8th Circ: recission of home loan means repayment; Truth in Lending action may proceed

Successful recission of a deceptive home loan requires repayment of loan benefits to lender; Truth in Lending Act violations not moot; Plaintiffs affidavits were sufficient to demonstrate material facts against summary judgment, though she was partially incompetent. 08/23/05 Stutzka, conservator for Gibilisco, v. McCarville, et al U.S. Court of Appeals Case No. 4-2208 District of Nebraska Blinded invalid's conservator won recission of mortgage that invalid had signed, because her companions may have used undue influence on her and the mortgage terms varied from how the lender carried out the loan."Stutzka contends that the district court erred by failing to relieve Gibilisco of the burden to make restitution for the $85,000 Popular mortgage. We review thedistrict court’s application of Nebraska law de novo, its denial of equitable relief forabuse of discretion, and its findings of fact for clear error." The dist court ordered recission as Plaintiff requested and a necessary consequence of the rescission was that the estate had to repay the benefits plaintiff's decedent received, which meant that the estate had to repay the $85,000 decedent received under the rescinded contract "an action to rescind a written instrument is an equity action. Kracl v. Loseke, 461 N.W.2d 67, 69 (Neb. 1990). Rescission is intended “toplace the parties in a status quo, that is, return the parties to their position whichexisted before the rescinded contract.” Id. at 75.; the district court erred in granting the defendants summary judgment on plaintiff's Truth in Lending Act claims as there were genuine issues of material of fact concerning compliance with the Act."Gibilisco’s signature on the documents created a rebuttable presumption that the proper disclosures had beendelivered to her. 15 U.S.C. § 1635(c). In an attempt to overcome that presumption,Stutzka submitted an affidavit signed by Gibilisco in which she stated that she “neverreceived any papers, documents, or letters of any kind regarding the mortgage.” The district court erred in equating Gibilisco’s lack of competency to close on the Popular mortgage with a lack of ability to testify to the general fact that she hadnot received the documents at the closing. This conclusion was inconsistent withgeneral evidentiary principles, see Fed. R. Evid. 601, and with the district court’sfactual findings that Gibilisco “displays good recollection of names, places, times and events.”Finally, these claims are not moot, because Stutzka may be entitled to statutory damages and attorney’s fees if he prevails on them, see 15 U.S.C. § 1640, notwithstanding the district court’s order rescinding the Popular mortgage on other grounds. See Dryden v. Lou Budke’s Arrow Fin. Co., 661 F.2d 1186, 1191 (8th Cir. 1981) (“TILA plaintiffs who are otherwise entitled to recover need not show that they sustained actual damages stemming from the TILA violations before they may recover the statutory damages provided.”)