Federal Deposit Insurance Corporation v. Attorneys' Title Insurance Fund, Inc.

Filing 101

OMNIBUS ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT, granting in part and denying in part 68 MOTION for Summary Judgment filed by Federal Deposit Insurance Corporation, granting in part and denying in part 64 Defendant's MOT ION for Summary Judgment filed by Attorneys' Title Insurance Fund, Inc. The parties shall file a proposed calculation of prejudgment interest by 9/5/2014 at 10:00 am. All pending motions are denied as moot. The case is closed. Motio ns terminated: 64 Defendant's MOTION for Summary Judgment filed by Attorneys' Title Insurance Fund, Inc., 68 MOTION for Summary Judgment filed by Federal Deposit Insurance Corporation. Signed by Judge Patricia A. Seitz on 9/3/14. (wc)

UNITED STATES D I
STR I C O URT
CT
SO UTH ERN D I
STR I T O F FLO RIDA
C
CA SE N O.1 23599- V - TZ/ M ONTON
2Cl SE1 Sl
FD I AS RECEI ER FOR W A SH I GTON
C
V
N

MUT LB
V ANK,
Pl ntf ,
ai if

ATTO RNEYS'TI
TLE I SURAN CE FUND ,
N
l C.
N ,
Def
endant
.
/

OM NI
BUS ORDER ON CROSS- OTI
M
ONS FOR SUM M ARY JUDGM ENT I 64, 681
DE DE

THI CAUSE ca beor t Cour o t pates cos- insfrs mmayj me .
S
me f e he
t n he ri ' r smoto o u r udg ht
( 6 DE 68 .l t sa ton,heFDI a r eve frW a hi onMut lBa Ci Mu' ,e
DE 4,
) n hi ci t
C, s ec i r o s ngt
ua nk Wa ' seks
)
r mb sme fom Ator y' Til l urnc Fund (d F' f W a sl sso 1 dea td
ei ure nt r
t ne s te ns a e
ç
ATl ' or Mu' ose n 4 fule
)
r dentalm orgages. A TI S agent and aut i ator
esi i
t
F'
s
horzed l neys s
erved as cl ng agentf each of
osi
or
t tans i
he r actons. The FD I now ass t t t agentsm aleas
C
er s hat he
'
f ance caus W aM u t l m oney t
ed
o end
o
unqualfed bor ower underf se pr ens ,and uli at y,causi a l ofm or t ni m ilon
ii
r
s
al et es
tm el
ng oss
e han ne li
dolar when t borower def t and t l
ls
he r
s auled
he oanswer w rten dow n and sol
e it
d.
W aM u and ATI had a s at i
.
F
epar e ndem niy agr entf each cl ng wher ATI agr t
t eem
or
osi
e
F eed o

r mbure W aM u f rl s sa ii outofiscl i a nts( )fa o dihon t i ha i t
ei s
o os e rsng
t osng ge ' a r ud r s esy n ndlng he

ba sf orcosngdoc nt or()t ag ntsf l et f lw t ba scosngi tu tons
nk' unds l i
ume s b he e ' aiur o olo he nk' l i nsrci .
Thee a re nt aek
s ge me s r nown i t ra esae idusr a Cl i Prtcin Letr (( '. As
n he e l tt n ty s osng oe to tes d
CPL'
)
W aM u' r ver afer is colaps t FDI m ade cl m s on each of t CPLS. W hen ATI
s ecei
t t
l e, he
C
ai
he
F
r us t honort ,t sacton f l
ef ed o
hem hi i olowed.

The c os- tonspr s n t f l ng fve dicrt is s f rr olton:( )whehert e
r smo i
e e t he olowi i s e e sue o es u i 1
t h
FDI has sa ng t s ek i mnii a i un r t CPLS ( whehe W a u' al g d
C
tndi o e nde fc ton de he
; 2)
t r M s le e

c ti or ne ie e prcl s r o r ( whehe te FDI S untmel n ie prcu
onrbut y glg nc e ude ec vey; 3) t r h
C' i y otc e ldes
rco r u ert e CPLS ( whehe ATI i Iabl f br a h ofc nta t a ( )t a ntof
e ve y nd h
; 4) t r F s i e or e c
o r c ; nd 5 he mou
dam ages, i any, t FDI i entted t r
f
he
C s il o ecover Upon consder i of t cr s- i
.
i aton
he os motons,

o ii ( 7 DE 82,rplesr 91 DE 9 ,a t volmiousr odss mmayj me
ppostons DE 8,
1 e i DE , 21 nd he u n ec r u r udg nt
mus b ga ed i par fre c pat TheCou tfndsa f l :( )t FDI ha sa ngt
t e rnt n t o a h ry.
r i s olows 1 he C s tndi o
puruet CPL cli ;()c tiut yne i nc i no ab t rc r ()egh oft f ree
s he
ams 2 onrb or glge e s t ar o e ovey; 3 i t he ou t n
ta a tonsaeno c vee und rteCPLSbe a et FDI f ldt ma atmel cli ( a d
rnsci r t o rd e h
c us he C aie o ke i y am; 4) n

()t FDI i e ild t s
5 he C s ntte o ummayj gme on te rmani sxta aci i t a nto
r ud nt h e i ng i rns tons n he mou f
$ 9 , 5 i da ge . As s c t r ae no is es t be r s v d a ti . Ea h fndi i
4,01973.4 n ma s
u h, he e r
su o
e ole t ral c i ng s
dicuss i t n,butGr t t diput sbackgr
s ed n ur
s , he s e'
ound i s f t i gr erdet l
s et orh n eat
ai.
1
.

FA CTUAL BA CK G R OUN D AND STAN DAR D
a. Background

Til i ur
te ns ance com pani lke ATI utlze net or ofaut i ator
es, i
F, ii
w ks
horzed t neysand agent t
so
i ue tte i ance polci i r esat t actons. Til i er agent alo com m onl ac as
ss il nsur
i es n eal t e rans i
te nsur s'
s s
y t
cl ng agent i t e tans i wher t com pany t r es i underwrii t tte
osi
s n hos r actons
e he
hey epr ent s
tng he il
i ur
ns ance. W hen a tte i er' agenti per or i t cl ng,m orgage l
il nsur s
s f m ng he osi
t
ender oft r r t
s en equie hat
t tte i ur i
he il ns er ndem niy t l
f he enderf l es t arse outoft agent' m iconduc or f l e t
or oss hat i
he
s s
t aiur o

f l cosn i tuci . J C.M ura Clsn Pr e to Letr . Irt/I ( d I Not
olow l ig nsr tons ohn
r y, o ig otc in te s l/z s an s )
/l

Cov r 5 PLlRe 1 @ e Yor 2008 . A cl i ag ntsr e i t s r ie t fn
eed/, 6l / al 93 w
k: )
osng e ' ol s o upe vs he ial
t ans i bet
r acton ween t buyer and s l by over eei t t ans er ofm oney and pr t and t
he
eler
s ng he r f
opery
he
ensurng t tans i docum ent ar fnalzed.
i he r acton
s ei i

One s docum ent i a f m known as a SHUD -I.' A HU D-I i t unior s tement
uch
s or
C
'
s he f m etl
sat entm andat by t RealEsat Setl entPr
t em
ed he
t e tem
ocedur A c i al tans i i vi l
es t n 1 r actons nvol ng oans

byfdeal i urd b nks 1 U. C.j260le s q.HUD- saeprpae i c n u tonwiht
e rly ns e a . 2 S.
te
l r e rd n o j nci t he
cl i and docum ent t tans i s paym ent and coss. The HUD -I i Spr
osng
he r acton'
s
t
s i obabl t m ost
y he
2

i tn do ume i t cosn pa ka ...g c e ...g u r,sles bor r,lndes
mpora t c nt n he l ig c ge
be ausl
blye s elr, rowes e r,
and s
econdar m ar pari pant al r y on t accur ofHU D-Is i m aki deci ons.' Unie
y ket tci s l el
he
acy
n
ng
si '
td

St e v Wikns 2 WL 8 47,a *8( D. nn.Mach22,20 .
ats . li , 007
961 t E. Te , r
07)
Pl ntf s t ent ei ai if' w y- ghtcount com pl nt aleges t i f t Sout Fl da r dental
ai l
hat n oureen
h ori esi i
tans i t t cl ed bet e 2005 and 2007' A TI S agent f audul l or dihonesl
r actons ha os
w en
F'
s r
enty
s
ty
docum ent t HU D-ls, cl ed tansactons t unqualf ed bor ow er i vi a i of W aM u'
ed he
os r
i
o
ii
r
s n olton
s
cl i i tuctons,and caused W aM u' f
osng nsr i
s unds t be t ans er ed wihoutdi osi t t bank t
o
r f r
t
scl ng o he
o

who t f sweeta f rd.Th b rwe i e choft 1 ta a tonsdefule ofe j ta
m he und r rnsere
e oro r n a
he 4 rns ci
a td, tn us
f paym ent i o t m orgage.
ew
s nt he
t
W aM u colapsed i 2008 i t bi t bank f l e i Am ercan hit y. l Sept ber
l
n
n he gges
aiur n
i
sor n
em

2008,t e Ofie o Th itSupe vii ($ ' t ok ove t ba OTS a n e t FDI a
h fc f rf
r son (
OTS' o
)
r he nk.
ppoit d he C s
W aM u' r ver and t FD I i m edit y sol a l ge pori of W aM u' ass s,i udi is
s ecei
he
C m
a el
d ar
ton
s et ncl ng t

morga l nporf i t J
t ge oa tolo,o pMora Chae($ s '.Thes esage me bewe nChas a te
g n s $ e'
Cha )
al re nt t e
e nd h
FDI i k
C s nown a t Purha ean Asumpi Age men (û Agre nt'.Asdic sd i
s he c s d s ton re t $
P&A
e me '
)
suse n
Secton l,t CPL i
i I he
ndem niy r ght wer dcar out'oft sal t enabl t FD I t pr ecut
t i s e d ved- ' he e o
e he
C o os e
W aM u' cl m s agai t t r pari t defauded t bank. Usi is adm i sr i subpoena
s ai
ns hid tes hat r
he
ng t
nitatve
power t FD I em bar on a l ge- cal i tga i i o 500 def t l sl i s pect
, he
C
ked
ar s e nves i ton nt
auled oan es t us ed
m i be atri abl t cl ng agent m aleasance. The f t tans i at is her wer a
ght
t but e o osi
f
oureen r actons s ue e e
par oft i tgaton.
t hat nves i i

:l t or lse i t Com pli , t ta scinsaea fl : 1 6 Meae c La (Meae c ' ()
n he der itd n he
ant he rn a t
o r s ol () 25 llu a ne i llu a' 2
ows
ç
)

1 0 No t F l La d raeBe c Bo e ad(û5 5F l La d rae',3 1 01Not Fo t u ed l Be c
5 5 rh o4 u ed l ah ulv r tl 0 o4 u ed l' () 5
)
rh r La d r ae a h
Bo e ad( l01Fot u rae' ()1 0 Bra wae Co rCx e k tr',5 3 2 I da aSre
ulv r . 5 r La ded l',4 1 6 e k tr u t Bra wae' ( ) 0 2 n in te t
&
)
)
(l in ',6 4 0Al nRo d # 1(Al n',7 1 0 WetAv n e /1 0 (Wet e',8 3 2 NE 1 8
'nda a' () 0 t a , 41 ç t ' () 2 0 s e u ,/ 1 2 t sAv .) () 0 9
ç
)
o
i o )
ç
'
8
Sre, 4 2(t88Sre',9 l l 5NW 78hLa e(78hLa e', 1 )2l Wae W a Ct trWa ', 1)3 1
te t# 2 ç te t) () l 4
1
'
t n $ t n ' (0 3 tr y Wae y' ( 1 6 5
:
)
)
Batre Ro d(Batre' , 1 )21 Ar W a Cç i y', 1 )7 BasAv n eCBa sAv .)a d(4 210
t sa a s tesa' ( 2 1 i y Ar Wa ' ( 3 6 s e u ç s e', n 1 ) 9
e
ç
)
)
'
Alma d Drv Ct a n a'.Ast e c ta a to ,h Co an alg so ebe c o c nrc c u tse ig
a n a ie Alma d '
) o ah rnscin te mplit l e n ra h f o tat o n e kn
e
d ma e a do ed caao yj d me tc u t e kn ad caainta ATI h sbe c dteCP a dta t
a g s n n e lrtr u g n o n se ig e lrto h t F a r ahe h L n h the
FD I i e il t da a .
C s ntted o m ges
3

b. St
andar
d

Su r j gme
mmay ud nt

a o it whe ûhe pl di s de iins a wes t
pprprae
n s
t
ea ng , posto , ns r o

i er ogat es and adm isi on fl t her wih t af i t i any, s
nt r ori ,
s ons
ie, oget
t he fdavis, f
how t t e i no
hat her s

ge neis a t an maei fc a ta temovi paryi e ildt aj dgme a amatro
nui sue s o y trala t nd h t h
ng t s ntte o u
nt s te f
l .' Ander on v. Ll cr.' f y, I c. 477 U. 24 247 ( 98 . On t movig pa t
aw '
s
/ obb n ,
p
S. 2,
1 6)
ce he
n ry
dem ons r t t abs
t a es he ence of a genui isue of m at i f t t non- ovi pary m us Scom e
ne s
eral ac , he
m ng t
tû
f war w ih specii f s s i t t e i a genui is f t i .'M atushia El I
or d t
fc act how ng hat her s
ne s ue or ral'
s t ec. ndus.

Co.r Ze t Ra oCop.47 U. 5 5 (1 )( tngFed. Ci P. ().Th Cou t s
. nih di r , 5 S. 74, 87 986 quoi
R. v. 56e) e r mut
vi t r d and a1 f t i er
ew he ecor
l ac ual nf ences t ef om i t lghtm os f abl t t non- ovi
her r n he i
t avor e o he
m ng
part and deci w het S he evi
y
de
her t
t
dence pr ent a s fci diagr entt r r s isi t a
es s ufi ent s eem
o equie ubm s on o

j r orwhehe i i s on sde t tonepat mus prvai a amatrofIw. Ale v T on
uy
t r t s o e-i d ha
ry t e l s
te a ' ln . ys
'
Food ,nc,1 1F. 6 6 ( 1hCi.1 )( otngAndes n, U. a 25152:.
s l . 2 3d 42, 46 1 t r 997 qu i
ro 477 S. t -

l o i amoi f s
n pposng
ton or ummayj
r udgme t t n mo ngpat ma notrl s el on
n, he on- vi ry y
ey ol y
t pl ngs,but m us s
he eadi
t how by af
fdavis depostons,ans
t,
ii
wers t i er ogat i and adm isi
o nt r ores,
s ons

ta s cfc fcse s d nsrtng ag uie is f ti . Se Fe R.Ci P.5 c,( ;se
h t pe ii a t xit emo tai
en n sue or ral e d.
v. 6() t) e
aloCeoe Cor v Catet477U. 31 32 ( 98 .A mee kcntla'ofe de cesppori
s ltx p. . rt,
S. 7, 4 1 6)
r s i il' vi n u tng
s

t op igpat spostonwilno s fc i ta t emutb as fce s n t tt j y
he posn ry' ii l t ufie;nse d,her s e ufiint howig ha he ur
coul r onabl fnd f t pary. Ander
d eas
y i or hat t
son,477 U . at252;see al W al v.Dar 911F.
S.
so
ker
by
2d

1 3,1 77 ( 1h Ci.1 0)
57 5 1 t r 99 .
I
I.

TH E FDIC H AS STA NDING TO PURSUE I CPL CLAIM S
TS

Thepate ha cos- ve frs
ris ve r smo d o ummayj dgme on ATI SFis Afimai Dee e
r u
nt
F' rt fr tve fns
t t FDI l
hat he
C acks s andi t ass tany cl m s undert CPLS becaus W aM u sol t l
t ng o er
ai
he
e
d he oans t
o
Chas i 2008. A TI m akes t o ar ent - frs,t CPL rght m ay onl be cl med by t
en
F
w
gum s i t hat
i s
y
ai
he
curentowneroft l i er t and second,t even i t CPL rght do notSr wih t l '
r
he and nt es ,
hat
f he
i s
sun t he and,'
t FD I di notcar t
he C d
ve hose rght outf om t 2008 P&A w ih Chas Though t l i t sar
i s
r he
t
e.
he aw n hi ea

i uns ted,a pl n r ng oft CPLS and t P& A agr entr r a Gndi t t FD I has
s etl
ai eadi
he
he
eem
equies
ng hat he
C
sandi t s undert CPLS.
t ng o ue
he
i
.

CPLsDo Not '
' Wih The Land'and are Sever e From Til l
Run t
'
abl
te nsurance

A l 1 CPLSus t sam e s at m andat f m pr am bl l
l4
e he
t eed or e
e anguage:
W hen tte i ur
il ns ance of A tor
t neys' Til l ur
te ns ance Fund i s fi f your
s peci ed or
pr ecton i connecton w ih cl ngs ofr es at tans tons i w hi you ar t
ot i n
i
t osi
eal t e r ac i n
ch
eo
be t l ee orpur er of an i er t i l or a l
he ess
chas
nt es n and
ender secur by a m ort
ed
gage

(ncudi a ot rs c rt i tume )ofa i eeti lnd,t Ator y 'Til
i l ng ny he e u iy nsr nt n ntrs n a he t ne s te
I ua e Fund,s j c t t Con ton a Excl i stf t beow,hee y
nsrnc
ube t o he dii s nd
usons e orh l
rb
agr t r m bur e you f act l s i r by you i connecton w ih s
ees o ei
s
or ual os ncur ed
n
i
t uch
cl ng when conduct by s d l ui AgentorAppr
osi
ed
ai ss ng
oved A tor when such l s
t ney
os

aiesou of...gge tf l et c ywihcl i i tu i orfa ...
rs t
a n aiur o ompl t osng nsrctons rudl
The ques i of sandi t ns,i par,on t pr
ton
t ng ur n t
he oper i ep r aton oft phr e Si whi
nt et i
he as tn
ch
you ar t be t l ee or pur er of an i er t i l or a l
e o
he ess
chas
nt es n and
ender s ed by a m ort
ecur
gage

(ncudi a ohe s cu iy i tume )o a i e es i l ' Courswihi t Ditita e s i
i l ng ny t r e rt nsr nt f n ntr t n and.
'
t t n he src r pl
t
o t tis e. I FDI v Fl i an Til Gr p,I . 1 21 90- 20l W L 5 43 ( D.Fl.
n ha s u n C . ordi te ou nc , 2- 8 cv, 3
346 5 S. a
Se .23,201 ) t c r f d t tlng ge lm ist e CPLSpr t tonst cu r ntposes o sof
pt
3 , he ou t oun ha a ua i t h
oec i o r e
s sr

lnd. Howe r i FDI v Pr pery T anf rSe vc s 1 805 c 201 WL 55
a
ve,n C . o t r se r ie , 2- 33-v, 3
35561( D.Fl
S. a.
Oc.7,201 (TFk'st c trjce t s c tucin as i e tng a lmiain whee t
t
3) û ç ) he our ee td hi onsr to
nsri
i tto
r he
l
anguage oft CPL does notr r doi s Rat ,t PTS cour r t phr e li w hi you
he
equie ng o. her he
t ead he as dn ch
ar t be t l s orpur er i t l or a l
eo
he es ee
chas n he and
ender s ed by a m ort
ecur
gage ...'t des i who
' o crbe
r ves i
ecei ndem nii ton pr ecton. The s
fca i
ot i
oundness oft t r ng i confnned by t abs
ha eadi s
i
he ence of
ot l
her anguage i t CPLS t di t a l
n he
hat vess enderof i
ndem niy rght when i s l t m orgage.See
t i s
t els he
t

JpMor Cha eBan v. rtAm.Til I s Co.7 F.Supp6 6 ( D.Mih. 3) Ass h,
gan s
k Fis
te n . , 95
24, 31 E. c 201 . uc
bas upon t l
ed
he anguage of t cont act t PTS cour' i em r aton beter r l s t pari '
he
r , he
ts nt et i
l etect he tes
i ent
nt .

Next ATI cont
,
F
ends t t CPLS necess iy r wih t l becaus t ar not
hat he
ar l un t he and
e hey e

sever e fom tte i ur
abl r
il ns ance and ar si pl ancil y t i. ATI butr ses is posti by
e m y
lar o t
F
tes
t
i on

s
uggestng CPLSar unsuppored by i
i
e
t
ndependentconsi aton and by hi i i t t t m sof
der i
ghlghtng hat he er
.

t e CPL e e s y lm i t la lt c ve e a û oe t nsve 'wih t tte i ur nc polc W hie
h
xpr s l i t he i bii o r d s k x e i ' t he il ns a e i y.
y
c
l
i i cor ectt t l
t s r ha ender do not pay a s at pr i f CPL cover
s
epar e em um or
age,CPLS ar nonet es
e
hel s
suppored by i
t
ndependentconsi aton. JpM or Chase Bank v.FistAm. Til I Co. 750
der i
gan
r
te. ns. ,

F.d573,5 (t Ci. 4) CPLSaea i e ntbyattei ur t t l de t buyistte
3
79 6h r 201 .
r n nduc me
il ns er o he en r o
t il
i u a e. 1 Le er bu a tte i ur n p iy,i pa t be a e tte i u e s a r e t pr vi
ns r nc d. nd s y il ns a ce olc n r, c us il ns r r g e o o de
t
hem w ih cl ng ser ces. The CPL i an i
t osi
vi
s ndem niy agr ent t a tte i ur us t quel a
t
eem
hat il ns er es o
l
l
ender s under t
'
sandabl f of ent us i an unknown agent w ih l
e ear
r tng
t arge s s of m oney and
um

i ra tIga doc ns JmesBr eDa s TheLcw o Clsn Pr e ton Letes 36 TOR
mpo tn e l ume t. a
uc vi,
f o ig otci
tr,
T
TRI & I .
AL NS PRACT. J 3 845( ) Th ef e t puch eoft ttei u a c f mst ba i
L.. , 2001. er or,he r as he il nsr n e or he ss
ofconsder i f t CPL cont act
i aton or he
r .
Though CPL labiiy i ûcoext ve' w ih t tte i ance polcy, CPLS and tte
i lt s s
ensi ' t he il nsur
i
il
i ance pr ecta l
nsur
ot
enderagai tdif entrs CPLS s eguar a l
ns f er iks.
af
d ender fom l es arsng fom a
r oss ii r
cl ng agent sf aud ordi
osi
' r
shones y orf l e t f l i tuctons,whie tte i ur
t
aiur o olow nsr i
l il ns ance s eguar
af
ds
agai tdef s i tte. The f t t tte i er lm is is labiiy under t CPL t t amount
ns ect n il
act hat he il nsur i t t i lt
he
o he
oft underyi i ur
he
l ng ns ance polcy does not m ake t docum ent i
i
he
s nsepa abl l f ,each oft
r e. n act
he

f te CPLS a is sae t t(te CPLJ s lnotafc t prtcin af de by a tte
oure n
t sue tt ha d h
g
hal
fe t he oe to for d
il
i urn bi r c
ns a ce nde, ommime orpolc of(nsr ttei uel' Th ,i i ce rt tt CPL a
t nt
iy i e t il ns rr. us t s la ha he
'
nd
tte i ur
il ns ance polcy ar ditnct
i e si .

T FDI ' r e Ou '1sRi s Unde t CPLsFr te Sal o te WaMu
he C ' v d t' t ght
Ca
r he
om h e f h

Loans t Chas
o
e

A TI S second ar ent t FDI l
F'
gum
he
C acks s andi i bas upon is r ew of t P& A
t ng s ed
t evi
he
A gr ent bet een t FDI and Chase. Bas on is i er et i ATI ass t t t FD I
eem
w
he
C
ed
t nt pr aton,
F ers hat he
C

s d is Cpl- ed i
ol t
vbas ndem niy rght t Chase i 2008. H ow ever ATI l
t i so
n
, F acks ess i pr
ental udental
i
s andi as an i ended t r pary benefci ' of t P&A A gr ent and t i f ecl ed fom
t ng
nt
hid- t
i al
y he
eem
hus, s or os r
6

ma ngt tagu n. Se I trac Kan r LLC v J
ki ha r me t e nef e ne,
. pMor Chas Ba ,N. ,7 F. 9
gan
e nk A. 04 3d 27,
93 ( lhCi.201 )(i ngt tt r pat t t WaMuP&A Agre ntb t e t FDI a
4 1 t r 3 fndi ha hid ry o he
e me ewe n he C nd
Cha elc sa ngt e oc isco tu to oftea r menlz
s a ks tndi o nfre t nsrcin h gee t.
1 1.
1

TH E FDI I EN TITLED TO SU M M A RY JUD G M EN T O N DEFEN DANT'
C S
S

THI AFFI ATI DEFENSE (C AM U AT FAULTM)
RD
RM
VE
S
W
I is t r am r atve def e, ATI as ers t t aleged f of W aM u' neglgent
n t hid
m i
ens
F s t hat he l
act
s
i
undenvrtng fees ATI of is i
ii r
F
t ndem niy oblgatons because Fl da l di avor a part
t
i i
ori aw sf s
y
i
ndem niyi is fagai tis ow n neglgence absent unequi
f ng t el
ns t
i
vocalt m s ofi ent See Chares Poe
er
nt .
l

Ma ony Ic.v.S ig Loc Scyol ng Re alEqui Co. 37 So. 487 489 ( a 1 )
s r n
prn
k a di
nt
p. , 4 2d ,
Fl. 979,
Howe r s
ve, ummayj
r udgme tmus bega e f Pl ntf ont sdee ebe aus Dee an ha no
n t rntd or ai if hi fns c e fnd t s t
es abls t f toft i
t ihed hat aul he ndem niee i a def
t s
ense i a CPL- ed i
n
bas ndem niy acton.
t
i

l f c,t t co r r t c r i FDI v Ator ys' teI .Fun4 I ,1 211 n a t o he nta y, he ou t n C . t ne Til ns
nc 0- 97 PCH,

si o a 6( D. a Ma 1 2011 (çnd ' hasale yrj ce t tag nt Th I ymac
lp p. t S. Fl. y 7, ) ç ymac'
l
)
rad eetd ha rume . e nd
cour f
t ound t CPLS ar ûs fci l dif ent'f om sandar i
hat
e dufi enty fer ' r
t
d ndem niy contact s t t
t
r s uch hat hey
ar an exce i t Fl i s gener pr bii on i
e
pton o orda'
al ohi ton
ndem nii i i cases of ne i
fcaton n
glgence.
2Eve i tear e c dbepr s nt ,i woul f i. See PTS,20l W L 5535561 1*6- Se i 3. oft
e e ed t
d al
n f h gum nt oul
3
a 7. cton 5 he
P& A Agr m e ,whih c r t rs r ton ofas es satsi pe tnen pa t
ee nt c once ns he e e vai
s t, t e n ri t r:

UpMo g nCh s l o sn t u c a e a q ieo as me o (x e t soh r s e p esypovd di ti
r a ae d e o p rh s, c ur r su , r e c p a tewie x rsl r ie n hs
Age me t o ti a o t t p rh s, c ur o as meu d rti Ag eme t..
re n) ban n pi o u c ae a q ie r su n e hs re n .
on

( )a yitrs,ih, cin cam, r u g n a an t. .i . .a y Pesn . .ean db
b n neetrg t ato , li o j d me t g is . () . (n ) ro . rtie y
teFaldBa k. . rsn o t fa yato o sino sc Pes ni sc c paiy (i a y
h i
e n . aiig u o n c r miso f u h ro n u h a ct,i) n

unde wrtroftna ili tt i bonds ba rsbl tbondsora ot ri urncepolc of
r ie i nca nsiuton
, nke ' anke
ny he ns a
iy

teFaldBa k . . r(v a yoh rPesnwh s a t no i cinma b rltdt a yls
h i
e n , . o i) n te ro o e ci rnato y e eae o n o s
o
(x lsv o a yls rs ligfo s c P ro sfi r t p yo aLoa ma eb teFald
e cu ie f n o s eut r m u h es n' al e o a n
n
u
n d yh i
e
Ba k i u r d b t eF i dBa k; r v d d,h tf rt ep pos sh r o , h a t, miso so
n l nc re y h a l n p o i e t a o h u e e e f t e cs o s in r
e

ohre nsgvngrs t a ysc cam sal a eocre ono b fr BakClsn ,
te vet ii ie o n uh li hlh v curd r eoe n oij

r r es ofwhe a s h cai i dic r andr gar e sofwhehe anys cl m i m a
ega dl s
n ny uc l m s s oveed
e dls
t r
uch al s de
wihr s c t afnanca i tttonbond,ba r sblnke bond,ora ot ri u a polcyof
t e pe t o i il nsiu i
nke ' a t
ny he ns r nce i
t FaiedBa i f c asofBa Cl i
he l
nk n or e
nk osng.

Th PT c ut orcl fu dta s cin3.()i d e n te e tCPLcamsfo teFDI Srsr aino
e S o r c re t o n h t e to 5b () o s o x mp
y
li r m h
C' eev to f
rg t,ha s cin35b(i d e no l t ut o l f rrc v r u d ris rn ep l is a dt t e t n
ihs t t e t .( )i o s t i s is ny o e o ey n e n u a c oi e, n ha s ci
o
)
mi
c
o
3.()i)a pl st CP camsb c u etee e t etbihn t lse o c re b fr tep e e es rb n '
5b(v p i o L li e a s h v ns sa l ig he o s s c urd eo e h rd c so a ks
e
s
f l e.
aiur
7

M or
eover as i dicuss at l h i Secton V, CPLS ar uni becaus t ar i
, s s ed
engt n
i
e que
e hey e ndem niy
t
agr e s whi oper e under t backdr of a f duci y r atonshi bet een t agent and
eem nt
ch
at
he
op
i ar el i
p w
he
l
ender
.

Tho A TI ha n c t d an de i i whe e a co tha f und t t Fl i s i m niy
ugh
F s ot ie y c son
r
ur s o
ha orda' nde t
r e applest CPLS,ATI s
ul
i o
F uggess t tt I ymac cour woul have r
t ha he nd
t
d
eached a dif entr ul had
f er es t

i c nsd rdteElve hCic tsr ig i Gibsv Ai Cana 81 F. 1 ( lh Ci.1 )3
t o iee h e nt rui' uln n b . r
da, 0 2d 529 1 t r 987 .
However Gi anot non, bbs,
her
CPL cas si y r t at t gener r e announced i Chares Poe
e, mpl eier es he
al ul
n
l

M asonl and does notcom pela dif entout e i I ymac. I G i t El
y
fer
com n nd
n bbs, he event Cicui f
h r t ound
t ,i t abs
hat n he ence ofcontar i ent any f toft i
r y nt ,
aul he ndem niee t i a I caus ofisown l
t hat s egal e t
oss
wilnegat t cont act i
l
e he
r ual ndem nior soblgaton.However,as Pl ntf poi souti isopposton,
t ' i i
ai if nt
nt
ii
t i
he ndem niy pr son i Gi i ca egori l dif entt t i
t ovii n bbs s t
caly fer han he ndem niy l
t anguage oft CPL.
he
Ther A icr tServi ,I agr t i
e, r af
ces nc. eed o ndem niy A i Canada f dam agescaus b t neglgence
f r
or
ed y he
i
or w ilulm iconduc ofA icr t Ser ces'em pl
lf
s
t
r af
vi
oyees. A s yet m or evi
e dence oft r uni
hei quenes
s,
CPLS m er y r r t t l dars outof't agent s m i
el equie hat he oss d ie
he
' sconduct whi i Fl i i onl a
, ch n orda s y
Qcaus connecton' butnotpr m at cause. Taurus Hol ngs I v. U. Fi iy and Guar.Co.
é al
i '
oxi e
di
nc.
S. delt
,

9l So. 528 5 40 ( a 2005. Mos i ranl ATI h ne ece t c nsd t a t l
3 2d , 39- Fl. )
t mpo t ty, F as gl td o o ier he cua
l
anguage oft CPL and,w ihoutf t aut iy,i cannot r y on is over enson of Gi t
he
t
urher hort t
el
t
ext i
bbs o

mak ne lw t warnts mmar udg ntonisco rbut yne i nc dee e.
e w a o ra u
yj me
t nti or glge e fns
IV .

ATI IS ENTITLED TO SU M M A RY JUDG M ENT O N EIGH T O F THE
F
FOU RTEEN TM N SAC TIO NS O N N O TICE G R O UN DS4

ATI ha mo dfrs
F s ve o ummayj me on 11oft 1 ta atonsongr ndst tte
r udg nt
he 4 rns ci
ou ha h
3ATI Scttont J
F' iai o udgeA lona spr-ralor ri Re o Bankv. Ato ne ' tel ur
t ga' eti de n gins
tr ys Til ns anceFun4 I . l
nc, 3205 i unpe s sve.J
75,s
r ua i
udgeA lonagadi de Pl ntf ' m oton i lm i t pr l De e ntfo ofe i
t
d ny ai ifs i n i ne o ecude f nda r m frng
evi er r ng Pl ntf' l n unde wrtng, t r cor c ai noex anai f whys is dt t
denc egadi ai ifs oa
r ii but he e d ont ns
pl ton or
he s ue ha
r i
ulng.

4 Forpur esoft dic sonon t a iai ofuntmeynoiedeens , t Cour as um est tt ei
pos
he s us i
he pplc ton
i l tc f e he
t s
ha he ght

CPLSa is eaev ldc nrcs ATI ddn t v frsmmayj d me to n tc g o n sa t teBatre ,
t su r ai o tat. F i o mo e o u r u g n n oie r u d s o h t s a
e
Ar W a orBas Ave tans ctons
i y,
s nue r a i .
8

FD I di nottm el notf t ATI ofW aM u' cl m sundert CPL. Ti el notce i a condii
C d
i y iy he
F
s ai
he
m y i s
ton
pr
ecedentt ATI Si
o
F' ndem niy oblgaton. Par aph 41 oft f m CPL pr des:
t
i i
agr
7 he or
ovi

Cl m so l ss l b ma pr mptyt t (ns r tte i ur )a isprncpa ofi
ai f os ha l e de o l o he i e t il ns er t t i i l fce
a (dde s.W h t fiur t gi pomptnotc s l prj cet (ns r tte
t a rs) en he al e o ve r
ie hal eudi he i et il
i uer,te la lt oft (nsr tte i ue)h r nde s l be r uc d t te
nsr ) h n ibii
y he i e t il ns rr eeu r hal ed e o h

e e tofs hprj ce The(nsr ttei ue)salnotbela eh r nde unls
xtn uc eudi . i e til ns rr h l
ibl eeu r es
noieofI si wrtngi rc v dbyt (nsr ttei uer wihi niey( da
tc os n ii s e eie
he i e til ns r ) t n n t 90) ys
f o t e da e ofdic r ofs h l s
rm h t
s ove y uc os .

The phr e tt dat of dicover ofsuch l s' i udes not onl t da e of dicover of
as the e
s
y
os ' ncl
y he t
s
y
act l , but alo when t i
ual oss
s
he ndem niee has know l
t
edge of s fc ac s gi ng rs t a cl m
pecii t vi ie o
ai
cover by t CPL. PTS,2013 W L 5535561,at*8. A s i s f h i gr erdeui i Sec i V,a
ed he
s et ort n eat
l n ton

ln ri e ildt ide fc toni t cl i a nt( )f ldt c ywihi tuci r aig
e de s ntte o n mniiai f he osng ge 1 aie o ompl t nsr tons eltn
t enf cabiiy of t m orgage l n,t r r ent t obt n docum ent or t r r ent t
o or lt
he
t
ei he equiem
o ai
s, he equiem
o

dib s f dspr ry,or( )c
s ure un ope l
2 ommitd fa ora t d dihon ty i ha dlng W a u' f ndsor
te r ud c e s esl n n i
M su
cl ng docum ent .
osi
s

Thus i W aM u ort FD I f l t gi notce t ATI t i s
,f
he C aied o ve i o
F hat t oughti
ndem nii i under
fcaton
t CPL w ihi 90 daysofl ni eiherofan agents f l e t f l cl ng i tuctonsorofan
he
tn
ear ng t
' aiur o olow osi ns r i
agents f audul or dihones conduct s
' r
ent
s
t
uch t ATI S i
hat
F' ndemnii i oblga i w oul be
fcaton
i ton
d
t i ed, ATI i not labl The 90- notce r r ent i a (brght lne,' m eani t
rgger
F s
i e.
day
i equiem
s di
i '
ng hat

prj c i ir e ntousde oft 9 da noie pero 1 . The un s t rc d e de e
eudie s relva ti
he 0- y tc id. d
dipued e or vi nc
showst tf ei oft f t tansac ons W aM u ort FDI knew m or t 90 daysbef e
ha or ght he oureen r
ti ,
he
C
e han
or

ma ngisCPL cai eih rof ()a undicl e sc mo ta a cl i mea n t a n di
ki t
l m te :a n s osd e ond rg ge t osng, nig he ge t d
no f lw cosn i tuc i ,or ( kne fc s t a t l s ar e ou of a a en ' fa d or
t olo l ig nsr tons
b) w a t h t he o s os t n g ts r u

dihon t Thu ,s
s esy. s ummayj dgme tmus b gr td o t 1 01 For La eral 1 05 For
r u n
t e ane n he 5
t ud d e, 5
t
Lauder e,A l anda, Br
dal
am
eakw a er l ana Steet Alon Road, W es Avenue, and 188 h St t
t , ndi
r , t
t
t ree

ta a to ,e c ofwhih i dic s d beow. Su r j gme mus be d ni a t tr rnscins a h
c s suse l
mmay ud nt t e ed s o hee
M el euca,W a erW aysand 78t Lane.
al
t
h

a. The Ei Pro i For lrd lSum mar Judgmenti Gr ed
ght pertes
'/ c/
lp
y
s ant

(l 1 For La ral ()1 For La ral
) 501 t uded e; 2 505 t uded e
The FDI m ade is cl m t ATI on t e CPLS i M ay 2011. However t r d
C
t ai o
F
hes
n
, he ecor
evi
dence show s t W aM u had notce of s fc f t gi ng rse t i
hat
i
pecii ac s vi i o ndem niy under t For
t
he t

La r l CPLSi lt 20 l De e be 200 W a u' c
ude dae
n a t 07. n c m r 7, M s ouns wr e a l te t ATI n iyi
el ot e t r o
F otf ng
A TI t i had a dut t def W aM u' i er t i t f ecl ur oft 1501 pr t f l i
F hat t
y o end
s nt ess n he or os e he
opery, olow ng

t boro r dea t g 6 2,p.9 . W a sc elal e t tATI Scl i a e ' fau
he rwes ful. DE 51
Mu' ouns leg d ha
F' osng g nts r d
t gger ATI S dut t def under t tte i ur
ri ed
F'
y o end
he il ns ance polcy. 1 The r d e dence r lect
i
d.
ecor vi
et s
t W aM u' couns had becom e aw ar oft f aud i Oct 2007,w hen an ator f t s l
hat
s
el
e he r
n ober
t ney or he eler
notfed W aM u' couns aboutf aud i bot t 1501 and 1505 tans i .1 atp.l1. Thus t
ii
s
el
r n h he
r actons d.
, he
uncontovert r d evi
r
ed ecor
dence s st i 2007,W aM u had s fci l partcul i know l
how hat n
uf i enty
i arzed
edge
about cl ng agent faud t makt a cl m under t tte i ur
osi
r
o
ai
he il ns ance polcy i connec i w ih t
i n
ton t he
1501 f ecl ur A s s
or os e.
uch,W aM u knew or s d have known t ,bas on t e s e f s,i
houl
hat ed
hes am act t
alo had an i
s
ndem nii i cl m on t CPLS Thatknowl
fcaton ai
he
.
edge not ihs andi t FDI di not
w t t ng, he
C d
m ake a cl m on t CPLS untlovert ee year l er Ass c ATI warnt smmayj gme t
ai
he
i
hr
s at .
u h, F ra s u r ud n

on Count Tw o,Thr Si een and Sevent
s
ee, xt
een.

( Alma a
3) a nd
The FD I m ade is cl m on t A lm anda CPL i Jul 2011. W aM u f ecl
C
t ai
he a
n y
or osed on

Al m a b r
a nda orower i J y 20
s n ul 08. The n i e o lspe n i s d w ih t e f e l u e c m pl n
otc f i nde s s ue t h or c os r o ai t
nam ed t A l anda pr
he am
opert s l , Ana Nov asa s dia e le hole . ( E 65- D E 67y eler
9;
o,
ubor n t in d r5 D

21 . The f c t a t s le r t ne a i e e ti t pr ry i e d c t tt s le fna e
41
a t h t he e lr eai d n ntr s n he ope t s vien e ha he e lr i nc d

te ta a ton a cl i As i stf t i grae deali S ton V ih' Wa u' sa r
h rnsci t osng.
s e orh n e tr ti n eci
n a, M s tndad
cl i i tuc i t t cl ng agent was t no out i s ce of fnanci i udi second
osng nsr ton o he osi
s
hat
sde our
i
ng, ncl ng
5A noieo Ispe
s t tce e or d n he hai i o e ope e r d
tc f i ndensi çano i , r c de i t c n ofttet r alpr o ,rquie orpemit i s
l
r ted n ome

j rs ito t wanal esnta cranp o ryi t s be tmatro liain a dt ta yitrssa q ie
u idcins o r lp ro h t eti rpet she u jc t f ig to , n ha n neet c urd
e t
d rn tep nd n yo tes iaes bett iso to . Blc sLf Dito ay 1 7 (0he . 01 )
u ig h e e c fh ut r u jc o t uc me' a k' z cin r 0 3 1 t d 2 4.
'
w

m orga es wa alowe w ih e e s wrte a pr l Thi s a da d c to a s a i d t
t g , s l d t out xpr s it n p ova . s t n r ondii n lo pple o

t Alma atansci g 71491 Theef e W a kne asofJ y 2008whe i fl t
he a nd r a ton. DE - .
r or, Mu w
ul
n t ied o
f ecl e on t pr
or os
he opert t ATI S agentKr er& Gol P. .f l t f l W aM u' cl ng
y hat F'
am
den A aied o olow
s osi
i t uctons pr bii cl ng t s e i t buyer had any secondar fnanci N onet es t
nsr i
ohi tng osi he al f he
y i
ng.
hel s, he

FD I di no m a e a CPL cl i un i t e y r l t r
C d t k
a m tl hr e ea s a t .
Th FD I do no co es t t t s ler A n Novo fn nc t s e o t t Kr m e &
e
C es t nt t ha he e l
a
i a ed he al r ha a r
Gol n f ied t f l w cl i i tuc i . Ra he ,t FD I S a g e i r s ons i t tt e ls
de a l o olo os ng nsr tons
t r he
C' r um nt n e p e s ha h i
pendens i ir evantbecaus i does notgi t det l oft diposton oft s
s r el
et
ve he ais he s ii
he econd m orgage
t
f
unds or dicl e whet t cl i agent par i pa ed i cl ng t second m ort
s os
her he osng
tci t n osi he
gage. That
ar ent i unavaii however because CPL labiiy f an agents vi aton of t cl ng
gum
s
lng
i lt or
' ol i
he osi

i tuc i doe notr quie pr o t e a en ' kno l dge ori t n ,i onl r quie a s ow i t t
nsr tons s
e r oof f h g t s w e
n e t t y e r s h ng ha
i was cl on t dat t ls pendens w as f l t t e w er f s s i t cl ng
t
ear
he e he i
ied hat her
e act how ng he osi

i tuci wee vi ae Ass h,s
nsr tons r oltd.
uc ummayj me i wara e f Dee n o Co s
r udg nt s rntd or fnda t n unt
Fourt and Twent Ei .
een
y ght

( Br a t
4) e kwaer
The FD I m ade a cl m on t Br
C
ai
he eakwat CPL i Augus 201l. ATI as t and
er
n
t
F sers,
V/
as4u does not deny, t as a part of cl ng package W aM u r ved a docum ent entted
hat
osi
ecei
il

, ed
û de e ofPes na Prpet l urn ' ( 65 ! 3 DE 77 ! 32 . The docum ent dat
d nc
Evi
ro l o ry ns a ce. DE
'
2;
1

Ocobe 1 2 lssNai alCiyBa a asc morga eeofteBra wae popet (
t r 2, 006,it ton t nk s e ond t g
h e k tr r ry. DE
65-0,p.341 Ra elUbia ATI Sag nt e c edt HUD- stlme sae n onOcob r
1
. pha
t, F' e , xe ut he
I ete nt ttme t
t e
1 2006. ( 67- 31 Ass h,i i a r n t tW a u kn w ors dha kno t tt e ewa
9,
DE 7 . uc t s ppa e t ha M
e
houl ve wn ha h r s
as
econd m ort
gage on t pr t a t tm e of cl i and,t by cl ng s a t ans i
he opery t he i
osng
hat
osi uch r acton,

Ubit vi ae t cosng i tuci .Aswiht Alma ta a ton,t FDI Sobe ton
ea oltd he l i nsr tons
t he a nda rns ci he C' j ci
t t Per onalPr
hat he s
opert I ance document i ir evanti a m ertes efor t i por a sci er
y nsur
s r el
s
il s f t o m t
ent

el ent i o t f l e t f l a cl ng i t uctonspr si Becaus t FDI di notm ake
em
nt he aiur o olow
osi ns r i
ovi on.
e he
C d

is CPL cl m untlal ost fve year aher W aM u knew of f s t w oul gi rse t a cl m ,
t
ai
i m
i
s
act hat
d ve i o
ai

s mmayj dg n i warntdfrDee nt onCo sFo a Eihte
u r u me t s ra e o fnda s
unt ur nd g e n.
()l a Ste t ()AlonRo d;7)Wes Ave ;()1 8hste t
5 ndina re; 6 t
a (
t nue 8 8 t re
The FD I r ved HUD -ISe tement f each oft above tansac onspur uantt an
C ecei
tl
s or
he
r
ti
s
o
adm i sr i s
nitatve ubpoena i Oct
n
ober 201l. Though each H UD-I show ed unaut i s di e
horzed ubor nat
fnanci and t cl l i cat t t tans i w er cl ed i cont aventon of W aM u'
i
ng
hus eary ndi ed hat he r actons e os n
r
i
s

cl i i s r c i s t e FDI di notpr vi ATI w rte no i e un i Fe ua y 201 o m on h
osng n t u ton , h
C d
o de
F it n tc tl br r
2, ne
t
out de of t 90- w i
si
he day ndow . The FD I S f l e t m eet t CPLS 90- notce condii
C' aiur o
he
day i
ton

prc de trquie s
e e n e rs ummayj me frATI onCo sFi a Ni te (ndina,Co sSi
r udg nt o
F
unt ve nd nee n l a ) unt x
a Twe y ( t ,Count Se n a Twe t one ( et,a c t Eihta Twe tnd
nt Alon)
s ve nd
nyW s) nd ouns g nd
nyTwo
( 88hste t1 t rel6
The FD I m akest ar ent why isf l e t m eett notce condii pr
C
wo gum s
t aiur o
he i
ton ecedents d
houl

be e us d. Fis ,i ar ue t tis u i i s wasbe aus oft vol e o W a u l n fl st t
xc e
r t t g s ha t ntmelne s
c e he um f M oa ie ha

ha t b rviwe a is gi ng noie i Fe uay as opp e t Jnuay wa obe tv y
d o e e e d, nd t vi tc n br r
osd o a r s j ciel
r onabl under t cicum s ances. W hie i m ay be tue t a backl i r ew i l f l
eas
e
he r
t
l t
r hat
og n evi ng oan ies

ca e teFDI Sdea Pli ifh no cie a a t rt t twoul alw aj calrwrt ofa
usd h
C' ly, antf as t td ny uhoiy ha
d lo udii e ie
CPL contactt alow a sal CPL cl m on t bass of an adm i sr i backl The cas t
r o l
te
ai
he i
ni tatve
og.
es o

whihPlitf doe cie Be ev Mai Ste I et nt,22 F.Supp.3 1 38,1 45- 3 ( D.
c anif s t, as . n ret nvsme s 0
d 3 3 1 47 M.

Fl. 2)a Rus l GasetCo.v Pho xo ror Isuanc .Co.5l F. 205, (t Ci.
a 200 nd sel k
. eni fHaf d, n r e , 2 2d 208 6h r
1 5) d no c els h a r ul eih .Bea e i i ppost be a e i i ve e us ofasa ue
97 , o t omp uc es t t er
s s na ie c us t nvol s xc e
tt t
oflm ia i ,nota bar ned-or contact Li
i t tons
gai f
r . kewi e,Russ lGasketCo.i i
s
el
s napplcabl becaus i
i e
et
i ves i ur
nvol ns ance and noti
ndem niy.
t
6Addii ly, i t f ecos r Co ai f t l88hSte tpr pe t whi W a u fld onJ 24, 2008,i
tonal n he or l u e mpl nt or he t r e o ry ch M ie
une
t

s fc l pl d t Countywi Ba ha a u e r s cond morgagei t a
peciialy ea hat
r de nk d n nr co ded e
t
n he mountof$ 000. a of
200, 00 s

Jn 5 2 0 ,h d t o teco ig.( 6 -0 p. 1.Ass h W a k e t eborwe h da u uh rzd
u e , 0 7 te ae fh lsn DE 5 1 , 3 1
uc , Mu n w h ro r a n nat oie
sc n mo ta ea co igi J n 2 0 .Thi fc wo l atr aieyj siytee tyo smmayj d me tfr
e o d rg g t lsn n u e 0 8 s a t ud len tv l u tf h nr f u r u g n o

ATI ont 1 t Stee CPL.
F he 88h r t

l
2

As is s
t econd ar entt FDI ass t t not t andi isuntm el notce,t r d
gum
he
C er s hat wihst ng t i y i he ecor
evi
dence makes cl t A TI knew aboutt f sgi ng rie t CPL cl m s wel bef e Febr y
ear hat F
he act vi s o
ai
l or
uar
201 becaus i had i tgat Ryan Dosen,t agent t cl ed aI f tans i
2
et
nves i ed
he
hat os
l our r actons. Though
ATI di i tga e Dos t FDI has notpr
F d nves i t
en, he
C
oduced any r d evi
ecor
dence t t s s t ATI
ha how hat F
had pari arzed know l
tcul i
edge of Dos s faud i t
en' r
n hese tans i s t i woul gi rs t
r actons uch hat t
d ve ie o
ATI S i
F' ndem niy oblgaton ort i ATI knew abouta pr pectve cl m ,i w as i a poston t
t
i i
hat f F
os i ai t
n
ii o
know t am ount oft l such t i coul r m bur W aM u f t l s. Know l
he
he oss
hat t
d ei
se
or he os
edge of b0t
h
f s ar crtcal t sa i y t CPL notce r r ent under Fl i l . See PTS, 2013 W L
act e ii o tsf he
i equiem
orda aw
5535561,at*8.

Su
mmar Jud t orATI i De edont Mealuc ,Watrrby,and 7 tzane
y gmen f
F s ni
he l e a
e l
z
8h
.

Transactons
i

I each oft e tans i ,ATI has pr ded a notce oflspendens as e dence t W aM u
n
hes r actons
F
ovi
i
i
vi
hat
knew t t e w er s
hat her
e econd m orgageson t pr
t
he opertes. H ow ever A TI S labiiy undert CPLS
i
, F' i lt
he

does not ars f om t m er f t of a s
ie r he
e ac
econd m orgage but t tm i oft second m ort
t
he i ng he
gage;t
he
m orgage had t be i exi ence att tm e ofcl ng. ATI hasnotpr ded any r d evi
t
o
n st
he i
osi
F
ovi
ecor
dence t
o

esabls such f ,nort t s s W aM u knew t t cl i agent f l t f l i tuctons
t ih
act
ha how
hat he osng
s aied o olow nsr i
by cl ng t ans i fnanced by second m orgages As s h,s mmayj dgme c n tbe
osi r actons i
t
.
uc u r u
nt a no
gr ed ast t e pr teson notce gr
ant
o hes operi
i
ounds.7

7W ihr pe tt t W aerW a ta aci , ATI as cl m st tW a u' l n-er ci notss t ba w a
t es c o he t
y rns ton
F lo ai ha M s oa s vi ng e how he nk s

a r o p si efa d.Th n t fo De e r4 2 0 sae ç-h b ye si)ha ti i afa g.) g v
wae f o sbl ru
e oe rm c mbe , 0 7 tts çf e u r ad t t hs s rud ..He a e
g'
te hipo ro atr e s i ta h i wokn wi teF Ch itn S p r . ( 6 - p.11 Ho v r
h m s we f ton y,ad h t e s rig t h Bl rsia he ad' DE 57, 0 . we e,
h
'

t svag sae e i notevi nc ofbr rAubr Rudd' m ico
hi ue ttm nt s
de e
oke
ey
s s nduc i t cosng s h t ti w oul gi rs
t n he l i uc ha t
d ve ie
t W a u' k l
o M s now edgeofaCPL cli .
am

V.

FDI I ENTI
C S
TLED TO SUM M ARY JUDGM ENT ON LI LI
ABI TY FOR
BR EAC H O F C O N TR AC T FO R TH E M ELA LU ECA , W A TER W A Y ,
BA TTER SE A , A l l W AY , 78TH LA N E , AN D BASS A V ENU E
t
TR AN SA CT I N S
O
As t al oft si r ai ng tansactons,t e i no genui diput i t r d evi
o l he x em ni r
i
her s
ne s e n he ecor dence

t ATI br
hat F eached is i
t ndem niy oblgaton undert CPLS and t Pl ntf i entted t r
t
i i
he
hat ai if s il o ecover

W a ' lse . Ass c , anifi e t ldt s mmayj d me t st al i ta s cin o b t
Mu s o s sB u h Plitf s n ie o u r u g n a o l sx rn a to s n oh
t
t be c ofc ta ta d d lrt yj gme c nt. Th a
he ra h onrc n ecaaor ud nt ou s e moun ofda ge i dicu sd i t
t
ma s s s se n he
nexts i l t f egoi dicus i each oft tans i i di cuss i vi l butfr t
ecton. n he or ng s son,
he r actons s s ed ndi dualy,
is ,
i i neces y t pr de an over ew ofhow br
ts
sar o ovi
vi
each ofcont acti es abls as i r a es t CPLS.
r s t ihed t elt o

Ge rly,h elme t ofabra ofc ta ta to ae:()t e se eofac rc;( abrac
neal te e ns
e ch onrc cin r 1 he xitnc
onta t 2) e h
oft c rc;a ()da g rs tn fom t bra Gr e Il As n I .v Gr e ll
he onta t nd 3 ma es eulig r he e ch. ov se s', nc . ov se
Asoc',LLLP,1 So. 1 ,1 95( a. DCA 201 )
s s
37 3d 081 094- F1 3d
4.

Exitnc o Contac
se e fa r t
W ih r pectt t fr tel ent t exit
t es
o he i s em , he sence ofa contact ast t M el euca,W a erW a
r , o he
al
t
y,
i y, h
and
r actons h al y he
Ar W a 78t Lane, BassAvenue t ans i , tev i t oft CPLSi undiputd.g 83,
di
s s e DE !

6,! 1 4,! 1 9,! l1 ,!1 19 Moe r i i undiputd a t aIsx ta a tonst tATI
3
5
8 71.
rove, t s s e s o l i rnsci ha
F
pr ded t tte i ur
ovi
he il ns ance and t W aM u hel a m orgage i er t t eby s if ng t
hat
d
t
nt es , her
ats yi he
condii pr
tons ecedentf CPL cover
or
age.

8 ATI ag e ta s mmayj d me t a n t ee trdbea s t eF C ddn t v do s mmayj d me t
F ru s h t u r u g n c n o b nee c u e h DI i o mo e fr u r u g n
o alofATI Safr i dee es Thati ani orec saem e oflw .ATI be r t bur n ofpr on is
n l
F' fimatve fns .
s nc r t tt nt a
F a s he de
oof t

afr tv d fn e a til S eT osens nv M/ a gu,8 F.d 147 1 5 -51( 1hCi. 9 0 (iains
fimaie ee ss tra. e h rtiso . vDr n r 91 2 5 , 5 0 1t r 1 9 ) ctt
o
o te ) Th s o apan if moinfrs mmayjdg n,h d fnd n b astei ta bzd no s o n ta
mitd. u , n litf s t o u r u me tte ee a t e r h ni l l e f h wig h t
o
i r
t ea f tv d fns i a p ia l. u Cr s a dBl eSh edv Wet, 3 F 2 1 4 1 5 ( 1h Ci.1 9 )
h fkma ie e e e s p l be Bl e o s n u il . i 91 . d 5 4, 5 2 1 t r 9 0 .
c
z
Onl upon s h as i t t afim ai deens i a i bl doest bur n s h t plitf r ga di t t
y
uc how ng hat he fr tve f e s pplca e
he de hi o an if e r ng ha
afim ai deens 1l a 1 .l He e Defndan hasnotadduc as ntlaofevi e i t r co dt ta ofis
fr tve f e. 6 t 3. r , e t
ed ci il
denc n he e r ha ny t
r m ani el endefns a ea iabl a ism e el ha ngpl t edefns camotpr cldet e r of
e i ng ev
e es r pplc e nd t r y vi ed hos
e es r
e u he nty

s mmayj d me tfrPlitf.
u r u g n o anif
9ATI dipu e t vai t oft Ba tr e CPL)but asi dic s bel w ihr pec t t Bat s a
F s t s he ldiy he te s a
s s used ow t es t o he tere
5
ta aci t CPL i de d a a he i c r tby vit ofisa tsi ato oft Fi Ame
rns ton,he
s eme n ut ntc ontac
rue t gen ' nvoc in he hh
ndme
nt

wh nh wa drcl ak da u tee itn eo t eCPL.g dDe o, 6 - 6 , 92 1 )
e e s iety s e bo th xse c f h
Rud p .DE 7 1 5 5 :-6 .
1
4

*

i.
i

Br
each

ATI diput w he hert CPLS w er act l br
F s es
t he
e ualy eached, However,t undiput r d
he
s ed ecor
evi
dence wih r d t t e si contact es abls t t contac s wer br
t egar o hes x
r s t ihes hat he
r t
e eached. Under t
he
CPLS,ATI w as labl t r m bur W aM u f is l es i eiheroft o cicum sances. I t fr
F
i e o ei
se
or t oss n t
w r
t
n he ist
cicum sance,A TI woul be labl t r m bur e W aM u f l esfarii outof't is ng agent
r
t
F
d
i e o ei
s
or oss s sng
he s ui
or appr
oved a t ney f lng t com pl w ih wrten cl i i tuctons as t
tor
aii o
y t
it
osng nsr i
hey r at t
el e o

S nfre iiy a d prort ofte le of(he mo ta ...t o ani of gny doc n
l oc abl n i iy h in t l rg ge
e
t
he bti ng a l ume t
s fcaly r r ...and t colecton and paym entoff
pecii l equied
he l i
undsdue.' Rel i t Senf ceabiiy
'
atng o s or
lt
and prort oft len' m eanshavi t do wih t bor ower' bona fdes,t len prort and t
i iy he i '
ng o
t he r
s
i
he i
i iy,
he
rght t s
i
o eek defci
i ency afer f ecl e. PTS, 2013 W L 553556, at *11. l t s
t or osur
n he econd
cicum sance, ATI w oul be labl t r m burs W aM u f l ses ar sng out of çFr
r
t
F
d
i e o ei
e
or os
rii
d aud or

diho syof(he Is i Ag torAppove Atore i ha i ( M u'jf so d me t
s ne t t l sung en
r d t n y n ndlng Wa s und r ocu ns
i c eci wih (he cl i ' Thus t esa ihbra h t FDI mus s w alc ofge uie
n onn ton t t j osng.
'
, o tbls e c he C t ho a k
n n
dipuei terc de d nc ta ()t cosnga nsf ldt co ywihi tuci rltngt
s t n h e or vie e h t l he l i ge t aie o mpl t nsr tons eai o
enf cabiiy of t m ort
or lt
he
gage l n, t r r ent t obt n document , or t r r ent t
ei he equiem
o ai
s
he equiem
o

dibu s f pr pe l or( )t a t a n sa t d wih fa ordiho t i ha dln W a u'
s r e unds o ry, 2 h t he ge t c e t r ud
s nesy n n ig M s
f
unds or cl ng docum ent .o I t CPL cont , t Pl ntf can es abls t i ent aspect of
osi
sl n he
ext he ai if
t i h he nt
tdi hones y' by show i t agentact ddelber t y,know i y,w iluly blnd off t t woul
ts
t'
ng he
ed ' i a el
ngl lf l i
ac s hat
d
ot
herwie be obvi orw ih r es dir d f her dutes ascl i agentdurng t cl i '
s
ous,
t eckl s s egar or
i
osng
i he osng.'
PTS,201 W L 5535561,a *1
3
t 3.

1 Top ov fa d teFDI mu ts ow t eco i ga e t d :( )af lesa e n of t ra fc ; 2 tea e t
0
r e ru h
C s h h l sn g n ma e 1 as t tme t mae i l a t ( ) h g n
k e o s o l h v k o o t e fli o t e sae n ; 3 t ea e t n e d dt a t ef lesae n id c
n w r h ud a e n wn f h ast f h tt me t ( ) h g n i tn e h t h as ttme t n u e
y
a te'rl n e a d()W a j siibyrl do teflesae n t i derme t Co g esPa kO /c
noh rs ei c ' n 4 Mu u tfa l ei n h as ttme to t ti n. n rs r fzc
a ,
e
s
Co d s1, LC v Fis- tzn Ba k& Tu tCo,l 5S 3 6 2, 0 , 14( a 4hDCA 2 3 .
n o 1L . rtci e s n r s . 0 o. d 0 6 6 * . F1. t
i
01 )

ii
i.

DamagesFrom t Br
he each

Tur ng t w he her dam ages t
ni o
t
low f om t br
r
he each, i i undi put t t t bor ower i
ts
s ed ha he r
sn

ever tans i def t on t r m orgages l i f t undiput t W aM u uli at y sol
y r acton auled
hei
t
. t s urher
s ed hat
tm el d
each of t not t J or Chas i rng,i ever i t
he es o pM gan
e, ncur i n
y ns ance,a s t i I
ubs antal oss. However t
,o
pr l t FDI m us esabls t W aM u' l es ar e out of t cl i agent m iconduct
evai, he
C
t t ih hat
s oss
os
he osng
s' s
.

Thelse onl ne dt ha Sgrsnlou of't ag ntsfiur t f l i tuci orfa dulnt
o ss y e o ve daie t
he e ' al e o olow nsr tons ru e
ordihones conduct whi i l st t calpr m at caus PTS,2013 W L 553556,a *1 A s
s
t
, ch s es han ypi
oxi e
e.
t 4.
di cus ed eari ,kars outof'm eans dorgi i f om ,'Shavi isorgi i ' Sgr i outof'
s s
ler t ies
'
s i natng r ' s ng t i n n,' s ow ng
,'
Stow i f om ,''i dentt ' orthavi a connecton w ih.' 1 Thus,t FDI can esabls t
sl ng r ' dnci
o,' d ng
i
t ' d.
he
C
t ih he
r sie l
equi t egal nexus by s
howi t t agent conduct r uled i W aM u m aki l
ng hat he
s'
es t n
ng oans t a
o
borowerwho w as l sbona fde t W aM u bar ned f .1 u .
r
es
i han
gai or 1

( M eae a
9) lluc
Ator M i
t ney chaelRos ATI Saut i agent cl ed t M el eucat ans i The cl ng
e, F' horzed
, os he al
r acton.
osi
i tuctonss at asf l
ns r i t ed olows:
ç
ç

. . . Ther i not t be any ot
e s
o
her fnanci s
i
ng, econdar fnanci or ot char
y i
ng,
her
ges
wihoutexpr swrit appr
t
es ten
ovalfom t Lender ..'
r he
. '

DI
SBURSEM EN T O F FUN D S SUBJECT
CO M M I EN T COND I ON S ...
TM
TI
THI LOAN
S

I SUBJECT TO
S

SATI CTI
SFA
ON

OF

TH E REA L ESTA TE SETTLEM EN T

PROCEDURES ACT (
RESPA) You a ehe e notfedt ty ar t de i td
:
r r by ii ha ou e he sgnae
Setl ent Agent a t eby ar r ponsi e f delverng t com pl ed RESPA
tem
nd her
e es
bl or i i he
d
Setl entSt em ent- HUD 1 For i accor
tem
at
m n
dance w ih t r r ent oft Real
t he equiem s he
Esat Setl entProcedur A ct and t a condii ofourcons t your cl ng
t e tem
es ,
hat
ton
ent o
osi
t s taps i i t you acce t e i tuctons and com pl e and delver t
hi r acton s hat
pt hes ns r i
et
i he
H UD-I St em enti accor
at
n
dance w ih t e r r ent ..
t hes equiem s.
Fi l t cl ng i tuctonsdocum entsat
naly he osi nsr i
t ed:

1 ATI ag e ta teF C c n t rv ia s mmayj g n o be c i p r, c u et ç ied wn '
1 F r u s h t h DI ano pe al t u r ud me t n rah,n atbe a s he ç t o s'
wr
W aM ut k ont l nsi t s l t Cha ewe enotduet cl i a
oo
he oa n he ae o
s r
o osng gentm af anc butbe us ofadeci i
leas e
ca e
lne n

v le o tes betpo et s amak tc n iinwhihATI ddn tis r.Ho v rta ag me talt
au s fh u jc rp ri , re o dto c
e
F i o n ue we e,h t r u n fi o
s

c i rt ti t CPL r l ,t sa r ofc us i i ls t pr m aec e.PTS,201 W L 553556,a
onsde ha n he
eam he tndad a aton s e s han oxi t aus
3
t
*1 .
4
1
6

Your m i rs il rc lcig anddiburig al b o rfe s Prpa eonl
fr s eponsbefo ole tn
s sn l r ke e. e r y
o HUD- Sete ntSttme .( 712 .
ne
I tlme ae nt DE -1
W a u ta f re $132 682. t Ros t f d t l n.Ros prpa e aHUD- t t
M r nse r d , 2, 54 o e o un he oa
e e rd
I ha
s we t boro pr vi d a de i of$1 0 a br hta a to $3 97 39 c s t
ho d he r wer o de
post
00,00 nd oug n ddiinal 49, 3. a h o

cl e. g 67281 The HUD- t tRo e s ted t Wa u doe no rtec t borwe'
os DE - .
I ha s ubmit o M
s t el t he ro rs
s
econd m ort
gage.
Two days bef e W aM u wied t l f
or
r he oan unds i o Rose' escr account Ros r ved
nt
s
ow
, e ecei

$1 , fom NainalCiy Ba (d ' t be puttwadst Meal c bor rsdown
87500 r
to
t nk û
NCB' o
)
o r he l eu a rowe '
paym ent Ros i ued N CB a HU D-I,whi cl l desi ed t N CB l as second m ort
. e ss
ch eary
gnat he
oan
gage.

g 67- .
DE 321
Rose cl m st have or l advi W aM u' r esent i t t M el euca borowerhad
ai o
aly
sed
s epr
atves hat he
al
r
a second m orgage and t W aM u agr t t s
t
hat
eed o he econd m orgage on t condii t s
t
he
ton he econd
m orgage w oul not dit b W aM u' fr t prort len. ( e De ,DE 654,pp.8 - 901
t
d
s ur
s is i iy i
Ros po.
8
.
However Ros f l t obt n texpr w rten appr ' i conf m iy w ih t cl i
,
e aied o
ai t ess it
oval' n
or t
t he osng
i t uctons,and hi cl ng f l does not cont n any mem or alzaton of t aleged convers i
ns r i
s osi ie
ai
ii i
he l
aton
bet
ween Ros and W aM u' r es atves.1 at92.
e
s epr ent i
d.
Regar ess even i W aM u gave is consent t m odiy t cl i i tuctons, Ros
dl ,
f
t
o
f he osng nsr i
e
r es y f l t dicl e t s
eckl sl aied o s os he econd m orgage on t HU D - he s it t W aM u. Li 204 of
t
he
I ubm ted o
ne

t HUD- f m s cii lyrquie t tt prnci a unt o s o morg e b lse W h
he
I or pe fcal e rs ha he i pal mo s f ec nà tag s e itd. en
as at hi deposii why he di notdicl t s
ked
s
ton
d
s ose he econd m orgage fnanci on t HUD-I he
t
i
ng
he
s it t W aM u,Ros ans er t because t N CB m orgage çhad aleady been f
ubm ted o
e w ed hat
he
t
l
r
unded ...

ter woul no be a ra o f met pu i o ter. ( 65- pp.1 9 - 1 21 Ros di
he
d t ny e s n or
o t t n h e' DE 4,
'
1
2 . e d
concede i hi deposton,how ever t by om itng t s
n s
ii
, hat
ti he econd m orgage,i appear t t buyer
t
t
ed hat he
w aspayi 20% oft per
ng
he centprce oft tans i i cas r hert w ih Gnanci 1 at125.
i
he r acton n h, at han t
ng. d.

Thus even i W aM u cons ed t s
,
f
ent o econdar fnanci Ros s f l e t dicl e t s
y i
ng,
e' aiur o s os he econd
1
7

*

m o t ge o t HUD- s tl m e sa e e he pr d W a u m ir pr s t d t b r s bo
rga n he
I e te nt t t m nt
ovi ed M
s e e en e he uye ' na
fdes as a m orgagor Ros s r ess di r d i f lng t dicl t s
i
t
.
e' eckl
segar n aii o s ose he econd m orgage on t
t
he
H UD-I am ount t dihonesy i t handlng ofW aM u' docum ent Because t r d evi
so s
t n he
i
s
s.
he ecor
dence
cl l esabls t Ros s m i
eary t ihes hat e' sconductentted W aM u t i
il
o ndem niy under t CPL,Pl ntf i
t
he
ai if s

e ildt s mmayj dgme onCou sOnea Fite
ntte o u r u nt
nt
nd fe n.
As t t M el euca tans i and as t al t r ai ng tansactons gener l ATI
o he
al
r acton,
o l he em ni r
i
aly, F
ar
guest t an agents f aud ordi honesy i t pr i a HUD -l i notcover under t CPL
ha
' r
s
t n he eparng
s
ed
he

be a et HUD- i nott Wa udoc n . ( 8 p9 .Howe rt tagu ti meils
c us he
Is ( M
a
ume t' DE 2, 1
'
ve,ha r men s rtes
becaus i i i
e t s nconss ent w ih wel- etl Fl i l t cl ng agent ar fduci i t
it
t
ls ted orda aw hat osi
s e i ares o

mo ta e s PT ,2 1 W L 5 3 5 * ,ct g Flrd %a v J y,6 9 S 2 l 6 ,1 6 ( a
rg g e . S 0 3
5 5 61 9 ii o ia r . o 7 o.d 1 5 1 7 Fl.
n
1 96 . The cosng i tu tonss cii a l r quie Ros t del raHUD- sae ntt W a u.
9 )
l i nsr c i pe fc ly e r d e o i
ve
I t tme o M
ATI S under t ng of what docum ent ar ûW aM u docum ent ' cover by t CPL i overy
F'
sandi
s e d
s'
ed
he
s
l
f m alsi and f l t r
or itc
ais o ecogni t as W aM u' fduci y,Ros had an oblgaton t exer se a
ze hat
s i ar
e
i i o
ci
r st l ofdii
equiie evel
lgence i al actonshe t on W aM u' behal,i udi dii
n l i
ook
s
f ncl ng lgence i delverng
n i i
a corectHUD -I asr r by t cl ng i tuctons The si e M i gan case on whi ATI
r
equied
he osi ns r i .
ngl chi
ch
F

rles New Fr e Morga Cor v Gl Morga Cor ,7 N. . 8 8 4 ( ih.
ei ,
e dom
t ge p. . obe t ge p. 61 W 2d 32, 42-4 M c
Ap 200 doe nota yFl ialw,do no co i rtefdu al rltc hi bewe naclsng
p. 8) s ppl ord a es t nsde h i ci . eaims p t e o i
y
agentand m orgagee, and i ot wie unper uasi 1
t
s her s
s ve.2

( 0 Wae W a ( 1 Batrea (2)Ar W a
1 ) tr y; 1 ) tes ' 1 i v
,
ATI agenta t ney A ubr Rudd s ved ascl i agentf t W at W ay,Ba t s and
F
tor
ey
er
osng
or he
er
ter ea,

Ar Wa ta atons ATI o ess mmayj dgme tby cai ngteFDI ha notprs td
i y rns ci . F ppos u r u
n
l mi h
C s
eene
any adm i i e evi
ssbl
dence t Rudd r ved W aM u' cl ng i tuctons. H ow ever when depos
hat
ecei
s osi nsr i
,
ed

1 M or ve , i i uncl rt tt ar
2 eo r t s ea ha he gume i t ual s
nt s ext ly uppored. l peri ntpa tCPLSsaet t y i
t n tne r,
t t hat he ndemniy
f

a antls aiigo to ûtru o ds n syo s i Is igAge t rAp r v dAton yi h n l gy u fn s
g is os rsn u ftla d r iho et f ad sun
g
n o p o e tr e n a di o r u d
n
ordoc e si conne i wih s h cl i . ATI i ope l asum est tt wor Eyour'm odiist ph as
um nt n
cton t uc osngs'
' F mpr ry s
ha he d t '
fe he r e
çdo
ç cument i con ci wih s h cosngs' Ar bl l our'onl m odii çfnds'
s n ne ton t uc l i . gua y, t ' y
'
y
fes lu .
'
l
8

*

on t s c os ng ,i l ng w he a k d whe he he r c i d t e c os ng i tuc i ,Rudd i ke
he e l i s nc udi
n se
t r e e ve h l i nsr tons
nvo d

te Fit Ame dme a r us d t ans r (ke Ru De ,DE 67-65,1 5 1 511 23*
h fh
n nt nd ef e o we . k
s
dd po.
1 0:- 5; :9- ,
1 2-1 Ass h,hi i oc to warnsa ad rei ee eonalmat srltdt t W ae
24: 5.
uc s nv ain ra t n ves nfrnc
l ter eae o he tr
W ay,Bater ea,and A r W ay tans i .
t s
i
r actons
The El
event Cicui r
h r t ecenty hel t t a non- t wines s i
l
d ha
pary t s' nvocaton of t Fit
i
he fh

Am endm enti a ci lcas warant an adver e i er
n vi e r s
s nf ence on a cas bye- case basi dependi on f ,
s
ng
our

non-xclsve fcor. Thee fcos ae:( )Ehe naur oft rlva r ai hi i ( dhe
e ui at s
s a tr r l û
t t e he ee nt eltons ps' 2) d
'
t
de e ofc r oft pat ove t non rywin s'()dh c
gre ontol he ry r he pat tesi 3 d e ompai lt oft itr t o t
' t
tbiiy he neess f he
pa t a n pa t win s i t ou c of t ltgai ' a ( ihe r e oft n pa t
ry nd on- ry t es n he t ome he ii toni nd 4) f ol
'
t
he on- ry

wines i t li tonv Coqui I e t nt v.TD.Bank XW. --F.d-- ( lh Ci.201 ,
t s n he igai '
t
'
na nv sme s
, , -- 3 -- 1 t r 4)
201 W L 37
4
20301 *6 (ul 29,201 . Though ATI di no c ntolRud a a e oy e,t i
Jy
4)
F d to r
d s n mpl e her
i er t a e algned. By pl ng t Fit Am endm ent Rudd appar l seeks t avoi crm i
nt es s r i
eadi he fh
enty
o
d i nal
kew s
labiiy f m ort
i lt or
gage f aud.3 Li ie, ATI beneft f om Rudd' i
r 1
F
is r
s nvocaton because Rudd'
i
s

sience kee t FD I f om uncoverng f swhi w oul expos A TI t labiiy undert CPLS
l
ps he C r
i act
ch
d
e
F o i lt
he
.
Rudd' r e asa non- t winessi cent ali t ltgaton gi t t f ofRudd' m iconduc
s ol
pary t
s
r n he ii i ven hat he act
s s
t
det m i whet ATI i labl t t FDI A ccor ngl Rudd' i
er nes
her
F s i e o he
C.
di y,
s nvoca i of t Fit
ton
he fh
Am endment war ant an adver e i er
r s
s nf ence as t ever hi perai ng t t tans tons about
o
yt ng t ni o he r ac i

w hi h ht r f e t a we qu tons
c
e us d o ns r es i .
W at rzz
er f'y
t

W a uta fre $2, 7,65. 8t Ru t f t e b rsmorg e.Aswiht
M r nse r d 71 5 1 o dd o und h uye '
tag
t he
M el euca tans i W aM u expr sl dialow ed s
al
r acton,
es y s l
econdar Gnanci i is cl ng i r i .
y
ng n t osi nstuctons

g 7l39 . Th buy rwass pos t ha boug $630,62.2 û a h t cos 'a Wa u
DE - 1 e e
up ed o ve r ht
1 3 û s o l e, nd M
c
'
fnde tel nc ntnge tonisbengteonl e er fndi s ce.( 6 1 1 Ru ne r
u d h oa o i n t i h y xt nal u ng our DE 7- 60. dd ve
1 I i ce rfom t de ii ta c i t tRudd wa k
3 t s la r he poston r ns rpt ha
s nownt t U.S.Ator sO fi a ha be nt
o he
t ney' fce nd d e he

tre o aGrn Jr sb o n .( 6 -65 1 1 - 9.
ag t f a d uy u p e a DE 7 1 , 9:7 1 1
1
9

A

rceve a esrw de ifom t bor r g 67 1 1 Mor ve,teHUD- Rud prpaed
e i d n co post r he rowe . DE - 57 .
eo r h
I d e r
and subm it t W aM u i t W at W ay tansacton di notdi os a s
ted o
n he
er
r
i
d
scl e econd m orgage. H ow ever
t
,
Rudd knew t buyer had obt ned a second m ort
he
ai
gage on t W at W ay pr t t day fom
he
er
opery hat
r

NCB i t a
n he moun of$ 000 be a eRud peron l no a iedt boro rssgnaur on t
t 328,
c us
d s aly t rz he r we ' i t e he

NCB la doc me sa prpae NCB' HUD- .g 67 1 J1
o n u nt nd e rd
S
I DE - 61.4
Rudd cl l vi at W aM u' cl ng i tucton t t tans i notbe fnanced wih
eary ol ed
s osi nsr i hat he r acton
i
t

a o h r e e na fn nci g. M o e r by r pr s n i on t H UD- t tt bu rbr gh é as
ny t e xt r l i a n
r ove , e e e tng
he
l ha he ye ou t é h
c
t cl e' w hen he knew t w as not t cas he act di
o os '
hat
he e,
ed shones l i handlng t cl i
ty n
i he osng
docum ent Because t t dihones r es a i concer t bor ower s bona fdes,A TI was
s.
ha s
t epr ent ton
ned he r
'
i
F

labet ri ure WaMu u rte CPL. Ass Pl ntf i enild t s
i l o emb s
nde h
uch, ai if s tte o ummayj dgme ton
r u n
Count Ten and Tw ent Four
s
y
.

ATI cl m s t W aM u knew about N CB ' s
F ai hat
S econd m ort
gage becaus Aubr Rudd s
e
ey
ent
bot t W aM u and N CB H UD-I s at ent t Fl wood Fundi w hi ATI cl m s ac ed as
h he
t em s o eet
ng, ch
F ai
t

W a smorga e boke. g 83,! 1 1 Howe r t r i n r od e de e s pori t t
Mu'
t g r r DE
43.
ve, hee s o ec r vi nc up tng ha
Fl t
ee wood s ed t i or aton w ih W aM u. Rudd' m er s ng bot HUD -I t Fl w ood
har he nf m i
t
s
e endi
h
S o eet
cannot r
easonabl under i t concl on t Rudd act dihonesl by f lng t diec l
y
m ne he
usi hat
ed s
ty
aii o r ty

dicl e t N CB s
s os he
econd m orgage t W aM u and does not s
t
o
upport denyi Pl ntf s m ar
ng ai if um
y

j dgme on te Wae Way Count. Sc An ron v fi ry Lobb I c,477 U. 242,252.
u nt h tr
s e de s . bet
y, n .
S.
(xpli ngt tt de taeage neis f ti ,h pat o i s
e ani ha o monsrt nui sue or ralte ry pposng ummayj dgme tmus
r u n t
s w aj yco dra o bl tn f t tp ry,n meel aç cntla' e de c ll
ho ur ul e s na y i d orha a t ot r y f i il'of vi n e .s
s

1 TheNCB M orgag documentbea sRu ' no ay samp andwha a ar t behi sgnaur . Ruddpl dedt
4
t e
r dds t r t
t ppe s o
si t e
ea
he

Fihwh nak dih n trz dted c me t ( 67 1 5 3 :0 1 4 ATI h sn tito u e a yrc r
h e se f e oa ie h o u n. DE -6 , 0 1 -6 . F a o nrd c d n e od
evi ncet r t tRudd notrze t document a t ef e,i i dee e t thedi
dt
o ebut ha
a i d he
, nd her or t s m d ha
d.

1Th a dto a b ssfrs p o t s mmayj d me to teFDI i tefc ta Ru dds zsdWa s
5 e d i n l a i o u p ri u l u g n fr h
i
ng
C sh at h t d ibl e Mu'
r
f ndst pa tesnotlstdon t HUD-Ihes itd t W a u i vi ai oft cl i i tuci .A s
u o ri
it
he
ubm te o M n olton he osng nsr tons
esabls d b a unr utedadve s i e e
t ihe y n eb t
re nfr nce,Rudd is che fom W a u' cl i f ndst ABC
s ued cks r
M s osng u
o

i sme si t a
nve t nt n he mountof$41 098. t G&C l t nt Co p,i amount of$1 000. a $31 098.
4, 50,o
nvesme s r n
s
00, 00 nd 4, 50,

Baters
t ea

The pari diput whe herA TI i ued a CPL i t stans i becaus ATI doesnot
tes s e t
F ss
n hi r acton
e
F
have a r d oft sCPL i is dat e. Pl ntf hasfl a docum entfom W aM u' Ba t s l
ecor
hi
n t abas
ai if
ied
r
s ter ea oan

fl ta ipupo t t beteBatre CPL.6 g 67 1 . Thou t CPL d n s ecfc ly
ie h t t r rs o h tesa
1 DE - 671
gh he
oes ot p iial
r er
ef ence t Ba t s pr t i doesbearRudd' nam e,hi A TI m em bernum ber and hi ofi
he ter ea opery, t
s
s
F
,
s fce
i or aton. The docum ent i si
nf m i
s gned by M ar
gret A . W ilam s as ( i M anager' f A TI
li
A sk
' or
F.
W ilam s t tfed at her deposii t not ever CPL had tansacton specii i or aton on i.
li
es ii
ton hat
y
r
i
fc nf m i
t

( ila De ,DE 6 1 8: 11.Whe akedwhehe herc niedt do me pur re t
W lims po.
7-4, 9- )
ns
t r e og z he cu nt potd o
bet Batre CPL,Ruddivoke t Fit Ame
he tesa
n d he fh
ndme t ( dDe o.DE 67 65,l 3:2 1 .
n. Rud p ,
-1 1 - 61

ATI ag t ts
F rues ha ummayj dgme tmus bede ed on CounsElve a d Twe y- ve
r u
n
t
ni
t e n n
nt Fi
becaus t FDI has not pr
e he
C
oven t exit
he s ence of a vald cont act H owever w hen t r d
i
r .
,
he ecor
evi
dence i consi ed w ih t adver e i er
s
der
t he
s nf ence cr ed by Rudd' i
eat
s nvocaton of t Fit
i
he fh
Am endm ent t diput i s one- i t t FDI m us pr lon t ques i oft contacts
, he s e s o
sded hat he
C
t evai
he
ton he
r '
valdiy asa m aterofI .
it
t
aw
Tur ng now t whet Rudd' conduct ti ed ATI S labiiy under t CPL, i i
ni
o
her
s
rgger
F' i lt
he
ts
obvi f om t r d evi
ous r
he ecor
dence t i di The HUD -I Rudd s it t W aM u r lect a
hat t d.
ubm ted o
et s

puc s prc of$2,00,00. g 67-74) W a ta fre $ 25 41 40t Ru t f dt
rha e ie
8 0
DE 1 . Mu rnserd 2, 2. 7. o dd o un he
l n.The b r we wa t ha br ht$5 , 03. t clsng;t e s le was t h ve r c i d
oa
oro r s o ve oug
41 1 70 o o i h elr
o a e eve
$121 , 70 o t pr c eds Ass tf t i t ecl i i tuc i ,he s lersc nti i t t e
, 3355. f he o e .
e orh n h osng nsr tons t e l ' o rbuton o h

s eprc c dnotha e e de 6% oft l roft puc eprc ora pr sdprc ( 71
al ie oul
ve xc e d
he owe he rhas ie p aie ie. DE 42 .
1

t TTS Desgns l i t a
o
i , nc.n he mountof$31 284. a t Cusom Coai ,LLC i t amountof$1 000.
3, 00, nd o t
tngs
n he
00, 00.

g 6 -6 , p. 2-9 .
DE 7 1 5 p 9 61
1I i u dsue ta Ru dise teATI tl p lc r 6 -6 )o teBatre po o .j 8 , 1 )
6 ts n ip td h t d su d h
F ie oiy DE 7 1 6 n h tesa rpe DE 3 ! 47.
t

Ru se cr ac ntr c dss
dd' s ow cou e or how he ne rr e ve a de i orf ds fom t borowe .
ve ec i d
post un r he r r

('c DE 67 1 1 Furh mor,Rudd' esrw r or e alt s lr wee onl dibu sd
ke
s
- 75 . ter e
s co ec dsrve he eles r y s re
$6 1 4.6 r t r t a t $121 355.0 r te td on t HUD- . Thi me n t e s le s
43, 5 6 ahe h n he , 3, 7 el ce
he
I
s a t h elr
e fc iel fna ce 20% oft e $2,00,00 pur as prc Ass h,Ru cos d t e ta a to i
fe tv y i n d
h
8 0
ch e ie.
uc
dd l e h r ns c in n
vi aton of t cl ng i tuctons. Separ el by cl i t tans i wihout t buyer
ol i
he osi ns r i
at y,
osng he r acton t
he
brngi any dow n paym ent and by f s y r pr entng on t H UD - t t buyer br
i ng
alel e es i
he
I hat he
ought

$ ,03.0 t cosng Ru s c nduc c tt t d fa i t ha ig oft c o ig do ume s
541 1 7 o l i , dd' o t onsiu e r ud n he ndln
he l sn c nt.
Rudd i pr um ed t have know i y com m it faud bas on hi i
s es
o
ngl
ted r
ed
s nvoki t Fi A m endm ent
ng he hh
w hen asked tar you aw ar ofwhet t e was a ...s r buyer i t Bater tans i '
ie
e
her her
taw
n he t sea r acton?'

( 67- 65 65: 8 .
DE 1 , 3-1
ATI cha l nge t a e c ofm a n i e e esa tRudd' c
F le s he d qua y
ki g nf r nc bou
s ondu tb e on hi ba k
c as d
s n

rcods ( 8 ! 15 5 . S i al ATI c e ta be a et s algainsae o y
e r . DE 3, 3-41 pecfc ly, F ontnds h t c us hee le to r nl
s
uppored by a sngl bank sat ent t possbiiy t t buyertans er t m oney t es ow
t
i e
t em , he
i lt hat he
r f red he
o cr
i t m ont eari , or t t r ni m oney w as t ans er ed t t seler i t mont
n he
hs ler
hat he emai ng
r f r o he l n he
hs

f l n t cosng,ca notber e o .Theobe ton i una aii By ctngt Ru sba k
olowig he l i
n
uld ut
jci s v lng.
ii o dd' n
r ds Pl ntf has com e f
ecor s ai if
orwar w ih r d evi
d t ecor
dence t s
o upportis cl m s. Def
t ai
endant cannot

s eyrl onco j tr t r b t eal ains i ha t prs trc de d nc ofisownt t
oll ey
necue o e ut hos leg to ;t s o een e or vie e t
ha
s
hows t Rudd' conducti notwhati appearst be,whi i has notdone.Thus t undiput
hat
s
s
t
o
ch t
, he
s ed

rc de de ewarnstee tyofs
e or vi nc ra t h nr ummayj dgme f Pl nifonCount Elve a dTwe yr u nt or aitf
s e nn
nt
Fi
ve.
ii
i.

Arilzz
lty
r

W a u f de a$2, 25 88l n f t Ar W a pr ry.TheHUD- t tRudd
M un d
676, 7. oa or he i y ope t
I ha
c e t d a s mit d t W aM u r l ce t tt e pur ha e prc woul b $ 50 000. t a t e
r ae nd ub te o
ete t d ha h
c s ie
d e 3, 0, 00, h t h
b r we woul be b i $91 08 21f dst cosng,a t t$l l , 20 woul bediti t
oro r
d
rng 4, 2. un o l i nd ha , 85462.
d
srbued

t tes le .( 67 l j Rudd' ecow a o rc dsdonotrfe teihe adibure n t te
o h elr DE - 86.
s sr cc unt e or
elc t r s s me t o h

slerfom tesl poc e orade ostofc s downfom tebu r ( 67- 85.Ruddt kt
el r h ae r e ds
p i ah
r h ye. DE 1 2
oo he
Fit Am endm ent w hen asked i t buyer br
fh
f he
ought t
hose f
unds t cl ng and w hen as i t
o osi
ked f he

a tofdibus me t sae on t HUD wee ma t t sler r 6 1 ,73:621.
moun
s re ns ttd
he
r de o he el . DE 7- 65 1 - )
Furher Rudd pl
t ,
eaded t Fit w hen asked i he knew t i or aton dicl ed i t HUD-I was
he fh
f
hat nf m i s os n he

no a c a e a t tm e h c os d t e t a a to 1 a 65:2- Th ,a a m a t rofl w t e r c d
t c ur t t he i e l e h r ns c i n. d. t
5. us s
te
a h e or
evi
dence esabls t Rudd s it di
t ihes hat
ubm ted shones l com pl ed cl i docum ent
ty
et osng
s.

Addii aly, Ru s pe s l cl i fl s c t i a m e o f o t Sele r qu s i a
ton l
dd' r ona osng ie on a n
m r m he l r e e tng

$ 00 dib s me tt t buy r W he a k d wh t rRudd ma t s dibu s me he a i
440, 0 s ure n o he e .
n se
e he
de hi s r e nt gan
pl
eaded t Fit A m endm ent whi w ar ant an adver e i er
he fh
, ch
r s
s nf ence t he di i f ,t ans er
hat
d, n act r f

$ 00 fom t s le t t buy r ( 1 8 7- .Ass h,Rudd f ldt f lw Wa u'
440, 0 r he elr o he e. 67-65, 3: 91
uc
aie o olo
M s
cl ng i r i ,whi Ike t W at W ay tansacton,r r t t s l ' conti i t
osi nstuctons
ch, i he
er
r
i equied hat he eler s
rbuton o

t sl prc no e e d 6% ofte l roft purhae prc o a aie prc E 71451
he ae ie t xc e
h owe
he c s ie r ppr sd ie. DE - .
Rudd w iluly i ed t W aM u' buyer br
lf l gnor hat
s
ought no f
unds of hi own t t cl ng,cl ed a
s
o he osi
os
tans i bas on a s t i l I ger s l conti i t aut i
r acton ed
ubsantaly ar
eler
rbuton han horzed, and f cat t
abri ed he
HUD -1 s tem ents at entgi t W aM u. Al oft e i pac ed W aM u' expect i aboutis
etl
t em
ven o
l hes m t
s
atons
t

borwe' bona td . Acc r ngl s
ro rs
s es
odi y, ummay j me i warne on Couns Tweve a
r udg nt s ra td
t
l nd
Ty ent si
v y- x.

( 3 7sbLa
1 ) t ne
h ne r ns c i
Ator y Rya Dos n cl e t e 78t L.a ta a ton. W a u ta f red $1027, 9.0 t
t ne
n
e os d h
M r nse r
, 61 1 o

D osen' escr account 1s cl i i tuctons m ir ed t condii of t M el euca
s
ow
. t osng nsr i
r or he
tons
he
al
tans i , i udi t pr bii on s di e fnanci 1 D os pr e t ee s at
r acton ncl ng he ohi ton
ubor nat i
ng.7
en epar d hr epar e
h
r
i
H UD-IS f t e 78t Lane tansacton. The H UD-I D os s it t W aM u di not r lect a
or h
en ubm ted o
d
et
1 Thoughi i undiputd t tDos ncl edt 78hLa tans c i , a w iht Ruddta aci , F diput
7
ts
s e ha
e os he t ne r a ton s t he
rns tons ATI s es
whehe Dos n a t l r ceve t cosng i tuci .Dos n i pr s
t r e cualy e i d he l i nsr tons
e s e umedt ha r ceve t i tu tons
o ve e i d he nsr ci

b c u ewh nak dwh t e h ddo n th ped dteFi .( snDe o.6 - 1 39 1 4 ATI h sn t
e a s e se eh r e i r o, e la e h lh Do e p , 79, 6 :- 3. F a o
pr uce a r co devi nc t r utt ti ernce.
od d ny e r
de e o tb ha nf e

%

s c d morga e. g 67-431 Theboro rdi i fc obanasco morga eontepr ry
e on
t g DE 1 .
rwe d n a t ti e nd t g
h opet
fo Nai alCiyBa i tea
rm ton t nk n h moun of$1 000. DE 67-441 Dos nk w a ou t sco
t
24, 00.(
1 . e ne b t he e nd
morg gebe a eh pe rdt ot rHUD- St trfetds c ndmorg efn nci ( 67ta c us e rpae wo he
I ha elce e o
tag ia ng. DE
1 ,DE 67-47 .
46
1 1
De pie W aM u' r quie en t t is f ng of t l ns wa c tn nton t b er n
s t
s e r m t ha t undi
he oa
s on i ge
he uy ot
usng s
i econdar f ng,Dos cl ed t tans i anp vay. As such,D os s f l e t f l
y undi
en os he r actons
en' aiur o olow

W aM u' cl i i tuc i ns r ule i W a u f di g a l n ba e on a m ir pr e a i a ut
s osng nsr to es t d n M un n
oa s d
s e es nt ton bo
t b r w e ' be tde ,w hi h,i t m ,e tte W a u t be i m nii d u r t CPL f t
he or o r s na s s
c n u
n ild M o
nde fe nde he
or he

l s .Ac or ngl Pl ntf se tte t s
oses c di y, ai ifi nild o ummayj dgme onCounsNi a Twe y- e
r u nt
t ne nd nt Thre.
(4)Ba sAve e
1 s
nu
Ator A nete Lopez,as prnci of her 1 of i Anete Lopez P. . cl
t ney
t
i pal
aw fce
t
A , osed t Bass
he

Aven ta aci W a u ta f re $175 1 7 t Lope t f t Ba sAve e b r rs
ue rns ton. M r nse r d , 4,49.2 o
z o und he s
nu orowe '
m orgage. W aM u' cl ng i t uc i t Lopez f t Bas Avenue tans ton m ir ed t e i
t
s osi nsr tons o
or he s
r ac i
r or hos n
t M el euca tans i butwih an addii i tucton lm ii t seler' conti i t 6% of
he
al
r acton
t
tonal nsr i i tng he l s
rbuton o

t l s er oft pu ch e prc o a pr s d prc Acc r ng t t e HUD - Lope c us d t b
he e s
he r as i e r p aie i e.
o di o h
I
z a e o e

s te t W a u,t pur h eprc oft e p ope t woul be$2, 0 0 t bo r
ubmitd o M he c as ie h r ry
d
200,00.0, he rowerwo d
ul

prvi $5 35 98a clsng,a s lrwo drc i $166 094. ( 67-9 Alope te
o de 05, 5. t o i nd ele ul e eve , 4, 37. DE 1 91 s r h
W a uHUD- ,Lo z' o fc wa t r c i nom o et n $1645. f rpe f r ngt cosng 1
M
I pe s fie s o e eve
r ha , 00 o ro mi he l i d.
.

I a t lt a c di t a s con H UD - Lo z' o fc pr pa e b di no gi t W a u, t e
n c ua iy, c or ng o e d
l pe s f i e e r d ut d t ve o M h

b erb oug not ng t cl i a t s lertok o y a outhal o t pz e ds sae i t e
uy r ht hi o osng nd he e l o nl b
f f he oc e ttd n h

o i na HUD- .( 67- DE 67- !1l.Morove,hes lrrmitd$ ,81l. back t t
rgi l
I DE 200;
3, )
e rt ele e te 481 9#
o he
buyeri t f m ofa ûcl ng cos cr t'and a Gboatdock r rcr t
n he or
s osi
t edi'
i
epai edi.

' ( 6 - 01 Wa u'
' DE 720 . M s

HU D-l di not r l eiher cr t M or ve , Lop ' ofie ma e mor t a $ 0 000 i
d
etect t
edi.
eo r
ez s fc
d
e h n 30 ,
n

di bu s m e t fom t l n pr e ds t e ii s not lsed o t e W a u HU D - I i udi an
s re ns r
he oa oc e o ntte
it n h
M
, ncl ng

$11905. dibu s me tt An t Lo zP A.( 7148.
, 00 s r e n o ete pe
DE - 1
.

24

*

The undi put r d evi
s ed ecor
dence s s t Lopez cl ed t Bass Avenue t ans ton i
how hat
os he
r ac i n
vi aton oft cl ng i tuctonsand act dihonesl i handlng W aM u' f
ol i
he osi nsr i
ed s
ty n
i
s undsand docum ent
s.

Ac odi y,Plitf i e ild t s
c r ngl anif s ntte o ummay j dgme on Cou s Thite an Twe y- v
r u nt
nt re n d
nt se en.
Lopez alow ed t Bas Avenue sal t cl des t t f t t seler' undicl ed cr t
l
he
s
e o ose pie he act hat he l s
s os
edis
fnanced neary 22% of t t ansacton and t buyer br
i
l
he r
i
he
oughtno m oney down. These actons by
i
Lopez diecty i plcat W aM u' expect i oft bor ower' bona fdes. Addii l Lopez'
r l m i ed
s
atons he r
s
i
tonaly,
s
f l e t pr de W aM u w ih an accur t HUD -I was s gr sl neglgent as t am ount t
aiur o ovi
t
ae
o os y
i
o
o
dihonesy. The HU D-l Lopez pr ded W aM u gave t appear
s
t
ovi
he
ance t t tans ton w oul
hat he r ac i
d

p o e d a c di t i tuc i ns The s c
r c e c or ng o nsr to .
e ond HUD - , ho e r s w e t t i a t lt t
I w ve , ho d ha n c ua iy he
t a a to vi a e s ve a of W a u' cl i c tons M or o r Lo z dihone ty ha e
r ns c i n ol t d e r l
M s osng ondii .
e ve , pe s
sl ndl d

W aM u' f ,a mos ce ry e de ce byt f c t ts ta f re a ad to l$1 0 t he
s unds s t la l vi n d he a t ha he r nse r d n diina 0,00 o r
of i outoft l pr
fce
he oan oceedsw ihoutW aM u' per isi
t
s m s on.
Though,A TI diput t aut i t oft s
F s es he hentciy
he econd HU D-I and cl m s t Lopez di not
ai hat
d

ûexecut t checks,' i has not shown a genui diput is of m a eral f i t r d.
c
e he
' t
ne s ed s ue
t i act n he ecor
Though Lopez cl m s nott r em berany det l aboutt BassAvenue cl i t s
ai
o em
ais
he
osng, he econd HUD -

1 d um e t wa t k fom Lo z' c os n fl s an w o d t r f e be a i sbl as a busne s
oc n s a en r
pe s l i g ie d ul he e or
dm s i e
i s

r c r ( pe De ,DE 83- 313- .Thefc t tLo zdi no is et c c i un aii
e od. Lo z po.
7; : 4J
a t ha pe d t su he he ks s av lng
gi t i i undiput bot t t checks wer isued fom hert us accountand t s i t
ven hat t s
s ed h hat he
es
r
r t
hat he s he
prnci oft ofi
i pal he fce.

Vl
.

TH E FDI I ENTI
C S
TLED TO D AM AG ES I TH E AM O U NT O F $4, 01 9 5
N
9 , 73. 4
AN D TO PREJUD GM ENT I TEREST
N
a. Act Los
ual s

The CPLS oblga ed ATI t r m bur e W aM u f ûact l s.' The FDI seekst dif ence
i t
F o ei
s
or l ual os '
C
he fer
bet
ween t unpai prnci bal
he
d i pal ance and t ûbook val 'ofw hatt FD I r
he û
ue'
he
C ecover on t l
ed
he oans

*

W he i s d t em t J M o ga Cha e i 2008.8 The Si h Cic tr c nty r tfe t tm e ho o
n t ol h o P r n
s n
1
xt r ui e e l a ii d ha t d î

c lultngda ge i JpMor Ch eBa v. r tAm.Til l .Co. 75 F. 57 58 ( t Ci.
ac a i ma s n
gan as nk Fis
te ns , 0 3d 3, 2 6h r
201 . Th daa o whih t e FDI r lesc mesfom Chas ' l n fls whih s w t e vaueof
4) e t n c h
C ei o
r
e s oa ie , c ho h l
t l asoft dat ofs e and t book val ofeach l
he oan
he e al
he
ue
oan. The t alda ages f t tans tons
ot m
or he r ac i

i whihPli ifi e ildt s
n c antf s ntte o ummayj me eq s$4, , 3.4, ok ndo a f lws'
r udg nt ual 90197 5 br e wn s olo :g
Tr acton
ans i

Unpai Prnci
d i pal
Bal
ance

Les dBook Val '
sd
ue'

Equal Act Loss
s ual

M eal c
l eu a

$13 267.9
,73, 1

$881328.
, 49

$4 ,38.
919 70

W a ewa
tr y

$ 700, 47
2, 790.

$1 95 95
69, 4.

$1070, 52
, 835.

Bat re
te s a

$2, , 6
241479.0

$1628,
, 000

$ 3,79.
61 4 60

Ar W a
i y

$261 986.2
, 8, 5

$1724,00
, 8

$8 18 52
94, 6.

78 La e
t n

$101 8 1
, 8,28.5

$ 8 72
483,94.

$ 9 4
534,33.3

Bas Ave
s

$1777,07.
, 1 28

$ 0, 7.
48 50 51

$1296, 77
, 599.

l opposng t e dam ages,A TI does not endea t s
n
i hes
F
vor o how a genui diput ofm at al
ne s e
eri
f twihi t r d evi
ac t n he ecor dence. Ra her A TI has sm pl posed a lt ofr ori ques i about
t , F
i y
iany het cal
tons
t basi of t am ount i udi how t book val w as cal at and what f or expens
he
s he
s ncl ng
he
ue
cul ed
ees
es
w er appled t unpai prnci bal
e
i o
d i pal ance.o Thatappr
z
oach i unavaii gi t undiput r d
s
lng ven he
s ed ecor
evi
dence.

1 Theunpad prncpa baa i ude t i talprnci balnc pl fesore ns s h a prmi pai t
8
i i i l lnce ncl s he nii i pal a e us e
xpe es uc s e ums d o
orgi t t l ne i a tzai a c lcton ordei nc f s Thefgur as r l ct a pa nt
i nae he oan, gatve mori ton, nd ole i
lnque y ee .
i e lo ete s ny yme s

t tep icp lha teb ro r ma eb fr te d futd ( 6 - , 23 .
o h rn ia t th or wes d eo e h y ea le . DE 7 6 ! )
1 conr r t ATI Sagum ens,t s ea he tdaa i a s i e.TheSi h Cic tf
9 ta y o
F' r
t he pr ds e t s dmisbl
xt r ui ound i aCPL ca et t
n
s ha
a s i ofasm ia s e he twaspr
dmison
i lr prads e
operbe us t s ur edat weebusnes r c dst twees f
ca e he o c
a r
i s e or ha r el-

a te tc t gu d rFe R. i. 0 1 )a e e tdfo tep o i to o hera u d rFe R. i.
uh niai n e d. Evd 9 2( 1 nd x mpe r m h rhbi n n asy n e d. Evd
n
i
8 36 .J r a Ch s Ba kv FisAm.TteIs Co, 5 F.d5 3, 8 (t Ci. 01 )
0 () pMo g n a e n . rt
il n . .7 0 3 7 5 2 6h r2 4 .
2 A ddii l , ATI cam si di notha s fcintnotc oft FDI ' da agec culto ATI hasfld a
0
tonaly
F li t d
ve ufi e
ie he C S m
al ain.
F
ie

Moint Srk Uni l Dicoe Wi e ss( 7 Ja dse st h v teifnnains p idb Cri
t o tie tmey s lsd t se DE 9 n ek o a e h n o to u pl y ag
o
n
e

Be e,whi esabls dama sba e on Chas sbusne sr co ds src n.TheCour ha is d as paae
adl
ch t ihes
ge s d
e' i s e r , tike
t s s ue e rt
or erdenyi t tm oton.
d
ng ha
i
-

&

The FD I S l am ount ar bas on is i tgaton of Chase' r ds concer ng t
C' oan
s e ed
t nves i i
s ecor
ni he

pur ha ed W a u l ns ATI S que i s a tt l c l ul ton a e e s nta l t e va e of
c s
M oa .
F'
re bou he oan a c a i r s e i ly he qui l nt
m e e de a s a utt c r c ne s o t e r c d- up t f c s t tt FDI ha br ugh f r r
r ni l bo he or e t s f h e or s pored a t ha he
C s o t o wa d.
Because ATI hasnotm etisbur t s
F
t den o how dby af i t depostons ans er t i er ogat i
s fdavis,
ii , w s o nt r ores,
and adm i i t s fc f sexi tdem onsr i a genui i s f ti ,'i hasnots
ssons hat pecii act s
tatng
ne s ue or ral' t
hown any
di y, he
C s il o ecover
gr ndsf why s mmayj gme mus bede e A ccor ngl t FDI i entted t r
ou or
u r ud nt t
nid.

d ma sof$ 901973.4.
a ge
4, , 5

b. Prjud ntI e e t
e gme ntr s

Unde Fl i lw, e aii pa te ar e ildt prj dgme ti eeti be chofc nta t
r orda a prv lng ris e ntte o eu
n ntrs n ra
o rc
actonswher t am ountoft cl m i lqui ed. M ayt oni ,Lt v.Aqua Vac Syst Inc. 277
i
e he
he ai s i dat
r cs d.
ems, ,

F.d 1 7,1 22 ( 1h Ci.2002 . l eetbe nst a cue fom te dae ofl sa rnsuni
3 31 3 1 t r
) ntrs gi o c r r h t
os nd u
tl

j gme ti e ee Ar autI .Co. Ma Pl n Co.474So. 21 21 ( a 1 5) Hee
ud n s ntrd. gon ns v. y umbig ,
2d 2, 5 Fl, 98 . r,
t dat of l t W aM u r f om t dat t cl ng agent cl ed t l
ht e oss o
uns r he e he osi
s os he oans i vi aton oft
n ol i
he

cl i i tuc i orfau e l ordihone ty han e W a u' f nds o c osng doc m en sa i
osng nsr tons r dul nty
s
sl
dld M s u
r l i
u t ss
setf h bel :
ort ow
Tr acton
ans i

D at Cl ed
e os

M el euca
al

June 17,2005

W at
erway

N ovem ber29,2006

Baters
t ea

J y l 2007
ul 2,

A r W ay
i

Jul 31 2007
y ,

78t Lane

June 29,2007

BassAvenue

June 18,2007

27

#

TheCoutwilrq r t pate t c e a s tt c c ai ofprj me itrs o
r l e uie he ris o onfr nd ubmi he alulton
eudg nt neet n
t
hese si pr tesconsit w ih t sOr
x operi
sent t hi der.
VIl

CO N CLU SION

Fort f egoi r ons,i i
he or ng eas
ts
ORDERED THAT

()Pl nifsM oi f SummayJ dgme ( 681i GRANTED I PART AND
1 aitf' ton or
r u
nt DE
s
N
DENI I PART asstf t a e.Pli ifi enil t s mmayj
ED N
e orh bov
antf s tted o u r udgme to Co sOn
n n unt e,
N i Ten,El
ne,
even,Twel Thi een,Fit Tw ent Thr Twent Four,Twent Fi Tw ent
ve, rt
feen,
y- ee,
yy- ve,
ySi and Twent
x,
y-seven.

()Dee n' Moi f SummayJ me g 6 i GM NTED I PART AND
2 fnda ts ton or
r udg nt DE 4) s
N

DENI I PART a stf t ab .Dee nti e ildt s mmayj
ED N
s e orh ove fnda s ntte o u r udgme tonCounsTwo,
n
t
Thr Four Fi Si Seven,Ei , Foureen, Si een, Sevent
ee,
, ve, x,
ght
t
xt
een,Ei een,N i een,Tw ent
ght
net
y,
Twent one,Tw ent Tw o,and Twent Ei .
yyy- ght

( TheCour s lc e rne l e e t J
3)
t hal ontmpoa ousy ntr he udgme rfe tngt prn pa a nt
nt elci he ici l mou

a d cl ai swiht sOrer Thepate s l fl aprposdc cultonofprj me it es
nd e arton t hi d .
ris halie o e al ai
eudg nt ner t
bySe e
ptmber5,201 at1 00am.Thej me wilt raferbea nde t r l tPli ips
4 0: udg nt l hee t
me d o efec antf
e ilmt tt prj me i ee t
ntte n o eudg ntntrs.
( ) Al pe ngmotonsa eDENI AS M OOT.
4 l ndi
i r
ED
( ) TheCASE I CLOSED .
5
S
DONE and ORDERED i M i i Fl i t s
n am , orda hi

S

d yo s pe e , 20 4.
a f e tmb r
-

*

P
ATRI A A. Ei- CI S iZ
UNI
TED STATES DI
STRI JUD GE
CT
cc:

Al couns ofr d
l
el ecor
Honor e W ilam C.Tur f
abl li
nof

28