CitiMortgage v. Chicago Bancorp., No. 15-1375 (8th Cir. 2015)
Annotate this CaseCMI filed suit against Bancorp, alleging breach of contract after Bancorp refused to cure or repurchase eleven loans. The district court granted summary judgment for CMI on eight of the eleven loans. Determining that Residential Funding Co. v. Terrace Mortg. Co. controls the court's analysis, the court held that the parties’ agreement granted the buyer sole discretion to determine whether a loan was defective and required the seller to repurchase if the buyer made such a determination, and the court should not inquire further by reviewing the validity of that determination. Even if CMI erroneously exercised its sole and exclusive discretion, Bancorp has presented no evidence that CMI exercised its discretion under the agreement in a manner intended to sabotage or evade the spirit of the agreement or to deny Bancorp the expected benefit of its bargain. Accordingly, the court concluded that the district court did not err in granting summary judgment on the Brown, Hansen, Maggio, and Perez loans. The court also concluded that the district court properly awarded CMI the repurchase price for the Brown and Bennett loans, as calculated using the formula set forth in the agreement. Finally, the court concluded that the district court did not err in granting summary judgment on the Curtis, Maggio, and Villares loans and rejected Bancorp's argument that there is a genuine issue of material fact regarding which party's negligent underwriting caused the loans to be defective. Accordingly, the court affirmed the judgment.
Court Description: Wollman, Author, with Colloton and Kelly, Circuit Judges] Civil case - Contracts. Under the parties' agreement, plaintiff had sole and exclusive discretion to determine whether loans it had purchased from defendant were defective and the court could not review the validity of its determination; even if plaintiff's determinations with respect to certain loans were erroneous, defendant failed to show plaintiff acted in bad faith, and the district court did not err in granting plaintiff's motion for summary judgment; damage-limiting doctrines cited by defendant do not trump the plain language of the parties' contract, and the district court properly awarded plaintiff the repurchase prices as calculated using the formula set out in the contract.
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