                                                                NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                _____________

                                     No. 10-1493
                                    _____________

                                 PAULA WILLIAMS,
                                     Appellant

                                           v.

                 WELLS FARGO HOME MORTGAGE, INC.;
         PREMIER EVENTS, INC., d/b/a TARGET HOME REMODELING;
                         H.E.M. CORPORATION


                   On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                           District Court No. 2:06-CV-03681
                   District Judge: The Honorable Legrome D. Davis

                  Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                 January 25, 2011

               Before: McKEE, Chief Judge, and SMITH, Circuit Judges,
                          and STEARNS, District Judge*

                               (Filed: February 8, 2011)
                               _____________________

                                     OPINION
                               _____________________

SMITH, Circuit Judge.




*
  The Honorable Richard G. Stearns, United States District Judge for the United States
District Court of Massachusetts, sitting by designation.
                                           1
       Paula Williams appeals from an order of the United States District Court for the

Eastern District of Pennsylvania granting summary judgment in favor of Wells Fargo

Home Mortgage, Inc.* For the reasons set forth below, we will affirm.

                                              I.

       Williams, who is disabled and blind, paid off the mortgage on her Philadelphia

home in 1997. In the fall of 2002, Target Home Remodeling solicited Williams‟ business

by delivering a flyer about its services to her home. She contacted Target, and its owner,

Buddy Beegal, who inspected her home and provided her with an estimate of $25,000 for

the repairs Williams sought. According to Williams, Beegal told her “he would handle

everything.” Approximately a month later, even though Williams had not taken any

action to obtain financing, Beegal advised her that the financing for the repairs had been

approved.

       H.E.M., a mortgage broker licensed in Pennsylvania, submitted Williams‟

completed loan application to Wells Fargo. The application included social security

award letters, an appraisal, a title search, and a letter from Williams stating that the

“purpose of the loan was to use the cash for home improvements.” The submissions did

not include any agreement providing for home improvements and Wells Fargo did not

know that Williams had already received an estimate from Target.




*
   The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367. We exercise
final order jurisdiction under 28 U.S.C. § 1291. We exercise plenary review of a district
court‟s order granting summary judgment. Shook v. Avaya, Inc., 625 F.3d 69, 72 (3d Cir.
2010). We also conduct de novo review of a district court‟s legal conclusions. Id.
                                               2
       On November 14, 2002, Williams executed a balloon note, secured by her home,

promising to pay Wells Fargo $28,000 at a yearly interest rate of 9.375. Williams

received only $13,820.83 from the $28,000 mortgage proceeds. The other proceeds were

distributed to satisfy delinquent real estate taxes, an overdue gas bill, and a bill to a

vendor, as well as the costs associated with the loan. On November 19, 2002, Williams

received from the settlement agent checks in the amount of $6,915.41 and $6,915.42.

       The day after the loan proceeds were distributed, Beegal completed a Home

Improvement Agreement for Installation and Service, which Williams executed. The

Agreement differed from the initial $25,000 estimate as it provided for a payment in cash

of $13,820.83, with the down payment and the final payment being the exact amounts of

the two checks disbursed to Williams by the settlement agent.

       In April of 2003, Williams‟ mortgage payment was $20 short and Wells Fargo

(inexplicably) refused to accept the insufficient amount. By the end of September of

2003, Wells Fargo had obtained a default judgment in its favor in a mortgage foreclosure

action filed in the Philadelphia Court of Common Pleas.

       Thereafter, Williams engaged in multiple legal actions in an effort to stay in her

home, initiating civil actions in the Philadelphia Court of Common Pleas and petitioning,

on several occasions, for protection under the Bankruptcy Code. On November 22, 2004

Williams‟ counsel sent a letter to Wells Fargo seeking to rescind the mortgage transaction

and to exercise her right to do so under the Truth in Lending Act (TILA), 15 U.S.C. §

1635(a). Wells Fargo did not respond.



                                               3
       On August 22, 2006, Williams filed a complaint in the District Court against

Wells Fargo and others. An amended complaint filed the same day alleged that Wells

Fargo had failed to comply with the TILA and the Home Equity Protection Act

(HOEPA), 15 U.S.C. § 1641, that this failure entitled her to rescind the loan transaction,

and that Wells Fargo was liable for statutory damages. In addition, Williams alleged that

Target had breached its contract and that Wells Fargo was liable for the breach because it

had failed to provide notice of a limitation of liability under 73 P.S. § 500-401 of the

Pennsylvania Home Improvement Finance Act (HIFA), and the HOEPA.

       The District Court granted Wells Fargo‟s renewed motion for summary judgment.

It concluded that Williams‟ claims under the TILA for damages and for rescission were

time-barred by the respective one- and three-year statute of limitations. It also

determined that the loan transaction was not subject to the requirements of HIFA and

HOEPA. This timely appeal followed.

                                               II.

       The TILA was “designed to strengthen the national economy by enhancing the

informed use of credit. It requires creditors to accurately and meaningfully disclose all

credit terms.” Reithman v. Berry, 287 F.3d 274, 279 (3d Cir. 2002) (citing 15 U.S.C. §

1601(a)). To that end, the TILA requires the lender to provide “material disclosures” to

the borrower. See 15 U.S.C. §§ 1601-1602, 1639. The TILA provides that in a consumer

credit transaction in which a “security interest . . . is . . . 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

                                               4
the consummation of the transaction or the delivery of the information and rescission

forms[.]” 15 U.S.C. § 1635(a); see also 12 C.F.R. § 226.23(a)(1) (hereafter referred to as

Regulation Z). If a creditor fails to provide the required notice of the right to rescind or

the TILA‟s material disclosures, the right to rescind exists for three years after the

consummation of the transaction. Reg. Z, § 226.23(a)(3). Section 1635(f) states:

       An obligor‟s right of rescission shall expire three years after the date of
       consummation of the transaction or upon the sale of the property,
       whichever occurs first, notwithstanding the fact that the information and
       forms required under this section or any other disclosures required under
       this part have not been delivered to the obligor[.]

15 U.S.C. § 1635(f) (emphasis added).

       Here, the transaction was consummated on November 14, 2002. The notice to

rescind was mailed on November 22, 2004, a little more than two years after the

transaction was consummated. The civil action to enforce the right to rescind, however,

was not filed until August 22, 2006, more than nine months after the three-year period

expired. Wells Fargo moved for summary judgment, claiming that Williams‟ action for

rescission was time-barred pursuant to 15 U.S.C. § 1635(f).

       The District Court agreed. Williams contends that her TILA claim should not

have been dismissed because the three-year statutory period only applies “to when

rescission must be effected [by notice], not when a suit to enforce that right to rescission

is exercised.” Alternatively, Williams contends that this statutory three-year period

should be subject to equitable tolling.

       We have yet to address whether the three-year period in § 1635(f) pertains to the

time within which either a notice of rescission must be tendered or an action for

                                              5
rescission must be commenced.† The district and bankruptcy courts within this circuit

have reached differing results.

       We conclude that the Supreme Court‟s analysis in Beach v. Ocwen Federal Bank,

523 U.S. 410 (1998), is dispositive. There, the Supreme Court granted certiorari to

“determine whether . . . the statutory right of rescission provided by § 1635 may be

revived as an affirmative defense after its expiration under § 1635(f).” Id. at 415. It

concluded that the plain language of the statutory provision answered the question,

reasoning that

       Section 1635(f), however, takes us beyond any question whether it limits
       more than the time for bringing a suit, by governing the life of the
       underlying right as well. The subsection says nothing in terms of bringing
       an action but instead provides that the “right of rescission [under the Act]
       shall expire” at the end of the time period. It talks not of a suit‟s
       commencement but of a right‟s duration, which it addresses in terms so
       straightforward as to render any limitation on the time for seeking a remedy
       superfluous.

Id. at 416-17 (citations omitted). Accordingly, the Court held that “§ 1635(f) completely

extinguishes the right of rescission at the end of the 3-year period.” Id. at 412.

“Congress‟s manifest intent,” the Court concluded, was “that the Act permits no federal

right to rescind, defensively or otherwise, after the 3-year period of § 1635(f) has run.”

Id. at 419.



†
  We declared in Smith v. Fidelity Consumer Discount Co., 898 F.2d 896, 902 (3d Cir.
1990), and In re Community Bank of Northern Virginia, 418 F.3d 277, 305 (3d Cir. 2005)
(Community Bank I), that an action for rescission must be initiated within three years of
the date of consummation of the transaction. Neither case, however, considered the
viability of a rescission action commenced after the statutory three-year period. Thus,
neither case is controlling.
                                              6
       By explaining that § 1635(f) “limits more than the time for bringing a suit,” id. at

417, and “permits no federal right to rescind, defensively or otherwise, after the 3-year

period of § 1635(f) has run,” id. at 419, the Court implicitly recognized that any claim for

rescission under § 1635 must be filed within the three-year period. It may be that an

obligor may invoke the right to rescission by mere notice. Mere invocation without

more, however, will not preserve the right beyond the three-year period. Rather,

consistent with § 1635(f), a legal action to enforce the right must be filed within the

three-year period or the right will be “completely extinguishe[d].” Id. at 412. Thus, we

conclude that the District Court correctly determined that Williams‟ action for rescission

was time-barred.

       Alternatively, Williams contends that the three-year period is subject to equitable

tolling. We disagree. In In re Community Bank of Northern Virginia, 622 F.3d 275 (3d

Cir. 2010) (Community Bank II), we noted that we had “incorrectly suggested [in

Community Bank I] that the three-year limitations period for claims for rescission under

TILA was a statute of limitation „subject to equitable tolling.‟” Id. at 301 n.18 (quoting

Cmty Bank I, 418 F.3d at 305). Furthermore, we noted that the Beach Court had held that

§ 1635(f) “is not a statute of limitations, but a statute of repose, i.e., one „governing the

life of the underlying right.‟” Id. (quoting Beach, 523 U.S. at 417). See also Miguel v.

Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002) (stating that “§ 1635(f) is a

statute of repose”); Jones v. Saxon Mortg., Inc., 537 F.3d 320, 326 (5th Cir. 1998) (noting

parties‟ concession that § 1635(f) is a statute of repose). Because the right ceases to exist

once a statute of repose has run, we conclude that equitable tolling cannot resurrect

                                               7
Williams‟ right to rescind the credit transaction. See Jones, 537 F.3d at 327 (reasoning

that it is “easy to understand why a statute of repose is typically an absolute time limit

beyond which liability no longer exists and is not tolled for any reason. To permit tolling

of a statute of repose would upset the economic best interests of the public as a whole”).

See also In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189, 199-200 (3d Cir. 2007)

(noting difference between a statute of limitations and a statute of repose).

                                             III.

       Williams also contends that the District Court erred by concluding that the loan

transaction was not subject to HIFA and therefore not subject to HOEPA. In her view,

the loan transaction qualified as a “home improvement installment contract” under HIFA,

which rendered it subject to HOEPA‟s requirements. Wells Fargo, however, asserts that

the loan was exempt from the HIFA definition of “home improvement installment

contract.”

       HIFA defines “home improvement installment contract” as

       an agreement covering a home improvement installment sale, whether
       contained in one or more documents, together with any accompanying
       promissory note or other evidence of indebtedness, to be performed in this
       Commonwealth pursuant to which the buyer promises to pay in
       installments all or any part of the time sale price or prices of goods and
       services, or services. The meaning of the term does not include such an
       agreement, if . . . (v) the loan is contracted for or obtained directly by the
       retail buyer from the lending institution, person or corporation[.]

73 P.S. § 500-102(10) (emphasis added). Because H.E.M., the mortgage broker, obtained

the loan for Williams, she asserts that the exception is inapplicable.




                                              8
       In interpreting this Pennsylvania statute, “our task is to discern the intent of the

Legislature, and the foremost indication of legislative intent is the plain language of the

statute.” In re D.L.H., 2 A.3d 505, 513 (Pa. 2010). The use of the disjunctive “or”

establishes that the exception also applies if Williams “contracted for” the loan. The

record confirms that she executed the note and the mortgage. She admitted as much

during her deposition. If we embraced Williams‟ interpretation of this statutory

exception, we would be reading out of the statute the words “contracted for.” “Such an

interpretation would defy the axiom of statutory construction that „whenever possible

each word in a statutory provision is to be given meaning and not to be treated as

surplusage.‟” Commonwealth. v. Lassiter, 722 A.2d 657, 661 (Pa. 1998) (quoting In re

Emp. of Student Serv., 432 A.2d 189, 195 (Pa. 1981)).

       In short, because Williams “contracted for” the loan with Wells Fargo, the

exception in the definition of “home improvement installment contract” applies. As a

result, the loan transaction was not subject to HIFA‟s requirements. Because it is not

subject to HIFA, the dependent HOEPA claim also fails.

       For the reasons set forth above, we will affirm the judgment of the District Court.




                                              9
