121947P.pdf   08/19/2013  Mavis Hartman  v.  Brian Smith
   U.S. Court of Appeals Case No:  12-1947
                          and No:  12-2012
   U.S. District Court for the District of Minnesota - Minneapolis   
   [PUBLISHED] [Smith, Author with Melloy and Benton, Circuit Judges] 
   Civil Case - Truth in Lending Act. Following a complicated financing 
   transaction to borrow money to finance a house improvement, the Hartmans 
   failed to make scheduled payments toward the contract for deed and the 
   Smiths served a statutory notice of cancellation. The Hartmans sent notice 
   to Prime Security Bank. Prime commenced foreclosure proceedings and the 
   property was sold. The Hartmans brought suit for damages and rescission of 
   all transactions under the Truth in Lending Act and brought state law 
   claims. The district court concluded plaintiffs' notice was sufficient to 
   exercise the TILA statutory right of rescission, granted summary judgment 
   to Prime on the TILA rescission claim, dismissed the damages claims and 
   dismissed the Hartmans as parties. The district court erred in concluding 
   notice was sufficient to exercise the right of rescission under 15 U.S.C. 
   sec. 1635. Noting a split in the circuits, this court joins the 9th and 
   10th Circuits in holding notice is not sufficient. Because plaintiffs 
   failed to file a rescission action prior to the sale, the right of 
   rescission expired upon the sale of the property. The district court 
   properly dismissed the damages claim, the state law claims, and the 
   Hartmans as parties. Judge Melloy concurs in the judgment.