Thursday, October 5, 2017

Eleventh Circuit betrays serious lack of understanding of TILA even after Jesinoski

The Supreme Court states in black and white that, where a homeowner sends a valid notice of rescission, the TILA "statute does not also require him to sue within three years."  Yet, the Eleventh Circuit says you have to sue -- or your claim will be time-barred.  Not to mention that the Circuit is also all over the map in (mis-) applying TILA's limitations provisions.

STEVEN W. BERNSTEIN, Plaintiff-Appellant,
v.
WELLS FARGO BANK, N.A.,
WELLS FARGO HOME MORTGAGE,
FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendants-Appellees,
MCCALLA RAYMER, LLC, Defendant.
No. 16-16440
UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
July 12, 2017
[DO NOT PUBLISH]
Non-Argument Calendar
D.C. Docket No. 1:15-cv-02520-RWS
Appeal from the United States District Court for the Northern District of Georgia
Page 2
Before TJOFLAT, JULIE CARNES, and JILL PRYOR, Circuit Judges.
PER CURIAM:
        In November 2007, Steven Bernstein gave Terrace Mortgage Company a security deed to secure a $400,000 note, the proceeds of which he used to refinance the mortgage on his residence. The deed and note were subsequently assigned to Wells Fargo. On February 22, 2010, Bernstein exercised his right to rescind the loan transaction under the Truth in Lending Act, 15 U.S.C. § 1601, et seq., specifically § 1635(a), by sending Wells Fargo a notice of his intent to rescind the transaction.1 Under § 1635(b), Wells Fargo had 20 days after receipt of Bernstein's notice to return to Bernstein "any money or property given as earnest money, down payment, or otherwise, and . . . take any action necessary or appropriate to reflect the termination of any security interest created upon the
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transaction."2 If the creditor fails to take these steps, it is amenable to suit under § 1640(e), which provides that an action may be brought in district court "within one year from the date of the occurrence of the violation." Id. § 1640(e). Wells Fargo failed to take any of these steps. In consequence, Bernstein had "three years after the date of the consummation of the [loan] transaction," to enforce his right to rescission; otherwise, it would expire. Id. § 1635(f).
        Bernstein brought this action pro se to enforce his right to rescission on July 15, 2015.3 He alleged that he exercised his § 1635(a) right to rescind on February 22, 2010, by sending Wells Fargo a notice to that effect, and that when Wells Fargo failed to respond, the notice rendered both Wells Fargo's security interest and the note he executed void by operation of law. Wells Fargo moved to dismiss Bernstein's claim, arguing that § 1635(f)'s three-year provision did not apply
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because the loan was a "residential mortgage transaction" and § 1635(e)(1) rendered that provision inapplicable.4 It argued alternatively that the three-year provision provided Bernstein no benefit because he waited more than five years after sending his notice of intent to rescind before filing suit.
        The District Court gave Bernstein the benefit of the doubt as to whether the loan was a residential mortgage transaction such that § 1635(f)'s three-year provision was rendered inapplicable by § 1635(e)(1)'s bar, but nonetheless concluded that his TILA claim was untimely. Under 15 U.S.C. § 1640(e), all TILA claims must be brought "within one year from the date of the occurrence of the [creditor's] violation." Wells Fargo's failure to discharge its § 1635(b) obligations within 20 days after receiving Bernstein's notice to rescind constituted a violation within the meaning of § 1640(e), and thus set the clock for the one-year period that section provides. That period began to run on March 14, 2011. Applying the three-year limitations period of § 1635(f), Bernstein had until March 13, 2014 to sue. He waited too long, until July 15, 2014, to act.
        Bernstein urged the District Court to hold that he was enforcing "an already-effective rescission of his mortgage, relying on Jesinoski vCountrywide Home LoansInc., 135 S. Ct. 790 (2015), for the proposition that giving notice alone affects a rescission by operation of law." Doc. 29 at 14. He posits that "pursuant
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to the 'roadmap' provided by Jesinoski he did not have to file a lawsuit to compel rescission." The burden was on Wells Fargo. Id. at 14-15. The District Court was not persuaded. Nor are we. We therefore affirm the District Court's ruling that Bernstein's claim is time-barred. In doing so, we reject his equitable-tolling argument as frivolous. We reject as meritless his argument that the Court erred in dismissing his claim for declaratory relief under the Georgia Declaratory Judgment Act, O.C.G.A. § 9-4-2.
        AFFIRMED.
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Footnotes:
        1. Section 1635(a), Disclosure of obligor's right to rescind, states in pertinent part:
[I]n the case of any consumer credit transaction . . . in which a security interest . . . is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction 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, by notifying the creditor, in accordance with regulations of the Bureau, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Bureau, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Bureau, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.
15 U.S.C. § 1635(a).
        2. Section 1635(b), Return of money or property following rescission, states in pertinent part:
When an obligor exercises his right to rescind under subsection (a), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value.
15 U.S.C. § 1635(f).
        3. Bernstein's complaint contained other claims arising out of the loan transaction not implicated in this appeal.

        4. Section 1635(e)(1) provides that § 1635, which includes § 1635(f), does not apply to "(1) a residential mortgage transaction as defined in section 1602(w) of this title."

Ninth Circuit reverses dismissal of TILA rescission suit

TIMOTHY BARNES, Plaintiff-Appellant,
v. 
CHASE HOME FINANCE, LLC, a
Delaware corporation; CHASE BANK
USA, N.A., a subsidiary of JP Morgan
Chase & Co., a Delaware corporation;
IBM LENDER BUSINESS PROCESS
SERVICES, INC., a Delaware corporation;
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, Defendants-Appellees.
No. 13-35716
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Argued and Submitted: May 10, 2017
August 10, 2017
NOT FOR PUBLICATION
D.C. No. 3:11-cv-00142-PK
MEMORANDUM*
Appeal from the United States District Court for the District of Oregon
Anna J. Brown, District Judge, Presiding
Argued and Submitted May 10, 2017 Portland, Oregon
Page 2
Before: BYBEE and HURWITZ, Circuit Judges, and RAKOFF,** District Judge.
        Timothy Barnes mailed a notice that he was exercising his right to rescind his mortgage to his creditor, Chase Bank USA, N.A. (CBUSA), and the loan servicers to which he had been making monthly payments, Chase Home Finance, LLC (CHF) and later IBM Lender Business Process Services, Inc. (LBPS). For reasons that are unclear from the record, the letter to the creditor was returned to Barnes undelivered. The loan was not rescinded, and Barnes brought suit for rescission and violation of the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its requirements regarding rescission procedures against CBUSA, CHF, and LBPS.1 The district court granted the defendants' motion for summary judgment. Because notice of rescission was properly given, we vacate the grant of
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summary judgment on Barnes's claims for rescission and failure to effect rescission and remand for further proceedings.2
        1. A borrower may rescind a loan within three years of the loan transaction if the creditor fails to provide specific disclosures required by TILA. See 15 U.S.C. § 1635(f); 12 C.F.R. § 226.23(a)(3). To exercise that right, a borrower must "notify[] the creditor, in accordance with regulations of the Bureau, of his intention to do so." 15 U.S.C. § 1635(a); see also Jesinoski vCountrywide Home LoansInc., 135 S. Ct. 790, 792 (2015) ("[R]escission is effected when the borrower notifies the creditor of his intention to rescind."). TILA's core implementing regulation, known as Regulation Z, outlines further details on how the borrower is to exercise the right to rescind. See 12 C.F.R. § 226(a). Specifically, Consumer Financial Protection Bureau (CFPB) Official Staff Commentary to Regulation Z provides: "Where the creditor fails to provide the consumer with a designated address for sending the notification of rescission, delivery of the notification to the person or address to which the consumer has
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been directed to send payments constitutes delivery to the creditor or assignee." 12 C.F.R. § 226, Supp. I, para. 23(a)(2); Truth in Lending, 69 Fed. Reg. 16,769-03, 16,771 (Mar. 31, 2004).
        Barnes attempted to notify both the creditor, CBUSA, and the servicer, CHF, of his intent to rescind by mailing letters to the addresses they had provided him. CBUSA "fail[ed] to provide [Barnes] with a designated address for sending the notification of rescission" because the address it did provide was not successfully receiving mail when Barnes sent his notice there. See 12 C.F.R. § 226, Supp. I, paras. 15(a)(2), 23(a)(2). The only remaining action for Barnes to take, per Regulation Z and the CFPB Official Staff Commentary, was to notify the servicer, which he had already done. Barnes's letter to CHF therefore provided sufficient notice to CBUSA that he was exercising his right to rescind.
        2. There remain disputed issues of fact warranting reversal of summary judgment for the claims against the defendants for failure to effect rescission in accordance with TILA's requirements. Because the rescission notice was timely provided, failure to comply with the requirements in 15 U.S.C. § 1635(b) within 20 days is actionable under 15 U.S.C. § 1640(a). Barnes's claim for damages, a declaratory judgment, and injunctive relief for failure to effect rescission following
Page 5
timely notice of intent to rescind against CBUSA and Fannie Mae were thus improperly dismissed on summary judgment by the district court.
        Barnes also argues that CHR and LBPS are liable for failure to rescind based on the theory that they are assignees. Due to the lack of clarity in the record on the relationship between the lenders and the servicers, Barnes has established a genuine dispute as to material fact on this question sufficient to survive summary judgment.
        3. Barnes argues that the servicers, CHF and LBPS, are liable under 15 U.S.C. § 1640(a) for failure to provide requested information about the creditor under § 1641(f)(2) ("Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation."). Barnes requested information about the name, address, and telephone number of the creditor from CHF and LBPA, and the record is not clear whether he actually received it. Because Barnes has raised a genuine issue of material fact regarding compliance with TILA, the district court erred in granting summary judgment on this issue.
        VACATED AND REMANDED.
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Footnotes:
        *. This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
        **. The Honorable Jed S. Rakoff, Senior United States District Judge for the Southern District of New York, sitting by designation.
        1. The Federal National Mortgage Association (Fannie Mae) was later added as a defendant in an amended complaint.

        2. Fannie Mae became a creditor after the three-year statute of repose date passed. Any claim against CBUSA can be brought against Fannie Mae as an assignee of CBUSA's interest, and should not have been be dismissed. See 15 U.S.C. § 1641(c) ("Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation.").

Friday, September 1, 2017

What's common between Depp/Heard divorce and Mnuchin's visit to Ft Knox?

Do lawyers put too mach emphasis on technical reading of the English language?  Or do they use linguistic technicalities to mislead the public? You decide.

During the infamous split between Johnny Depp and Amber Heard, the lawyers for both sides came out with a crafty and clever press release that read: "Neither party has lied nor made false accusations for financial gain."

The statement does not say "Neither party has lied or made false accusations."  Only that they didn't do so "for financial gain", which opens up the possibility that they did so for other purposes, such as to hurt the other, etc.  So to a lawyer, this immediately raises the question: did either party nonetheless lie or make false statements, but for other purposes, unrelated to financial gain?

What does it have to do with Mnuchin's recent visit to Ft Knox and his subsequent tweet "Glad gold is safe!"?  I am surprised that no one in the media has called Mr. Mnuchin on his statement, similarly to how some press outlets called Johnny and Amber on their crafty statement.  Because Mnuchin doesn't say "gold is there."  He only says "gold is safe."  So it could be "safe" in a whole different place in the U.S., Europe or even China, and not at Ft. Knox, which would mean that some conspiracy theorists are at least partially right in thinking that the gold that used to be at Ft. Knox is no longer there, whether the gold is "safe" or not.  Just saying....

Monday, June 12, 2017

In a breath of fresh air, West Virginia court applies TILA as written

TERESA LAVIS, Plaintiff,
v.
REVERSE MORTGAGE SOLUTIONS, LLC, Defendant.
CIVIL ACTION NO. 5:17-cv-00209
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA BECKLEY DIVISION
June 9, 2017
MEMORANDUM OPINION AND ORDER
        The Court has reviewed the Plaintiff's Complaint (Document 1-1), the Defendant's Motion to Dismiss (Document 6), Defendant Reverse Mortgage Solutions Inc.'s Memorandum in Support of Rule 12(b)(6) Motion to Dismiss (Document 7), the Plaintiff's Memorandum in Opposition to Defendant's Motion to Dismiss (Document 8), and the Defendant's Reply Memorandum in Support of Motion to Dismiss (Document 10).1 In addition, the Court has reviewed all attached exhibits. For the reasons stated herein, the Court finds that the motion should be granted in part and denied in part.
FACTUAL ALLEGATIONS
        The Plaintiff, Teresa Lavis, sought a reverse mortgage in 2013 to obtain money to financially assist her mother. A realtor told Ms. Lavis that her home was worth approximately
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$160,000, and she owed less than $14,000 on her existing mortgage. She called Defendant Reverse Mortgage Solutions (RMS) after finding its phone number online, and was directed to Scott Shindle, who then acted as her loan officer. Mr. Shindle told Ms. Lavis that she "would never have to make a house payment again," would not have to pay any interest, and described an RMS reverse mortgage as a "government loan." (Compl. at ¶¶ 44-46.)
        Mr. Shindle arranged for an appraisal, which was conducted by Lori Noble. Ms. Noble viewed the exterior of the home, and Ms. Lavis paid her $150 for the appraisal. Mr. Shindle informed Ms. Lavis that he had received the appraisal, but claimed he could not legally disclose the amount to her. Mr. Shindle also helped arrange Ms. Lavis' legally mandated loan counseling. He arranged for her to speak with an out-of-state counselor over the telephone. Ms. Lavis alleges that the "counselor had undisclosed, prior business dealings with RMS," and "was not independent, free of conflicts, and dedicated solely to helping Ms. Lavis understand her best interests and the best financial options available." (Id. at ¶¶ 57-58.) The counseling session lasted less than five minutes. Ms. Lavis asked about alternatives to reverse mortgages and about RMS's reputation, but the counselor said he could not answer those questions. He further replied that "I am supposed to tell you that this is a great loan." (Id. at ¶ 63.)
        The loan closing took place at Ms. Lavis' home on November 22, 2013. She signed a Settlement Statement that detailed $9,389.47 in settlement charges, a $13,577.57 payoff of her previous mortgage, and $22,967.04 in loan proceeds provided to Ms. Lavis. The total principal loan amount was $66,976.00. (Document 7-1).2 The Settlement Statement includes a checked box stating "You do not have a monthly escrow payment for items, such as property taxes and
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homeowner's insurance. You may pay these items directly yourself," although the form lists $2,113.57 for homeowner's insurance as an "item required by lender to be paid in advance." (Settlement Statement.) Ms. Lavis also signed a Home Equity Conversion Loan Agreement. (Document 7-2.) That document includes a provision permitting RMS to withhold funds for property charges, including property taxes and hazard insurance, unless the borrower elects to pay such charges directly, in which case any withheld amounts must be returned. In addition, an Adjustable Rate Note, signed November 22, 2013, provides that the lender may require immediate repayment of the full amount of the principal loan plus accrued interest if the borrower(s) die, move, or fail to perform "[a]n obligation of the Borrower under the Security Instrument." (Document 7-3 at 3.) The property may be sold to enforce the demanded repayment. A Deed of Trust contains similar provisions, and specifies that the Secretary [of Housing and Urban Development] must approve acceleration of the loan for reasons other than the death of the borrower, including failure to meet obligations.
        Ms. Lavis asserts that she did not understand the terms of the documents she signed at closing. In May, 2016, she learned that RMS "contracted for, imposed, received, and/or collected illegal and/or excessive fees, charges, and costs, including undisclosed fees and/or settlement costs up-charged or subject to hidden division, in violation of West Virginia law." (Id. at ¶ 66.) Specifically, she alleges that her loan principal totaled $66,978.00, and closing costs were $9,389.47, including an origination charge of $2,625.00. RMS charged a document preparation fee of $125 as well as fees for a credit report, flood certification, and recording. RMS also applied allegedly excessive title insurance charges, including a $718.10 agent commission to a company not licensed in West Virginia. RMS charged an additional $700 "settlement or closing fee," a
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$200 "Notary Fee," and a $375 appraisal fee, for the same appraisal Ms. Lavis paid for directly at the time.
        RMS also deducted $2,113.57 from the amount Ms. Lavis was to receive to pay a hazard insurance premium a year in advance. Although the insurance company returned the money to RMS, RMS sought an additional $1,946.71 from Ms. Lavis to pay for a different force-placed hazard insurance policy. RMS threatened to foreclose if Ms. Lavis failed to pay. She disputed the charge. RMS sent her a letter dated August 21, 2015, stating that "RMS would accelerate her loan immediately if she did not pay $1,310.33" in "taxes and insurance," although Ms. Lavis had paid the real estate taxes. (Id. at ¶ 73.) Ms. Lavis was charged for taxes paid on an unrelated property in Gwinnet County, Georgia. She again contacted RMS, contested the tax charge, and expressed willingness to set up a monthly payment plan for any amounts she owed. RMS instead demanded that she pay the full sum immediately. "On September 18, 2015, RMS sent Ms. Lavis a letter stating her loan was in default for failure to pay 'Property Taxes and Hazard Insurance,' and had been accelerated so that the entire principal balance (represented to be $72,929.82) was immediately due and payable." (Id. at ¶ 87.) The letter also indicated attorney's fees and expenses could be added, and offered Ms. Lavis the options of "paying the full loan balance, walking away, selling the home, or giving RMS a deed in lieu of foreclosure." (Id. at ¶ 88.) Alternatively, Ms. Lavis could pay the $1,310.33, representing "the Servicer's payment of the property charges." (Id. at ¶ 89.) RMS added fees to Ms. Lavis' account for several property inspections and two appraisals.
        On March 8, 2016, an agent of RMS engaged in debt collection sent Ms. Lavis a letter asserting that she was in default in the amount of $1,946.71, and that her loan could be accelerated
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if she did not pay that amount within ten (10) days. The same debt collector sent Ms. Lavis a second letter the same day, asserting that she was required to pay $74,313.06, but could dispute the claim within thirty (30) days. Several days prior to mailing those letters, another debt collection agent published notice that Ms. Lavis' home would be sold in a trustee's sale on April 6, 2016, but subsequent direct communications with Ms. Lavis did not inform her of the impending sale of her home. Ms. Lavis obtained counsel when she learned of the trustee sale about a week before it was scheduled, and the sale was cancelled temporarily. As of the filing of the complaint, RMS was continuing to bill Ms. Lavis for tax and insurance fees, and continuing to threaten her with foreclosure.
        Ms. Lavis asserts that her experiences with RMS are typical of its business practices within West Virginia. In Count One of her complaint, she asserts class claims for illegal and excessive fees, charges, and costs, in violation of the West Virginia Residential Mortgage Lender, Broker and Servicer Act, the West Virginia Reverse Mortgage Enabling Act, and the implementing regulations. She also asserts seven individual claims. Count Two alleges unconscionable inducement. Count Three asserts misrepresentation. Count Four alleges unfair debt collection. Count Five asserts refusal of payment, in violations of W.VA. Code § 46A-2-115. Count Six asserts breach of contract. Count Seven asserts that Ms. Lavis properly rescinded the loan. Count Eight asserts failure to honor rescission.
STANDARD OF REVIEW
        A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Francis vGiacomelli, 588 F.3d 186, 192 (4th Cir. 2009); Giarratano vJohnson, 521 F.3d 298, 302 (4th Cir. 2008). "[T]he legal sufficiency of a complaint
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is measured by whether it meets the standard stated in Rule 8 [of the Federal Rules of Civil Procedure] (providing general rules of pleading) . . . and Rule 12(b)(6) (requiring that a complaint state a claim upon which relief can be granted.)" Id. Federal Rule of Civil Procedure 8(a)(2) requires that a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).
        In reviewing a motion to dismiss under Rule 12(b)(6) for failure to state a claim, the Court must "accept as true all of the factual allegations contained in the complaint." Erikson vPardus, 551 U.S. 89, 93 (2007). The Court must also "draw[ ] all reasonable factual inferences from those facts in the plaintiff's favor." Edwards vCity of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). However, statements of bare legal conclusions "are not entitled to the assumption of truth" and are insufficient to state a claim. Ashcroft vIqbal, 556 U.S. 662, 679 (2009). Furthermore, the Court need not "accept as true unwarranted inferences, unreasonable conclusions, or arguments." EShore Mkts., vJ.DAssocsLtdP'ship, 213 F.3d 175, 180 (4th Cir. 2000). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice...[because courts] 'are not bound to accept as true a legal conclusion couched as a factual allegation.'" Iqbal, 556 U.S. at 678 (quoting Atlantic CorpvTwombly, 550 U.S. 544, 555 (2007)).
        To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, 'to state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570.) In other words, this "plausibility standard requires a plaintiff to demonstrate more than 'a sheer possibility that a defendant has acted unlawfully.'" Francis vGiacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 570.) In the
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complaint, a plaintiff must "articulate facts, when accepted as true, that 'show' that the plaintiff has stated a claim entitling him to relief." Francis, 588 F.3d at 193 (quoting Twombly, 550 U.S. at 557.) "Determining whether a complaint states [on its face] a plausible claim for relief [which can survive a motion to dismiss] will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.
DISCUSSION
        RMS seeks dismissal of Counts One, Three, Four, Six, Seven, and Eight of the complaint.
        ACount One - Illegal and Excessive FeesChargesand Costs
        RMS asserts that a two-year statute of limitations applies to fees and costs assessed at closing, and more than two years elapsed between the closing of Ms. Lavis' reverse mortgage and the filing of this suit. Ms. Lavis argues that consideration of the statute of limitations is premature, as the complaint does not contain all facts relevant to a determination. Further, Ms. Lavis asserts that she relies on multiple legal theories as to Count One, including the WVCCPA, which has a four-year statute of limitations. Ms. Lavis also argues that the West Virginia Residential Mortgage Lender, Broker, and Servicer Act (RMLBSA) is most comparable to a usury statute, which the West Virginia Supreme Court of Appeals found to involve continuing injury throughout the loan period, such that the statute of limitations would begin to run when the loan is fully paid, rather than at the time of origination.
        West Virginia Code § 31-17-8 prohibits certain excessive and/or undisclosed fees associated with mortgages. Section 31-17-17(a) provides that a loan "made in willful violation of the provisions of this article...may be canceled by a court of competent jurisdiction." In West
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Virginia, "A five step analysis should be applied to determine whether a cause of action is time-barred."
First, the court should identify the applicable statute of limitation for each cause of action. Second, the court (or, if questions of material fact exist, the jury) should identify when the requisite elements of the cause of action occurred. Third, the discovery rule should be applied to determine when the statute of limitation began to run by determining when the plaintiff knew, or by the exercise of reasonable diligence should have known, of the elements of a possible cause of action. Fourth, if the plaintiff is not entitled to the benefit of the discovery rule, then determine whether the defendant fraudulently concealed facts that prevented the plaintiff from discovering or pursuing the cause of action. Whenever a plaintiff is able to show that the defendant fraudulently concealed facts which prevented the plaintiff from discovering or pursuing the potential cause of action, the statute of limitation is tolled. And fifth, the court or the jury should determine if the statute of limitation period was arrested by some other tolling doctrine.
Syl. Pt. 5, Dunn vRockwell, 689 S.E.2d 255, 258 (W. Va. 2009) (internal citation omitted).
        The RMLBSA does not contain a statute of limitations provision, and the West Virginia Supreme Court of Appeals has not determined the appropriate statute of limitations for RMLBSA claims related to fees imposed at closing on a mortgage. However, federal district courts for both the Northern District of West Virginia and the Southern District of West Virginia have found that the standard two-year statute of limitations contained in W.Va. Code Section 55-2-12 generally begins to run at the time of injury, when the allegedly improper fees are imposed. Fluharty vQuicken LoansInc., No. 5:13CV68, 2013 WL 5963060, at *3 (N.D.W. Va. Nov. 7, 2013), aff'd, 623 F. App'x 65 (4th Cir. 2015); In re Shaver, No. 10-813, 2014 WL 3057951, at *2 (Bankr. N.D.W. Va. June 26, 2014); Robinson vQuicken Loans Inc., 988 F. Supp. 2d 615, 627-28 (S.D.W. Va. 2013) (Chambers, C.J.). Ms. Lavis challenges fees imposed at closing. Thus, the elements of the claim were complete on November 22, 2013, and she was aware of those
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elements. Though she may not have been aware of the law under which those fees could be challenged, the Settlement Statement clearly lists the various fees. SeeDunn vRockwell, 689 S.E.2d 255, 265 (W. Va. 2009) ("The plaintiff is charged with knowledge of the factual, rather than the legal, basis for the action.") There is no allegation here that RMS concealed facts to prevent Ms. Lavis from pursuing a claim with respect to the origination and other challenged closing fees. As it is clear from the face of the complaint that more than two years had passed between the loan closing date and the initiation of this suit, and Ms. Lavis has not come forward with any allegations that, if proven, would permit tolling of the statute of limitations, the Court finds that claims under the RMLBSA are time-barred. The motion to dismiss Count One should be granted.3
        BCounts Three and Four- Misrepresentation and Unfair Debt Collection
        RMS argues that Counts Three and Four fail because the relevant provisions of the WVCCPA apply only to debt collectors. RMS asserts that it originated the debt at issue, and therefore, cannot be considered a debt collector. It further argues that the fees it attempted to collect "were charged in connection with the origination and closing of the Loan, not in connection with attempting to collect payments due under those loans." (Mem. in Supp. of Mot. to Dismiss at 11.) Moreover, RMS states the "taxes and insurance obligations were not sought through debt collection, but were merely Plaintiff's obligation per the terms of the loan agreement to maintain on the property, the violation of which constituted default of the Loan." (Id.) Ms. Lavis maintains that both the West Virginia Supreme Court of Appeals and federal courts interpreting
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the WVCCPA have found that the statute, including the definition of "debt collection," should be broadly interpreted. She notes that courts have concluded that creditors may also be debt collectors under the WVCCPA.
        The WVCCPA defines a "debt collector" as "any person or organization engaging directly or indirectly in debt collection." W.Va. Code § 46A-2-122(d).4 "Debt collection," in turn, is defined as "any action, conduct or practice of soliciting claims for collection or in the collection of claims owed or alleged to be owed or due by a consumer." Id. at § 122(c). In 1980, the West Virginia Supreme Court of Appeals held, based on the plain meaning of those definitions, that "the provisions of Article 2 of Chapter 46A regulating improper debt collection practices in consumer credit sales must be applied alike to all who engage in debt collection, be they professional debt collectors or creditors collecting their own debts." Syl. Pt. 3, Thomas vFirestone Tire & Rubber Co., 266 S.E.2d 905, 906 (W.Va. 1980); see also Fleet vWebber Springs Owners Ass'nInc., 772 S.E.2d 369, 377 (W. Va. 2015) (again finding a creditor attempting to collect debt allegedly owed to it to be a debt collector). Federal courts in West Virginia have likewise permitted WVCCPA claims against creditors, even where federal Fair Debt Collection Practices Act claims cannot proceed. Seee.g., Patrick vPHH MortgCorp., 937 F. Supp. 2d 773, 782 (N.D.W. Va. 2013); In re Machnic, 271 B.R. 789, 792 (Bankr. S.D.W. Va. 2002). In short, under the WVCCPA, whether a party is a debt collector is determined by its conduct, and those who take actions to collect alleged debts are debt collectors for purposes of the WVCCPA.
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        Nothing in the penalty provisions of the WVCCPA alters those conclusions. West Virginia Code Section 46A-5-101 does specify certain remedies available when violations are committed by the creditor, while others are available whether a creditor or debt collector committed the violation. Section 46A-5-101(1) provides certain remedies "[i]f a creditor or debt collector has violated the provisions of this chapter applying to...illegal, fraudulent or unconscionable conduct, any prohibited debt collection process...." In addition, the legislature amended the WVCCPA without changing the language defining "debt collector" that the West Virginia Supreme Court held included creditors engaging in debt collection, indicating that it did not intend to alter that holding. Thus, it is clear that the WVCCPA contemplates liability for creditors who engage in debt collection.
        In addition to allegations regarding unlawful fees imposed at closing, Ms. Lavis alleges that RMS sought to collect alleged debts related to hazard insurance and property taxes. She further asserts that the debts were not properly assessed and RMS ignored her attempts to resolve the dispute. It sent her repeated notices demanding payment and threatening foreclosure, and even scheduled a foreclosure sale based on Ms. Lavis' failure to pay those alleged debts. Accordingly, the Court finds that Ms. Lavis has stated claims under the WVCCPA, and RMS's motion to dismiss Counts Three and Four should be denied.
        CCount Six - Breach of Contract
        RMS asserts that Ms. Lavis has not alleged a viable breach of contract claim because she alleges only a breach of the implied covenant of good faith and fair dealing, without alleging a breach of any express contract term. Ms. Lavis argues that her allegations are sufficient to survive a motion to dismiss.
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        State law governs contract disputes. In West Virginia, a claim for breach of contract requires "the existence of a valid, enforceable contract; that the plaintiff has performed under the contract; that the defendant has breached or violated its duties or obligations under the contract; and that the plaintiff has been injured as a result." McNeely vWells Fargo BankN.A., No. 2:13-CV-25114, 2014 WL 7005598, at *9 (S.D.W. Va. Dec. 10, 2014) (Goodwin, J.) (citations and quotation marks omitted.) A breach of the duty of good faith implied in all contracts "does not give rise to an independent cause of action." Doyle vFleetwood Homes of VirginiaInc., 650 F. Supp. 2d 535, 540 (S.D.W. Va. 2009) (Copenhaver, J.). "[F]ailure to allege a breach of contract [is] fatal to [a] claim for a breach of the implied covenant of good faith and fair dealing." Evans vUnited BankInc., 775 S.E.2d 500, 509 (W.Va. 2015).
        Ms. Lavis clearly asserted that "RMS breached express provisions of the contract, as well as its duty of good faith and fair dealing." (Compl. at ¶ 113.) Though the complaint does not re-assert the factual basis to clarify precisely how RMS breached the contract provisions, the facts set forth in the complaint adequately state a breach of contract claim. For example, the Home Equity Conversion Loan Agreement permits Ms. Lavis to pay for taxes and insurance directly, and indicates that any money withheld for such purposes will be returned if she pays those charges. Ms. Lavis alleges that RMS withheld $2,113.57 for insurance, but the insurance company returned that money to RMS. RMS did not return the money to Ms. Lavis, but demanded an additional $1,946.71 from Ms. Lavis to pay for a different policy. Ms. Lavis also alleges that she paid the property taxes directly, but RMS charged her for taxes. The facts alleged, taken as true, therefore support a breach of contract claim, and the accompanying claim for breach of the duty of good faith and fair dealing may proceed. RMS's motion to dismiss Count Six should be denied.
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        DCounts Seven and Eight - Rescission and Failure to Honor Rescission
        RMS argues that Ms. Lavis' rescission claims must fail because she does not allege that she assured RMS of her ability to return the loan proceeds when seeking rescission. Ms. Lavis argues that the Truth in Lending Act (TILA) does not require such an assurance.
        TILA gives borrowers the right to rescind covered transactions within three days, or within three years if the lender failed to provide proper disclosure forms. 15 U.S.C. § 1635(a),(f). The borrower must provide written notice of the rescission, after which the creditor has twenty (20) days to "return any money or property...and shall take any action necessary to reflect the termination of the security interest." 12 C.F.R. § 1026.23(a), (d). After the creditor satisfies its obligations, the borrower must tender any money or property received from the creditor, or its reasonable value. Id. at § 1026.23(d)(3). The procedures for the return of money or property by both parties "may be modified by court order." Id. at § 1026.23(d)(4).
        The Fourth Circuit considered the right of rescission in American Mortgage NetworkIncvShelton, affirming a grant of summary judgment in favor of the lender. 486 F.3d 815 (4th Cir. 2007). There, the borrower had misrepresented his income and had used an appraiser who worked under his supervision to generate an allegedly inflated value of the home. Id. at 819. The borrower informed the lender that he could not return the loan proceeds, and instead offered to sell the home to the lender "for the difference between an appraised value of the house, $370,000, and the net loan proceeds, $313,468.39." Id. at 818. As the lender was not in the business of buying and selling homes, and believed the appraised value to be inflated, it declined to accept the tender or the rescission notice and brought suit to clarify its TILA obligations. The Fourth Circuit
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determined that "[t]he trial court, in exercising its powers of equity, could have either denied rescission or based the unwinding of the transaction on the borrower's reasonable tender of the loan proceeds." Id. at 820. However, the Fourth Circuit noted that "the better practice may have been for the trial judge to set terms for rescission by allowing the [borrower] a time certain to tender the net loan proceeds." Id. at 821 (but finding the trial court's decision to be a reasonable exercise of discretion under the facts of the case).
        The Fourth Circuit again considered rescission in Gilbert vResidential Funding LLC, 678 F.3d 271 (4th Cir. 2012). There, the court separated "the issue of whether a borrower has exercised her right to rescind [from] the issue of whether the rescission has, in fact, been completed and the contract voided." Gilbert, 678 F.3d at 277. The written communication indicating an intent to rescind is sufficient to exercise the right to rescind, but "the creditor must acknowledge that the right of rescission is available and the parties must unwind the transaction amongst themselves, or the borrower must file a lawsuit so that the court may enforce the right to rescind" in order to complete the rescission and void the contract. Id. (citing Shelton, 486 F.3d at 821) (internal quotation marks and citations omitted). Like the instant case, Gilbert involved both a claim for rescission and a claim for statutory damages based on the lender's failure to honor the initial written rescission notification. The Fourth Circuit permitted both claims to proceed. Id. at 278-79.
        The United States Supreme Court later provided clear guidance indicating that "all that a borrower must do in order to exercise his right to rescind under the Act" is provide the lender with written notice of the intention to rescind within the applicable statute of limitations. Jesinoski vCountrywide Home LoansInc., 135 S. Ct. 790, 793 (2015). The Court also noted that TILA
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modified the common-law requirement that "the borrower tender the proceeds received under the transaction" as a condition precedent to rescission. Id.
        The Court finds RMS's reliance on Shelton misplaced.5 Shelton did not create a pleading standard requiring borrowers seeking rescission to state their ability to tender the loan proceeds at the outset. It simply found that rescission could not be properly completed in that case, following discovery, because the borrower could not or would not agree to return the reasonable value of the loan proceeds in a timely manner. The Fourth Circuit also emphasized that the outcome was a reasonable exercise of the trial court's discretion under the specific facts of the case, with other options available for managing rescission cases. Ultimately, as held in Shelton, Ms. Lavis will be required to tender the loan proceeds to return the parties to status quo ante in order to complete rescission and void the loan, and the Court could deny rescission if she is unable or unwilling to do so.6 The Court and/or the parties, however, retain some flexibility under 15 U.S.C. § 1635(b) and 12 C.F.R. § 1026.23(d)(4), to determine how rescission should proceed under the circumstances presented. The Court finds that Ms. Lavis has adequately pled her claims for rescission and failure to honor rescission at this stage, and RMS's motion to dismiss Counts Seven and Eight will therefore be denied.
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CONCLUSION
        Wherefore, after thorough review and careful consideration, the Court ORDERS that the Defendant's Motion to Dismiss (Document 6) be GRANTED as to Count One and DENIED as to Counts Three, Four, Six, Seven, and Eight. The Court specifically ORDERS that Count One of the Plaintiff's Complaint (Document 1-1) be DISMISSED.
        The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and to any unrepresented party.
        ENTER: June 9, 2017
        /s/_________
        IRENE C. BERGER
        UNITED STATES DISTRICT JUDGE
        SOUTHERN DISTRICT OF WEST VIRGINIA
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Footnotes:
        1. Both parties failed to fully comply with the Local Rules of Civil Procedure. The Defendant attached exhibits to its supportive memorandum, rather than to its motion, as specified by L.R. Civ. P. 7.1(a)(1). The Plaintiff's response exceeds the standard page limit of twenty (20) pages set forth in L.R. Civ. P. 7.1(a)(2). The Court urges counsel to review the Local Rules and ensure that all future filings are in compliance.
        2. RMS attached the closing documents as exhibits to its motion to dismiss. Finding that these documents are integral to the complaint, and their authenticity has not been challenged, the Court will consider the contents of the documents.
        3. Ms. Lavis asserts that Count One encompasses claims involving later fees and other legal theories. Those claims appear to the Court to be adequately alleged in other counts. To be clear, the motion to dismiss Count One is granted only as to RMLBSA claims involving fees imposed on or before the loan closing date.
        4. Although this definition is amended by CONSUMER CREDIT, 2017 West Virginia Laws S.B. 563 (West's No. 200), the new language adds an exclusion not applicable to the Plaintiff's claims without changing the quoted definition.
        5. RMS cites other district court cases within the Fourth Circuit that have similarly relied on Shelton to dismiss rescission claims for a failure to allege or demonstrate the ability to tender any loan balance. Given the subsequent clarifications from the Fourth Circuit in Gilbert and the United States Supreme Court in Jesinoski, the Court does not find those cases persuasive to the extent they would impose a requirement that borrowers specifically plead their ability to meet the tender obligations at the beginning of the rescission process. Further, it does not appear that the Southern District of West Virginia has previously imposed any such pleading requirement. Seee.g., Lenhart vEverBank, No. 2:12-CV-4184, 2013 WL 5745602, at *6-7 (S.D.W. Va. Oct. 23, 2013) (Copenhaver, J.) (denying summary judgment where plaintiffs pled that they were prepared to tender if the court modified the rescission process, and produced evidence that the value of the home would be sufficient to secure a loan in excess of the tender amount).

        6. Contrary to Ms. Lavis' contention, RMS's waiver of any claim that she repay the loan in the reverse mortgage contracts obviously does not impact the requirement that she repay the loan proceeds in order to complete rescission. Rescission is designed to void the loan and return the parties to their original positions, not allow borrowers to escape any repayment obligation while retaining the secured property.