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Sweat v. Suntrust Bank, N.A.

United States District Court, D. Maryland, Southern Division

September 7, 2018

MOISETTE SWEAT, et al., Plaintiffs,
SUNTRUST BANK, N.A., et al., Defendants.


          Charles B. Day, United States Magistrate Judge

         Before the Court is Defendant Old Line Bank's (“Defendant”) Motion for Summary Judgment (“Motion”) (ECF No. 34) requesting summary judgment be entered against Moisette Sweat, Terry Sweat, and Michael Wolff, Chapter 7 Trustee of the Bankruptcy Estate of Sweatism, LLC (collectively “Plaintiffs”). The Court has reviewed Defendant's Motion, related memoranda, and the applicable law. No. hearing is deemed necessary. Local Rule 105.6 (D. Md.). For the reasons set forth below, the Court GRANTS Defendant's Motion.


         In attempting to pursue the opening and operation of a restaurant in July 2015, Mr. and Mrs. Sweat sought to obtain financial backing in the form of a loan from Defendant. Id. at 160:6-161:19. Prior to contacting Defendant in regards to a loan, Plaintiffs reached a financing agreement with Wing Heaven Franchise Systems, LLC at an initial cost of $15, 000, contracted with a general contractor to restructure the restaurant space, liquidated their retirement accounts, purchased a work vehicle, and executed a lease agreement for a space for the restaurant for which they were paying rent. Id. at 46:11-21, 90:13-91:4, 102:11-16, 107:1-21, 120:3-18, 147:7-148:16. As part of the lending process, Mr. and Mrs. Sweat engaged in numerous email communications with Holley Zippi, a loan officer and vice president with Defendant, concerning the loan. Zippi Aff. at 2 (ECF No. 34-4). Defendant contends that on July 24, 2015, after Ms. Zippi's review of Plaintiffs' loan application, Plaintiffs loan application was denied, with Ms. Zippi informing Mr. Sweat of the denial by telephone. Defendant claims that it sent an adverse action notice to Plaintiffs. Id. at 2-3. In November 2015, Plaintiffs provided co-signor information to Defendant for further consideration of the loan application. Dep. of M. Sweat, at 168:16-169:13. On November 30, 2015, an adverse action notice was sent, addressed to Plaintiffs but with an incorrect address. Zippi Aff. at 3.

         On January 19, 2017, Plaintiffs filed suit against Defendant alleging two counts: first, a claim of violations of the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq., by Defendant in failing to provide adverse action notices; and second, a claim of negligence by Defendant in failing to review Plaintiffs' loan application and co-signor information. Am. Compl. 5-6.


         Under the Federal Rules of Civil Procedure, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is deemed genuine only if the “evidence is such that a reasonable jury could return a verdict for the nonmoving party, ” and a fact is deemed material only if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Supreme Court has explained that the burden of proof lies with the movant to identify “those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to show an absence of evidence in the record as to an essential element of the claim or to present “specific facts showing that there is a genuine issue for trial.” Id. at 324. A court reviewing a motion for summary judgment must view the evidence in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).


         A. Assuming arguendo the presence of a technical violation of the ECOA, Plaintiffs are unable to prove actual damages resulting from said violation.

         1. The Notice Requirements

         Plaintiffs claim that Defendant failed to provide an adverse action notice as required by the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq. Am. Compl. 5. The ECOA, originally enacted to protect against discrimination in lending practices, provides that “it shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction on the basis of race, color, religion, national origin, sex or marital status, or age.”[1] 15 U.S.C. § 1691(a)(1). The ECOA and its accompanying Regulation B, 12 C.F.R. § 202, contain notification requirements mandating “a creditor to provide written notice of any adverse action taken in connection with an application for credit within a certain timeframe and pursuant to certain content guidelines.” Coulibaly v. J.P. Morgan Chase Bank, N.A., Civ. Ac. No. DKC-10-3517, 2012 WL 3985285, at *4 (D. Md. Sept. 7, 2012) (citing 15 U.S.C. § 1691(d)). Regulation B further requires that “[a] creditor shall notify an applicant of action taken within: 30 days after receiving a completed application concerning the creditor's approval of, counteroffer to, or adverse action on the application . . .”. 12 C.F.R. § 202.9(a)(1)(i). Regulation B further mandates that

[a] notification given to an applicant when adverse action is taken shall be in writing and shall contain [1] a statement of the action taken; [2] the name and address of the creditor; [3] a statement of the provisions of § 701(a) of the Act; [4] the name and address of the federal agency that administers compliance with respect to the creditor; and either [5]: [(i)] a statement of specific reasons for the action taken; or [(ii)] a disclosure of the applicant's right to a statement of specific reasons within 30 days, if the statement is requested within 60 days of the creditor's notification.

Id. at § 202.9(a)(2). Indeed, “when a creditor fails to comply with these requirements, it is in violation of the ECOA, regardless of whether it engaged in any prohibited discrimination.” Coulibaly, 2012 WL 3985285, at *4 (citations omitted).

         Plaintiffs allege that Defendant failed to provide proper notification of adverse action on Plaintiffs' small business loan application. Pls.' Am. Compl. 5. Specifically, Plaintiffs argue that (1) the November 2015 notice was sent to the wrong address and did not contain information required by the ECOA, (2) the wrong address being listed on the notice constituted negligence on Defendant's ...

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