Court: District Court, D. New Jersey; July 9, 2012; Federal District Court
Defendant Bank of America Corporation, previously known as Countrywide Bank, filed a motion for reconsideration of the court's order denying its motion for summary judgment regarding the claims brought by Plaintiffs Carl and Barbara D’Argenzio. Plaintiffs opposed this motion, asserting the court's previous denial was justified. Following oral arguments on April 27, 2012, the court granted the Defendant's motion for reconsideration, vacating its earlier denial of summary judgment concerning the Plaintiffs’ claim under the New Jersey Consumer Fraud Act (NJCFA) and entering summary judgment in favor of the Defendant. However, the court maintained its denial of summary judgment related to the Equal Credit Opportunity Act (ECOA) claim, doing so without prejudice.
The court's prior opinion dated November 21, 2011, had denied the Defendant's summary judgment motion, allowing both the NJCFA and ECOA claims to proceed. It noted genuine issues of material fact regarding the completeness of the July 2008 loan application and potential unlawful conduct by the Defendant, which allegedly misled the Plaintiffs into the 2007 loan agreement. The court concluded that a rational jury could find the Plaintiffs were fraudulently induced to enter the agreement and sustained ascertainable losses as a result. Regarding the ECOA claim, disputes existed over whether the Plaintiffs withdrew their loan application and the completeness of the application, with implications for compliance with the ECOA.
In its reconsideration request, the Defendant claimed the court had overlooked three key documents: a July 2, 2008 Notice of Incompleteness, a September 8, 2008 Withdrawal Letter, and an October 23, 2007 Loan Commitment, which were crucial for determining summary judgment. These documents were included in the declarations submitted by the Defendant.
The Defendant asserts compliance with the Equal Credit Opportunity Act (ECOA), arguing that the Notice of Incompleteness and Withdrawal Letter demonstrate no adverse action was taken against the Plaintiffs. Additionally, the Defendant contends that the 2007 Loan Commitment contradicts the Plaintiffs' claims of an automatic refinancing promise, suggesting the dismissal of the Plaintiffs’ New Jersey Consumer Fraud Act (NJCFA) claim. A new argument raised during reconsideration claims that the Plaintiffs' ECOA claim is barred by the statute of limitations. The Plaintiffs oppose this, asserting that genuine material facts exist, and that the aforementioned notices are not conclusive, citing their deposition testimony to support their position. They also maintain that the 2007 Loan Commitment does not negate their NJCFA claim, given their allegations of an oral refinancing commitment, and argue the Defendant waived the statute of limitations defense by consenting to their amended complaint.
Following the initial motion for reconsideration, the Defendant sought to supplement the record with the Plaintiffs' 2008 tax returns, claiming these documents reveal materially false income information on the Plaintiffs’ 2008 Uniform Residential Loan Application (URLA) and demonstrate the futility of the refinancing efforts. The Plaintiffs did not oppose the motion to supplement but argued that the tax returns are irrelevant to the court's prior summary judgment decision because they reflect the Plaintiffs' situation post-2007 loan and alleged refinancing promise. The court granted the motion for reconsideration to address the new evidence.
The review of the Defendant’s motion for reconsideration is governed by Local Civil Rule 7.1(i), which requires the movant to identify overlooked factual matters or legal authorities. The court's discretion in granting such motions is limited to cases of intervening law changes, newly available evidence, or the correction of clear legal errors to prevent injustice. The standard for granting reconsideration is stringent, with relief being granted sparingly.
The Court has allowed the original movant to introduce new evidence, specifically the 2008 tax returns, which were previously withheld by the Plaintiffs, necessitating a thorough reconsideration of the original motion. The Defendant claims that the Court overlooked three supporting documents for its summary judgment motion: the July 2, 2008 Notice of Incompleteness, the September 8, 2008 Withdrawal Letter, and the October 23, 2007 Loan Commitment. The Court clarified that it had addressed the Notice of Incompleteness, indicating that it detailed missing items from the Plaintiffs' loan application and acknowledged a dispute over whether the Plaintiffs submitted the requested information. Despite the acknowledgment of the dispute, the Court found no reason to reconsider based on this document as it was not overlooked.
Conversely, the Court did not consider the Withdrawal Letter and the Loan Commitment because they were not included in the record submitted by either party at the time of the initial ruling. The Defendant's motion for reconsideration asserts that these documents were included in its reply submission; however, it did not attach them to its initial motion. Legal precedent dictates that a moving party cannot introduce new issues or evidence in a reply brief that should have been included initially. Hence, the Defendant's failure to attach the Withdrawal Letter and Loan Commitment in its initial brief undermines the basis for reconsideration regarding those documents.
The Defendant submitted documents to the court for the first time in a reply brief, which were not included in the initial motion for summary judgment. The court allowed consideration of these documents despite the procedural misstep, as the Plaintiff had the chance to address them during reconsideration.
To prevail under the New Jersey Consumer Fraud Act (NJCFA), a plaintiff must show: (1) unlawful conduct by the Defendant, (2) an ascertainable loss suffered by the Plaintiff, and (3) a causal link between the unlawful conduct and the loss. In this case, the court found that the 2007 Loan Commitment clearly did not include an automatic refinancing provision to a 6% interest rate after three months, and the Plaintiffs could have contested its absence before signing. The integration clause in the loan commitment indicated that any prior agreements not included were superseded.
The court granted summary judgment for the Defendant on the NJCFA claim, concluding that no reasonable jury could find fraudulent inducement, as the terms were fully disclosed before execution. Additionally, the 2008 tax returns revealed that the Plaintiffs’ reported income was significantly overstated, indicating they would not have been financially able to refinance or make mortgage payments even if a lower interest rate loan had been obtained. The alleged oral promise to refinance was contingent on improving Carl D’Argenzio’s credit, which did not occur, further negating the causal relationship required for the NJCFA claim. Without sufficient income or assets, the Plaintiffs would have faced foreclosure regardless of the interest rate on their loan.
Plaintiff Carl D’Argenzio provided false testimony during his deposition regarding his and his wife's income for 2008, claiming it was between $5,000 and $10,000 per month, which would equate to an annual income of $60,000 to $120,000. In reality, their actual adjusted gross income for that year was only $15,786. This significant discrepancy remains unaddressed by the Plaintiffs or their attorney, confirming that they attempted to mislead Countrywide about their true income when applying for a loan. The Plaintiffs' financial situation had worsened compared to 2007, and they did not meet the conditions necessary for refinancing promised by the bank. Consequently, it is clear that the Plaintiffs were not defrauded, and no reasonable jury could support their claims, leading to the dismissal of their New Jersey Consumer Fraud Act (NJCFA) claim due to lack of causation.
Additionally, in a reconsideration motion, the Defendant raised a statute of limitations defense regarding the Plaintiffs' Equal Credit Opportunity Act (ECOA) claim, arguing it was filed beyond the two-year limitation period. While new legal arguments should generally not be introduced in motions for reconsideration, the court allowed discussion of this issue due to the parties' consensus for a prompt resolution. The court concluded that the ECOA claim relates back to the original pleading date under Rule 15(c) of the Federal Rules of Civil Procedure, as it arose from the same conduct as the originally asserted causes of action. Therefore, the ECOA claim was considered timely filed, falling within the applicable limitations period.
The court maintains that a genuine dispute exists regarding the processing and withdrawal of the Plaintiffs' mortgage refinancing application, despite the absence of documentary evidence from the Plaintiffs. The Plaintiffs testified that they submitted all necessary paperwork and did not withdraw their application, which creates a material fact issue. Additionally, a voicemail from a Countrywide employee indicating acceptance of the loan application further supports this contention. The Defendant has not proven that the Plaintiffs received the Withdrawal Letter, which raises questions about compliance with ECOA's statutory notice requirements. Consequently, summary judgment on this claim is denied, necessitating a trial.
Regarding the New Jersey Consumer Fraud Act claim, the court grants the Defendant's motion for reconsideration based on new evidence (the Plaintiffs' 2008 tax returns) and dismisses this claim. However, the ECOA claim remains active due to unresolved material facts about the notice requirement. The court notes that the Plaintiffs have yet to provide their 2007 tax returns, despite their importance in establishing their eligibility for the loan. The Plaintiffs' claimed income of $13,916 monthly for 2008 contradicts their actual annual income of $15,786, raising questions about their credibility. The court highlights that any misconduct by the Plaintiffs may impact equitable relief or damages but does not inherently negate the ECOA claim. This matter will be addressed at trial if necessary.
