                                                                                 FILED
                                                                     United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                         Tenth Circuit

                             FOR THE TENTH CIRCUIT                            July 7, 2017
                         _________________________________
                                                                         Elisabeth A. Shumaker
                                                                             Clerk of Court
VIVIAN L. RADER; STEVEN R.
RADER,

      Plaintiffs - Appellants,

v.                                                         No. 16-1379
                                                  (D.C. No. 1:15-CV-02736-LTB)
CITIBANK N.A., as Successor Trustee to                       (D. Colo.)
U.S. Bank National Association as
Successor to Wachovia Bank National
Association as Trustee for the
Certificateholders of Mastr Alternative
Loan Trust 2004-1 Mortgage Pass Through
Certificates Series 2004-1; OCWEN
LOAN SERVICING, LLC,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before MATHESON, McKAY, and MORITZ, Circuit Judges.
                 _________________________________

      Plaintiffs-Appellants Vivian L. Rader and Steven R. Rader appeal from the

district court’s dismissal of their action brought pursuant to 15 U.S.C. § 1635 of the

Truth in Lending Act (TILA), in which they sought to rescind a 2003 promissory

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
note and deed of trust (collectively, the “Mortgage Loan”). Exercising jurisdiction

pursuant to 28 U.S.C. § 1291, we affirm.

                                           I.

      Steven Rader borrowed $630,000 from GreenPoint Mortgage Funding, Inc. on

October 8, 2003. See Aplt. App. at 183.1 The promissory note was secured by the

Raders’ property in Pagosa Springs, Colorado, pursuant to a deed of trust dated

October 8, 2003. See id. at 187, 189. The deed of trust was recorded on October 15,

2003, in the records of the County of Archuleta, Colorado. Id. at 187.

      After the loan transaction closed, the Raders began making payments in 2003,

but stopped making payments sometime in 2008 because of alleged billing errors.

See id. at 43, 47. Seven years later, in August 2015, defendant-appellee Citibank,

N.A. (the holder of the note) sold the mortgaged property at a foreclosure sale.2 In

October 2015, the Raders sent “Rescission Letters” purporting to rescind the

Mortgage Loan. The Raders then filed a “Verified Petition to Enforce Rescission” in



      1
        Most of the facts recited here are contained in documents attached to the
motion to dismiss. The Raders haven’t disputed the authenticity of these documents
and they are central to the claims in their complaint. Many of the facts are also
subject to judicial notice. We agree with the district court that “consideration of such
documents is essential to providing the factual background of this case.” Aplt. App.
at 285-86.
      2
         In a prior case, the Raders sought to prevent Citibank from foreclosing on
their property by alleging that Citibank wasn’t the proper holder of the note. Rader
v. Citibank, N.A., 616 F. App’x 383, 384 (10th Cir. 2015). The district court
concluded that the Raders’ claim failed as a matter of law and we affirmed the
district court’s dismissal. Id. at 384-85.

                                           2
December 2015 against Citibank and defendant-appellee Ocwen Loan Servicing, Inc.

(the servicer of the loan).

       Under TILA, an obligor’s right of rescission expires three years after the date

of the consummation of the transaction. 15 U.S.C. § 1635(f). In their petition, the

Raders asserted that the loan wasn’t consummated at the closing because the true

lender wasn’t disclosed; therefore, their time to rescind didn’t begin to run until

October 2015, when they learned the true identity of the lender. They alleged that:

the original lender, GreenPoint, “was not a party competent to enter into the loan

agreement . . . as it was not the true lender”; “[t]here was no agreement between [the

Raders] and the true lender”; and “no consideration was provided to [the Raders] by

[GreenPoint].” Aplt. App. at 10.

       Citibank and Ocwen moved to dismiss under Rule 12(b)(6) of the Federal

Rules of Civil Procedure, arguing that the Raders’ allegations weren’t plausible and

that the rescission action was untimely because the loan transaction was

consummated at the 2003 closing. The district court agreed, concluding the Raders

had “failed to plausibly plead that the Mortgage Loan was not consummated at the

2003 closing.” Id. at 288. The district court also rejected the Raders’ alternative

theory that their claim for rescission wasn’t time-barred because the running of the

three-year limitation period should be equitably tolled.

                                           II.

       “We review de novo the grant of a Rule 12(b)(6) motion to dismiss for failure

to state a claim.” Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir. 2010). “Dismissal

                                            3
is appropriate only if the complaint, viewed in the light must favorable to plaintiff,

lacks enough facts to state a claim to relief that is plausible on its face.” United

States ex rel. Conner v. Salina Reg’l Health Ctr., Inc., 543 F.3d 1211, 1217

(10th Cir. 2008) (internal quotation marks omitted).

      “Generally, the sufficiency of a complaint must rest on its contents alone.”

Gee, 627 F.3d at 1186. But there are limited exceptions to this general rule. Id.

Those include: “documents referred to in the complaint if the documents are central

to the plaintiff’s claim and the parties do not dispute the documents’ authenticity”

and “matters of which a court may take judicial notice.” Id. (internal quotation marks

omitted).

      On appeal, the Raders argue that the district court erred by not accepting their

allegations as true and by considering evidence outside the scope of the complaint.

We disagree.

      For purposes of TILA, “[c]onsummation means the time that a consumer

becomes contractually obligated on a credit transaction.” 12 C.F.R. § 226.2(a)(13).

The question of when a consumer becomes contractually obligated is determined by

state law. See id. § 226.2(b)(3) (“Unless defined in this regulation, the words used

have the meanings given to them by state law or contract.”); id. Pt. 226 Supp. I,

Subpt. A, § 226(a)(13) (providing that “State law governs” consummation under

§ 226.2(a)(13) because “[w]hen a contractual obligation on the part of a consumer is

created is a matter to be determined under applicable law”). Under Colorado law, a

contract is formed when there is “mutual assent to an exchange, between competent

                                            4
parties, with regard to a certain subject matter, for legal consideration. Indus. Prods.

Int’l, Inc. v. Emo Trans, Inc., 962 P.2d 983, 988 (Colo. App. 1997).

        As noted above, the Raders alleged the loan wasn’t consummated at the

closing in 2003 because there was no mutual assent between GreenPoint and

themselves, GreenPoint wasn’t competent to contract, and GreenPoint provided no

consideration. But their allegations are implausible and contradicted by documents

properly before the district court.

        “Manifestation of mutual assent to an exchange requires that each party either

make a promise or begin or render a performance.” Restatement (Second) of

Contracts, § 18 (Am. Law Inst. 1981); see also, e.g., FDIC v. Fisher, 292 P.3d 934,

937 n.2 (Colo. 2013) (“In signing the Third Extension, the parties manifested their

mutual assent to the new loan terms.”). Mutual assent to the contract is shown here

by facts that are subject to judicial notice, are contained in the Mortgage Loan

documents that are central to the Raders’ claim, or are contained in the Raders’ own

affidavits. Those facts show that Steven Rader and GreenPoint signed the Mortgage

Loan documents, whereby Steven Rader acknowledged receiving a loan of $630,000

from GreenPoint in exchange for a promise to pay back the funds, with interest, and

pledged his property to GreenPoint as security for the loan. The Raders then began

performing the terms of the contract by making payments on the loan from 2003 to

2008.

        Competency to make a contract under Colorado law simply refers to the legal

capacity to enter into contracts, which is presumed to exist, see Forman v. Brown,

                                           5
944 P.2d 559, 562 (Colo. App. 1996) (“Every person is presumed by the law to be

sane and competent for the purposes of entering into a contract.”). The Raders

alleged that GreenPoint “was not a party competent to enter into the loan agreement

as it did not have funds to loan, as it was not the true lender, and did not lend any

money.” Aplt. App. at 10. But again, the undisputed facts from properly considered

documents show the Raders received the funds GreenPoint agreed to provide them

under the Mortgage Loan. Thus, the Raders’ assertion that GreenPoint wasn’t

competent to contract because it didn’t have these funds and didn’t provide them to

the Raders is not a well-pleaded allegation that must be accepted as true. See

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[T]he tenet that a court must accept as

true all of the allegations contained in a complaint is inapplicable to legal

conclusions.”); GFF Corp. v. Assoc. Wholesale Grocers, Inc., 130 F.3d 1381, 1385

(10th Cir. 1997) (“[F]actual allegations that contradict . . . a properly considered

document are not well-pleaded facts that the court must accept as true.”).

      Finally, although the Raders assert they didn’t receive consideration from

GreenPoint, the Mortgage Loan documents show that they received $630,000.

Whether GreenPoint or a third party provided the “consideration” to the Raders is

irrelevant to whether the Raders were contractually obligated under Colorado law.

See Int’l Paper Co. v. Cohen, 126 P.3d 222, 225 (Colo. App. 2005) (“The fact that

consideration comes from a third party, rather than from a promisee, does not render

the consideration legally insufficient, provided the promisor receives a benefit from

the third party as consideration for the agreement.”).

                                            6
      We conclude that the district court properly considered facts subject to judicial

notice and facts from documents central to the claim in the complaint in deciding the

motion to dismiss. In doing so, it didn’t improperly convert the motion to dismiss

into a motion for summary judgment. See Tal v. Hogan, 453 F.3d 1244, 1264 n.24

(10th Cir. 2006). We agree with the district court that the Raders’ petition failed to

plausibly allege that the loan was not consummated in 2003 and, therefore, their

claim for rescission expired in 2006.

      We also agree with the district court that the three-year rescission period can’t

be equitably tolled because “§ 1635(f) completely extinguishes the right of rescission

at the end of the 3-year period,” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412

(1998). The Raders argue that other courts have permitted equitable tolling of TILA

claims, but those cases involved claims for damages under 15 U.S.C. § 1640(e). See,

e.g., Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703, 706-07 (11th Cir. 1998);

King v. California, 784 F.2d 910, 914-15 (9th Cir. 1986). Section 1635(f) and

§ 1640(e) contain two distinct types of statutory time limitations. As the court

explained in Ellis:

      When Congress enacts statutes creating public rights or benefits, it can
      impose time limits on their availability. These time limits can either
      completely extinguish the right or simply bar the remedy for enforcement.
      In the former case, jurisdiction does not exist because the cause of action
      has been totally extinguished. In the latter case, the court continues to have
      jurisdiction and has the discretion to consider particular circumstances
      affecting the ability of a party seeking review to comply with the time
      limits, which can be tolled when principles of equity render their rigid
      application unfair.
160 F.3d at 706.

                                            7
       Section 1635(f) contains a time limitation that extinguishes the right, while

§ 1640(e) contains a time limitation that bars the remedy for enforcement and may be

subject to equitable tolling. Compare 15 U.S.C. § 1635(f) (“An obligor’s right of

rescission shall expire three years after the date of consummation of the transaction

. . . .”) with id. § 1640(e) (“[A]ny action under this section may be brought in any United

States district court, or in any other court of competent jurisdiction, within one year from

the date of the occurrence of the violation . . . .”); see also Beach, 523 U.S. at 412

(“[Section] 1635(f) completely extinguishes the right of rescission” (emphasis added));

Ellis, 160 F.3d at 706-08 (concluding the statute of limitations in § 1640(e) is subject to

equitable tolling); King, 784 F.2d at 913, 915 (explaining that § 1635 claim was “barred

by the three-year absolute limitation on rescission actions set out in 15 U.S.C. § 1635(f)”

but recognizing that equitable tolling might be appropriate for § 1640(e) claim). The

Raders’ claim for rescission was untimely as it was filed more than three years after the

consummation of the loan transaction, and it wasn’t subject to equitable tolling.

                                             III.

       The district court didn’t err in dismissing the Raders’ petition for failure to

state a claim upon which relief may be granted. Accordingly, we affirm the district

court’s judgment.


                                               Entered for the Court


                                               Nancy L. Moritz
                                               Circuit Judge


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