Markham v. Colonial Mortg. Service Co., Associates, Inc.

• Decision Date: 02 August 1979
• Docket Number: No. 78-1616,78-1616
• Parties: , 196 U.S.App.D.C. 50 CADC 79-145 Jerry W. MARKHAM and Marcia J. Harris, a/k/a Marcia Markham, Appellants, v. COLONIAL MORTGAGE SERVICE CO., ASSOCIATES, INC., et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 566

605 F.2d 566

55 A.L.R.Fed. 448, 196 U.S.App.D.C. 50

CADC 79-145 Jerry W. MARKHAM and Marcia J. Harris, a/k/a Marcia Markham, Appellants, v. COLONIAL MORTGAGE SERVICE CO., ASSOCIATES, INC., et al.

No. 78-1616.

United States Court of Appeals District of Columbia Circuit.

Argued March 28, 1979.

Decided Aug. 2, 1979.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 77-0232).

Jerry W. Markham, pro se.

Irving Kator, Washington, D. C., for appellee, Illinois Federal Service Savings and Loan Ass'n.

Matthew A. Kane, Washington, D. C., was on brief, for appellee, B. W. Real Estate, Inc.

Douglas L. Parker, Washington, D. C., was on brief, for amicus curiae, Consumer Federation of America urging reversal.

Drew S. Days III, Asst. Atty. Gen., Dept. of Justice, Earl J. Silbert, U. S. Atty., Walter W. Barnett and Cynthia L. Attwood, Attys., Dept. of Justice, Washington, D. C., were on brief, for amicus curiae, United States urging a remand.

Before WRIGHT, Chief Judge, SWYGERT, Circuit Judge, ¹ and ROBB, Circuit Judge.

Opinion for the court filed by SWYGERT, Circuit Judge.

SWYGERT, Circuit Judge.

The Equal Credit Opportunity Act, 15 U.S.C. §§ 1691, Et seq., prohibits creditors from discriminating against applicants on the basis of sex or marital status. We are asked to decide whether this prohibition prevents creditors from refusing to aggregate the incomes of two unmarried joint mortgage applicants when determining their creditworthiness in a situation where the incomes of two similarly situated married joint applicants would have been aggregated. The plaintiffs in this action, Jerry and Marcia Markham, appeal the judgment of the district court granting defendant Illinois Federal Service Savings and Loan Association's motion for summary judgment. We reverse. The plaintiffs also appeal the judgment of the district court granting a motion for summary judgment on behalf of defendants Colonial Mortgage Service Co. Associates, Inc., Al Shoemaker, and B.W. Real Estate, Inc. As to this matter, we affirm.

I

In November 1976, plaintiffs Marcia J. Harris ² and Jerry Markham announced their engagement and began looking for a residence in the Capitol Hill section of Washington, D.C. One of the real estate firms which they contacted, defendant B.W. Real Estate, Inc., found suitable property for them, and in December 1976, Markham and Harris signed a contract of sale for the property.

Upon the recommendation of B.W. Real Estate, plaintiffs agreed to have defendant Colonial Mortgage Service Co. Associates, Inc. (Colonial Mortgage) conduct a credit check. Plaintiffs subsequently submitted a joint mortgage application to Colonial Mortgage, who in turn submitted it to Colonial Mortgage Service Company (Colonial-Philadelphia), a business entity located in Philadelphia and not a party to this action.

In March 1976, Colonial-Philadelphia had entered into an agreement with defendant Illinois Federal Service Savings and Loan Association (Illinois Federal), whereby Illinois Federal agreed to purchase certain mortgages and trust deeds offered it by Colonial-Philadelphia. Pursuant to this agreement, Colonial-Philadelphia offered plaintiffs' mortgage application to Illinois Federal.

Plaintiffs and B.W. Real Estate had decided that February 4, 1977 would be an appropriate closing date for the purchase of the Capitol Hill residence. Accordingly, plaintiffs arranged to terminate their current leases, change mailing addresses, and begin utility service at the new property. On February 1, the loan committee of Illinois Federal rejected the plaintiffs' application. On February 3, the eve of the settlement date, plaintiffs were informed through a B.W. Real Estate agent that their loan application had been denied because they were not married. They were advised that their application would be resubmitted to the "investor" who was not identified on February 8, but that approval would be contingent upon the submission of a marriage certificate.

On February 8, the Illinois Federal loan committee reconsidered the plaintiffs' application, but again denied it. A letter was sent that date from Illinois Federal to Colonial-Philadelphia, which letter stated that the application had been rejected with the statement: "Separate income not sufficient for loan and job tenure."

On February 9, 1977 plaintiffs filed this suit, alleging violation of the Equal Credit Opportunity Act. After the district court separately granted the motions of Illinois Federal and the other defendants for summary judgment on May 25, 1978, plaintiffs brought this appeal.

II

A.

We address first the appeal from the district court's summary judgment entered in favor of Illinois Federal. The district court concluded as a matter of law that plaintiffs could not state a claim under the Equal Credit Opportunity Act even if they showed that Illinois Federal's refusal to aggregate their incomes resulted, in whole or in part, in the denial of their loan application. This conclusion was based on the premise that creditors need not ignore the "special legal ties created between two people by the marital bond." It was the court's conclusion that under Illinois law ³ the mere fact of marriage provides creditors with greater rights and remedies against married applicants than are available against unmarried applicants. Presumably the district court believed that this excused Illinois Federal under 15 U.S.C. § 1691d(b), which allows a creditor to take "(s)tate property laws directly or indirectly affecting creditworthiness" into consideration in making credit decisions.

We fail to see the relevance of any special legal ties created by marriage with respect to the legal obligations of joint debtors. This was not an instance where a single person is applying for credit individually and claiming income from a third party for purposes of determining creditworthiness. In such an instance, the absence of a legal obligation requiring continuance of the income claimed by the applicant from the third party would reflect on the credit applicant's creditworthiness. Inasmuch as the Markhams applied for their mortgage jointly, they would have been jointly and severally liable on the debt. Each joint debtor would be bound to pay the full amount of the debt; he would then have a right to contribution from his joint debtor. See 4 A. Corbin, Contracts §§ 924, 928 (1951). See also Clayman v. Goodman Properties, Inc., 171 U.S.App.D.C. 88, 518 F.2d 1026 (1973); Welch v. Sherwin, 112 U.S.App.D.C. 124, 300 F.2d 716 (1962); Ill.Ann.Stat. ch. 76, § 3 (Smith-Hurd). While it may be true that judicially-enforceable rights such as support and maintenance are legal consequences of married status, they are irrelevancies as far as the creditworthiness of joint applicants is concerned. Illinois Federal would have had no greater rights against the Markhams had they been married, nor would the Markhams have had greater rights against each other on this particular obligation. Thus, inasmuch as the state laws attaching in the event of marriage would not affect the creditworthiness of these joint applicants, section 1691d(b) may not be used to justify the refusal to aggregate the plaintiffs' incomes on the basis of marital status.

B.

We turn to a consideration of whether the Equal Credit Opportunity Act's prohibition of discrimination on the basis of sex or marital status makes illegal Illinois Federal's refusal to aggregate plaintiffs' income when determining their creditworthiness. Illinois Federal contends that neither the purpose nor the language of the Act requires it to combine the incomes of unmarried joint applicants when making that determination.

We start, as we must, with the language of the statute itself. March v. United States, 165 U.S.App.D.C. 267, 274, 506 F.2d 1306, 1313 (1974). 15 U.S.C. § 1691(a) provides:

It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction

(1) on the basis of . . . sex or marital status

This language is simple, and its meaning is not difficult to comprehend. Illinois Federal itself has correctly phrased the standard in its brief: The Act forbids discrimination "on the basis of a person's marital status, that is, to treat persons differently, all other facts being the same, because of their marital status . . . ." Brief for Defendant Illinois Federal at 18. Illinois Federal does not contend that they would not have aggregated plaintiffs' income had they been married at the time. Indeed, Illinois Federal concedes that the law would have required it to do so. ⁴ Thus, it is plain that Illinois Federal treated plaintiffs differently that is, refused to aggregate their incomes solely because of their marital status, which is precisely the sort of discrimination prohibited by section 1691(a)(1) on its face.

Despite the section's clarity of language, Illinois Federal seeks to avoid a finding of prohibited discrimination by arguing that it was not the Congressional purpose to require such an aggregation of the incomes of non-married applicants. It can be assumed, Arguendo, that one, perhaps even the main, purpose of the act was to eradicate credit discrimination waged against women, especially married women whom creditors traditionally refused to consider apart from their husbands as individually worthy of credit. But granting such an assumption does not negate the clear language of the Act itself that discrimination against Any applicant, with respect to Any aspect of a credit transaction, which is based on marital status is outlawed. When the plain meaning of a statute appears on its face, we need not concern ourselves with legislative history, See Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917), especially when evidence of the legislation's history as has been presented to us does not argue persuasively for a narrower...