Deutsche Bank National Trust Co. v. Daniel

Citations: 217 P.3d 127; 2009 OK CIV APP 13; 2008 Okla. Civ. App. LEXIS 109Docket: No. 105,481

Court: Court of Civil Appeals of Oklahoma; August 12, 2008; Oklahoma; State Appellate Court

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David Daniel (Borrower) appeals a summary judgment favoring Ameriquest Mortgage Company in a tort and contract action related to a foreclosure. The Borrowers refinanced their home in November 2005 and executed a $71,920 promissory note and mortgage to Ameriquest. This loan covered their existing mortgage, credit card debts, and provided cash. The adjustable rate note featured an initial interest rate of 8.75% for three years. The Borrowers acknowledged that oral agreements were unenforceable and that the written agreement contained all terms. They received a document advising them to consult an attorney, not to feel pressured, to compare loan offers, and that they had seven days to cancel the loan after closing, although Borrower disputed signing this document. The Borrowers defaulted on payments after January 2006, and the note and mortgage were assigned to Deutsche Bank, which initiated foreclosure proceedings in June 2006. Borrowers counterclaimed against Deutsche Bank, alleging violations of HOEPA, fraud, emotional distress, breach of an oral contract, and negligence. The trial court granted Deutsche Bank's motion for summary judgment, determining the Borrowers had executed the note, were aware of the loan terms, and had the option to rescind the loan, which they did not exercise. An earlier appeal was affirmed. In the current appeal, Borrowers' third-party petition against Ameriquest included claims similar to those against Deutsche Bank. Ameriquest's motion for summary judgment was granted, prompting the appeal. Summary judgment is appropriate when there is no significant dispute over material facts, warranting a de novo review by the appellate court.

Borrower's claims stem from a real estate transaction involving a commercial lender, Ameriquest, and a closing agent. The lending process typically begins with marketing efforts directed at potential borrowers, leading to a loan application and credit check. Upon approval, the lender extends a loan offer, which may include a locked interest rate. If accepted, the lender gathers property information and engages a closing agent to manage the transaction, including title work and appraisals. The closing agent ensures all documentation is prepared, verifies tax payments, and obtains the borrower’s signature on the loan documents. The lender finalizes the loan by either transferring funds to the seller or depositing them into the closing agent’s escrow account for later disbursement.

In this case, Borrower completed the loan process, signed the necessary documents, and received funds from Ameriquest but subsequently defaulted on payments. Deutsche Bank, as the mortgage holder, initiated foreclosure proceedings. The trial court previously upheld Deutsche Bank's summary judgment for foreclosure. Now, the focus is on the trial court's summary judgment favoring Ameriquest regarding Borrower’s third-party claims. Borrower alleges predatory lending practices by Ameriquest, citing high upfront costs and interest rates designed to facilitate loan failure, in violation of the Home Ownership and Equity Protection Act (HOEPA). Borrower references a previous case that examined creditors' lending patterns without assessing borrowers' repayment abilities, including income and obligations.

The Court of Civil Appeals addressed a borrower's claims against Ameriquest regarding a loan agreement. The borrower contended that her property was in a blighted area, the loan terms were predatory, and the loan was designed to fail, leading to foreclosure. However, the court determined that these claims did not apply to the current borrower, who lacked evidence to support similar allegations. Specifically, the court found that the interest rate of 8.75% was not excessive, closing fees were reasonable, and the borrower had the ability to repay the loan at the time of signing. Ameriquest’s attempts to collect payments were aimed at avoiding foreclosure, and the loan was later assigned to Deutsche Bank.

In his second cause of action, the borrower claimed intentional infliction of emotional distress due to Ameriquest's collection efforts. The court noted that to succeed in such a claim, the borrower needed to prove that Ameriquest's conduct was extreme or outrageous, which the evidence did not support. The demands made were consistent with the loan documents or were the result of increased property taxes.

The borrower’s third claim involved fraudulent misrepresentation of loan terms. The court highlighted that while Ameriquest initially provided an estimate with lower rates, the borrower signed a written agreement that accurately reflected the terms he agreed to, negating his claim of fraud.

In the fourth cause of action, the borrower alleged economic duress in accepting a higher interest rate. The court found no evidence of coercive behavior from Ameriquest, noting that the borrower had expressed satisfaction with the loan shortly after its execution. Ultimately, the court concluded that unsupported allegations would not suffice to counter a motion for summary judgment.

Borrower claims Ameriquest breached a verbal contract for an 8% interest rate and a $560 monthly payment, which included insurance and taxes. The trial court previously granted summary judgment to Deutsche Bank, determining that Borrower was bound by a written contract that superseded any oral agreements, classifying the oral representation merely as a representation rather than a binding contract. This ruling is a final judgment, and Borrower is collaterally estopped from challenging its validity. Even if an oral contract existed, it was modified when Borrower signed the written loan documents, which indicated that the terms were contingent on final approval by the lender.

In the sixth cause of action, Borrower alleges Ameriquest breached the contract and acted negligently in calculating the payoff amount for his original mortgage and in transferring funds. However, the loan closed on November 11, 2005, and Ameriquest transferred sufficient funds to the closing agent on November 18, as per the closing documents. Any issues regarding a "short" payoff check were not due to Ameriquest's actions, and there was no breach related to a one-day delay in disbursing cash to Borrower.

Borrower also questioned the validity of his signatures on certain documents, including the notice of the seven-day right to cancel the loan. However, the trial court's previous ruling implied Borrower was aware of his rescission rights. Regardless, even if there were questions concerning the signatures or knowledge of those rights, Borrower’s claims are not contingent on that document. The Court affirmed the summary judgment in favor of Ameriquest. Additionally, Borrower's attempt to file an amended petition on behalf of himself and another party was invalid due to lack of authorization, allowing the appeal to proceed solely for Borrower David Daniel.

A notice of record completion from the Cleveland County Court Clerk's office was filed, followed by a withdrawal of that completion; however, all relevant documents appear to have been included in the record submitted to the Court. Nations Title served as the closing agent in this case, but Borrowers did not successfully serve them, thus Nations Title is not a party to the appeal. Settlement costs typically encompass loan origination fees, discount points, processing fees, and additional costs intended to be charged by the lender. "Reverse redlining" is defined as the denial of credit extension based on the geographic area, income, race, or ethnicity of its residents, referencing United Cos. Lending Corp. v. Sargeant. The actual settlement charges of $7,599.95 (10.6% of the $71,920 loan) were not disproportionately higher than the estimated charges of $5,469.41 (9.7% of the original requested loan amount of $56,363.59), which is consistent with the typical increase of settlement costs relative to the loan size. The Borrower lost his job and was imprisoned weeks after signing the loan documents, a detail that will be elaborated on later in the opinion. There is a dispute regarding the originally discussed interest rate, with the Borrower claiming it was 8%, while documentation shows the initial requested rate was 8.45%. Additionally, issues arose concerning OCWAN's calculation of the payoff amount and potential delays by Nations Title in transmitting the payment. An affidavit indicates that the Borrowers were aware that the closing agent held the funds. The prior appeal order noted that Borrowers had an additional week to rescind the loan for any reason, reinforcing the concept of collateral estoppel.