Howard v. Riggs Nat. Bank

• Decision Date: 27 May 1981
• Docket Number: No. 79-1108.,79-1108.
• Citation: 432 A.2d 701
• Parties: Phyllis HOWARD, Appellant, v. The RIGGS NATIONAL BANK, Appellee.
• Court: D.C. Court of Appeals

432 A.2d 701

Phyllis HOWARD, Appellant, v. The RIGGS NATIONAL BANK, Appellee.

No. 79-1108.

District of Columbia Court of Appeals.

Argued April 17, 1980.

Decided May 27, 1981.

As Amended July 14, 1981.

COPYRIGHT MATERIAL OMITTED

Leonard S. Rubenstein, Alexandria, Va., for appellant. Janis L. McDonald, Alexandria, Va., also entered an appearance for appellant.

Frank F. Roberson, Washington, D. C., with whom Wendy T. Kirby, Washington, D. C., was on the brief, for appellee.

Before KELLY, NEBEKER and HARRIS, Associate Judges.

HARRIS, Associate Judge:

Appellant brought suit in the Superior Court charging appellee The Riggs National Bank (Riggs) with (1) common-law fraudulent misrepresentation, and (2) alleged violations of the District of Columbia Consumer Protection Procedures Act, D.C.Code 1978 Supp., Title 28 App., § 5. Appellant challenges the trial court's grant of summary judgment in favor of Riggs. We affirm.

I

Viewed in the light most favorable to appellant, the record reveals the following facts.¹

In early April of 1978, appellant contacted Louise Kelly, then a loan officer at the Watergate branch of Riggs, to apply for a mortgage loan. Appellant told Kelly that she needed approximately $53,000 to purchase and renovate a house located in northwest Washington.

Kelly indicated that before a construction loan could be made, the bank would need to see plans and specifications for the proposed renovation. When appellant expressed concern at the expense of retaining an architect to draft plans prior to her procuring the loan, Kelly commented that she knew of a contractor that could both draw up the plans and do the construction work at a reasonable price. Kelly mentioned that this contractor, Corio Corporation (Corio), had performed renovations for several of Riggs' customers, and that in one instance Corio had done the work for $10,000 less than any other construction firm had bid. Kelly also said that she had seen some of Corio's work and that it was "very good . . . very beautiful." She then gave a loan application form and Corio's telephone number to appellant, and asked appellant to return after she had obtained an estimate for the proposed construction work² Kelly did not mention to appellant that she (Kelly) was a personal acquaintance and former co-worker of Glenna Cortinas, the wife of one of Corio's co-owners, Antonio Cortinas, Jr.

On April 13, appellant met with Antonio Cortinas and Andrew Ciaccio, the other co-owner of Corio, at the house which she intended to purchase. At the time, Cortinas and Ciaccio informed appellant that they would need an $8,000 deposit before they could give her an estimate. The next day, a Friday, appellant attempted to reach Kelly at the bank to inquire about the advisability of paying the deposit, but she was told that Kelly was out of town. Appellant then decided to go ahead and sign a contract with Corio, paid Corio the $8,000 deposit, and received an itemized estimate for the proposed renovation work.³ Appellant did not contact any other prospective contractors. The following Monday, appellant telephoned Kelly at Riggs and told her that she had signed the contract and had paid the deposit. Kelly replied, "That's okay. Do you have the estimate?" Appellant answered that she did, whereupon Kelly asked her to bring it to the bank so that the loan application could be processed.

After Kelly had received the pertinent information, she forwarded the application to John Kline, an assistant vice-president of Riggs in the bank's real estate loan department. Approximately one month later, Kline informed appellant by phone that the bank tentatively had decided to make her a loan, but that the bank did not feel her financial status justified lending her the full amount she had requested. He offered her a loan of $40,000, which she accepted. On May 17, Kline sent appellant a letter conforming her acceptance of the loan and listing the terms and conditions of the loan agreement. The letter stated that the loan commitment was subject to the bank's approval of a general contractor who could provide a completion bond of a recognized surety company. It also required submission of plans and specifications for the renovation work and copies of the building permits. Appellant then arranged a meeting with Kline. At that meeting to which Ciaccio accompanied appellant, Kline explained that $31,500 of the loan would be paid at settlement, and the remaining $8,500 would be disbursed upon completion of the renovation. Kline then asked Ciaccio for Corio's certificate of bonding. Ciacco replied that he had left it back at his office. Ciaccio gave Kline the name of the bonding company and said that he would deliver the certificate the next day.

About a week later, appellant telephoned Kline to see whether he had received Corio's bonding certificate. She was told that no certificate would be needed after all, and that she should go ahead and arrange a settlement date. Although Kline did not explain the reasons for this change to her, the record reflects that the bank had decided to offer appellant a conventional mortgage loan rather than a construction mortgage loan. This was done because appellant had indicated that she would need more money "up front" at settlement than would be forthcoming under a construction loan.⁴ Moreover, Riggs had determined that, even without any renovations, the value of the property involved was greater than the amount of the loan, thus negating any need for a certificate of bonding.

In the latter part of May, still prior to settlement, Cortinas and Ciaccio told appellant that they had purchased the necessary materials and that they wanted to begin work immediately after settlement. They asked her, however, to modify their contract so as to provide for an additional payment of $8,000 prior to the commencement of any construction work. As consideration, they offered to lower the total price for the renovations by $500. Appellant agreed, and and in the latter part of May she signed a new contract. Settlement on the real estate transaction took place on June 16.

Shortly after settlement, Corio entered the property and began removing various fixtures, the ceiling, and woodwork. That, unfortunately, was the total extent of the work performed on the contract by Corio. When it became apparent that Corio was not going to perform, appellant — with Louise Kelly's assistance — tracked down Cortinas and Ciaccio, who told her that they were running low on money because of some "bad deals," but that they would complete the job for $25,000 if the entire balance were paid in advance. That proposition quite understandably was unattractive to appellant at that point, so she sought the aid of the Office of Consumer Protection (OCP).⁵ Through the OCP, appellant obtained an agreement from Corio that it would pay her back the $16,000 which she had advanced to it. However, only $400 was returned. Sometime after appellant filed her law suit, Cortinas filed for bankruptcy. The record does not reveal what happened to the Corio Corporation.

In the trial court, appellant alleged that Riggs, through its employees Kelly and Kline, made material misrepresentations and withheld material information concerning Corio which tended to induce her reliance thereon to her detriment. Specifically, she complained that Kelly made representations concerning Corio's reputation and the quality of Corio's work which were misleading and in reckless disregard of the truth. Appellant also pointed to Kelly's failure to disclose her acquaintance with Antonio Cortinas' wife, and to her failure to disclose the fact that Cortinas had defaulted on a loan from Riggs several weeks before appellant first spoke with Kelly.⁶ Finally, appellant asserted that Kline had led her to believe that Corio was "fully legitimate and bonded," when in fact it was not. The trial court concluded flat no cause of action lay under either a commonlaw theory of fraudulent misrepresentation or the Consumer Protection Procedures Act. Accordingly, the court granted summary judgment in favor of Riggs.

II

It is axiomatic that summary judgment is an extreme remedy which is appropriate only when the moving party is clearly entitled to judgment as a matter of law. See, e. g., Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 728, 88 L.Ed. 967 (1944); Willis v. Cheek, D.C.App., 387 A.2d 716, 719 (1978). The movant in such a case must bear the burden of proving that no genuine issue of material fact exists. Moreover, all inferences which may be drawn from subsidiary facts are to be resolved against him. See e. g., Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d. 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Willis v. Cheek, supra, at 719.

We conclude that although there are disputes as to subsidiary facts, no genuine dispute as to material facts sufficient to bar summary judgment exists. Even under appellant's version of the events leading to this lawsuit, the facts support the ruling in favor of Riggs as a matter of law. See, Super.Ct.Civ.R. 56(c).

III

The tort of fraudulent misrepresentation has four essential elements: (1) a false representation or willful omission of a material fact; (2) knowledge of the falsity; (3) an intention to induce reliance; and (4) action taken in reliance on the representation. Jacobs v. District Unemployment Compensation Board, D.C.App., 382 A.2d 282, 286 & n. 4 (1978); Rosenberg v. Howle, D.C.Mun.App., 56 A.2d 709, 710 (1948); see Bennett v. Kiggins, D.C.App., 377 A.2d 57, 59 (1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 768, 54 L.Ed.2d 782 (1978); W. Prosser, The Law of Torts § 105 (4th ed. 1971) (listing a fifth element, damages resulting from the action taken in reliance on the representation). To prevail at trial, a plaintiff must establish these requisite elements. Bennett v....