Lelar M. Lagrone v. Alan H. Johnson

Alan and Laura Johnson and Sanco Investment & Loan Company (Sanco) appeal from a grant of summary judgment to Lelar M. LaGrone in an action to rescind a consumer credit transaction pursuant to section 125 of the Truth in Lending Act, 15 U.S.C. § 1635 .

Mrs. LaGrone owned a duplex, in which she resided, subject to first and second deeds of trust. She solicited Sanco to secure a loan to prevent foreclosure on the second deed of trust. Sanco brokered a loan agreement between the Johnsons and Mrs. LaGrone, pursuant to which Mrs. LaGrone gave the Johnsons a security interest in her duplex. Various documents were exchanged by the parties, including a note and deed of trust and a disclosure statement notifying Mrs. LaGrone of her right to rescind and explaining that right.

Mrs. LaGrone defaulted on the loan. The Johnsons foreclosed their lien, obtaining title to the duplex at a trustee’s sale. One week later the Johnsons deeded the property back to Mrs. LaGrone upon the signing of a new loan agreement identical to the first.

Mrs. LaGrone defaulted on the second loan agreement. She also became delinquent on the note and first deed of trust, and the holder commenced foreclosure…