F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

J E R R Y H O A N G ; L E U Y E

N T H I H O A N G , Plaintiffs-Appellants
,

v.

B A NK O F A ME R

I C A , N.A.; F E D E R AL N A T I ON

AL M O R T G A G E A S S O C I A T I ON , I

N C ., D efendants-Appellees. No. 17-35993

D.C. No. 2:17-cv-00874-J L R

OPI NI ON

Appeal from the United States District Court for the W e stern District of W ashing ton J ames L . Robart, Senior District J udg e, Presiding

Argued and Submitted October 12, 2018

Seattle, W a shing ton

F iled December 6, 2018

B efore: N. Randy

Smith and Morg an Christen, Circuit J u dg e s, and Robert E. Pay ne, * District J udg e.
Opinion by

J udg e N.R. Smith

* T h e Ho n orab le Ro b ert E. P ay n e, Sen io r Un ited States D i strict J u dg e f o r th e EasternDistrict o f

Virg in ia, sittin gb y

d esig n atio n

.H O A N G V

. B A

NK O F A M E R

I C A 2

SUMMARY * *

Truth in Lending Act

The panel reversed the district court’s d ismissal of an action broug ht by a borrower ag a inst B ank of America, N .A.,

a lleg ing claims under the Truth in L ending Act ( “ T I L A ” ) after the bank d eclared the borrower in default on a loan a nd initiated non-judicial foreclosure proceeding s.

I f a c r editor fails to make required disclosures under TI LA, b orrowers are a llowed three y ears f rom the loan’s consummation date t o rescind certain loans. 1 5 U .S.C. § 1635(f). T he borrower sent the bank notice of intent to rescind the loan within three y ears o f the consummation date.

The panel h eld that under Jesinoski v

. Countrywide Home Loans
, 135 S. Ct. 790, 792 (2015), borrowers may a f f ect

r e scission of such a loan simply by notifying the cred i t o r o f their intent to rescind within the three-year p e r i od f rom the loan’s consummation d a t e

. The panel further h eld that because TI L A did not include a statute of li m i t a t i ons outlining when an action to enforce such a rescission must be broug ht, c ourts must b orrow the most analog ous state law
statute of limitations and apply that limitation period to T I L A

re s c ission enforcement claims. The panel held that in W a shing ton, the state’s six -y e ar c ontract s t atute of limitations

was the most analog ous statute. The panel r ej ec t e d the district court’s application o f TI L A ’ s one-year statute o f limitations for leg al damag es claims. The panel a lso rejected

** T h is su m m ary co n stitu

t es n o p art o f th e o p in io n o f th e co urt. It h as b eenp rep ared b y

co urt staf

f f o r th e co nv en i en ce o f

th e read er.H O A N G V

. B A

NK O F A M E R

I C A 3

the bank’s argument that W a shing ton’s two

- y ear catch-all
statute o f limitations should apply

. B ecause the borrow e r broug ht this action within six y ears, the district court erred in dismissing the TI L Aclaim as time barred.

T h e p anel held that the d istrict court improperly denied the b o rrower leave to amend the c omplaint. The district court made i ts determination based on its determination that amendment would be futile because the claims we r e t imebarred. The p a n e l held that because the borrower’s T I L A rescission enforcement clai m w a s not time-barred, an amendment by

the borrower would not be futile.

COUNSEL

J ill J

. Smith (arg

ued), Natural Resource L a w Group PL L C, Seattle, W ashing ton, for Plaintiffs-Appellants.

Eliz abeth Holt Andrews ( argued), J o n D. I ves, and J an T. Chilton, Severson & W erson, San F r ancisco, C a lifornia; for Defendants-Appellees.H O A N G V

. B A

NK O F A M E R

I C A 4

OP INION

N.R. SMI TH, Circuit J udg e :

I f a creditor fails to make required disclosures unde r t h e Truth in L ending Act (TI L A), borrowers are allowed three
y ears from the loan’s consummation date to rescind c ertain loans. 1 15 U.S.C. § 1635(f). B orrowers may effect that rescission simply by notifyin g the creditor of their intent to rescind within the t

hr e e-year period. Jesinoski v. Countrywide Home Loans
, 135 S. Ct. 790, 792 (20 15). TI LA does not include a statute of l i m i t a t i ons outlining when an action to enforce such a rescission must be broug ht. W ithout a statute of limitations in TI L A, courts mu s t fi r st borrow the most analog ous state law statute of lim i t at i o ns a nd apply that limitation period to TI L A rescission enforcement claims. Cty. of Oneida v. Oneida Indian Nation of N

. Y

. State
, 470 U.S. 226, 240 (1985). In W a shing ton, the state’s six -y ear contract statute of limitations is the most analog ous statute. W e have jurisdiction under 28 U.S.C. § 1291, and we rev e r se a nd remand for further proceeding s.

1 S ectio n 1 6 3 5 ap p lies to co n su m er cred it tran sactio n s, as d ef in ed in 1 5 U.S.C. § 1 60 2 , w

h i chin clu d e ref

in an ced h o m e lo an s su ch as th e lo an at issu e h ere.H O A N G V

. B A

NK O F A M E R

I C A 5

I. 2

In December 2004
, P l aintiffs, J erry Hoang and L e Uy en Thi Hoang (H oang ), borrowed money from W ells F arg o B ank, N.A. to purchase a home in Tukwila, W ashing ton. On April 30, 2010, Hoang refinanced the Wells F arg o home loan with B ank of America
, N.A. and the F e deral National Mortg ag e Association (collectively
, the B ank). At the time o f the refinancing
, the B ank failed to gi v e H o a ng notice of the rig ht to rescind the loan, thereby violating TI L A ’s disclosure requirement. See 15 U .S.C. § 1635(a). As a result, Hoang h ad three y ears from the loan’s consummation date o f A p r i l 30, 2010, to rescind the loan. See 15 U.S.C. § 1635(f). On April 15, 2013 (within the three-year period), Hoang sent the B a nk notice of intent to r escind the loan under TI L A. The r ecord reflects that the B ank took no a ction in r e sponse to r eceiving the notice.

In F ebruary 2017, the B ank declared Hoang in default on the loan and initiated n on-judicial f orecl o s u r e proceeding s. To stop the non-judicial foreclosure proceeding s, Hoang filed

su it o n May 9, 2017. Hoang requested enforcement of the loan rescission under TI L A
, 15 U.S.C. § 1635(f), th roug h declaratory and injunctive relief. In addition, Hoang ’ s prayer for relief requested monetary damag es under the W ashing ton Consumer Protection Act (W CPA), a lthoug h reference to that
statute ap p eared nowhere else in the complaint. The B a nk moved to dismiss the case, arguing that Hoang ’s claims were

2 B ecau se th is case arises f ro m t h e district co urt’ s g ran t o f th e B ank ’ s

m o tio n to d ism iss, “ w e accep t th e f actu al alleg atio n s inth e co m p lain t as tru e an d co n stru e th e p lead in g in th e l ig ht m o st f av o rab le to [H o a ng ]

. ” No rth sta r Fin

. Ad

viso rs In c. v. S

ch wa b In vest. , 7 7 9 F.3 d 1 0 3 6
, 1 0 4 2 (9 th Cir. 2 0 1 5 ) (alteratio n

an dcitatio n

o m itted ).H O A N G V

. B A

NK O F A M E R

I C A 6

t ime barred, because Hoang f ailed to bring a suit f o r rescission within three ye a rs of the loan’s consummation.

The d istrict court hel d t hat Hoang timely rescinded the loan b y sending notice of rescission to the B ank within three
y ears of the loan’s consummation. 3 Nevertheless, the district
court g ranted the B ank’s motion to dismiss, because Hoang ’s claims were time b arred. To find the claims time barred, the district court adopted the one-year statute of li m i t ations applicable to TI L A claims for monetary damag es, 15 U .S.C. § 1 6 4 0 ( e). However, it adopted that statute, because it

m i s read Hoang ’s request f or damag es under the W CPA ( i n Hoang ’s prayer for relief) as a cl a i m f or monetary relief under TI L A. The district c ourt di s missed Hoang ’s c laim a s untimely for f

ailure to b ring suit w ithin one y ear. Ne i t h er party disputes that the district court erred in interpreting Hoang ’s complaint as requesting TI L A damag es.

A s t o Hoang ’s requests for declaratory and injunctive relief, the district court acknowledg ed th a t the limitations period a pplicable to TI L A rescission enforcement claims is an “unsettled issue of law” post-Jesinoski

. S e e Jesinoski v

. Countrywide Home Loans
, 135 S. Ct. 790 (2015). The district court determined that some statute of limitations must apply

a n d b o rrowed the limitations period for monetary damag e s under TI L A, 15 U.S.C. § 1 6 4 0 ( e) ( b ased, in part, on its misconception that Hoang a sserted a claim under t h at section). Under the one-year statute o f limitations, the district
court found that Hoang ’s claim for injunctive a nd d eclaratory relief was also time barred. B ecause it found tha t a ll o f Hoang ’s claims were time b a rred, the district court

3 T h is d eterm in atio n b y th e d istrict co urt reso lv ed th is issu e, an d it h as

n o t b eenraised o n

ap p eal.H O A N G V

. B A

NK O F A M E R

I C A 7

determined that any a m e n d m en t w o u l d be futile. According ly
, the district court g ranted the B ank’s motion a nd dismissed the case without leave to amend.

II.

W e review the d istrict court’s choice of the applicable
statute of limitations de n o vo. H ooper v. Lockheed Martin Corp. , 688 F .3d 1037, 1045 (9th Cir. 2012). W e also r eview dismissal on statute of limitations g r ounds de novo, because

we have accepted all factua l alleg ations in the complaint a s true an d d r a w all reasonable inferences in favor o f the nonmoving party

. Gregg v. Hawaii

, D e p ’ t of Public Safety
, 870 F .3d 883, 886–87 (9th Cir. 2017).

TI L A g ives borrowers the ri gh t t o rescind certain loans within three b usiness day s after consumma t i o n of the loan. 15 U.S.C. § 1635(a). However, if the creditor f ai l s to make required TI L A disclosures to the borro we r, the window for rescission is ex panded to three y ears from consummation of the loan. 15 U.S.C. § 1635(f). Once a bo rr o w e r rescinds a loan under TI L A, the borrower “is not liable for any finance

or othe r c h a

rg e, and any security interest g iven by the [ borrower]

. . . becomes voi d u p o n such a rescission.” 15 U.S.C. § 1 635(b); see 1 2 C.F .R. § 226.23( a )(3). W ithin 2 0 d a y s after the creditor receives a notice of rescission, t h e creditor must take steps to wind up the loan. 15 U .S.C. § 1635(b). “Upon the p e r f o r mance of the creditor’s oblig ations under this section, the [ borrower] shall tender the property to the creditor . . . [ or] tender its reasonable value.” Id. On c e b o t h creditor and borrower have so a cted, the loan has been wound up.H O A N G V

. B A

NK O F A M E R

I C A 8

Previously
, we required that b o r rowers effectuate T I L A loan rescissions by g iving lenders their notice of re s cission and also b ring ing suit to enforce that resci s s i o n , both to be accomplished within the three-year window set fort h i n 15 U.S.C. § 1 635(f). See, e.g. , McOmie-Gray v. Bank of A m

. Home L o a n s , 667 F .3d 1325, 1328 (9th Cir. 2 012) (“[ R] escission suits must be b roug ht within three y ears from the c onsummation o f the loan.”); Miguel v. Country Funding Corp.
, 309 F .3d 1161, 1164 (9th C i r

. 2002) ( “[ S] ection 1635(f) repr e s e n ts an ‘ absolute limitation on rescission actions’ which bars a

ny claims filed more than three y ears after the consummation of the transaction.”) (quoting King v

. California
, 784 F .2d 910, 9 13 (9th Cir. 1986)). However, the S u preme Court altered that u sual procedure in Jesinoski

. I t eliminated the need for a borrower to bring suit withi n the three-year window to e x erci s e TI LA rescission. Instead, “rescission is effected when the borrower notifies the creditor of his intention to r escind.” Jesinoski
, 135 S. Ct. at 792. “[ S] o long as the borrower notifies within three y ears after the transaction is consummated, his resciss i o n is timely

. The
statute does not also require him to sue w i t h i n three y ears.” Id. Thus, althoug h emphasiz ing that t h e borrower need only g ive the n otice of rescission within the three y ears, the Court did not clarify whe n a suit to e nforce the rescission must be broug ht after a lender’s failure to a ct on t h at notice o f rescission. W e are n ow presented w ith that question: when a borrower effectively r escinds a loan under TI L A, but no steps

are taken to wi n d u

p the loan, when must suit be broug ht to enforce that rescission?

Hoang argues that no statute of limitations applies to such

an action in the absence o f a n e x press statute of limitations
set forth in TI L A and in lig ht of J e sinoski

. Alternatively
, the B ank a g r ees with the d istrict court that a limitation periodH O A N G V

. B A

NK O F A M E R

I C A 9

must apply but argue s that the district court should have applied W ashing ton’s two-y e ar catchall statute of limitations. Neither party on ap p e a l a rgues that we should adopt the district court’s view a

nd borrow the TI L A damag e limitation
p e r iod in 15 U .S.C. § 1 640(e). After review, w e ag ree w i t h the district court that t h e re is a statute of limitations applicable to TI L A rescission enforcement actions, but we reject the district court’s decision a nd the parties’ arguments as to what that limitation period should be.

W h en there is no statute of limitations ex pressly applicable to a federal statute, “we do not ordinarily a ssume that Cong ress intended that there b e no time limit o n actions
at all.” DelCostello v. Int’l Bhd. of Teamsters
, 462 U.S. 151, 158 (1983). Rather, “the g eneral rule is that a state limitations period f or an analog ous cau s e of action is b orrowed a nd applied to the federal claim.” Cty. of Oneida
, 470 U.S. at 240. As a “narrow ex ception to the g eneral ru l e,” c ourts may “decline to borrow a state statute of limitations o n ly w h e n a rule from e lsewhere in federal law c learly provides a closer analog y than available state statute s , and when the federal policies at stake and the practicalities of litig ation make that rule a sig nificantly more ap p r o p riate vehicle for interstitial lawmaking .” Re ed v. United Transp. Union
, 488 U.S. 319, 324 ( 1989) (internal q

uotation marks omitted). However, “application of a federal statute will be unusual, and resort to state law remains the norm f o r borrowing of limitations periods.” Id. (internal quotation marks omitted).

As above ex plain e d
, T I L A does not provide a statute o f limita t ions for rescission e nforcement claims. A c cording ly
, our precedent requires that we borrow from analog o us W a shing ton state law. See Sharkey v. O’Neal
, 778 F .3d 767, 770–71 (9th Cir. 2015). Under Washing ton’s g eneral contractH O A N G V

. B A

NK O F A M E R

I C A 10

l a w , the statute of limitations sets forth a six -y ear limitation period for an “action upon a c o n t r a ct in writing
, o r liability

ex p ress or implied arising o ut of a written ag reement.” W a sh. Rev. Code § 4.16.040. The loan ag reement between Hoang and the B ank is a contract in w riting

. An action to rescind that loan (under TI L A or otherwise) a r ises out of that written ag reement. B ecause TI L A re s c i ssions necessarily require a contract to be r escinded, contract law provides the best analog y a n d w e adopt the g eneral c ontract law statute o f limitations. The district court ag reed, acknowledg ing that the W as h i ng ton contract statute o f limitations provided the closest state law a nalog y to T I L A rescission enforcement (althoug h it d e c l i ned to borrow it). 4 T here is no federal law that provides a closer analog y , nor do T I L A policies at stake and the practicalities of TI L A r es c i s sion litig ation make federal law a more appropri a t e vehicle for interstitial lawmaking

.

W e reject the district court’s applica t i o n o f TI L A’s oney ear statute of limitations for leg al d amag es claims. 15 U .S.C. § 1640(e). F irst, the d istrict court’s choice to apply the T I L A

on e-y ear leg al damag es statute o f limitations was based primarily on a misreading of Hoang ’s complaint as requesting TI LA relief r ather than relief under the W CPA. More im portantly
, TI LA provides for both leg al damag es a nd equitable relief but only includes a statute of limitations f o r leg al d amag es reli e f

. The statute does not sug g est that the
statute of limitations f or leg al d amag es relief is also applicable to c l a i ms for equitable r e medies. I f Cong ress intended t h at statute to apply
, Cong ress surely k new how to

4 T h e d i stri c t co urt d eclin ed to bo rro w W ash in g to n ’ s co n t ract lim itatio n s perio d, b ecau se it reaso n edth at 1 5 U.S.C. § 1 64 0 (e), T IL A ’ s d am ag es statute, p ro v i d eda clo s er an alo g y

.H O A N G V

. B A

NK O F A M E R

I C A 11

d r a f t the statute according ly

. T hus, the district court err e d when it declined to f

o llow the “norm for borrowing [ state l a w ] limitations periods.” See Reed
, 488 U.S. at 3 24. O n l y when a state statute o f limitations would “frustrate o r sig nificantly interfere w i th federal policies” do we turn instead to federal law to supply the limitation period. I d

. at 327. Application of W ashin gt o n ’s long er six -y ear contract statute of limitations w ould actually further T I L A’s purpose, which is to protect c o nsumers from predatory lending practices and promote the informed use of credit. 1 5 U .S.C. § 1601(a).

W e a lso reject the B ank’s argument that W ashing to n ’s two-y ear catchall statute of limitations sho u l d ap ply

. The catchall provision applies to “ [ a] n a ct i on for relief not hereinbefore provided for[ .] ” W a sh. Rev. Code § 4.16.130. In similar contex ts, the Supreme Court p r eviously determined that catchall statutes w ere not substantively a nalog ous a

nd declined to b o rrow them. See Agency Holding Corp. v

. Malley-Duffy & Assoc., I nc. , 4 83 U.S. 1 4 3
, 152–53 ( 1 987);

see a lso DirecTV, Inc. v. W ebb
, 545 F .3d 837, 849 (9th Cir. 20 0 8). W e decline to find that W a shing ton’s catchall is analog ous to TI L A and do not borrow i t here. Additionally
, because we find that Washing ton’s contract sta tu t e o f limitations is cl o sely analog ous, we need not resort to W a shing ton’s catchall limitation period.

L ast, because “we do not ordinarily assume that Cong ress intended that there be no time limit on actions at all,” DelCostello
, 462 U .S. at 1 58, we reject Hoang ’ s argument that no statute of limitations applies to TI L A res ci s s i o n enforcement claims.H O A N G V

. B A

NK O F A M E R

I C A 12

Applying W ashing t o n’s six -y ear contract statute o f limitations, H oang ’s TI L A claim is timely

. Hoang ’ s cause o f action arose in May 2 0 1 3 w h e n the B ank failed to take any

a ction to wind up the loan within 20 day s of recei v i n g Hoang ’s notice of rescis s i o n. 5 See 15 U.S.C. § 1635(b). B ecause Hoang b roug ht this suit within six y ears, the district court erred in dismissing the claim as time barred.

III.

The district court im p roperly denied Hoang leave to amend the complaint. W e review denial of leave to amend for abuse of discretion. A E ex rel. Hernandez v. Cty. o f Tulare
, 666 F .3d 631, 636 (9th Cir. 2012).

A party may amend its p lea d i ng with the court’s leave, which “[ t] he court should freely g ive

. . . when justice so requires.” F e d. R. Civ. P. 15(a)(2). “Th i s policy is to be applied with ex treme liberality .” Emine n ce Capital, LLC v

. Aspeon, Inc.
, 316 F .3d 1048, 1 051 (9th C i r. 2003) (internal quotation marks omitted). “Dismissal with prejudice a nd without leave to amend is not appropriate unless it is clear on de novo r e v iew that the complaint could not b e saved b y amendment.” Id. at 1052. L ea v e to amend can and should g enerally be g ive n , e v e n in the absence of such a r equest b y the party

. See Ebner v

. Fr e s h, I nc. , 838 F .3d 958, 963 (9th Cir. 2016) (“[ A] d istrict court should g rant leave to amend

even if no request to amend the p leading was made, unless it determines t h at the pleading could not possibly be c ured b y the a lleg ation of other facts.”). H owever, leave to amend need

5 A lth o u g h th e co m

p lain t alleg es th at Ho an g sent th e n o t ice of rescissio n to th e B ank o n Ap r i l 1 5, 2 0 1 3
, it is n o t clear w h en th e n otice

w as actu ally

receiv edo r w

h en th e 2 0

- d ay

p erio dw o u ldh av e ru n

.H O A N G V

. B A

NK O F A M E R

I C A 13

not be gr a n ted when “any amendment would b e a n ex ercise in futility ,” Steckman v. Hart Bre w i n g , Co.
, 143 F .3d 1293, 1298 (9th Cir. 1998), such as wh e n the claims are barred b y the applicab l e s t atute of limitations. See Platt Elec. Supply, Inc. v

. E OFF Elec., Inc.
, 5 22 F .3d 1049, 1060 (9th Cir. 2008).

The d istrict court here dismissed Hoang ’s claims without leave to a m end. However, the district court made that determination based on its finding that an amendment would be futile because the claims were time barred by the o n e-ye ar statute of limi t a t i o ns applicable to TI L A damag e claims. 15 U.S.C. § 1640(e). With the six -y ear contrac t s t atute o f limitations, H oang ’ s TI L A rescis sion enforcement claim is
not time barred. Therefore, an amendment by Hoang may not be futile.

REVERSE AND REMAND.