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Prince-Servance v. BankUnited

August 10, 2009

MARY PRINCE-SERVANCE, PLAINTIFF,
v.
BANKUNITED, FSB, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant BankUnited, FSB's (BankUnited) motion for summary judgment on Count III. For the reasons stated below, we grant the motion for summary judgment.

BACKGROUND

Plaintiff Mary Prince (Prince) alleges that in 2005 she began to contemplate her plans for retirement from the Chicago Public Schools as an administrator. She claims to have heard a radio commercial at that time advertising mortgage service for the use in purchasing homes. She allegedly called the phone number from the advertisement and spoke to Defendant Gavin Beal (Beal), a loan officer for Defendant The Mortgage Exchange (TME), about buying a new home. Prince contends that she frequently contacted Beal and that he attempted to gain her confidence and ultimately convinced her he was a trustworthy person. Prince also contends that Beal knew that Prince qualified for the best mortgage rates available on the mortgage market.

Prince asserts that she came across a new home offered for $465,000, but she did not think she could afford such a house. According to Prince, Beal convinced her she could purchase the home and have a mortgage payment of $1,500 per month. When Prince asked how such a low payment was possible, Beal allegedly told her to trust him and he would work it out. Prince entered into a contract to purchase the home. Just prior to closing, Prince allegedly received documents from Beal's employer, TME, indicating that her monthly mortgage payments would be between $1,900 and $4,400 per month. Beal allegedly told Prince to ignore the documents and that they were sent in error. Prince claims that she told Beal she needed to get an attorney, and Beal told her he was an attorney and he would protect her.

TME and Beal allegedly arranged a loan for Prince that was funded by BankUnited (Loan). Prince contends that the Loan was a 40-year loan requiring monthly adjustments to Prince's interest rate. Prince also contends that the loan allowed the interest rate under the Loan to increase by more than 400 percent. The principal on the loan is allegedly expected to increase from $485,150 to $546,984.39 over the first seven years of the loan. Prince contends that BankUnited is a subprime lender that engages with the other Defendants in certain unscrupulous lending practices involving fees and matters such as yield spread premiums.

Prince claims that in January 2007, she discovered that she was the victim of fraud by the mortgage broker. She contends that she found that her credit report included an additional $10,000 on the principal amount she owed on the loan. She then allegedly found a third party to look over the loan documents for her and help her understand them. Prince and the third party allegedly discovered that the loan application claimed that she was making $12,000 per month at a job when, in fact, she was retired on a fixed income and getting $4,200 per month in benefits. Prince also claims to have discovered that Beal is not a licensed attorney and was not looking out for her best interests. Prince contends that she now has a mortgage that may soon require triple her monthly income and she will have to spend her life savings to avoid going into bankruptcy. Prince brought this predatory lending suit against Defendants.

Prince includes in her complaint: fraud claims brought against TME and Beal (Count I), Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., claims brought against all Defendants (Count II), a claim alleging violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, et seq., anti-kickback provisions brought against all Defendants (Count III), breach of fiduciary duty claims brought against TME and Beal (Count IV), and an inducement to breach of fiduciary duty claim brought against BankUnited (Count V). The prior judge in this case previously denied TME's and Beal's motion to dismiss. The judge also granted BankUnited's motion to dismiss the claims brought against it in Counts II and V. The instant motion brought by BankUnited is brought solely in regard to the RESPA claim brought against BankUnited in Count III, which is the only remaining claim against BankUnited.

LEGAL STANDARD

Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In seeking a grant of summary judgment, the moving party must 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)(quoting Fed. R. Civ. P. 56(c)). This initial burden may be satisfied by presenting specific evidence on a particular issue or by pointing out "an absence of evidence to support the non-moving party's case." Id. at 325. Once the movant has met this burden, the non-moving party cannot simply rest on the allegations in the pleadings, but, "by affidavits or as otherwise provided for in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). A "genuine issue" in the context of a motion for summary judgment is not simply a "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). The court must consider the record as a whole, in a light most favorable to the non-moving party, and draw all reasonable inferences that favor the non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000).

DISCUSSION

BankUnited contends that it is entitled to summary judgment on the RESPA claim (Count III), arguing that Prince cannot show that BankUnited received a kickback or unearned fee in violation of RESPA. RESPA's anti-kickback provisions provide the following:

a) Business Referrals

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a ...


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