Sampson v. Washington Mutual Bank

Sampson v. Washington Mutual Bank, No.11-11400 (11th Cir. October 5, 2011)
The Eleventh Circuit affirmed district court's dismissal of Sampson's complaint. In its analysis, the Eleventh Circuit found that the district court had erred in granting dismissal under FRCP 12(c). The pleadings in the case were not closed - no answer had been filed. As the essential question remained the same - i.e., "whether the [complaint] stated a claim for relief" the Eleventh Circuit construed the motion on appeal as raised under FRCP 12(b)(6). The Eleventh Circuit found that (1) Sampson's TILA claim was time barred because nondisclosure is not a continuing violation for purposes of the SOL and does not by itself toll the running of the limitations period; and (2) Sampson's claims for fraud, wrongful foreclosure, rescission of note and mortgage, promissory estoppel, violation of the Fair Credit Reporting Act and for predatory lending were not sufficiently pled to support the claims alleged.
Procedural context:
Appeal of district court's order dismissing Sampson's complaint on Washington Mutual Bank's FRCP 12(c) motion.
In October, 2004 Sampson refinanced his residential mortgage borrowing $1.3 million from Washington Mutual Bank ("WAMU"). The WAMU loan was later purchased by JP Morgan Chase Bank. Sampson defaulted on the loan and a nonjudicial foreclosure sale was held in July, 2009. A couple of weeks later Sampson filed a complaint asserting claims for (1) violations of TILA; (2) fraud in the inducement; (3) wrongful foreclosure; (4) rescission of the note and mortgage; (5) promissory estoppel; (6) violation of the Fair Credit Reporting Act; and (7) predatory lending. Defandants filed, and were granted, judgment on the pleadings. The fraud, wrongful foreclosure and rescission claims were dismissed without prejudice. On appeal, Sampson claimed that with respect to his TILA claims, the court should equitably toll the limitations period due to WAMU withholding disclosure documents. The Court noted that noted that equitable tolling is available for TILA claims if the plaintiff was prevented from bringing suit due to inequitable circumstances. The Court held that the violation alleged (non-disclosure) occurred when the loan was consummated - it was not a continuing violation for statute of limitatons purposes. No other ineqitable circumstances were alleged. The district court did not err in dismissing Sampson's TILA claims as time-barred. Sampson failed to plead fraud with with the requisite particularity by failing to allege "who made the misrepresentations, what their precise content was, when they were made, and where they were made." Therefore, the Court held that Sampson failed to state a claim for fraud. Sampon's claims for wrongful foreclosure and rescission failed as they depended on WAMU having committed fraud. Similarly, Sampson failed to allege essential elements in his promissory estoppel and Fair Credit Reporting Act claims and failed to cite any legal athority for his predatory lending claim. The Eleventh Circuit held that the district court did not err in dismissing Sampson's complaint.
Edmondson, Carnes & Kravitch

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