the failure to disclose the frequency of repayment. For the following reasons, DBNTC's motion to dismiss is granted in part and denied in part.

II. STANDARD OF REVIEW

A Rule 12(b)(6) motion tests the sufficiency of a complaint, not the merits of a case.

Autry v. Northwest Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir. 1998). DBNTC's motion to dismiss should be granted only if Briscoe cannot prove any set of facts in support of her claim that would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Furthermore, I must accept all well-pleaded factual allegations in the complaint as true, drawing all reasonable inferences from those facts in Plaintiff's favor. Cleveland v. Rotman, 297 F.3d 569, 571 (7th Cir. 2002). Stated another way, I should not grant DBNTC's motion "unless no relief could be granted 'under any set of facts that could be proved consistent with the allegations.'" Nance v. Vieregge, 147 F.3d 589, 590 (7th Cir. 1998) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)). That said, Briscoe's "obligation to provide the grounds of [her] entitlement for relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic v. Twombly, ---U.S. ----, ---- - ----, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007).

III. STATEMENT OF RELEVANT FACTS

I take the statement of facts from Briscoe's first amended complaint. Prior to October 21, 2005, plaintiff Briscoe applied to New Century Mortgage Corporation ("New Century") for refinancing. New Century granted Briscoe an adjustable rate mortgage in the principal amount of $157,000. The mortgage was closed on or about October 21, 2005. Briscoe made monthly payments until her interest rate increased in November 2007. At that time, Briscoe phoned Chase Home Finance, LLC, servicer of the mortgage, to explain that she was having difficulty making payments. In response to her plea for assistance, the customer service representative with whom she spoke told her to sell her home. The loan was later sold to DBNTC.

IV. DISCUSSION

A. Count I

Count one of the complaint alleges that when mortgagee New Century made an adjustable rate loan to Briscoe, New Century failed to provide Briscoe with the required financial disclosures under TILA, namely "the number, amount, and due dates or periods of payments scheduled to repay the obligation." 15 U.S.C. § 1638(a)(6). Additionally, Briscoe alleges that she received only one Notice of Right to Cancel in violation of the requirement that two copies be provided to the mortgagor under 12 C.F.R. § 226.23(b)(1). Based on these allegations, Briscoe seeks rescission of her mortgage, statutory damages for failure to rescind, and statutory damages for the underlying violations.

In its motion to dismiss, DBNTC makes two main assertions. First, DBNTC maintains that because the disclosures provided to Briscoe by New City comply with TILA, Briscoe fails to state a claim for rescission of her mortgage. Second, DBNTC asserts that Briscoe's damages claim for the underlying TILA violations are barred by TILA's one-year statute of limitations, pursuant to 15 U.S.C. ยง 1640(e). Briscoe contends, however, that if she is entitled to a three-year right ...


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