United States District Court, E.D. Louisiana
ORDER AND REASONS
ANN VIAL LEMMON UNITED STATES DISTRICT JUDGE
IS HEREBY ORDERED that Graystar Mortgage,
L.L.C.'s Motion to Dismiss (Rec. Doc.
23) is GRANTED in part, and the rescission
claim against Graystar is dismissed;
IS FURTHER ORDERED that Investor Equities'
Motion for Summary Judgment on
Plaintiff's Complaint (Rec. Doc. 24) is
DENIED with respect to the question of
prescription and DENIED as moot with respect
to all other issues;
IS FURTHER ORDERED that Investor Equities'
Motion for Summary Judgment on its
Counterclaim (Rec. Doc. 25) is DENIED as
IS FURTHER ORDERED that Betty Johnson's
Motion for Time for Additional Discovery
Under Federal Rule 56(d) (Rec. Doc. 33) is
DENIED as moot.
the court are the following motions: Greystar Mortgage,
L.L.C.'s 12(c) Motion to Dismiss; Investor Equities'
Motion for Summary Judgment on Plaintiff's Complaint;
Investor Equities' Motion for Summary Judgment on its
Counterclaim; and Betty Johnson's Motion for Time for
Additional Discovery under Federal Rule 56(d). Following the
Magistrate Judge's grant of leave for plaintiff to file
her amended complaint (Rec. Doc. 55), counsel informed the
court that Graystar Mortgage, L.L.C.'s
("Graystar's") Motion was still valid and
pending, Investors Equities' motions were moot except
with regard to whether plaintiff's claims were
prescribed, and plaintiff's Rule 56(d) motion was moot.
the court considers Graystar's motion to dismiss, and
Investors Equities' summary judgment motions solely with
respect to the prescription issue.
following factual allegations relevant to the pending motions
are taken from plaintiff's amended complaint. Plaintiff
is an elderly homeowner living on social security income, who
owns her principal dwelling at 4842 Strasbourg Street in New
Orleans. Until the transactions that are the subject of this
suit, she owned the home free and clear of any encumbrances.
complaint alleges that on or about February 2015, Johnson
contacted Bruce Coffman at America's Mortgage Resource
about a reverse mortgage. She was informed that repairs were
needed to her residence to qualify for a reverse mortgage,
and for a fee, Coffman arranged for financing with Michael
Brown for the home improvements. Plaintiff entered into a
consumer credit transaction with Brown secured by her primary
residence. She signed two promissory notes to Brown totaling
$27, 000.00, with interest only payments to begin on May 1,
2016. The notes were scheduled to mature on October 1, 2015.
Johnson had the requested repairs performed over the course
of 2015 and 2016, but did not receive a reverse mortgage.
August 2016, Johnson approached Coffman regarding the matured
notes. Coffman then arranged financing with Investor
Equities, an LLC for which Coffman is an officer and manager.
On August 8, 2016, plaintiff entered into a consumer credit
transaction with Investor Equities. She borrowed $60, 000.00
from Investor Equities, secured by a mortgage on her home, in
a transaction that involved $24, 894.94 in settlement
charges, including $11, 568.00 in loan fees and costs, paid
to Investor Equities, which amounted to approximately 28% of
the total loan amount. The twelve $600.00 interest only
payments were prepaid as part of the settlement charges, as
were homeowners and flood insurance. Her principal loan
balance, previously $27, 675.00, was now $60, 000.00.
Plaintiff did not receive any consumer counseling regarding
the transaction. Investor Equities transferred its interest
in plaintiff's mortgage to Graystar.
August of 2017, plaintiff's $60, 000.00 balloon payment
became due, and she contacted Coffman. Again, Coffman
arranged additional financing through Investor Equities,
which took a new security interest in plaintiff's home.
The loan proceeds were used in part to pay off the Graystar
loan. In connection with the August 2017 transaction,
plaintiff's total settlement charges were $13, 487.87,
which included a payment to Investor Equities of $4200.00 in
points and fees, approximately 6.2% of the total loan amount,
as well as six prepaid interest payments of $750 per month,
and homeowners and flood insurance. At the time she made the
loan, the interest only payments were $750 per month, and
plaintiff's income from social security was $677.00 per
month. She did not receive consumer counseling regarding the
transaction. Investor Equities transferred its interest in
the mortgage to Michael Brown.
lawsuit, Johnson seeks to rescind both the 2016 and 2017
transactions for violations of the Truth in Lending Act
("TILA"), 15 U.S.C. § 1601 et seq.,
and the Home Ownership and Equity Protection Act
("HOEPA"), 15 U.S.C. § 1602(bb). She alleges
that the original creditor, Investor Equities, was subject to
the requirements of TILA and HOEPA, that material disclosures
required under TILA and HOEPA were not provided to her in
connection withe 2016 transaction, and that the terms of the
2016 transaction include provisions that violated HOEPA
restrictions. With respect to Graystar, Johnson claims that
she is entitled to rescission under TILA and HOEPA for the
2016 mortgage loan against Graystar as assignee, and for
damages under HOEPA against Graystar as assignee.
Greystar's Rule 12(c) Motion to Dismiss
seeks dismissal of plaintiffs claims under Rule 12(c) on
three bases: (1) that Johnson's TILA and HOEPA claims are
barred by a one-year statute of limitations; (2) that
Greystar is not liable to Johnson under TILA as an assignee;
and (3) that Johnson cannot state a rescission ...