Cappuccio v. Prime Capital Funding LLC

PRECEDENTIAL

IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

_____________

No. 09-4055
_____________

KAREN V. CAPPUCCIO,

Appellant

v.

PRIME CAPITAL FUNDING LLC; KIRK AYZENBERG;
AMERICA’S WHOLESALE LENDER; COUNTRYWIDE
BANK, NA; COUNTRYWIDE HOME LOANS
SERVICING, L.P.; FIRST MAGNUS FINANCIAL
CORPORATION; HOMECOMINGS FINANCIAL, L.L.C. a
GMAC Company; MAK ABSTRACT; E*TRADE, d/b/a
E*Trade Financial Corporate Services, Inc., d/b/a E*Trade
Mortgage Corporation

_____________

On Appeal from the District Court
for the Eastern District of Pennsylvania
(No. 07-cv-04627)
District Judge: Honorable Juan R. Sánchez

1
 Argued May 24, 2011

Before: FUENTES, FISHER, and NYGAARD, Circuit
Judges

(Opinion Filed: August 16, 2011)

Cary L Flitter, Esq.
Theodore E. Lorenz, Esq. [ARGUED]
Andrew M. Milz, Esq.
Lundy, Flitter, Beldecos & Berger, P.C.
450 North Narberth Avenue
Narberth, PA 19072

Counsel for Appellant

Joseph F. Riga, Esq. [ARGUED]
McDowell Riga, P.C.
842 West Lancaster Avenue, Second Floor
Bryn Mawr, PA 19010

Counsel for Appellee

OPINION OF THE COURT

FUENTES, Circuit Judge:

Appellant Karen Cappuccio appeals an unfavorable
jury verdict on her complaint under the Truth In Lending Act
(“TILA”), 15 U.S.C § 1601 et seq., against Appellee E*Trade

2
for its failure to properly notify her of her right to cancel her
home mortgage. Cappuccio challenges various aspects of the
jury instructions, including the District Court’s directive that
because her signature was on the notice of right to cancel,
“something more than just [her] testimony . . . is needed to
rebut the presumption that she received” the notice. Because
we find no basis in TILA or the Federal Rules of Evidence for
this portion of the instruction, and because we do not find the
error to be harmless, we will vacate the verdict and remand
for a new trial on her rescission claim.

I.

A. Background

In 2006, Appellant Karen Cappuccio sought to
refinance the mortgages on her home in Hellertown,
Pennsylvania, while interest rates were low. She had two
existing mortgages on her home: a 30-year 6.38% fixed-
interest loan and a 30-year 11.2% fixed-interest loan.
Cappuccio hoped to combine these two loans into a single
mortgage with a lower monthly payment and interest rate,
while receiving an additional $20,000 to $25,000 with which
to make home improvements. Later, at trial, Cappuccio
sought to introduce evidence that she had specifically sought
a 30-year 5% fixed-interest mortgage in the amount of
approximately $165,000, but was precluded from doing so by
an evidentiary ruling of the District Court.

While exploring the options for refinancing,
Cappuccio responded to an advertisement on the internet by
providing information about her existing mortgages as well as
the type of refinancing she was interested in obtaining.

3
Shortly thereafter, she received a phone call from an
individual named Kirk Ayzenberg, who was a loan agent for a
brokerage firm called Prime Capital Funding LLC (“Prime
Capital”). Ayzenberg told Cappuccio that he had received
her information and could help her obtain the kind of loan she
was interested in. Shortly after, Prime Capital submitted a
Universal Residential Loan Application on behalf of
Cappuccio to lender Countrywide Bank, NA for both a 30-
year 5% fixed-interest loan and a 30-year 4.75% fixed-
interest loan. Prime Capital also submitted a loan application
on behalf of Cappuccio to lender First Magnus Financial
(“First Magnus”) for a 20-year 11.5% fixed-interest loan.
Cappuccio later testified that she did not want two separate
mortgages on her home and that Prime Capital did not tell her
that it was submitting applications for two different loans.

After receiving Cappuccio’s loan application,
Countrywide generated a new application which resulted in
an offer of a 30-year adjustable, “negative amortizing loan” 1
with a 9.95% interest rate ceiling and an initial one month
“teaser” rate of 4.75%. Countrywide did not inform
Cappuccio that it was not processing the original loan
applications, nor that it was offering her a more complex and
expensive mortgage. First Magnus Financial rejected the
application it was sent by Prime Capital and instead it
provided Cappuccio with a 15-year 13.477% interest loan that

1
A “negative amortizing loan” is a loan where payments
made during the first few years of the mortgage are less than
the interest accrued by the borrower, thus increasing the size
of the principal beyond its original amount. James Charles
Smith, The Structural Causes of Mortgage Fraud, 60
Syracuse L. Rev. 473, 495 (2010).

4
included a $40,727 “balloon” payment due at the time of the
last loan payment. First Magnus did not notify Cappuccio of
the differences between the loan it offered her and the loan
for which she had applied.

The lenders, Countrywide and First Magnus, hired
MAK Abstract as the title agent to close Cappuccio’s loans.
MAK Abstract then hired Maureen Krajczar, a notary in
Bethlehem, Pennsylvania, to act as the closing agent.
Ayzenberg told Cappuccio that she would meet with Krajczar
on the evening of November 3, 2006, at Krajczar’s house, in
order to go through all of the paperwork for the closing.
Cappuccio testified that she and Krajczar sat at Krajczar’s
kitchen table, alone together, as Krajczar passed Cappuccio
various documents one at a time, directed her attention to the
signature page, asked Cappuccio to “sign, date here, sign,
date here, sign, date here” for each, before taking the
documents away. (App. 270-71). Cappuccio testified that the
process felt rushed and very hasty, and that Krajczar never
explained any of the documents to her. She further testified
that when she asked Krajczar questions, Krajczar stated that
she had to remain neutral and therefore could not answer
them. Cappuccio acknowledged at trial that she signed a
Notice of Right to Cancel (hereinafter a “notice”) for each
loan on the night of the closing, but testified that she did not
understand what they meant or signified at the time she
signed them.

The notices stated:

YOUR RIGHT TO CANCEL:
You are entering a transaction that will result in
a mortgage, lien or security interest on/in your

5
home. You have a legal right under federal law
to cancel this transaction, without cost, within
three business days from whichever of the
following events occurs last:

1. the date of the transaction, which is
NOVEMBER 3, 2006; or
2. the date you receive your Truth in Lending
disclosures; or
3. the date you receive this notice of your right
to cancel.
…
If you cancel by mail or telegram, you must
send a notice no later than midnight of
NOVEMBER 07, 2006 (or midnight of the
third business day following the latest of the
three events listed above). If you send or
deliver your written notice to cancel some other
way, it must be delivered to the above address
no later than that time.
…
ACKNOWLEDGMENT OF RECEIPT

BY SIGNING BELOW, I, THE
UNDERSIGNED, HEREBY
ACKNOWLEDGE THAT ON THE DATE
LISTED ABOVE I RECEIVED TWO (2)
COMPLETED COPIES OF THIS NOTICE OF
RIGHT TO CANCEL IN THE FORM
PRESCRIBED BY LAW ADVISING ME OF
MY RIGHT TO CANCEL THIS
TRANSACTION.

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(App. 62-63).

Cappuccio testified that about 40 minutes after she
arrived, having completed all of the paperwork, she left
Krajczar’s house without any documents from the closing in
her possession. Krajczar could not recall any of the details of
Cappuccio’s closing, but testified that in accordance with her
normal practices and Countrywide’s policy, she is confident
she would have given Cappuccio the correct number of copies
of the notices and Truth in Lending statement to take with her
from the closing. Krajczar also testified that, typically, a
closing like Cappuccio’s that involved two loans would take
an hour and a half to two hours.

According to Cappuccio, by November 8, when the
loan proceeds were disbursed, she had not yet received copies
of the notices or Truth in Lending statements. She testified
that a UPS package from MAK Abstract arrived the next day,
November 9, containing a $14,000 check, loan documents, a
single copy of the notice, and a Truth in Lending statement
for the Countrywide loan. Cappuccio observed that the terms
of the loan listed were not what she expected. She also saw
the bolded date, “November 07, 2006,” which she incorrectly
read as the last day for her to rescind her loan. She therefore
believed it was too late to cancel the loan.

Cappuccio further testified that two copies of the
notice and a Truth in Lending statement for the First Magnus
loan arrived in a UPS package on November 14. She stated
that an additional $2,000 check came in a separate envelope.
Cappuccio again mistakenly believed that she could no longer
rescind the loan because November 7 had passed. In contrast,
Michael Kuldiner, owner of MAK Abstract, testified that the

7
two UPS packages they sent to Cappuccio each contained
only one check, no notices or other loan documents, and that
he has never sent loan documents to borrowers in the manner
Cappuccio described.

On August 15, 2007, Cappuccio, through her counsel,
sought to rescind both loans. Countrywide and E*Trade
Bank, the assignee of the First Magnus loan, both refused to
honor her claimed rescission or make restitution. Cappuccio
then filed suit.

B. The trial

Cappuccio brought claims against the lenders,
Countrywide and First Magnus, for (1) damages, rescission,
and injunctive relief under TILA; (2) common law fraud; (3)
statutory fraud under the Pennsylvania Unfair Trade Practices
Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-2; and
(4) violations of the adverse action notice requirement of the
U.S. Equal Opportunity Act (“EOA”), 15 U.S.C. § 1691.
Cappuccio also brought claims for damages, rescission, and
injunctive relief under TILA against Appellee E*Trade, the
assignee, and Homecoming Financial LLC, the servicer of the
First Magnus loan (hereinafter jointly referred to as
“E*Trade”). 2 Finally, Cappuccio brought claims for statutory

2
While Appellee argues in footnote 2 of its opposition brief
that Homecoming Financial, as servicer, is not liable under 15
U.S.C. § 1641(f) of TILA, it does not cite to any place in the
record, other than the pleadings, where this contention was
raised before the District Court. Accordingly, we leave this
issue for the parties and the District Court to resolve upon
remand.

8
fraud under the UTPCPL against the title agent, MAK
Abstract, the broker, Prime Capital, and the loan agent, Kirk
Ayzenberg, as well as common law fraud against the latter
two.

A jury trial was held in September 2008. As to the
fraud claims, the jury awarded Cappuccio a verdict in the
amount of $40,000 against Countrywide for common law
fraud and statutory fraud under the UTPCPL, as well as
$50,000 (including $10,000 in punitive damages) for
violations of the adverse action notice requirement of the
EOA. Cappuccio did not bring those same fraud claims
against E*Trade because it was only the assignee of the loan,
not the original lender.

As to the TILA rescission claim, Cappuccio sought to
prove that she did not receive the notices of her right cancel at
the closing, and further, that to the extent she did receive the
notices in the mail after the closing, they were not clear and
conspicuous because they listed the wrong final rescission
date and because they were received only after the loan funds
had been disbursed, thus triggering a three-year extension of
her right to rescind the mortgages.

To determine whether the District Court erred when it
instructed the jury that something more than just Cappuccio’s
testimony was needed to rebut the presumption that she
received the notice, we set forth the verdict sheet the jury
considered along with the instructions given by the District
Court. As to the TILA rescission claim, the verdict sheet
asked the jury the following questions:

1. Do you find by the preponderance

9
of the evidence that the First Magnus
Defendants provided Ms. Cappuccio with two
copies of the Notice of Right to Cancel on
November 3, 2006, the date of the loan closing?

Answer: ____ Yes ____ No

[If the answer to question 1 is yes, please
STOP, you are finished with the TILA section]

2. Do you find by the preponderance
of the evidence that the First Magnus
Defendants provided Ms. Cappuccio with two
copies of the Notice of Right to Cancel after
November 3, 2006, the date of the loan closing?

Answer: ____ Yes ____ No

[If the answer to question 2 is yes, please
continue to question 3, if the answer to question
2 is no, please continue to [a question regarding
statutory damages].]

3. If you find by a preponderance of
the evidence that the First Magnus Defendants
provided Ms. Cappuccio with two copies of the
Notice of Right to Cancel after November 3,
2006, do you find by a preponderance of the
evidence that the Notices would have clearly
and conspicuously informed a reasonable
consumer of his or her right to cancel the loans?

Answer: ____ Yes ____ No

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 [If the answer to question 3 is yes, please
STOP, you are finished with the TILA section]

(App. 52) (emphasis added).

Instruction 18 of the jury instructions directed the jury
as follows with regard to question 1:

18. TILA Presumption

Where the borrower signs a document
acknowledging that she received two copies of
the Notice of Right to Cancel, a presumption
that she actually did receive them arises. A
presumption shifts the burden of proving a
particular fact to the party opposing its
existence. In a TILA case, something more than
just the testimony of the borrower is needed to
rebut the presumption that she received two
copies of the Notice. In addition, the lender
does not have to give the borrower two copies
of the Notice at the closing. It can satisfy its
obligations under TILA by mailing it to the
borrower after the closing.
Since Plaintiff signed an
acknowledgement that she received two copies
of the Notice from both Countrywide and the
First Magnus defendants on November 3, 2006,
she is presumed to have received the copies.

(App. 17) (emphasis added).

11
 The jury answered “yes” to question 1 on the verdict
sheet, finding that Cappuccio had received the notices on
November 3. As a result, the jury never reached questions 2
or 3, returning a verdict in favor of the lenders on the TILA
claim. On March 13, 2009, the District Court,
notwithstanding the verdict, dismissed all claims against
Countrywide pursuant to a post-trial settlement it had reached
with Cappuccio. That same day the District Court entered
judgment in favor of E*Trade on the TILA rescission claim.
Although on March 17, 2009, the District Court granted
Cappuccio’s motion for an entry of default judgment against
the remaining defendants, Prime Capital, Ayzenberg, and
MAK Abstract, and scheduled a hearing to determine
damages, in October Cappuccio voluntarily dismissed her
claims against those defendants, apparently to hasten her
appeal against E*Trade.

II. 3

A. The motion to dismiss the appeal.

As a threshold matter, E*Trade moves to dismiss
Cappuccio’s appeal. It argues that the District Court’s
issuance of a default judgment against Prime Capital,
Ayzenberg, and MAK Abstract on March 13, 2009 resolved
the last remaining claims in the case, and was therefore the
Court’s “final order,” despite the fact that the District Court
did not characterize it as such. E*Trade contends that this

3
The District Court had jurisdiction over this matter under the
Truth in Lending Act, 15 U.S.C. § 1640(e), as well as 28
U.S.C. § 1331. We have jurisdiction over Cappuccio’s appeal
pursuant to 28 U.S.C. § 1291.

12
makes Cappuccio’s October 16, 2009 Notice of Appeal
untimely under Federal Rule of Appellate Procedure
4(a)(1)(A), which permits 30 days to appeal a “final order.”

The initial flaw in E*Trade’s argument is that although
judgment had been entered as to all claims and all defendants
on March 13, 2009, there had been no determination of the
amount of damages owed by each of the defaulting
defendants. “We have previously recognized that, ‘[i]t is a
well-established rule of appellate jurisdiction . . . that where
liability has been decided but the extent of damage remains
undetermined, there is no final order.’” DeJohn v. Temple
Univ., 537 F.3d 301, 307 (3d Cir. 2008) (quoting Apex
Fountain Sales, Inc. v. Kleinfeld, 27 F.3d 931, 934-35 (3d Cir.
1994)). Here, because the District Court was still in the midst
of determining the “extent of damage,” Cappuccio argues
there was no final order until October of 2009, when she
voluntarily dismissed her claims against the defaulting
defendants.

E*Trade responds by noting that Cappuccio sought
damages from the defaulting defendants in the liquidated
amount of $40,000, which the jury had awarded her on her
UTPCPL claim against Countrywide. (Doc. # 108, 1).
E*Trade argues that because the liability of the three
defaulting defendants is joint and several with Countrywide,
the remaining allocation of damages between those parties
was a mere “ministerial” task of setting off from the $40,000
the amount that Countrywide had paid in its settlement and
allocating the remainder to the defaulting defendants.
E*Trade cites to Hattersley v. Bolt, 512 F.2d 209, 212-14 (3d
Cir. 1975), where we held that regardless of the allocation of
damages among defendants, when both liability and the total

13
amount of damages owed have been established for those
defendants, “payment awaits only a future ministerial order,
[and] finality is not lacking.” Id. at 214.

We do not find Hattersley to be applicable, however,
because the District Court here still had more than a
ministerial task before it. Although the defaulting defendants
argued at the damages hearing and in their subsequent filings
that they were entitled to a “set off” from liability equal to the
amount Cappuccio had already received in her settlement
with Countrywide, Cappuccio disputed this contention in her
opposition to the motion to strike the default judgments,
arguing that the jury awarded her $40,000 in damages based
on Countrywide’s fraudulent actions alone, which were
different from the actions that the defaulting defendants were
alleged to have taken. (Doc. # 157, 11-12). While we need
not determine which party would have prevailed on this
question, the important point for purposes of finality is that
the District Court had not yet ruled on this question of law
and therefore, unlike Hattersley, it had more than a mere
ministerial task before it. Even if E*Trade were correct that
Cappuccio’s position as to the “set off” was clearly wrong, it
is important that the finality of a judgment not rest on the
parties’ often subjective views of whether a still-outstanding
damages issue is a close one, on the one hand, or easily
resolved, on the other. The rule in Hattersley must be
narrowly limited to those circumstances where the remaining
task for the District Court is truly ministerial, in the sense of
requiring no independent legal judgment. A broader rule
would prove both impractical and unfair, forcing would-be
appellants to make uncertain and risky determinations about
whether a judgment is truly final. See Grider v. Keystone
Health Plan Central, Inc., 580 F.3d 119, 132 (3d Cir. 2009)

14
(“The finality requirement should be given a ‘practical rather
than a technical construction.’”) (quoting Firestone Tire &
Rubber Co. v. Risjord, 449 U.S. 368, 375 (1981)).
Accordingly, Hattersley is not controlling here and there was
no “final order” until October of 2009. 4 Cappuccio’s appeal
is timely. 5

B. The Truth in Lending Act

Congress expressly provided that the purposes of
enacting TILA were “to assure a meaningful disclosure of
credit terms so that the consumer will be able to compare
more readily the various credit terms available to him . . . and
to protect the consumer against inaccurate and unfair credit . .
. practices.” 15 U.S.C. § 1601(a). We have paraphrased
TILA’s purpose by stating that “Congress enacted TILA to
4
We also note that the District Court had dismissed
Cappuccio’s request for treble damages without prejudice,
with leave to raise the issue again at the damages hearing,
which had been partially completed and then adjourned.
(Doc. # 152, 1). Thus, the treble damages issue had also not
been finally resolved by the time of the October 13 voluntary
dismissals.
5
Both parties have moved for damages and costs pursuant to
Federal Rule of Appellate Procedure 38. E*Trade argues that
Cappuccio’s appeal is frivolous because it was clearly
untimely, and Cappuccio argues that E*Trade’s motion to
dismiss her appeal was frivolous because of longstanding
precedent that a judgment is not final until damages have
been determined. Because neither the appeal nor the motion
to dismiss the appeal can fairly be characterized as frivolous,
we deny both motions.

15
guard against the danger of unscrupulous lenders taking
advantage of consumers through fraudulent or otherwise
confusing practices.” Ramadan v. Chase Manhattan Corp.,
156 F.3d 499, 502 (3d Cir. 1998). Accordingly, because
“TILA is a remedial statute and should be construed liberally
in favor of the consumer.” Id.

With certain exceptions not present here, TILA
requires that a creditor in a consumer transaction disclose
various items of information, including, among other things:
(1) the identity of the creditor; (2) the “amount financed;” (3)
the “finance charge;” (4) the “annual percentage rate;” (5) the
sum of the amount financed and the finance charge, or “total
of payments;” (6) the number, amount, and due dates or
period of payments scheduled; (7) the “total sale price;” and
(8) explanations and definitions of the foregoing terms. See
15 U.S.C. § 1638; 12 C.F.R. § 226.18.

In addition to the required disclosures, “TILA
generally permits a consumer borrower to rescind a loan
transaction that results in the creditor taking a security interest
in the borrower’s principal dwelling.” In re Porter, 961 F.2d
1066, 1073 (3d Cir. 1992) (citing 15 U.S.C. § 1635(a)). The
default three-day period during which the borrower may
rescind the loan is intended to provide a “‘cooling off’ period
during which . . . consumers [can] change their minds . . . .”
Id. at 1068 (citing 15 U.S.C. § 1635(a)). “The creditor must
‘clearly and conspicuously disclose’ the borrower’s rescission
rights and provide forms for the borrowers to do so, in
accordance with regulations promulgated by the [Federal
Reserve] Board.” Id. at 1073 (citing § 1635(a)). “The
Board’s regulations require lenders to deliver to borrowers
two copies of a notice of the right to rescind, and the notice

16
must clearly and conspicuously disclose”:

(1) The retention or acquisition of a security
interest in the consumer’s principal dwelling.
(2) The consumer’s right to rescind the
transaction.
(3) How to exercise the right to rescind, with a
form for that purpose, designating the address
of the creditor’s principal place of business.
(4) The effects of rescission, as described in
paragraph (d) of this section.
(5) The date the rescission period expires.

Id. (citing 12 C.F.R. § 226.23(b)). This regulation, at 12
C.F.R. § 226.1 et seq., is also known as “Regulation Z.” In re
Cmty. Bank of North Va., 622 F.3d 275, 282 (3d Cir. 2010).
“Under the statute and regulations, if the lender’s notice is
proper, the borrower’s right to rescind lasts for three days[.]”
In re Porter, 961 F.2d at 1073. The Official Staff
Interpretations of Regulation Z, § 226.23, Supp. I, cmt.
23(b)(4), provides that the lender may deliver the notice after
the transaction, but that if it does so, the rescission period of
three days “will not begin to run until the notice is given.”
Further, “the rescission period extends to three years if the
required notice and material disclosures (the annual
percentage rate, [etc.]) are not delivered.” In re Porter, 961
F.2d at 1073 (citing 12 C.F.R. § 226.23(a)(3) and 15 U.S.C. §
1635(f)). It is Cappuccio’s primary contention that the
lenders failed to timely provide her with compliant notices,
thus triggering this three-year extension of the rescission
period.

Finally, of relevance here, when a borrower signs a

17
“written acknowledgment of receipt” of the aforementioned
disclosures required by TILA, his or her signature “does no
more than create a rebuttable presumption of delivery
thereof.” 15 U.S.C. § 1635(c). This provision was the basis
for the District Court’s instruction to the jury that Cappuccio
was presumed to have received the notices and that something
more than her testimony was necessary to rebut that
presumption.

C. The presumption of receipt

1. Whether the instruction was erroneous

Cappuccio argues that the District Court erred when it
instructed the jury that “[i]n a TILA case, something more
than just the testimony of the borrower is needed to rebut the
presumption that she received two copies of the Notice.”
(App. 18). 6

Federal Rule of Evidence 301 provides the default rule
for rebutting a presumption in a civil case. Rule 301 states:

In all civil actions and proceedings not
otherwise provided for by Act of Congress or
by these rules, a presumption imposes on the
party against whom it is directed the burden of
going forward with evidence to rebut or meet
the presumption, but does not shift to such party

6
“We exercise plenary review in determining ‘whether the
jury instructions stated the proper legal standard.’” United
States v. Leahy, 445 F.3d 634, 642 (3d Cir. 2006) (quoting
United States v. Coyle, 63 F.3d 1239, 1245 (3d Cir. 1995)).

18
 the burden of proof in the sense of the risk of
nonpersuasion, which remains throughout the
trial upon the party on whom it was originally
cast.

In other words, unless Congress or the Rules of Evidence
provide otherwise, “a presumption in a civil case imposes the
burden of production on the party against whom it is directed,
but does not shift the burden of persuasion.” McCann v.
Newman Irrevocable Trust, 458 F.3d 281, 287 (3d Cir. 2006);
see also In re G-I Holdings, Inc., 385 F.3d 313, 318 (3d Cir.
2004) (same). Under this theory, called the “ThayerWigmore
‘bursting bubble’ theory of presumptions[,] . . . ‘the
introduction of evidence to rebut a presumption destroys that
presumption, leaving only that evidence and its inferences to
be judged against the competing evidence and its inferences
to determine the ultimate question at issue.’” McCann, 458
F.3d at 287-88 (quoting McKenna v. Pac. Rail Serv., 32 F.3d
820, 829-30 (3d Cir. 1994)). “This view of Rule 301 is
widely accepted.” Id. at 288 (collecting cases and treatise
sources). But see 21B Wright, Miller & Kane, Federal
Practice and Procedure, § 5122.2 (disagreeing with the
majority view).

Further, the quantum of evidence needed to “burst” the
presumption’s “bubble” under Rule 301 is also minimal,
given that “the presumption’s only effect is to require the
party [contesting it] to produce enough evidence
substantiating [the presumed fact’s absence] to withstand a
motion for summary judgment or judgment as a matter of law
on the issue.” McCann, 458 F.3d at 288. We have previously
held that a single, non-conclusory affidavit or witness’s
testimony, when based on personal knowledge and directed at

19
a material issue, is sufficient to defeat summary judgment or
judgment as a matter of law. See, e.g., Kirleis v. Dickie,
McCamey & Chilcote, P.C., 560 F.3d 156, 161-63 (3d Cir.
2009). This remains true even if the affidavit is “self-
serving” in the sense of supporting the affiant’s own legal
claim or interests. Id. Here, Cappuccio’s testimony related
directly to a material issue in her TILA claim: whether she
received two copies of a notice of the right to rescind her First
Magnus loan when she left Krajczar’s house on the night of
the closing. Her testimony was also obviously based on her
personal knowledge and was in no way conclusory.
Accordingly, under Rule 301, her testimony would appear to
be sufficient to burst the presumption’s bubble, leaving the
decision of whether to credit her testimony, or that of
E*Trade’s witnesses, to the jury.

However, by its own terms, Rule of Evidence 301
states that it applies only where “not otherwise provided for
by Act of Congress . . . .” Accordingly, E*Trade could
support the District Court’s presumption instruction if it could
show that Congress “otherwise provided” for a stronger
presumption than that provided for by default under Rule 301.
Yet E*Trade cites to no language in TILA or any other act
that would demonstrate Congress’s intent to create a stronger
presumption. Nor is there any such language in Regulation Z.
To the contrary, Cappuccio convincingly argues that the
language in § 1635(c), “does no more than create,” indicates
that the provision is intended to construct the weakest form of
presumption possible. Further, Cappuccio argues that
elsewhere in TILA, Congress used plain and unambiguous
language to create stronger presumptions when it intended to
do so. For instance, § 1641(b) provides that in determining
whether an assignee has acquired an obligation under TILA,

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“written acknowledgement of receipt by a person to whom a
statement is required to be given pursuant to this subchapter
shall be conclusive proof of the delivery thereof . . . .”
(emphasis added). Cappuccio persuasively concludes that the
words, “does no more than,” indicate an intent to apply the
normal presumption provided for by Rule of Evidence 301,
and not something “more than” that.

In sum, because of the plain language of TILA, and the
resulting conclusion that Congress did not intend something
other than a Rule 301 presumption to apply, we hold that the
testimony of a borrower alone is sufficient to overcome
TILA’s presumption of receipt.

2. Harmless error

E*Trade argues that even if the District Court erred in
requiring something more than Cappuccio’s testimony to
rebut the presumption of receipt, that error was harmless,
given that Cappuccio presented to the jury “something more
than just [her] testimony” that she never received the notices
on the night of the closing. Specifically, it references the
November 14 overnight UPS envelope from First Magnus
that Cappuccio alleges also contained the disclosure forms
and notices that should have been given to her on the night of
the closing, as well as Cappuccio’s testimony before the jury
that she received the notices in that envelope eleven days
after the closing.

E*Trade’s argument is unconvincing. First, the jury
should have been permitted to weigh all of the evidence as it
saw fit without any instruction as to the appropriate weight to
be given to one piece or another. Yet because the jury was

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instructed that Cappuccio’s testimony about what she
received on the night of the closing was not weighty enough
by itself to rebut the presumption, it could reasonably also
have understood the instruction to imply that the same
testimony must carry little weight even when considered in
tandem with the other favorable evidence in the case,
including the physical UPS envelope and Cappuccio’s own
testimony that she received the notices in the mail on
November 14. In other words, we think it quite possible that
the instruction affected the jury’s weighing of Cappuccio’s
testimony, whether the jury evaluated the testimony in
isolation or in combination with other favorable evidence that
was material to the issue of receipt. Thus, we find that the
presence of additional evidence in Cappuccio’s favor does not
necessarily make the instruction any less prejudicial.

Furthermore, we believe the jury could have
reasonably interpreted the instruction to refer not only to
Cappuccio’s testimony about the closing, but also to her
testimony about what she received in the mail on November
14. After all, the language “something more than just the
testimony of the borrower” logically encompasses
Cappuccio’s testimony about what she received in the mail on
November 14. Thus, the jury could easily have interpreted
the instruction to mean that neither Cappuccio’s testimony
about what she received on the night of the closing, nor her
testimony about what she received in the mail days later, was
sufficient to rebut the presumption of receipt.

Finally, we also reject E*Trade’s position that had the
correct instruction been given, the jury verdict would surely
have been in its favor, given the weight of the evidence. The
question of whether Cappuccio received the notices on the

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night of the closing ultimately depends on whether the
factfinder believes the testimony of Cappuccio or Krajczar,
which in turn necessitates multiple subtle credibility
determinations. For this Court, on appeal, to attempt to
extrapolate or predict what the jury’s credibility findings
would have been under a proper instruction would be entirely
speculative. Because “we cannot say that there is a high
probability that the error did not affect the outcome of the
case[,]” Woodson v. Scott Paper Co., 109 F.3d 913, 931 (3d
Cir. 1997), we conclude that the error was not harmless.

D. Additional references to the presumption

Cappuccio further argues that the jury instruction was
erroneous or confusing because the District Court repeatedly
referred to a presumption that Cappuccio received the notices
on November 3, despite the fact that the presumption should
have been deemed to have “dropped out” of the case once she
met her burden of production by testifying that she did not, in
fact, receive the notices on November 3.

As explained above, we have previously held that “a
presumption in a civil case imposes the burden of production
on the party against whom it is directed, but does not shift the
burden of persuasion.” McCann, 458 F.3d at 287. “Under
this theory, ‘the introduction of evidence to rebut a
presumption destroys that presumption, leaving only that
evidence and its inferences to be judged against the
competing evidence and its inferences to determine the
ultimate question at issue.’” Id. at 288 (quoting McKenna, 32
F.3d at 830 (3d Cir. 1994)) (emphasis added); see also, 2
McCormick on Evid. § 344 (6th ed. 2009) (“The trial judge
need only determine that the evidence introduced in rebuttal

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is sufficient to support a finding contrary to the presumed
fact. If that determination is made, certainly there is no need
to instruct the jury with regard to the presumption.”)
(emphasis added).

Of course, as the plaintiff, Cappuccio still bears the
underlying burden of persuasion in proving, by a
preponderance of the evidence, that she did not receive the
notices. And the jury may still consider and weigh as
evidence the fact that the notices were signed by Cappuccio,
as well as all “inferences properly drawn therefrom.”
McCann, 458 F.3d at 288 n.5 (internal quotation omitted).
Cappuccio’s burden of persuasion, however, which was
explained to the jury elsewhere in the instructions, should not
be supplemented by language about a presumption of non-
receipt, which could potentially confuse the jury by implying
that something more than a mere preponderance of the
evidence was needed to prove non-receipt.

Indeed, as a matter of good practice, where a party has
produced sufficient facts to rebut a Rule 301 presumption,
and it drops out of the case, the District Court should avoid
references to such a presumption in its instructions. 7

7
Cappuccio also objects to the District Court’s ruling that the
parol evidence rule prevented her from introducing evidence
of representations and promises made to her about favorable
loan terms that she never ultimately received. She argues on
appeal that the modification of the terms—what she calls the
“bait and switch”—was the lenders’ motive for delaying
delivery of the notices, which in turn was the factual basis of
her TILA claim. However, in opposing the District Court’s
parol evidence ruling, it does not appear that Cappuccio’s

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 E. The completeness of the instructions

Finally, Cappuccio argues that the District Court erred
when it instructed the jury that the lenders could satisfy their
obligations under TILA by mailing the notices to Cappuccio
after the closing, without also instructing that: (1) if they did
so, the three-day rescission period would not begin to run
until the notices were received; (2) that the lenders must
provide the correct date for the expiration of the right of
rescission on the notice; and (3) that the lenders must delay
disbursement of the funds until the rescission period has
passed.

Here, however, Instruction 17 states that the “[n]otice
must inform borrowers that they may cancel their loan within
three business days of the loan closing or the date on which
they receive the Notice, whichever occurs later.” (App. 16)
(emphasis added). This language adequately conveys the law
as to the tolling of the rescission period. Further, Instruction
19 states that the “Notice of Right to Cancel must clearly and
conspicuously disclose . . . [t]he date the rescission period
expires.” (App. 18). This adequately explains that the date
the rescission period ends must be accurately displayed on the
notice. Finally, we have previously held that while

counsel ever squarely raised the alleged relevance of the
change in the loan terms for her TILA claim. Accordingly,
upon retrial we leave it to Cappuccio to raise before the
District Court her argument for why the modified loan terms
are relevant to her TILA claim, and for the Court to
determine, in the first instance, whether such evidence falls
within the scope of the parol evidence rule.

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disbursement of the funds prior to the rescission date is a
violation of § 226.23(c), it is not a violation of § 226.23(b)
and therefore does not trigger the three-year extension of the
rescission period. Smith v. Fidelity Consumer Discount Co.,
898 F.2d 896, 904 (3d Cir. 1990) (“The two subsections,
while adjacent in the C.F.R., are separate with a violation of
only § 226.23(b) extending the rescissory period.”).
Accordingly, the failure to instruct the jury on the timing of
the disbursement was not error, given that premature
disbursement does not lead to a three-year extension of the
rescission period, the basis of Cappuccio’s rescission claim.
As to these issues, the District Court did not misstate the law
in its instructions or abuse its discretion.

III.

For the foregoing reasons, we will vacate the judgment
of the District Court and remand for further proceedings not
inconsistent with this opinion.

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