Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 20, 2024 _________________________________ Christopher M. Wolpert Clerk of Court MARQUISE MILLER; DEKOVEN RIGGINS; RICHARD OSEI; CHAD TYLER,
Plaintiffs - Appellants,
and
CDMR, LLC, an Oklahoma limited liability company,
Plaintiff,
v. No. 23-6050 (D.C. No. 5:22-CV-00185-F) FIRST UNITED BANK AND TRUST (W.D. Okla.) COMPANY, an Oklahoma banking corporation, d/b/a First United Bank,
Defendant - Appellee. _________________________________
ORDER AND JUDGMENT * _________________________________
Before HARTZ, PHILLIPS, and McHUGH, Circuit Judges. _________________________________
* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 2
Marquise Miller, Dekoven Riggins, Richard Osei, and Chad Tyler (together,
Individuals), appearing pro se, appeal the district court’s judgment dismissing their
claims of credit discrimination. They also appeal the district court’s denial of their
motion to alter or amend the judgment. Exercising jurisdiction under 28 U.S.C. § 1291,
we affirm.
I. BACKGROUND
The Individuals filed a pro se complaint alleging credit discrimination claims
against First United Bank and Trust Co. (First United) under the Equal Credit
Opportunity Act (ECOA), see 15 U.S.C. §1691(a); the Fair Housing Act (FHA), see
42 U.S.C. §§ 3604–3605; and 42 U.S.C. § 1981. 1 The claims arose from First United’s
denial of a loan application to finance the purchase of an apartment complex. The
Individuals, who are Black, alleged that they applied for financing through First United,
that they also were to be guarantors of the loan, and that First United denied the
application based on their race. They sought damages.
First United filed a motion to dismiss the FHA claim. The district court granted
the motion and dismissed the FHA claim without prejudice, reasoning that the FHA did
not apply under the alleged circumstances. However, the court gave the Individuals leave
to amend their complaint.
1 In relevant part, § 1981 provides: “All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens.” § 1981(a). It also protects those rights “against impairment by nongovernmental discrimination.” § 1981(c). 2 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 3
An attorney then entered an appearance on behalf of the Individuals and filed a
motion for leave to add CDMR, LLC as a necessary party-plaintiff because “the loan
application guaranteed by the four individual Plaintiffs [was] directed to and made by . . .
CDMR, . . . which is owned by the four individual Plaintiffs.” R. at 80. The motion also
sought permission to file a first amended complaint (FAC). The FAC added CDMR as a
plaintiff, asserted the same three claims as the original complaint, and sought damages.
The court granted the motion.
Next, First United filed a motion under Federal Rule of Civil Procedure 12(b)(6),
seeking dismissal of Plaintiffs’ FHA and ECOA claims and the Individuals’ § 1981
claim. 2 The court granted the motion as to Plaintiffs’ FHA claim, dismissing it without
prejudice. On appeal, the Individuals 3 do not challenge this ruling, so we omit further
discussion of it.
The district court also granted the motion as to the Individuals’ ECOA claim,
dismissing it without prejudice. The court concluded that the Individuals failed to
establish their right to sue under the ECOA because the ECOA prohibits racial
discrimination against loan applicants, but they alleged they were to be personal
guarantors of the loan. The court also observed that although 12 C.F.R. § 1002.2(e)
defines “applicant” to include a guarantor, it does so only for purposes of 12 C.F.R.
§ 1002.7(d). Section 1002.7(d) is part of the ECOA’s implementing regulation,
2 We refer to CDMR and the Individuals together as “Plaintiffs.” 3 CDMR is not an appellant. 3 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 4
Regulation B, and prohibits requiring spouses to guarantee loans (referred to as the
“signature rules” or the “spouse-guarantor rules”). See Riggs Nat’l Bank of Washington,
D.C. v. Linch, 36 F.3d 370, 374 (4th Cir. 1994) (“It is well-established that the ECOA
and its implementing regulations prohibit a creditor from requiring a spouse’s signature
on a note when the applicant individually qualifies for the requested credit.” (citations
omitted)). However, the court determined that there were no allegations that First United
violated the signature rules. But with respect to CDMR, the court concluded that the
FAC alleged sufficient facts to establish a prima facie ECOA claim. The court therefore
dismissed only the Individuals’ ECOA claim.
Turning to the Individuals’ § 1981 claim, the district court observed that “‘a
plaintiff cannot state a claim under § 1981 unless he has (or would have) rights under the
existing (or proposed) contract that he wishes “to make and enforce.”’” R. at 238
(quoting Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 479–80 (2006), which quoted
§ 1981). Applying that rule, the court concluded the Individuals lacked statutory
standing because they had not identified “any injuries flowing from any alleged racially
motivated breach of [their] contractual relationship with [First United],” but only
“injuries flowing from the allegedly racially motivated breach of CDMR’s proposed
contractual relationship with [First United].” Id. The court therefore dismissed the
Individuals’ § 1981 claim.
The court’s rulings left only CDMR’s ECOA and § 1981 claims.
The Individuals then filed a pro se “Motion to Add Necessary Party,” seeking to
add themselves back into the case as to the ECOA claim. See R. at 240–42. While that
4 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 5
motion was pending, Plaintiffs’ counsel filed a motion to withdraw. The district court
granted the motion to withdraw and gave CDMR a month to secure an entry of
appearance by new counsel. Soon thereafter, the Individuals filed a pro se motion for
leave to file a second amended complaint (SAC) to add allegations that they were
“co-borrowers[] along with CDMR.” R. at 273.
The district court denied the Individuals’ pending motions. The court construed
the Motion to Add Necessary Party as a motion for reconsideration of its dismissal of the
Individuals’ ECOA claim and found no reason to reconsider its earlier ruling. The court
rejected the Individuals’ reliance on Citgo Petroleum Corp. v. Bulk Petroleum Corp.,
No. 08-CV-654, 2010 WL 3931496 (N.D. Okla. Oct. 5, 2010) (unpublished), which
concluded that the ECOA’s protections against discrimination extended to a guarantor
who was required to sign a spousal guaranty, see id. at *7–9. After explaining that it was
not bound by the decision of other federal district courts, the district court distinguished
Citgo Petroleum because it involved an alleged violation of the signature rules, whereas
there was no such alleged violation in the instant case.
Turning to the motion to amend, the district court concluded that the Individuals
could not seek amendment because Federal Rule of Civil Procedure 15(a)(1) provides
that a “party” may be granted leave to amend, but they were no longer parties to the
case—the court had denied reconsideration of its dismissal of their ECOA claim, and
they had not sought reconsideration of their FHA or § 1981 claims. In the alternative, the
court denied leave to amend because the proposed SAC appeared to be offered in bad
faith given an irreconcilable factual contradiction between the FAC and the SAC. The
5 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 6
FAC, which was “filed by retained counsel,” alleged that the Individuals, “‘through their
business entity, CDMR,’” had “applied for financing through First United, and that the
individual Plaintiffs ‘were personal guarantors of the loan.’” R. at 343 (quoting
R. at 112, ¶ 6, and 116, ¶ 33). In contrast, the proposed SAC alleged that the Individuals
were “‘co-borrowers’ and that they, ‘along with CDMR,’” had “‘applied for financing’
through First United.” R. at 343 (apparently quoting R. at 279, ¶ 7). The court found it
“clear . . . that the proposed [SAC] is making factual allegations that the individual
plaintiffs would have been aware of when the [FAC] was filed, but they did not choose to
advance those factual allegations until after the court dismissed their claims.”
R. at 343–44. Thus, the court denied the motion to amend.
By separate order on the same day, the district court dismissed CDMR’s FAC and
action without prejudice because CDMR did not secure an entry of new counsel by the
court’s deadline. R. at 345–46. The court also entered a separate judgment.
A week later, the Individuals filed a motion to alter or amend the judgment under
Federal Rule of Civil Procedure 59(e). They asked the court “to include them in the
lawsuit as necessary parties” and “to allow them to amend their complaint to add all
relevant causes of action.” R. at 401. In support of those requests, they advanced
multiple theories regarding their standing to bring their ECOA and § 1981 claims as
personal guarantors or co-borrowers. The district court construed the motion as
proposing a need to correct clear error and denied it. Although the court concluded that
the arguments and authorities could have been raised in prior briefing, it nevertheless
addressed the merits and concluded that the Individuals had not demonstrated clear error.
6 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 7
We postpone further discussion of the district court’s ruling until the relevant sections of
our analysis.
The Individuals filed a timely notice of appeal.
II. DISCUSSION
A. Standards of review
The Individuals’ appellate arguments chiefly concern (and largely without clearly
discerning between) the district court’s orders denying the Motion to Add Necessary
Parties (construed as a motion for reconsideration of the dismissal of the Individuals’
ECOA claim), the motion for leave to file the SAC, and the Rule 59(e) motion. We
review those orders for an abuse of discretion. See Roberts v. Winder, 16 F.4th 1367,
1385 (10th Cir. 2021) (motion for reconsideration); Jensen v. W. Jordan City, 968 F.3d
1187, 1201 (10th Cir. 2020) (motion for leave to amend); Pueblo of Jemez v. United
States, 63 F.4th 881, 889 (10th Cir. 2023) (Rule 59(e) motion). A district court abuses its
discretion if its ruling “was arbitrary, capricious, whimsical, or manifestly unreasonable,”
or the court made “an error of law.” Pueblo of Jemez, 63 F.4th at 889 (internal quotation
marks omitted).
To the extent the Individuals’ appellate arguments implicate the district court’s
Rule 12(b)(6) dismissal of their ECOA and § 1981 claims as set out in the FAC, our
review is de novo. See Albers v. Bd. of Cnty. Comm’rs, 771 F.3d 697, 700 (10th Cir.
2014). “To survive a [Rule 12(b)(6)] motion to dismiss, a plaintiff must plead facts
sufficient to state a claim to relief that is plausible on its face.” Id. (internal quotation
marks omitted). And “we must accept all the well-pleaded allegations of the complaint
7 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 8
as true and must construe them in the light most favorable to the plaintiff.” Id. (internal
quotation marks omitted).
We afford the Individuals’ pro se filings a liberal construction, but we may not
serve as their advocates. See Yang v. Archuleta, 525 F.3d 925, 927 n.1 (10th Cir. 2008).
B. Arguments concerning ECOA claim
1. Guarantor theory
The Individuals first argue that, as guarantors of the loan to CDMR, they had
statutory standing to bring their ECOA claim. We disagree.
In relevant part, the ECOA makes it “unlawful for any creditor to discriminate
against any applicant, with respect to any aspect of a credit transaction . . . on the basis of
race.” 15 U.S.C. § 1691(a)(1). It defines “[t]he term ‘applicant’” as “any person who
applies to a creditor directly for an extension, renewal, or continuation of credit.”
§ 1691a(b). 4 The plain language of the statute does not include guarantors. However,
Regulation B’s definition of “applicant” includes a guarantor, but only for purposes of the
signature rules: “Applicant means any person who requests or who has received an
extension of credit from a creditor, and includes any person who is or may become
contractually liable regarding an extension of credit. For purposes of [12 C.F.R.]
§ 1002.7(d), the term includes guarantors, sureties, endorsers, and similar parties.”
12 C.F.R. § 1002.2(e) (emphasis added).
4 “The term ‘person’ means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.” 15 U.S.C. § 1691a(f). 8 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 9
Section 1002.2(e)’s plain language allows a guarantor to be considered an
applicant for one limited purpose—violation of the signature rules. And, as the district
court found, the Individuals never alleged a violation of the signature rules. Thus, the
district court concluded that they lacked statutory standing.
In contesting the district court’s handling of their ECOA claim, the Individuals
lean heavily on several statements in RL BB Acquisitions, LLC v. Bridgemill Commons
Development Group, 754 F.3d 380 (6th Cir. 2014) (RL BB), which they relied on in their
Rule 59(e) motion. In that case, the Sixth Circuit concluded that the statutory definition
of “applicant” is “ambiguous because it could be read to include third parties who do not
initiate an application for credit, and who do not seek credit for themselves—a category
that includes guarantors.” Id. at 384–85. The court saw “no reason to artificially limit
the possible meanings of ‘applicant’” because the “ECOA prohibits discrimination ‘with
respect to any aspect of a credit transaction,’” id. at 385 (quoting 15 U.S.C. § 1691(a))
(emphasis in RL BB), and because the ECOA “has broad remedial goals,” id. (internal
The Individuals argue that we should extend these broad statements beyond the
specific circumstances of RL BB to conclude they have ECOA standing based on their
proposed role as guarantors of the loan CDMR applied for. We decline to do so because
this argument rests on an incomplete reading of the Sixth Circuit’s opinion and requires
us to use a disfavored canon of statutory construction.
In RL BB, the Sixth Circuit considered whether the regulatory definition of
applicant was “entitled to deference such that guarantors may raise ECOA claims.” Id.
9 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 10
at 384. To answer that question, the court applied the two-step inquiry set out in
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43
(1984). The court recognized that at Chevron’s first step, the inquiry is whether the
statute is silent or ambiguous on the relevant issue. RL BB, 754 F.3d at 384. The court
concluded that the statutory definition was ambiguous such that it could include
guarantors. See id. at 384–85. At Chevron’s second step, the court asked whether the
regulatory definition was a permissible construction of the statutory definition. See
id. at 385. The court determined that it was, but only to the extent of asserting violations
of the signature rules. See id. at 385–86. Importantly, the Sixth Circuit observed that
treating guarantors as applicants for the limited purpose of the signature rules was “a
result that the regulators reached with caution. When the Federal Reserve began the
process of amending Regulation B to cover guarantors, it initially proposed that
guarantors would be deemed applicants throughout the regulation.” Id. at 385 (citing
50 Fed. Reg. 48018, 48020 (Nov. 20, 1985) (Official Staff Commentary)). 5 “This
definition would have allowed guarantors to sue for violations of any portion of
Regulation B. But the final version limited the definition of applicant so it would only
apply to the spouse-guarantor rule.” Id. at 386. “The Federal Reserve reached this
conclusion ‘in response to the concerns of industry commenters who believed that the
5 The 1985 Official Staff Commentary cited in RL BB concerned 12 C.F.R. §§ 202.2(e) and 202.7(d). The regulations at issue here, 12 C.F.R. §§ 1002.2(e) and 1002.7(d), were not promulgated until 2011. See 76 Fed. Reg. 79442-01, 79442, 79445 (Dec. 21, 2011). However, because the two regulatory definitions of “applicant” are materially identical, we may apply the 1985 Official Staff Commentary to our interpretation of § 1002.2(e). 10 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 11
unlimited inclusion of guarantors and similar parties in the definition might subject
creditors to a risk of liability for technical violations of various provisions of the
regulation.’” Id. (quoting 50 Fed. Reg. at 48,020).
For our purposes, we may assume, without deciding, that RL BB correctly
determined that the statutory definition of “applicant” is ambiguous and that the inclusion
of guarantors in the regulatory definition of applicant is entitled to deference. 6 But even
so, the regulatory definition brings guarantors within the meaning of “applicant” only for
purposes of the signature rules, and the Individuals did not allege any violation of those
rules.
Furthermore, even assuming the ECOA has “broad remedial goals,” id. at 385
(internal quotation marks omitted), we may not use that purpose to employ a liberal
construction of the statute or the regulation “as a substitute for a conclusion grounded in
. . . text and structure.” CTS Corp. v. Waldburger, 573 U.S. 1, 12 (2014). 7 The text and
structure here show that the ECOA and its implementing regulations define an applicant
as including guarantors only for purposes of the signature rules. That conclusion is
Other circuit courts that have considered the issue have reached the opposite 6
conclusion and, consequently, have held that Regulation B’s inclusion of guarantors in the definition of applicant is not entitled to Chevron deference. See Regions Bank v. Legal Outsource PA, 936 F.3d 1184, 1193 (11th Cir. 2019); Hawkins v. Cmty. Bank of Raymore, 761 F.3d 937, 942 (8th Cir. 2014), aff’d by an equally divided court, 577 U.S. 495 (2016); Moran Foods, Inc. v. Mid-Atl. Mkt. Dev. Co., 476 F.3d 436, 441 (7th Cir. 2007)). We do not weigh in on this circuit split. Canons of statutory construction are equally applicable to the interpretation of 7
regulations. See Time Warner Ent. Co. v. Everest Midwest Licensee, L.L.C., 381 F.3d 1039, 1050 (10th Cir. 2004). 11 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 12
reinforced by evidence that the Federal Reserve rejected the idea of allowing guarantors
to be considered applicants for all portions of Regulation B (and, by extension, all
portions of the ECOA). 8
The Individuals also point out that the regulatory definition of applicant “includes
any person who is or may become contractually liable regarding an extension of credit.”
12 C.F.R. § 1002.2(e). They argue that this phrase includes guarantors because a
guarantor may become contractually liable for repayment of a loan by, for example,
intervening in the contract to make payments to avert a default. See Aplt. Reply Br.
at 3–6. We disagree. “[O]ne of the most basic interpretive canons [is] that a statute
should be construed so that effect is given to all its provisions, so that no part will be
inoperative or superfluous, void or insignificant.” United States v. Dawes (In re Dawes),
652 F.3d 1236, 1242 (10th Cir. 2011) (internal quotation marks omitted). Crediting the
Individuals’ reading of § 1002.2(e)’s first sentence would render the next sentence of the
definition superfluous; if guarantors are applicants because they “may become
contractually liable regarding an extension of credit,” there would have been no need to
specify that guarantors are applicants for purposes of the signature rules. Furthermore, as
we have already explained, when it revised the regulatory definition of applicant, the
Federal Reserve clearly intended guarantors to fall within that definition only for
purposes of enforcing the signature rules.
8 For the same reasons, the Individuals’ continued reliance on Citgo Petroleum Corp. v. Bulk Petroleum Corp., No. 08-CV-654, 2010 WL 3931496 (N.D. Okla. Oct. 5, 2010) (unpublished), is misplaced. 12 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 13
2. Principal borrower theory
The Individuals next argue that they were the principal borrowers for ECOA
purposes because CDMR had no credit or financial history, which they claim this court
requires a borrower to have under United States v. Gregory, 54 F.4th 1183 (10th Cir.
2022), cert. denied, 143 S. Ct. 1756 (2023). Gregory, however, was a direct criminal
appeal involving a challenge to the sufficiency of the evidence to sustain a federal bank
fraud conviction. In that context we discussed a lender’s consideration of one “type[] of
information banks evaluate and expect to receive when they are asked to consider a
loan,” namely, “the character of the borrowers.” Id. at 1193 (emphasis omitted). We
observed that “[l]enders need to know the character of the borrower and those serving as
guarantors on the loan.” Id. at 1194 (emphasis added). Even if we might import that
principle into an ECOA analysis, it does not equate a guarantor to a borrower (or, for
ECOA purposes, an applicant) when the borrower (applicant) lacks a credit or financial
history. To the contrary, it only heightens the distinction between a borrower (applicant)
and a guarantor. The Individuals’ reliance on Gregory, therefore, is misplaced.
3. Co-borrower theory
The Individuals next rely on several general principles concerning sureties and
guarantors—that guarantors have the same rights as sureties, including the right to
proceed against a creditor; and that like borrowers, guarantors are directly responsible to
the creditor. From these principles they argue that although a guarantor does not become
the principal borrower, he can act in the principal borrower’s place “vicariously in his
individual capacity,” Aplt. Opening Br. at 14 (italics omitted), which they apparently
13 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 14
conclude renders them co-borrowers. None of the cases they rely on for support,
however, are ECOA cases; they instead concern state or common law principles and
causes of action. It is true that we must adopt a common-law rule of decision or
incorporate state law where a question involving “a federal claim . . . cannot be answered
by statutory interpretation.” Ellis v. Liberty Life Assurance Co. of Bos., 958 F.3d 1271,
1280 (10th Cir. 2020). But here we are satisfied that the ECOA and its implementing
regulations adequately answer the question before us. We therefore reject this line of
argument.
In further support of their theory that their submission of their personal financial
information rendered them co-borrowers, the Individuals rely on Durdin v. Cheyenne
Mountain Bank, 98 P.3d 899 (Colo. App. 2004). 9 In Durdin, the Colorado Court of
Appeals considered whether Durdin, the sole shareholder and owner of a corporation
called Carefree, had standing to pursue an ECOA claim involving a bank’s allegedly
untimely notice of an adverse decision on a loan application. See id. at 901. Because
Durdin had not brought a claim under the signature rules, the court concluded that he
would lack standing if he had “alleged that his status in submitting the application was
simply as a potential guarantor of Carefree’s loan.” Id. at 902. The court then
determined that Durdin was both a guarantor and a co-borrower because, among other
things, he had “submitted the loan application to [the bank] not simply as a guarantor of
9 The Individuals discuss Durdin as part of their challenge to the district court’s refusal to allow them to file the SAC. But analytically, Durdin also bears on their theory that they were co-borrowers. We therefore examine it as part of their co-borrower theory. 14 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 15
Carefree, but also as a coborrower”; there was evidence “that [the bank] ordered a credit
report on him and requested his personal financial records, personal income tax returns,
and personal financial statement”; and he had “specifically requested in writing that [the
bank] consider the loan as a personal one secured by his assets.” Id. at 903.
The district court rejected the Individuals’ reliance on Durdin in its order denying
their Rule 59(e) motion. The court distinguished Durdin because the Individuals “did not
allege or proffer any facts that they specifically requested in writing that First United
consider the loan to purchase the apartment complex as a personal one to them.”
R. at 427. In support, the district court relied on “Paragraph 7(d)(1) of the Official Staff
Interpretations to Regulation B.” Id. That paragraph states: “The term ‘joint applicant’
refers to someone who applies contemporaneously with the applicant for shared or joint
credit. It does not refer to someone whose signature is required by the creditor as a
condition for granting the credit requested.” 12 C.F.R. Pt. 1002, Supp. I., ¶ 7(d)(1).2. It
also states that “[a] person’s intent to be a joint applicant must be evidenced at the time of
the application.” Id., ¶ 7(d)(1).3.
The district court determined that the record facts at the time it denied the Motion
to Add Necessary Parties (treated as a motion for reconsideration of the court’s dismissal
of the Individuals’ ECOA claim) did not show that the Individuals had “requested in
writing to First United that the commercial loan be a personal loan for them or that they
were applying for the loan individually as well as on behalf of CDMR.” R. at 427. The
court explained that the then-existing record facts, as set out in the counseled motion to
add CDMR as a plaintiff, the FAC, and the Motion to Add Necessary Parties, showed just
15 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 16
the opposite—the Individuals were proposed personal guarantors of the loan, CDMR
made the loan application, and CDMR was to purchase the complex, as indicated on the
purchase contract. Id. The court afforded no significance to the fact that the Individuals
had supplied their personal financial information: “[T]hat First United required and
examined the financial information of [the Individuals], who were the proposed personal
guarantors of the loan, was not unusual since the bank could extend credit ‘solely on the
financial strength of’ the guarantors.” Id. at 427–28 (quoting 12 C.F.R.
§ 217.122(b)(2)(i)).
In challenging the district court’s treatment of their Durdin argument, the
Individuals fail to address the key distinguishing fact—the absence of any allegations that
they had submitted a loan application as co-borrowers (other than in the SAC, the
rejection of which, as we later explain, was not an abuse of discretion) or had specifically
requested in writing that First United consider the loan a personal one secured by their
assets. This distinction is fatal to their reliance on Durdin.
C. Arguments concerning § 1981 claim
As the district court observed, the Supreme Court has held “that a plaintiff cannot
state a claim under § 1981 unless he has (or would have) rights under the existing (or
proposed) contract that he wishes ‘to make and enforce.’” Domino’s Pizza, Inc., 546 U.S.
at 479–80 (quoting § 1981). To do that, “[§] 1981 plaintiffs must identify injuries
flowing from a racially motivated breach of their own contractual relationship, not of
someone else’s.” Id. at 480.
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The Individuals contest the district court’s rulings that they lacked standing to
pursue their § 1981 claim. First United argues that, through inadequate briefing, the
Individuals have waived review of those rulings. We disagree. Liberally construed,
part VI of the opening brief adequately advances an argument concerning the district
court’s dismissal of the Individuals’ § 1981 claim. That argument, however, lacks merit.
The Individuals’ § 1981 argument rests on three premises: a guarantor can (1) be
sued individually, (2) act in place of the principal borrower, and (3) sue a creditor
directly. From those premises, they conclude that the district court erred in dismissing
their § 1981 claim on the ground that they had identified injuries flowing only from an
allegedly racially motivated breach of CDMR’s proposed contractual relationship. None
of the cases they rely on for this argument, however, involved a § 1981 claim. And in the
§ 1981 context, we have “reject[ed] the premise that a stockholder’s status as a guarantor
gives the stockholder status to assert an individual [§ 1981] claim against a third party
where that harm is derivative of that suffered by the corporation.” Guides, Ltd. v.
Yarmouth Grp. Prop. Mgmt., Inc., 295 F.3d 1065, 1073 (10th Cir. 2002). Here, the
Individuals have not shown that any harm they experienced is not derivative of any harm
CDMR may have sustained from First United’s allegedly discriminatory denial of
CDMR’s loan application. They have therefore failed to show reversible error in the
district court’s dismissal of their § 1981 claim.
D. Arguments concerning denial of leave to file the SAC
As discussed earlier, the district court denied the Individuals’ motion for leave to
file the SAC based on the court’s view that the SAC was proposed in bad faith: In the
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FAC, the Individuals alleged that they were personal guarantors, but in the proposed SAC
they alleged they were co-borrowers—a fact, the district court found, that they would
have been well aware of when they filed the FAC.
The Individuals argue that allegations in their original complaint related to their
submission of financial information to First United in order to get the loan, combined
with the lack of any allegations that CDMR had to submit any financial information to
qualify for the loan, implied that they were borrowers or co-borrowers, especially in light
of Durdin. They also contend that their original pro se complaint came close to stating a
claim and that the FAC related back to the original complaint under Federal Rule of Civil
Procedure 15(c)(1). They therefore conclude that the district court should have allowed
them to file the SAC.
The first problem with this line of argument is that, under Rule 15(c)(1), an
“amended complaint, as the operative complaint, supersedes the original complaint’s
allegations, but not its timing.” May v. Segovia, 929 F.3d 1223, 1229 (10th Cir. 2019).
Thus, the FAC, which was filed by counsel, related back for purposes such as a statute of
limitations, see id., but it superseded the original complaint’s allegations, thus leaving the
district court to compare only the FAC and the SAC. And the FAC alleged that CDMR
was “wholly owned and operated by the four individual Plaintiffs” and that they applied
for the loan “through . . . CDMR.” R. at 112, ¶ 5–6. It also alleged that the Individuals
“were personal guarantors of the loan.” R. at 116, ¶ 33; see also R. at 117, ¶ 49 (same).
These allegations were clearly at odds with the allegations in the SAC that the Individuals
were co-borrowers. The second problem with this argument is that, for the same reasons
18 Appellate Case: 23-6050 Document: 010111002451 Date Filed: 02/20/2024 Page: 19
we concluded that Durdin is distinguishable in the context of the Individuals’ ECOA
claim, see supra, Part II.B.3., it fails to aid them here.
Given that the Individuals did not seek to file the SAC until after the district court
had dismissed their claims, we see no abuse of discretion in the district court’s finding
that the competing, contrary allegations in the FAC and the SAC were indicative of
bad-faith because the Individuals would have been aware, when the FAC was filed,
whether they were co-borrowers. See Viernow v. Euripides Dev. Corp., 157 F.3d 785,
800 (10th Cir. 1998) (finding no abuse of discretion in refusal to permit amendment
where “amended complaint proposed new theories that [the plaintiff] did not choose to
advance until after his primary theories had been dismissed,” noting that “we do not favor
permitting a party to attempt to salvage a lost case by untimely suggestion of new
theories of recovery, especially after the trial judge has already expressed adverse
rulings” (brackets and internal quotation marks omitted)).
III. CONCLUSION
We affirm the district court’s judgment and its order denying the Individuals’
Rule 59(e) motion.
Entered for the Court
Gregory A. Phillips Circuit Judge