If A Consumer’s Testimony Is Based On Firsthand Knowledge It Is Sufficient To Overcome TILA’s Presumption Of Delivery For The Purpose Of Summary Judgment

In Marr v. Bank of America, (No. 11-1424 December 6, 2011), the consumer filed a rescission action alleging that at the closing of the mortgage loan he only received one copy of the Notice of Right to Cancel (Notice), instead of two copies as required by TILA. During depositions the consumer testified that he did not have time to review the loan documents at closing but he left the closing with a folder containing all the closing documents. The consumer testified that he placed the folder in his filing cabinet and did not disturb it until two years later. The lender moved for summary judgment supported by the Notice, bearing the consumer’s acknowledgement that he received two copies, and an affidavit from closing agent who testified that she followed her standard practice at the closing which included providing consumers with two copies of the Notice. The consumer submitted his own affidavit disputing what the closing agent said happened at the closing. The district court granted summary judgment in favor of lender and the consumer appealed. In reversing the district court’s judgment, the 7th Circuit Court of Appeals first noted that pursuant to section 1635(c) of TILA the borrower’s signed acknowledgment that he received two copies of the Notice created only a rebuttable presumption of delivery. To overcome this presumption at summary judgment stage, the borrower only needed to produce enough evidence to permit a reasonable jury to find that he did not receive the two copies. The appellate court held such evidence may be in the form of uncorroborated, self-serving testimony, if based on personal knowledge or firsthand experience as such testimony can be evidence of disputed material facts. The appellate court did not address the envelope theory but found that the borrower’s testimony that what happened at the closing the deviated from what the closing agent said was her standard practice was enough to permit a reasonable jury to find in his favor. Accordingly, it reversed the grant of summary judgment and remanded for further proceedings.

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