Anderson v. Wachovia Mortg. Corp.

• Citation: 609 F.Supp.2d 360
• Decision Date: 03 April 2009
• Docket Number: Civ. No. 06-567-SLR.
• Parties: Tolano ANDERSON, Cathy Anderson, Richard Wilkins, Brenda Wilkins, Lloyd Wheatley, and Audria Wheatley, Plaintiffs, v. WACHOVIA MORTGAGE CORPORATION, and Wachovia Corporation, Defendants.
• Court: U.S. District Court — District of Delaware

609 F.Supp.2d 360

Tolano ANDERSON, Cathy Anderson, Richard Wilkins, Brenda Wilkins, Lloyd Wheatley, and Audria Wheatley, Plaintiffs, v. WACHOVIA MORTGAGE CORPORATION, and Wachovia Corporation, Defendants.

Civ. No. 06-567-SLR.

United States District Court, D. Delaware.

April 3, 2009.

COPYRIGHT MATERIAL OMITTED

John S. Grady, Esquire, Grady & Hampton, LLC, Dover, DE, for Plaintiffs.

Michael J. Barrie, Esquire, Schnader Harrison Segal & Lewis LLP, Wilmington, DE, of Counsel, Elizabeth K. Ainslie, Esquire, and Stephen A. Fogdall, Esquire, Schnader Harrison Segal & Lewis LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.

I. INTRODUCTION

Plaintiffs Tolano and Cathy Anderson ("the Andersons"), Richard and Brenda Wilkins ("the Wilkinses"), and Dr. Lloyd and Audria Wheatley ("the Wheatleys") (collectively, "plaintiffs") filed the action at bar on August 11, 2006, in the Superior Court of the State of Delaware. (D.I. 1, ex. A) Defendants Wachovia Mortgage Corporation and Wachovia Corporation (collectively, "Wachovia" or "defendants") removed this suit to federal court on September 13, 2006. (D.I. 1)

Plaintiffs filed an amended complaint on October 3, 2006, alleging that defendants are liable for racial discrimination under 42 U.S.C. § 1981 and tortious interference with contractual relations, breach of contract, and breach of the covenant of good faith and fair dealing pursuant to the laws of the State of Delaware.¹ (D.I. 8) On October 23, 2006, defendants filed a motion to dismiss on the grounds that the amended complaint failed to state a claim under Fed.R.Civ.P. 12(b)(6) and that plaintiffs' § 1981 claim is time-barred. (D.I. 10, 11) On July 18, 2007, 497 F.Supp.2d 572 (D.Del.2007), the court granted, in part, defendants' motion, dismissing plaintiffs' breach of contract and tortious interference with contract claims. (D.I. 16 at 15, 20) The court denied defendants' motion to dismiss plaintiffs' claims for violation of § 1981² and breach of the covenant of good faith and fair dealing. (Id. at 12, 14, 18) Plaintiffs filed a second amended complaint on January 22, 2008, to which defendants filed an amended answer on February 6, 2008.

Currently before the court is defendants' motion for summary judgment. The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331, and has supplemental jurisdiction over plaintiffs' state law claims under 28 U.S.C. § 1367. For the reasons stated below, defendants' motion for summary judgment is granted with respect to plaintiffs' claims under 42 U.S.C. § 1981, and with respect to plaintiffs' claims for breach of contract and tortious interference with contractual relations under Delaware law. Plaintiffs' remaining claim for breach of the implied covenant of good faith and fair dealing pursuant to Delaware law shall be remanded to the Superior Court of the State of Delaware.

II. BACKGROUND

Plaintiffs are three African American couples who each purchased one of three adjoining residential properties in Dover, Delaware. Plaintiffs claim that defendants discriminated against them on the basis of race by adding terms and conditions to their mortgage contracts that were not applied to similarly-situated white applicants. Prior to June 2004, plaintiffs had collectively obtained eight mortgages from defendants for properties in what plaintiffs allege were predominantly minority or racially-mixed neighborhoods. The majority of these mortgages were commercial in nature, and none were for owner-occupied residences. (D.I. 60 at ¶ 3; D.I. 67 at A-6, A108-10) Plaintiffs had also held bank accounts with Wachovia Bank in the past. (D.I. 60 at ¶¶ 2) In June 2004, Tolano Anderson contacted J.D. Hogsten ("Hogsten"), a loan officer for defendants, and informed him of plaintiffs' plan to purchase three adjoining properties in Dover from a seller named Jack Aigner ("Aigner"). (Id. at ¶ 4) The properties were located in what plaintiffs describe as a "white neighborhood." (Id.) Tolano Anderson told Hogsten that plaintiffs had entered into a single contract to purchase all three properties simultaneously and that, if any of the three homes were not purchased, plaintiffs would lose their entire deposit of $40,000. (Id. at ¶ 7) Hogsten informed Tolano Anderson that an appraisal was needed for the properties. (Id. at ¶ 12)

Plaintiffs allege that Hogsten and the appraiser who was sent to value the Andersons' house "appeared to know each other well." (D.I. 69 at 6) The appraiser, John Mullens, was assigned by GreenLink LLC, a subsidiary of Wachovia Corporation. (D.I. 66 at 10; D.I. 69 at 5). When Mullens arrived, he indicated that the Anderson house could not be valued because there was damage to the basement.³ (D.I. 60 at ¶ 15) Hogsten informed Tolano Anderson that, because a comparable house could not be found, the appraisal could not be conducted and the Andersons' mortgage could not be completed.⁴ (Id. at ¶ 17) The property was unoccupied and Tolano Anderson was aware it had water damage that needed to be resolved. (D.I. 60 at ¶ 6; D.I. 67 at A-127, A-134) Hogsten told Anderson that this would create problems going forward and suggested repairs be made. (D.I. 66 at 11; D.I. 69 at 6) Tolano Anderson subsequently contacted another appraiser, Carl Kaplin, who provided him with a list of comparable homes. (D.I. 60 at ¶ 20) On July 20, 2004 defendants issued a commitment letter to the Andersons, which contained a provision requiring "[s]atisfactory appraisal supporting minimum value of $266,666.00." (D.I. 68 at A434-35) Tolano Anderson subsequently made repairs to the property as suggested and, on August 2, 2004, the property received a satisfactory appraisal with a valuation of $267,000.00. (D.I. 60 at ¶¶ 22, 77; D.I. 68 at A-451-A-452)

On July 23, 2004, Hogsten informed Richard Wilkins that he and his wife would have to show how they were planning to pay the deposit on their house and prove that the funds were their own.⁵ (D.I. 60 at ¶ 32) That same day, Hogsten informed the Andersons that the purchase of their desired property could not be completed because the property was not valuable enough. (Id. at ¶ 34) Tolano Anderson informed Hogsten that the required "move in" construction was nearly complete and that the house was ready for its second appraisal. (Id.) The second appraisal, completed August 2, 2004, valued the Andersons' house at the purchase price. (Id. at ¶ 35; D.I. 68 at A-451)

On July 7, 2004, the Wheatley property was appraised "as-is" at a value of $267,000.00, but noting that work may be needed on the roof, some basement piping may be wrapped in asbestos, and lack of heat on the 2nd floor. (D.I. 60 at ¶ 35; D.I. 68 at A-422, A-424) Hogsten informed Lloyd Wheatley that he would also have to upgrade his house to "move in" condition prior to settlement. (D.I. 60 at ¶ 36; D.I. 66 at A-226, A441-42) Lloyd Wheatley responded that he did not want to complete the upgrades before settlement, as he was planning to do custom work on the house after the property was purchased. (D.I. 60 at ¶ 37) Wheatley also explained that he had no access to the house and, therefore, could not bring it to "move in" condition; likewise, he stated that he would not be able to complete upgrades on his current home prior to selling it if he had to work on the new property. (Id.) Despite this, Hogsten did not lift the requirement.⁶ (Id.) Thereafter, Lloyd Wheatley was given access to the property by Aigner and completed the work required by Hogsten. (Id. at ¶¶ 42-43) An appraiser was dispatched to the Wheatleys' house on August 4, 2004, resulting in an appraised value of $267,000.00. (Id. at ¶ 44; D.I. 68 at A-421)

All three properties were scheduled for settlement in August 2004. (D.I. 60 at ¶ 45) The Andersons' and Wilkinses' settlements were completed on August 6, 2004. (Id. at ¶ 46) The Wheatleys' settlement was postponed, however, because defendants failed to forward to the closing attorney the documents necessary to complete the transaction. (Id.) Upon inquiry, Hogsten stated that defendants did not send the Wheatleys' paperwork because they needed a letter from a certified contractor confirming that the roof of the Wheatley house did not have any leaks.⁷ (Id. at ¶ 48) In order to expedite the sale, Aigner arranged for his personal contractor to fax the required letter to defendants as per Hogsten's demand. (Id. at ¶ 52)

The Wheatleys were also required to bringing the total down payment to 20% of the purchase price, before defendants would send the required closing documents. (Id. at ¶ 56) "[Tolano] Anderson told Hogsten that this was an unexpected surprise and [that] [Lloyd] Wheatley was not prepared for the change." (Id. at ¶ 54) Although the Wheatleys managed to obtain funds for the 20% down payment from joint accounts, Hogsten informed them that they were now unable to qualify for the mortgage because they no longer had sufficient reserves of cash.⁸ (Id. at ¶ 59) On August 12, 2004, a Mr. Destefano ("Destefano") informed the Wheatleys that defendants were unable to obtain primary mortgage insurance ("PMI") for their house and that the only way to circumvent this problem was to submit a 20% down payment and "eliminate the PMI requirement." (Id. at ¶ 60-61)

The Wheatleys' settlement was rescheduled again, this time for August 13, 2004. (Id. at ¶ 62) Before that date, Aigner allegedly called Destefano and informed him that "[Aigner] was aware of the [defendants'] inappropriate conduct and that the scheduled settlement was being sabotaged." (Id. at ¶ 64) At that point, Skowronski "intervened and approved the release of the loan documents"; the Wheatleys' settlement was then completed, as scheduled, on August 13, 2004. (Id.)

In order to meet defendants' requirements and finalize their contract with Aigner, the Andersons spent approximately $15,000 plus "numerous man hours." (Id. at ¶ 77) According to plaintiffs, by requiring the Wheatleys to upgrade...