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Sloan v. Urban Title Services

September 14, 2009

ANDREA SLOAN, AS GUARDIAN AND CONSERVATOR ON BEHALF OF MARY JUERGENS, AN INCAPACITATED INDIVIDUAL, IN BOTH MARY JUERGENS' INDIVIDUAL CAPACITY AND AS THE SOLE MEMBER OF "1230 23RD STREET, LLC," PLAINTIFF,
v.
URBAN TITLE SERVICES, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

The above-captioned lawsuit was filed by the original Plaintiff in this matter, Mary Juergens,*fn1 nearly three years ago to challenge the legality of two disparate loans extended to Plaintiff, each of which was secured by a condominium located at 1230 23rd Street, N.W., Apartment 505, Washington, D.C. 20037 (the "Condo"). Plaintiff named as Defendants in this action Urban Title Services, Inc. ("UTS"), Dale Duncan, First Mount Vernon Industrial Loan Association, Inc., Arthur Bennett, and Brickshire Settlements, LLC.*fn2 According to Plaintiff, the first of the two loans at issue in this case was extended with the assistance of UTS, while the second loan was extended by First Mount Vernon Industrial Loan Association, Inc., with the assistance of Bennett, Duncan and Brickshire (collectively, "FMV Defendants").

Currently pending before the Court are a series of cross-motions for partial summary judgment filed by the various parties in this action. This Memorandum Opinion addresses only those motions for partial summary judgment filed by Plaintiff with respect to allegations in her Fourth Amended Complaint relating to the first loan-i.e., the loan extended with the assistance of UTS-and Defendant UTS' related cross-motion for partial summary judgment. There are three such motions: (1) Plaintiff's [156] Motion for Summary Judgment on the Issue of UTS's Conversion, (2) Plaintiff's [157] Motion for Summary Judgment on the Issue of Whether UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10), and (3) Defendant UTS' [170] Cross-Motion for Summary Judgment as to Counts X and XI. The first motion relates to Count II of Plaintiff's Fourth Amended Complaint while the latter two motions relate to Counts X and XI of Plaintiff's Fourth Amended Complaint.

Upon a searching review of the memoranda filed with respect to the pending motions, the exhibits thereto, the relevant case law and statutes, and the entire record herein, the Court shall DENY the parties' pending motions for the reasons set forth below. Specifically, the Court: (1) DENIES as moot Plaintiff's [156] Motion for Summary Judgment on the Issue of UTS' Conversion in light of the parties' joint stipulation and UTS' concession of liability; (2) DENIES Plaintiff's [157] Motion for Summary Judgment on the Issue of Whether UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10) and Defendant UTS' [170] Cross-Motion for Summary Judgment as to Counts X and XI, insofar as it moves for summary judgment on the issue of UTS' status as a statutory mortgage broker, based upon the existence of disputes of material fact; (3) DENIES as moot Defendant UTS' [170] Cross-Motion for Summary Judgment as to Counts X and XI, insofar as it moves for summary judgment with respect to Count XI, in light of Plaintiff's stipulation of dismissal; and (4) DENIES Defendant UTS' [170] Cross-Motion for Summary Judgment as to Counts X and XI, insofar as it moves for summary judgment with respect to Count X, based upon the existence of material disputed facts.

I. BACKGROUND

The Court assumes familiarity with the factual background of this case, which is set forth in detail in both its May 25, 2007 Memorandum Opinion, see generally Juergens v. UTS, 246 F.R.D. 4 (D.D.C. 2007), and its February 4, 2008, Memorandum Opinion, see generally Juergens v, UTS, 533 F. Supp. 2d 64 (D.D.C. 2008), and therefore discusses only those facts that are relevant to the motions at issue in the instant Memorandum Opinion. In particular, although Plaintiff's Fourth Amended Complaint includes a variety of allegations regarding the loan extended to her by the FMV Defendants, the Court does not address herein the facts relevant to that loan because Plaintiff's claims as to the FMV Defendants are irrelevant to the motions at issue in this Opinion.

A. Factual Background

In or around 2001, Plaintiff obtained a condominium unit located at 1230 23rd Street, N.W., Washington, D.C., (the "Condo"). Def.'s UTS' Stmt., Docket No. [170], ¶ 10. The Condo was purchased for Plaintiff as a gift from her benefactor, Douglas Yearley. Id. Plaintiff, however, was responsible for paying the monthly residential assessments to the condominium association. Id. Notwithstanding this arrangement, Plaintiff failed to make the required monthly payments and, by late summer/early fall of 2003, Plaintiff owed approximately $10,000 in condominium assessment fees and related payments. Id. ¶¶ 12, 14. The condominium association threatened to foreclose on Plaintiff's Condo. Id. ¶ 12. Accordingly, Plaintiff decided to secure a loan to cover her delinquent condominium fees and to avoid foreclosure. See id. ¶¶ 13-16.

At that time, Plaintiff owned the Condo free and clear of any mortgages or liens, save for the delinquent condominium assessment and associated fees and penalties. Id. ¶ 15. She was also receiving $5,500 in income per month from Yearley. Id. ¶ 16. Nonetheless, Plaintiff's credit prevented her from obtaining a mortgage loan from any commercial bank. Id. ¶¶ 17-18. Although many of the remaining facts surrounding Plaintiff's attempts to secure a mortgage loan are in dispute, the parties agree that Plaintiff ultimately secured a mortgage loan for $60,000 from a private lender, the Owen Living Trust, and that UTS acted as the closing agent for this loan. Id. ¶¶ 29-31. The parties disagree, however, as to whether UTS-in addition to acting as the settlement agent-also played a role in soliciting the mortgage loan on Plaintiff's behalf.

UTS is a settlement company whose services include performing real estate closings and related services. Id. ¶ 1. Neither UTS nor any of its agents, servants, or employees possess a mortgage lender or mortgage broker license. Id. ¶ 2. William Kenney, Paul Erb and Robert Carney*fn3 were owners of and partners in UTS. Id. ¶ 3. Within UTS, Kenney's duties included marketings and closings; Erb handled the company's accounting and prepared the HUD-1 Settlement Statements; and Carney supervised Erb, provided legal advice, and prepared title insurance binders. Id. ¶ 4. In addition, the parties agree that, separate from his work with UTS, Carney had an outside, unrelated law practice. Id. ¶ 5. As part of that law practice, Carney provided legal services to various private lenders, and he would call on these clients from time to time to make loans to individuals such as Plaintiff. Id. ¶ 7. One such client was George Owen, who made private loans to individuals through his trust, the Owen Living Trust, a private, non-federally regulated lender. See id. ¶¶ 8-9.

As previously explained, Plaintiff met with several local banks in late summer/early fall of 2003, but was unable to obtain a mortgage loan from any of these banks because of her poor credit. Id. ¶ 18. Accordingly, in an effort to secure a loan through alternative routes, Plaintiff met with Robert Brickman, a loan officer at Atlantic Capital Funding Corporation ("Atlantic Capital"). Id. ¶ 20. Although neither Plaintiff nor UTS has explicitly explained how Plaintiff was first introduced to Brickman, it appears from the record that Plaintiff was first referred to Atlantic Capital by Kenney-in other words, that Plaintiff met first with Kenney at UTS who then referred her to Brickman to assist her with locating a mortgage loan. See Pl.'s Resp. ¶ 5, Docket No. [190], (quoting Juergens Deposition at pp. 241:12-242:17 ("[Brickman] was an associate of [Kenney's] and was in that - the same kind of business and was trying to help. I don't know what his company was, but he was someone that Mr. Kenney worked with and was trying to help me get a loan.")); see also id. ¶ 2 (quoting Carney Deposition at pp. 26:6-27:2 ("[Kenney] sent his loans to Atlantic Capital or he always had a tie-in with somebody for his loans.")).

Brickman then solicited a mortgage loan application from Plaintiff, obtained copies of her credit report, and obtained an appraisal of the Condo. Def. UTS' Stmt., Docket No. [170],¶ 21. It appears from the record that Kenney played some role in this process, although the exact extent is unclear; at a minimum, there is evidence that Kenney assisted Plaintiff with her application to Atlantic Capital. See Pl.'s Resp. ¶ 5, Docket No. [190], (quoting Juergens Deposition at pp. 241:12-242:17 (testifying that Kenney assisted Plaintiff with the application to Atlantic Capital) and at p. 172:3-10 ("I recall Bill Kenney applying to Atlantic and a friend of his, Bob Brickman, but I don't know that I specifically filled out an application. I think they might have done it for me because they were scrambling around to different places trying to get me a loan.")). Ultimately, despite multiple attempts to obtain a loan through public mortgage companies, Plaintiff's credit was so poor that Brickman was unable to obtain a home mortgage loan for Plaintiff. Def. UTS' Stmt., Docket No. [170],¶ 22.

Both Plaintiff and UTS agree that, at this point, Plaintiff's loan file was transferred to Carney, who was eventually responsible for contacting Owen and securing the loan from the Owen Living Trust. The parties disagree, however, as to whether Kenney played any role in referring the matter to Carney and whether Carney was acting on behalf of UTS in securing the loan. According to UTS, when Brickman realized he was unable to obtain a traditional mortgage loan for Plaintiff, given her poor credit history, he transferred Plaintiff's loan file to Carney because he "knew that Carney was an attorney whose clients included private lenders and believed that Carney may have a private lender who would be willing to make a loan to [Plaintiff]." Id. ¶¶ 24-25; see also Def. UTS' [170] Opp'n/Cross-MSJ, Ex. A (Declaration of Robert Brickman) (hereinafter "Brickman Decl.") ¶ 17. By contrast, Plaintiff contends that it was actually Kenney (an undisputed agent of UTS) who transferred the file to Carney and asked him if he could try to locate a potential lender for Plaintiff. See Pl.'s Resp. ¶ 2, Docket No. [190]. In support of this assertion, Plaintiff directs the Court to an excerpted citation from Carney's deposition testimony in which he states that Kenney gave him Plaintiff's loan file and asked him "to see[] if any of [his] clients would be interested in making a loan... to [Plaintiff]." Id. (quoting Carney Deposition at p. 11:9-16); see also id. (quoting Carney Deposition at pp. 12:2-13:8 ("Bill Kenney came into my office and he brought a thick file and he gave me some pertinent information about the deal, that he had gone through one loan company -- I think it was Atlantic Capital -- and he just informed me to look it over and see if I might have a client that would be interested in making the loan, including myself.")).*fn4 The record before the Court thus reflects a dispute as to whether Brickman or Kenney actually provided Plaintiff's loan file to Carney and requested that he see if he could locate any interested lenders.

Both parties agree, however, that upon receipt of the Plaintiff's loan file, Carney reviewed it and eventually contacted Owen, a client of his legal practice, to ask him if he would be interested in making a loan to the ...


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