Saucier v. Countrywide Home Loans
Decision Date | 18 April 2013 |
Docket Number | No. 11–CV–646.,11–CV–646. |
Citation | 64 A.3d 428 |
Parties | Joyce SAUCIER, et al., Appellants, v. COUNTRYWIDE HOME LOANS, et al., Appellees. |
Court | D.C. Court of Appeals |
OPINION TEXT STARTS HERE
Thomas J. Henderson, with whom David W. Sanford, Sharon Y. Eubanks, and Carolyn Hahn, Washington, DC, were on the brief, for appellants.
Thomas M. Hefferon, Washington, DC, with whom Matthew M. Hoffman, Washington, DC, and Sabrina M. Rose–Smithwere on the brief, for appellee Countrywide Home Loans, Inc.
Daniel J. Tobin, for appellee Presidential Bank FSB.
Before THOMPSON and BECKWITH, Associate Judges, and REID, Senior Judge.
These cases concern the rehabilitation and conversion into condominium units of rental apartments, located on Good Hope Road in the Southeast quadrant of the District of Columbia, and mortgage loans obtained for purchase of the condo units. After moving into their respective units, Joyce Saucier and ten other persons, plaintiffs/appellants, brought a lawsuit against Countrywide Home Loans, Inc. (“Countrywide”) and Presidential Bank FSB (“Presidential”), defendants/appellees, alleging various causes of action, including common law fraud, conspiracy, and violations of the District of Columbia Consumer Protection Procedures Act (“CPPA”). Following extensive proceedings in the trial court, the Honorable A. Franklin Burgess, Jr., granted summary judgment in favor of Presidential on all counts, and in favor of Countrywide except with respect to three plaintiffs as to one CPPA count. Ms. Saucier and the other appellants contend that the trial court erred in granting summary judgment to defendants on their fraud claims, two of their CPPA counts, and their conspiracy claim. In addition, they challenge the trial court's ruling that their Condominium Association lacked standing to sue under the CPPA. We affirm the trial court's grant of summary judgment with respect to the common law fraud claim, the conspiracy claim, and D.C.Code § 28–3904(e), but we vacate the judgment pertaining to the CPPA claim under § 28–3904(f), and we hold that the Condominium Association has standing to sue on behalf of its members.
The voluminous record reveals that at least five cases were filed in the trial court between the years 2004 and 2008, relating to rental apartment conversion to condominiums in the Good Hope Road area, and mortgage loans on condo units. Plaintiffs in these cases made similar claims. The trial court consolidated four of the cases (“the Fitzhugh cases”) and decided to manage discovery in the Saucier case with the consolidated cases. However, the court issued separate comprehensive and dispositive memorandum opinions (each exceeding 100 pages) in the Fitzhugh and Saucier cases. Eventually, the parties settled the Fitzhugh cases, but the Saucier plaintiffs appealed their case to this court.
The Saucier case had its origin in the purchase of condo units in a fifty-two year-old renovated property known as “King's Court.” Between January and August 2002, Ms. Saucier and the other ten plaintiffs closed on mortgage loans from either Countrywide (five loans) or Presidential (six loans). The loans were insured by the Federal Housing Administration (“FHA”), an agency within the federal Department of Housing and Urban Development (“HUD”).
Plaintiffs/appellants' original complaint, filed in March 2005, involved forty-three counts, including fraud, fraudulent concealment, breach of contract, violation of the CPPA, and conspiracy. On August 23, 2007, in a fifty-three page memorandum opinion, the Honorable Brook Hedge granted motions to dismiss some of the original defendants and counts. The cases were re-assigned to the Honorable Joan Zeldon from the end of December 2007 to the end of December 2009. During that time, a second amended complaint was filed in February 2008; the parties conducted extensive discovery and scheduled depositions. At the end of December 2009, the cases were transferred to Judge Burgess, who presided over continuing discovery and handled pre-trial filings and dispositive motions.
According to Judge Hedge's 2007 memorandum opinion responding to defendants' motions to dismiss, plaintiffs' original complaint alleged that four classes of defendants engaged in a “scheme to sell unsafe over-appraised condominiums to unsophisticated first time home buyers.” One of the developer defendants allegedly “was the main organizer of the overall scheme.” The complaint averred that the developer filed a public offering statement (“POS”) containing assertions that the defendants allegedly knew to be false, and that “[i]nstead of being renovated in compliance with the representations made in the POS, the condominiums were poorly renovated ..., resulting in condominiums that are not only of lesser quality than promised, but that are actually unsafe to live in due to their many problems including, a roof that requires replacing, improper ventilation, and poor drainage.” The second class of defendants, the “sales defendants,” sought to convince prospective condo unit owners to purchase, in part, by allegedly “manipulat[ing]” figures comparing rental and ownership costs, telling “plaintiffs that the units and common areas were backed by a two-year warranty against defects and major repairs although they knew this warranty would not be honored,” filling out and approving false applications for mortgage loans, and steering plaintiffs to certain mortgage lenders when they knew plaintiffs would not be able to make the mortgage payments. The mortgage defendants, specifically Countrywide and Presidential, who purportedly were protected because FHA insured the mortgages and because they resold the loans to other entities, “allegedly knowingly approved plaintiffs' loan applications knowing that the information on them was incorrect, that the property the plaintiffs were purchasing was overvalued, and that plaintiffs would be unable to repay their loans.” Finally the “appraiser defendant,” Chesapeake Appraisal, “allegedly intentionally over appraised the value of the condominiums to make the investment more attractive to potential creditors.”
Plaintiffs' depositions, through fact and expert witnesses, were designed to provide support for their litigation theory.1 Some unit owners experienced financial problems before and after the purchase of their condo units. For example, Barbara Wilkerson, who bought her condo unit for $62,995, testified that she “walked away” from her previously owned home because she could not pay the taxes on the home. Adrienne Newell Currington co-owned her sister's car and a loan officer told her she would not be approved for a Presidential loan; however, a sales agent gave her money to get the car off of her outstanding credit indebtedness. In light of these types of ongoing financial difficulties, plaintiffs began to question the accuracy of the appraised value of their units, whether they had timely received certain documents before closing on their loans, the accuracy of documents they ultimately saw, and whether the mortgage defendants approved their loans even though they knew plaintiffs could not afford to make the mortgage payments. After purchasing their condo units, some of the plaintiffs obtained equity credit lines or loans, or refinanced their mortgages one or more times in an effort to meet ongoing obligations, including credit card payments and financing of automobiles.
Plaintiffs testified that they did not timely receive, or had no recollection of receiving, certain documents from the mortgage defendants that may have influenced their decision as to whether to purchase a condo unit. Four documents were mentioned specifically: the Informed Consumer Choice Disclosure Notice, the POS, the Notice of Right to Copy of Appraisal, and the actual appraisal of their respective condo units. There is no Informed Consumer Choice Disclosure Notice in the record for Katie Carter, Traci Hamilton, Michael Maxwell, and Carlton Wilson. The notice for Roosevelt Hall appears in the record; it is signed (presumably by him) but undated. The notice appears in the record for the other appellants and is signed and dated.
Traci Hamilton maintained that she did not receive the POS until after closing, and that it contained a false statement, namely that the “roof was only five years old.” There is no Notice of Right to Copy of Appraisal for plaintiffs/appellants Carter, Hall, Hamilton, Maxwell, Wilson, and Dixon. However, there is a signed and dated notice for the other plaintiffs/appellants. Katie Carter and Roosevelt Hall denied receiving an appraisal, and Michael Maxwell did not remember receiving an appraisal before closing.
In addition to the specified documents, plaintiffs/appellants claim that they did not receive certain information, or accurate information, from the mortgage defendants that may have influenced their decision to purchase a condo unit—information that they could not afford to pay off the mortgage loan, that the loans did not comply with FHA/HUD guidelines and regulations, that the appraisals were inflated, and that the rehabilitation of the condo building was defective or lacking in new equipment and a new roof. The appraisal report that Ms. Hamilton eventually received stated falsely, she claimed, that the condo building “has a new flat rubberized bituminous membrane roof.” Katie Carter's appraisal said: “The subject has a flat rubberized bituminous membrane roof that has been replaced,” but there also was a later statement signed by Countrywide's underwriter that specified: “needs roofing cert.” A “notice to homeowner” statement contained in the Chesapeake appraisal report for Carl Wilson said that the condo building “has a flat rubberized membrane roof that has been replaced.” 2 Sheleta Bedney Watts testified that she took a friend and the friend's father to her meeting with sales agents, and...
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