Hofbauer v. NORTHWESTERN NAT. BANK OF ROCHESTER
Decision Date | 02 June 1981 |
Docket Number | No. 1-79 Civ. 422.,1-79 Civ. 422. |
Citation | 547 F. Supp. 940 |
Parties | Stanley J. HOFBAUER and Jean F. Hofbauer, Plaintiffs, v. The NORTHWESTERN NATIONAL BANK OF ROCHESTER, MINNESOTA, Defendant. |
Court | U.S. District Court — District of Minnesota |
COPYRIGHT MATERIAL OMITTED
Brown, Bins & Klampe by Michael D. Klampe, and Mary B. Stein, Rochester, Minn., for plaintiffs.
Briggs & Morgan by Richard G. Mark, and Bruce Mooty, Saint Paul, Minn., for defendant.
When considering a motion for summary judgment, all facts must be viewed in the light most favorable to the party opposing the motion, and that party is entitled to the benefit of all reasonable inferences to be drawn from the facts. Robert Johnson Grain Co. v. Chemical Interchange Co., 541 F.2d 207 (8th Cir. 1976). Also, the right to judgment must be shown with such clarity as to leave no room for controversy and it must appear that the opposing party would not be entitled to recover under any discernible circumstances. Minnesota Bearing Co. v. White Motor Corp., 470 F.2d 1323 (8th Cir. 1973).
During oral argument, the court inquired of counsel for both parties as to the appropriateness of summary judgment at this time. Both counsel agreed that there was no genuine dispute as to any material facts relating to the liability of defendant under the various statutory provisions in question, and therefore, with regard to the liability issue, the case was ripe for summary judgment. The court concurs. The parties have reserved for later determination the issue of damages.
In seeking summary judgment, the parties presented the following issues to the court:
1. Are federal statutes 42 U.S.C. § 4012a(b) and 42 U.S.C. § 4104a and the regulations promulgated thereunder applicable to the Hofbauer transaction in light of the language and effective date of 42 U.S.C. § 4106(b)?
2. Do federal statutes 42 U.S.C. § 4012a(b) and 42 U.S.C. § 4104a and the regulations promulgated thereunder give rise to an implied private cause of action for damages on behalf of the plaintiffs?
3. If an implied private cause of action exists, did defendant comply with the provisions of 42 U.S.C. § 4012a(b) and 42 U.S.C. § 4104a and the regulations promulgated thereunder?
4. Apart from any implied private cause of action that may exist, do federal statutes 42 U.S.C. § 4012a(b) and 42 U.S.C. § 4104a and the regulations promulgated thereunder create a statutory standard of conduct that if breached would give rise to an action for common law negligence?
There are three principal statutory provisions at issue. They are:
The defendant contends that the National Flood Insurance Act (the "Act"), of which the three above-quoted statutes are a part, is not applicable to the Hofbauer transaction because of the language of § 4106(b). First, defendant claims § 4106(b) exempts from the application of the Act any loan made to finance the acquisition of a residential dwelling occupied as a residence prior to January 1, 1976,1 and since the Hofbauer residence was occupied in March of 1975, the Act does not apply. Plaintiffs respond by pointing out that the 1975 amendment adding the exemption provision was not enacted until nearly four months after the Hofbauer transaction closed, and that the defendant should not be permitted to escape liability by relying on an exemption that did not even exist at the time the conduct complained of took place. The court agrees. Moreover, defendant's position assumes that § 4106(b) is controlling over all other sections of the Act, i.e., if a transaction fits within the exemption provision of § 4106(b), it is automatically exempt from all other sections of the Act. The court feels this is an improper interpretation of the Act. As more fully discussed hereafter, each of the three sections involved herein, § 4012a(b), § 4104a and § 4106(b), is independent of the other two.
Defendant's second argument regarding the inapplicability of the Act to the Hofbauer transaction is that § 4106(b) has an effective date of July 1, 1975, some four months after the Hofbauer transaction took place. While recognizing that §§ 4012a(b) and 4104a have effective dates of "sixty days following December 31, 1973" and "thirty days following August 22, 1974," respectively, defendant again argues that § 4106(b) is controlling. Apart from plaintiffs' argument regarding the exemption provision listed above, they do not specifically address the issue of, as defendant puts it, the "inconsistent" effective dates of the three statutes. For the reasons set forth below, the court is of the opinion that there is no inconsistency among the statutes, that each of the three statutes must be looked at independently, and while a given transaction may be exempt from one section, it does not automatically follow that it is exempt from all other sections.
First, to hold that § 4106(b) is controlling would be to say that the effective dates of §§ 4012a(b) and 4104a are meaningless. It is difficult to imagine that Congress intended such a result.
Second, there is no reference to § 4106(b) in either § 4012a(b) or § 4104a. Further, the defendant has offered no evidence, and indeed there is none indicating that § 4012a(b) or § 4104a are in any way dependent on § 4106(b).
Third and most importantly is the fact that each section has its own very important and distinct purpose. Both §§ 4012a(b) and 4106(b) were enacted as part of the Flood Disaster Protection Act of 1973.2 Section 4012a(b) requires that no loans be made "after the expiration of sixty days following December 31, 1973" if such loan is "secured by improved real estate ... located ... in an area ... identified ... as an area having special flood hazards and in which flood insurance has been made available under this chapter ..." unless flood insurance is obtained.
Section 4106(b), on the other hand, prohibits the making of any loan after July 1, 1975 if such loan is "secured by improved real estate ... located ... in an area ... identified ... as an area having special flood hazards, unless the community in which such area is situated is then participating in the national flood insurance program." Thus, § 4012a(b) and § 4106(b) have related but different purposes. Section 4012a(b) encourages the purchase of flood insurance where available, while § 4106(b) encourages local communities to participate in the national flood insurance program. Both are stated goals of the Act. See 42 U.S.C. § 4001.
The purpose of § 4106(b), and its relationship to the other sections of the Act, is further made clear by § 4105 which provides that the Secretary of Housing and Urban Development ("Secretary") must notify each community of its "identification as a community containing one or more areas having special flood hazards." The community then has a certain period of time in which to make "proper application to participate in the national flood insurance program." If a community fails to...
To continue reading
Request your trial-
Brill v. Northern California Sav. & Loan Ass'n
...& Loan Ass'n, Civ. 79-1360 (D.Kan. Feb. 4, 1981) (hereinafter cited as Adlesperger); Hofbauer v. Northwestern National Bank of Rochester, 547 F.Supp. 940 (D.Minn.1981) (hereinafter cited as Hofbauer), holding that sections 4012a(b) and 4104a do create an implied private right of action. Gre......
-
Hofbauer v. Northwestern Nat. Bank of Rochester, Minn.
...Court held that there is such a right of action and granted plaintiffs' motion for summary judgment. Hofbauer v. Northwestern Nat'l Bank of Rochester, 547 F.Supp. 940 (D.Minn.1981). We are persuaded to the contrary by the reasoning of several recent appellate opinions that were not availabl......
-
Jacobsen v. Banco Mortg. Co., 3-80 Civ. 441.
...and 4 as outlined above. However, the court did address each of those issues in the companion case of Hofbauer v. Northwestern National Bank of Rochester, 547 F.Supp. 940 (D. Minn.1981). B. Whether 42 U.S.C. § 4012a(b) and 42 U.S.C. § 4104a and the Regulations Promulgated Thereunder Create ......