More California courts are demanding that a Plaintiff in a TILA rescission case allege that he or she can tender the loan proceeds

Consumers suing in some California District Courts better think twice before asking to rescind a loan under TILA. Several recent cases from the Eastern and Northern District of California have tossed TILA rescission cases where the consumer has failed to allege in the Complaint that he or she has tendered or intends to tender the borrowed funds back to the defendants. Relying on _Yamamoto v. Bank of New York_, 339 F.3d 1167 (9th Cir. 2003), the courts in Carlos v. Ocwen Loan Servicing, LLC, No. CV F 09-0260LJOGSA (E.D.Cal. May 08, 2009 Sitanggang v. Indymac Bank, F.S.B., No. CVF09-0367LJOSMS (E.D.Cal. May 06, 2009 Guerrero v. Citi Residential Lending, Inc., No. CVF08-1878 LJO GSA (E.D.Cal. Apr. 03, 2009 Pagtalunan v. Reunion Mortg. Inc., No. C-09-00162EDL (N.D.Cal. Apr. 08, 2009 and _Garza v. American Home Mortg._, No. CV F 08-1477LJOGSA (E.D.Cal. Jan. 27, 2009), have all held that a claim for rescission requires a plaintiff to allege that the plaintiff can or will tender the borrowed funds back to the lender. In Edelman v. Bank of America Corp., No. SACV 09-00309-CJC (MLGx) (C.D.Cal., Apr. 17, 2009), the court went further and held that the consumer’s offer to pay the loan back in monthly installments on more favorable terms, or by modifying her loans, was insufficient to overcome the pleading defect. Because the offer of tender was defective, Defendant had no obligation to rescind the mortgage. These cases continue the trend we have seen whereby courts are requiring the consumer wishing to rescind a loan to demonstrate that it has the means and intent to return the loan proceeds. In _Alcaraz v. Wachovia Mortg., FSB, _No. CVF081640LJOSMS (E.D.Cal. Jan. 21, 2009), the court refused to dismiss a complaint seeking injunctive relief and rescission on the grounds that the plaintiff failed to allege an ability to tender. The court deemed this a factual issue but admonished the plaintiff, subject to F.R.Civ.P. 11(b) requirements, to address the issue if she elects to amend her complaint. Note that the Southern District of California has ruled that the issue is factual and cannot (or should not) be resolved on a motion to dismiss. See, _Harrington v. Home Capital Funding, Inc._, No. 08CV1579 BTM(RBB) (S.D.Cal. Mar. 02, 2009 _Horton v. California Credit Corp. Retirement Plan,_ No. 09CV274-IEG-NLS (S.D.Cal. Mar. 16, 2009).

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