The opinion of the court was delivered by: Joseph F. Bianco, District Judge
Plaintiffs brought this class action against various financial institutions alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., state consumer protection statutes, and common law fraud and unjust enrichment.*fn1 By Memorandum and Order dated September 12, 2007, the Court granted defendants' motion for summary judgment on statute of limitations grounds as to plaintiffs' TILA claims that accrued on or before March 15, 2003 and, therefore, dismissed the TILA claims of any class member whose claim had accrued on or before March 15, 2003. See McAnaney v. Astoria Fin. Corp., No. 04-CV-1101 (JFB), 2007 U.S. Dist. LEXIS 67552, at *54 (E.D.N.Y. Sept. 12, 2007) (the "September 12 Order"). Moreover, because the Court found that the named plaintiffs were included in this category of class members whose claims were time-barred, the Court also found that the named plaintiffs were no longer adequate representatives of the class. Thus, according to the procedure favored by the Second Circuit, the Court afforded plaintiffs an opportunity to submit a motion for the substitution or intervention of new named plaintiffs.
Plaintiffs now move for partial reconsideration of the September 12 Order, pursuant to Rules 54(b), 59(e), and 60(b) of the Federal Rules of Civil Procedure, as well as Local Rule 6.3, on the grounds that the Court's decision was contrary to controlling law. Specifically, plaintiffs argue that the Court mischaracterized a Home Equity Line of Credit ("HELOC") held by named plaintiffs Philip and Cynthia Russo (the "Russos") as a "closed-end" line of credit under TILA instead of an "open-end" line.*fn2
As a consequence, plaintiffs argue, the Court should apply an alternate legal standard to determine the date the Russos' claim accrued. Plaintiffs argue that under this alternate standard, which measures the limitations period from the date the TILA violation is discovered, the Russos' claim survives. In opposition, defendants argue that plaintiffs are improperly raising an argument that they did not raise previously and that, in fact, contradicts plaintiffs' prior claim that all of their loans were closed-end. Defendants further argue that even if the HELOC were open-end, plaintiffs propose the wrong standard for determining the limitations period for open-end lines of credit. Under the appropriate standard, defendants argue, the Russos' claim is time-barred. Finally, defendants argue that this claim is time-barred even under the standard plaintiffs propose.
For the reasons set forth below, based upon the complaint and the statement in the plaintiffs' opposition papers to the summary judgment motion that this is a "closed-end transaction" (see Pls.' Mem. Opp. at 32 & n.20), the defendants and the Court concluded that plaintiffs were not alleging any "open-end transactions" in connection with this lawsuit. Based upon that ostensible position, the Court failed to consider whether the HELOCs were open-end lines of credit. However, plaintiffs now state in their motion for reconsideration that they did not intend to make any such con. Despite the ambiguity in their original position, the Court grants the partial motion for reconsideration to consider whether the HELOCs were open-end lines of credit and, if so, how that impacts the statute of limitations analysis as to those loans. However, after carefully reconsidering that issue below, the Court adheres to its prior ruling that the Russos' claim remains time-barred. Specifically, although a HELOC is an openend line of credit, plaintiffs propose the incorrect standard for calculating the one-year limitations period for open-credit transactions, and the proper standard bars the Russos' claim. In any event, this claim fails under plaintiffs' proposed standard as well because the Russos were on notice that they were being assessed finance charges, not specifically designated as such, at the time they entered the HELOC on May 8, 2002 and, thus, such claims were time-barred when plaintiffs filed this action in March 2004.
The underlying facts giving rise to this litigation are comprehensively described by the Honorable Arthur D. Spatt, District Judge, in a prior decision addressing defendants' motion to dismiss, and by the undersigned both in the September 12 Order and in the decision granting plaintiffs' motion for class certification. See McAnaney v. Astoria Fin. Corp., 357 F. Supp. 2d 578, 581-82 (E.D.N.Y. 2005); McAnaney v. Astoria Fin. Corp., No. 04-CV-1101, 2006 U.S. Dist. LEXIS 66941 (E.D.N.Y. Sept. 19, 2006). Thus, the Court presumes the parties' familiarity with the facts of this case and briefly recites only those facts adduced during discovery that are relevant to resolution of the instant motion.
On May 8, 2002, the Russos obtained a residential loan from defendant Astoria Federal Savings and Loan Association ("Astoria Federal") in the form of a Home Equity Line of Credit (the "Russo HELOC"). (Pls.' 56.1 ¶ 95.) The Russo HELOC was serviced by Astoria Federal until it was repaid. (Id. ¶ 97.) In two "payoff letters" dated, respectively, June 2, 2004, and June 16, 2004, Astoria Federal listed the amounts "necessary to satisfy" the Russo HELOC loan, including (1) a "Satisfaction Fee/Atty Document Preparation Fee" of $125, and (2) a "County Clerk Fee/Recording Fee" of $64.50. (Id. ¶¶ 98-101, 107.) It is undisputed that the Russos paid both fees to Astoria Federal. (Pls.' 56.1 ¶¶ 106, 111; Dfts.' Am. Resp. 56.1 ¶¶ 106, 111.)
Plaintiffs assert that Astoria Federal improperly demanded and collected the fees from the Russos. (Pls.' 56.1 ¶ 103; Dfts.' Am. Resp. 56.1 ¶ 103; Dfts.' 56.1 ¶ 92; Pls.' Resp. 56.1 ¶ 92.) In any event, it is undisputed that Astoria Federal did not represent to the Russos that it had improperly demanded or collected the fees from the Russos. (Pls.' 56.1 ¶¶ 105-06; Dfts.' Am. Resp. 56.1 ¶¶ 105-06.)
With respect to all of the loans at issue in this case, including the Russo HELOC, plaintiffs assert that defendants failed to disclose any of the disputed fees to plaintiffs in accord with the disclosure provisions of TILA prior to origination of the respective loans at issue. (Pls.' 56.1 ¶¶ 43-46, 68, 69, 71, 91-94, 113-14; Dfts.' Am. Resp. 56.1 ¶¶ 43-46, 68, 69, 71, 91-94, 113-14.)
Plaintiffs commenced this class action on March 16, 2004, and submitted an amended complaint on November 8, 2005 (the "complaint"). On March 31, 2006, the case was reassigned from Judge Spatt to the undersigned. The Court certified a class on September 19, 2006 and granted defendants' motion for summary judgment on September 12, 2007.
Plaintiffs submitted the instant motion on September 17, 2007. Defendants responded on October 1, 2007. Plaintiffs submitted their reply on October 3, 2007. Further, by letter dated October 4, 2007, defendants wrote to the Court regarding ...