FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KATHRYN MCOMIE-GRAY, 

Plaintiff-Appellant, No. 10-16487

v. D.C. No.  2:09-cv-02422- BANK OF AMERICA HOME LOANS,

MCE-EFB FKA Countrywide Home Loans,

Inc., OPINION

Defendant-Appellee. 

Appeal from the United States District Court

for the Eastern District of California

Morrison C. England, District Judge, Presiding

Argued and Submitted

December 6, 2011—San Francisco, California

Filed February 8, 2012

Before: Carlos T. Bea and Stephen S. Trott, Circuit Judges,

and Rebecca R. Pallmeyer, District Judge.*

Opinion by Judge Pallmeyer

* The Honorable Rebecca R. Pallmeyer, United States District Judge for

the Northern District of Illinois, sitting by designation. 

1355
COUNSEL

Thomas A. Jenkins and Daniel Joseph Mulligan, San Diego,

California; Larry Wayne Gabriel, Woodland Hills, California;

Jenkins Mulligan & Gabriel LLP; Pamela Simmons, Simmons & Purdy, Soquel, California, for the plaintiff-appellant.

James Goldbert, Bryan Cave LLP, San Francisco, California,

for the defendant-appellee.

Tara A. Twomey, Carmel, California, for the amicus.

MCOMIE-GRAY v. BANK OF AMERICA 1357
OPINION

PALLMEYER, District Judge:

Kathryn McOmie-Gray appeals the dismissal of her lawsuit

for failure to state a claim upon which relief may be granted

pursuant to Federal Rule of Civil Procedure 12(b)(6).

McOmie-Gray sought rescission of her loan secured by a trust

deed with Bank of America Home Loans (“the Bank”) for

alleged violations of disclosure requirements under the federal

Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. On

the Bank’s motion, the district court dismissed the suit as

untimely because it was filed after the three-year period set by

15 U.S.C. § 1635(f). McOmie-Gray argues that because she

gave the Bank timely notice of rescission, she was not

required to bring suit within the three-year period, and the district court erred in dismissing this case. 

For us, the question presented is a matter of first impression. McOmie-Gray cites decisions from several district

courts in this circuit that apply the one-year statute of limitations set forth in 15 U.S.C. § 1640(e), measuring the time

from the date on which the lender fails to respond to the borrower’s notice of rescission. We disagree with those courts,

and conclude, as set forth below, that the time limit established by 15 U.S.C. § 1635(f) is applicable here. Moreover, as

we explained in Miguel v. Country Funding Corp., 309 F.3d

1161 (9th Cir. 2002), 15 U.S.C. § 1635(f) is a three-year statute of repose, requiring dismissal of a claim for rescission

brought more than three years after the consummation of the

loan secured by the first trust deed, regardless of when the

borrower sends notice of rescission.

I

On April 14, 2006, McOmie-Gray obtained a first trust

deed loan from Paramount Equity Mortgage. At the closing,

McOmie-Gray was presented with several loan documents to

1358 MCOMIE-GRAY v. BANK OF AMERICA
sign, including two Notice of Right to Cancel forms.

McOmie-Gray alleges, however, that neither of these forms

explained when the borrower’s right to cancel would expire.

Subsequently, Paramount assigned its interest in the loan to

Countrywide Home Loans, Inc., a company that the Bank

later acquired.

On January 18, 2008, McOmie-Gray, through her attorney,

sent the bank notice of her intent to rescind the loan, citing the

Bank’s failure to advise McOmie-Gray of the final date to

cancel the transaction. The Bank refused rescission, asserting

that McOmie-Gray had received proper notice of her right to

rescind. According to McOmie-Gray, although the Bank initially refused to accept her notice of rescission, it “negotiated

with [her] for over a year regarding the rescission.” McOmieGray’s Opening Brief at 5. McOmie-Gray further alleges that

to facilitate this negotiation, the Bank agreed to toll the statute

of limitations with respect to her TILA claims until August

30, 2009. 

On August 28, 2009, McOmie-Gray filed a complaint with

the district court seeking rescission of the loan secured by a

first trust deed. On the Bank’s motion, the district court dismissed the initial complaint with leave to amend because

McOmie-Gray failed to allege tender. McOmie-Gray then

filed her First Amended Complaint on March 30, 2010. The

district court dismissed the First Amended Complaint as well.

In its June 23, 2010 order, the court concluded that McOmieGray’s right to rescission was subject to a three-year statute

of repose under 15 U.S.C. § 1635(f). Because this period

expired on its face on April 14, 2009—three years after the

consummation of the mortgage transaction—the court concluded that McOmie-Gray’s claim was time-barred. The court

made no mention of the alleged tolling agreement.

II

[1] TILA protects consumers from fraud, deception, and

abuse within the residential secured lending marketplace by

MCOMIE-GRAY v. BANK OF AMERICA 1359
mandating that lenders disclose certain information to borrowers. To ensure that lenders comply with these disclosure

requirements, TILA grants borrowers the right to rescind a

home-secured loan in the event the lender has failed to make

the required disclosures. Specifically, § 1635(a) provides that

a borrower shall have a right to rescind a loan secured by the

borrower’s residence by providing prompt notice to the creditor:

[T]he obligor shall have the right to rescind the

transaction until midnight of the third business day

following the consummation of the transaction or the

delivery of the information and rescission forms

required under this section together with a statement

containing the material disclosures required under

this subchapter, whichever is later, by notifying the

creditor, in accordance with regulations of the [Federal Reserve Board], of his intention to do so.

15 U.S.C. § 1635(a). Regulation Z, promulgated by the Federal Reserve Board, confirms that notification is the means by

which borrowers exercise their right to rescind: 

To exercise the right to rescind, the consumer shall

notify the creditor of the rescission by mail, telegram

or other means of written communication. Notice is

considered given when mailed, when filed for telegraphic transmission or, if sent by other means,

when delivered to the creditor’s designated place of

business.

12 C.F.R. § 226.23(a)(2). Rescission is not automatic upon a

borrower’s mere notice of rescission, as McOmie-Gray contends, however. Instead, where a lender fails to comply with

§ 1635(b), the statute and regulations contemplate that a borrower, who by sending notice of rescission has “advanced a

claim seeking rescission,” will seek a determination that

1360 MCOMIE-GRAY v. BANK OF AMERICA
rescission is proper. Large v. Conseco Fin. Servicing Corp.,

292 F.3d 49, 55 (1st Cir. 2002). 

[2] Section 1635 does not explicitly establish a time limit

in which borrowers must bring suit for rescission if a lender

does not comply with the rescission request. Indeed, it “says

nothing in terms of bringing an action” or “a suit’s commencement.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 417

(1998). Where the borrower alleges, as McOmie-Gray has

here, that “proper notice of rescission rights is not delivered

to the consumer at the time of closing, and the lender fails to

cure the omission by subsequently providing the proper information, the consumer’s usual right to rescind within three

days of closing is extended to three years.” Miguel v. Country

Funding Corp., 309 F.3d 1161, 1163 (9th Cir. 2002). Specifically, § 1635(f) provides: 

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). In another section of the Act, 15 U.S.C.

§ 1640, Congress created a claim for damages for a lender’s

violation of TILA, adopting a one-year statute of limitations

for such actions. This provision makes no mention of rescission which, as noted, is governed by § 1635 and its three-year

statute of repose.

III

[3] Were we writing on a blank slate, we might consider

whether notification within three years of the transaction

could extend the time limit imposed by § 1635(f). But under

the case law of this court and the Supreme Court, rescission

MCOMIE-GRAY v. BANK OF AMERICA 1361
suits must be brought within three years from the consummation of the loan, regardless whether notice of rescission is

delivered within that three-year period. 

In Beach, the Supreme Court addressed whether mortgagors, who never sent a notice of rescission to the lender, could

nonetheless raise the right of rescission as “an affirmative

defense in a collection action brought more than three years

after the consummation of the transaction.” 523 U.S. at 411-

12. The mortgagors conceded 

that any right they may have had to institute an independent proceeding for rescission under § 1635

lapsed . . . three years after they closed the loan with

the bank, but they argue[d] that the restriction to

three years in § 1635(f) is a statute of limitation governing only the institution of suit and accordingly

has no effect when a borrower claims a § 1635 right

of rescission as a “defense in recoupment” to a collection action.

Id. at 415. The Court rejected this proposed reading of

§ 1635(f). Specifically, the Court observed that

[s]ection 1635(f) . . . 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 417 (alteration in original). The plain meaning of the

Act, the Court concluded, “permits no federal right to rescind,

defensively or otherwise, after the 3-year period of § 1635(f)

1362 MCOMIE-GRAY v. BANK OF AMERICA
has run.” Id. at 419 (emphasis added). Thus, the Court held

that the mortgagor could not raise the right to rescind as a

defense to the mortgagee’s foreclosure action after the threeyear period had run. Id. The language the Court used, however, broadly assumes that a three-year limitation governs

cases where a borrower, as plaintiff, seeks rescission of the

mortgage transaction.

Following the Supreme Court’s holding in Beach, we

addressed the question whether a borrower may file a lawsuit

seeking rescission beyond the three-year period if the borrower never sent a timely notice of rescission. Miguel, 309

F.3d 1161. In Miguel, the borrowers refinanced their home on

December 1, 1994. On November 7, 1997, the borrowers sent

notice of rescission to the mortgage servicer, an agent of the

actual lienholder. The borrowers filed suit against the agent

on December 1, 1997, exactly three years from the closing

date. When the borrowers realized that they had sued the

wrong entity, they filed an amended complaint that included

the lienholder as a defendant on June 17, 1998, well after the

three-year period had expired. The district court concluded

that the borrower was entitled to rescission. Id. at 1162-63. 

[4] On appeal, we reversed and held that the borrowers’

right to rescission had expired because the bank did not

receive a notice of rescission within three years from the consummation of the transaction. Id. at 1165. We relied on Beach

and a Ninth Circuit opinion holding “that section 1635(f) represents an ‘absolute limitation on rescission actions’ which

bars any claims filed more than three years after the consummation of the transaction.” Id. at 1164 (citing King v. California, 784 F.2d 910, 913 (9th Cir. 1986)). The Miguel court

concluded in broad language that “§ 1635(f) is a statute of

repose, depriving the courts of subject matter jurisdiction

when a § 1635 claim is brought outside the three-year limitation period.” Id. at 1164. Section 1635(f) is therefore not

merely a statute of limitations—it completely extinguishes the

underlying right itself. The plaintiff in Miguel argued that her

MCOMIE-GRAY v. BANK OF AMERICA 1363
notice of rescission triggered an additional one-year period for

filing suit under § 1640. We concluded, however, that § 1640

was irrelevant, and now hold that adopting § 1640’s one-year

statute of limitations to rescission actions contradicts the plain

language of the statute. 

[5] We are bound by Miguel, not only as to its “logically

necessary” holdings but also as to its reasoned dicta. See U.S.

v. Johnson, 256 F.3d 895, 914 (9th Cir. 2001) (en banc).

“[W]here a panel confronts an issue germane to the eventual

resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of

the circuit, regardless of whether doing so is necessary in

some strict logical sense.” Id. at 914. We thus adhere to

Miguel’s conclusion that § 1635(f) is a statute of repose that

represents an absolute three-year bar on rescission actions.

We recognize, however, that the Supreme Court has established a clear-statement rule for treating a statutory limitation

on coverage as jurisdictional. See Gonzalez v. Thaler, ___ S.

Ct. ___, 2012 WL 43513, at *4 (Jan. 10, 2012); Arbaugh v.

Y & H Corp., 546 U.S. 500, 515 (2006). Consistent with this

intervening Supreme Court precedent, though the three-year

statute is mandatory and enforceable, we withdraw our characterization of that bar as jurisdictional. 

[6] Because § 1635(f) is a statute of repose, it extinguished

McOmie-Gray’s right to rescission on April 14, 2009, three

years after the consummation of the loan. McOmie-Gray did

not file her rescission suit until August 28, 2009. Therefore,

the district court properly dismissed this case as untimely and,

as McOmie-Gray herself conceded at oral argument, whether

she and Bank of America Home Loans had an agreement tolling the statute of limitations is irrelevant.

AFFIRMED.

1364 MCOMIE-GRAY v. BANK OF AMERICA