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Barnes v. Chase Home Finance, LLC

United States Court of Appeals, Ninth Circuit

August 14, 2019

Timothy Barnes, Plaintiff-Appellant,
v.
Chase Home Finance, LLC, a Delaware corporation; Chase Bank USA, N.A., a subsidiary of JP Morgan Chase & Co., a Delaware corporation; IBM Lender Business Process Services, Inc., a Delaware corporation; Federal National Mortgage Association, Defendants-Appellees.

          Argued and Submitted July 9, 2019 Seattle, Washington

          Appeal from the United States District Court for the District of Oregon, No. 3:11-cv-00142-PK Michael W. Mosman, District Judge, Presiding

          Elizabeth S. Weinstein (argued), Yarmuth Wilsdon PLLC, Seattle, Washington, for Plaintiff-Appellant.

          Kevin Hisashi Kono (argued) and Kaley L. Fendall, Davis Wright Tremaine LLP, Portland, Oregon; Frederick B. Burnside, Davis Wright Tremaine LLP, Seattle, Washington; for Defendants-Appellees Chase Home Finance LLC and Chase Bank USA N.A.

          Lance E. Olsen (argued), McCarthy Holthus LLP, Seattle, Washington; John M. Thomas, McCarthy Holthus LLP, Portland, Oregon, for Defendants-Appellees IBM Lender Business Process Services Inc., and Federal National Mortgage Association.

          Before: Paul J. Watford and Eric D. Miller, Circuit Judges, and Barbara Jacobs Rothstein, [*] District Judge.

         SUMMARY [**]

         Truth in Lending Act

         The panel affirmed the district court's grant of summary judgment in favor of the defendants in an action brought under the Truth in Lending Act.

         The panel held that, on remand following a prior appeal, the district court properly considered defendants' new argument that plaintiff had no right of rescission under TILA because his loan was a residential mortgage transaction under 15 U.S.C. § 1635(e)(1). The panel held that the argument was not waived because a defendant need not raise every possible argument in a motion for summary judgment and may make a different argument on remand if a grant of summary judgment in its favor is reversed on appeal. In addition, neither the law of the case nor the mandate in the prior appeal barred the district court from addressing defendants' new argument.

         The panel affirmed the district court's conclusion that plaintiff's loan was a residential mortgage transaction to which the right of rescission under TILA does not apply. A residential mortgage transaction is defined as "a transaction in which a mortgage . . . is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling." Plaintiff previously had quitclaimed his interest in the property at issue to his then-wife, and he obtained the mortgage loan and took title to the property in compliance with a divorce judgment. The panel held that the statutory definition of a residential mortgage transaction includes both an initial acquisition and a reacquisition of a property. Assuming without deciding that plaintiff gained an interest in the property by operation of state law upon the filing of the marital dissolution petition, the panel held that he did not "acquire" this interest for purposes of TILA's residential mortgage transaction provision. The panel rejected plaintiff's arguments that (1) the language used in the loan documents showed that he already owned an interest in the property before he took out the loan, and (2) he took out the mortgage to comply with the divorce judgment, and not to finance his acquisition of the property.

          OPINION

          ROTHSTEIN JUDGE

         Timothy Barnes appeals the district court's grant of summary judgment in favor of defendants in his action under the Truth in Lending Act ("TILA"), seeking rescission of a mortgage as well as damages and declaratory and injunctive relief. In a prior appeal, we held that Barnes gave proper, timely notice of rescission under TILA, and we vacated the district court's judgment and remanded for further proceedings. Barnes v. Chase Home Fin., LLC, 701 Fed.Appx. 673, 674-75 (9th Cir. 2017) (unpublished memorandum disposition). On remand, the district court granted summary judgment on a different ground, concluding that Barnes had no right of rescission under TILA because his loan was a residential mortgage transaction under 15 U.S.C. § 1635(e)(1).

         We conclude that the district court properly considered defendants' new argument on remand and properly granted summary judgment because Barnes obtained the mortgage in order to reacquire a residential property in which his prior ownership interest had been extinguished; thus, the right of ...


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