465 F.

3d 24

Amy PALMER, Plaintiff, Appellant,

v.
CHAMPION MORTGAGE, Defendant, Appellee.
No. 06-1246.

United States Court of Appeals, First Circuit.

Heard September 12, 2006.
Decided September 29, 2006.

Christopher M. Lefebvre, with whom Family and Consumer Law Center

was on brief, for appellant.
W. Scott O'Connell, with whom Paul M. Lanagan and Nixon Peabody
LLP were on brief, for appellee.
Before SELYA, Circuit Judge, SILER,* Senior Circuit Judge, and
HOWARD, Circuit Judge.
SELYA, Circuit Judge.

This case requires us to determine whether a consumer's professed lack of

comprehension of a notice of right to rescind alone suffices to pave the way for
belated rescission under the Truth in Lending Act (TILA), 15 U.S.C. 16011667. The district court concluded that a bald assertion of subjective confusion
did not trump the plain language of the disputed notice and dismissed the
plaintiff's amended complaint. The court then rebuffed the plaintiff's twopronged endeavor either to obtain reconsideration or to restate her claim. This
appeal followed. After careful consideration, we affirm.
I. BACKGROUND

Because this appeal follows the granting of a motion to dismiss under

Fed.R.Civ.P. 12(b)(6), we rehearse the facts as set forth in the plaintiff's
amended complaint. See Chongris v. Board of Appeals, 811 F.2d 36, 37 (1st
Cir.1987). Consistent with the case law, however, we eschew reliance on the
pleader's rhetorical flourishes, including unsupported conclusions and

assertions. See id.; see also Centro Medico del Turabo, Inc. v. Feliciano de
Melecio, 406 F.3d 1, 5-6 (1st Cir.2005).
3

In March of 2003, plaintiff-appellant Amy Palmer obtained a debtconsolidation loan, secured by a mortgage on her residence, from defendantappellee Champion Mortgage. The closing took place on March 28, 2003. The
plaintiff executed, then and there, a promissory note, a mortgage, a TILA
statement, and a settlement sheet. She left without receiving copies of any of
these documents.

Several days later, the plaintiff received by mail copies of the closing
documents. Included among these papers was a notice of right to cancel (the
Notice) a notification required by the TILA. See 15 U.S.C. 1635(a). In
relevant part, the Notice informed the plaintiff that:

You have a legal right under federal law to cancel this transaction, without cost,
within three (3) business days from whichever of the following events occurs
last:

(1) the date of the transaction, which is MARCH 28, 2003; or (date)

(2) the date you received your Truth-in-Lending disclosures; or

(3) the date you received this notice of your right to cancel.

The Notice further provided: "If you cancel by mail or telegram, you must send
the notice no later than midnight of APRIL 01, 2003 (or midnight of the third
business day following the latest of the three (3) events listed above)."

10

Although the plaintiff cannot remember the specific date on which she received
the documents, she allegesand for present purposes we acceptthat they
arrived in early April of 2003, but after April 1. At any rate, nothing happened
for well over a year. Then, on or about August 6, 2004, the plaintiff notified
Champion of her intent to rescind the transaction.

11

When Champion failed to respond to the plaintiff's importunings, she sued in

federal district court. Her complaint alleged that the inclusion of the April 1
deadline was confusing and that, therefore, she retained the right to rescind the
transaction under 15 U.S.C. 1635, which provides for an extended three-year
rescission period when a creditor fails to make one or more material disclosures

required under the TILA.

12

After some procedural skirmishing, not relevant here, the plaintiff served an
amended complaint. In tandem with the section 1635 claim, the amended
complaint asserted that a right to rescind the transaction also existed under the
TILA's state-law counterpart, Mass. Gen. Laws ch. 140D, 32. Champion
moved to dismiss on the ground that the amended complaint failed to state a
cognizable claim. See Fed. R.Civ.P. 12(b)(6). The lower court allowed this
motion, concluding that "[t]he Notice the plaintiff received clearly and
conspicuously advised her of her right to cancel the transaction within three
business days from the last to occur of three events, one of which was the date
she received the notice of right to cancel." Thus, the court reasoned, the
plaintiff had received the full complement of disclosures stipulated by the TILA
and her belated attempt to rescind the transaction was time-barred.2

13

Undaunted, the plaintiff moved for reconsideration, see Fed.R.Civ.P. 59(e), or

in the alternative, for leave to file a second amended complaint, see
Fed.R.Civ.P. 15(a). The district court denied both entreaties. In refusing leave
to amend, the court emphasized that the complaint had already been amended
once and that the motion to dismiss had been pending for several months before
the court disposed of it. This timely appeal followed.
II. ANALYSIS

14

On appeal, the plaintiff contests the district court's allowance of Champion's

motion to dismiss, as well as the denial of her requests for reconsideration and
for leave to file a second amended complaint.3 We discuss these claims of error
sequentially.

A. The Motion to Dismiss.

15

We review dismissals for failure to state a claim de novo, accepting all wellpleaded facts as true and giving the party who has pleaded the contested claim
the benefit of all reasonable inferences. See Rogan v. Menino, 175 F.3d 75, 77
(1st Cir.1999). Thus, our primary task here is to determine whether, viewing
the facts in the light most flattering to the plaintiff, she articulated an actionable
TILA claim.

16

We begin this inquiry with a synopsis of the relevant portions of the federal
statute. Congress enacted the TILA in 1968 "to assure a meaningful disclosure
of credit terms" and "to protect the consumer against inaccurate and unfair

credit . . . practices." 15 U.S.C. 1601(a). To this end, the TILA requires

creditors to disclose clearly and accurately all the material terms of a credit
transaction. See Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412, 118 S.Ct. 1408,
140 L.Ed.2d 566 (1998).
17

With respect to non-purchase-money mortgages on residential dwellingsthe

type of credit transaction at issue here the TILA confers upon the debtor a
right to rescind within three days of the transaction's consummation or three
days from delivery of the material disclosures, whichever occurs later.4 See 15
U.S.C. 1635(a). The creditor also must clearly disclose this rescission right to
the debtor. See 12 C.F.R. 226.23(b)(1). Should a creditor fail to deliver any of
the required material disclosures (including notice of the right to rescind), the
debtor may rescind at any time up to three years following the consummation
of the transaction. See id. 226.23(a)(3). If a creditor does not respond to a
rescission request within twenty days, the debtor may file suit in federal court
to enforce the rescission right. See Belini v. Wash. Mut. Bank, 412 F.3d 17, 20
(1st Cir.2005); see also 15 U.S.C. 1635(b).

18

We move now from the general to the particular. The plaintiff in this case
concedes that she received copies of all the material disclosures mandated
under the TILA but alleges that the Notice was "defective" and "confusing."
She points specifically to the inclusion of a date-certain deadline for rescission
(April 1, 2003) and complains that the designated date already had passed by
the time she received the Notice. Relying on our admonition that "a misleading
disclosure is as much a violation of TILA as a failure to disclose at all," Barnes
v. Fleet Nat'l Bank, 370 F.3d 164, 174 (1st Cir.2004) (quoting Smith v.
Chapman, 614 F.2d 968, 977 (5th Cir.1980)), she asseverates that the confusing
nature of the Notice triggered the extended three-year rescission period.

19

Champion readily concedes, as it must, that the Notice included an April 1

deadline for rescission. But it hastens to add that the Notice twice indicated in
plain language that, in the alternative, the debtor had three business days after
receipt of the Notice within which to rescind. To strengthen its argument,
Champion observes that the Notice is identical in all material respects to the
model form authored by the Federal Reserve Board, and that other courts have
found such adherence to be an impenetrable shield against TILA-based attacks.
See, e.g., Gibson v. Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 286 (7th
Cir.1997); Murphy v. Empire of Am., 583 F.Supp. 1563, 1566 (W.D.N.Y.1984);
see also In re Porter, 961 F.2d 1066, 1076 (3d Cir.1992) (explaining that "use
of an appropriate model form necessarily complies with the [TILA]" (emphasis
omitted)). Based on the Notice's plain language and its adherence to the model
form, Champion urges us to disregard the plaintiff's subjective state of mind

and join the district court in holding the Notice adequate as a matter of law.
20

We find Champion's argument compelling. Although we are required to view

the well-pleaded facts in the light most favorable to the plaintiff, we need not
"swallow [her] invective hook, line, and sinker." Aulson v. Blanchard, 83 F.3d
1, 3 (1st Cir.1996). As part and parcel of this approach, we must refrain from
crediting her "bald assertions, unsupportable conclusions, and `opprobrious
epithets.'" Chongris, 811 F.2d at 37 (quoting Snowden v. Hughes, 321 U.S. 1,
10, 64 S.Ct. 397, 88 L.Ed. 497 (1944)); accord Aulson, 83 F.3d at 3. This
methodology is particularly appropriate in the TILA context where we, like
other courts, have focused the lens of our inquiry on the text of the disclosures
themselves rather than on plaintiffs' descriptions of their subjective
understandings. See, e.g., Barnes, 370 F.3d at 172-74 (examining the language
of disputed disclosures in the face of plaintiff's claim that they were
misleading); Zamarippa v. Cy's Car Sales, Inc., 674 F.2d 877, 879 (11th
Cir.1982) (noting that "it is unnecessary to inquire as to the subjective
deception or misunderstanding of particular consumers" in determining whether
a disclosure violates the TILA); Bustamante v. First Fed. Sav. & Loan Ass'n,
619 F.2d 360, 364 (5th Cir.1980) (applying objective standard in evaluating
TILA claim).

21

This emphasis on objective reasonableness, rather than subjective

understanding, is also appropriate in light of the sound tenet that courts must
evaluate the adequacy of TILA disclosures from the vantage point of a
hypothetical average consumera consumer who is neither particularly
sophisticated nor particularly dense. See Smith v. Cash Store Mgmt., Inc., 195
F.3d 325, 327-28 (7th Cir.1999) (explaining that TILA disclosures should be
viewed from the perspective of an ordinary consumer, not a federal judge); see
also Edmondson v. Allen-Russell Ford, Inc., 577 F.2d 291, 296 (5th Cir.1978)
("We must assess the adequacy of disclosure . . . by the audience for which
disclosure was intended."). Thus, we turn to the question of whether the
average consumer, looking at the Notice objectively, would find it confusing.
We conclude that she would not.

22

The Notice itself is annexed to the amended complaint and, therefore, is

deemed fair game on a motion to dismiss. See Centro Medico del Turabo, 406
F.3d at 5; Rodi v. S. New Engl. Sch. of Law, 389 F.3d 5, 12 (1st Cir.2004); In re
Colonial Mortg. Bankers Corp., 324 F.3d 12, 15 (1st Cir.2003). It clearly and
conspicuously indicates that the debtor can rescind "within three (3) business
days from whichever of [three enumerated] events occurs last." Although the
Notice does state in part that rescission has to occur "no later than midnight of
APRIL 01, 2003," the plaintiff wrests this statement from its contextual

moorings. The statement is followed immediately by a parenthetical reading "

(or midnight of the third business day following the latest of the three (3)
events listed above)." We fail to see how any reasonably alert personthat is,
the average consumerreading the Notice would be drawn to the April 1
deadline without also grasping the twice-repeated alternative deadlines.
23

This facial transparency is bolstered by the fact that the language of the Notice
closely tracks the language of the model form. This is, at the very least, prima
facie evidence of the adequacy of the disclosure.5 See 12 C.F.R. 226 Supp. I,
Intro. para. 1 ("Good faith compliance with [the Federal Reserve Board's]
commentary affords protection from liability under [the TILA]."). Accordingly,
we agree with the district court that the Notice was crystal clear and, thus, did
not trigger an extended rescission right under the TILA.

24

If more were neededand we doubt that it iswe note that accepting the
plaintiff's argument might contravene the goals of the TILA. Holding all parties
to the plain language of disclosures aids the due enforcement of the statutory
requirements by ensuring that any consumer subject to a misleading disclosure
may bring suit against the creditor. See Chapman, 614 F.2d at 971 (observing
that "consumers who are aware of the true terms of a contract are more able to
see that these terms are not clearly and conspicuously disclosed"). The flip side
of the coin, of course, is that any creditor who uses plain and legally sufficient
language ought to be held harmless. In other words, courts ought not to invent
ambiguities that do not in fact exist.

25

The plaintiff attempts to circumvent this relatively straightforward analysis by

citing a raft of cases in which notices of rescission rights were found wanting.
In each of those cases, however, the notice was either given prior to the closing
and phrased so that the rescission deadline expired before the loan closed, see,
e.g., Jackson v. Grant, 890 F.2d 118, 122 (9th Cir.1989); Basnight v. Diamond
Developers, Inc., 146 F.Supp.2d 754, 758 (M.D.N.C.2001); In re Vickers, 275
B.R. 401, 404-05 (Bankr.M.D.Fla.2001), or stated only a single fixed rescission
deadline that had elapsed prior to delivery of the notice, see, e.g., In re Bell, 309
B.R. 139, 157 (Bankr.E.D.Pa.2004), or stated no rescission deadline
whatsoever, see, e.g., Semar v. Platte Valley Fed. Sav. & Loan Ass'n., 791 F.2d
699, 702 (9th Cir.1986); Reynolds v. D & N Bank, 792 F.Supp. 1035, 1038
(E.D.Mich.1992); Johnson v. Thomas, 342 Ill.App.3d 382, 276 Ill.Dec. 669,
794 N.E.2d 919, 931 (2003). The Notice here does not suffer from any of these
infirmities.

26

That ends this aspect of the matter. Because we find the Notice clear and
adequate, and because the plaintiff otherwise concedes receiving all the

required disclosures, her right of rescission under the TILA had long expired by
the time she commenced this action. Accordingly, the district court did not err
in dismissing the action on the ground that the plaintiff's TILA claim was timebarred.
B. The Motion for Reconsideration.
27

We need not linger long over the plaintiff's objection to the denial of her motion
for reconsideration. The granting of a motion for reconsideration is "an
extraordinary remedy which should be used sparingly." 11 Charles Alan Wright
et al., Federal Practice and Procedure 2810.1 (2d ed.1995). Unless the court
has misapprehended some material fact or point of law, such a motion is
normally not a promising vehicle for revisiting a party's case and rearguing
theories previously advanced and rejected. See In re Sun Pipe Line Co., 831
F.2d 22, 24-25 (1st Cir.1987). To obtain relief, the movant must demonstrate
either that newly discovered evidence (not previously available) has come to
light or that the rendering court committed a manifest error of law. See Marie v.
Allied Home Mortg. Corp., 402 F.3d 1, 7 n. 2 (1st Cir.2005). The standard of
appellate review is correspondingly deferential: we will not overturn the district
court's denial of a motion for reconsideration absent an abuse of discretion. See
Iverson v. City of Boston, 452 F.3d 94, 104 (1st Cir.2006); In re Sun Pipe Line,
831 F.2d at 25.

28

Here, the plaintiff's motion for reconsideration did no more than reiterate the
arguments she earlier had advanced, claiming somewhat counterintuitively that
the district court had "overlooked" her allegation that the Notice was confusing.
Since the court had not overlooked that allegation but, rather, had found it
wanting, the motion was denied. We discern no hint of error.

C. The Request for Leave to Amend.

29

As a last-ditch measure, the plaintiff contests the district court's refusal to allow
her to file a second amended complaint. We review this ruling for abuse of
discretion. James v. Watt, 716 F.2d 71, 77-78 (1st Cir.1983). In conducting that
review, we "will defer to the district court's hands-on judgment so long as the
record evinces an adequate reason for the denial." Aponte-Torres v. Univ. of
P.R., 445 F.3d 50, 58 (1st Cir.2006).

30

In this instance, there is a temporal wrinkle: the plaintiff requested further leave
to amend only after the district court dismissed her first amended complaint. If
made subsequent to the entry of judgment, such requests, whatever their merit,
cannot be allowed unless and until the judgment is vacated under, say,

Fed.R.Civ.P. 60. See 6 Federal Practice and Procedure, supra, 1489 (2d
ed.1990). Here, no such vacation occurred.
31

We need not probe this point too deeply. The record below is tenebrous as to
timing, see supra note 2, and it is arguable that the plaintiff's request to amend
antedated the formal entry of judgment. But even if we assume for argument's
sake that the vacation-of-judgment barrier does not pertain, that assumption
would not salvage the plaintiff's cause. In that event, the district court would
have had to evaluate the plaintiff's request under the liberal standard of
Fed.R.Civ.P. 15(a). Even so, we nevertheless would uphold the district court's
rejection of the request to amend.

32

Our analysis is as follows. Amendments may be permitted pre-judgment, even

after a dismissal for failure to state a claim, and leave to amend is "freely given
when justice so requires." Fed. R.Civ.P. 15(a). That is not to say, however, that
a district court lacks authority to deny a request to amend. In appropriate
circumstancesundue delay, bad faith, futility, and the absence of due
diligence on the movant's part are paradigmatic examplesleave to amend
may be denied. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9
L.Ed.2d 222 (1962). In short, a request to amendespecially a belated request
requires the court to examine the totality of the circumstances and to exercise
its informed discretion in constructing a balance of pertinent considerations. See
Quaker State Oil Ref. Corp. v. Garrity Oil Co., 884 F.2d 1510, 1517 (1st
Cir.1989).

33

On this occasion, the plaintiff made her request for leave to amend more than
fifteen months after commencing her action and more than nine months after
initially amending her complaint. Her proposed second amendment sought to
assert a new theory based on the timing of Champion's disbursement of the loan
proceeds. This is not an instance in which newly discovered evidence, not
previously available, suddenly came to light; the plaintiff was aware of the
factual predicate on which her new theory rested before she brought suit.
Considering the totality of the circumstances, we conclude that the district
court had sufficient reason to reject the plaintiff's belated attempt to amend her
complaint yet again. Consequently, we find no abuse of the district court's wide
discretion.
III. CONCLUSION

34

We need go no further. For the reasons elucidated above, we hold that, as a

matter of law, the notice of right to cancel provided by Champion complied

with the applicable TILA requirements. The plaintiff's statutory right to rescind
therefore expired three days after she received the Notice, and the district court
did not err in dismissing her TILA claim as time-barred. By like token, the
district court did not abuse its discretion either in denying the plaintiff's motion
for reconsideration or in refusing to grant her leave to file a second amended
complaint.
35

Affirmed.

Notes:
*

Of the Sixth Circuit, sitting by designation

Relatedly, the district court ruled that no claim inhered under the Massachusetts
statute invoked by the plaintiff, because that statute was preempted by the
TILA. Since the plaintiff does not challenge this ruling on appeal, we make no
further mention of the state-law claim

In her brief, the plaintiff directs our attention to the incorrect termination of the
case one day prior to the actual entry of judgment, in violation of Fed.R.Civ.P.
58(a)(1). We acknowledge that this technical bevue occurred, but in the
circumstances of this case any error was patently harmless. The plaintiff is not,
therefore, entitled to relief on this accountSee Alternative Sys. Concepts, Inc. v.
Synopsys, Inc., 374 F.3d 23, 30 (1st Cir.2004).

It is unsettled whether Massachusetts citizens retain a rescission right under the

TILA, given the statutory exemption granted to Massachusetts and the
concomitant Federal Reserve regulationsSee 15 U.S.C. 1633; Belini v. Wash.
Mut. Bank, 412 F.3d 17, 28 (1st Cir.2005). Inasmuch as the plaintiff has failed
to state a valid claim for rescission under the TILA, see text infra, it is
unnecessary for us to resolve this thorny issue.

There is some statutory support for the proposition that adherence to a model
form bars a TILA non-disclosure claim entirelySee 15 U.S.C. 1604(b),
1635(h), 1640(f). There is also some case law to that effect. See, e.g., Bob
Watson Chevrolet-Geo, 112 F.3d at 286; Murphy, 583 F.Supp. at 1566. The
case at hand does not require that we go that far, and so we leave for another
day the question of whether such adherence invariably brings a creditor within
a safe harbor.