TILA AND HOEPA RESCISSION MAKING BIG COMEBACK: TENDER IN INSTALLMENTS APPROVED LESS DAMAGES $90,000 AWARDED IN ATTORNEY FEES

Excerpts:
Technicality argument:
“After denying [TILA and HOEPA] violations for almost a year, First Commercial and Crossroads now attempt to minimize these violations as mere technicalities. The Court disagrees. Requiring three days’ advance written disclosure of key information is a central pillar of HOEPA. By failing to comply with this requirement, Crossroads deprived Coleman of the opportunity to consider the terms of the Loan in the peace and quiet of her own home, with the counsel of trusted friends and family members, and without the confusion, time pressure, and intimidation that any homeowner (particularly an elderly homeowner such as Coleman) may experience at a closing. Likewise, by failing to inform Coleman of the correct date on which her rescission right expired after the closing, Crossroads deprived Coleman of an additional day on which she could have exercised her right to get out of what appears to have been a bad loan. Rather than having a full six business days during which she could consider and discuss the wisdom of entering into the Loan, Coleman was given only two days — and, contrary to the intent of Congress, those two days were both after the loan had closed. . . . The Court . . . rejects the notion that the TILA and HOEPA violations in this case were mere technicalities that had no effect on the outcome of the Loan transaction and did not affect Coleman’s substantive rights.”

Tender vel non of payoff amount for previous lender, and manner:
“[T]he parties dispute whether Coleman must tender an additional $29,819.50, which is the amount that was disbursed to pay off the HRA Loans. The Court finds this to be a close and difficult question. . . . The Court . . . concludes [for reasons explained] that Coleman’s tender must include the $29,819.50 that was disbursed to pay off the HRA Loans. . . . The parties next dispute when and how Coleman must tender the required amount. . . . The Court finds that, in this case, permitting Coleman to pay her tender obligation in monthly installments is the most appropriate remedy. . . . Coleman has acted reasonably in attempting to effectuate rescission, but her efforts have been frustrated by First Commercial’s conduct. . . . It would not be fair for the consequences of First Commercial’s delaying tactics to be visited solely upon Coleman.”

Attorney fees, right and amount:
“First Commercial argues that, because Coleman has been represented by attorneys working pro bono and by a nonprofit legal-services organization, she is not entitled to recover fees. Even assuming that First Commercial has not waived this argument by failing to raise it earlier, it is plainly meritless. . . . In the alternative, First Commercial argues that Coleman’s fee request is unreasonably large and should be significantly reduced. Having witnessed the progress of this case and the conduct of counsel, the Court strongly disagrees. . . . The Court disagrees with First Commercial’s argument that the requested rates are too high because this action did not require much legal skill. Having endured a great deal of poor lawyering in TILA cases, the Court is grateful to have had the assistance of Coleman’s knowledgeable, experienced, and ethical counsel in this case. . . . The Court also finds that the number of hours expended — approximately 325 — is reasonable. This case was actively litigated, and much of that litigation was caused by First Commercial’s unreasonable behavior. . . .

In disputing the reasonableness of the fees sought by Coleman, First Commercial makes a number of arguments that are absurd. Prominent among those arguments is First Commercial’s contention that because its violation of TILA was so obvious, this litigation could have been resolved with little or no discovery. Yet in its answer, First Commercial denied that it had violated TILA. If the TILA violation was as obvious as First Commercial now claims, then First Commercial and its attorneys should be sanctioned under Fed. R. Civ. P. 11 for denying that violation in the answer. It gets worse: After answering, First Commercial continued to refuse to acknowledge its supposedly obvious violation of TILA, forcing Coleman to bring a summary judgment motion. And yet First Commercial now objects to having to pay for the time that Coleman’s attorney spent traveling to and appearing at the hearing on that motion — a motion that was in large part necessitated by First Commercial’s wrongful refusal to acknowledge its supposedly obvious TILA violation.

In short, First Commercial’s unreasonable conduct both necessitated and prolonged this litigation. In contrast, Coleman and her counsel have acted reasonably and efficiently to bring this matter to a conclusion. The Court therefore finds that the lodestar is properly calculated at $90,165.75.