Crawford v. Franklin Credit Mgmt. Corp.

Decision Date11 July 2014
Docket NumberDocket No. 13–2514.
Citation758 F.3d 473
PartiesLinda D. CRAWFORD, Plaintiff–Counterclaim–Defendant–Appellant v. FRANKLIN CREDIT MANAGEMENT CORPORATION, Tribeca Lending Corporation, Defendants–Counterclaimants–Cross–Claimants–Appellees, Lenders First Choice Agency, Inc., Defendant–Crossclaim–Defendant–Appellee.
CourtU.S. Court of Appeals — Second Circuit

OPINION TEXT STARTS HERE

Chittur & Associates, Ossining, N.Y., (Krishnan S. Chittur, of counsel), submitted a brief for PlaintiffCounterclaim–DefendantAppellant.

Martin C. Bryce, Jr., Philadelphia, PA, (Ballard Spahr, Philadelphia, PA, on the brief), for DefendantsCounterclaimantsCross–ClaimantsAppellees.

Before: KEARSE, JACOBS, and LYNCH, Circuit Judges.

KEARSE, Circuit Judge.

Plaintiff Linda D. Crawford appeals from a judgment of the United States District Court for the Southern District of New York, John F. Keenan, Judge, dismissing her amended complaint (“Complaint”) which alleged that defendants fraudulently procured a mortgage on her home, and thereafter sought to foreclose on that mortgage, in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq., the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691 et seq., the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq., the New York General Business Law, N.Y. Gen. Bus. Law § 349, and common law. The district court denied a motion by Crawford for partial summary judgment on the issues of liability. The court granted the motions of defendants Franklin Credit Management Corporation (Franklin) and Tribeca Lending Corporation (Tribeca) for summary judgment dismissing the claims against them, ruling that, because Crawford had failed to disclose these claims in a 2006 proceeding under Chapter 13 of the Bankruptcy Code (“Code”), her present suit was barred for lack of standing or by collateral estoppel. The court noted that defendant Lenders First Choice Agency, Inc. (Lenders First Choice), had not been served and did not appear in the action. On appeal, Crawford makes no argument with respect to the dismissal of Lenders First Choice. She principally challenges the district court's standing and estoppel rulings in favor of Franklin and Tribeca (or Defendants) and its denial of her motion for partial summary judgment against them.

For the reasons that follow, we affirm the denial of Crawford's motion for partial summary judgment in her favor; we vacate so much of the judgment as dismissed Crawford's TILA and common-law fraud claims against Franklin and Tribeca and remand for further proceedings on those claims; we affirm the dismissal of Crawford's other claims because, as to each, she failed to adduce evidence sufficient to show a genuine issue of material fact to be tried.

I. BACKGROUND

Except as indicated below, the following facts, taken largely from the parties' respective statements pursuant to Rule 56.1 of the Local Rules for the Southern District (Rule 56.1), are not in dispute.

A. Events in November and December 2004

In 2000, Crawford, a registered nurse and longtime flight attendant, bought a home at 40 Paradise Avenue in Piermont, New York (“40 Paradise”). The purchase was funded with a mortgage loan from Community Home Mortgage Corporation (“Community”); Crawford later took out a line of credit from Chase Bank, secured by a second mortgage on 40 Paradise. In 2003, Crawford enrolled as a full-time student in medical school in the Dominican Republic. Although she also continued to work to some extent as a flight attendant and a nurse, by November 2004 she was in default on her debts to Community and Chase Bank. The total balance on those two loans was approximately $400,000, and a foreclosure action on 40 Paradise was commenced by Community.

At the times relevant to this action, Tribeca was a lending company and a wholly owned subsidiary of Franklin. Franklin maintains that it merely serviced loans originated and retained by Tribeca but did not itself make loans. Crawford attributes the allegedly fraudulent mortgage transaction to both Tribeca and Franklin, based in part on documents produced by Defendants.

In November 2004, Tribeca employee Robert Koller telephoned Crawford to discuss the possibility of her obtaining a loan from Tribeca. The two never met, but they had several such telephone conversations, the contents of which are in dispute.

Crawford's version is that Koller said Franklin and Tribeca were “foreclosure rescuers” and offered to refinance her home. (Plaintiff's Statement of Undisputed Facts Under Local Rule 56.1 In Support of Plaintiff's Cross–Motion For Summary Judgment With Respect To Liability of Defendants Franklin Credit and Tribeca Lending (“Crawford's Rule 56.1 Statement”) ¶ 10.) Crawford told Koller that, because of her full-time-student status and reduced work with the airline, she could not afford to make any monthly payments on a mortgage for at least a year; Koller said he would “tailor” for Crawford a one-year “bridge loan” of $35,000, and that Tribeca would take care of her monthly payments to her mortgagees and stave off foreclosure for a year; thereafter that loan would be converted to a 30–year fixed-rate mortgage loan. ( Id. ¶¶ 11–13 (internal quotation marks omitted).) Koller urged Crawford to act on Tribeca's offer promptly, telling her that since Crawford was an African–American, Community would foreclose very quickly. ( See id. ¶ 14.)

According to Crawford, Koller thereafter told her that papers she had submitted were insufficient to show her signature and that he would arrange for someone to meet her at JFK airport, when she was available between flights, so that she could provide “specimen signatures.” ( Id. ¶ 21 (internal quotation marks omitted).) As support for her Rule 56.1 assertions, Crawford principally cited her own deposition testimony, along with the allegations in her Complaint, which she had expressly adopted and incorporated by reference in a declaration ( see Declaration of Linda Crawford dated July 9, 2010 (“Crawford Decl.”), ¶ 2) submitted “under penalties of perjury.”

In opposition to Crawford's motion, Franklin and Tribeca submitted, inter alia, a declaration from Koller stating that [s]everal of the statements” in Crawford's Rule 56.1 Statement were “not true.” (Declaration of Robert Koller dated August 13, 2010 (“Koller Decl.”), ¶ 4.) Koller, who stated that he had been employed by Tribeca as a loan officer from February 2004 to June 2005, denied telling Crawford that he or Tribeca was a “foreclosure rescuer” and denied that he ever offered her a “bridge loan” or used that term. ( Id. ¶¶ 1, 5–6 (internal quotation marks omitted).) Instead, Koller stated that he told Crawford, and always believed she understood, that the loan from Tribeca would result in a mortgage on her property. ( See id. ¶ 7.) Koller said he never told Crawford she would not have to make payments on her loan for a year, or that because she was an African–American her lenders would foreclose very quickly. ( See id. ¶¶ 8–9.) He also denied telling her that papers she had submitted were deficient and denied that he arranged, or told her that he would arrange, for someone to meet her at the airport to obtain specimen signatures. ( See id. ¶¶ 10–11.)

It is undisputed that on December 11, 2004, Crawford met someone at the airport for the purpose of providing her signature. Here too, however, there are divergent versions as to substance. Crawford stated that she met Defendants' representative” and that she “signed some blank pages as requested by Defendants' representative.” (Crawford's Rule 56.1 Statement ¶ 23.) She stated that she never requested a mortgage from Franklin or Tribeca but that they, without her knowledge, intent, or consent, “use[d her] signatures to manufacture a mortgage” on her home in the amount of $504,000 ( id. ¶¶ 24–26, 28) (the “Tribeca Mortgage”). Crawford said she did not receive copies of any note or mortgage on December 11; she did not receive closing documents concerning the Tribeca Mortgage until June 2007. ( See id. ¶ 35.)

Franklin and Tribeca submitted a declaration from Anthony Decarolis, an attorney, who stated that he met with Crawford at the airport on December 11, 2004 ( see Declaration of Anthony Decarolis dated July 28, 2010 (“Decarolis Decl.” or “Decarolis Declaration”), ¶¶ 1, 4–6); but Decarolis denied that he asked Crawford to sign any blank pages, saying “I have never requested, nor have I been asked to request, that a borrower sign blank pages” ( id. ¶ 10). Rather, although Decarolis said he has never been employed directly by Franklin or Tribeca and could not remember precisely who had first contacted him on this matter, he said he had been retained to handle the closing of Crawford's mortgage from Tribeca. ( See id. ¶¶ 3–4.) That closing took place at JFK airport in Decarolis's car; no one other than Decarolis and Crawford was present. Decarolis stated that he described the closing documents to Crawford, and she reviewed them before signing them. He said his customary practice, like that of most lenders, was to request that the borrower sign multiple copies of documents, and to give the borrower copies at the closing. Decarolis said he had no reason to believe he deviated from these practices during the closing of Crawford's loan. ( See id. ¶¶ 7–9.)

Of the proceeds from the $504,000 Tribeca Mortgage, a total of $459,102.62 was used to pay off Crawford's two existing mortgages; $1,400 was used to pay Crawford's outstanding property taxes; $35,050.86 was used to pay settlement charges on the loan; and $7,196.52 was disbursed to Crawford in cash. Crawford promptly complained to Koller that she had expected to receive $35,000. She asserts—and Koller denies—that he told her the “fees” were higher than expected. (Crawford's Rule 56.1 Statement ¶ 30 (internal quotation marks omitted); Koller Decl. ¶ 15.)

B. The Tribeca Foreclosure and...

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