Brian Timm v. Wells Fargo Bank NA
701 F. App'x 171
| 3rd Cir. | 2017Background
- In 2008 Timm executed a $400,000 note and mortgage naming Wells Fargo as lender; funds were disbursed and Timm made payments exceeding $90,000. Closing occurred March 14, 2008.
- Wells Fargo foreclosed in state court in 2012; that action was dismissed in 2015.
- In 2015 Timm (pro se) sent Wells Fargo a notice of rescission and then filed a federal TILA suit asserting six claims based on (1) alleged failure to disclose the “true lender” (another entity funded the loan) and (2) Wells Fargo’s failure to honor the rescission notice and related obligations.
- Timm sought damages, return of payments, a satisfaction of mortgage, and criminal penalties under 15 U.S.C. § 1611.
- Wells Fargo moved to dismiss under Rule 12(b)(6), arguing Timm’s damages claim was barred by TILA’s one-year limit (15 U.S.C. § 1640(e)), rescission was barred by the three-year statute of repose (15 U.S.C. § 1635(f)), and § 1611 creates no private right of action.
- The District Court dismissed with prejudice as untimely and futile to amend; the Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TILA damages claim is timely | Timm: transaction never consummated because lender identity was undisclosed, so one-year clock never started | Wells Fargo: transaction was consummated at closing in 2008; one-year limitations applies | Court: One-year limitations began at closing; damages untimely except any damages tied to 2015 notice response (but those fail merits) |
| Whether rescission claim timely under §1635(f) | Timm: no consummation so three-year rescission period never began | Wells Fargo: consummation at 3/14/2008; three-year repose bars rescission after 2011 | Court: Transaction consummated at closing; §1635(f) is a statute of repose and bars rescission asserted in 2015 |
| Whether a “true lender” nondisclosure prevents consummation | Timm: naming Wells Fargo while another funded loan means no contract/consummation | Wells Fargo: note and mortgage named Wells Fargo; closing, disbursement, and payments show consummation | Court: “True lender” theory rejected here; consummation determined by contract/closing under state law and Timm’s own allegations show consummation |
| Whether notice of rescission in 2015 revived rescission or created damages | Timm: rescission notice in 2015 triggered creditor duties and damages for failure to respond | Wells Fargo: §1635(f) extinguished right to rescind by 2011; no duty triggered; no waiver of defenses | Court: §1635(f) extinguishes the right; 2015 notice not an exercise of a right to rescind and did not create damages or waive defenses |
| Whether Timm may seek criminal penalties under §1611 | Timm: requests prosecution/penalties as relief | Wells Fargo: §1611 is criminal and creates no private civil cause of action | Court: §1611 imposes criminal liability only; no private right to pursue criminal penalties |
| Whether dismissal should permit leave to amend | Timm: should be allowed to amend | Wells Fargo: defects are jurisdictional/untimely and cannot be cured | Court: Dismissal with prejudice affirmed; amendment would be futile and plaintiff proposed no viable amendment |
Key Cases Cited
- In re Cmty. Bank of N. Va., 622 F.3d 275 (3d Cir.) (treats TILA rescission limitations as repose and discusses limitations for damages)
- Bartholomew v. Northampton Nat’l Bank of Easton, 584 F.2d 1288 (3d Cir. 1978) (one-year TILA damages limitation runs from consummation)
- Smith v. Fid. Consumer Disc. Co., 898 F.2d 896 (3d Cir. 1990) (addresses TILA rescission timing)
- Jackson v. Grant, 890 F.2d 118 (9th Cir. 1989) (transaction not consummated where documents did not identify a lender)
- Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159 (3d Cir. 2010) (standard of review for Rule 12(b)(6) dismissal and leave to amend)
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (1998) (§1635(f) is a statute of repose extinguishing the right to rescind)
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (borrower must serve notice to effect rescission)
- Vallies v. Sky Bank, 591 F.3d 152 (3d Cir. 2009) (distinguishing TILA provisions that create private rights from criminal provisions)
- Ramadan v. Chase Manhattan Corp., 156 F.3d 499 (3d Cir. 1998) (tolling principles for TILA damages statute)