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Woods v. First National Bank of Durango

United States District Court, D. Colorado

October 14, 2014

THE FIRST NATIONAL BANK OF DURANGO, a chartered National Bank, Defendant.


WILEY Y. DANIEL, Senior District Judge.


THIS MATTER is before the Court on Defendant, First National Bank of Durango's ("FNBD"), Motion for Summary Judgment (ECF No. 103), filed on September 23, 2013. This motion seeks summary judgment on an Equal Credit Opportunity Act claim ("ECOA"), 15 U.S.C. § 1691, and 10 contractual and non-contractual claims. FNBD asserts that its notice of denial of credit to Plaintiffs, Reson L. Woods and Shaun K. Woods, was not untimely and that it did not violate its lending commitments. Plaintiffs filed a Response (ECF No. 123) on November 18, 2013. A reply (ECF No. 127) in support of FNBD's motion was filed on December 2, 2013. For the reasons stated below, FNBD's Motion for Summary Judgment is denied.


A. Standard of Review

Summary judgment may be granted where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the... moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A fact is material' if, under the governing law, it could have an effect on the outcome of the lawsuit." E.E.O.C. v. Horizon/CMS Healthcare Corp., 220 F.3d 1184, 1190 (10th Cir. 2000). "A dispute over a material fact is genuine' if a rational jury could find in favor of the nonmoving party on the evidence presented." Id.

The burden of showing that no genuine issue of material fact exists is borne by the moving party. Horizon/CMS Healthcare Corp., 220 F.3d at 1190. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.'" Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000) (quotation omitted). When applying the summary judgment standard, the court must "view the evidence and draw all reasonable inferences therefrom in the light most favorable to the party opposing summary judgment.'" Id. (quotation omitted). All doubts must be resolved in favor of the existence of triable issues of fact. Boren v. Southwestern Bell Tel. Co., 933 F.2d 891, 892 (10th Cir. 1991).

B. Whether Summary Judgment is Proper as to Plaintiffs' ECOA Claim

Plaintiffs' Second Amended Complaint (ECF No. 30) brings an ECOA claim, in which they assert that FNBD failed to provide timely notice of its denial of credit in the dealings it made with Plaintiffs. Under the ECOA, "[w]ithin thirty days... after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application."[1] 15 U.S.C. § 1691(d)(1) (emphasis added). "Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor." 15 U.S.C. § 1691(d)(2). Adverse action means "[a] refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered." 12 C.F.R. § 202.2(c)(1)(i) (emphasis added). Adverse action "does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit." 15 U.S.C. § 1691(d)(6) (emphasis added).

In the case at hand, FNBD argues that summary judgment is appropriate due to the lack of either adverse action or application completeness. Specifically, FNBD contends that the April 2008 Construction Loan constituted a counteroffer; Plaintiffs' default on the Construction Loan and prior undisclosed delinquency precludes an ECOA claim; and the adverse action notice associated with the September 2009 Uniform Residential Loan Application was not untimely because the application was incomplete. As explained below, I find that Plaintiffs have demonstrated the existence of genuine issues of material fact as to each of these contentions.

1. Counteroffer

A counteroffer may preclude an adverse action claim under the ECOA. 12 C.F.R. § 202.2(c)(1)(i). On April 15, 2008, FNBD issued Plaintiffs a Construction Loan Agreement in response to Plaintiffs' loan application submitted in February of 2008. In regards to the application, Plaintiffs allege that they submitted a single application to FNBD for a Construction Loan and a Permanent Loan. ECF No. 123, at p. 21. FNBD, however, asserts that Plaintiffs submitted a single application for just a Construction Loan. ECF No. 103, at p. 17. Plaintiffs subsequently signed the Construction Loan Agreement, but dispute FNBD's characterization of the Agreement as a counteroffer. ECF No. 123, at p. 24. In pertinent part, the Agreement states, "Borrower has applied to Lender for one or more loans for purposes of constructing the Improvements on the Real Property described below. Lender is willing to lend the loan amount to Borrower solely under the terms and conditions specified in this Agreement and In the Related Documents, to each of which Borrower agrees."[2] ECF No. 104-10, at p. 10.

FNBD contends that the Construction Loan Agreement constitutes a counteroffer, precluding adverse action under the ECOA. ECF No. 103, at p. 26. Plaintiffs contend that there are genuine issues of material fact to be resolved, including whether the Construction Loan Agreement constitutes a counteroffer[3] and whether the counteroffer was ...

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