In Re Beach
U.S. Bankruptcy Court District of Idaho
Justice Jim D. Pappas
Case No. 08-40013-JDP
Decision Date: 2/25/2011
Chapter 7
Full Text HERE

Debtors entered into a mortgage agreement with Bank of America. Upon non payment of the mortgage, Bank of America proceeded with a non-judicial foreclosure. Debtors filed a state court claim asserting the bank violated the Truth in Lending Act (TILA) and Idaho Consumer Protection Act and received a temporary restraining order staying the banks foreclosure actions. The case was removed to federal district court and referred to the Bankruptcy Court. At the time of removal, Debtors filed for chapter 7 relief. The Bank subsequently moved to dismiss due to debtor’s lack of personal jurisdiction and failure to state a claim for relief under Fed. R. Civ. P. 12(b)(1) and (b)(6).

The Court accepted the allegations of the complaint as true according to precedent that allegations are to be taken as sufficient on their face. The Court concluded that the Debtors did not plead sufficient facts to allow the Court to find a plausible claim and Debtor’s ICPA claim was dismissed. The Court held the Banks non-judicial foreclosure is an “action to collect a debt” and that the statute of limitations began to run at the time of the non-judicial foreclosure. Further, because Debtor’s raised the TILA claim as a defense to Banks debt collection action the TILA 1 year statute of limitations does not apply and the allegations were found timely. The Court concluded that both Debtors and Trustee have prudential standing to make a TILA claim against the bank.

© 2011 Hyrum M. Zeyer some rights reserved.

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