This matter comes before the Court on Plaintiff's Partial
Motion for Summary Judgment [# 35] and Defendant AVCO Financial
Services' ("AVCO") Cross-Motion for Summary Judgment [# 34].*fn1
Plaintiff, Gladys Wiggins, brings this action pursuant to the
Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., and
the District of Columbia Consumer Protection Procedures Act
("DCCPPA"), D.C.Code §§ 28-3904(a), (b), (d), (e), (f), (q), (t),
and (dd), seeking to rescind a home improvement loan made to her
by Defendant AVCO. Upon consideration of the motions,
oppositions, replies, and the entire record herein, for the
reasons stated below, Plaintiff's Motion for Partial Summary
Judgment is granted and Defendant's Cross Motion for Summary
Judgment is granted in part and denied in part.
Plaintiff owns and resides in a property at 3922 New Hampshire
Avenue, N.W., in the District of Columbia. In September 1994,
Plaintiff was contacted by an unlicensed home improvement
contractor, Arctic Windows and Doors, Inc., also known as
Weather-Guard Corporation ("Arctic"), with an offer to undertake
home repairs. Plaintiff thereafter entered into a contract with
Arctic on September 24, 1994. At the time, Plaintiff owned her
home free and clear.
As a condition of the contract, Plaintiff authorized Arctic to
secure financing on her behalf. On September 26, 1994, Arctic
submitted a loan application to Coastal Mortgage Corporation
("Coastal"), a mortgage broker in the State of Maryland. On
September 28, 1994, Coastal forwarded the loan application and a
copy of Plaintiff's credit report to Defendant AVCO for approval.
Plaintiff was pre-approved for a $70,000 loan on October 3, 1994.
In early October 1994, Coastal mailed a number of disclosure
documents to Plaintiff, including an Estimate of Borrower's
Settlement Costs, a Mortgage Brokers Agreement, and a Financing
Agreement setting forth the terms of the loan. Plaintiff signed
and returned these documents to Coastal on October 20, 1994.
On December 15, 1994, the parties met at the offices of
Certified Title Corporation ("Certified"), a company retained by
Defendant AVCO to handle all matters pertaining to the settlement
and closing of the loan. At the closing, Plaintiff signed a
number of documents, including a Note and Deed of Trust, granting
Defendant a security interest in her home, as well as a Notice of
Right to Cancel. The loan provided for 120 monthly payments of
with a balloon payment of $66,104.59 after ten years, at an
annual percentage rate of approximately twelve percent. The
closing documents were then forwarded to AVCO on December 20,
1994, after which Coastal disbursed two checks in the amount of
$27,300 each to Plaintiff and Arctic jointly. Plaintiff endorsed
both checks to Arctic the following day. Arctic never performed
any of the contracted-for home improvement services.
Plaintiff defaulted on the loan in February 1995. On December
11, 1997, Plaintiff then gave notice to Defendant of her intent
to rescind the loan.*fn3 This lawsuit followed.
II. Standard of Review
A party against whom a claim . . . is asserted . . .
may, anytime, move with or without supporting
affidavits for a summary judgment in the party's
favor as to all or any part thereof. . . . The
judgment sought shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled
to judgment as a matter of law.
Fed.R.Civ.P. 56(b)-(c). The party seeking summary judgment bears
the initial burden of showing an absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106
S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether they
have met this burden, a court must consider all factual
inferences in the light most favorable to the nonmoving party.
McKinney v. Dole, 765 F.2d 1129, 1135 (D.C.Cir. 1985). Once the
moving party makes its initial showing, however, the nonmoving
party must demonstrate "specific facts showing that there is a
genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct.
2548; McKinney, 765 F.2d at 1135. Moreover, as already noted,
"[i]n determining a Motion for summary judgment, the court may
assume that facts identified by the moving party in its statement
of material facts are admitted, unless such a fact is
controverted in the statement of genuine issues filed in
opposition to the Motion." Local Rule 108(h).
A. TILA Claims
Plaintiff seeks a declaratory judgment that Defendant AVCO
violated TILA by requiring her to sign on the day of closing a
pre-printed statement which both acknowledged receipt of notice
of the right to cancel and certified her decision not to cancel.
Congress passed the Truth in Lending Act, 15 U.S.C. § 1601, et
seq., as a consumer protection measure in an age of expanding
consumer credit. Mourning v. Family Publications Service, Inc.,
411 U.S. 356, 363, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973). TILA, by
its own terms, is designed to "assure a meaningful disclosure of
credit terms so that the consumer will be able to compare more
readily the various credit terms available to him and avoid the
uninformed use of credit, and to protect the consumer against
inaccurate and unfair credit billing and credit card practices".
15 U.S.C. § 1601.
Because the loan in the instant case was secured with
Plaintiff's primary residential property, TILA provides that "the
obligor shall have the right to rescind the transaction until
midnight of the third business day following the consummation of
the transaction or the delivery of the information and rescission
forms . . . together with a statement containing the material
disclosures. . . ." 15 U.S.C. § 1635(a). The statute further
provides that "[t]he creditor shall clearly and conspicuously
disclose, in accordance with regulations of the Board, to any
obligor in a transaction subject to
this section the rights of the obligor under this section." Id.
Notice of these rights must be provided to a consumer "on a
separate document that identifies the transaction and . . .
clearly and conspicuously discloses" information describing the
transaction and the consumer's rights. 12 C.F.R. § 226.23(b)(1).
If the creditor fails to comply with these requirements, the
consumer's right to rescind is extended for up to three years.
12 C.F.R. § 226.23(a)(3).
Because TILA was passed, primarily, as an aid to the
unsophisticated consumer, so that he or she would not be easily
misled as to the total costs of financing, Thomka v. AZ
Chevrolet Inc., 619 F.2d 246, 248 (3rd Cir. 1980), it is to be
liberally construed in favor of borrowers. Bizier v. Globe
Financial Services, 654 F.2d 1, 3 (1st Cir. 1981); see also
Rodash v. AIB Mortgage Co., 16 F.3d 1142, 1145 (11th Cir.
1994) (quoting McGowan v. King Inc., 569 F.2d 845, 848 (5th Cir.
1978)). Furthermore, a single violation of TILA, whether it be
substantive or technical, extends a borrower's period for
rescission. Smith v. Fidelity Consumer Discount Company,
898 F.2d 896, 898 (3d Cir. 1990); Semar v. Platte Valley Federal
Savings & Loan Assoc., 791 F.2d 699, 704 (9th Cir. 1986).
All courts are agreed that alleged violations of TILA are
subject to an objective standard of review. Zamarippa v. Cy's
Car Sales, 674 F.2d 877, 879 (11th Cir. 1982). Courts have
applied such an objective standard regardless of whether the
borrower is a trained attorney*fn4 or simply an individual who
had a sudden need for additional funds. A number of courts have
further concluded that notice under TILA need not be absolutely
perfect. It need only be clear and conspicuous. Veale v.
Citibank, F.S.B., 85 F.3d 577, 580 (11th Cir. 1996). So long as
the intent of TILA is satisfied by the disputed notice provision,
courts have generally ruled that it is the substance of the
disclosure, not the form that is controlling. Joseph v. Norman's
Health Club, Inc., 532 F.2d 86, 90 (8th Cir. 1976).
Central to the dispute in this case is a document giving notice
of Plaintiff's right to cancel her loan, informing her of the
procedure to cancel, and permitting her to certify a decision not
to cancel. Pl.'s Ex. 3A; Def.'s Ex. L. The one-page document
consists of three sections stating in relevant part:
NOTICE OF RIGHT TO CANCEL . . .
You are entering into a transaction that will
result in a mortgage on your home. You have a legal
right under federal law to cancel this transaction,
without cost, within THREE (3) BUSINESS DAYS from
whichever of the following events occurs last:
(1) The date of the transaction, which is December
15, 1994; or
(2) The date you received your truth in lending
(3) The date you received this notice of your right
to cancel. . . .
HOW TO CANCEL
If you decide to cancel this transaction, you may
do so by notifying us in writing at:
AVCO FINANCIAL SERVICES