Etta Lowery v. Capital One Mortgage ( 2011 )

Case: 10-10906 Document: 00511513835 Page: 1 Date Filed: 06/20/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 20, 2011
No. 10-10906
Summary Calendar Lyle W. Cayce
Clerk
ETTA LOWERY,
Plaintiff-Appellant
v.
CAPITAL ONE M ORTGAGE; DOVENM UEHLE MORTGAGE,
INCORPORATED; JOHN DOES 1-10,
Defendants-Appellees
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:09-CV-737
Before REAVLEY, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Etta Lowery obtained a home equity loan from Willow Bend Mortgage
Company (WBMC) on December 18, 2003. Lowery believed that she had entered
into a fixed interest rate mortgage. In February of 2009, Lowery received a bill
showing an increase in her loan payment. She called Capital One Mortgage
(Capital One) and was informed that her mortgage had an adjustable interest
rate. On December 7, 2009, Lowery filed a suit in Texas state court against
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 10-10906 Document: 00511513835 Page: 2 Date Filed: 06/20/2011
No. 10-10906
Capital One and Dovenmuehle Mortgage, Inc. (DMI). DMI removed the case to
federal court because it contained federal questions.
Lowery sought to invalidate the mortgage under the Texas Constitution.
She sought rescission of the mortgage and statutory damages under the Truth
in Lending Act (TILA), 15 U.S.C. § 1601 et seq. Capital One and DMI moved to
have Lowery’s suit dismissed under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim. The district court considered the pleadings and
attachments and entered an order granting the motions to dismiss under Rule
12(b)(6). Among other things, the district court found that the documents
submitted by Lowery showed that she was given notice of the three-day right to
rescind the mortgage as provided by the Texas Constitution and that the right
to rescind under the TILA, see 15 U.S.C. § 1635(f), expired three years after the
date of the consummation of the transaction in 2003.
Lowery has moved for leave to file a corrected reply brief. The motion is
granted.
This court reviews a district court’s dismissal for failure to state a claim
pursuant to F ED. R. C IV. P. 12(b)(6) de novo. General Elec. Capital Corp. v.
Posey, 415 F.3d 391, 395 (5th Cir. 2005). In reviewing a F ED. R. C IV. P. 12(b)(6)
motion, the “court accepts all well-pleaded facts as true, viewing them in the
light most favorable to the plaintiff.” In re Katrina Canal Breaches Litigation,
495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks and citation
omitted). Lowery’s pro se brief has been afforded liberal construction. Haines
v. Kerner, 404 U.S. 519, 520 (1972).
In the second amended complaint, Lowery asserted that she was not
provided with a “Texas Home Equity Notice of Right to Rescind.” The district
court rejected the claim noting that the loan documents introduced by Lowery
contained references to the right to rescind in two places. Lowery does not
dispute this finding and has not raised a challenge to it on appeal. See
2
Case: 10-10906 Document: 00511513835 Page: 3 Date Filed: 06/20/2011
No. 10-10906
Brinkmann v. Dallas County Deputy Sheriff Abner, 813 F.2d 744, 748 (5th Cir.
1987).
Lowery argues that the TILA specifies the form of the notice of the right
to rescind and that the federal TILA preempts state law. The substance of this
argument is that she was not given the correct notice of rescission under the
TILA. With respect to the three-year limit on rescissions found in 15 U.S.C.
§ 1635(f), Lowery does not dispute the district court’s finding that more than
three years had passed since the consummation of the mortgage. She argues
that the three-year period is subject to equitable tolling. This argument fails in
light of Beach v. Ocwen Federal Bank, 523 U.S. 410, 419 (1998), where the
Supreme Court concluded that § 1635(f) does not contain a statute of limitations
for bringing a claim, but rather provides that the right to rescission under the
TILA expires after three years. Id. Because there is no right to rescind after
three years, the district court did not err in finding that Lowery had failed to
state a claim in seeking rescission under the TILA beyond the three year period.
AFFIRMED; MOTION GRANTED.
3