The opinion of the court was delivered by: RAKOFF
In August 1997, pro se plaintiff Andrew Van Pier, who not only had already defaulted on the mortgage loan he obtained in 1984 in connection with his purchase of a cooperative apartment in New York City
but also had been unsuccessful in several state court attempts to stay the foreclosure sale of the collateral, made a further attempt to stave off foreclosure by suing the instant defendants for their alleged failure to provide certain financial disclosures in connection with the loan in violation of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"). Plaintiff's motion for injunctive relief staying the impending foreclosure sale was denied on August 27, 1997 by the Hon. Harold Baer, Jr., U.S.D.J., and the sale went forward that day. However, claims for money damages remained.
After the close of discovery, the parties cross-moved for summary judgment, and on April 7, 1998, the Honorable Andrew J. Peck, U.S.M.J., issued a Report and Recommendation that defendants' motions for summary judgment be granted and the Complaint dismissed. Following the receipt of objections and other submissions by the parties, the Court undertook a de novo review of the underlying record and of the portions of the magistrate judge's disposition that were objected to. See Fed. R. Civ. P. 72(b). Upon that review, the Court hereby determines that the magistrate judge's conclusions were correct in all respects and that summary judgment must be awarded to defendants.
Magistrate Judge Peck concluded that this action, brought some thirteen years after plaintiff obtained the loan at issue, is time-barred under 15 U.S.C. § 1640(e). That statute provides that a creditor must bring a TILA damages action "within one year from the date of the occurrence of the violation." It further provides, however, that even after expiration of that one-year period, a creditor is not barred from asserting a TILA violation "in an action to collect the debt . . . as a matter of defense by recoupment or set-off in such action." 15 U.S.C. § 1640(e). Relying on this latter provision, plaintiff argues that his TILA claim in effect constitutes assertion of a defense of recoupment to the foreclosure sale initiated by defendants, and therefore is not within the one-year limitations period. Under the plain language of the statute, however, this argument is unavailing, because here plaintiff asserts his TILA claim affirmatively, in an action for damages that he himself commenced, and not as a defense "in an action to collect the debt." See R.B. Moor v. Travelers Ins. Co., 784 F.2d 632, 634 (5th Cir. 1986) ("When the debtor hales the creditor into court, . . . the claim by the debtor is affirmative rather than defensive."); see also Beach v. Ocwen Federal Bank, 140 L. Ed. 2d 566, 118 S. Ct. 1408, 1410 (1998) (noting that under section 1640 "a borrower may assert the right to damages 'as a matter of defense by recoupment or set-off' in a collection action brought by the lender even after the one year is up") (emphasis added).
While plaintiff further argues that equitable tolling of the statute of limitations is warranted on the basis of defendants' alleged fraudulent concealment of their alleged TILA violations, the Court agrees with Magistrate Judge Peck that even assuming arguendo the one-year limitations period may sometimes be subject to equitable tolling, such tolling would not be available here. It is undisputed that plaintiff was aware of the alleged violations by February 1996, when he filed his second state court complaint concerning this matter and alleged therein that "all necessary disclosures in accord with Truth-in-Lending and Regulation Z were not met by Defendants (lenders)." Affidavit of Joseph C. Savino, dated March 5, 1998, Ex. M. Yet plaintiff did not file this action until August 1997, more than a year thereafter.
Finally, to the extent that plaintiff seeks to avoid the time bar by re-characterizing his Complaint as one for rescission of the loan transaction (which, under 15 U.S.C. § 1635, might not be subject to the one-year limitations period of § 1640) this argument is likewise unavailing. For even assuming arguendo both that plaintiff's complaint, very liberally construed, see Haines v. Kerner, 404 U.S. 519, 520-21, 30 L. Ed. 2d 652, 92 S. Ct. 594 (1972), might be read to assert such a claim, and that, as plaintiff further contends, the underlying loan transaction constitutes a "consumer credit transaction," 15 U.S.C. § 1635(a), rather than a "residential mortgage transaction" as to which the right of rescission does not apply, see 15 U.S.C. § 1635(c)(1),
the rescission claim nonetheless would be time-barred, for the borrower's right of rescission under § 1635 "expire[s] three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first," id. § 1635(f); see Beach v. Ocwen Federal Bank, 140 L. Ed. 2d 566, 118 S. Ct. 1408, 1410 (1998). As noted, however, this action was not commenced until some thirteen years after the underlying loan transaction was consummated.
The Court has carefully considered the other objections raised by plaintiff and finds them to be without merit. Accordingly, the Court hereby incorporates by reference the Report and Recommendation of Magistrate Judge Peck and, for the reasons articulated therein and those set forth above, adopts its recommendations and dismisses the Complaint in its entirety. Clerk to enter judgment.
Dated: New York, New York