The opinion of the court was delivered by: JAMES H. ALESIA
The plaintiffs, Mark & Anita Jones ("the Joneses") filed suit in this court alleging that Citibank, Federal Savings Bank ("Citibank"), violated the Equal Credit Opportunity Act, 15 U.S.C. § 1691 (1988), the Fair Housing Act, 42 U.S.C. §§ 3601-3631 (1992), sections 1981 and 1982 of Title 42, 42 U.S.C. § 1981 (1991), 42 U.S.C. § 1982 (1988), and Federal Reserve Regulation 202.9, 12 C.F.R. § 202.9 (1993). Citibank moves this court for summary judgment, arguing that all of these claims are barred by the respective statutes of limitations. For the reasons set forth below, this court grants Citibank's motion with respect to Federal Reserve Regulation 202.9, and denies its motion with respect to the remaining claims.
On or about March 20, 1991, the Joneses submitted a mortgage application to Citibank.
The Joneses sought to refinance their condominium. (Plaintiffs' Complaint at P 8) ("Pl. Compl."). On April 22, 1991, Citibank denied their application, contending that the Joneses had an unsuitable credit record with the Maryland National Bank of America. Id. at P 15. The Joneses maintain that Citibank denied the application because the Joneses are African-American. Id. at P 21. Thus, because the Joneses allege that Citibank discriminated on the basis of race with respect to a loan for real estate, they charge Citibank with violations of the Equal Credit Opportunity Act ("ECOA"), Fair Housing Act ("FHA"), and sections 1981 and 1982 of Title 42 ("sections 1981 and 1982").
The Joneses further allege that they never received written notification of the rejection from Citibank, in violation of Federal Reserve Regulation 202.9 ("Regulation 202.9"). (Pl. Compl. at PP 27-28). Citibank claims that the Joneses received a rejection letter from it shortly after May 9, 1991. (Defendant's Reply in Support of its Motion for Summary Judgment at 8) ("Def. Reply"). The parties agree that Citibank orally notified the Joneses of the rejection on May 17, 1991.
The parties do not seriously dispute that a two-year statute of limitations applies to each claim. By their express terms, the Equal Credit Opportunity Act, Fair Housing Act, and Regulation 202.9 are governed by two-year statutes of limitation. 15 U.S.C. § 1691e(f), 42 U.S.C. § 3613(a)(1)(A), 12 C.F.R. § 202.14(b)(2). As Congress did not provide a statute of limitations for sections 1981 and 1982, 42 U.S.C. §§ 1981 and 1982, a federal court must borrow the most analogous state limitation period. Goodman v. Lukens Steel Co., 482 U.S. 656, 660, 107 S. Ct. 2617, 2620, 96 L. Ed. 2d 572 (1987). The Supreme Court and the Seventh Circuit Court of Appeals have held that the state limitation period for personal injury suits is an appropriate limitation period for section 1981. Id. at 662; Smith v. Chicago Heights, 951 F.2d 834, 837-38 (7th Cir. 1992). In Illinois, this period is two years. 735 ILCS 5/13-202 (1993); Smith, 951 F.2d at 837 n.1. Thus, the Joneses' claim for section 1981 has a two-year limitation period.
The Joneses' cause of action for section 1982 also has a two-year period, although for a different reason. For section 1982, the most appropriate limitation period typically has been held to be the limitation period for personal injury suits. Scheerer v. Rose State College, 950 F.2d 661, 664 (10th Cir. 1991). cert. denied, 120 L. Ed. 2d 872, 112 S. Ct. 2995 (1992); Mitchell v. Sung, 816 F. Supp. 597, 601 (N.D. Cal. 1993); see also, Village of Bellwood v. Dwivedi, 895 F.2d 1521, 1528 (7th Cir. 1990) (stating that by combining the Supreme Court's holding in Wilson v. Garcia, 471 U.S. 261, 276-80, 105 S. Ct. 1938, 1947-49, 85 L. Ed. 2d 254 (1985) with the Seventh Circuit's holding in Baker v. F & F Investment, 420 F.2d 1191, 1198 (7th Cir. 1970), cert. denied, 400 U.S. 821, 91 S. Ct. 41, 91 S. Ct. 42, 27 L. Ed. 2d 49 (1970), one should conclude that the appropriate state limitation period for section 1982 is the personal injury limitation period). However, in the Seventh Circuit, a different period may be warranted if the state has enacted a statute of limitation generally regarding personal rights. Gray v. Lacke, 885 F.2d 399, 407-08 (7th Cir. 1989), cert. denied, 494 U.S. 1029, 110 S. Ct. 1476, 108 L. Ed. 2d 613 (1990).
In the instant case, Illinois has enacted the Illinois Human Rights Act which expressly prohibits discrimination in the sale of real estate transactions. 775 ILCS 5/3-102.
Similarly, section 1982 provides that "all citizens of the United States shall have the same right . . . to purchase, lease, sell, hold and convey real . . . property." 42 U.S.C. § 1982. Because both section 1982 and section 5/3-102 explicitly prohibit discrimination in real estate transactions, section 1982 is more analogous to section 5/3-102 than it is to a cause of action for personal injury. See Gray, 885 F.2d at 407-08 (holding that Wisconsin's personal rights statute of limitations, rather than its personal injury statute of limitations, applied to a section 1983 cause of action). Thus, the statute of limitations period for section 5/3-102 applies, which is two years. 775 ILCS 5/10-102.
Accordingly, section 1981 borrows the Illinois limitation period for personal injury, and section 1982 borrows the Illinois limitation period for section 5/3-102 of the Illinois Human Rights Act -- both of which are two years.
(1) The Date On which the Statute of Limitations Began to Run for the Equal Credit Opportunity Act, Fair Housing Act, and Sections 1981 and 1982.
While not disputing that two-year limitation periods apply to the causes of action in the instant case, the parties do dispute the date on which these two-year periods began to run. Citibank argues that the operative date is April 22, 1991, when it denied the Joneses loan application. (Defendant's Memorandum in Support of its Motion for Summary Judgment at 3) ("Def. Mem. in Supp."). It reasons that because it allegedly discriminated against the Joneses on the basis of race on April 22 by denying their loan application, April 22 is the date on which it allegedly violated the ECOA, FHA and sections 1981 and 1982. The Joneses argue that the statutes began to run on May 17, 1991, when Citibank notified the Joneses of the denial of their application, reasoning that causes of action do not accrue until a plaintiff discovers the injury. (See Plaintiff's Response to Defendant's Motion for Summary Judgment at 4).
The operative date "is not the date on which the wrong that injures the plaintiff occurs, but the date . . . on which the plaintiff discovers that he has been injured." Cada v. Baxter Healthcare Corp., 920 F.2d 446, 450 (7th Cir. 1990), cert. denied, 115 L. Ed. 2d 1079, 111 S. Ct. 2916 (1991). See also, Webb v. Indiana Nat'l. Bank, 931 F.2d 434, 436 (7th Cir. 1991) ("The relevance of knowledge and reason to know is that the time for suit does not begin to run until you know or should know that you have been injured."); Tolle v. Carroll Touch, Inc. 977 F.2d 1129, 1139 (7th Cir. 1992) ("Under the federal discovery rule, a claim accrues once the party performs the alleged unlawful act and once the party bringing a claim discovers an injury resulting from this unlawful act."). Thus, the statutes in the instant case began to run on the date on which Citibank notified the Joneses of its decision to deny their loan application because it is the date on which the Joneses allegedly discovered that they suffered an injury allegedly due to race discrimination. Id.; see also, Bailey v. Northern Indiana Pub. Service Co., 910 F.2d 406, 412 (7th Cir. 1990) (holding that a cause of action under section 1981 accrues when the plaintiff receives notice that the defendant has discriminated against him); Birkett Williams Ford, Inc. v. East Woodworking Co., 8 Ohio App. 3d 231, 235, 456 N.E.2d 1304, 1309 (1982) (holding that a cause of action arising under the Equal Credit Opportunity Act accrues when the plaintiff receives notice that the defendant has denied his loan application). The Joneses allege that they received this notice on May 17, 1991. If true, their causes of action expired on May 17, 1993 and, because they filed suit on May 14, 1993, their action is not barred by the two-year limitation periods.
Citibank nonetheless argues that the First Circuit Court of Appeals' opinion in Farrell v. Bank of New Hampshire-Portsmouth, compels a contrary result. Farrell v. Bank of New Hampshire-Portsmouth 929 F.2d 871 (1st Cir. 1991). Citibank understands Farrell as holding that a limitation period begins to run when a lender decides to deny the loan application, regardless of when it notifies the applicant of its decision. (Def. Mem. in Supp. at 4). This court does not share Citibank's understanding of Farrell.
In Farrell, the defendant bank notified loan applicants on May 3, 1988, that it would not approve the loan unless the applicants' wives personally guaranteed the loan. Farrell, 929 F.2d at 872. On June 3, 1988, the bank approached the wives with the personal guarantees, and the wives signed them. Id. On June 1, 1990, the plaintiff wives sued the bank for spousal discrimination, averring that the limitation period began to run on the date that the bank requested their signatures. The plaintiffs never asserted that they lacked knowledge of ...