Catherine F. Velardo v. Fremont Investment & Loan , 298 F. App'x 890 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
NOV 3, 2008
No. 08-12387 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 07-01253-CV-ORL-31-GJK
CATHERINE F. VELARDO,
NELSON J. VELARDO,
Plaintiffs-Appellants,
versus
FREMONT INVESTMENT & LOAN,
AMERICAS SERVICING COMPANY,
EASTERN SEABOARD FINANCIAL,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(November 3, 2008)
Before TJOFLAT, BLACK and BARKETT, Circuit Judges.
PER CURIAM:
The claims in this case arose out of the refinancing of the mortgage on
appellants’ home. Appellants refinanced their mortgage by entering into a contract
with Eastern Seaboard Financial (“ESF”) on October 19, 2005, to obtain a loan
from Fremont Investment & Loan (“Fremont”). The loan closed, and on February
1, 2006, Fremont assigned the loan to American Servicing Company (“ASC”).
Prior to the assignment, appellants, on December 3, 2005, sent Fremont a notice to
rescind the refinancing agreement because ESF and Fremont and violated the
Florida Consumer Protection Act, the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. § 2607, the Home Owners Equity Protection Act
(“HOEPA”), 15 U.S.C. § 1602, and the Florida Fair Lending Act. On February 6,
2006, appellants sent the same notice to rescind to ASC.
The refinanced mortgage went into default, and on July 18, 2006, ASC
brought a foreclosure action against appellants in Florida circuit court. The circuit
court entered judgment for ASC on February 8, 2007, and on August 6, 2007,
appellants, proceeding pro se brought this lawsuit against Fremont, ASC, and ESF.
In a eight-count complaint, they sought damages in Counts I and V under the Truth
in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., and in Count IV under
RESPA. In Counts II and III, they sought rescission of the mortgage loan under
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TILA. Counts VI, VII, and VII were brought under state law.
In an order entered on April 25, 2008, the district court granted appellees’
motion for judgment on the pleadings. See Fed. R. Civ. P. 12(c). Record, Vol. 3 at
Tab 79. The court dismissed Counts I, IV, and V, because they were barred by
one-year statutes of limitations and the limitations periods were not subject to
equitable tolling. The court dismissed the Count II and III TILA rescission claims
pursuant to the Rooker-Feldman1 doctrine, concluding that the claims were not
independent of the claims involved in the circuit court foreclosure action. Finally,
the court declined to exercise supplemental jurisdiction over the state law claims of
Counts VI, VII, and VIII.
Appellants now appeal the court’s judgment. They contend that although all
of their TILA claims were untimely filed, the claims were subject to equitable
tolling, because Fremont and ASC concealed the violations and they were diligent
in seeking district court relief. They also contend that the district court erred in
dismissing their TILA rescission claims under the Rooker-Feldman doctrine.
The TILA requires creditors to provide consumers with “clear and accurate
disclosures of terms dealing with things like finance charges, annual percentage
rates of interest, and the borrower's rights,” including the right of rescission.
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Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S. Ct. 149, 68 L. Ed. 362 (1923); D.C. Court
of Appeals v. Feldman, 460 U.S. 462, 103 S. Ct. 1303, 75 L. Ed. 2d 206 (1983).
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Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412, 118 S. Ct. 1408, 1410, 140 L. Ed.
2d 566 (1998). Further, the TILA provides that, when a loan made in a consumer
credit transaction is secured by the consumer's principal dwelling, the consumer
has the right to rescind the transaction until midnight of the third business day
following the consummation of the transaction or delivery of the material
disclosure and rescission forms, whichever is later. 15 U.S.C. § 1635(a). If the
creditor fails to deliver the forms, or fails to provide the required information, then
the consumer's right of rescission extends for three years after the date of
consummation of the transaction, or until the property is sold, whichever occurs
first. 15 U.S.C. § 1635(f); 12 C.F.R. § 226.23(a)(3). Within 20 days after receipt
of a notice of rescission, the creditor shall take any necessary action to reflect the
termination of any security interest created by the transaction. 15 U.S.C. § 1635(b).
Pursuant to § 1640(e), all TILA claims must be brought “within one year
from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e). The
violation “occurs” when the transaction is consummated. Nondisclosure is not a
continuing violation for purposes of the statute of limitations. In re Smith (Smith
v. American Fin. Sys., Inc.), 7373 F.2d 1549, 1552 (11th Cir. 1984). TILA’s
limitations period is subject to equitable tolling, however, in cases where the debtor
has been prevented from bringing suit due to inequitable circumstances. Ellis v.
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GMAC, 160 F.3d 703, 706 (11th Cir. 1998). In Ellis, we said that the statute was
subject to equitable tolling because, otherwise, a consumer whose cause of action
fraudulently was concealed from him until after a year had passed would be
prevented from pursuing the cause of action, an “anomalous result.” Id. at 708.
Because appellants filed their TILA claims for damages beyond the one-year
limitations period, and they were on notice that the alleged mortgage fraud had
occurred at the time they signed their loan documents or soon thereafter, their
claims were untimely, and they did not meet the standard for equitable tolling.
Under the Rooker-Feldman abstention doctrine, “[i]t is well-settled that a
federal district court lacks jurisdiction to review, reverse, or invalidate a final state
court decision.” Dale v. Moore, 121 F.3d 624, 626 (11th Cir. 1997). “[T]he
authority to review final decisions from the highest court of the state is reserved to
the Supreme Court of the United States.” Id. (internal citations omitted). “The
doctrine extends not only to constitutional claims presented or adjudicated by a
state court, but also to claims that are ‘inextricably intertwined’ with a state court
judgment. A federal claim is inextricably intertwined with a state court judgment
if the federal claim succeeds only to the extent that the state court wrongly decided
the issues before it.” Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1332
(11th Cir. 2001). In deciding this relationship, the court focuses on the federal
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claim’s relationship to the issues involved in the state court proceeding, instead of
on the type of relief sought by the plaintiff. Id. at 1333 (holding that the Rooker-
Feldman doctrine is broad enough to bar all federal claims that were, or should
have been, central to the state court decision, even if those claims seek a form of
relief that might not have been available from the state court).
In the scenario presented here, it is obvious that appellants’ federal claims
were inextricably intertwined with those litigated by the circuit court judgment.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
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