Rescission is Permissible in NV 6 Year SOL[1]
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Rescission is Permissible in Residential Mortgage Transactions In section II.1.c. of the Motion, the Defendant alleges that the Plaintiff does not have a claim for rescission. In Nevada, there is a six year statute of limitations for rescinding a contract. Mackintosh v. California Federal Sav. & Loan Ass’n, 113 Nev. 393, 404 (Nev. 1997), citing NRS 11.190(1)(b). The Plaintiff’s loan is only three years old, so rescission is available. Moreover, in Nevada, the right of rescission has been extended to land sale contracts and their accompanying mortgages if fraud or deceptive practices are involved. See Ford v. Wertheimer, 79 Nev. 447, 448-49 (Nev. 1963) (“The plaintiffs were entitled to rescission” of their mortgage “by reason of the fraudulent representations of the defendants”). Moreover, as set forth above, TILA’s statutory time limits are tolled when fraud or deceptive practices may be involved. Therefore, the Plaintiff has rescission claims. Nevada also recognizes the unilateral mistake rule found in the Restatement (Second) of Contracts, which allows for rescission when “a mistake … at the time of contract was made as to a basic assumption … which … has a material effect on the agreed exchange of performances that is adverse to him [who made the mistake]… and (b) the other party had reason to know of the mistake or his fault caused the mistake.” Home Savers, Inc. v. United Sec. Co, 103 Nev. 357, 358-59 (Nev. 1997), quoting Restatement (Second) of Contracts, § 153 (1981). By withholding all the proper disclosures from the Plaintiff, the Defendant was responsible for its misrepresentations of the Transaction, something the Defendant knew or should have known. As a result, the Plaintiff may rescind her loan, under TILA, Nevada statutes, and Nevada law. Accordingly, the Motion should be denied. The Nevada Deceptive Trade Practices Act Provides for a Private Cause of Action In two short paragraphs, the Defendant seeks to dismiss the Plaintiff’s Deceptive Trade Practices Act claim by arguing that “the statutory scheme does not provide for a private right of action.” See Motion, p. 8. In these transactions, the Plaintiff was charged at least $22,729.22 for services related to his loan. Those fees did not culminate in services that adequately disclosed the loan’s terms in accordance with TILA and RESPA. As such, the Plaintiff was deceived, which is actionable under NRS 598.023(3), because NRS Section 41.600.2(e) provides for a private cause of action for a person who is a victim of consumer fraud. NRS 41.600.2(e) defines “consumer fraud” to include a “deceptive trade practice as defined in NRS 598.0915 to 598.0925, inclusive.” See In Re Schwalb, 347 B.R. 726, 757
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tolling and rescission
Transcript of Rescission is Permissible in NV 6 Year SOL[1]
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Rescission is Permissible in Residential Mortgage Transactions
In section II.1.c. of the Motion, the Defendant alleges that the Plaintiff does not have aclaim for rescission. In Nevada, there is a six year statute of limitations for rescinding acontract. Mackintosh v. California Federal Sav. & Loan Ass’n, 113 Nev. 393, 404 (Nev.1997), citing NRS 11.190(1)(b). The Plaintiff’s loan is only three years old, so rescissionis available.
Moreover, in Nevada, the right of rescission has been extended to land sale contracts andtheir accompanying mortgages if fraud or deceptive practices are involved. See Ford v.Wertheimer, 79 Nev. 447, 448-49 (Nev. 1963) (“The plaintiffs were entitled to rescission”of their mortgage “by reason of the fraudulent representations of the defendants”).Moreover, as set forth above, TILA’s statutory time limits are tolled when fraud ordeceptive practices may be involved.Therefore, the Plaintiff has rescission claims.
Nevada also recognizes the unilateral mistake rule found in the Restatement (Second) ofContracts, which allows for rescission when “a mistake … at the time of contract wasmade as to a basic assumption … which … has a material effect on the agreed exchangeof performances that is adverse to him [who made the mistake]… and (b) the other partyhad reason to know of the mistake or his fault caused the mistake.” Home Savers, Inc. v.United Sec. Co, 103 Nev. 357, 358-59 (Nev. 1997), quoting Restatement (Second) ofContracts, § 153 (1981).
By withholding all the proper disclosures from the Plaintiff, the Defendant wasresponsible for its misrepresentations of the Transaction, something the Defendant knewor should have known.
As a result, the Plaintiff may rescind her loan, under TILA, Nevada statutes, and Nevadalaw.
Accordingly, the Motion should be denied.
The Nevada Deceptive Trade Practices Act Provides for a Private Cause of Action
In two short paragraphs, the Defendant seeks to dismiss the Plaintiff’s Deceptive TradePractices Act claim by arguing that “the statutory scheme does not provide for a privateright of action.” See Motion, p. 8. In these transactions, the Plaintiff was charged at least$22,729.22 for services related to his loan. Those fees did not culminate in services thatadequately disclosed the loan’s terms in accordance with TILA and RESPA. As such, thePlaintiff was deceived, which is actionable under NRS 598.023(3), because NRS Section41.600.2(e) provides for a private cause of action for a person who is a victim ofconsumer fraud.
NRS 41.600.2(e) defines “consumer fraud” to include a “deceptive trade practice asdefined in NRS 598.0915 to 598.0925, inclusive.” See In Re Schwalb, 347 B.R. 726, 757
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n.43, (Bankr. D.Nev. 2006), quoting NRS 41.600.2(e). Plaintiff has an actionable claimunder NRS 598.023(3) for the violations outlined herein.
Specifically, by not disclosing all of its fees and services properly, the Defendantmisrepresented the quality and character of its services. Misrepresenting the quality andcharacteristics of a product or service is actionable under NRS 598.0915(7). By notproviding a good faith estimate, by charging duplicative fees, and by not providing atimely and proper HUD-1 Settlement Statement to the Plaintiff, the Defendantmisrepresented the benefit of its services. Misrepresenting the benefits of your product orservice is actionable under NRS 598.0915(5). By not providing all the necessary andproper disclosures at closing, the Defendant misrepresented Plaintiff’s rights in theproducts (i.e. the loan). Misrepresenting the rights of your product is actionable underNRS 598.0920(8). As a result, the Plaintiff has claims.
The fees were charged by the Defendant as compensation for the services of providingthe loan and properly disclosing its terms. The Defendant failed to provide these servicesin full, which in turn gives rise to claims under Nevada law. Accordingly, the Motionshould be denied.
