Rife v. One West Bank, F.S.B.
2017 U.S. App. LEXIS 18889
| 1st Cir. | 2017Background
- In 2015 John Rife sued OneWest, MERS, IndyMac Mortgage Services, and Deutsche Bank in state court alleging predatory lending under Massachusetts PHLPA (Mass. Gen. Laws ch. 183C) and other claims; the case was removed to federal court.
- The mortgage at issue was executed on May 26, 2006; Rife filed his chapter 183C claim on April 28, 2015—outside the statute of limitations period set by § 15(b)(1) (5 years from closing of a high-cost mortgage).
- Rife alleged predatory features in the note and mortgage (interest-only periods, negative amortization/payment options, lack of full documentation, unlawful prepayment penalties, high LTV and DTI ratios, combined-LTV issues).
- The district court dismissed the entire complaint as time-barred and denied leave to amend, concluding tolling did not apply because the loan terms that formed the basis of the PHLPA claim were contained in Rife’s mortgage documents and were discoverable in 2006.
- Rife argued on appeal that the limitations period should be tolled until he discovered in 2013 defects in an assignment involving MERS and that the court should have allowed amendment; the First Circuit found those arguments waived or meritless and affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rife's PHLPA claim is time-barred | Rife: tolling should apply until ~Jan 11, 2013 (discovery of defective assignment), so claim is timely | Defendants: claim accrued at closing (2006); 5-year limitations expired; loan documents put Rife on notice in 2006 | Held: Claim is time-barred; equitable tolling not available because the loan terms were in Rife's possession and discoverable in 2006 |
| Whether equitable tolling applies because plaintiff could not have discovered essential information earlier | Rife: did not reasonably discover fraudulent/misconduct facts until later (assignment issue) | Defs: plaintiff, with reasonable diligence, could have discovered loan terms and asserted claim within 5 years | Held: No equitable tolling—plaintiff knew or should have known facts in 2006; tolling denied |
| Whether district court abused discretion in denying leave to amend | Rife: should be allowed to amend (one-time right under Rule 15 or for good cause) to add facts supporting PHLPA claim | Defs: amendment would be futile because it cannot cure statute-of-limitations bar | Held: Denial affirmed; amendment would be futile because amended complaint still time-barred |
| Whether arguments raised only in reply (relation back to 2010 Land Court filing; Rule 8 procedural objection) are preserved | Rife: raised in reply that amendment should relate back and that defendants waived SOL defense | Defs: issues were not timely raised; waived | Held: Arguments raised for first time in reply are waived; court deemed them waived |
Key Cases Cited
- Abdallah v. Bain Capital LLC, 752 F.3d 114 (1st Cir. 2014) (explains standard for equitable tolling and discovery rule)
- Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315 (1st Cir. 2008) (requirement to "sketch a factual predicate" to invoke tolling or estoppel)
- Santana-Castro v. Toledo-Davila, 579 F.3d 109 (1st Cir. 2009) (de novo review of statute-of-limitations dismissal)
- Bernier v. Upjohn Co., 144 F.3d 178 (1st Cir. 1998) (standard on discovery and equitable tolling)
- Tagliente v. Himmer, 949 F.2d 1 (1st Cir. 1991) (plaintiff "knew or should have known" bar to tolling)
- Mills v. U.S. Bank, NA, 753 F.3d 47 (1st Cir. 2014) (standards on waiver of arguments and leave to amend)
- Glassman v. Computervision Corp., 90 F.3d 617 (1st Cir. 1996) (futility means amended complaint would still fail to state a claim)
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (Rule 15 leave-to-amend should be freely given absent futility)