United States District Court, District of Columbia
E. Boasberg United States District Judge
or beetle - drought or tempest - on a farmer's land may
fall, / But for first-class ruination, trust a mortgage
'gainst them all.” Will Carleton may have written
these words over a century ago to capture the plight of rural
American farmers, but Plaintiff Anthony Floyd alleges that he
can bear witness to their continued relevance for the urban
real-estate investor of today. According to him, after the
District of Columbia erroneously listed one of his
residential properties as blighted, Defendants PNC Mortgage
and The Bank of New York Trust Company improperly required
inflated mortgage payments to cover the subsequent increase
in property taxes. He then sued them, citing two federal
statutes and a variety of state causes of action. Defendants
now move for summary judgment on the ground, inter
alia, that the federal laws Floyd invokes do not apply
to his loan. As the Court agrees, it will grant
Defendants' Motion as to his federal counts and refuse to
exercise supplemental jurisdiction as to what is left.
Court need not enter the corn maze of this case as a few
facts laid out in the light most favorable to Plaintiff will
suffice. On April 14, 1988, Floyd purchased a single-family
house located at 17 Rhode Island Avenue N.E., Washington,
D.C. See ECF No. 10 (Amended Complaint), ¶ 6;
ECF No. 37-4 (Deposition of Anthony Floyd) at 12. The
Property was originally purchased as an owner-occupied
residence. See Floyd Depo. at 12-14. In or around
1996, however, Floyd moved out and rented the Property to
others thenceforth. Id. (confirming he might have
lived at Property for some period, but not in the past 20
2004, Plaintiff refinanced the Property by securing a
residential loan from National City Mortgage Company.
See ECF No. 41-1, Exhs. 1 (Note), 2 (Deed of Trust).
To effectuate that loan, he executed a Note and Deed of Trust
on single-family residential forms. Id. All went
well with the mortgage until the District of Columbia
erroneously listed the Property as blighted in 2011 and,
accordingly, began charging additional property taxes on it.
See ECF No. 41-1, Exhs. 4-5. Defendants had, by this
time, taken over the loan servicing and thus paid these
additional taxes to the District. See ECF No. 41-2,
Exh. 6. They then sought to recover these amounts from
Plaintiff by increasing the escrow property-tax portion of
his monthly mortgage payments to match the new tax rate.
Id. Floyd, however, protested that he was not
obligated to pay this new sum. See ECF No. 39
(Opposition) at 3-4. Defendants, nevertheless, continued to
seek higher payments and eventually declared the mortgage in
default. Id.; Floyd Depo. at 44.
October 15, 2014, Floyd filed this action in the Superior
Court of the District of Columbia. See ECF No. 1
(Notice of Removal). After Defendants successfully removed
the case to this Court, Floyd filed an Amended Complaint
asserting six claims against them. See ECF No. 10.
Counts I and II allege that they violated two federal laws -
the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.
§ 2601, et seq., and the Truth in Lending Act
(TILA), 15 U.S.C. § 1601, et seq. See
Am. Compl., ¶¶ 24-61. The remaining four counts
allege various claims related to unfair or deceptive business
practices in violation of District of Columbia laws.
Id., ¶¶ 62-86. Discovery is now complete,
and Defendants jointly move for summary judgment on all
Standard of Review
judgment may be granted if “the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986); Holcomb v.
Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A fact is
“material” if it is capable of affecting the
substantive outcome of the litigation. See Liberty
Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at
895. A dispute is “genuine” if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party. See Scott v. Harris, 550 U.S. 372,
380 (2007); Liberty Lobby, 477 U.S. at 248;
Holcomb, 433 F.3d at 895. “A party asserting
that a fact cannot be or is genuinely disputed must support
the assertion” by “citing to particular parts of
materials in the record” or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” Fed.R.Civ.P.
motion for summary judgment is under consideration,
“[t]he evidence of the non-movant is to be believed,
and all justifiable inferences are to be drawn in his
favor.” Liberty Lobby, 477 U.S. at 255;
see also Mastro v. PEPCO, 447 F.3d 843, 850 (D.C.
Cir. 2006); Aka v. Wash. Hosp. Ctr., 156 F.3d 1284,
1288 (D.C. Cir. 1998) (en banc). The nonmoving
party's opposition, however, must consist of more than
mere unsupported allegations or denials and must be supported
by affidavits, declarations, or other competent evidence,
setting forth specific facts showing that there is a genuine
issue for trial. See Fed.R.Civ.P. 56(e); Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986). The
nonmovant is required to provide evidence that would permit a
reasonable jury to find in its favor. See Laningham v.
Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987).
Court first takes up Floyd's two federal claims, granting
summary judgment to Defendants on both. It next describes its
reasons for not exercising supplemental jurisdiction over
Federal Claims (RESPA and TILA)
Plaintiff's federal claims rely on statutes - RESPA and
TILA - that Congress passed to protect consumers
from abuse by creditors. Mourning v. Family Publications
Serv., Inc., 411 U.S. 356, 361-68 (1973) (explaining
history of TILA's passage to remedy problems with
consumer credit); Johnson v. Wells Fargo Home Mortg.,
Inc., 635 F.3d 401, 417 (9th Cir. 2011) (explaining
Congress passed RESPA “in 1974 to protect consumers
from abusive practices in mortgage closings”). Neither
of these statutes, accordingly, applies to loans taken out
for commercial or business purposes. See 12 U.S.C.
§ 2606(a)(1) (RESPA) (exempting “credit
transactions involving extensions of credit . . . primarily
for business, commercial, or agricultural purposes”);
15 U.S.C. § 1603(1) (TILA) (same). In general, a loan is
deemed to be for a business purpose when it is
“extended to acquire, improve, or maintain rental
property . . . that is not owner-occupied” -
e.g., “a single-family house that will be
rented to another person to live in.” 12 C.F.R. pt.
226, supp. I, cmt. 3(a)(4); accord Johnson, 635 F.3d
fundamental problem with Floyd's federal claims is thus
readily apparent. On his 2004 mortgage forms, he explicitly
indicated that he intended to use the Property for
“investment” purposes. See ECF No. 37-8
(Application) at 1 (indicating “Property will be
Investment, ” rather than “Primary
Residence” or “Secondary Residence”). He
then confirmed in his deposition in this case that he in fact
has used the Property as a rental since refinancing it in
2004 and, indeed, for nearly a decade before doing so.
See Floyd Depo. at 12-14. These two facts alone are
fatal to his federal claims.
acknowledges that these statutes do not apply to business
loans. See Opp. At 7-8. He nevertheless seeks to
avoid summary judgment by advancing two arguments, both of
which are factually misleading. He first contends that there
is a genuine issue of material fact as to whether he lived at
the property within a year of acquiring the 2004 loan,
see id., thus rendering it a consumer transaction
under RESPA and TILA. To support this assertion, he points
only to three pages of his deposition. Reproducing those
pages in full tells quite a different tale:
A. [Responding to question of how long he has owned the
Property . . .] Twenty? Let me think back. This is 2000 -
Q. This is 2016. So, say, from 1996, have you owned [the
Property] since at least 1996?
Q. What kind of property is ...