UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ANDREA SLOAN, as Guardian and Conservator on behalf of Mary Juergens, an Incapacitated Individual, in both Mary Juergens’ individual capacity and as the sole member of “1230 23rd Street, LLC,” Civil Action No. 06-1524 (CKK) Plaintiff,
v.
URBAN TITLE SERVICES, INC., et al.,
Defendants.
MEMORANDUM OPINION (September 14, 2009)
The above-captioned lawsuit was filed by the original Plaintiff in this matter, Mary
Juergens,1 nearly three years ago to challenge the legality of two disparate loans extended to
Plaintiff, each of which was secured by a condominium located at 1230 23rd Street, N.W.,
Apartment 505, Washington, D.C. 20037 (the “Condo”). Plaintiff named as Defendants in this
action Urban Title Services, Inc. (“UTS”), Dale Duncan, First Mount Vernon Industrial Loan
Association, Inc., Arthur Bennett, and Brickshire Settlements, LLC.2 According to Plaintiff, the
1 Subsequent to filing the instant action, Ms. Juergens was found to be an “incapacitated individual,” and Andrea Sloan was appointed as Guardian and Conservator on behalf of Ms. Juergens and has been substituted as Plaintiff for Ms. Juergens, in both her individual capacity and in her capacity as the sole member of 1230 23rd Street, LLC. See Docket No. [114] at 2; see also Fourth Am. Compl., Docket No. [120]. For convenience, the Court shall refer to Ms. Juergens and Ms. Sloan interchangeably as “Plaintiff.” 2 Plaintiff also originally named as Defendants in this matter First Mount Vernon Mortgage, L.L.C. (“FMVLLC”), as well as individuals William Kenney, Robert William Carney, and Paul Erb. Plaintiff’s claims against Defendant FMVLLC were dismissed by this Court in a Memorandum Opinion and Order dated February 4, 2008, Juergens v. Urban Title Servs., 533 F. first of the two loans at issue in this case was extended with the assistance of UTS, while the
second loan was extended by First Mount Vernon Industrial Loan Association, Inc., with the
assistance of Bennett, Duncan and Brickshire (collectively, “FMV Defendants”).
Currently pending before the Court are a series of cross-motions for partial summary
judgment filed by the various parties in this action. This Memorandum Opinion addresses only
those motions for partial summary judgment filed by Plaintiff with respect to allegations in her
Fourth Amended Complaint relating to the first loan—i.e., the loan extended with the assistance
of UTS—and Defendant UTS’ related cross-motion for partial summary judgment. There are
three such motions: (1) Plaintiff’s [156] Motion for Summary Judgment on the Issue of UTS’s
Conversion, (2) Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether UTS
Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10), and (3) Defendant UTS’
[170] Cross-Motion for Summary Judgment as to Counts X and XI. The first motion relates to
Count II of Plaintiff’s Fourth Amended Complaint while the latter two motions relate to Counts
X and XI of Plaintiff’s Fourth Amended Complaint.
Upon a searching review of the memoranda filed with respect to the pending motions, the
exhibits thereto, the relevant case law and statutes, and the entire record herein, the Court shall
DENY the parties’ pending motions for the reasons set forth below. Specifically, the Court: (1)
DENIES as moot Plaintiff’s [156] Motion for Summary Judgment on the Issue of UTS’
Supp. 2d 64, 75 (D.D.C. 2008), and Plaintiff’s claims against the individual Defendants Kenney, Carney, and Erb have been voluntarily dismissed by Plaintiff, see Jt. Stip. Regarding Dismissal of Defendants William Kenney and Paul Erb, Docket No. [112] and Stip. of Dismissal, Docket No. [113] (dismissing without prejudice any and all claims asserted against Defendants Kenney and Erb individually); see also Notice and Stip. of Vol. Dismissal, Docket No. [116] (dismissing any and all claims asserted against Defendant Carney).
2 Conversion in light of the parties’ joint stipulation and UTS’ concession of liability; (2) DENIES
Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether UTS Acted as a
Mortgage Broker Pursuant to D.C. Code § 26-1101(10) and Defendant UTS’ [170] Cross-Motion
for Summary Judgment as to Counts X and XI, insofar as it moves for summary judgment on the
issue of UTS’ status as a statutory mortgage broker, based upon the existence of disputes of
material fact; (3) DENIES as moot Defendant UTS’ [170] Cross-Motion for Summary Judgment
as to Counts X and XI, insofar as it moves for summary judgment with respect to Count XI, in
light of Plaintiff’s stipulation of dismissal; and (4) DENIES Defendant UTS’ [170] Cross-Motion
for Summary Judgment as to Counts X and XI, insofar as it moves for summary judgment with
respect to Count X, based upon the existence of material disputed facts.
I. BACKGROUND
The Court assumes familiarity with the factual background of this case, which is set forth
in detail in both its May 25, 2007 Memorandum Opinion, see generally Juergens v. UTS, 246
F.R.D. 4 (D.D.C. 2007), and its February 4, 2008, Memorandum Opinion, see generally Juergens
v, UTS, 533 F. Supp. 2d 64 (D.D.C. 2008), and therefore discusses only those facts that are
relevant to the motions at issue in the instant Memorandum Opinion. In particular, although
Plaintiff’s Fourth Amended Complaint includes a variety of allegations regarding the loan
extended to her by the FMV Defendants, the Court does not address herein the facts relevant to
that loan because Plaintiff’s claims as to the FMV Defendants are irrelevant to the motions at
issue in this Opinion.
A. Factual Background
In or around 2001, Plaintiff obtained a condominium unit located at 1230 23rd Street,
3 N.W., Washington, D.C., (the “Condo”). Def.’s UTS’ Stmt., Docket No. [170], ¶ 10. The
Condo was purchased for Plaintiff as a gift from her benefactor, Douglas Yearley. Id. Plaintiff,
however, was responsible for paying the monthly residential assessments to the condominium
association. Id. Notwithstanding this arrangement, Plaintiff failed to make the required monthly
payments and, by late summer/early fall of 2003, Plaintiff owed approximately $10,000 in
condominium assessment fees and related payments. Id. ¶¶ 12, 14. The condominium
association threatened to foreclose on Plaintiff’s Condo. Id. ¶ 12. Accordingly, Plaintiff decided
to secure a loan to cover her delinquent condominium fees and to avoid foreclosure. See id. ¶¶
13-16.
At that time, Plaintiff owned the Condo free and clear of any mortgages or liens, save for
the delinquent condominium assessment and associated fees and penalties. Id. ¶ 15. She was
also receiving $5,500 in income per month from Yearley. Id. ¶ 16. Nonetheless, Plaintiff’s
credit prevented her from obtaining a mortgage loan from any commercial bank. Id. ¶¶ 17-18.
Although many of the remaining facts surrounding Plaintiff’s attempts to secure a mortgage loan
are in dispute, the parties agree that Plaintiff ultimately secured a mortgage loan for $60,000
from a private lender, the Owen Living Trust, and that UTS acted as the closing agent for this
loan. Id. ¶¶ 29-31. The parties disagree, however, as to whether UTS—in addition to acting as
the settlement agent—also played a role in soliciting the mortgage loan on Plaintiff’s behalf.
UTS is a settlement company whose services include performing real estate closings and
related services. Id. ¶ 1. Neither UTS nor any of its agents, servants, or employees possess a
mortgage lender or mortgage broker license. Id. ¶ 2. William Kenney, Paul Erb and Robert
4 Carney3 were owners of and partners in UTS. Id. ¶ 3. Within UTS, Kenney’s duties included
marketings and closings; Erb handled the company’s accounting and prepared the HUD-1
Settlement Statements; and Carney supervised Erb, provided legal advice, and prepared title
insurance binders. Id. ¶ 4. In addition, the parties agree that, separate from his work with UTS,
Carney had an outside, unrelated law practice. Id. ¶ 5. As part of that law practice, Carney
provided legal services to various private lenders, and he would call on these clients from time to
time to make loans to individuals such as Plaintiff. Id. ¶ 7. One such client was George Owen,
who made private loans to individuals through his trust, the Owen Living Trust, a private, non-
federally regulated lender. See id. ¶¶ 8-9.
As previously explained, Plaintiff met with several local banks in late summer/early fall
of 2003, but was unable to obtain a mortgage loan from any of these banks because of her poor
credit. Id. ¶ 18. Accordingly, in an effort to secure a loan through alternative routes, Plaintiff
met with Robert Brickman, a loan officer at Atlantic Capital Funding Corporation (“Atlantic
Capital”). Id. ¶ 20. Although neither Plaintiff nor UTS has explicitly explained how Plaintiff
was first introduced to Brickman, it appears from the record that Plaintiff was first referred to
Atlantic Capital by Kenney—in other words, that Plaintiff met first with Kenney at UTS who
then referred her to Brickman to assist her with locating a mortgage loan. See Pl.’s Resp. ¶ 5,
Docket No. [190], (quoting Juergens Deposition at pp. 241:12-242:17 (“[Brickman] was an
associate of [Kenney’s] and was in that - the same kind of business and was trying to help. I
don’t know what his company was, but he was someone that Mr. Kenney worked with and was
3 As explained above, Kenney, Erb and Carney were originally named by Plaintiff as individual defendants, but have since been dismissed from this action. See supra p.1, n. 2.
5 trying to help me get a loan.”)); see also id. ¶ 2 (quoting Carney Deposition at pp. 26:6-27:2
(“[Kenney] sent his loans to Atlantic Capital or he always had a tie-in with somebody for his
loans.”)).
Brickman then solicited a mortgage loan application from Plaintiff, obtained copies of her
credit report, and obtained an appraisal of the Condo. Def. UTS’ Stmt., Docket No. [170], ¶ 21.
It appears from the record that Kenney played some role in this process, although the exact extent
is unclear; at a minimum, there is evidence that Kenney assisted Plaintiff with her application to
Atlantic Capital. See Pl.’s Resp. ¶ 5, Docket No. [190], (quoting Juergens Deposition at pp.
241:12-242:17 (testifying that Kenney assisted Plaintiff with the application to Atlantic Capital)
and at p. 172:3-10 (“I recall Bill Kenney applying to Atlantic and a friend of his, Bob Brickman,
but I don’t know that I specifically filled out an application. I think they might have done it for
me because they were scrambling around to different places trying to get me a loan.”)).
Ultimately, despite multiple attempts to obtain a loan through public mortgage companies,
Plaintiff’s credit was so poor that Brickman was unable to obtain a home mortgage loan for
Plaintiff. Def. UTS’ Stmt., Docket No. [170], ¶ 22.
Both Plaintiff and UTS agree that, at this point, Plaintiff’s loan file was transferred to
Carney, who was eventually responsible for contacting Owen and securing the loan from the
Owen Living Trust. The parties disagree, however, as to whether Kenney played any role in
referring the matter to Carney and whether Carney was acting on behalf of UTS in securing the
loan. According to UTS, when Brickman realized he was unable to obtain a traditional mortgage
loan for Plaintiff, given her poor credit history, he transferred Plaintiff’s loan file to Carney
because he “knew that Carney was an attorney whose clients included private lenders and
6 believed that Carney may have a private lender who would be willing to make a loan to
[Plaintiff].” Id. ¶¶ 24-25; see also Def. UTS’ [170] Opp’n/Cross-MSJ, Ex. A (Declaration of
Robert Brickman) (hereinafter “Brickman Decl.”) ¶ 17. By contrast, Plaintiff contends that it
was actually Kenney (an undisputed agent of UTS) who transferred the file to Carney and asked
him if he could try to locate a potential lender for Plaintiff. See Pl.’s Resp. ¶ 2, Docket No.
[190]. In support of this assertion, Plaintiff directs the Court to an excerpted citation from
Carney’s deposition testimony in which he states that Kenney gave him Plaintiff’s loan file and
asked him “to see[] if any of [his] clients would be interested in making a loan . . . to [Plaintiff].”
Id. (quoting Carney Deposition at p. 11:9-16); see also id. (quoting Carney Deposition at pp.
12:2-13:8 (“Bill Kenney came into my office and he brought a thick file and he gave me some
pertinent information about the deal, that he had gone through one loan company – I think it was
Atlantic Capital – and he just informed me to look it over and see if I might have a client that
would be interested in making the loan, including myself.”)).4 The record before the Court thus
reflects a dispute as to whether Brickman or Kenney actually provided Plaintiff’s loan file to
Carney and requested that he see if he could locate any interested lenders.
Both parties agree, however, that upon receipt of the Plaintiff’s loan file, Carney reviewed
it and eventually contacted Owen, a client of his legal practice, to ask him if he would be
interested in making a loan to the Plaintiff. Def. UTS’ Stmt., Docket No. [170], ¶¶ 26, 28.
4 Although UTS seeks to minimize this testimony by arguing that it demonstrates, at most, that Kenney acted as a “courier” who simply transferred Plaintiff’s loan file from Atlantic Capital to Carney, a fair reading of Carney’s cited deposition testimony in fact supports Plaintiff’s position that Kenney not only brought Carney the file but also asked him to try and locate any interested private lenders. Pl.’s Resp., Docket No. [190] ¶ 2 (quoting Carney Deposition at p.12:2-13:8).
7 Carney explained to Owen all the details of the property and the associated risks of the loan. Id.
¶ 29. Based that information, Owen ultimately agreed to extend a $60,000 loan to Plaintiff
(hereinafter, the “Owen Loan”), with UTS acting as the closing agent for the loan. Id. ¶¶ 29-30.
The terms of the Owen Loan required a monthly payment of $792.90 and a maturity date of
October 20, 2004, at which time the principal was due in full. Id. ¶ 30.
According to UTS, its role as the closing agent for the Owen Loan was entirely separate
from and independent of Carney’s role in obtaining the loan from the Owen Living Trust, which
UTS alleges that he undertook strictly within the confines of his outside, unrelated law practice
on behalf of his private lender clients and not as an agent and/or employee of UTS. See id. ¶ 27.
The evidence on the record, however, is mixed. First, Carney testified that neither he nor Owen
had any conversations with Plaintiff about the Owen Loan—i.e., that all communications about
the Owen Loan flowed through Kenney, not Carney or Owen. Pl.’s Resp., Docket No. [190], ¶ 3.
UTS admits that Kenney spoke with Plaintiff about the Owen Loan, although UTS contends that
Kenney never actually spoke with Owen himself. Def. UTS’ Resp., Docket No. [170], ¶ 3. It
therefore appears that Carney was responsible for negotiating the terms of the loan with Owen,
but that Kenney—and not Carney—was charged with communicating those terms to Plaintiff and
securing her approval of the loan.
Second, although UTS contends that Carney’s payment for his work on the Owen Loan
was entirely separate from and independent of the payment to UTS for its settlement work—a
fact that would, of course, support UTS’ position that Carney’s work on the loan was separate
from his work with UTS—the evidence on this point is contradictory. The parties largely agree
that both UTS and Carney received payment for their services from the proceeds of the Owen
8 Loan, but they disagree as to the precise details of those payments. UTS asserts that it received
$6,223.00 from the Owen Loan proceeds in exchange for its work as the settlement agent, and
that Carney was separately paid $2,500.00 for the legal work performed on behalf of his client,
Mr. Owen. Id. ¶¶ 32-33. As support, UTS directs the Court’s attention to the Owen Loan HUD-
1 Settlement Statement, which lists the various payments paid to the relevant parties as part of
the loan closing. See Fourth Am. Compl., Ex. 1 (a copy of the HUD-1 for the Owen Loan)
(hereinafter “HUD-1”). The HUD-1 itself, however, is ambiguous, as it indicates only that the
$2,500.00 payment for attorneys’ fees was paid to “Robert Carney/UTS,” and does not specify
whether this money was paid directly to Robert Carney or to UTS. See HUD-1. In addition,
although UTS also directs the Court to testimony from both Kenney and Carney, in which they
confirm that Carney was ultimately paid $2,500.00 for his work on the Owen Loan, see Def.
UTS’ Stmt., Docket No. [170], ¶ 33, Carney explicitly testified that this was how much “[he] was
charging [UTS] for all the work he performed surrounding this loan,” Def. UTS’ [170]
Opp’n/Cross-MSJ, Ex C (Excerpts of Carney Deposition) at 24:5-9. Carney’s testimony
contradicts UTS’ position that UTS’ and Carney’s payments for the work on the Owen Loan
were entirely separate.
B. Procedural Background
Plaintiff filed her Fourth Amended Complaint in the above-captioned civil action on
October 7, 2008. See Fourth Am. Compl., Docket No. [120]. Plaintiff sets forth 38 causes of
action against the Defendants in this matter, 13 of which relate to Defendant UTS. See generally
id. Discovery in this case is now closed, and the parties have each filed a series of dispositive
motions on many of Plaintiff’s allegations in her Fourth Amended Complaint, as well as on the
9 various counterclaims asserted by the Defendants in this action. For clarity’s sake, the Court
addresses herein only those motions for partial summary judgment filed by Plaintiff with respect
to allegations in her Fourth Amended Complaint relating to the first loan—i.e., the loan extended
with the assistance of UTS—and Defendant UTS’ related cross-motion for partial summary
judgment: (1) Plaintiff’s [156] Motion for Summary Judgment on the Issue of UTS’s
Conversion, (2) Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether UTS
Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10), and (3) Defendant UTS’
[170] Cross-Motion for Summary Judgment as to Counts X and XI. The first motion relates to
Count II of Plaintiff’s Fourth Amended Complaint while the latter two motions relate to Counts
X and XI of Plaintiff’s Fourth Amended Complaint. All other pending dispositive motions shall
be addressed by separate order.
II. LEGAL STANDARDS
Pursuant to Federal Rule of Civil Procedure 56, a party is entitled to summary judgment
“if the pleadings, the discovery and disclosure materials on file, and any affidavits show that
there is no genuine issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(c). See also Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994).
Under the summary judgment standard, the moving party bears the “initial responsibility of
informing the district court of the basis for [its] motion, and identifying those portions of the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits which [it] believe[s] demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the non-moving party must “go
beyond the pleadings and by [its] own affidavits, or depositions, answers to interrogatories, and
10 admissions on file, ‘designate’ specific facts showing that there is a genuine issue for trial.” Id.
at 324 (internal citations omitted).
Although a court should draw all inferences from the supporting records submitted by the
nonmoving party, the mere existence of a factual dispute, by itself, is insufficient to bar summary
judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, the
factual assertion must be capable of affecting the substantive outcome of the litigation; to be
genuine, the issue must be supported by sufficient admissible evidence that a reasonable trier-of-
fact could find for the nonmoving party. Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C.
Cir. 1987); Liberty Lobby, 477 U.S. at 251 (the court must determine “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided
that one party must prevail as a matter of law”). “If the evidence is merely colorable, or is not
sufficiently probative, summary judgment may be granted.” Liberty Lobby, 477 U.S. at 249-50
(internal citations omitted). “Mere allegations or denials in the adverse party’s pleadings are
insufficient to defeat an otherwise proper motion for summary judgment.” Williams v.
Callaghan, 938 F. Supp. 46, 49 (D.D.C. 1996). The adverse party must do more than simply
“show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Instead, while the movant bears the initial
responsibility of identifying those portions of the record that demonstrate the absence of a
genuine issue of material fact, the burden shifts to the non-movant to “come forward with
‘specific facts showing that there is a genuine issue for trial.’” Id. at 587 (citing Fed. R. Civ. P.
56(e)) (emphasis in original).
11 III. DISCUSSION
The Court shall turn first to consider Plaintiff’s [156] Motion for Summary Judgment on
the Issue of UTS’s Conversion, which relates to Count II of Plaintiff’s Fourth Amended
Complaint. The Court shall then address Plaintiff’s [157] Motion for Summary Judgment on the
Issue of Whether UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10), and
Defendant UTS’ [170] Cross-Motion for Summary Judgment as to Counts X and XI.
A. Plaintiff’s Motion for Summary Judgment on the Issue of UTS’ Conversion
First, Plaintiff has moved for summary judgment as to Count II of her Fourth Amended
Complaint alleging that UTS unlawfully retained a portion of Plaintiff’s settlement proceeds
from the UTS loan. See Pl.’s MSJ, Docket No. [156]. Shortly after Plaintiff filed her motion but
before UTS filed any response, Plaintiff and UTS jointly filed a [165] Stipulation of Dismissal,
advising the Court that UTS has admitted liability with respect to Count II (conversion). The
parties therefore contemplate a trial with respect to Count II only as to damages. See Stip. of
Dismissal, Docket No. [165] at 2. In light of this stipulation by Plaintiff and UTS, Plaintiff’s
[156] Motion for Summary Judgment on the Issue of UTS’ Conversion is DENIED as moot.
B. Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10) and Defendant UTS’ [172] Cross-Motion for Summary Judgment as to Counts X and XI
Plaintiff has also moved for summary judgment on the issue of whether UTS acted as a
statutory mortgage broker as defined under D.C. Code § 26-1101(10). See Pl.’s MSJ, Docket
No. [157]. As is clear upon review of Plaintiff’s Fourth Amended Complaint, the question of
UTS’ status as a statutory mortgage broker is directly relevant to two of Plaintiff’s claims against
UTS: (1) Count X (Violation of the D.C. Home Loan Protection Act); and (2) Count XI
12 (Violation of the D.C. Mortgage Lender Broker Act). Specifically, the parties agree that, in order
for Plaintiff to succeed on either claim, she must first show that UTS acted as a statutory
“mortgage broker” in its dealings with Plaintiff, as that term is defined under D.C. Code § 26-
1101(10).5 UTS opposes Plaintiff’s motion, and has filed both an opposition to Plaintiff’s
motion as well as a cross-motion for summary judgment. See Def. UTS’ Opp’n/Cross-MSJ,
Docket No. [170]. Unlike Plaintiff, UTS has moved for summary judgment not only as to the
question of whether it acted as a statutory “mortgage broker,” but also with respect to the
substantive allegations asserted in Counts X and XI of Plaintiff’s Fourth Amended Complaint.
See generally id.
Plaintiff timely filed a consolidated opposition to Defendant UTS’ cross-motion and reply
in support of her own motion. See Pl.’s Opp’n/Reply, Docket No. [190]. In so doing, Plaintiff
advised the Court that she is withdrawing Count XI of her Fourth Amended Complaint, in which
Plaintiff alleges that UTS violated the D.C. Mortgage Lender Broker Act. Id. at 21, n. 22; see
also Stip. of Dismissal of Count XI, Docket No. [218] (stipulating that Plaintiff withdraws and
dismisses with prejudice Count XI of her Fourth Amended Complaint). Accordingly, Defendant
UTS’ [170] Cross-Motion for Summary Judgment as to Counts X and XI is DENIED as moot
with respect to Count XI. The only issues that remain with respect to the parties’ cross-motions
are whether UTS acted as a statutory mortgage broker and whether UTS violated the D.C. Home
Loan Protection Act, DC. Code § 26-1151.01 et seq. (“HLPA”), as asserted in Count X. As UTS
5 The Court notes that Plaintiff has moved for summary judgment only as to the underlying issue of whether UTS has acted as a statuory mortgage broker pursuant to D.C. Code § 26-1101(10). She has not moved for summary judgment on the ultimate question of whether, assuming UTS did act as a statutory “mortgage broker,” it violated the substantive provisions of these statutes as alleged in Counts X and XI of the Fourth Amended Complaint.
13 has since filed its reply, see Def. UTS’ Reply, Docket No. [220], the parties’ cross-motions with
respect to these two issues are now fully briefed and ripe for the Court’s review.
As is demonstrated from the discussion above, see supra at pp. 3-9, it is readily apparent
that substantial factual disputes exist in this case. The Court must therefore consider whether, in
light of the relevant legal framework that must be applied in this case, the factual disputes
outlined above are material to resolution of Plaintiff’s claims, such that summary judgment is
inappropriate at this stage. Here, Plaintiff contends that UTS acted as a statutory mortgage
broker, pursuant to D.C. Code § 26-1101(10), in its dealings with Plaintiff and that, as a statutory
mortgage broker, UTS is therefore liable for violations under HLPA. In relevant part, section 26-
1101(10) of the D.C. Code defines a “mortgage broker,” as
any person who, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly accepts or offers to accept an application for a mortgage loan, solicits or offers to solicit a mortgage loan on behalf of a borrower, or negotiates or offers to negotiate the terms and conditions of a mortgage loan on behalf of a lender.
Unfortunately, neither party has directed the Court to any case law discussing or applying this
statutory definition nor has either party proffered any case law or other legal support indicating
how the various terms in the statute should be construed. Absent a more detailed discussion of
this statutory provision by the parties—a provision that, on its face, appears to adopt a very
liberal definition of who qualifies as a “mortgage broker”—the Court is not in a position to
delineate the exact contours of the statute’s reach.
Nonetheless, it is readily apparent that—regardless of the precise scope of the statutory
definition quoted above—the determination of whether UTS acted as a statutory mortgage broker
in its dealing with Plaintiff is dependent upon its specific conduct in this case. As discussed
above, however, genuine disputes exist as to UTS’ conduct and role in soliciting the Owen Loan.
14 On the one hand, UTS contends that it acted solely as a settlement agent with respect to the
Owen Loan and had no involvement in soliciting the loan from the Owen Living Trust; although
UTS admits that one of its own partners, Carney, was ultimately responsible for negotiating the
loan terms, UTS asserts that he did so strictly at the request of Atlantic Capital and acted entirely
in his capacity as a private lawyer—not as an agent or partner of UTS. On the other hand,
Plaintiff alleges that UTS was the main driving force behind efforts to secure Plaintiff’s
mortgage loan and that Carney, in negotiating with the Owen Living Trust, was acting on behalf
of UTS, having been requested by Kenney to solicit a private mortgage loan for Plaintiff.
Plaintiff and UTS have each introduced conflicting evidence as to these issues. Given that UTS’
status as a mortgage broker is dependent upon the exact extent of its conduct in this case—an
issue which cannot be resolved at this stage in the litigation—the Court concludes that genuine
disputes of material fact preclude summary judgment on the record now before the Court.
Accordingly, Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether UTS
Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10) is DENIED, and Defendant
UTS’ [170] Cross-Motion for Summary Judgment as to Counts X and XI is DENIED, insofar as
UTS argues that it did not act as a statutory mortgage broker in its dealings with Plaintiff.
Nonetheless, UTS asserts that it is entitled to summary judgment on the larger question of
whether it violated HLPA as alleged in Count X of Plaintiff’s Fourth Amended Complaint
because, even assuming it acted as a statutory mortgage broker in this instance, there is no
evidence supporting Plaintiff’s allegations with respect to HLPA. In Count X of her Fourth
Amended Complaint, Plaintiff alleges that UTS violated the HLPA by, inter alia, extending the
Owen Loan to Plaintiff even though she could not have been reasonably expected to make the
scheduled payments, as required under D.C. Code § 26-1152.02(a). UTS has moved for
summary judgment as to this allegation, asserting that it was reasonable for the lender in this case
15 to conclude that Plaintiff could be expected to make the scheduled payments on the Owen Loan.6
See UTS’ [170] Opp’n/Cross-MSJ at 7-8; UTS’ [220] Reply at 8-10. Plaintiff opposes UTS’
motion, arguing that, “while Mary Juergens clearly had the ability to make the regular $792.90
monthly payments on the loan out of her $5,500.00 monthly stipend from Mr. Yearly,” it was
unreasonable to expect Plaintiff to be able to pay off the balloon payment in its entirety, either in
cash or through refinancing. Pl.’s [190] Opp’n/Reply at 14-25. Given Plaintiff’s concession that
she could have reasonably been expected to make the monthly loan payments, the only issue now
before the Court is whether Plaintiff reasonably could have been expected to make the balloon
payment.
The HLPA provides that “[a] lender shall not make a covered loan if the borrower, at the
time that the covered loan is closed, cannot reasonably be expected to make the scheduled
payments.” D.C. Code § 26-1152.02(a). The statute specifies various factors that a lender7 may
consider in making that determination. See generally id. For example, the statute provides that a
lender may consider “the current and expected income, current obligations, and other financial
resources of the borrower (other than the borrower's equity in the dwelling which secures
repayment of the loan).” Id. § 26-1152.02(a)(1). In addition, as is particularly relevant to the
6 Plaintiff, in Count X of the Fourth Amended Complaint, alleges that UTS violated the HLPA in multiple ways, including, for example, by unlawfully considering Plaintiff’s equity in the Condo; by failing to inform Plaintiff of her right to obtain counseling; by failing to send Plaintiff a “Red Flag Warning Disclosure Notice,” etc. See Fourth Am. Compl. ¶¶263-271. The Court notes that UTS has not addressed any of these additional allegations in its motion for summary judgment. Rather, UTS has focused solely on the allegation that it violated the HLPA by extending the Owen Loan to Plaintiff even though she could not have been reasonably expected to make the payments. Thus, although UTS purports to move for summary judgment as to the entirety of Count X, it is clear that UTS has in fact moved only as to one of the various allegations asserted by Plaintiff in Count X of the Fourth Amended Complaint. 7 For purposes of HLPA, a “lender” is defined to include a “mortgage broker,” as that term is used in D.C. Code § 26-1101(10). See D.C. Code §§ 1151.01(11) and (13).
16 parties’ arguments, the statute also provides that “the lender’s determination of the ability of the
borrowers to make an expected balloon payment at the scheduled maturity date may include
consideration of the borrowers’ equity interest in the residential real property and the borrowers’
ability, based on current market conditions, to refinance the covered loan without penalty,
hardship, or material loss of equity.” Id. § 26-1152.02(a)(3).
UTS argues that, even assuming it qualifies as a lender under the HLPA, it is nonetheless
entitled to summary judgment because (a) HLPA explicitly states that a lender may consider a
borrowers’ ability to refinance in determining the ability of a borrower to make an expected
balloon payment, and (b) “it was reasonable for the lender to believe that, if Ms. Juergens were
able to establish a good payment record on the Owen Loan, she would be able to refinance at the
end of the year ‘without penalty, hardship, or material loss of equity.’” UTS’ [170] Opp’n/Cross-
MSJ at 8; see also UTS’ [220] Reply at 9. Significantly, however, UTS has not presented any
factual or legal support for this assertion. Rather, UTS simply contends—without support—that
it would have been reasonable to assume that Plaintiff could have obtained refinancing given her
equity in the condominium unit and the assumption that Plaintiff’s credit rating would have
improved after a year of timely payments on the Owen Loan. UTS, as the moving party, bears
the burden of demonstrating that it is entitled to summary judgment. Absent any evidentiary or
legal support that such a determination was, in fact, reasonable, the Court is not in a position to
find that, as a matter of law, it was reasonable for a lender to conclude that Plaintiff could have
obtained refinancing under these specific conditions. The question is one better reserved for the
jury. Accordingly, Defendant UTS’ [170] Cross-Motion for Summary Judgment as to Counts X
and XI is DENIED insofar as UTS seeks a ruling that it did not violate HLPA as alleged in Count
X of the Fourth Amended Complaint.8
8 The Court notes that UTS advances, for the first time in its Reply, the argument that it is entitled to summary judgment because the applicable statutory provisions of HLPA (i.e., section
17 IV. CONCLUSION
For the reasons set forth above, the Court shall DENY Plaintiff’s [156] Motion for
Summary Judgment on the Issue of UTS’s Conversion, Plaintiff’s [157] Motion for Summary
Judgment on the Issue of Whether UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-
1101(10), and Defendant UTS’ [170] Cross-Motion for Summary Judgment as to Counts X and
XI. Specifically, the Court:
• DENIES as moot Plaintiff’s [156] Motion for Summary Judgment on the Issue of
UTS’ Conversion in light of the parties’ joint stipulation and UTS’ concession of
liability;
• DENIES Plaintiff’s [157] Motion for Summary Judgment on the Issue of Whether
UTS Acted as a Mortgage Broker Pursuant to D.C. Code § 26-1101(10) and
Defendant UTS’ [170] Cross-Motion for Summary Judgment as to Counts X and XI,
insofar as it moves for summary judgment on the issue of UTS’ status as a statutory
mortgage broker, based upon the existence of material disputes of fact;
• DENIES as moot Defendant UTS’ [170] Cross-Motion for Summary Judgment as to
Counts X and XI, insofar as it moves for summary judgment with respect to Count
26.1152.02(a)) do not apply in this case. See UTS’ [220] Reply at 6. Specifically, UTS asserts that Plaintiff’s gross income, as reported on the loan application, exceeded 120% of the median family at the time the application was received, and therefore, pursuant to D.C. Code § 26.1152.02(b), Plaintiff’s loan application was not subject to the relevant HLPA provisions. See id. Although this argument appears to have merit, UTS did not include this assertion in its opening brief, and the Court therefore does not have the benefit of a response from Plaintiff. Accordingly, the Court declines to consider this argument at this time in deciding UTS’ motion for summary judgment. See Am. Wildlands v. Kempthorne, No. 07-5179, 2008 WL 2651091, at *8 (D.C. Cir. July 8, 2008) (“We need not consider this argument because plaintiffs . . . raised it for the first time in their reply brief.”); McBride v. Merrell Dow & Pharm., 800 F.2d 1208, 1211 (D.C. Cir.1986) (“Considering an argument advanced for the first time in a reply brief . . . is not only unfair to an appellee, but also entails the risk of an improvident or ill-advised opinion on the legal issues tendered.”) (internal citation omitted).
18 XI, in light of Plaintiff’s stipulation of dismissal; and
• DENIES Defendant UTS’ [170] Cross-Motion for Summary Judgment as to Counts X
and XI, insofar as it moves for summary judgment with respect to Count X, based
upon the existence of material disputed facts.
An appropriate Order accompanies this Memorandum Opinion.
Date: September 14, 2009
/s/ COLLEEN KOLLAR-KOTELLY United States District Judge