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Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 15-1412

_____________

JUDITH CUNNINGHAM;

FREDERICK D. DEIMLER, III;

CAROL VANOVER, individually and on behalf of all others 

similarly situated,

Appellants

v.

M&T BANK CORP.; M&T BANK;

M&T MORTGAGE REINSURANCE COMPANY, INC.;

MORTGAGE GUARANTY INSURANCE CORP.;

GENWORTH MORTGAGE INSURANCE 

CORPORATION

________________

Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. Civil Action No. 1-12-cv-01238)

District Judge: Honorable Christopher C. Conner

________________

Submitted Under Third Circuit LAR 34.1(a)

January 12, 2016

Case: 15-1412 Document: 003112211406 Page: 1 Date Filed: 02/19/2016
2

Before: McKEE, Chief Judge, AMBRO, 

and SCIRICA, Circuit Judges

(Opinion filed February 19, 2016)

Edward W. Ciolko, Esquire

Terence S. Ziegler, Esquire

Donna S. Moffa, Esquire

Natalie Lesser, Esquire

Kessler Topaz Meltzer & Check

280 King of Prussia Road

Radnor, PA 19087

Counsel for Appellants

David J. Bird, Esquire

Reed Smith

225 Fifth Avenue, Suite 1200

Pittsburgh, PA 15222

Andrew J. Soven, Esquire

Reed Smith 

1717 Arch Street

Three Logan Square, Suite 3100

Philadelphia, PA 19103

Counsel for Appellees

________________

OPINION OF THE COURT

________________

Case: 15-1412 Document: 003112211406 Page: 2 Date Filed: 02/19/2016
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AMBRO, Circuit Judge

Judith Cunningham, Frederick Deimler III, and Carol 

Vanover (collectively, “Plaintiffs”) claim to represent a 

nationwide class of homeowners who were victims of a 

captive reinsurance scheme perpetrated by M&T Bank 

Corporation, M&T Bank, and M&T Mortgage Reinsurance 

Company (collectively, “M&T”). Plaintiffs filed this lawsuit 

several years after the applicable statute of limitations had 

expired. After allowing discovery related to the timeliness of 

Plaintiffs’ claims, the District Court granted summary 

judgment for M&T. As the Court explained, Plaintiffs’ 

claims were untimely and not subject to equitable tolling. 

Because we agree that equitable tolling does not apply to 

these claims, we affirm. 

I.

Plaintiffs obtained residential mortgage loans from 

M&T Bank to finance the purchase of their homes. When a 

borrower seeks a mortgage loan that exceeds 80% of the 

value of the residence, he or she must ordinarily agree to pay 

for insurance to protect the lender from the risk of default. 

Private mortgage insurance thus permits lenders such as 

M&T Bank to extend credit at lower interest rates and to 

borrowers who might otherwise not be able to get a mortgage 

loan. Each Plaintiff fell into this category and had to buy 

insurance as a condition of his or her mortgage. Each paid 

premiums to a private mortgage insurer and, in case of 

default, M&T Bank would be the beneficiary of the insurance 

agreement. As is customary in the industry, M&T Bank 

selected the insurers with whom the plaintiffs would contract. 

Companies offering private mortgage insurance will 

often contract with others for “reinsurance” of the risk they 

Case: 15-1412 Document: 003112211406 Page: 3 Date Filed: 02/19/2016
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hold. Under a reinsurance agreement, the reinsurance 

company assumes a portion of the risk associated with default 

in exchange for a percentage of the mortgage insurance 

premiums paid by the borrower. Reinsurance thus allows the 

insurer to manage its own risk and offer greater amounts of 

insurance at lower premiums. Many mortgage lenders 

operate their own “captive” companies that reinsure 

mortgages the lenders originated. In this case, M&T Bank 

referred Plaintiffs to private mortgage insurers who, in turn, 

reinsured the insurance policy with M&T Mortgage 

Reinsurance Company—M&T Bank’s captive reinsurer. 

Beginning in late 2011, counsel sent letters to 

Plaintiffs advising that they were investigating claims 

concerning M&T Bank’s captive mortgage reinsurance. 

Plaintiffs agreed to be part of a lawsuit against M&T and filed 

a putative class action complaint alleging violations of the 

Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. 

§ 2607, and unjust enrichment.1 

In the complaint, Plaintiffs claimed to represent a 

nationwide class of persons who obtained residential 

mortgage loans from M&T Bank that were reinsured by M&T 

Mortgage Reinsurance Company. They alleged that M&T 

Bank and its reinsurer colluded with private mortgage 

insurers, referring customers to the private mortgage insurers 

and receiving in return reinsurance agreements that required 

M&T Mortgage Reinsurance to take on little or no actual risk. 

 

1 Plaintiffs also named Mortgage Guaranty Insurance 

Corporation and Genworth Mortgage Insurance Corporation 

as defendants. After the District Court granted summary 

judgment for all defendants, Mortgage Guaranty and 

Genworth settled with Plaintiffs and they are not participating 

in this appeal. 

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This scheme allegedly violated RESPA’s anti-kickback and 

anti-fee-splitting provisions. See 12 U.S.C. § 2607(a)–(b). 

M&T moved to dismiss under Federal Rule of Civil 

Procedure 12(b)(6), arguing that RESPA’s one-year statute of 

limitations barred the claims of Plaintiffs and they were not 

entitled to equitable tolling of the limitations period. The 

District Court denied the motion, declining to resolve the 

fact-bound issue of equitable tolling until the parties could 

take discovery limited to that issue. Cunningham v. M&T 

Bank Corp., No. 12-cv-1238, 2013 WL 5876337, at *7 (M.D. 

Pa. Oct. 30, 2013); see also In re Cmty. Bank of N. Virginia, 

622 F.3d 275, 301–02 (3d Cir. 2010) (“Community Bank I”) 

(noting that the issue of equitable tolling is “not generally 

amenable to resolution on a Rule 12(b)(6) motion”). 

After discovery, M&T moved for summary judgment 

and the Court granted the motion. With the benefit of a more 

detailed factual record, it held that the claims were indeed 

time barred and that Plaintiffs could not equitably toll the 

limitations period. Cunningham v. M&T Bank Corp., No. 12-

cv-1238, 2015 WL 539761, at *6–8 (M.D. Pa. Feb. 10, 2015). 

This was so because none of them had exercised reasonable 

diligence in investigating any potential claims under RESPA. 

Plaintiffs appeal that decision.2 

 

2 Plaintiffs’ counsel also filed nearly a dozen identical 

lawsuits in this Circuit against mortgage lenders, private 

mortgage insurance companies, and mortgage reinsurance 

companies. Three cases (including this one) have proceeded 

to summary judgment, and in each the District Court has 

entered summary judgment for the defendants and concluded 

that the claims under RESPA were time barred and not 

subject to equitable tolling. Cunningham, 2015 WL 539761, 

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II.

The District Court had jurisdiction under 28 U.S.C. 

§ 1331. We have jurisdiction per 28 U.S.C. § 1291. Our 

review of the District Court’s grant of summary judgment is 

plenary. Seamans v. Temple Univ., 744 F.3d 853, 859 (3d 

Cir. 2014). A moving party is entitled to summary judgment 

only if “there is no genuine dispute as to any material fact and 

the movant is entitled to judgment as a matter of law.” Fed. 

R. Civ. P. 56(a). A dispute about a material fact is “genuine” 

only “if the evidence is such that a reasonable jury could 

return a verdict for the nonmoving party,” Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), as to whom all 

reasonable inferences must be drawn, Prowel v. Wise Bus. 

Forms, Inc., 579 F.3d 285, 286 (3d Cir. 2009).

 

at *6–8; Hill v. Flagstar Bank, No. 12-cv-2770, 2014 WL 

2892397, at *7 (E.D. Pa. June 26, 2014); Riddle v. Bank of 

Am. Corp., No. 12-cv-1740, 2013 WL 6061363, at *9 (E.D. 

Pa. Nov. 18, 2013). Last year, we affirmed the grant of 

summary judgment in one of those three cases in a nonprecedential opinion. Riddle v. Bank of America Corp., 558 

Fed. App’x 127, 130 (3d Cir. 2014). Finally, eight cases with 

substantially identical claims remain pending and have been 

stayed awaiting our decision in this appeal. Ba v. HSBC USA, 

Inc., No. 13-cv-0072 (E.D. Pa.); Barlee v. First Horizon Nat’l 

Corp., No. 12-cv-3045 (E.D. Pa.); Blake v. JPMorgan Chase 

Bank, N.A., No. 13-cv-6433 (E.D. Pa.); Hall v. Wachovia 

Bank, N.A., No. 13-cv-5994 (E.D. Pa.); Manners v. Fifth 

Third Bank, No. 12-cv-0442 (W.D. Pa.); Menichino v. 

Citibank, N.A., No. 12-cv-0058 (W.D. Pa.); Thurmond v. 

SunTrust Bank, No. 11-cv-1352 (E.D. Pa.); White v. PNC Fin. 

Servs. Grp., Inc., No. 11-cv-7928 (E.D. Pa.). 

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III.

Plaintiffs’ claims under RESPA have a one-year 

statute of limitations. 12 U.S.C. § 2614. It runs “from the 

date of the occurrence of the violation,” id., which begins at 

the closing of the loan, Community Bank I, 622 F.3d at 281. 

Cunningham, Deimler, and Vanover closed on their home 

mortgage loans in May 2007, June 2008, and October 2007, 

respectively. They filed suit in June 2012, several years after 

the statute of limitations had expired. 

Plaintiffs nonetheless argue that their RESPA claims 

are not time barred because they have satisfied the 

requirements to equitably toll the statute of limitations. 

Equitable tolling “can rescue a claim otherwise barred as 

untimely by a statute of limitations when a plaintiff has been 

prevented from filing in a timely manner due to sufficiently 

inequitable circumstances.” Santos ex rel. Beato v. United 

States, 559 F.3d 189, 197 (3d Cir. 2009). We have previously 

held that the statute of limitations in RESPA is not 

jurisdictional and is thus eligible for equitable-tolling 

consideration. In re Cmty. Bank of N. Virginia Mortgage 

Lending Practices Litig., 795 F.3d 380, 400 n.20 (3d Cir. 

2015) (“Community Bank II”). But “[e]quitable tolling is an 

extraordinary remedy which should be extended only 

sparingly.” Hedges v. United States, 404 F.3d 744, 751 (3d 

Cir. 2005); see also Wallace v. Kato, 549 U.S. 384, 396 

(2007) (“Equitable tolling is a rare remedy to be applied in 

unusual circumstances, not a cure-all for an entirely common 

state of affairs.”). 

Plaintiffs’ basis for tolling, also known as fraudulent 

concealment, requires them to show three elements: “(1) that 

the defendant actively misled the plaintiff; (2) which 

prevented the plaintiff from recognizing the validity of her 

claim within the limitations period; and (3) where the 

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plaintiff’s ignorance is not attributable to her lack of 

reasonable due diligence in attempting to uncover the relevant 

facts.” Cetel v. Kirwan Fin. Grp., Inc., 460 F.3d 494, 509 (3d 

Cir. 2006). “To demonstrate reasonable diligence [which 

means here, as noted below, to investigate possible claims], a 

plaintiff must ‘establish[] that he pursued the cause of his 

injury with those qualities of attention, knowledge, 

intelligence and judgment which society requires of its 

members for the protection of their own interests and the 

interests of others.’” Mest v. Cabot Corp, 449 F.3d 502, 511 

(3d Cir. 2006) (quoting Cochran v. GAF Corp., 666 A.2d 

245, 250 (Pa. 1995)). 

Plaintiffs argue that M&T Bank actively misled them 

regarding the nature and existence of their claims. But before 

Plaintiffs closed on their respective loans as mortgagors, each 

person received a disclosure form separate from the mortgage 

explaining reinsurance in plain language, stating that 

reinsurance could be with a company affiliated with the 

lender, that the reinsurance company would receive a 

percentage of the mortgage, and that the mortgagor had the 

opportunity to opt out of captive reinsurance. It read: 

Your lender or a subsequent holder of your loan 

(the “Lender”) may[,] directly or through an 

affiliated company (a “Reinsurance Company”), 

enter into a reinsurance agreement with the 

primary insurance company that will be 

providing the mortgage insurance covering your 

loan. 

Under a reinsurance agreement, the Reinsurance 

Company may assume a portion of the risk 

associated with such Mortgage Insurance. In 

exchange for its assumption of such risk, the 

Reinsurance Company receives a percentage of 

Case: 15-1412 Document: 003112211406 Page: 8 Date Filed: 02/19/2016
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the mortgage insurance premium paid to obtain 

the mortgage insurance covering your loan. 

The reinsurance agreement does not increase 

the amount you have to pay for mortgage 

insurance or the length of time you must 

maintain the insurance.

If you do not want the mortgage insurance on 

your loan to be reinsured with Lender’s 

Reinsurance Company you may check the “opt 

out” box below when you sign and 

acknowledge receipt of this disclosure. Your 

election to opt in or out will not affect our credit 

decision regarding your loan.

Each Plaintiff signed and dated the disclosure and none 

elected to opt out from reinsurance with an affiliate of M&T 

Bank. The mortgage documents also disclosed the possibility 

of captive reinsurance on a page of the mortgage each person 

initialed. Plaintiffs confirmed during depositions that they 

were aware at the time of closing of the possibility of captive 

reinsurance, though none recalled asking any questions about 

the reinsurance agreement. 

After the closing, Plaintiffs took no steps to investigate 

whether M&T Bank’s captive reinsurance program might 

violate state or federal law. They did not, for example, ask 

their mortgage insurer if their particular insurance policy had 

been reinsured and, if so, with whom. They did not seek the 

advice of an attorney, research captive reinsurance, request 

documents related to their mortgage insurance, or take any 

steps to discover if they had a claim under RESPA.3 

 

3

If Plaintiffs had taken some steps to investigate captive 

reinsurance, they would have found breadcrumbs leading 

them toward a potential RESPA claim. Captive reinsurance 

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Plaintiffs claim simply that it was not until late 2011 or early 

2012, when counsel asked them to join a lawsuit, that they 

became aware of the basis for a possible claim under RESPA. 

On these undisputed facts, we conclude that Plaintiffs 

have failed to show due diligence and cannot use equitable 

tolling to rescue otherwise time-barred claims. At the 

closing, Plaintiffs were made aware that the mortgage 

insurance on their home might be reinsured with an affiliate 

of M&T Bank and, at that moment, they had all the facts 

necessary to develop their claims under RESPA. Yet they 

failed to take any steps to investigate during the 

approximately four-year period between the time of the 

closing and the time that they were approached by counsel. 

This inaction was not reasonable diligence. 

Plaintiffs advance several arguments against summary 

judgment, but none persuade us that the District Court got it 

wrong. They first argue that they were, in fact, diligent. 

According to their theory of diligence, M&T Bank’s 

misrepresentations in the lengthy mortgage documents did not 

give them any reason to investigate. And in the absence of 

any “storm warnings” that would put them on notice of the 

 

arrangements date back to the late 1990s. Lawsuits 

challenging the arrangements as vehicles for illegal kickbacks 

soon followed. See, e.g., Baynham v. PMI Mortg. Ins. Co., 

No. 99-cv-241 (S.D. Ga. filed Dec. 17, 1999). And around 

the time Plaintiffs closed on their mortgage loans with M&T 

Bank, their current counsel had brought several nearly 

identical lawsuits against lenders and captive reinsurance 

companies in this area. See, e.g., Alston v. Countrywide Fin. 

Corp., 585 F.3d 753 (3d Cir. 2009) (complaint filed in August 

2007). 

Case: 15-1412 Document: 003112211406 Page: 10 Date Filed: 02/19/2016
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need for follow up, Plaintiffs assert that we can excuse their 

inaction until they were put on notice by a letter from a 

lawyer. We disagree. 

For one, most of the cases that Plaintiffs cite in support 

of this argument actually address the discovery rule, which 

relates to claim accrual (when the limitations period begins to 

run) rather than equitable tolling (the events that can stop the 

clock on a limitations period once it has begun to run). Under 

the discovery rule, a cause of action does not accrue until the 

plaintiff discovers or in the exercise of reasonable diligence 

should have discovered the basis for her claim against the 

defendant. See DeBenedictis v. Merrill Lynch & Co., 492 

F.3d 209, 216 (3d Cir. 2007); Benak ex rel. All. Premier 

Growth Fund v. All. Capital Mgmt. L.P., 435 F.3d 396, 400 

(3d Cir. 2006); In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 

1325 (3d Cir. 2002). In deciding when a diligent plaintiff 

would have discovered the basis of a claim, courts look for 

“storm warnings” that would put the plaintiff on notice of her 

injury. However, the discovery rule is not apt for RESPA 

claims because Congress specifically provided that the 

limitations period begins to run on “the date of the occurrence 

of the violation.” 12 U.S.C. § 2614; see also Macauley v. 

Estate of Nicholas, 7 F. Supp. 3d 468, 487 n.16 (E.D. Pa. 

2014) (“[C]ourts across the country have refused to apply the 

discovery rule to RESPA claims.”). It is thus irrelevant for 

purposes of the statute of limitations in RESPA when a 

reasonable plaintiff would have discovered her claim. 

Setting aside that distinction, however, what Plaintiffs 

ask us to do is to ignore the plain words of M&T Bank’s 

disclosure. Based on the disclosure, they were on notice that 

reinsurance for their mortgage loans was reasonably likely 

through an affiliate of M&T Bank. Armed with the facts 

necessary to allege their claim under RESPA, it is undisputed 

that they took no steps to investigate whether the reinsurance 

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arrangement was fully valid. See Oshiver v. Levin, Fishbein, 

Sedran & Berman, 38 F.3d 1380, 1390 (3d Cir. 1994) 

(“Equitable tolling . . . keys on a plaintiff’s cognizance, or 

imputed cognizance, of the facts supporting the plaintiff’s 

cause of action.”). Even if M&T Bank’s disclosure did not 

give Plaintiffs warning of the need to investigate, the onus is 

still on Plaintiffs in these circumstances to exercise some 

degree of diligence in order to receive the benefit of equitable 

tolling.

Plaintiffs’ reliance on our decision in Community Bank 

II is also misplaced. There, a class action brought on behalf 

of homeowners alleged that a residential mortgage loan 

business and two banks were involved in a predatory lending 

scheme in violation of RESPA. 795 F.3d at 385. Though 

some of the homeowners’ claims were barred by RESPA’s 

statute of limitations, class counsel argued that fraudulent 

concealment would toll the limitations period. On a motion 

to certify a class, defendants argued the issue of equitable 

tolling would be too individualized and too central to the 

litigation for certification under Rule 23(b)(3). See Fed. R. 

Civ. P. 23(b)(3) (class action may be maintained if, among 

other things, “the court finds that the questions of law or fact 

common to class members predominate over any questions 

affecting only individual members”). 

We rejected the argument, holding that commonality 

was satisfied despite the need for some class members to rely 

on fraudulent concealment. Regarding the due diligence 

element of fraudulent concealment, we noted that “when a 

wrongful scheme is perpetrated through the use of common 

documentation, such as the documents employed to 

memorialize each putative class member’s mortgage loan, full 

participation in the loan process is alone sufficient to establish 

the due diligence element.” Community Bank II, 795 F.3d at 

404. Plaintiffs focus on this language to argue that their 

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participation in the loan closing was sufficient to establish 

diligence. The decision made clear, however, that its 

discussion of fraudulent concealment was limited to the 

commonality question under Rule 23. It explicitly did not 

“not address whether the class members are actually entitled 

to equitable tolling on the merits,” id. at 404–5; thus it does 

not control our analysis of the very fact-specific doctrine of 

fraudulent concealment in this case. 

Finally, Plaintiffs argue that the District Court could 

not have properly resolved the question of equitable tolling by 

considering the lack of diligence without also considering 

M&T Bank’s misrepresentations. In effect, Plaintiffs argue 

that courts must analyze all the elements of fraudulent 

concealment before dismissing a time-barred claim. This is 

incorrect. To repeat, there are three elements for fraudulent 

concealment: “(1) that the defendant actively misled the 

plaintiff; (2) which prevented the plaintiff from recognizing 

the validity of her claim within the limitations period; and (3) 

where the plaintiff’s ignorance is not attributable to her lack 

of reasonable due diligence in attempting to uncover the 

relevant facts.” Cetel, 460 F.3d at 509. If a plaintiff with an 

otherwise time-barred claim has not presented sufficient 

evidence of even one of the three elements, summary 

judgment may be entered for the defendant.4 

 

4 The District Court also entered summary judgment against 

the Plaintiffs on their unjust enrichment claims. On appeal, 

they make no serious effort to challenge that decision. They 

simply allege that the District Court erred in dismissing the 

unjust enrichment claims for the same reasons it erred in 

dismissing the RESPA claims. They provide no authority for 

this argument and, in these circumstances, have waived it for 

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* * * * *

Statutes of limitations are “designed to promote justice 

by preventing surprises through the revival of claims that 

have been allowed to slumber until evidence has been lost, 

memories have faded, and witnesses have disappeared.” 

Order of R.R. Telegraphers v. Ry. Express Agency, 321 U.S. 

342, 348–49 (1944). We will sometimes make an exception 

to the rule where its rigid application would be unfair because 

a defendant concealed its wrong and prevented a diligent 

plaintiff from bringing her claim within the limitations period. 

This not such a case. Indeed, accepting Plaintiffs’ theory in 

this case—toll indefinitely the limitations period for claims 

under RESPA until a lawyer can find the right plaintiff to join 

a lawsuit and notify other putative plaintiffs—would 

effectively write the statute of limitations out of RESPA. We 

thus affirm the decision of the District Court granting 

summary judgment for M&T. 

 

purposes of appeal. See Kost v. Kozakiewicz, 1 F.3d 176, 182 

(3d Cir. 1993). 

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