In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-3984
SARAH HAMM,
Plaintiff-Appellant,
v.
AMERIQUEST MORTGAGE COMPANY,
AMERIQUEST MORTGAGE SECURITIES,
INC., and AMC MORTGAGE SERVICES, INC.,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 227—Samuel Der-Yeghiayan, Judge.
____________
No. 06-3086
SHIRLEY JONES,
Plaintiff-Appellee,
v.
AMERIQUEST MORTGAGE COMPANY,
AMERIQUEST MORTGAGE SECURITIES,
INC., and AMC MORTGAGE SERVICES, INC.,
Defendants-Appellants.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 432—David H. Coar, Judge.
____________
ARGUED APRIL 13, 2007—DECIDED OCTOBER 17, 2007
____________
2 Nos. 05-3984, 06-3086
Before FLAUM, MANION, and WOOD, Circuit Judges.
WOOD, Circuit Judge. Plaintiffs Sarah Hamm and
Shirley Jones sued defendants Ameriquest Mortgage
Company (“Ameriquest”), Ameriquest Mortgage Securities,
Inc., and AMC Mortgage Services, Inc., in separate actions
brought under the Truth In Lending Act (“TILA”), 15
U.S.C. § 1640. Each of them claimed that Ameriquest, the
original lender, violated TILA by failing to state ex-
plicitly the payment period in the borrowers’ TILA Dis-
closure Statements. In addition, each asserted that
Ameriquest’s inclusion of a one-week rescission right
notice alongside the TILA-mandated three-day rescission
right notice violated TILA because it could cause borrowers
unknowingly to give up their TILA rescission rights. As
remedies, they claimed both damages and the right to
rescind their mortgages.
The two suits, though identical from a legal standpoint,
wound up before different district court judges; those
judges reached opposite results. In the Hamm action, the
district court granted summary judgment to the defen-
dants on both claims; Hamm appeals based only on the
theory of liability relating to the payment period. In the
Jones action, the district court granted summary judg-
ment to Jones based on Ameriquest’s failure properly to
state the payment period; it denied both Jones’s and
Ameriquest’s summary judgment motions on the argu-
ment relating to the notice of a right to rescind, concluding
that material issues of fact remained on that claim.
On the surface, it would appear that the Jones action is
not yet resolved in the district court. However, we have
held that,
once [a district court has] entered a judgment giving
the plaintiff all the relief that it was seeking, the
plaintiff ’s remaining ground merged in the judgment,
which ended the case in the district court and there-
Nos. 05-3984, 06-3086 3
fore was appealable without the aid of Rule 54(b), even
though, should such a judgment be reversed on appeal,
the lawsuit would not be over, because the plaintiff
had an alternative theory of liability.
Ind. Harbor Belt R.R. Co. v. Am. Cyanamid Co., 916 F.2d
1174, 1183 (7th Cir. 1990). In short, a plaintiff can win
only once, and so it does not matter how many other
theories are left on the table if the claim itself has been
resolved. The judgment of the district court, which is
what we review, is final in Jones’s case and thus ripe
for appeal. Before this court, the defendants have ad-
dressed both theories of liability, while Jones argues that
her allegation of defective notice of the right to rescind
provides an alternative basis for affirming the district
court’s grant of summary judgment in her favor.
We conclude that the district court in the Jones action
reached the correct result on the payment period theory
of liability. That is enough to require reversal in Hamm’s
case and affirmance in Jones’s case. We do not reach the
issue concerning the notice of the right to rescind.
I
The facts in these two cases are not in dispute, and so
we review them here only briefly. On January 19, 2002,
Hamm entered into a loan transaction secured by a
mortgage with Ameriquest. On March 13, 2002, Jones did
the same thing. At closing, Hamm and Jones each signed
a form entitled “Disclosure Statement” that listed a
specific date as the due date for the first payment and
another specific date for the final payment.
Neither Disclosure Statement ever says, in so many
words, that payments will be made over a 360-month
period of time. Instead, the relevant part of the forms
looked like this (using Hamm’s as the example):
4 Nos. 05-3984, 06-3086
NUMBER OF AMOUNT OF PAYMENTS
PAYMENTS PAYMENTS ARE DUE
BEGINNING
359 $541.92 03/01/2002
1 $536.01 02/01/2032
Elsewhere on the form it indicates the “Total of Pay-
ments,” which in Hamm’s case was $195,085.29 and in
Jones’s case was $172,766.38. At no place on either
Disclosure Statement does the number “360” appear, nor
is there any reference to “360 months,” nor an indication
that payments are to be made monthly. On the other
hand, it does not take much calculation to realize that the
time between the first entry in the third column and
the last entry is just shy of thirty years, or 360 months.
Both Hamm and Jones signed other documents that
said things like “loan payments are required monthly” or
that at least used the term “monthly” when referring
generally to the required payments.
At their loan closings, Hamm and Jones also each
received copies of a “Notice to Cancel” form and a “One
Week Cancellation” form. The “Notice to Cancel” form
states that TILA allows three days for a borrower to cancel
a loan. The “One Week Cancellation” form informs the
borrower that Ameriquest gives her a right to cancel for
a full week. After the transactions were complete,
Ameriquest Mortgage Company sold the mortgages to
defendant Ameriquest Mortgage Securities; they are
both serviced by defendant AMC Mortgage Services.
In the Jones action, the district court entered judgment
against only defendant Ameriquest Mortgage Securities,
Inc., after concluding that Jones filed her suit after the
statutory deadline for relief other than rescission. It
Nos. 05-3984, 06-3086 5
dismissed the case as moot against the other two defen-
dants. It also ordered Ameriquest to pay Jones’s attorneys’
fees and other costs. In the Hamm case, as we noted
earlier, the district court entered judgment for Ameriquest.
II
A
We begin with the plaintiffs’ complaint that the Disclo-
sure Statements did not explicitly state the payment
period of their loans, as required by TILA. We review a
decision to grant summary judgment de novo. Conn.
Indem. Co. v. DER Travel Serv., Inc., 328 F.3d 347, 349
(7th Cir. 2003). In conducting our review, we look to the
language of the statute, the implementing regulation
(“Regulation Z,” promulgated by Federal Reserve Board
(“FRB”)), and the relevant FRB Staff Commentary. TILA
was written to serve more than each individual borrower’s
needs. Congress passed it to improve information in credit
transactions and thus enhance the efficiency of credit
markets, relying on “meaningful disclosure of credit terms
so that the consumer will be able to compare more readily
the various credit terms available” to achieve this goal.
15 U.S.C. § 1601(a).
Courts pay particular heed to the FRB Staff Commen-
tary to TILA’s regulations when evaluating an alleged
TILA violation. The Supreme Court has held that “defer-
ence is especially appropriate in the process of interpreting
the Truth in Lending Act and Regulation Z [and] . . .
[u]nless demonstrably irrational, Federal Reserve Board
staff opinions construing the Act or Regulation should be
dispositive.” Ford Motor Credit Co. v. Milhollin, 444 U.S.
555, 565 (1980). In keeping with Milhollin, this court has
deferred to the views of the FRB, as expressed in the
Commentary, when we are called upon to interpret TILA.
6 Nos. 05-3984, 06-3086
Our treatment of the commentary interpreting 15 U.S.C.
§ 1638(a)(6), the portion of TILA at issue in this case, is no
exception. Clay v. Johnson, 264 F.3d 744, 748 (7th Cir.
2001).
TILA imposes an explicit requirement that a lender
include “[t]he number, amount, and due dates or period
of payments scheduled to repay the total of payments,”
in its Disclosure Statement to the borrower. 15
U.S.C. § 1638(a)(6) (emphasis added); see also 12 C.F.R.
§ 226.18(g)(1). The relevant section of the FRB commen-
tary states that:
To meet this requirement creditors may list all of the
payment due dates. They also have the option of
specifying the “period of payments” scheduled to repay
the obligation. As a general rule, creditors that choose
this option must disclose the payment intervals or
frequency, such as “monthly” or “bi-weekly,” and the
calendar date the beginning payment is due. For
example, a creditor may disclose that payments are
due “monthly beginning on July 1, 1988.” This infor-
mation, when combined with the number of payments,
is necessary to define the repayment period and
enable a consumer to determine all of the payment
due dates.
Supp. I, para. 18(g)(4)(I); 63 Fed. Reg. 16673. An “Excep-
tion” section immediately follows and allows some flex-
ibility in the narrow situation where the first date of the
lending period is unknown at the time the loan is issued.
Supp. I, para. 18(g)(ii). This rule and exception are all that
the commentary has to say about § 226.18(g)’s require-
ment to disclose the payment period. The FRB’s interpre-
tation does not strike us as so irrational that we would
be required to disregard it. We conclude, therefore, that
TILA requires a lender to state clearly on the Disclosure
Statement either the due dates or period of payments
Nos. 05-3984, 06-3086 7
scheduled. The question is whether TILA is satisfied if
the form provides only enough information from which the
consumer might infer either the due dates or the pay-
ment period.
TILA’s purpose is achieved by promoting uniformity in
credit documents. Atypical terms and forms can confuse
borrowers, leading them to agree to credit products that
they might have rejected had they understood them
properly. For that reason, TILA requires that many items
of information be disclosed in specified ways. If a lender
does not disclose one such piece of information in the
specified way, leaving the borrower to make assumptions,
then TILA has been violated. “[W]hether a particular
disclosure is clear for purposes of TILA is a question of
law that ‘depends on the contents of the form, not on how
it affects any particular reader.’ ” Handy v. Anchor Mort-
gage Corp., 464 F.3d 760, 764 (7th Cir. 2006) (citing Smith
v. Check-N-Go of Ill., Inc., 200 F.3d 511, 515 (7th Cir.
1999)). It is immaterial if the borrower in a particular
transaction made the right assumptions about the terms
and documents presented to her, if the form otherwise does
not comply with the statute and regulations.
We have held that, when it comes to TILA, “hyper-
technicality reigns.” Handy, 464 F.3d at 764. (This is not,
we recognize, the formulation that some of our sister
circuits use. See, e.g., Santos-Rodriguez v. Doral Mortgage
Corp., 485 F.3d 12, 17 n.6 (1st Cir. 2007) (noting the
difference between our standard and that of other cir-
cuits)). Our decision on the adequacy of Ameriquest’s
disclosure of the payment period depends on just how
picky we think the statute is. The Supreme Court has
held that “[t]he concept of ‘meaningful disclosure’ that
animates TILA . . . cannot be applied in the abstract.
Meaningful disclosure does not mean more disclosure.
Rather, it describes a balance between competing consider-
ations of complete disclosure . . . and the need to
8 Nos. 05-3984, 06-3086
avoid . . . [informational overload].” Milhollin, 444 U.S. at
568 (internal quotation marks and citations omitted).
Following Milhollin’s guidance, our approach means that
when completeness of disclosure does not lead to informa-
tional overload, completeness must be required. Rhetoric
to one side, this leads to an outcome that is fairly similar
to the one reached in our sister circuits.
We also strike the balance this way because the FRB
specifically rejected our attempts at a more functional
approach to TILA violations. In Carmichael v. Payment
Ctr., Inc., 336 F.3d 636, 641 (7th Cir. 2003), we held that
“courts are to evaluate § 1638(a)(6)’s strictures function-
ally, not in formalistic manner [sic].” Shortly after we
issued the Carmichael decision, the FRB amended its
commentary to avoid exactly the kind of result we
reached in Carmichael; it noted that our decision was the
impetus for its action. The crux of the revised commentary
is that when a specific requirement is straightfor-
ward, lenders should not be able to dance around it in
their disclosures. In other words, the FRB opted for
hypertechnicality.
B
In this case, Ameriquest cannot escape the fact that it
committed a technical TILA violation by failing explicitly
to state the payment period of Hamm’s and Jones’s loans
on the Disclosure Statements. We do not doubt that many
(or most) borrowers would understand that a mortgage
with 360 payments due over approximately 30 years
contemplates a payment by the borrower each month
during those 30 years. But unfortunately for Ameriquest,
the Disclosure Statements do not say that; they do not
even say that the transaction is for a “360-month loan” or
anything similar. All they say, as the table we
have provided above illustrates, is that 359 payments
Nos. 05-3984, 06-3086 9
have to be made; the first one is due on a particular
date, and after all 359 payments are made, one more
payment in a slightly different amount will be due on
another particular date. The latter date happens to fall
about 30 years after the first due date. A borrower read-
ing this form alone would have to make assumptions
and take some steps in order to determine her payment
period. She could not, for example, simply postpone
payments 2-359 until approximately the last year of the
loan and make one payment per day. The borrower would
instead have to assume that her payments were evenly
spaced over the 30 years and that each payment was due
on the first of the month.
By contrast, punctilious compliance with TILA would
require only that the Disclosure Statement contain the
word “monthly” alongside the number of payments. This
would be neither burdensome for the lender nor so de-
tailed that the borrower would be buried in information.
It serves both the goals of TILA and the needs of the
borrower. As we have already noted, other forms provided
to Hamm and Jones referred to a “monthly” payment
period, but nowhere on the Disclosure Forms was this
fact mentioned. Not on the front page, not on the back
page, not even in “fine print.” TILA does not require
people to dig through a raft of forms and make assump-
tions about which one is accurate and which trumps
another. If the Disclosure Forms provided to Hamm and
Jones had mentioned the “monthly” nature of the pay-
ments at all, we would have a different case here alto-
gether.
Still, Ameriquest urges us to find that there are ambigu-
ities in the statute, Regulation Z, and the Commentary
that would absolve it of its obligation to disclose the
payment period. For example, the Commentary refers to
the explicit disclosure of the pay period or scheduled
payment due dates as a “general rule.” Ameriquest inter-
10 Nos. 05-3984, 06-3086
prets this to imply that there are other, unstated ways to
satisfy the disclosure requirement. However, “[a] statute
and its implementing regulations should be read as a
whole and, where possible, afforded a harmonious inter-
pretation.” Carmichael, 336 F.3d at 640. Here, they are
easily and best read to reinforce an explicit disclosure
requirement that can be made in just one of two ways,
and that recognizes one narrow exception to that rule.
Ameriquest also argues that the lack of the phrase
“using that term” in § 1638(a)(6) means that it is unclear
what exactly constitutes a proper disclosure of the pay-
ment period. It is true that in other sections of TILA, a
lender is required not just to make a particular disclosure,
but also to make that disclosure using a particular term.
See 15 U.S.C. § 1638(a)(3) (requiring disclosure of the
“finance charge” and that the disclosure “us[e] that term”).
The TILA sections that command the use of a particular
term, however, are different from the disclosure require-
ment imposed by § 1638(a)(6) in a critical way.
TILA requires the use of a designated term for items
that might not otherwise be identifiable to a borrower
if not labeled in a consistent way, such as “finance charge,”
“total of payments,” and “annual percentage rate.” See
15 U.S.C. § 1638(a). By contrast, the word “monthly” or
“bi-weekly” does not need to be labeled as a “payment
period” in order to be understood by a borrower. That
seems to be precisely the type of information overload that
Milhollin sought to avoid. The difference is made clear by
§ 1638(a)(8), which requires that the lender provide
“[d]escriptive explanations of the terms ‘amount financed,’
‘finance charge,’ ‘annual percentage rate,’ ‘total of pay-
ments,’ and ‘total sale price’ as specified by the Board” and
also “us[e] th[ose] terms.” These special terms not only
have to be used, but also have to be explained. Thus, the
requirement to use a specified term is one mechanism
that TILA uses to ensure uniformity; there is no neces-
Nos. 05-3984, 06-3086 11
sary implication that other aspects of the statute require
the same treatment. Section 1638(a)(1), for example,
requires disclosure of the “identity of the creditor re-
quired to make disclosure,” but does not require the
lender to use the exact term “identity.” That does not mean
the identity requirement can be satisfied through im-
plication alone, nor would any lender expect that to be the
case.
We emphasize that we are not holding that a Disclosure
Form that fails to use the magic word “monthly” will
always fail to comply with the requirement in § 1638(a)(6)
of disclosing the payment period. The Commentary
itself lists “monthly” and “bi-weekly” only as two ex-
amples of the way in which a lender might comply with
the rule. The key point is that the borrower should not
have to make any assumptions; she should be told her
payment period in explicit terms. (For example, a Disclo-
sure Statement that said “payment is due on the first of
every month from March 1, 2002, through January 1,
2032,” would effectively tell the borrower that her payment
period is monthly without using the word “monthly.”)
Because Ameriquest’s form required such an assump-
tion, it did not meet TILA’s requirements.
III
At one level, it may seem unrealistic to think that
Hamm and Jones did not realize that they were obligated
to make monthly payments on their 30-year mortgages.
Nonetheless, in today’s diversified credit markets, such
assumptions are not always well founded. There are many
credit products now where the borrower pays nothing for
a year or two and then begins regular payments, or where
payments are clumped together for a time, to be followed
by a balloon payment, or where the loan is structured in
other ways to induce the borrower to patronize a particular
12 Nos. 05-3984, 06-3086
lender or to facilitate a transaction for a cash-strapped
borrower. Here, Hamm and Jones could not look at the
Disclosure Statement and know with certainty how often
their payments were due, without additional information.
That is the information that TILA required Ameriquest
to furnish, but that it did not.
Ameriquest has not offered any reason to conclude that
TILA’s requirement that the Disclosure Statement in-
clude explicit information about the payment period did
not apply here or that its forms complied with the rules.
Ameriquest violated TILA, even if unintentionally, and the
plaintiffs are entitled to relief. We AFFIRM the district
court’s grant of summary judgment against Ameriquest
Mortgage Securities, Inc., in Jones’s case. We REVERSE
the district court’s grant of summary judgment for defen-
dant Ameriquest Mortgage Securities, Inc., against
Hamm and hold that the district court must enter judg-
ment in favor of Hamm against that company. Summary
judgment in favor of Ameriquest Mortgage Company and
AMC Mortgage Services, Inc., is proper in both cases, and
we AFFIRM both district courts to that extent. Finally, we
REMAND these cases for further proceedings consistent
with this opinion.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-17-07