700 Fed.Appx. 817 (10th Cir. 2017), 16-1379, Rader v. Citibank N.A
| Citation | 700 Fed.Appx. 817 |
| Opinion Judge | Nancy L. Moritz, Circuit Judge |
| Party Name | Vivian L. RADER; Steven R. Rader, Plaintiffs-Appellants, v. CITIBANK N.A., as Successor Trustee to U.S. Bank National Association as Successor to Wachovia Bank National Association as Trustee for the Certificateholders of Mastr Alternative Loan Trust 2004-1 Mortgage Pass Through Certificates Series 2004-1; Ocwen Loan Servicing, LLC, Defendants-... |
| Attorney | William Jeffrey Barnes, Beverly Hills, CA, for Plaintiffs-Appellants Morton Lewis, Paul J. Lopach, Cynthia Lowery-Graber, Bryan Cave, Denver, CO, for Defendants-Appellees |
| Judge Panel | Before MATHESON, McKAY, and MORITZ, Circuit Judges. |
| Case Date | July 07, 2017 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Tenth Circuit |
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Editorial Note:
UNPUBLISHED OPINION (See Fed. Rule of Appellate Procedure 32.1. See also U.S.Ct. of App. 10th Cir. Rule 32.1.)
(D.C. No. 1:15-CV-02736-LTB) (D. Colorado)
William Jeffrey Barnes, Beverly Hills, CA, for Plaintiffs-Appellants
Morton Lewis, Paul J. Lopach, Cynthia Lowery-Graber, Bryan Cave, Denver, CO, for Defendants-Appellees
Before MATHESON, McKAY, and MORITZ, Circuit Judges.
ORDER AND JUDGMENT[*]
Nancy L. Moritz, Circuit Judge
Plaintiffs-Appellants Vivian L. Rader and Steven R. Rader appeal from the district
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courts dismissal of their action brought pursuant to 15 U.S.C. § 1635 of the Truth in Lending Act (TILA), in which they sought to rescind a 2003 promissory note and deed of trust (collectively, the " Mortgage Loan" ). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.
I.
Steven Rader borrowed $630,000 from GreenPoint Mortgage Funding, Inc. on October 8, 2003. See Aplt. App. at 183.1 The promissory note was secured by the Raders property in Pagosa Springs, Colorado, pursuant to a deed of trust dated October 8, 2003. See id . at 187, 189. The deed of trust was recorded on October 15, 2003, in the records of the County of Archuleta, Colorado. Id . at 187.
After the loan transaction closed, the Raders began making payments in 2003, but stopped making payments sometime in 2008 because of alleged billing errors. See id . at 43, 47. Seven years later, in August 2015, defendant-appellee Citibank, N.A. (the holder of the note) sold the mortgaged property at a foreclosure sale.2 In October 2015, the Raders sent " Rescission Letters" purporting to rescind the Mortgage Loan. The Raders then filed a " Verified Petition to Enforce Rescission" in December 2015 against Citibank and defendant-appellee Ocwen Loan Servicing, Inc. (the servicer of the loan).
Under TILA, an obligors right of rescission expires three years after the date of the consummation of the transaction. 15 U.S.C. § 1635(f). In their petition, the Raders asserted that the loan wasnt consummated at the closing because the true lender wasnt disclosed; therefore, their time to rescind didnt begin to run until October 2015, when they learned the true identity of the lender. They alleged that: the original lender, GreenPoint, " was not a party competent to enter into the loan agreement ... as it was not the true lender" ; " [t]here was no agreement between [the Raders] and the true lender" ; and " no consideration was provided to [the Raders] by [GreenPoint]." Aplt. App. at 10.
Citibank and Ocwen moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the Raders allegations werent plausible and that the rescission action was untimely because the loan transaction was consummated at the 2003 closing. The district court agreed, concluding the Raders had " failed to plausibly plead that the Mortgage Loan was not consummated at the 2003 closing." Id . at 288. The district court also rejected the Raders alternative theory that their claim for rescission wasnt time-barred because the running of the three-year limitation period should be equitably tolled.
II.
" We review de novo the grant of a Rule 12(b)(6) motion to dismiss for failure to
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state a claim." Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir. 2010). " Dismissal is appropriate only if the complaint, viewed in the light must favorable to plaintiff, lacks enough facts to state a claim to relief that is plausible on its face." United States ex rel. Conner v. Salina Regl Health Ctr., Inc., 543 F.3d 1211, 1217 (10th Cir. 2008) (internal quotation marks omitted).
" Generally, the sufficiency of a complaint must rest on its contents alone." Gee, 627 F.3d at 1186. But there are limited exceptions to this general rule. Id. Those include: " documents referred to in the complaint if the documents are central to the plaintiffs claim and the parties do not dispute the documents authenticity" and " matters of which a court may take judicial notice." Id. (internal quotation marks omitted).
On appeal, the Raders argue that the district court erred by not accepting their allegations as true and by considering evidence outside the scope of the complaint. We disagree.
For purposes of TILA, " [c]onsummation means the time that a consumer becomes contractually obligated on a credit transaction." 12 C.F.R. § 226.2(a)(13). The question of when a consumer becomes contractually obligated is determined by state law. See id. § 226.2(b)(3) (" Unless defined in this regulation, the words used have the meanings given to them by state law or contract." ); id . Pt. 226 Supp. I, Subpt. A, § 226(a)(13) (providing that " State law governs" consummation under § 226.2(a)(13) because " [w]hen a contractual obligation on the part of a consumer is created is a matter to be determined under applicable law" ). Under Colorado law, a contract is formed when there is " mutual assent to an exchange, between competent parties, with regard to a certain subject matter, for legal consideration." Indus. Prods. Intl, Inc. v. Emo Trans, Inc., 962 P.2d 983, 988 (Colo.App. 1997).
As noted above, the Raders alleged the loan wasnt consummated at the closing in 2003 because there was no mutual assent between GreenPoint and themselves, GreenPoint wasnt competent to contract, and GreenPoint provided no consideration. But their allegations are implausible and contradicted by documents properly before the district court.
" Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a...
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