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Johnson v. GMAC Mortgage Corp.2/22/2005
ratory judgment, requesting that the court issue a judgment " declaring the rights of the parties in and to the security instrument [with GMAC]." When the trial court dismissed this count, it found that it "attempts to restate the plaintiff's previously dismissed count for rescission by renaming it as a cause for declaratory judgment" and that " s such, tender is still an essential element of the plaintiff's claim that remains unstated."
Mr. Johnson contends that the trial court erred in dismissing these counts of his first and second amended petitions because he was not seeking the equitable remedy of rescission but a declaration of what rights, if any, GMAC had under the deed of trust.
Respondents, on the other hand, contend that Mr. Johnson's first amended petition is not properly before this court, having been abandoned, and that neither the first amended petition nor the second amended petition alleged sufficient facts to state a claim that the deed of trust was void, because a lender is not required to release a deed of trust unless the borrower tenders or offers to tender repayment of the benefits received.
We have already determined that Mr. Johnson's first amended petition is not before this court. Therefore, the question before us is solely whether Mr. Johnson has stated a claim for declaratory relief in his second amended petition. Neither party has furnished this court with any helpful authority to determine whether the declaratory judgment count in the second amended petition states a claim for relief.
Respondents simply argue that "the majority of cases . . . hold that a creditor is not required to release its security interest upon receiving a notice of rescission unless the obligor tenders or offers to tender repayment." Riopta v. Amresco Res. Mortgage Mfg. Corp. , 101 F.Supp.2d 1326, 1331 (D. Hawaii 1999). This may be true, but it is not the same thing as saying that Mr. Johnson must plead tender or an offer of tender to maintain his declaratory judgment action.
15 U.S.C.A. 1635(b) governs the process of unwinding this transaction. Itsays:
When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction . If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court.
15 U.S.C.A. section 1635(b) (emphasis added).
Although the security interest "becomes void" upon rescission, the first circuit has explained that a lender need not relinquish its interest until an "appropriate decision maker" has dete
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