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PULPHUS v. SULLIVAN

July 14, 2004.

MATILDA PULPHUS, BARBARA VANZANT, SYLVIA MANDERSON, and STEPHANIE BARNAS, Plaintiffs,
v.
JOHN J. SULLIVAN; NEW LOOK HOME SERVICES, INC.; ERIC GOLD; MDR MORTGAGE CORPORATION; ESTHER ALFARO-GILER; HERITAGE TITLE COMPANY; HARTFORD FINANCIAL SERVICES, INC.; CITIZENS BANK; BANK ONE; PROVIDENT BANK; EQUICREDIT CORPORATION OF AMERICA; and FAIRBANKS CAPITAL CORPORATION, Defendants.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Several Plaintiffs, including Barbara Vanzant, filed suit against several Defendants, including EquiCredit Corporation of America ("EquiCredit") and Fairbanks Capital Corporation ("Fairbanks"). Vanzant alleges that she was unlawfully solicited to sign high-interest mortgages to finance poorly constructed home improvements. EquiCredit and Fairbanks move for summary judgment as to Counts III and V.

Vanzant alleges, in Count III, that EquiCredit and Fairbanks failed to comply with the Truth in Lending Act, 15 U.S.C. § 1601, et seq., by taking Vanzant's Truth in Lending Act Notice of Right to Cancel disclosure before her three-day rescission period ended. Vanzant alleges, in Count V, that EquiCredit and Fairbanks engaged in common-law fraud by knowing, through its possession of loan documents, that Vanzant was fraudulently induced into two loan transactions. For the following reasons, EquiCredit and Fairbanks' motion for summary judgment is granted with respect to Count V, but EquiCredit and Fairbanks' motion is denied with respect to Count III.

  LEGAL STANDARD

  Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses. . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the moving party on a motion for summary judgment is responsible for demonstrating to the court why there is no genuine issue of material fact, the non-moving party must go beyond the face of the pleadings, affidavits, depositions, answers to interrogatories, and admissions on file to demonstrate, through specific evidence, that a genuine issue of material fact exists and to show that a rational jury could return a verdict in the non-moving party's favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

  Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment, a court must view all inferences to be drawn from the facts in the light most favorable to the opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). However, a metaphysical doubt will not suffice. Matsushita, 475 U.S. at 586. If the evidence is merely colorable or is not significantly probative or is no more than a scintilla, summary judgment may be granted. Anderson, 477 U.S. at 249-250.

  BACKGROUND

  The undisputed facts, for the purposes of this motion, taken from the parties' Local Rule 56.1(a) & (b) statements of material facts (referred to herein as "Pl.'s 56.1" and "Def's 56.1") and exhibits, are as follows.

  Vanzant owns and lives at a home on the west side of Chicago. Def.'s 56.1 ¶ 1. John Sullivan and New Look Home Services, Inc. ("New Look") proposed to remodel Vanzant's home. Def.'s 56.1 ¶ 10. Sullivan stated that he could arrange financing for the remodeling and further stated that a person in New Look's finance department would handle the financing. Pl.'s 56.1 ¶ 6.

  In January 2001, Sullivan called Vanzant and told her someone would pick her up and take her to complete the paperwork for the loan. Pl.'s 56.1 ¶ 7. A man who worked for either New Look or Sullivan drove Vanzant to complete the loan. Pl.'s 56.1 ¶ 7. Vanzant signed documents that created a mortgage transaction between Vanzant and Hartford Financial Services, Inc. ("Hartford"). Def.'s 56.1 ¶ 12. One of the documents Vanzant signed and received was the three-day Notice of Right to Cancel required by the Truth in Lending Act, pursuant to 15 U.S.C. § 1635. Def.'s 56.1 ¶ 13. Vanzant was unaware this was called the closing, and she did not understand the significance of the mortgage transaction. Pl.'s 56.1 ¶ 7. Vanzant also signed two other Truth in Lending Act Disclosure Statements in connection with her January 2001 loan. The first statement indicated Vanzant signed the statement on January 9, 2001. Pl.'s App., Pl.'s Ex. F. The second statement indicated Vanzant signed the statement on January 12, 2001. Pl.'s App., Pl.'s Ex. E.

  Two days after the closing, Sullivan came to Vanzant's house and asked her for all of the documents she had received at the closing, including the Notice of Right to Cancel. Def.'s 56.1 ¶ 14. Vanzant gave him the requested documents. Def.'s 56.1 ¶ 14. Plaintiff did not attempt to exercise her right to rescind the January 2001 loan. Def.'s 56.1 ¶ 15. Thereafter, Hartford assigned this mortgage and promissory note to EquiCredit. Def.'s 56.1 ¶ 18.

  Sullivan then proposed that Vanzant obtain another loan so that she could finance additional improvements. Def.'s 56.1 ¶ 21. In March 2001, Sullivan called Vanzant and told her someone would pick her up and take her to complete the paperwork for the loan. Pl.'s 56.1 ¶ 22. The same man who drove Vanzant earlier, for the January 2001 loan, once again drove Vanzant to complete the loan. Pl.'s 56.1 ¶ 22. Vanzant signed documents that created a second mortgage transaction between Vanzant and Hartford. Def.'s 56.1 ¶ 23. Vanzant was unaware this was called the closing, and she did not understand the significance of the mortgage transaction. Pl.'s 56.1 ¶ 22. Vanzant also signed two Truth in Lending Act Disclosure Statements in connection with her March 2001 loan. The first statement indicated Vanzant signed the statement on March 15, 2001. Pl.'s App., Pl.'s Ex. I. The second statement indicated Vanzant signed the statement on March 27, 2001. Pl.'s App., Pl.'s Ex. J.

  Hartford never represented that Sullivan and New Look were its agents. Def.'s 56.1 ¶ 29. Sullivan never represented to Vanzant that he worked for anyone other than New Look. Def.'s 56.1 ¶ 30. Moreover, no misrepresentations are apparent on the face of either of Vanzant's promissory notes and mortgages, which were later assigned to EquiCredit. Def.'s 56.1 ¶¶ 19, 26. Neither EquiCredit nor Fairbanks ever engaged in any communications with Vanzant in order to induce her to enter into either of the loans. Def.'s 56.1 ¶ 27.

  Thereafter, Hartford assigned the second mortgage and promissory note to EquiCredit. Def.'s 56.1 ¶ 25. Fairbanks later became the ...


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