|Syllabus ||Opinion |
[ Souter ]
The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
BEACH et ux. v. OCWEN FEDERAL BANK
CERTIORARI TO THE SUPREME COURT OF FLORIDA
No. 975310. Argued March 2, 1998Decided April 21, 1998
Petitioners David and Linda Beach refinanced their Florida house in 1986 with a loan from Great Western Bank. In 1991, they stopped making mortgage payments, and in 1992 Great Western began this foreclosure proceeding. Respondent bank was thereafter substituted as the plaintiff. The Beaches acknowledged their default but raised affirmative defenses, alleging, inter alia, that the banks failure to make disclosures required by the Truth in Lending Act gave them the right under 15 U.S.C. § 1635 to rescind the mortgage agreement. The Florida trial court rejected that defense, holding, among other things, that any right to rescind had expired in 1989 under §1635(f), which provides that the right of rescission shall expire three years after the loan closes. The States intermediate appellate court affirmed, as did the Florida Supreme Court. That court remarked that §1635(f)s plain language evidences an unconditional congressional intent to limit the right of rescission to three years and distinguished its prior cases permitting a recoupment defense by ostensibly barred claims as involving statutes of limitation, not statutes extinguishing rights defensively asserted.
Held: A borrower may not assert the §1635 right to rescind as an affirmative defense in a collection action brought by the lender after §1635(f)s 3-year period has run. Absent the clearest congressional language to the contrary, Reiter v. Cooper, 507 U.S. 258, 264, a defendant may raise a claim in recoupment, a
Souter, J., delivered the opinion for a unanimous Court.