John S. Burson, et al., v. Jeffrey G. Capps, No. 2, September Term, 2014

Federal Truth in Lending Act—Right of Rescission—Statutory Interpretation
Under the federal Truth in Lending Act (TILA), the right of rescission granted in 15
U.S.C. § 1635 may not be invoked by borrowers before the loan transaction is
consummated. Before consummation, there is nothing for a borrower to rescind. An
attempt to do so is without effect. Our holding is consistent with Regulation Z, TILA’s
implementing regulation, which presupposes that, when the right to rescission is
exercised, there is something to rescind.
Circuit Court for Frederick County
Case No. 10-C-09-003783

Argued: September 9, 2014
                                       IN THE COURT OF APPEALS OF
                                               MARYLAND

                                                         No. 2

                                             September Term, 2014


                                           JOHN S. BURSON, ET AL.

                                                          v.

                                              JEFFREY G. CAPPS



                                            Barbera, C.J.,
                                            Harrell,
                                            Battaglia,
                                            Greene,
                                            Adkins,
                                            McDonald,
                                            Watts,

                                                   JJ.


                                              Opinion by Harrell, J.
                                     Adkins and McDonald, JJ., concur in part
                                               and dissent in part.
                                         Watts, J., joins judgment only.



                                     Filed: October 23, 2014
         May one undo what one has not done yet? Although the answer to this abstract

question has been the premise for many a time travel “B” movie, it bodes even less well

for a borrower or borrowers attempting to rescind loans that have not been consummated,

within the meaning of the federal Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et

seq (2012). Prior to closing on a home refinancing loan, Respondent, Jeffrey G. Capps,

submitted a notice of rescission of the loan to the lender. A day or two after submitting

the notice, Capps signed a Note and Deed of Trust consistent with the negotiated terms of

the ostensibly rescinded loan. The loan proceeds were distributed as agreed to previously

by the parties. Capps made payments on the Note for approximately two years before

defaulting on the loan. After a foreclosure sale occurred, Capps filed exceptions, arguing

that he had rescinded validly the loan pursuant to 15 U.S.C. § 1635. The Circuit Court

for Frederick County overruled the exceptions and ratified the sale. In an unreported

opinion, the Court of Special Appeals reversed the Circuit Court, holding that the

rescission notice was timely. Because there was no language in § 16351 or Regulation


1
    The relevant portion of the statute is as follows:

                Except as otherwise provided in this section, in the case of
                any consumer credit transaction . . . in which a security
                interest . . . is or will be retained or acquired in any property
                which is used as the principal dwelling of the person to whom
                credit is extended, the obligor shall have the right to rescind
                the transaction until midnight of the third business day
                following the consummation of the transaction or the delivery
                of the information and rescission forms required under this
                section . . . , whichever is later, by notifying the creditor, in
                accordance with regulations of the Bureau, of his intention to
                do so. . . . The creditor shall also provide, in accordance with
                                                                          (Continued…)
Z2—TILA’s implementing regulation—prohibiting a borrower from rescinding a loan

prior to consummation of the transaction, the intermediate appellate court reasoned that

such an initiative, when viewed in a light favoring borrowers, was supported by the

statute. We shall reverse, holding that, under TILA, the loan may not be rescinded before

it came into being.

                                JUST THE FACTS, IF YOU PLEASE

         In March of 2003, Respondent, Jeffrey G. Capps (hereinafter “Capps”), purchased

a home located at 2909 Loch Haven Court, Ijamsville, Maryland. Early in 2007, Capps

decided to pursue refinancing his home loan.            He applied for refinancing through

(… Continued)
            regulations of the Bureau, appropriate forms for the obligor to
            exercise his right to rescind any transaction subject to this
            section.

15 U.S.C. § 1635(a) (2012) (emphasis added).
2
    The relevant portion of the regulation is as follows:

                (2) To exercise the right to rescind, the consumer shall notify
                the creditor of the rescission by mail, telegram, or other
                means of written communication. Notice is considered given
                when mailed, or when filed for telegraphic transmission, or, if
                sent by other means, when delivered to the creditor's
                designated place of business.

                (3) The consumer may exercise the right to rescind until
                midnight of the third business day following the occurrence
                described in paragraph (a)(1) of this section that gave rise to
                the right of rescission, delivery of the notice required by
                paragraph (b) of this section, or delivery of all material
                disclosures, whichever occurs last. . . .

12 C.F.R. § 226.15(a) (2013).

                                                2
Endeavor Mortgage Group—a loan broker—to EquiFirst Corporation. In February of

2007, EquiFirst offered Capps terms of a refinancing, which offer he rejected. In March

of 2007, EquiFirst offered Capps a second proposal, which he rejected as well. In April

of 2007,3 EquiFirst offered Capps a third refinance package, which he accepted.

       The state of this record conjures illusions of multiple factual currents, pulling in

seemingly different directions. Although we find no material disputes of fact were

generated properly with regard to the dispositive question before us,4 and accordingly no

evidentiary hearing was sought or held, we shall call-out the confusion generated and

burn away the obscuring fog at the same time.

       The Deed of Trust and Adjustable Rate Note implementing the third offer were

signed by Capps on 17 April 2007.5 These documents secured a loan for $350,000. The


3
  All further references in this opinion to “April” refer to dates in April of 2007, unless
specifically noted otherwise.
4
  The essential material facts that tee-up the question before us are: (1) Capps transmitted
what he purported to be a notice of rescission of the agreed upon third refinance loan
proposal before April 17; (2) the note and deed of trust, which were consistent with the
loan proposal bearing Capps’s signature, are dated April 17; (3) Capps accepted the
benefits of the distribution of the loan proceeds; (4) Capps paid on the note, according to
its terms, for approximately two years; (5) Capps lost his job and defaulted on the loan,
which led to this foreclosure action; and, (6) for purposes of this litigation in the posture
in which it reaches us, see infra note 18 and accompanying text, his defense was that he
rescinded the loan properly under TILA.
5
  Although Capps’s signature on these documents is not dated separately, the typed date
of each of these documents is April 17. At different points in this litigation, Capps
sought, as the spirit or occasion moved him, to argue inconsistent inferences as to when
the loan documents were signed by him. In a Declaration (attached as Exhibit 1 to his
Motion to Stay and Dismiss Foreclosure Action in the trial court), dated 30 December
2009, Capps seems unwilling to admit that the Deed of Trust and Note were signed on
                                                                    (Continued…)
                                             3
(… Continued)
April 17, although he does not allege actually otherwise: “In April of 2007, EquiFirst
offered a third mortgage to me. I signed it, but, on April 16, 2007, I exercised the right to
rescind the Note and sent the TILA rescission notice to EquiFirst by fax.”
       Capps urges an inference—but does not allege actually—that the loan documents
were misdated. Sometimes Capps implied before the Circuit Court that the loan
documents were signed before April 17. See Def.’s Mot. to Stay & Dismiss Foreclosure
Action (“In this case, the lender EquiFirst provided defendant with the proper notice [of
the right to rescission] and forms, and defendant completed the forms and exercised that
right. At that point, the Note was rescinded and had no legal effect.”); Def.’s Exceptions
to Foreclosure Sale (arguing the same, but referring to the Note and Deed of Trust); see
also Resp’t’s Opp’n to Pet. for Cert. 4; Official Tr. of Proceedings (Exceptions Hr’g); Br.
of Rsp’t 4–5. Before us, Capps implies that the loan documents were signed after April
17. See Resp’t’s Opp’n to Pet. for Cert. 3 (“It is obvious in this case that the lender
violated [12 C.F.R. § 226.15(c), requiring the lender to disburse the funds at least three
days after the loan documents were signed] and disbursed the funds before the three day
waiting period had expired.”). Elsewhere, Capps alleged, in the same pleading, that the
loan documents were signed both before and after April 17. Compare Resp’t’s Opp’n to
Pet. for Cert. 3 with id. at 4; compare Br. of Resp’t 4 with id. at 4–5.
       The trial court seems to have gotten caught up in the confusion during its
exceptions hearing. The judge stated:

                     Well, Counsel, as I said I did review the file, and I see,
              I notice a foreclosure was filed in July of 2009. [T]hat was
              filed along with the deed of trust, which was dated 4/17/07
              and then the note and then the addendum to notes. . . .
                     [I]n December I see that [Capps’s counsel] . . . filed a
              third party complaint . . . against EquiFirst Corporation, Wells
              Fargo, and . . . the allegations were that the, Mr. Capp [sic]
              had rescinded. Apparently, there’s no dispute about that.
              [T]hat he signed the note, and then within the period of
              time—he was given the proper notice for a rescission, within
              the period of time . . . he did rescind.

       Capps came close to alleging explicitly that the loan documents were signed
before April 17 in his brief to this Court. Br. of the Resp’t 6 (“[I]n this case, Respondent
signed the loan documents, and then he sent the notice of rescission in a timely manner.”
(emphasis added)). In his First Amended Third Party Complaint, which was dismissed
ultimately, see infra note 13, Capps alleged that he told a Wells Fargo representative that
“he had tried to rescind the loan immediately after he had signed the loan papers and that
EquiFirst had improperly not allowed him to rescind. He told the Wells Fargo
                                                                       (Continued…)
                                             4
settlement date on the financing statement was April 24,6 and the loan proceeds (net of

charges, costs, and fees) were disbursed on April 25, in satisfaction of the pre-existing

mortgage ($292,061.86) and Capps’s credit card debts ($32,045), with an additional

$5,878.31 to the borrower directly.

         On April 15 or 16,7 2007, Capps attempted to rescind a loan by faxing to EquiFirst

a form titled “Notice of Right to Cancel”8 referring solely to a property address of 2909

Loch Haven Court, Ijamsville, MD, 21754.9 In the subject line on the fax cover sheet of


(… Continued)
representative that he wanted to rescind, and Wells Fargo refused to allow rescission.”
This pleading was not made under oath or affirmation and was not supported by affidavit.
He did not reiterate this allegation subsequently under oath or affidavit. Paradoxically,
Capps has never alleged that the loan documents were misdated.
       The confusion was perpetuated at oral argument before us. The attorney for Capps
suggested repeatedly that Capps signed the Deed of Trust and Note—and then was
provided with the precompleted Notice of Right to Cancel forms—before he faxed the
Notice, which would have been necessarily before April 17, the date on the documents.
(Counsel responded to the question: “So, under your theory, after he—he signs this
Notice of Rescission at closing?” with “No, he signed it afterwards.”) When asked how
counsel’s theory could be compatible with the April 17 date, counsel referred simply to
an email chain between EquiFirst and Endeavor Mortgage employees. See infra note 10.
6
    See supra note 5.
7
   Capps’s signature on the Notice of Right to Cancel was dated April 16. The
transmission verification report on the fax of the same to EquiFirst reflects that it was
sent on April 15, at 9:19 pm. Again, this could be explained as another example of time
travel or an exercise in post-dating.
8
  Called the “Notice of Right to Cancel,” this form was designed by the lender to satisfy
the requirements of 12 C.F.R. § 226.15(b) (describing the required features of a notice of
right to rescind).
9
  The typed date on the heading of the form is April 2. The body of the document
instructed Capps that he had a legal right to cancel the transaction within three business
                                                                     (Continued…)
                                             5
this form, Capps stated “I wish to exercise this Right[.] Please see attached form.” This

document was received by EquiFirst.10 Capps alleges that at some point after he sent the

fax, someone from EquiFirst “told [him] that this rescission was not effective, that [he]

could not rescind, and that the mortgage would remain in effect.” Capps did not identify


(… Continued)
days of the date of the transaction. The date of the purported transaction, printed within
the body of the document, was April 2. This typed iteration of the transaction date was
crossed out, with “11th” handwritten on the document in its place. The notice goes on to
instruct Capps that he must send the notice by mail or telegram no later than midnight on
April 5, although this date was crossed out also, with “16th” handwritten in its place. In a
footnote in his brief to this Court, Capps suggests, for the first time, that the Notice of
Right to Cancel should have reflected a third set of dates entirely, although he fails to say
what they should have been. (“In practice, a borrower does not receive the three day
rescission forms until closing on a loan. Therefore, Respondent could not have rescinded
until after closing, and the notice was misdated.”). His only support for this theory is that
“[t]he lender admitted in an email to having timely received the notice.” This reliance
was misplaced. See infra note 10.
        It was suggested by the Trustees in their brief to us that this Notice may have been
left over from the first or second refinance offer and perhaps Capps submitted this Notice
before going through with the third mortgage offered to him, in an attempt to ensure that
he was working on a clean slate with the third offer. This is supposition, as the record is
silent as to the actual origin of this particular document. The record also does not contain
any information as to whether Capps was provided with a new Notice of Right to Cancel
on April 17 or at any point thereafter. Regardless, it is not material to the disposition of
this case precisely when Capps received the form or who altered it.
10
   Capps makes much of a subsequent email chain between EquiFirst and Endeavor
Mortgage employees, suggesting that the email chain shows that the rescission notice was
received timely. On April 17 at 7:54 am, one email correspondent informed several
others that “FYI, this file was cancelled due to the borrower signing the right to cancel. It
will now be forwarded to the Charlotte office.” Another correspondent responded by
noting that something, presumably their interactions with Capps, were “a waist of our
time.. [sic]” This email chain does not show, however, that the lender acknowledged the
rescission as timely; rather, it acknowledges simply that a Notice of Right to Cancel had
been signed and received by them. The initial email was sent before normal business
hours on April 17, leaving plenty of time for Capps to sign the loan documents later in
the day.

                                             6
which EquiFirst employee made such statements, nor did he substantiate from any other

source that the conversation occurred.        He alleged further that he “believed what

EquiFirst told [him]” and therefore began making payments on the loan. In 2009, Capps

lost his job and became unable to make his monthly mortgage payments.

                                   PROCEDURAL HISTORY

         On 30 September 2009, Petitioners (the Substitute Trustees,11 or “Trustees”) filed

in the Circuit Court for Frederick County an Order to Docket Foreclosure, thereby

commencing an action to foreclose under the deed of trust. On 30 December 2009,

Capps filed a Motion to Stay or Dismiss the foreclosure proceeding, in which he argued

that he had rescinded the loan, pursuant to 15 U.S.C. § 1635, by faxing a “Notice of Right

to Cancel” to EquiFirst.12 Also on 30 December 2009, Capps filed in the foreclosure

action a third-party complaint against EquiFirst and Wells Fargo, again arguing that he

rescinded timely and validly the loan and also that EquiFirst violated TILA by refusing to

recognize his rescission.      Wells Fargo filed a Motion to Dismiss the Third-Party

Complaint, arguing that, whatever the merits, Capps’s claim fell beyond the applicable

statute of limitations and further that he waived his claims by accepting the benefits of




11
  At some point, EquiFirst transferred the note to SABR Mortgage Loan 2008-1 REO
Subsidiary-1, LLC (“SABR”). The record does not suggest when this transfer occurred.
SABR is a securitized trust administered by Wells Fargo Bank, N.A. (“Wells Fargo”).
On 1 September, 2009, SABR appointed John S. Burson, et al., as Substitute Trustees.
12
     This Motion was denied on 5 January 2010, without elaboration, by the trial court.

                                              7
the transaction. Wells Fargo’s motion was granted ultimately on 2 May 2011.13 On 7

December 2011, the note holder purchased the home for $275,000 at a foreclosure public

auction. A Report of Sale was filed on 5 January 2012.

         Capps filed on 23 February 2012 Exceptions to the Foreclosure Sale, where he

argued again that he had rescinded the loan. The Substitute Trustees reiterated their

position that Capps’s TILA claim was barred by the applicable statute of limitations, that

they had standing to foreclose, and further that Capps did not raise any allegations which,

if true, could result in the sale being rescinded. The exceptions were overruled at a

hearing on 3 April 2012,14 and the sale was ratified on 5 April 2012. That same day, the


13
   Wells Fargo first filed a Motion to Dismiss Third-Party Complaint on 15 November
2010, which the Circuit Court granted on 10 March 2011with leave to amend. Capps
filed his First Amended Third-Party Complaint on 25 March 2011. Wells Fargo
responded with a Motion to Dismiss Amended Third-Party Complaint on 7 April 2011.
This motion was granted on 2 May 2011.
14
     The trial court’s explanation for the denial was:

                        I find this case presents some very interesting issues,
                and I can understand the Defendants raising them again.
                Although, I think they were properly raised prior to sale, and
                ruled upon. So, . . . Defendant disagrees with the ruling, so I
                think from that he may have an appeal.
                        As to the particular point where we are, really there is
                no allegations [sic] as to the validity or irregularity of the sale
                as it went forward specifically, . . . that would require the sale
                to be rescinded, . . . because all of the allegations that are
                made are really as to the validity of the note of first, no note,
                then the deed of trust gets cancelled, et cetera, et cetera, et
                cetera. There’s nothing upon which to foreclose.
                        And these arguments are not simple, but I do believe
                that they have been argued by both of you in your briefs prior
                to trial, and nothing really new has been raised. So, at this
                                                                           (Continued…)
                                                8
court entered an Order of Ratification of Sale. Capps appealed to the Court of Special

Appeals.

      In an unreported opinion, the Court of Special Appeals reversed the Circuit Court,

addressing the question of whether the loan had been rescinded “lawfully.”15 The Court

of Special Appeals reasoned that TILA’s overarching purpose was to “protect consumers

in a rather difficult and complicated process.” Because there was no language in § 1635

or Regulation Z—TILA’s implementing regulation—prohibiting a borrower from

rescinding a loan prior to the consummation of the transaction, the Court of Special

Appeals reasoned that such an action, when viewed in a light favoring the interests of

borrowers, was supported by the statute.16       Otherwise, reasoned the intermediate

appellate court, the rights of borrowers to protect themselves would be restricted

severely, contrary to Congress’ stated goals in TILA. The three judge panel of our

appellate colleagues explained that the three-day window for rescissions did not open at

closing and then shut at midnight three business days later, but rather the window


(… Continued)
            point, . . . [Capps’s Counsel], I’m going to deny your motion
            to strike exceptions [sic].
15
   In considering the question, the Court of Special Appeals addressed issues of
timeliness and modality of the purported rescission. Based on the manner in which this
case was litigated and the questions presented to us on appeal, see infra, we decide here
solely the issue of timeliness, which is dispositive of this case.
16
   The intermediate appellate court stated: “Based on our reading of 15 U.S.C. § 1601 and
Regulation Z, as well as case law, we perceive no such prohibition [on exercising the
right to rescind prior to a loan’s consummation]. In fact, there is nothing in either
regulation specifically prohibiting such conduct.”

                                           9
remained open throughout the negotiation process for a loan commitment leading up to

closing and lapsed at the end of three days after closing. The intermediate appellate court

remanded the case to the Circuit Court to (1) determine whether it is possible for all

parties to return to the status quo ante, (2) use its equitable powers to restore Capps’s

credit rating should he be able to return the proceeds of the loan, and (3) determine

whether EquiFirst violated TILA by ignoring intentionally Capps’s rescission notice.17

       We granted the Trustees’ Petition for Writ of Certiorari. 435 Md. 501, 79 A.3d

947 (2013). The Trustees posed the following three questions in their petition:

          1. Whether a TILA Notice of Rescission can be effective to
             cancel a loan transaction that has not yet taken place, and
             remain effective despite the issuing party’s subsequent
             acceptance of the benefits of the transaction?

          2. Whether a TILA action filed in December 2009 on the basis
             of a Notice of Rescission issued in April 2007 was untimely
             as beyond the one-year statute of limitation in 15 U.S.C.
             § 1640(e)?

          3. Whether rescission is an available remedy when the trial court
             has no jurisdiction over either the original lender or its
             assignee because all claims against both have been dismissed,
             with no appeal taken from that dismissal?

Because of our answer to the first question, we do not reach the others.

       Before us, the Trustees argue that Capps could not have rescinded the loan at a

point in time when he had not yet signed the deed of trust, note, and other loan

17
  The Court of Special Appeals remanded the case to the Circuit Court to make a final
determination as to whether the contract between Capps and EquiFirst was rescinded
properly, but, based on its discussions of the issues presented to it, the intermediate
appellate court seemed convinced that the loan was rescinded timely and through the
proper channels.

                                            10
documents. He may have gone through the motion of submitting a Notice of Right to

Cancel, but he did so prematurely—namely, before he consummated the transaction. If

he had wanted actually to avoid the obligations of the loan, the Trustees argue, he should

not have signed the note and deed of trust, nor should he have accepted the net loan

proceeds and authorized the lender to pay off the existing mortgage and his other

creditors. Capps, for his part, echoes the reasoning of the Court of Special Appeals, and

further argues that the Notice of Right to Cancel, regardless of when it was sent, operated

to cancel the transaction, and that the funds never should have been disbursed. 18


18
   In his brief to, and at oral argument before, this Court, Capps makes three additional
arguments, none of which is properly before this Court. First, he suggests that the lender
violated 12 C.F.R. § 226.15(c) by disbursing funds before the three-day rescission
waiting period expired. Chronological inconsistencies aside, see supra note 5, Wells
Fargo’s Motion to Dismiss Capps’s third party complaint alleging TILA violations was
granted and no cross-appeal was taken. Even had that judgment been appealed properly,
the third party complaint did not allege a violation of 12 C.F.R. § 226.15(c)’s three-day
funds-dispersal waiting period rule.
        Second, Capps argues in his brief to this Court that EquiFirst committed
fraudulent conduct when it told him that his rescission was not effective and that he was
still bound by the Note and its terms. Accordingly, the Note and Deed of Trust are not
enforceable. Third, at oral argument, Capps’s attorney suggested that the Trustees
violated the Maryland Rules by not serving him with a Report of Sale, instead sending
the document only to Capps. Neither of these two questions were preserved properly for
appeal.
        The concurring and dissenting opinion implies that Capps’s allegation of
fraudulent conduct might still be a live question. See Concurring and Dissenting slip op.
at pp. 3–4, 5–6. Capps did not file, however, a cross-petition for a writ of certiorari as to
that question. See Maryland Rules 8-131(b). Even if that issue were properly before this
Court, Capps failed to argue the question with particularity in that he failed to cite even a
single case or authority relevant to the question in his brief either to us or the intermediate
appellate court. “[A]rguments not presented in a brief or not presented with particularity
will not be considered on appeal.” Klauenberg v. State, 355 Md. 528, 552, 735 A.2d
1061, 1074 (1999) (refusing to consider an argument when one statement to that effect
was “lumped in” with another argument); Mathis v. Hargrove, 166 Md. App. 286, 318,
                                                                         (Continued…)
                                              11
                                  STANDARDS OF REVIEW

       Before a foreclosure sale takes place, “the defaulting borrower may file a motion

to ‘stay the sale of the property and dismiss the foreclosure action.’” Bates v. Cohn, 417

Md. 309, 319, 9 A.3d 846, 852 (2010) (quoting Md. Rule 14-211(a)(1)). In other words,

the borrower may “petition the court for injunctive relief, challenging ‘the validity of the

lien or . . . the right of the [lender] to foreclose in the pending action.’” Bates, 417 Md. at

319–20, 9 A.3d at 852 (quoting Md. Rule 14-211(a)(3)(B)). In Svrcek v. Rosenberg, the

Court of Special Appeals explained the appropriate standard of review on appeal from a

denial of a Motion to Dismiss or Stay sought pursuant to Maryland Rule 14-211: “‘The

grant or denial of injunctive relief in a property foreclosure action lies generally within

the sound discretion of the trial court.’ Accordingly, we review the circuit court’s denial

of a foreclosure injunction for an abuse of discretion. We review the trial court’s legal

conclusions de novo.” 203 Md. App. 705, 720, 40 A.3d 494, 503 (2012) (quoting




(… Continued)
888 A.2d 377, 396 (2005) (refusing to review one argument on appeal because no
authority for the position was cited); Pool v. State, 207 Md. App. 614, 633, 53 A.3d 479,
491 (2012) (refusing to consider an argument when it was made in one sentence, in a
footnote, with no supporting argument). The full extent of his argument to this Court on
the question of fraudulent conduct attributable to the Substitute Trustees is as follows:
“[I]nstead of honoring Respondent’s request, the lender told him that his request was
legally not effective and that he was bound by the Note and its terms. This was both a
violation of TILA and fraudulent conduct, and, as a result, the Note and Deed of Trust are
not enforceable.” The point was argued similarly in his brief to the Court of Special
Appeals as well. This is plainly insufficient under our appellate Rules and case law.
Further, certiorari was not granted as to either question. We decline to consider them.
See 8504(a)(3), (5); Comptroller of Treas. v. Aerial Prods., Inc., 210 Md. 627, 644, 124
A.2d 805, 814 (1956).

                                              12
Anderson v. Burson, 424 Md. 232, 243, 35 A.3d 452, 459 (2011) and citing Wincopia

Farm, LP v. Goozman, 188 Md. App. 519, 528, 982 A.2d 868, 873 (2009)).

      When ruling on exceptions to a foreclosure sale:

             [T]rial courts may consider both questions of fact and law. In
             reviewing a trial court's finding of fact, we do “not substitute
             our judgment for that of the lower court unless it was clearly
             erroneous” and give due consideration to the trial court’s
             “opportunity to observe the demeanor of the witnesses, to
             judge their credibility and to pass upon the weight to be given
             their testimony.” Young v. Young, 37 Md. App. 211, 220, 376
             A.2d 1151, 1157 (1977). Questions of law decided by the
             trial court are subject to a de novo standard of review.

Jones v. Rosenberg, 178 Md. App. 54, 68, 940 A.2d 1109, 1117 (2008) (citations

omitted). Once a foreclosure sale has been ratified:

             The ratification of a foreclosure sale is, however, presumed to
             be valid. Webster v. Archer, 176 Md. 245, 253, 4 A.2d 434,
             437–38 (1939). It is settled law that, “there is a presumption
             that the sale was fairly made, and that the antecedent
             proceedings, if regular on the face of the record, were
             adequate and proper, and the burden is upon one attacking the
             sale to prove the contrary.” Id. The party excepting to the
             sale bears the burden of showing that the sale was invalid,
             and must show that any claimed errors caused prejudice. Ten
             Hills Co. v. Ten Hills Corp., 176 Md. 444, 449, 5 A.2d 830,
             832 (1939).       Additionally, “[i]n reviewing a court’s
             ratification of a foreclosure sale, we will disturb the circuit
             court’s findings of fact only when they are clearly erroneous.”
             Fagnani, 190 Md. App. at 470, 988 A.2d at 1138 (relying on
             Jones v. Rosenberg, 178 Md. App. 54, 68–69, 940 A.2d 1109
             (2008)).

Fagnani v. Fisher, 418 Md. 371, 384, 15 A.3d 282, 290 (2011).




                                            13
                                        DISCUSSION

       The right of rescission dispute joined in this case derives from that right as granted

in the federal Truth in Lending Act (“TILA”).          TILA was designed to “assure a

meaningful disclosure of credit terms so that the consumer will be able to compare more

readily the various credit terms available to him and avoid the uninformed use of

credit . . . .” 15 U.S.C. § 1601(a) (2012). TILA requires creditors “to provide borrowers

with clear and accurate disclosures of terms dealing with things like finance charges,

annual percentage rates of interest, and the borrower’s rights.” Beach v. Ocwen Fed.

Bank, 523 U.S. 410, 412 (1998); see McOmie-Gray v. Bank of Am. Home Loans, 667

F.3d 1325, 1327 (9th Cir. 2012) (“TILA protects consumers from fraud, deception, and

abuse within the residential secured lending marketplace by mandating that lenders

disclose certain information to borrowers.”).

       When interpreting TILA and its implementing regulations, federal and Maryland

principles of statutory construction agree that we begin with its text. “‘The Supreme

Court has repeatedly emphasized the importance of the plain meaning rule, stating that if

the language of a statute or regulation has a plain and ordinary meaning, courts need look

no further and should apply the regulation as it is written.’” Gilbert v. Residential

Funding LLC, 678 F.3d 271, 276 (4th Cir. 2012) (quoting Textron, Inc. v. Comm’r, 336

F.3d 26, 31 (1st Cir. 2003). By the same token, “‘absent some obvious repugnance to the

statute, the . . . regulation implementing [TILA] should be accepted by the courts.”

Textron, Inc., 336 F.3d at 277 (quoting Anderson Bros. Ford v. Valencia, 452 U.S. 205,

219 (1981)). Our goal in interpreting TILA, as with any legislation, is “to ascertain and

                                             14
implement the legislative intent, which is to be derived, if possible, from the language of

the statute (or Rule) itself. If the language is clear and unambiguous, our search for

legislative intent ends and we apply the language as written in a commonsense manner.”

Downes v. Downes, 388 Md. 561, 571, 880 A.2d 343, 349 (2005). We “presume that [a]

legislature says in a statute what it means and means in a statute what it says there.”

Turner v. Knight, 406 Md. 167, 175, 957 A.2d 984, 988 (2008) (internal quotations

omitted). The interpretation of a word or phrase “depends upon reading the whole

statutory text, considering the purpose and context of the statute, and consulting any

precedents or authorities that inform the analysis.” Turner, 406 Md. at 175, 957 A.2d at

989 (internal quotations omitted).

       TILA grants homeowners a right to rescission in certain circumstances:

              Except as otherwise provided in this section, in the case of
              any consumer credit transaction (including opening or
              increasing the credit limit for an open end credit plan) in
              which a security interest, including any such interest arising
              by operation of law, is or will be retained or acquired in any
              property which is used as the principal dwelling of the person
              to whom credit is extended, the obligor shall have the right to
              rescind the transaction until midnight of the third business
              day following the consummation of the transaction or the
              delivery of the information and rescission forms required
              under this section together with a statement containing the
              material disclosures required under this subchapter,
              whichever is later, by notifying the creditor, in accordance
              with regulations of the Bureau [of Consumer Financial
              Protection], of his intention to do so. The creditor shall
              clearly and conspicuously disclose, in accordance with
              regulations of the Bureau, to any obligor in a transaction
              subject to this section the rights of the obligor under this
              section. The creditor shall also provide, in accordance with
              regulations of the Bureau, appropriate forms for the obligor to


                                            15
              exercise his right to rescind any transaction subject to this
              section.

15 U.S.C. § 1635(a) (emphasis added).        See 12 C.F.R. § 226.15(a)(3) (2013) (“The

consumer may exercise the right to rescind until midnight of the third business day

following the occurrence described in paragraph (a)(1) of this section that gave rise to

the right of rescission, delivery of the notice required by paragraph (b) of this section, or

delivery of all material disclosures, whichever occurs last.” (emphasis added)). This

three-day rescission window is a cooling-off period within which the borrower may

rescind with no questions asked. The lender may not disburse the funds until those three

days have passed (unless the borrower waives the right to rescind).               12 C.F.R.

§ 226.15(c). In the event that the lender fails to comply with the statutory disclosures, the

right to rescind is extended to three years after closing. 15 U.S.C. § 1635(f); 12 C.F.R.

§ 226.15(a)(3).

       Regulation Z, TILA’s implementing regulation, describes how the right to rescind

is to be exercised:

              To exercise the right to rescind, the consumer shall notify the
              creditor of the rescission by mail, telegram, or other means of
              written communication. Notice is considered given when
              mailed, or when filed for telegraphic transmission, or, if sent
              by other means, when delivered to the creditor’s designated
              place of business.

12 C.F.R. § 226.15(a)(2).

       Once the right to rescission has been exercised timely and properly, the borrower

is “not liable for any finance or other charge, and any security interest given by the

obligor, including any such interest arising by operation of law, becomes void upon such

                                             16
a rescission.” 15 U.S.C. § 1635(b); see 12 C.F.R. § 226.15(d)(1) (“When a consumer

rescinds a transaction, the security interest giving rise to the right of rescission becomes

void, and the consumer shall not be liable for any amount, including any finance

charge.”). Upon receipt of a notice of rescission, “the creditor shall return to the obligor

any money or property given as earnest money, downpayment, or otherwise, and shall

take any action necessary or appropriate to reflect the termination of any security interest

created under the transaction.” 15 U.S.C. § 1635(b).

       Capps bows, as he must, to what the statute provides as to when the three-day

window for rescission shuts—at midnight three business days after closing, or, if the

notice was delivered after closing, three days after that later date. We must decide here

when that window sash is flung open.

       TILA does not define the term “rescission.” Regulation Z provides that, when a

term is not defined, “the words used have the meanings given to them by state law or

contract.” 12 C.F.R. § 226.2(b)(3). The Court of Special Appeals had occasion to

consider the definition of “rescission” in Maslow v. Vanguri, where the intermediate

appellate court sought to determine the point at which a breach of contract became

material enough to warrant rescission under Maryland common law. 168 Md. App. 298,

323–24, 896 A.2d 408, 423 (2006). The court adopted the definition of rescission in an

earlier iteration of Black’s Law Dictionary:

              Rescission of Contract. To avoid, or cancel a contract;
              particularly, nullifying a contract by the act of a party . . . . To
              declare a contract void in its inception and to put an end to it
              as if it never were . . . . A ‘rescission’ amounts to the
              unmaking of a contract, or an undoing of it from the

                                               17
              beginning . . . . It necessarily involves a repudiation of the
              contract and a refusal of the moving party to be further bound
              by it.

168 Md. App. at 323, 896 A.2d at 423 (quoting Black’s Law Dictionary 1306–07 (6th ed.

1990)).19 Other courts have looked to Black’s Law Dictionary, as well as Webster’s

Third New International Dictionary, for definitions of the term:

              While neither the Act nor the implementing regulations
              define the term, common definitions of “rescission” indicate
              that it covers more than simply removing a security interest
              created through a loan.          According to [Black’s Law
              Dictionary], the term means “[a] party’s unilateral unmaking
              of a contract,” which “restores the parties to their
              precontractual positions.” According to [Webster’s Third
              New International Dictionary], the term means “an act of
              cutting off” or “an act of rescinding, annulling, or vacating or
              of cancelling or abrogating (as by restoring to another party to
              a contract or transaction what one has received from him).”

See Barrett v. JP Morgan Chase Bank, N.A., 445 F.3d 874, 879 (6th Cir. 2006) (citations

omitted). For present purposes, we understand the term “rescission” in TILA to mean “to

cancel” or “to undo.”

       The right of rescission belongs to borrowers only “in the case of any consumer

credit transaction.” 15 U.S.C. § 1635(a). In those cases, the borrower may rescind until

midnight of the third business day “following the consummation of the transaction.” Id.

§ 1635(a). Regulation Z defines “consummation” as “the time that a consumer becomes




19
  The current iteration of Black’s Law Dictionary defines rescission as follows: “1. A
party’s unilateral unmaking of a contract for a legally sufficient reason . . . .” Rescission,
Black’s Law Dictionary 1420–21 (9th ed. 2009).

                                             18
contractually obligated on a credit transaction.”20 12 C.F.R. § 226.2(a)(13). TILA does

not define the phrase “consumer credit transaction,” nor the term “transaction.” The

word “transaction,” however, is included as part of two other defined terms, each of

which presupposes that the “transaction” must be consummated.          See Weintraub v.

Quicken Loans, Inc., 594 F.3d 270, 273 (4th Cir. 2010). TILA’s definitional section

defines “residential mortgage transaction” as “a transaction in which a mortgage, deed of

trust, purchase money security interest arising under an installment sales contract, or

equivalent consensual security interest is created or retained against the consumer’s

dwelling to finance the acquisition or initial construction of such dwelling.” 15 U.S.C.

§ 1602(x) (emphasis added). Similarly, a “reverse mortgage transaction,” also defined in

§ 1602, is “a nonrecourse transaction in which a mortgage, deed of trust, or equivalent

consensual security interest is created against the consumer’s principal dwelling . . . .”

Id. § 1602(cc) (emphasis added). Both definitions treat the word “transaction” as a

consummated event, “indicating that any credit transaction under § 1635(a) must be

consummated for the right to rescind to attach.” Weintraub, 594 F.3d at 275.



20
  When a consumer “becomes contractually obligated on a credit transaction” is, in turn,
determined by looking to state law: “State law governs. When a contractual obligation
on the consumer’s part is created is a matter to be determined under applicable law;
Regulation Z does not make this determination.” 12 C.F.R. Pt. 226, Supp. I, p. 612
(Official Staff Commentary). As the case was presented here, neither party alleged that
the consummation date was some date in the negotiation process other than the date that
the Adjustable Rate Note and Deed of Trust were signed and dated. Accordingly, for
present purposes, the consummation date in this case was April 17. We decline to opine
on the definition of the word “consummation” and whether other events might qualify as
“becom[ing] contractually obligated.”

                                           19
       Regulation Z presumes that, at the time a borrower wishes to exercise his or her

rescission right, there is something to rescind. It notes that the effect of rescission is to

render void “the security interest giving rise to the right of rescission.” 12 C.F.R.

§ 226.15(d)(1). There must be a security interest in being to rescind in order for it to be

rendered void. See 12 C.F.R. Pt. 226, Supp. I, pp. 709–10 (Official Staff Commentary)

(“In order for the right of rescission to apply, the security interest must be retained as part

of the credit transaction.”); 12 C.F.R. Pt. 226, Supp. I, p. 712 (Official Staff

Commentary) (“Any security interest giving rise to the right of rescission becomes void

when the consumer exercises the right of rescission.               The security interest is

automatically negated, regardless of its status and whether or not it was recorded or

perfected.”). In our view, “consummation of the transaction” refers to closing, or, the

moment when the note and deed of trust or mortgage are signed.                Until a loan is

consummated, there is no consumer credit transaction, and the consumer has no

obligations from which he or she would need a right of rescission. If the loan was not

consummated yet, the borrower could decline simply to sign the loan documents and

avoid liability. Under TILA, a borrower cannot rescind that which has not occurred yet.21



21
   We need not grapple with, in the abstract, whether TILA’s right of rescission mirrors,
enlarges, or diminishes existing Maryland common law on rescission because the
outcome is the same under either. Under Maryland common law, “if a party who knows
the facts would justify rescission, does any act which recognizes the continued validity of
the contract or indicates that he still feels bound under it, he will be held to have waived
his right to rescind.” Lazorcak v. Feuerstein, 273 Md. 69, 76, 327 A.2d 477, 481 (1974).
It is undisputed that, approximately a week and a half after submitting a Notice of Right
to Cancel, Capps accepted not only sufficient funds to pay off his prior mortgage (almost
                                                                        (Continued…)
                                              20
      In the case at bar, Capps could not have rescinded what he had not yet created. On

the 15th of April, when he faxed a Notice of Right to Cancel, the arguably rescindable

transaction had not come into being yet, and therefore could not be cancelled then.

Capps consummated the transaction on Tuesday, April 17, when he signed the loan

documents. April 17, then, is the earliest that the three-day window could have opened.22

If Capps wanted to avoid the loan, he should not have signed the loan documents, or he

should have caused the proceeds to be returned promptly.

      The United States Court of Appeals for the Fourth Circuit shares our view of

§ 1635. In Weintraub v. Quicken Loans, Inc., 594 F.3d 270 (4th Cir. 2010), the Fourth

Circuit considered whether the TILA right to rescind applies in cases where the

transaction had not closed yet. The borrowers in that case argued, like Capps, that the

text of § 1635(a) does not require that a loan be consummated before the right to rescind

may arise, but rather that rescission is possible any time after the parties begin

negotiations for a potential extension of credit. Weintraub, 594 F.3d at 273–74. The

Fourth Circuit held that “no ‘consumer credit transaction’ exists for which the right to

rescind can be exercised until that transaction has been consummated, or put another

way, until credit is in fact extended.” Weintraub, 594 F.3d at 275 (internal quotations

omitted).

(… Continued)
$300,000), but also more than $32,000 to pay off credit card debts and $5,878.31 in his
pocket. In addition, he made monthly payments on the loan until 2009.
22
  In the event that Capps was provided with a Notice of Right to Cancel after April 17,
the three-day window would have opened at that time. See 15 U.S.C. § 1635(a).

                                           21
      In support of its decision, the Fourth Circuit looked to TILA disclosure cases in

the context of automobile loans for the proposition that TILA liability under the

analogous § 1638 does not attach until after the consummation of a consumer credit

transaction. Weintraub, 594 F.3d at 274–75 (examining Nigh v. Koons Buick Pontiac

GMC, Inc., 319 F.3d 119 (4th Cir. 2003), rev’d on other grounds, 543 U.S. 50 (2004),

and Baxter v. Sparks Oldsmobile, Inc., 579 F.2d 863 (4th Cir. 1978)). In Baxter, the

Fourth Circuit held that there was no consumer credit transaction to which TILA would

apply when the consumer cancelled the transaction before it was consummated. Baxter,

579 F.2d at 864. In Nigh, although the transaction had not been consummated formally

(i.e., the credit had not yet been extended), the Fourth Circuit held that Baxter was

satisfied once the consumer became obligated contractually on the credit transaction.

Nigh, 319 F.3d at 123–24.

      The Fourth Circuit relied also on “a commonsense reading of the text of

§ 1635(a)” in holding that the term transaction “refers to a consummated, binding

agreement, rather than to the whole course of the parties’ interactions. The right to

rescind a transaction defined as the whole course of interactions between the parties

would essentially be meaningless—there would often be nothing to rescind.” Weintraub,

594 F.3d at 276.




                                         22
      We could find little else on point across the country. In an unreported opinion23

from 2002, a federal district court in Illinois held similarly that the TILA remedy of

rescission was not available to homeowners before closing. In Sampanetti v. E*Trade

Mortgage Corp., No. 02-C-3513, 2002 WL 31478269 (N.D. Ill. Nov. 5, 2002), the

homeowners signed a “Lock-In Agreement” which provided that their $400 interest-rate

lock-in fee was only refundable in the event that E*Trade did not approve the loan for

closing. Sampanetti, 2002 WL at *1. The homeowners alleged that this was in violation

of their statutory right to rescind under TILA. E*Trade argued that that right was not

available yet as the parties had not closed. Sampanetti, 2002 WL at *1–*2. Because

TILA and Regulation Z “do not clearly indicate that the concept of rescission, or the

language requiring a refund upon rescission, applies to a situation where a loan has not

yet closed,” the court concluded that “holding that the rescission and refund provisions

apply to such a situation would constitute an impermissible expansion of the statute and

the regulations.” Sampanetti, 2002 WL at *2.

      We are aware of only one additional opinion that speaks to the question of

whether, under TILA, a loan may be rescinded before it is consummated. In 1997, a City

Court for Mt. Vernon, New York (a trial court-equivalent), held in Community Mutual

Savings Bank v. Gillen, 655 N.Y.S.2d 271 (N.Y. City Ct. 1997), that consumers have a

right to rescind even when they do not close on the loan. Cmty Mut. Sav. Bank, 655

23
   We do not include this case for any precedential or persuasive value here. The Fourth
Circuit’s opinion in Weintraub serves as persuasion enough. Sampanetti is recounted
merely to illustrate the paucity of opinions nationally—especially from high courts—as
to the question before us.

                                          23
N.Y.S.2d at 273. In that case, the borrowers applied for a loan and received a firm

commitment letter, which scheduled closing for 12 July 1996. Cmty Mut. Sav. Bank, 655

N.Y.S.2d at 272. Due to a dispute over real property taxes, the borrowers did not sign the

loan documents at the closing table. Id. Nonetheless, the representatives of the lender

gave the rescission notice to the borrowers and asked that they sign it immediately, which

they did. Cmty Mut. Sav. Bank, 655 N.Y.S.2d at 274. The City Court reasoned that,

because the notice of rescission itself did not say that the loan needed to be consummated

before it could be used, and because the lender gave the notice to the borrowers and

instructed them to sign it, the lender “must be bound by its own notice of rescission.” Id.

From the court’s perspective, “the consummation merely provides a frame of reference

from which the time for rescission may be calculated.” Cmty Mut. Sav. Bank, 655

N.Y.S.2d at 273. Further, the City Court reasoned that, as rescission is an equitable

doctrine, “[n]othing in TILA or Regulation Z limits a Court of Equity from preventing an

inequitable or improper result from the exercise of the statutory rescission.” Cmty Mut.

Sav. Bank, 655 N.Y.S.2d at 274. To the extent that the City Court reasoned that, under

TILA, a contract need not be formed before it may be rescinded, we are unpersuaded and

disagree accordingly. See Cmty Mut. Sav. Bank, 655 N.Y.S.2d at 273 (indicating, in

dicta, that “[a]ccording to the plain language of the statute and regulation, there is no

requirement that the transaction be consummated”).

      In the present case, the Court of Special Appeals relied on another Fourth Circuit

case, Gilbert v. Residential Funding LLC, 678 F.3d 271 (4th Cir. 2012), in holding that

Capps did what a borrower is supposed to do to rescind a loan. In Gilbert, the Fourth

                                            24
Circuit considered what actions by borrowers were sufficient to exercise the right of

rescission. There, the borrowers notified the lender by letter, within three years of the

execution of the note, that they were rescinding their mortgage transaction. Gilbert, 678

F.3d at 274–75. The Fourth Circuit considered whether a borrower must file a lawsuit

within three years after the consummation of a loan transaction, or whether he or she may

assert the right simply through a written notice. Gilbert, 678 F.3d at 276. Based on the

plain meaning of the statute, the court concluded that 15 U.S.C. § 1635 “does not require

borrowers to file a claim for the invocation of that right.” Gilbert, 678 F.3d at 278.

Although Gilbert is instructive as to the appropriate demonstrative methodologies by

which a borrower may rescind a loan, it has little to contribute on the subject of when a

borrower may rescind under TILA. At most, Gilbert suggests that Capps may have

chosen a proper method when he employed a form Notice of Right to Cancel; however,

he deployed it prematurely.



                                         JUDGMENT OF THE COURT OF
                                         SPECIAL APPEALS REVERSED; CASE
                                         REMANDED TO THAT COURT WITH
                                         DIRECTIONS   TO   AFFIRM   THE
                                         JUDGMENT OF THE CIRCUIT COURT
                                         FOR FREDERICK COUNTY; COSTS IN
                                         THIS COURT AND THE COURT OF
                                         SPECIAL APPEALS TO BE PAID BY
                                         RESPONDENT CAPPS.

Judge Watts joins the judgment only.




                                           25
Circuit Court for Frederick County
Case No. 10-C-09-003783
Argued: September 9, 2014
                                        IN THE COURT OF APPEALS
                                              OF MARYLAND

                                                    No. 2

                                            September Term 2014


                                         JOHN S. BURSON, ET AL.

                                                      v.

                                             JEFFREY G. CAPPS


                                                    Barbera, C.J.
                                                    Harrell
                                                    Battaglia
                                                    Greene
                                                    Adkins
                                                    McDonald
                                                    Watts

                                                            JJ.


                                     Concurring and Dissenting Opinion by
                                     McDonald, J., which Adkins, J., joins


                                            Filed: October 23, 2014
       The Majority opinion holds that a borrower’s right to rescind a loan transaction under

the federal Truth in Lending Act does not extend to a transaction that has yet to occur. I have

no quarrel with that legal proposition, but it is not at all clear that it applies to this case. The

Majority opinion essentially engages in its own fact-finding in an effort to apply that holding

and to resolve this case. But that is not our role. I would remand this matter to the Circuit

Court for further factual development in the appropriate forum.

       The Majority opinion makes heroic efforts, largely in footnotes,1 to construct a factual

basis for its decision. But, as the Majority opinion recognizes, the current record of this case

is quite murky with respect to the sequence of events involving Mr. Capps, the mortgage

broker, and the lender. The Majority opinion attributes this state of the record solely to Mr.

Capps. Majority slip op. at pp. 3-5 & n.5. However, while Mr. Capps provided a sworn

affidavit and e-mails between the loan broker and lender2 on the question of rescission in the

Circuit Court, the substitute trustees never disputed the timeliness of the rescission notice in

the Circuit Court and, perhaps for that reason, did nothing themselves to clarify the record




       1
           Majority slip op. at pp. 3-5 n.5, pp. 5-6 nn.9-10.
       2
         Those e-mails documented that the loan broker and lender received the rescission
notice. While the representative of the loan broker expressed disappointment that the
transaction had fallen through (“what a waist” [sic]), none of the parties in the e-mail string
suggests that the rescission was premature. The Majority opinion puts its own gloss on these
e-mails, asserting that because some of the e-mails are dated on the morning of April 17,
there was “plenty of time for Capps to sign the loan documents later in the day.” Majority
slip op. at p. 6 n.10. Whether some unknown event occurred on April 17 that resulted in a
transaction taking place subsequent to the e-mails – contrary to Mr. Capps’ assertion – is pure
speculation by the Majority opinion. The substitute trustees offered no evidence in the
Circuit Court on that point.
on the relevant time line.3 Nonetheless, the Majority opinion faults Mr. Capps alone for

failing to clarify the time line of the loan transaction and rescission.

       In the Circuit Court, the substitute trustees relied on a host of other legal arguments,

but not the one on which the Majority opinion decides this case. Indeed, the substitute

trustees did not suggest that Mr. Capps’ rescission of the transaction was premature until this

case reached the Court of Special Appeals. In its unreported opinion, the intermediate

appellate court held that a rescission notice is effective under the Truth in Lending Act, even

if it is sent before the consummation of a transaction. Thus, resolution of the time line in Mr.

Capps’ case was not essential to that court’s decision. That court apparently accepted the

substitute trustees’ belated assertion that the rescission notice pre-dated the transaction and

held that, under its view of the rescission right, that timing did not matter.

       In this Court, the substitute trustees challenge the timeliness of the rescission notice

based on typewritten and handwritten dates that appear on various documents, although they

offered no evidence in the Circuit Court as to the accuracy of any particular date. The

Majority appears to accept the idea that the typewritten and handwritten dates on various

documents may not be the dates on which the particular documents were actually executed.

Majority slip op. at pp. 5-6 nn.7, 9. Nevertheless, it generally draws inferences in favor of

the substitute trustees and against Mr. Capps as to the accuracy of particular dates.


       3
        In opposing Mr. Capps’ exceptions to the foreclosure sale in the Circuit Court, the
substitute trustees themselves did not argue that the rescission notice was premature. Record
Excerpts at 82-91.

                                               2
       In the oral argument before us, the substitute trustees conceded that a borrower

receives the form to rescind a loan only at the closing – a fact that suggests that the borrower

(Mr. Capps) could only have submitted the rescission form – however the documents may

have been dated or mis-dated – after the closing. The Majority opinion dismisses this

information as to when a borrower receives a rescission form in relation to a closing as “not

material” to the question of when this borrower would have been able to submit the

rescission form related to the loan transaction in this case. Majority slip op. at pp. 5-6 n.9.

But the Majority opinion can only speculate as to how Mr. Capps would have come into

possession of the rescission form prior to the closing.

       Mr. Capps asserted in the Circuit Court that he had rescinded the transaction in a

timely manner, but that the lender had told him – incorrectly – that the rescission was

ineffective, that he was bound by the promissory note he had signed, and that he was

obligated to accept the funds and make payments. It is not inconceivable that a mortgage

broker or a lender, who stands to lose a substantial fee if a transaction does not go forward,

would discourage a borrower from rescinding a transaction.4 The Majority opinion discounts

Mr. Capps’ affidavit, although it is unrebutted in this record, and faults Mr. Capps for not

elaborating on the circumstances of the rescission by filing an additional affidavit. Majority




       4
       The record discloses that, in Mr. Capps’ transaction, the loan broker and lender
received fees totaling more than $13,000 upon closing of the transaction. Record Excerpts
at 41.

                                               3
slip op. at pp. 3-5 n.5. The substitute trustees introduced no evidence – in the form of sworn

affidavits or otherwise – on this issue in the Circuit Court.

       As the Majority opinion notes, at the hearing on exceptions in the Circuit Court, the

judge summarized the history of the case as to the rescission issue – without any

contradiction or objection by counsel for the substitute trustees – as follows:

              ... the allegations [in a third party complaint against the lender]
              were that Mr. Capps had rescinded. Apparently, there’s no
              dispute about that. [T]hat he signed the note, and then rescinded
              within the period of time – he was given proper notice for a
              rescission, within the period of time, ... he did rescind.

                    [A]pparently there’s little dispute about the fact that, ...
              when he spoke to the lender he was told he couldn’t ... rescind
              and he then began making payments on the loan, which
              apparently he made until he lost his job.

Record Excerpts at 109-10. The Majority opinion dismisses the trial judge’s statement as the

result of “confusion.” Majority slip op. at p. 4 n.5.

       At times, it appears that it is the Majority opinion that is confused or that simply

disregards parts of the record. For example, the Majority opinion relies heavily on the

undisputed facts that Mr. Capps accepted the proceeds of the loan and made payments on it

until he lost his job. Majority slip op. at p. 3 n.4, 11, 20-21 n.21.5 While it notes that Mr.

Capps recounted in his affidavit that he did so because the lender had told him that his

rescission was ineffective and that the mortgage would remain in effect, it gives no weight


       5
       These are two of the six facts it deems material to the disposition of this case.
Majority slip op. at p. 3 n.4.

                                              4
to that undisputed fact,6 stating that “Capps did not identify which Equifirst employee made

such statements, nor did he substantiate from any other source that the conversation

occurred.” Majority slip op. at pp. 6-7 (emphasis added). Apparently, the Majority opinion

would prefer to have more evidence on the circumstances of this conversation, as might a

fact-finder at trial. But the substitute trustees never challenged Mr. Capps’ statement that this

conversation occurred.

       The Majority opinion disregards Mr. Capps’ factual allegations by noting that the

order granting a writ of certiorari did not address fraud. This is not surprising, as the Court

of Special Appeals did not rely on the allegedly fraudulent statements by the lender in issuing

its decision and remanding the case to the Circuit Court.7 The Majority opinion does not



       6
        Indeed, in arguing that Mr. Capps waived his right of rescission, Majority slip op. at
pp. 20-21 n.21, the Majority either ignores these facts or is very forgiving as to the lender’s
alleged misconduct, which would constitute a violation of the Truth in Lending Act.
       7
         The record before us reveals that Mr. Capps has consistently asserted that he went
through with the loan and made payments because he was told by the lender that he could not
rescind the loan. This allegation of fraud on the part of the lender, supported by a sworn
affidavit and never rebutted by the substitute trustees, was part of his initial motion to stay
and dismiss the foreclosure action and was reiterated in the post-sale exceptions and
considered by the Circuit Court. Although that court alluded to the possibility of a fraud
exception to the limitations of Rule 14-305, see Bates v. Cohn, 417 Md. 309, 324 n.10, 9
A.3d 846 (2010), it ultimately did not address the effect of the rescission or the lender’s
alleged statement, as the court held that the issue did not concern “the validity or irregularity
of the [foreclosure] sale.” See Record Excerpts at 43, 78, 111-12. Thus, the Circuit Court
did not make any fact findings as to whether the alleged statements were made or whether
Mr. Capps accepted the loan and made payments in reliance on those statements. In ruling
in Mr. Capps’ favor, the Court of Special Appeals did not address the fraud question and
remanded the case for a determination whether Mr. Capps had in fact rescinded the
transaction.

                                               5
explain why Mr. Capps should have filed a conditional petition for certiorari on an issue that

was not decided against him in the intermediate appellate court and that would remain part

of the case on remand to the Circuit Court. In any event, we should not disregard sworn

factual information in the record simply to make the remaining facts fit our disposition of the

case.

        In sum, in concluding that Mr. Capps’ rescission was premature, the Majority is

making a decision that is premature. Now that the question of the timing of the rescission

has been raised, further proceedings in the Circuit Court would clarify what documents were

post-dated or pre-dated, whether Mr. Capps was purposely vague or the substitute trustees

were purposely silent, and whether there is other evidence of when the closing took place in

relation to the rescission notice. It may be that the Majority’s speculation as to the facts of

this case would ultimately prove accurate and that Mr. Capps’ rescission notice would be

held ineffective or that the lender had not misled him and he had waived the rescission. But

the trial court is the appropriate forum for determining the dispositive facts. Pursuant to

Maryland Rule 8-604(d),8 I would remand without affirming or reversing for further factual

development.

        Judge Adkins has advised that she joins this opinion.




        8
         That rule provides, in pertinent part, that “[i]f the Court concludes that the substantial
merits of a case will not be determined by affirming, reversing or modifying the judgment,
or that justice will be served by permitting further proceedings, the Court may remand the
case to a lower court....”

                                                6
