Steven W. Bernstein v. Wells Fargo Bank, N.A.
693 F. App'x 848
11th Cir.2017Background
- In Nov. 2007 Bernstein refinanced his home, giving Terrace Mortgage a security deed to secure a $400,000 note; the loan was later assigned to Wells Fargo.
- On Feb. 22, 2010 Bernstein sent Wells Fargo a notice of rescission under TILA § 1635(a).
- § 1635(b) requires a creditor to return money and terminate security interests within 20 days of receiving a rescission notice; Wells Fargo did not comply.
- § 1640(e) creates a one-year civil-action window from the date of the creditor’s violation; § 1635(f) provides a separate three-year rescission limitation; § 1635(e)(1) excludes certain residential mortgage transactions from § 1635’s provisions.
- Bernstein sued pro se on July 15, 2015 to enforce rescission; Wells Fargo moved to dismiss as time-barred, arguing § 1635(f) inapplicable to residential mortgage transactions or, alternatively, that Bernstein waited more than the applicable limitations periods.
- The district court held Bernstein’s TILA claim untimely because the one-year § 1640(e) limitations period began when Wells Fargo failed to comply within 20 days, and Bernstein filed after the applicable period; the court also rejected equitable tolling and dismissed his declaratory-judgment claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bernstein timely enforced rescission under TILA | Bernstein contends his Feb. 2010 notice alone effected rescission by operation of law (relying on Jesinoski), so he was enforcing an already-effective rescission and need not have sued within one year of Wells Fargo’s violation | Wells Fargo argues the one-year damages/action window in § 1640(e) governs and started when it failed to comply with § 1635(b), making Bernstein’s suit untimely; alternatively § 1635(f) doesn’t benefit him if the loan is a residential mortgage under § 1635(e)(1) | Court held claim time-barred: § 1640(e)’s one-year action clock began when Wells Fargo failed to perform within 20 days; applying limitations, Bernstein filed too late |
| Effect of Jesinoski on post-notice enforcement remedies | Bernstein relies on Jesinoski to argue notice alone rescinds the loan and thus he could later seek enforcement of an already-effective rescission | Wells Fargo contends Jesinoski does not negate statutory limitations or the separate one-year suit window triggered by a creditor’s § 1635(b) violation | Court rejected Bernstein’s reading of Jesinoski and held it did not save his claim from being time-barred |
| Equitable tolling of limitations | Bernstein urged equitable tolling to excuse delay | Wells Fargo opposed tolling | Court rejected equitable-tolling argument as frivolous |
| Dismissal of declaratory relief under Georgia law | Bernstein sought declaratory relief under O.C.G.A. § 9-4-2 | Wells Fargo sought dismissal | Court affirmed dismissal of declaratory-judgment claim as meritless |
Key Cases Cited
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (held that a borrower may effect rescission under TILA by notifying the creditor, without filing suit)