Barrigan v. Elite Funding et al, No. 1:2007cv00951 - Document 126 (E.D. Va. 2009)
Court Description: MEMORANDUM OPINION re: Defendant's Motion for Summary Judgment, Plaintiff's Motion for Leave to File Surreply, and Plaintiff's Motion for Relief Under FRCP 36B. Signed by District Judge Claude M. Hilton on 1/6/09. (tfitz, )
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IN THE UNITED FOR THE STATES DISTRICT EASTERN DISTRICT COURT OF VIRGINIA ? Alexandria Division fi i J LISA BARRIGAN, 6 2009 ) Plaintiff, ) v. ) ELITE FUNDING, re et al^., Civil Action No. 07-0951 ) Defendants. ) MEMORANDUM OPINION This matter comes before the Court on Defendant Elite Funding and Defendant Decision One's Motions Judgment, see Fed. to File Surreply, R. Civ. P. 56(b), for Summary Plaintiff's Motion for Leave and Plaintiff's Motion for Relief Under FRCP 3 6B. Plaintiff owner of 12481 Hayes property"). was resides in Bristow, Court, Unit Virginia, 303, Defendant Elite Funding and is Fairfax, Virginia finance Defendant Plaintiff's In the named Thomas Decision One was purchase summer of 2005, Tamm ("Tamm") employed by Elite Funding. of the ("Fairfax (a/k/a Tenacity Mortgage) the mortgage broker Plaintiff used to purchase property. the record the mortgage the Fairfax lender used to same property. Plaintiff engaged a mortgage broker in order to purchase a home. During their initial Tamm was conversation on or about July 11, Tamm asked Plaintiff for basic financial information and told her that she could obtain 100% through two separate loans; one loan at account for 80% of the cost, financing 6% interest rate would and the second loan at 9% interest would account for the remaining 20% of the cost of the house. Based on this preliminary information, Tamm pre-approved Plaintiff for a mortgage up to $450,000 and told Plaintiff that she would have a monthly payment of In August 2005, $2,000 total Plaintiff decided to purchase the Fairfax property which had an asking price of $375,000. Plaintiff signed a sales contract to purchase $366,500, and on that with a the rate was On August 26, a variety of Plaintiff for the two separate the These 11.250%. Good realtor letter stated that that stated differing estimates rates than previously estimated. the estimate for the primary loan was $293,200 with an interest Both for signed two Good Faith Estimate documents loans; secondary loan was rate of the property for Tamm met with Plaintiff and presented her with loan documents in the amount of This 15, "TBD." her loan and different Specifically, On August same day Tamm provided Plaintiff's "Mortgage Pre-Approval Letter." interest for both loans. in the amount of rate of 6.940%, and $73,300 with an interest loans would carry a 2% prepayment penalty. Faith Estimates indicated required to pay approximately $2,400 that Plaintiff would be in monthly payments without including taxes and fees. In contrast to these figures, Plaintiff also signed at least two documents, Agreement and a Loan Application, a Rate Float which stated a 6.090% interest rate on the primary loan without a prepayment penalty. On September 13, 2005, Tamm informed Plaintiff that the rates on her loans would be consistent with the figures listed in the Good Faith Estimates Specifically, that signed on August 26. the primary loan would be for $293,200 at a 6.94% interest rate, the secondary loan would be interest rate of 11.250%, prepayment penalty. would be Plaintiff $2,400 for $73,300 at an and both loans would carry a 2% The total monthly payment on these exclusive of On September 20, 2005, loans taxes and fees. Plaintiff signed the loans that Tamm described on September 13. On September 20, 2007, Plaintiff Plaintiff's Amended Complaint, filed this filed on April the following six counts against Defendants: Negligent Misrepresentation, Supervision, 59.1 200, and/or Retention, (1), Judgment 25, (1) (2), on all Pursuant and (6) and three to Rule (5) 2008, Fraud, Negligent Hiring, (4) Violation of Va. Virginia Mortgage Lender Broker Act, Fiduciary Duty, claims (3) lawsuit. (5) alleged (2) Training, Code Sec. Breach of injunctive and declaratory relief. remain, and Defendants seek Summary claims. 56(c), this Court must grant summary Only judgment genuine is if the moving party demonstrates issue as entitled to 56 (c). views to any material judgment as "that fact and that a matter of law." there the moving party Fed. R. In reviewing a motion for summary judgment, the facts party. in a Anderson v. light most is no Civ. this P. Court favorable to the non-moving Liberty Lobby, Inc.. 477 U.S. 242, 255 {1986}. Once a motion for summary judgment supported, the opposing party then has a genuine dispute as Elec. 87 Indus. (1986) . Co.. to any material Ltd. v. is properly made and the burden of fact does Zenith Radio Corp.. The mere existence of showing that exist. 475 U.S. some alleged factual Matsushita 574, 586- dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; there be no genuine at 248. "Rule issue of material 56 (e) requires the pleadings and by *depositions, answers file,' issue designate [his] fact. Anderson, 477 U.S. the nonmoving party to go beyond own affidavits, to interrogatories, 'specific for trial.'" the requirement is that facts or by the and admissions showing that Celotex Corp. v. Catrett, there is 477 U.S. on a genuine 317, 324 (1986) . Plaintiff's that this expired. suit claims do not was Virginia brought survive Defendants' after law requires the that statute of challenges limitations had claims arising from fraud must "be brought within two years after the cause of accrues." Va. Code Ann. limitation applies fraud"). This to § 8.01-243(A) (2007)(stating that this "every action for damages resulting from limitation applies to both Plaintiff's negligent misrepresentation claims. Companies. 585 action S.E.2d 567, 573 n.4 Hansen v. (Va. fraud and Stanley Martin 2003) ("Negligent misrepresentation is the essence of a claim for constructive fraud in Virginia." Bovis. Inc.. (citing Richmond Metro. 507 S.E.2d 344, 347 (Va. Auth. 1998)). should have discovered, 8.01-249(1) (2007). the fraud. The undisputed facts McDevitt St. A cause of action for fraud accrues when the plaintiff discovered, diligence v. or using due Va. Code Ann. § show that Plaintiff discovered the facts underlying her claims of fraud and negligent misrepresentation no later than September 13, brought this suit on September 20, beyond the 2007, 2005. Plaintiff placing her fraud claims two-year limitation on making such claims. A claim for the breach of a fiduciary duty in Virginia is subject to a two-year statute of 8.01-248 begins Ann. § (2007). Under this Code section, tolling on the date 8.01-230 limitations. (2007). the injury was Va. Code Ann. § the two-year period sustained. Plaintiff's breach of Va. Code fiduciary duty claim asserts that the loan terms shared with Plaintiff on September 13 obtained, and were not that the best September 13 loan was terms too she late could have a date for her to seek alternative funding. to this Plaintiff's initial injury giving rise claim occurred no later than September Plaintiff brought this suit on September 20, claim for breach of 13, 2007, 2005. placing her fiduciary duty beyond the two-year limitation on making such a claim. Even if Plaintiff's claims were timely filed under their applicable statutes of limitations, Plaintiff has failed to establish any genuine issue of material fact to enable her claims of fraud, negligent misrepresentation, duty to survive establish actual failed to present evidence that would fraud. (3) mislead, damage To demonstrate actual "(1) a false representation, made intentionally or knowingly, (5) to 515 S.E.2d 291, Plaintiff was notified of Prospect 297 (Va. of material with intent to and Dev. 1999) (2) (4) reliance by the party misled, the party misled." Bershader, fraud under Plaintiff must establish six elements by clear and convincing evidence: fact, fiduciary summary judgment. Plaintiff has Virginia law, and breach of (6) Co. resulting Inc. v. (citations omitted). the loan terms contained in the September 20 documents no later than September 13, Tamm accurately represented the final terms 2005. to Plaintiff on September 13, there was no misrepresentation of material and Plaintiff could not have been misled by these signing the final loan documents Since on September 20. terms fact, into Plaintiff alleges that Defendants' July loan estimates were false representations which misled her into signing the final loan agreement. It is a common and lawful practice for mortgage brokers to quote estimated loan terms which may differ from the establish fraud, final Plaintiff must to potential borrowers loan terms. In order to show that a reasonable person would have believed in and relied on the false representations. Evaluation Research Corp. 1994). "Additionally, pre-existing fact, v. Aleauin, fraud must relate 781 (Va. as (Va. or a to future events." Consultant Eng'g Services. Inc., 467 S.E.2d 778, 1996)(internal punctuation and citation removed). order to make a showing of able to a present 390 and cannot ordinarily be predicated on unfulfilled promises or statements Mortarino v. 439 S.E.2d 387, fraud in this case, Plaintiff must be to show that a reasonable person would have loan estimates as final loan terms. Moreover, In relied on the Plaintiff must show that this was a reasonable belief even after being notified of the actual final loan terms a week prior to closing. estimates were nothing more The loan than unfulfilled promises or statements as to a future event. Plaintiff has not established reasonable reliance nor any misrepresentation of any material facts and, of therefore, has failed to establish any material issue fraud. As discussed above, Plaintiff's negligent misrepresentation claim is properly reviewed as a constructive fraud claim.1 her complaint, and constructive Plaintiff fraud claims with the supports her actual same evidence, namely, estimates were fraudulent representations. circumstances, however, claim of constructive S.E.2d 335, 342 McDevitt St. {Va. Bovis. will a promise of fraud." Inc.. 507 Ford Truck Sales v. 1985)). These Schneider. loan estimates unfulfilled promise of for a Plaintiff claims S.E.2d 344, Inc. v. 348 Auth. a broker owes his principal v. 94 (Va. than an therefore, they cannot fraud claim. Funding, through Tamm, breached a fiduciary duty owed to her as her broker. fiduciary, 666 1998); S.E.2d 91, constructive that Defendant Elite Johnson. (Va. were nothing more successful loan future action support a 325 future action and, the "Under no 2008)(citing Richmond Metro. Colonial form the basis SuperValu. that In "As a the duty to use utmost 1 Defendant Decision One argues that Virginia does not recognize the tort of negligent misrepresentation and therefore Plaintiff's claim ought to be dismissed as a matter of law. As support for this proposition, Defendant Decision One cites a series of cases from Virginia state and federal courts. Bentley v. Legent Corp.. 849 F. Supp. 429 (E.D. Va. 1994), aff'd sub nom. Herman v. Legent Corp.. 50 F.3d 6 (4th Cir. 1995); Joyce v. Lincoln Nat'l Life Ins. Co.. 845 F. Supp. 353 (E.D. Va. 1993), aff'd sub nom. Joyce v. Benefits Mktcr. Group. Inc.. 32 F.3d 562 (4th Cir. 1994); Haigh v. Matsushita Elec. Corp. of Am.. 676 F. Supp. 1332 (E.D. Va. 1987); JTH Tax. Inc. v. Whitaker. 2007 U.S. Dist. LEXIS 71938 (E.D. Va. Sept. 27, 2007); A.T. Massev Coal Co. v. Rudimex GmbH. 2006 U.S. Dist. LEXIS 1882 (E.D. Va. Jan. 9, 2006). Upon review, One's proposition, while these cases support Defendant Decision none are in a position to guide this Court's decision as they are either unpublished opinions or from a court whose decisions are not binding on this 8 Court. fidelity to him and must disclose to him all broker's knowledge which may be material which might action." influence the principal Firebaugh v. However, Hanback. facts within the to the transaction, in deciding upon a course of 443 S.E.2d 134, 137 a claim for breach of fiduciary duty fails plaintiff is unable to Vanguard Military Equip. Corp. Finestone Co.. Inc.. 492 Plaintiff claims (Va. if 1994). the identify a common law fiduciary duty that was breached. 6 or F. Supp. 2d 488, that Defendant Elite v. David B. (E.D. Va. 1997). Funding breached a fiduciary duty owed to Plaintiff to obtain the best mortgage product possible for her. Plaintiff further claims that this duty was breached since Defendant Elite Funding failed to ensure that Plaintiff fully understood the terms of the loan at a time when she had alternative options. establish that these actions were However, Plaintiff a breach of fails to a common law fiduciary duty. The undisputed facts show that Tamm did in fact obtain the best mortgage he could for Plaintiff based on her credit eligibility. Further, better alternatives to Plaintiff's claim that the mortgage rates provided by Tamm is conjectural to support a finding of material trial. same The informed of not have the is true final sufficient she would have had for Plaintiff's rates time to seven days fact remaining for claim that once prior too to secure alternative she was closing she funding. In did fact, Plaintiff entered into a Sales Contract on the Fairfax property in August which required her to obtain financing within four days of her signing that contract. a material fact remains Plaintiff has failed to show that for trial on her claim that Defendant Elite Funding breached a fiduciary duty owed to her. Plaintiff has failed to establish that her claims of fraud and breach of fiduciary duty were timely filed and her claim of negligent misrepresentation fails Furthermore, as a matter of law. even if Plaintiff had timely filed her claims, she has failed to establish any material fact remaining for trial on these claims. entitled to For the reasons stated above, Defendant is summary judgment. With regards to Plaintiff's Motion for Leave to File Surreply, the issues in this case have been fully briefed and a surreply is not appropriate. Relief Under FRCP 36B, Regarding Plaintiff's Motion for Plaintiff's responses to Decision One's Requests for Admissions will be considered timely filed. An appropriate Order shall issue. /s/ Claude M. Hilton United States District Judge Alexandria, Virginia January , U 2 009 . 10
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