United States Court of Appeals
For the Eighth Circuit
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No. 16-3385
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Larry D. Jesinoski; Cheryle Jesinoski
lllllllllllllllllllll Plaintiffs - Appellants
v.
Countrywide Home Loans, Inc., doing business as America's Wholesale Lender, a
subsidiary of Bank of America, N.A.; BAC Home Loans Servicing, LP, a
subsidiary of Bank of America, N.A., a Texas limited partnership, formerly known
as Countrywide Home Loans Servicing, L.P.; Mortgage Electronic Registration
Systems, Inc., a Delaware corporation; John and Jane Does 1-10
lllllllllllllllllllll Defendants - Appellees
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Appeal from United States District Court
for the District of Minnesota - Minneapolis
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Submitted: December 13, 2017
Filed: February 28, 2018
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Before WOLLMAN, LOKEN, and MELLOY, Circuit Judges.
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MELLOY, Circuit Judge.
Mortgage loan borrowers Larry and Cheryle Jesinoski received Truth in
Lending Act (“TILA”) disclosure documents at their loan closing. Pursuant to TILA
and its regulations, borrowers may rescind their loan within three days of closing, but
the rescission period extends to three years if the lender fails to deliver “the required
notice or material disclosures.” 12 C.F.R. 1026.23(a)(3)(i); see also 15 U.S.C.
§ 1635(a), (f). Admitting that the lender delivered the required notice (the “Notice”)
and material disclosures, but arguing that the lender did not provide the required
number of copies, the Jesinoskis sought to rescind their loan on a date just shy of the
three-year anniversary of loan execution.
The lender denied rescission, asserting the Jesinoskis had signed an
acknowledgment indicating receipt of the required disclosures. The Jesinoskis sued
more than three years after closing, alleging TILA violations. The district court
dismissed the action as untimely, holding that, even if the three-year limitation period
applied, borrowers must file suit and not merely provide notice within the three-year
time period. On appeal, our court affirmed, recognizing that our circuit had already
taken a position on this issue within an existing circuit split. Jesinoski v.
Countrywide Home Loans, Inc., 729 F.3d 1092, 1093 (8th Cir. 2013) (per curiam).
The Supreme Court granted certiorari and reversed, holding the three-year limitation
period applied to the provision of notice rather than the filing of suit. Jesinoski v.
Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015).
On remand, the district court1 granted summary judgment, concluding the
signed acknowledgment created a rebuttable presumption that the Jesinoskis had
received the required number of copies. The court also concluded the Jesinoskis
failed to generate a triable question of fact rebutting the presumption. We affirm.
1
The Honorable Donovan W. Frank, United States District Judge for the
District of Minnesota.
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I.
At loan closing, the Jesinoskis signed their names to an acknowledgment form
stating in material part:
The undersigned each acknowledge receipt of two copies of NOTICE
of RIGHT TO CANCEL, and one copy of the Federal Truth in Lending
Disclosure Statement. Each borrower/owner in this transaction has the
right to cancel. The exercise of this right by one borrower/owner shall
be effective to all borrowers/owners.
In this litigation, the Jesinoskis do not claim to remember whether they
received a total of two or four copies of the Notice. Rather, they attempt to
demonstrate that they received only two copies by establishing that, several years
later, their file of closing documents contained only two copies. Specifically, Larry
Jesinoski states that he took a file containing his closing documents home
immediately after the closing and placed it in an inconvenient-to-access, but
unlocked, filing cabinet. Then, more than two years later, in an attempt to negotiate
better loan terms, the Jesinoskis contacted Mark Heinzman, a mortgage specialist at
a firm named Financial Integrity. Heinzman referred the Jesinoskis to a firm named
Modify My Loan USA. The Jesinoskis claim they paid Modify My Loan USA
$3,000 but were defrauded and received no assistance. They then recontacted
Heinzman who asked them to look in their mortgage file for certain documents. Larry
Jesinoski asserts that, at that time, he opened the file for the first time since closing,
but he did not understand what Heinzman wanted him to locate. As such, the
Jesinoskis agreed to bring their file to Heinzman.
According to the Jesinoskis, they were present when Heinzman received and
reviewed their file approximately two years and nine months after loan closing. Also
according to the Jesinoskis, Heinzman told them they were entitled to rescind their
loan because their file did not contain all necessary copies of disclosure documents.
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Soon after the meeting, the Jesinoskis paid Heinzman $3,000 to draft a rescission
notice and send it to the lender.
The lender refused rescission based on the acknowledgment, and the Jesinoskis
eventually contacted an attorney to initiate this suit. Larry Jesinoski could not recall
whether he kept the closing file after his in-person meeting with Heinzman and gave
the closing file to his attorney himself, or whether he left the closing file with
Heinzman and Heinzman gave it to their attorney. Cheryle Jesinoski, in contrast,
stated that they took their closing file home again after the meeting with Heinzman.
Heinzman, however, stated in a declaration that he remembers nothing about the
Jesinoskis’ file and, if deposed, would answer that he does not remember the
Jesinoskis’ file.
At Larry Jesinoski’s deposition, counsel for the lenders asked him whether he
had seen various paginated closing documents that the Jesinoskis produced in
discovery and that were missing pages. Larry did not know if he had seen the
documents before and did not know if the missing pages had been present at an
earlier time. Then, in Cheryle Jesinoski’s deposition, her attorney interrupted
opposing counsel’s questioning to emphasize that, although the Jesinoskis produced
documents in response to discovery, they did not actually “represent[] whether or not
[the documents produced were] the entire contents of what was contained within the
closing documents on . . . refinance.” The Jesinoskis repeatedly disclaimed any
personal knowledge of the actual documents signed and received at closing.
Ultimately, against this backdrop, the district court concluded the
acknowledgment created a presumption that the Jesinoskis received the proper
number of copies, and the summary judgment record did not present a genuine
question of fact to rebut the presumption.
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II.
The parties raise several legal arguments concerning the availability of
rescission. The Jesinoskis argue that TILA demands strict compliance such that the
provision of the Notice to borrowers, albeit with one rather than two copies apiece,
warrants belated rescission, an award of attorneys’ fees, and an award of statutory
damages. They also argue that, even though TILA expressly grants courts the
authority to require tender of the loan proceeds prior to cancellation of the lender’s
security interest, the Supreme Court in the earlier appeal in this matter eliminated that
authority. The defendants contest these assertions, arguing: Supreme Court language
quoted by the Jesinoskis is dicta; the statute itself only requires “notice” not a
particular number of copies; and any error in delivery is harmless because the
Jesinoskis received actual notice. We need not address these issues. Even if the
Jesinoskis’ theories were otherwise correct, their theory of relief is foreclosed on
summary judgment unless a reasonable jury could conclude the lender failed to
provide the required number of copies of the Notice.
We review the district court’s grant of summary judgment de novo. See Davis
v. U.S. Bancorp, 383 F.3d 761, 765 (8th Cir. 2004). Although this case arises under
TILA, the parties agree that Minnesota contract law governs underlying questions of
contract interpretation. Interpretation of the acknowledgment and determination of
whether the acknowledgment is ambiguous are questions of law for the court. See
Thomsen v. Famous Dave’s of Am., Inc., 606 F.3d 905, 908 (8th Cir. 2010);
Denelsback v. Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003) (“[W]hether
a contract is ambiguous is a question of law . . . .”). As such, we review de novo
whether the signed acknowledgment is ambiguous.
Pursuant to TILA, a signed acknowledgment that the borrowers received the
required Notice creates a rebuttable presumption of proper delivery. 15 U.S.C.
§ 1635(c); Keiran v. Home Capital, Inc., 858 F.3d 1127, 1131 (8th Cir. 2017),
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petition for cert. filed, Nov. 3, 2017. We conclude the acknowledgment in this case
is unambiguous and gives rise to the presumption. The acknowledgment states, “The
undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO
CANCEL, and one copy of the Federal Truth in Lending Disclosure Statement.”
Larry Jesinoski signed the acknowledgment indicating his receipt of two copies.
Cheryle Jesinoski also signed the acknowledgment, indicating her receipt of two
copies.
The Jesinoskis argue that because the acknowledgment does not state, “each
acknowledge receipt of two copies each” the acknowledgment shows receipt of only
two copies total or, at a minimum, results in ambiguity that must be construed against
the lender. We view this argument as a tortured attempt to create an ambiguity where
none exists. See Lee v. Countrywide Home Loans, Inc., 692 F.3d 442, 451 (6th Cir.
2012) (holding the language “[t]he undersigned each acknowledge receipt of two
copies of NOTICE OF RIGHT TO CANCEL. . . .” unambiguously gave rise to the
statutory presumption that the debtors who signed the acknowledgment received the
proper number of copies (alteration in original)). The language of the
acknowledgment as presented to and signed individually by Larry and Cheryle more
than suffices to demonstrate clearly each spouse’s receipt of two copies. There is no
indication on the acknowledgment that the Jesinoskis were signing jointly on one
another’s behalf. As such, we agree with the Sixth Circuit which interpreted identical
language and concluded, “[s]uch clarity should be rewarded with a presumption of
delivery that cannot be overcome without specific evidence demonstrating that the
borrower did not receive the appropriate number of copies of the Notice.” Id.
To rebut the presumption, the Jesinoskis do not claim to have personal
knowledge of the number of copies they received at closing. Rather, the Jesinoskis
attempt to disprove their receipt of four copies total by focusing on the contents of
their closing-document folder as it purportedly existed two years and nine months
after closing. Relying upon what the parties refer to as a closed-envelope theory, the
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Jesinoskis assert a reasonable jury could conclude the lender provided only two
copies total at closing because, according to the Jesinoskis, their folder contained
only two copies years later when opened.
To prove the contents of the file, however, the Jesinoskis’ rely on their own
recitation of Heinzman’s purported description of the closing file. They represent
that he said the file contained only two copies of the Notice, but they do not claim
that they conducted their own inspection. Although Larry states that he looked at the
file in his home prior to meeting with Heinzman, he admits he did not know what he
was looking for at that time. Moreover the Jesinoskis do not agree as to whether they
subsequently left the file with Heinzman nor do they claim to have produced their
entire file in discovery. Finally, even as to documents they did produce, they do not
claim to have knowledge of, or explanation for, seemingly missing pages.
A party may not defeat summary judgment with evidence that will be
inadmissible at trial, and the Jesinoskis’ representation about what Heinzman
described is textbook inadmissible hearsay.2 See Mays v. Rhodes, 255 F.3d 644, 648
(8th Cir. 2001) (“While we review the record in the light most favorable to Mays as
the non-moving party, we do not stretch this favorable presumption so far as to
consider as evidence statements found only in inadmissible hearsay.”); see also Fed.
R. Civ. P. 56(e). Given the other indicia of unreliability surrounding the Jesinoskis’
closing file, there exist no exceptions that might permit a court to consider the
hearsay.
2
Recognizing the critical importance of Heinzman’s hearsay statements to their
case, the Jesinoskis moved in the district court for leave to conduct an untimely
deposition of Heinzman. The district court denied the motion. As noted, the actual
summary judgment record contains a declaration from Heinzman disavowing personal
knowledge of the Jesinoskis’ file. As such, the district court did not abuse its
considerable discretion in denying the Jesinoskis’ discovery motion.
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Finally, we note that the defendants urge us to affirm the judgment of the
district court based simply on Keiran, in which we held two debtors’ self-serving
affidavits claiming personal knowledge of the closing documents failed to overcome
the TILA presumption arising from a signed acknowledgment. 858 F.3d at 1131–32.
The Jesinoskis argue in response that their case is more akin to earlier cases in which
our court denied summary judgment based, in part, on similar affidavits. See Bank
of Am., N.A. v. Peterson, 746 F.3d 357, 358–59 (8th Cir. 2014), vacated in part on
other grounds, Bank of Am., N.A. v. Peterson, 782 F.3d 1049, 1050 (8th Cir. 2015);
Stutzka v. McCarville, 420 F.3d 757, 762–63 (8th Cir. 2005). We reject the parties’
invitation to parse these cases. Here, the Jesinoskis neither claim personal knowledge
nor rely on affidavits like the debtors in Kieran, Peterson, and Stutzka. Simply put,
the Jesinoskis’ evidentiary showing on summary judgment does not rise to the level
present in any of the three cited cases.
We affirm the judgment of the district court.
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