Page 1
342 So.2d 859
(Cite as: 342 So.2d 859)
District Court of Appeal of Florida, Second District.
San Juan YSLAS and Silvestra Yslas, Appellants,
v.
D. K. GUENTHER BUILDERS, INC., Appellee.
No. 76-1476.
Feb. 25, 1977.
A secured lender filed a complaint seeking to
foreclose a mortgage on a parcel of real property
owned by defendants after alleged default under a
home improvement installment sales contract. The
Circuit Court, Lee County, Thomas W. Shands, J.,
granted the lender's motion for summary judgment,
and the borrowers appealed. The District Court of
Appeal, Boardman, C.J., held that entry of summary
judgment was precluded by an unresolved issue of
material fact as to whether one of the borrowers had
received the required notice of, and timely exercised,
her right to rescind.
Roversed and remanded.
West Headnotes
[1] Consumer Credit 92B 51
92B Consumer Credit
92BII Federal Regulation
92BII(B) Disclosure Requirements
92Bk51 k. Form and Sufficiency of
Disclosure in General. Most Cited Cases
(Formerly 293k6.8 Pawnbrokers and Money
Lenders)
Where real property affected by transactions subject
to federal Truth in Lending Act is held by obligors as
joint owners, right to receive notice of right of
rescission and right to rescind applies separately to
each of those obligated under such transaction. Truth
in Lending Act, § 125(f), 15 U.S.C.A. § 1635(f);
Truth in Lending Regulations, Regulation Z, §
226.9(h), 15 U.S.C.A. following Section 1700.
[2] Consumer Credit 92B 36
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
92B Consumer Credit
92BII Federal Regulation
92BII(A) In General
92Bk36 k. Rescission Rights; Liens on
Residences. Most Cited Cases
(Formerly 293k6.9 Pawnbrokers and Money
Lenders)
Where obligors under home improvement installment
sales contract secured by mortgage held mortgaged
property as joint owners, mortgage would be void
and parties entitled to be returned to status quo, and
perhaps to recover damages, if it were shown that
wife did not receive required notice of opportunity to
rescind, and exercised that right in timely fashion.
Truth in Lending Act, § 125(f), 15 U.S.C.A. §
1635(f); Truth in Lending Regulations, Regulation Z,
§ 226.9(h), 15 U.S.C.A. following Section 1700.
[3] Judgment 228 181(25)
228 Judgment
228V On Motion or Summary Proceeding
228k181 Grounds for Summary Judgment
228k181(15) Particular Cases
228k181(25) k. Mortgage Cases. Most
Cited Cases
Consumer Credit 92B 51
92B Consumer Credit
92BII Federal Regulation
92BII(B) Disclosure Requirements
92Bk51 k. Form and Sufficiency of
Disclosure in General. Most Cited Cases
(Formerly 293k6.8 Pawnbrokers and Money
Lenders)
Summary judgment foreclosing mortgage on real
property after default in home improvement
installment sales contract secured by such mortgage
was inappropriate in view of unresolved issues of
material fact as to whether one of two owners of
mortgaged real estate received required notice of, and
timely exercised, her right to rescind installment
contract. Truth in Lending Act, §§ 102-145, 125,
125(a, b, f), 130, 15 U.S.C.A. §§ 1601-1665, 1635,
1635(a, b, f), 1640; Truth in Lending Regulations,

342 So.2d 859
(Cite as: 342 So.2d 859)
Regulation Z, §§ 226.6(e), 226.9(b, d, f), 226.902, 15
U.S.C.A. following section 1700.
*860 Robert M. Hustead, Florida Rural Legal
Services, Inc., Immokalee, for appellants.
James L. Goetz, of Roberts, Watson, Bright &
Adams, Fort Myers, for appellee.
BOARDMAN, Chief Judge.
Appellee/plaintiff, Guenther Builders, filed a
complaint on February 19, 1976, seeking to foreclose
a mortgage on a parcel of real property owned by
appellants/defendants, Silvestra and San Juan Yslas.
On April 15, 1975, appellants, husband and wife, and
appellee entered into a home improvement
installment sales contract. Appellants executed a note
and a mortgage on their residence[FN1] to secure
payment of the contract price and finance charges.
Under the terms of the promissory note appellants
agreed to pay appellee a total of $5,609.52 which
included a finance charge of $2,309.52. Appellee
alleged that appellants defaulted and declared that
appellants owed $3,266.61 on the note plus interest.
Appellants answered that the obligation relied on by
appellee had been rescinded by the terms of 15
U.S.C. s 1635(f) and 12 C.F.R. s 226.9(h), that no
contract existed upon which suit could be based, and
that the security interest was void. Appellants filed a
counterclaim praying that the court decree that the
contract was voided by rescission, that any monies
paid by them on the contract be returned, and that the
court award damages, attorneys' fees and costs.
Appellants alleged appellee's failure to disclose their
right to cancel the contract and note within three days
following the transaction in violation of the Truth in
Lending Act, 15 U.S.C. ss 1601-1665. The trial court
granted appellee's motion for summary judgment
which was accompanied by a supporting affidavit
that he had served appellant San Juan Yslas with a
federal rescission form which Mr. Yslas signed.
Appellee stated in a memorandum of law in support
of its motion that the transaction had not been
rescinded pursuant to 15 U.S.C. s 1635. Appellants
contend on appeal that appellee did not refute all of
their affirmative defenses nor all of the allegations of
their counterclaim. They contend specifically that
appellant Silvestra Yslas was entitled to notice of her
opportunity to rescind as an obligor which she had
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 2
not received and that she had rescinded the
transaction.
FN1. Although appellants do not state in
their pleadings that they own the property
either as an estate by the entireties or by
joint tenancy the installment sales contract
appended to appell's complaint recites that
the record owners of the property are
Silvestra and San Juan Yslas. Since there
was no affirmative showing to the contrary
we will assume for purposes of this appeal
that appellants hold the property under some
type of joint ownership. There is no question
that both appellants were obligors under the
terms of the contract.
[1][2][3] It is well established that on a motion for
summary judgment the movant admits all facts and
inferences or conclusions reasonably drawn from the
evidence which are favorable to the opposing party.
Where the real property affected by the transaction is
held by the obligors as joint owners the right to
receive notice of the right of rescission and the right
to rescind applies separately to each of those
obligated under the transaction. See Gerasta v.
Hibernia National Bank, 411 F.Supp. 176 (E.D.La.
1976); 12 C.F.R. ss 226.6(e), .9(f), .902. If appellants
are able to prove that Mrs. Yslas did not receive the
required notice and did timely exercise her right to
rescind, the mortgage would be void and the parties
entitled to be returned to the status quo.[FN2]*86115
U.S.C. s 1635(b); 12 C.F.R. s 226.9(b)(d).
Furthermore if appellee did fail to comply with its
obligation appellants may be entitled to damages
under 15 U.S.C. s 1640. [FN3] We hold that whether
appellee complied with 15 U.S.C. s 1635(a) by
notifying Silvestra Yslas of her right to rescind and
whether she exercised that right to rescind are
material questions of fact which could not be
resolved by summary judgment.
FN2. The statutory scheme to effect
restoration to the status quo provides that
within ten days of receipt of the notice of
rescission the creditor return any property of
the debtor and void the security interest in
the debtor's property. The debtor is not
obligated to tender any property of the
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342 So.2d 859

(Cite as: 342 So.2d 859)

creditor in the debtor's possession until the

creditor has performed his obligations. If the
creditor does not perform within ten days of
the notice or does not take possession of his
property within ten days of the tender,
ownership of the creditor's property vests in
the debtor without further obligation. See
Sosa v. Fite, 498 F.2d 114 (5th Cir. 1974);
Powers v. Sims & Levin Realtors, 396
F.Supp. 12 (E.D.Va. 1975); 15 U.S.C. s
1635(b). As suggested in Grandway Credit
Corp. v. Brown, 295 So.2d 714 (Fla.3d
DCA 1974) and Gillis v. Fisher Hardware
Co., 289 So.2d 451 (Fla.1st DCA 1974) the
underlying obligation is not voided by 15
U.S.C. s 1635 rescission unless the creditor
fails to perform his statutory duties.

FN3. It has not been firmly established

whether the debtor can elect both remedies,
that is to rescind and to seek damages, or
must seek one or the other. See Am.Jur.2d
New Topic Service Consumer Credit
Protection s 80 (1976); Annot., 11
A.L.R.Fed. 815 (1972, Supp.1976).

Accordingly the judgment of the trial court is

reversed and the cause remanded for further
proceedings consistent with this opinion.

REVERSED and REMANDED.

GRIMES and OTT, JJ., concur.

Fla.App. 1977.
Yslas v. D. K. Guenther Builders, Inc.
342 So.2d 859

END OF DOCUMENT

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