GARY R. JONES, Magistrate Judge.
This matter is before the Court on ECF No. 6, Defendant's Motion to Dismiss. Plaintiffs have filed a response in opposition. (ECF No. 8.) The motion is therefore ripe for review. For the following reasons, it is recommended that the motion to dismiss be granted.
Plaintiffs, husband and wife, initiated this action under 28 U.S.C. § 1331 purporting to allege claims for violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1639, et seq. Plaintiffs allege they are residents of Orange County, Florida. Their claims stem from the execution of a promissory note and mortgage, which are the subject of a foreclosure action filed in the Alachua County Circuit Court. See Fed. Nat'l Mortgage Ass'n v. Altier, No. 01-2014-CA-002751 (Fla. Alachua County Ct. July 30, 2014).
This is not the first time Plaintiffs have attempted to void the same promissory note and mortgage. See Altier v. Fed. Nat'l Mortg. Ass'n, No. 1:13-cv-164-MW-GRJ, ECF No. 1 (N.D. Fla. Aug. 16, 2013). The previous case concerns a quiet title complaint Plaintiffs filed In 2013, in the Circuit Court for the Eighth Judicial Circuit in and for Alachua County, Florida. Id. There, Plaintiffs brought various claims to quiet title to the real property that is the subject of the mortgage. In the previous state court quiet title action Plaintiff purported to bring claims for fraud in the execution of the assignment of the mortgage, misrepresentation, and violation of TILA alleging the assignment of the mortgage was not timely recorded. In addition to the request to quiet title, Plaintiffs also requested the state court to enter an order voiding the mortgage, thus relieving Plaintiffs from the obligation to repay the loan secured by the mortgage. The defendants in that case (which included the Federal National Mortgage Association) removed the case to federal court. After the case was removed the Court on December 6, 2013, dismissed Plaintiffs claims on the grounds that Plaintiffs lacked standing to challenge the validity of the assignment, Plaintiffs' challenges to the validity of the mortgage and assignment failed as a matter of law, and Plaintiffs failed to state a claim for relief. Id., ECF Nos. 26-28.
The underlying mortgage and promissory note in this case were executed on November 3, 2005. As evidenced by the documents filed in the previous state court action Plaintiffs executed a promissory note in the amount of $166,000 in favor of SunTrust Mortgage, Inc. (ECF No. 6, Ex. A ("Note")).
On January 13, 2015, a final judgment of foreclosure was entered in favor of Defendant with respect to Plaintiffs' property. See Fed. Nat'l Mortg. Ass'n v. Altier, No. 01-2014-CA-002751 (Fla. Alachua County Ct. July 30, 2014).
On August 22, 2016, however, Plaintiffs allege they sent a rescission notice to: (1) Defendant; (2) Suntrust Mortgage, Inc.; (3) Seterus, Inc.; (4) Rushmore Loan Management Services; and (5) the Consumer Financial Protection Bureau. (ECF No. 1 at 2, 8.) The notice asserted that Plaintiffs were rescinding the loan due to violations of TILA, including but not limited to the unlawful failure to give timely and proper notices required under TILA. (Id. at 8.) Plaintiffs further advised in the notice that they were rescinding the mortgage loan "due to recently discovered fraud, concealment, non-disclosure, white collar crime, R.I.C.O. crime and more at alleged closing." (Id.) Plaintiffs asserted in the notice that the note and security interest in the home were null and void and demanded that the parties terminate their security interest in the loan, return the cancelled note, and refund all payments. (Id.)
Six days elapsed without response from the parties to whom the notice had been sent. (Id. at 2.) Plaintiffs then filed the complaint in this case. Plaintiffs also filed a notice of lis pendens concerning the real property located at 216 NE 10th Avenue, Gainesville, Florida 32601. (ECF No. 3.)
As relief Plaintiffs seek a temporary and permanent injunction enjoining Defendant from taking any affirmative action or seeking any relief with respect to the loan. (ECF No. 1 at 3-4.) Plaintiffs claim Defendant is proceeding with a non-judicial sale and that Plaintiffs will be irreparably damaged should Defendant continue to pursue the wrongful foreclosure in violation of TILA. (Id. at 4.) Plaintiffs allege Defendant will likely fail or refuse to comply with its rescission duties under TILA. (Id. at 4-6.) Thus, Plaintiffs also seek a mandatory injunction, ordering Defendant to (1) return the cancelled note to Plaintiffs, (2) release any encumbrances or liens arising out of the loan contract, and (3) pay Plaintiffs all monies received from Plaintiffs, all monies earned by all parties paid as a commission, and all fees and interest thereon. (Id. at 5-6.)
In deciding a motion to dismiss, the Court must view the allegations of the complaint in the light most favorable to Plaintiffs, consider the allegations of the complaint as true, and accept all reasonable inferences therefrom. See, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1532, 1534 (11th Cir.1994).
In Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), the Supreme Court articulated a two-pronged approach for evaluating a motion to dismiss under Rule 12(b)(6): The court must first determine what factual allegations in the complaint are entitled to a presumption of veracity, and then assess whether these facts give rise to an entitlement for relief. In determining whether factual allegations are entitled to the presumption of truth, the Court stated that it was not whether the facts are "unrealistic or nonsensical" or even "extravagantly fanciful," but rather it is their conclusory nature that "disentitles them to the presumption of truth." Id. at 679. Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations of the complaint. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). "While the pleadings of pro se litigants are `liberally construed,' they must still comply with procedural rules governing the proper form of pleadings." Hopkins v. Saint Lucie County School Bd., 2010 WL 3995824, **1 (11
On a motion to dismiss, the Court ordinarily must limit its consideration to the complaint and written instruments attached as exhibits. See U.S. ex rel. Osheroff v. Humana, 776 F.3d 805, 811 (11th Cir. 2015). Nonetheless, "a district court may consider an extrinsic document even on Rule 12(b)(6) review if it is (1) central to the [p]laintiff's claim, and (2) its authenticity is not challenged." Id. (noting that the records of plaintiff's underlying Florida Supreme Court case were plainly central to his claims and that plaintiff did not challenge the authenticity of the records); Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005)."Courts may take judicial notice of publicly filed documents, such as those in state court litigation, at the Rule 12(b)(6) stage." Humana, at 811 n.4.
Defendant requests the Court to dismiss Plaintiffs' complaint for failure to state a claim upon which relief can be granted. Specifically, Defendant contends Plaintiff has failed to state a claim for rescission under TILA. Further, Defendant argues that even if Plaintiff had stated a claim for rescission, Plaintiffs are not entitled to injunctive relief under TILA.
The purpose of TILA is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices." 15 U.S.C. § 1601(a); Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998).
Plaintiffs' claim in this case is based upon the incorrect assumption that they are entitled to rescission of the mortgage and note under TILA. Based upon the plain language of TILA, Plaintiffs have no right of rescission because the rescission provisions of TILA do not apply to second homes and do not apply to residential mortgage transactions where the borrower uses the borrowed funds to purchase or construct the dwelling. Specifically, under 15 U.S.C. § 1635(a) of TILA the rescission provisions apply to "[a]ny property which is used as the principal dwelling of the person to whom credit is extended ..." Additionally, TILA does not apply to residential mortgages used to finance the initial acquisition or construction of the dwelling. Dunn v Bank of America, N.A., 844 F.3d 1002, 1005 (8
Plaintiffs' transaction falls into both categories. There is little question that the property was a second home. Attached to the mortgage is a Second Home Rider, in which Plaintiffs represented to the lender (SunTrust Mortgage, Inc.) that they would only occupy and use the property as Plaintiffs' second home.
Second, the original loan from Suntrust that was assigned to FNMA appears to be a purchase money mortgage, thus exempting the transaction from TILA. Under 15 U.S.C. § 1635(e) certain listed transactions are exempted from TILA. One of those exempted transactions is "a residential mortgage transaction as defined in section 1602(w)
Plaintiffs' argument in response to Defendant's motion to dismiss is spurious. Plaintiffs say that the argument that they have no right to rescission is moot and irrelevant because Defendant lost all rights by failing to timely respond within twenty days after receipt of the notice of rescission. (ECF No. 8 at 4.) This argument makes no sense. While a mortgage holder is required to take action within 20 days after receipt of a notice of rescission this obligation only arises where the borrower has a valid right of rescission. As explained Plaintiffs do not. Because Plaintiffs were never entitled to rescission under TILA, Plaintiffs' notice of rescission had no legal effect. Dunn, 844 F. 3d at 1006.
Second, even assuming arguendo that Plaintiffs did have a right of rescission—which they clearly do not—the TILA statute of limitations would bar their claim. "[A] borrower whose loan is secured with his `principal dwelling,' and who has been denied the requisite disclosures" may "rescind the loan transaction entirely `until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later.'" Beach, 523 U.S. at 412 (quoting § 1635(a)). "[T]he borrower's right of rescission `shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first,' even if the required disclosures have never been made." Id. at 413 (quoting § 1635(f)).
Thus, any right of rescission would have expired on November 3, 2008, three years after the loan closed. Plaintiffs did not mail their notice of rescission until August 22, 2016. Plaintiffs even admit in their response that the 3-year time limit has expired. (ECF No. 8 at 4.) Plaintiffs' argument that the loan was never consummated because they were not provided with all of the disclosures required by law fails because the right of rescission expires after three years even if the disclosures were never made. See Beach, 523 U.S. at 413.
In addition to Plaintiff's lack of legal entitlement to rescission under TILA, Plaintiffs are not entitled to injunctive relief under TILA. TILA does not "confer upon private litigants an implied right to an injunction or other equitable relief such as restitution or disgorgement." Christ v. Beneficial Corp., 547 F.3d 1292, 1298 (11th Cir. 2008); see Turner v. Bank of Am., N.A., No. 1:12-CV-03302-AT-JFK, 2013 WL 12109237, at *9 (N.D. Ga. July 3, 2013) (recommending that plaintiff's claim for injunctive relief for a violation of TILA be dismissed), adopted, 2013 WL 12110114, at *1 (N.D. Ga. Aug. 22, 2013). Notably, the state court already has issued a Certificate of Title in the foreclosure action. See Fed. Nat'l Mortg. Ass'n, No. 01-2014-CA-002751 (Fla. Alachua County Ct. Nov. 16, 2016). Although Plaintiffs appealed to the First District Court of Appeal, the appeal was voluntarily dismissed on February 22, 2017 pursuant to Fla. R. App. P. 9.350(b). Id.
Plaintiffs' requests for injunctive relief essentially ask this Court to undo what the state court did in the foreclosure proceedings. Under the Rooker-Feldman doctrine district courts are precluded from exercising appellate jurisdiction over final state-court judgments. Exxon Mobil Corp. v. Saudi Basic Industs. Corp., 544 U.S. 280, 283-84 (2005) (citing Rooker v. Fid. Trust Co., 263 U.S. 413 (1923; Dist. of Columbia Ct. of Appeals v. Feldman, 460 U.S. 462 (1986)).
Finally, to the extent Plaintiffs' request may be construed as seeking statutory damages unrelated to rescission under TILA, Plaintiffs' claims for damages also would be time-barred. An action seeking damages for a violation of TILA must be brought within one year after the violation. § 1640(e). When the violation is nondisclosure, the violation occurs when the transaction is consummated. See Velardo, 298 F. App'x at 892. Because the loan transaction was completed in 2005, any claim Plaintiffs may have for damages under TILA would now also be time-barred. Plaintiffs' assertion that they discovered the nondisclosures in 2015 does not change the outcome. While affirmative concealment may warrant equitable tolling, as discussed above, Plaintiff has not plausibly alleged any facts supporting equitable tolling. See Justice v. United States, 6 F.3d 1474, 1479 (11th Cir. 1993) ("The burden is on the plaintiff to show that equitable tolling is warranted.").
Accordingly, for all of the reasons discussed above, it is respectfully
Nevertheless, even if there was a prior proceeding to enforce the provisions of § 1635 within three years after the date of consummation of the transaction (which determined that there was a violation of § 1635), Plaintiffs' right to rescind would have expired, at best, one year following the conclusion of a judicial review or period for judicial review. This period has long since expired.
Although Plaintiffs asserted a claim for TILA violations in their case filed on July 16, 2013 to quiet title, the court dismissed Plaintiffs' claims with prejudice on December 6, 2013. Altier, No. 1:13-cv-164-MW-GRJ, ECF Nos. 26-28. Plaintiffs did not appeal the dismissal. Id., ECF No. 29. Not only has there never been a finding of TILA violations as required for this exception to apply, Plaintiffs do not meet the time periods under this exception.
Plaintiff's notice of rescission includes a vague and conclusory allegation of "fraud." None of Plaintiff's filings expand on this alleged fraud. There are no allegations suggesting how the lender affirmatively concealed anything from Plaintiff, other than by failing to make certain required disclosures. This does not plausibly suggest that equitable tolling should be applied in this case. See Lefont v. SunTrust Mortg., Inc., No. 2:10-CV-036-RWS-SSC, 2011 WL 679426, at *6 (N.D. Ga. Jan. 27, 2011), adopted, 2011 WL 674749 (Feb. 16, 2011) (declining to equitably toll plaintiffs' TILA claim where plaintiffs asserted their loan was fraudulent and that defendant failed to provide certain disclosures without any other allegations to demonstrate that defendant fraudulently concealed the cause of action from plaintiffs).
