16-611-cv
Smith v. Wells Fargo Bank, N.A.


                                   UNITED STATES COURT OF APPEALS
                                       FOR THE SECOND CIRCUIT

                                          SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 16th day of December, two thousand sixteen.

PRESENT: BARRINGTON D. PARKER,
                 REENA RAGGI,
                 PETER W. HALL,
                                 Circuit Judges.
----------------------------------------------------------------------
ALLYSON SMITH,
                                 Plaintiff-Appellant,

                                  v.                                     No. 16-611-cv

WELLS FARGO BANK, N.A.,
                                 Defendant-Appellee.
----------------------------------------------------------------------
APPEARING FOR APPELLANT:                          RANDALL S. NEWMAN, Wolf Haldenstein
                                                  Adler Freeman & Herz LLP, New York,
                                                  New York.

APPEARING FOR APPELLEE:                          DAVID M. BIZAR (Robert J. Carty, Jr.,
                                                 Seyfarth Shaw LLP, Houston, Texas, on the
                                                 brief),  Seyfarth Shaw    LLP,    Boston,
                                                 Massachusetts.

          Appeal from a judgment of the United States District Court for the District of

Connecticut (Stefan R. Underhill, Judge).

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       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment entered on February 8, 2016, is AFFIRMED.

       Plaintiff Allyson Smith appeals from the dismissal of her complaint alleging that

defendant Wells Fargo Bank (“Wells Fargo”) violated the Truth in Lending Act

(“TILA”), see 15 U.S.C. §§ 1601 et seq., by misstating her rescission expiration date in

notices it provided her in connection with a mortgage-loan refinancing.1 We review de

novo the dismissal of a complaint pursuant to Fed. R. Civ. P. 12(b)(6), accepting all

factual allegations as true and drawing all reasonable inferences in plaintiff’s favor. See

Biro v. Condé Nast, 807 F.3d 541, 544 (2d Cir. 2015). In so doing, we assume the

parties’ familiarity with the facts and record of prior proceedings, which we reference

only as necessary to explain our decision to affirm substantially for the reasons stated by

the district court. See Smith v. Wells Fargo Bank, N.A., 158 F. Supp. 3d 91, 97–99 (D.

Conn. 2016).

       TILA affords a borrower three business days during which to rescind a covered

loan transaction, calculated from “consummation of the transaction,” the delivery of the

required rescission forms, or the delivery of the material disclosures required by the

statute, whichever is latest. 15 U.S.C. § 1635(a). If proper forms are never provided,

the borrower’s right of rescission survives until three years after the transaction

consummation date or until sale of the property, whichever occurs first. Id. § 1635(f).


1
  Smith also brought claims under the Connecticut Unfair Trade Practices Act, which the
district court dismissed for failure to state a claim and, in the alternative, as preempted.
Because she does not challenge the dismissal of those state claims, we consider any such
argument waived. See Bishop v. Wells Fargo & Co., 823 F.3d 35, 50 (2d Cir. 2016).

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TILA’s implementing regulations require rescission forms “clearly and conspicuously” to

advise a borrower of “the date the rescission period expires.”                   12 C.F.R.

§ 1026.23(b)(1)(v).

       The parties agree that, on March 9, 2012, Smith received from Wells Fargo a

“Close at Home Mortgage Kit” that included rescission forms advising her that her

rescission period would expire on “3/29/12,” three business days from “the date of the

transaction, which is 3/26/12,” the deadline for Smith to return signed acceptance

documents to Wells Fargo. J.A. 21. Smith, however, argues that her transaction did

not consummate until March 30 or 31, making the date of rescission in Wells Fargo’s

notice inaccurate and, thereby, making her rescission more than two years later timely

under 15 U.S.C. § 1635(f). Like the district court, we reject Smith’s argument for a

consummation date later than March 26, 2012.

1.     Date of Consummation of Transaction

       TILA’s regulations define “consummation” as “the time that a consumer becomes

contractually obligated on a credit transaction,” 12 C.F.R. § 1026.2(a)(13), a matter

decided by reference to state law, see id. pt. 1026, supp. I, pt. 1, 2(a)(13).

       “To form a contract” under Connecticut law, “generally there must be a bargain in

which there is a manifestation of mutual assent to the exchange between two or more

parties,” which manifestation “may be made wholly or partly by written or spoken words

or by other acts.” Bartomeli v. Bartomeli, 65 Conn. App. 408, 414, 783 A.2d 1050,

1055 (2001) (internal quotation marks omitted). Thus, it has long been recognized that,

when the “proposition of one party” is “met by an acceptance of the other, which

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corresponds with it,” a contract is formed. Hoffman v. Fidelity & Cas. Co. of N.Y., 125

Conn. 440, 444, 6 A.2d 357, 359 (1939) (internal quotation marks omitted); accord

Geary v. Wentworth Labs., Inc., 60 Conn. App. 622, 627, 760 A.2d 969, 972–73 (2000).

       Wells Fargo’s March 9, 2012 Mortgage Kit—which included the note, mortgage

deed, two copies of the requisite Notice of Right to Cancel, a TILA disclosure statement,

a HUD-1 Settlement Statement (“HUD-1”), and a letter outlining the transaction and

indicating that the materials must be returned “no later than 03/26/12,” J.A.

30—constituted the lender’s “proposition.” Smith’s execution of all documents in the

Mortgage Kit, which she acknowledged doing on “March 13, 2012,” and “sen[ding] . . .

to Wells Fargo several days thereafter,” id. at 10, constituted her perfectly corresponding

acceptance.

       Thus, like the district court, we conclude that, as a matter of Connecticut law,

Smith became contractually obligated on March 13, 2012, or soon after, when she

transmitted the executed documents to Wells Fargo. See Smith v. Wells Fargo Bank,

N.A., 158 F. Supp. 3d at 99 (finding it unnecessary to decide whether execution or

transmittal effected consummation); see also Echavarria v. Nat’l Grange Mut. Ins. Co.,

275 Conn. 408, 417 n.10, 880 A.2d 882, 888 n.10 (2005) (“[A] contract is regarded as

made at the time and place that the letter of acceptance is put into the possession of the

postal service.”).

       In urging otherwise, Smith argues that there is no record evidence of when she

mailed the executed documents back to Wells Fargo, precluding a finding that she did so

on or before March 26. But where, as here, March 26 was the deadline and the loan

                                            4
indisputably was financed, the record can only support an inference that Smith complied

with that deadline, absent facts to the contrary, which are not alleged here. See Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility [so as to survive

motion to dismiss] when the plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the misconduct alleged.”). To

the contrary, Smith alleges that she returned the documents to Wells Fargo “several days”

after signing them on March 13, which, even drawing reasonable inferences in her favor,

does not suggest two weeks or more later. See generally Black’s Law Dictionary 1498

(9th ed. 2009) (defining “several” as “more than one or two but not a lot”).

       No different conclusion is warranted by language in the Wells Fargo letter

accompanying the Mortgage Kit, which “reserve[d] the right to modify or eliminate this

Home Affordable Refinance Program (HARP) at any time without notice to [Smith].”

J.A. 30. Smith specifically disclaims any argument that Wells Fargo was making an

illusory offer in the Mortgage Kit. See Appellant’s Br. 19. Thus, this language is

properly construed as a condition precedent, i.e., that Wells Fargo must still be providing

HARP loans when Smith returned her loan documents. See Lach v. Cahill, 138 Conn.

418, 421, 85 A.2d 481, 482 (1951) (noting that condition precedent is “fact or event

which the parties intend must exist or take place before there is a right to performance”).

Even if such a condition affected formation of the contract, and not simply performance,

it would not support Smith’s argument because the condition was satisfied here, making

her contract obligation effective, and her transaction consummated by, no later than the

March 26 date in her notice. See BG Grp., PLC v. Republic of Argentina, 134 S. Ct.

                                             5
1198, 1207 (2014) (citing Williston on Contracts § 38.4 for principle that “condition

precedent determines what must happen before a contractual duty arises but does not

make the validity of the contract depend on its happening” (internal quotation marks

omitted)); Sicaras v. City of Hartford, 44 Conn. App. 771, 780, 692 A.2d 1290, 1296–97

(1997) (describing defendant’s approval as condition precedent that did not affect

contract formation); see also Hatheway Farms Ass’n, Inc. v. Hatheway Farms of Suffield,

LLC, 135 Conn. App. 1, 11, 43 A.3d 175, 181 (2012).

       That conclusion is only reinforced by the fact that TILA’s regulatory definition of

consummation focuses on when the “consumer becomes contractually obligated on a

credit transaction.”   12 C.F.R. § 1026.2(a)(13) (emphasis added); see Bragg v. Bill

Heard Chevrolet, Inc., 374 F.3d 1060, 1066 (11th Cir. 2004) (determining that consumer

was contractually obligated under TILA after signing agreement even if creditor had not

signed); Nigh v. Koons Buick Pontiac GMC, Inc., 319 F.3d 119, 122 (4th Cir. 2003),

rev’d on other grounds, 543 U.S. 50 (2004) (same); cf. Murphy v. Empire of Am., FSA,

746 F.2d 931, 935 (2d Cir. 1984) (“The focal point for possible reconsideration by the

borrower is when he becomes contractually bound, which normally occurs when he signs

the commitment.”); Bryson v. Bank of New York, 584 F. Supp. 1306, 1317 (S.D.N.Y.

1984) (describing consummation as point at which “consumer . . . makes a choice and

commits himself or herself to the purchase of credit, without regard for the degree of

commitment of the lender”).

       Smith nevertheless insists that consummation of her transaction could not have

occurred before Wells Fargo’s March 30 telephone call confirming that her loan would

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be funded because, on March 5, Wells Fargo had instructed her to continue making

payments on her existing loan until she received notice that her refinancing had been

approved. The argument fails because the March 5 conversation could not override the

written terms of an agreement to which Smith consented by executing and returning the

loan documents. Indeed, the Mortgage Kit letter itself stated that, if Smith executed the

new loan documents, she “may skip [her] April mortgage payment.” J.A. 30. Smith’s

reliance on the HUD-1’s date of March 31 is no more availing in delaying the date of

consummation because Smith transmitted it back to Wells Fargo on or before March 26,

thereby becoming contractually obligated.

       We also identify no merit in Smith’s claim that the notices she received were not

clear as to the date her right to rescind expired. The notices stated that Smith had a right

to cancel “within three business days from whichever of the following events occurs last:

(1) the date of the transaction, which is 03/26/12; or (2) the date you received your

Truth-in-Lending disclosures; or (3) the date you received this notice of your right to

cancel.” J.A. 21. The second and third events having occurred on March 9, 2012,

there could be no question that Smith’s rescission expiration period did not start to run

until March 26. Further, her notice reiterated that “you must send the notice no later

than midnight of 03/29/12, (or midnight of the third business day following the latest of

the three events listed above).” Id. Thus, Smith cannot plausibly maintain that she

was not given clear notice as to the expiration date of the rescission period.

       Finally, Smith’s statute-of-frauds argument in her reply brief fares no better.

Arguments first made in a reply brief are waived. See Bishop v. Wells Fargo & Co.,

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823 F.3d 35, 50 (2d Cir. 2016). But even if Smith could clear that hurdle, the argument

fails because, for the relevant period, it is Wells Fargo that is seeking to enforce the

agreement, which Smith indisputably signed. See Conn. Gen. Stat. § 52-550.

2.    Conclusion

      We have considered Smith’s other arguments and conclude that they are without

merit. Accordingly, we AFFIRM the judgment of dismissal.

                                        FOR THE COURT:
                                        Catherine O’Hagan Wolfe, Clerk of Court




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