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PERKINS v. NASH

July 29, 1988

WINDELL PERKINS, Plaintiff,
v.
THOMAS K. NASH, et al., Defendants


Royce C. Lamberth, United States District Judge.


The opinion of the court was delivered by: LAMBERTH

ROYCE C. LAMBERTH, UNITED STATES DISTRICT JUDGE

 Plaintiff Windell Perkins brings this suit arising out of a loan transaction in which he and his wife were the borrowers, against defendant Thomas K. Nash, the lender. Also named as defendants are Barioux Trust (a transferee of the note signed by the Perkins pursuant to the loan), and various other unnamed defendants who allegedly participated with Nash in a scheme to defraud Mr. and Mrs. Perkins. In particular, Perkins alleges fraud, breach of fiduciary duty, and unjust enrichment; violation of various portions of the D.C. Consumer Protection Act, 6 D.C. Code Ann. § 28-3904 (1981); and violation of federal statutes, including the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. (1982), and the Racketeer Influenced and Corrupt Organizations Act, "RICO", 18 U.S.C. § 1962(c) (1982). In addition, Perkins seeks an accounting of all monies he paid to defendants. Nash has moved to dismiss and for summary judgment. No other defendant has been served or responded to plaintiff's complaint.

 FACTS: *fn1"

 In 1979, a salesman called on plaintiff Windell Perkins at his home, offering to sell him storm windows and to contract to perform various repairs to his house. Perkins said he was interested in the storm windows, but could not afford them. In the course of their conversation, Perkins indicated he also needed money for child support and to pay tuition for his daughters' schooling. The salesman promised to put him in touch with people who could finance whatever he needed.

 A few days later, Perkins was contacted by an unknown defendant, "John Doe", who said he belonged to an organization that could help him with his financial situation. Shortly thereafter, he and Perkins went to the office of defendant Thomas K. Nash for a meeting, during which Perkins told Nash he needed $ 15,000 to meet his child support obligations and to finance his daughters' schooling. Nash indicated such a loan could be arranged.

 About a week later, on January 22, 1980, Perkins and his wife went to Nash's office to obtain the loan, the funds for which Nash succeeded in obtaining from another unnamed defendant, "Richard Roe." Nash presented three documents for execution, including an affidavit, a promissory note, and a deed of trust to secure the note. According to Perkins, Nash made certain oral representations about the terms of the loan, and then told Perkins what to write on the documents. A copy of the note and affidavit are attached to Perkins' complaint.

 As can be seen, the two documents contain differing versions of the length of the loan, the affidavit saying "the note is due in two years " while the note itself says the entire balance is due in five years. Enigmatically, both Mr. and Mrs. Perkins wrote their initials by the five years term on the note, as if reinforcing their assent, while Mr. Perkins nonetheless filled in the two year term on the affidavit.

 More important to this action are the disparities between the actual terms contained in the loan documents, and what Nash allegedly told the Perkins such terms would be. Nash had said the interest rate would be 16% or 18% (Perkins does not now recall which), while the note specifies 12% for the first year and 30% thereafter. Nash said the total interest charged would be $ 4,768 on a principal loan amount of $ 15,000, for a total repayment amount of $ 19,768. The note indicates that $ 19,768 was only the principal amount. Finally, Nash said that the entire loan would be paid off after one year of monthly payments of approximately $ 197 plus one more year of monthly payments of approximately $ 494 (for a total of about $ 8,292); however, the affidavit indicates the specified principal sum of $ 19,768 would still be due at the end of such payments, and the note indicates that three additional years of the higher monthly payment would be due, and that such payments were for interest only, with the specified principal sum of $ 19,768 due at the end of the five year term.

 Perkins offers as an explanation that he did not read the documents he signed because he believed Nash had fully explained their terms to him. However, many of the pertinent terms which Perkins says were misrepresented to him were actually written in by Perkins himself. On the affidavit, he filled in the blanks of the following sentence. "The face amount of the note is $ 19,768 which is more than the proceeds which is [sic] $ 15,000." He also filled in the interest rates of 12% and 30% which he now claims Nash misrepresented to him. Further, he wrote "(interest only)" in the blanks following the descriptions of his monthly payments. Perkins contends that he filled in these terms at Nash's direction without understanding their import.

 In addition, Perkins complains that Nash also failed to inform him that by taking out a business loan he was losing the advantages conferred by various consumer protection statutes.

 After executing the documents, Perkins received the $ 15,000 loan. Contrary to another statement he wrote on the affidavit, he did not plan to use the loan proceeds for "Repairs/Rental Apartments" or any other colorable business purpose; rather, they were to be used to pay child support and tuition. Complaint para. 22.

 In January of 1982, approximately two years after taking out the loan, Nash told Perkins for the first time that the monthly payments he had been making were for interest only, and that he still owed the principal amount of $ 19,768 which now was due. Perkins told Nash he did not realize that was what the documents required, and said he didn't have that kind of money. Nash told him of some people who could refinance his loan; however, Perkins chose to continue to make monthly payments, attempting to bring his account current in order to forestall Nash's calling the loan.

 Evidently he succeeded for awhile: the record contains no dunning notices for most of 1982. But they started up again on November 29, 1982 and continued sporadically into 1984. The last dunning notice, dated July 31, 1984, stated that foreclosure proceedings would begin on August 7, 1984, that Perkins was $ 2,100.60 overdue on the note, and that it must be paid immediately.

 Sometime after that (plaintiff does not indicate when), Perkins secured refinancing and paid off the $ 19,768 Nash claimed he owed. He ...


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