December 6, 2017
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 16 C 3531 -
Rebecca R. Pallmeyer, Judge.
WOOD, Chief Judge, and Easterbrook and Hamilton, Circuit
EASTERBROOK, CIRCUIT JUDGE.
James Fendon borrowed money from Bank of America; the loan
was secured by a mortgage on his home. A borrower may rescind
such a transaction for any reason within three days and for
some reasons within three years. See 15 U.S.C. §1635
(part of the Truth in Lending Act); Jesinoski v.
Countrywide Home Loans, Inc., 135 S.Ct. 790 (2015).
Fendon alleges that he notified the Bank on August 15, 2008;
April 16, 2009; and June 17, 2010, that he was rescinding the
loan, and that the Bank ignored the first two notices and
rejected the third. In 2011 the Bank filed a foreclosure
action in state court, and on March 23, 2016, a state court
entered a final judgment confirming the foreclosure sale.
That same day Fendon filed this suit under the Act seeking
rescission and any other available relief.
time Fendon began this suit it was too late to unwind the
transaction, because the property securing the loan had been
sold. Federal district courts lack authority to revise the
judgments of state courts. See Rooker v. Fidelity Trust
Co., 263 U.S. 413 (1923); District of Columbia Court
of Appeals v. Feldman, 460 U.S. 462 (1983). Fendon asked
the district court to declare that the state court's
decision was erroneous, but that would have been an advisory
opinion-a legal declaration that could not affect
anyone's rights. Still, there remains the possibility of
relief that takes as a given the judgment in the state
litigation, which would not be problematic under the
Rooker-Feldman doctrine. It might be problematic as
a matter of issue or claim preclusion, see Exxon Mobil
Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 293
(2005), but the Bank has not invoked that affirmative
it relies on a different affirmative defense: the statute of
limitations. The Bank maintains, and the district judge held,
that the suit is untimely under 15 U.S.C. §1640. See
2017 U.S. Dist. Lexis 33236 at *11-13 (N.D. 111. Mar. 8,
2017). Section 1640(a)(1) authorizes awards of damages for
violations of the Act, including §1635. The first
sentence of §1640(e) then sets a one-year period of
limitations for any claim under §1640 as a whole. The
second and later sentenc- es of §1640(e) provide some
exceptions, but none of those applies.
insists that no statutory time limit applies to claims for
rescission. He notes, as the Supreme Court held in
Jesinoski, that §1635(f) gives a borrower three
years to notify the creditor of an election to rescind when
the creditor failed to provide information required by the
Act. Fendon's notices all came within three years of the
date he signed the note and mortgage. Section 1635 does not
specify a time limit for suit if the creditor fails to
acknowledge or implement a proper rescission. This means,
Fendon tells us, that there is no federal statute of
limitations for claims based on §1635. Yet §1640
expressly provides otherwise for damages actions. Section
1640(a) authorizes money damages for violations of
§1635, and §1640(e) sets a one-year period of
limitations for suits under §1640(a).
Fendon had filed suit before 2011, when the foreclosure
action started, he might have had a strong argument that
rescission may be enforced at any time, subject only to the
doctrine of laches that governs equitable actions in the
absence of a statutory time limit. Tied as it is to
§1640(a), the one-year limit in §1640(e) would not
have applied. But Fendon did not do this. After the Bank
ignored his notices of rescission, he ignored the Bank-he did
not sue, and neither did he pay. By 2016, when he finally got
around to filing suit, the only possible relief was damages.
(When asked at oral argument what relief other than
damages might be permissible, given the state court's
conclusive judgment of foreclosure, Fendon's lawyer did
not have any suggestions.) And by 2016 it was far too late to
seek damages, given §1640(e). (Because §1640(e)
applies, we need not consider whether 28 U.S.C. §1658(a)
would apply when the Truth in Lending Act itself does not
provide a time limit, or whether a state period of
limitations should be borrowed.)
sent his first notice of rescission on August 15, 2008. A
creditor has 20 days to act on such a notice. 15 U.S.C.
§1635(b); 12 C.F.R. §226.23(d). So by September 4,
2008, after the Bank ignored the notice, Fendon had suffered
a legal wrong (if he was indeed entitled to rescind) and
could have sued. Under federal law a claim accrues as soon as
a person knows that he has been injured and thus possesses a
"complete and present" right of action. Wallace
v. Kato,549 U.S. 384, 388 (2007); United States v.
Kubrick, AAA U.S. Ill. (1979). Fendon asserts that the
later notices, and sporadic communications to and from the
Bank, extend the time for suit. Yet negotiations, requests
for reconsideration, and new demands for action do not affect
the time to sue on a claim that has already accrued. See,
e.g., Chardon v. Fumero Soto,462 U.S. 650 (1983);
Delaware State College v. Ricks,449 U.S. 250
(1980); Lever v. Northwestern University, 979 F.2d
552 (7th Cir. 1992). The Bank did not say or do ...