Thomsen et al v. JPMorgan Chase Bank N A

Filing 14

DECISION AND ORDER signed by Judge Lynn Adelman on 1/18/17 granting 9 Motion to Dismiss for Failure to State a Claim. The action is dismissed and the Clerk of Court shall enter final judgment. (cc: all counsel, via USPS to plaintiffs) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CHARLES W. THOMSEN and
MARIA I. THOMSEN,
Plaintiffs,
v.

Case No. 16-C-0259

JPMORGAN CHASE BANK, N.A.,
Defendant.

DECISION AND ORDER
Plaintiffs Charles W. Thomsen and Maria I. Thomsen, proceeding pro se, filed a
complaint in state court against JP Morgan Chase Bank, N.A. JP Morgan then removed
the case to this court. Before me now is JP Morgan’s motion to dismiss the complaint
for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P.
12(b)(6).
I. BACKGROUND
According to the allegations of the complaint, on September 16, 2005, the
plaintiffs took out first and second mortgages on their principal dwelling, located in
Kenosha County, Wisconsin, from Washington Mutual Bank.

Compl. ¶ 1.

After

Washington Mutual collapsed in 2008, JP Morgan purchased certain of its assets from
the FDIC.

Id. ¶¶ 2–3.

The allegations of the complaint suggest that the plaintiffs’

mortgages were among the Washington Mutual assets that JP Morgan purchased.
However, the plaintiffs seem to dispute that their mortgages were assigned to JP
Morgan.

In any event, the plaintiffs allege that JP Morgan at least services their

mortgages on behalf of those to whom they were assigned. Id. ¶ 4.

In their complaint, the plaintiffs allege that, during the closing on their mortgages
in 2005, “numerous violations under the Truth in Lending Act” were committed. Compl.
¶ 9. The plaintiffs do not identify these alleged violations with specificity, but instead
allege in conclusory fashion that the violations included “the fabricating of false personal
information on their alleged ‘Residential Loan Application’ without their knowledge or
consent and non-disclosure of material facts related to the alleged loan(s).” Id. The
plaintiffs do not allege who committed these violations. But because the violations are
alleged to have been committed during the closing on the mortgages, I presume that the
plaintiffs intended to allege that they were committed by Washington Mutual or one of its
agents.

The plaintiffs allege that they discovered the alleged TILA violations in

February 2015. Id.
The plaintiffs allege that, on July 14, 2015, they sent written “notices of
rescission” of the two mortgages to various parties believed to be involved with the
mortgages, including JP Morgan. Compl. ¶ 25. The plaintiffs allege that, by operation
of a provision of TILA that grants a borrower a right to rescind a mortgage transaction in
certain circumstances, see 15 U.S.C. § 1635, their sending the notices of rescission
rendered the mortgages void. Id. ¶¶ 45, 48. Nonetheless, JP Morgan continues to
collect, or at least attempt to collect, mortgage payments from the plaintiffs. Id. ¶ 29.
In 2016, the plaintiffs, proceeding pro se, filed the complaint in this action in state
court in Kenosha County, seeking a declaratory judgment that their mortgages had
been rescinded under TILA and rendered void. In the caption of the complaint, the

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plaintiffs named only JP Morgan as a defendant. 1 JP Morgan then removed the action
to this court, as the plaintiffs’ claim arises under TILA, a federal law. See 28 U.S.C.
§ 1331. JP Morgan then moved to dismiss the complaint for failure to state a claim
upon which relief can be granted.
II. DISCUSSION
JP Morgan argues that the complaint should be dismissed for two reasons: (1)
Under 15 U.S.C. § 1635(f), the plaintiffs’ right to rescind their mortgage transactions
expired, at the latest, in 2008, yet the plaintiffs did not attempt to exercise this right until
2015. (2) The plaintiffs never had a right to rescind their mortgages because such
mortgages were created during a “residential mortgage transaction,” which, under
§ 1635(e)(1), is exempt from TILA’s right of rescission. Below, I address only the first
reason.
Under TILA, a borrower has three days to rescind a loan after obtaining it. 15
U.S.C. § 1635(a). If the lender fails to make required TILA disclosures, the right of
rescission may be extended beyond three days. However, TILA provides that the right
of rescission “expire[s]” three years after the date of consummation of the loan
transaction or upon the sale of the property that was encumbered as part of the loan
transaction, whichever occurs first. 15 U.S.C. § 1635(f). This provision is not a statute
of limitations, but rather a specification that the right to rescind expires after three years.
See Beach v. Ocwen Federal Bank, 523 U.S. 410, 416–17 (1998).

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Although the plaintiffs wrote the Latin abbreviation “et al.” after JP Morgan’s name, no
other defendants have appeared, and the plaintiffs have not suggested that they
intended to sue any entity other than JP Morgan. In any event, the complaint does not
state valid claims against any other defendants.
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In the present case, the plaintiffs allege that the loan transactions they seek to
rescind were consummated on September 16, 2005. Compl. ¶ 1. They further allege
that they did not send rescission notices to JP Morgan or any other entity involved in the
transactions until nearly ten years later, on July 14, 2015.

Id. ¶ 25.

Thus, the

allegations of the complaint establish beyond doubt that the plaintiffs’ right to rescind the
transactions has expired, and that the plaintiffs have no valid claim under TILA.
In their complaint, and in their brief in opposition to JP Morgan’s motion to dismiss,
the plaintiffs state in conclusory fashion that their notices of rescission were “timely”
under the “Doctrine of Equitable Tolling.” Compl. ¶ 47; Br. in Opp. at 2. This doctrine
applies “when the plaintiff, exercising due diligence, was unable to discover evidence
vital to a claim until after the statute of limitations expired.” Moultrie v. Penn Aluminum
Int'l, LLC, 766 F.3d 747, 752 (7th Cir.2014). Here, however, § 1635(f) is not a statute of
limitations, and thus the doctrine of equitable tolling does not apply. See Beach, 523
U.S. at 412–13 (recognizing that “§ 1635(f) completely extinguishes the right of
rescission at the end of the 3–year period,” even if the lender has never made the
required disclosures); Sitthidet v. First Horizon Home Loans, 633 F. App’x 407, 407 (9th
Cir. 2016).
III. CONCLUSION
For the reasons stated, IT IS ORDERED that JP Morgan’s motion to dismiss
(ECF No. 9) is GRANTED. This action is dismissed, and the Clerk of Court shall enter
final judgment.

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Dated at Milwaukee, Wisconsin, this 18th day of January, 2017.

s/ Lynn Adelman
____________
LYNN ADELMAN
District Judge

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