Beach v. Great Western Bank

David Beach (plaintiff) entered into a mortgage agreement with Great Western Bank (GWB) (defendant). GWB provided Beach with all required Truth in Lending Act (TILA) disclosures. Five years later, Beach defaulted on the mortgage. GWB filed a foreclosure action against Beach. Beach challenged, arguing that because GWB had minimally overstated Beach’s mortgage obligations, under TILA, Beach had a right to rescind the mortgage and a right to recoup all overpayments. The trial court (1) held that Beach’s rescission claim was time-barred because Beach failed to raise it within three years of the commencement of the mortgage loan; but (2) awarded Beach actual and statutory damages to remedy all overpayments. Beach appealed, arguing his right-to-rescind was not time-barred because it was raised as a defense-in-recoupment based on TILA violations. The appellate court affirmed, holding that because TILA explicitly states that the right-of-rescission expires after three years, it would violate TILA’s plain statutory meaning to allow the right-to-rescind to be revived as a defense-in-recoupment beyond the statutory three-year expiration period. The appellate court then certified the following question to the Florida Supreme Court as a matter of great public importance: whether TILA’s statutory right-to-rescind could be revived as a defense-in-recoupment more than three years after the commencement of the mortgage.