Gaughan v. New American Funding LLC

Filing 36

ORDER signed by Judge J P Stadtmueller on 9/24/2024. 30 Plaintiff's Motion for Leave to File Summary Judgment Response Brief Instanter is GRANTED. 25 Defendant's Motion for Summary Judgment is GRANTED in part and DENIED in part. Plaintiff's claim for violations of Wis. Stat. § 100.18 is DISMISSED with prejudice. See Order. (cc: all counsel, via mail to David P Gaughan)(jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DAVID P. GAUGHAN,
Plaintiff,
Case No. 23-CV-641-JPS

v.
NEW AMERICAN FUNDING, LLC,

ORDER

Defendant.

Plaintiff David P. Gaughan (“Plaintiff”), a licensed attorney
proceeding pro se, sues Defendant New American Funding, LLC
(“Defendant”) for alleged misconduct arising out of Plaintiff’s efforts to
refinance a loan. ECF No. 10 at 1 (citing ECF No. 1-1). In August 2023, the
Court granted in part and denied in part Defendant’s motion to dismiss
Plaintiff’s complaint and ordered Plaintiff to file an amended complaint as
to the remaining claims. Id. at 25–26. In September 2023, Plaintiff did so, and
at this juncture, his remaining two claims are for (1) violations of Wis. Stat.
§ 100.18 and (2) breach of contract. ECF No. 15 at 6–8.
Before the Court is Defendant’s motion for summary judgment on
both remaining claims. ECF No. 25.1 The motion is fully briefed, ECF Nos.

With his opposition brief, Plaintiff filed a motion for leave to submit the
brief instanter. ECF No. 30. Under this District’s Local Rules, because Defendant’s
motion for summary judgment was filed on April 1, 2024, Plaintiff’s opposition
brief was due on or before May 1, 2024. Civ. L.R. 56(b)(2); ECF No. 25. Plaintiff’s
opposition brief, filed on May 13, 2024, was therefore untimely. ECF No. 31. In his
motion for leave to submit the brief instanter, Plaintiff explains that he was unable
to view the motion for summary judgment electronically when Defendant emailed
it to him and that he did not receive it in the mail until over a week after it was
filed. ECF No. 30 at 1–2. In response to the motion for leave to submit the brief
1

29, 31, 33, and for the reasons set forth below, will be granted in part and
denied in part. Specifically, the Court grants Defendant’s motion for
summary judgment as to Plaintiff’s Wis. Stat. § 100.18 claim and denies it
as to Plaintiff’s breach of contract claim. A trial scheduling order will be
entered contemporaneously with this Order.
1.

LEGAL STANDARD
Under Federal Rule of Civil Procedure 56, the “court shall grant

summary judgment if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56; Boss v. Castro, 816 F.3d 910, 916 (7th Cir. 2016) (citing
Alexander v. Casino Queen, Inc., 739 F.3d 972, 978 (7th Cir. 2014)). A
“genuine” dispute 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). The Court construes all facts
and reasonable inferences in a light most favorable to the nonmovant.
instanter, Defendant argues that the Federal Rules already allow for delay
attributed to the mail and that Plaintiff has failed to meet his burden to
demonstrate excusable neglect for his untimely extension request. ECF No. 35 at
1–2 (citing Fed. R. Civ. P. 5(b)(C), 6(d), and 6(b)(1)(B), and Civ. L.R. 56(b)(1)).
The Court finds Plaintiff’s explanation in the motion for leave to file the
brief instanter adequate to meet the excusable neglect standard, particularly
considering Plaintiff’s consistent prosecution of this case and the minimal
prejudice to Defendant. With the three-day grace period allowed under Rule 6(d),
Plaintiff’s opposition brief was submitted only one week late, and he filed it
instanter instead of asking for an extension. See Postle v. Bath & Body Works, LLC,
No. 13CV50374, 2015 WL 521365, at *4 (N.D. Ill. Feb. 9, 2015) (weighing two-week
delay in filing brief against the fact that it was filed instanter, together with other
excusable neglect factors). Therefore, the Court will grant Plaintiff’s motion for
leave to file his opposition brief instanter, ECF No. 30, and the Court will consider
all the briefing before it in reaching its decision on the underlying motion for
summary judgment, ECF No. 25.

Page 2 of 30

Bridge v. New Holland Logansport, Inc., 815 F.3d 356, 360 (7th Cir. 2016) (citing
Burritt v. Ditlefsen, 807 F.3d 239, 248 (7th Cir. 2015)). In assessing the parties’
proposed facts, the Court must not weigh the evidence or determine
witness credibility; the Seventh Circuit instructs that “we leave those tasks
to factfinders.” Berry v. Chi. Transit Auth., 618 F.3d 688, 691 (7th Cir. 2010)
(citing Anderson, 477 U.S. at 255 and Kodish v. Oakbrook Terrace Fire Protection
Dist., 604 F.3d 490, 505 (7th Cir. 2010)).
2.

RELEVANT FACTS2
On April 30, 2018, Defendant extended—and is the servicer for—a

mortgage loan to Plaintiff in the original principal amount of $318,000 (the
“Existing NAF Loan”) secured by a mortgage recorded against a property
in Twin Lakes, Wisconsin (the “Property”). Plaintiff also owned property
in Chicago, Illinois (the “Chicago Property”), which secured a mortgage
loan extended by Republic Mortgage, Inc. to Plaintiff, and others, on May
27, 2004 in the amount of $333,700 (the “Chicago Loan”). Plaintiff entered
into a Home Affordable Modification Agreement with OneWest Bank

The parties submitted a stipulated statement of undisputed facts. ECF No.
26. For purposes of Defendant’s motion for summary judgment, the Court will
adopt those stipulated facts that are material, with minor, non-substantive edits.
Citations to the statement of undisputed facts, and internal citations therein, are
omitted for brevity. Where the Court draws from the record to fill in gaps in the
narrative, citations are included.
2

Plaintiff and Defendant also each filed a set of itemized disputed facts. ECF
No. 27. Plaintiff thereafter filed an additional set of itemized disputed facts, ECF
No. 32, to which Defendant responded (and included therein a response to
Plaintiff’s original set of disputed facts), ECF No. 34. The Court will note those
disputes where applicable in the Analysis section, and it will incorporate those
relevant facts that are undisputed in the Relevant Facts section. In accordance with
its pretrial order, ECF No. 11 at 9, the Court disregards any facts introduced in the
parties’ briefing that are not set forth in the statements of undisputed or disputed
facts.

Page 3 of 30

Mortgage Servicing concerning the Chicago Loan effective July 1, 2016 (the
“Chicago Loan Modification”).
Defendant routinely communicates and markets to its existing
customers opportunities to refinance their current loans with Defendant.
Defendant reached out to Plaintiff on numerous occasions in 2020 by both
phone and email concerning the potential for refinancing the Existing NAF
Loan. For example, in November 2020, Defendant emailed Plaintiff seeking
to “catch up about [his] current home loan,” to “review [his] account,” and
“offer substantial savings.” ECF No. 26-5 at 2. In December 2020, Plaintiff
called Defendant to inquire about refinancing the Existing NAF Loan.
On or about December 29, 2020, Defendant initiated a refinance
application for the Existing NAF Loan. Defendant sent Plaintiff disclosures
on December 31, 2020, including a “Loan Estimate Disclosure.” According
to the Loan Estimate Disclosure, the estimated terms for a potential
refinance of the Existing NAF Loan included a 2.875% interest rate, a loan
amount of $310,000, closing costs in the amount of $4,835, and origination
charges in the amount of $1,629. On December 31, 2020, Plaintiff signed and
submitted to Defendant several related authorization and verification
forms. ECF No. 34 at 1. The same day, Defendant sent Plaintiff a “Notice of
Incomplete Application.” Id. Plaintiff submitted all the necessary
documents requested in the “Notice of Incomplete Application.” Id. at 2.
Defendant ran Plaintiff’s credit and began verifying his information on
December 29, 2020. Id.
On January 15, 2021, Jay Dao (“Dao”), a Senior Loan Consultant with
Defendant, emailed Plaintiff that “underwriting found there was rental
income in 2019 returns, therefor [sic] we cannot consider this a 2d home. If
you qualify and still want to proceed, I can do the loan but the fees would
Page 4 of 30

go up by $6757. Do you want to proceed?” ECF No. 26-1 at 4. Plaintiff
responded the same day to clarify that, although he had “d[one] some short
term rentals,” “[he] did not use a management company,” “always
maintained control,” and “used the house as a second home.” ECF No. 2615 at 7. Dao responded to Plaintiff, “Ok I have a note out to the
underwriter.” ECF No. 26-1 at 39. Dao later emailed Plaintiff the same day,
stating, “I can call [you] back today as I should underwriting [sic] decision
today.” Id. at 40–41.
On Friday, January 22, 2021, Plaintiff asked Dao for updates, and
Dao responded, stating, “Yes I’m having a zoom meeting with the u/w in
your file. This is a secondary home, I just need to make the income work.”
ECF No. 26-15 at 6. Plaintiff responded to Dao the same day, writing, “Let
me know if you need anything. Remember if it’s close I can knock $200 off
the monthly payment on the other property by catching up the escrow. If
push really came to shove I can pay off the car and eliminate $345 a month.”
Id. Dao responded the same day, saying, “Thank you for letting me know
those options. I will get back to you today.” Id. at 5.
The following Monday, January 25, 2021, Plaintiff emailed Dao,
saying, “Please verify that I am approved. Someone from Guaranteed Rate[,
Inc.] [(‘Guaranteed Rate’)] contacted me and I want to make sure I’m
approved before I tell him not to proceed. What’s the next step?” Id. Dao
responded the same day, writing, “Your loan is good and approved. That
was the good news I wanted to share Friday.” Id. Plaintiff asked Dao for
next steps, and Dao informed Plaintiff that he would “send[] . . . docs soon”
and “reach out.” ECF No. 26-1 at 37.
Later that day, Plaintiff emailed Dao, asking, “[w]ill we be able to
close the first or second week of February?” Id. at 36. Dao responded,
Page 5 of 30

“[T]here is 0% we close first or 2nd week of feb. Due to covid delays across
the industry, we are looking at late February AT BEST. Other wise [sic]
closing will be sometime in March.” Id. at 35. Plaintiff responded the same
day, writing,
Jay I’m sticking with you either way. You contacted me first
and I know you worked hard. If we can close by Feb. 15 that
would be great but I’m going with you either way. I don’t
know if it was the credit check or what but I’ve been getting a
bunch of solicitations since I applied with you. One of them
was the original broker I worked with two years ago who is
now with [G]uaranteed [R]ate. Do your best and I’m sticking
with you. Thanks.
Plaintiff claims and testified that he and Defendant reached an
agreement for the approval of his application to refinance the Existing NAF
Loan verbally on January 22, 2021, which was subsequently confirmed by
email on January 25, 2021 (the “Alleged Contract”). Plaintiff further
testified that he understood that the terms of the Alleged Contract were
“fixed” as of January 25, 2021.
In interrogatory responses, Plaintiff averred that the terms of the
Alleged Contract included “[a]pplication fee waived/paid by [Defendant]
for [Plaintiff]. $311,000.00 30 year fixed rate loan with an interest rate of
2.625%.3 [Lender credit] $977 plus title/closing costs of $[2,716.00]. Closing
in March 2021.” In the same interrogatory responses, Plaintiff wrote that his
claimed consideration for the Alleged Contract was that Plaintiff “did not
pursue or continue to pursue a loan with another lender; did not pursue a
loan with [Defendant] or another lender for a lesser amount; did not pursue

Plaintiff pleads that, contemporaneous with this email, Dao represented
to Plaintiff that Dao “was able to get [P]laintiff a better 30 year fixed rate of
2.625%.” ECF No. 15 at 3 (citing ECF No. 15-1 at 11).
3

Page 6 of 30

with [Defendant] or another lender paying points to reduce the interest rate
which would lower the monthly payment improving [P]laintiff’s debt to
income ratio.”4
On January 25, 2021, Dao and Plaintiff exchanged additional emails
after Dao’s “good and approved” email, including an email from Dao to
Plaintiff with a screenshot of the “Fannie Mae” “Desktop Underwriter”
indicating the recommendation for “Approve/Eligible” for the Loan
Application. Dao further explained in this email:
In case you were wondering why it isn’t a quick approval,
please see screenshot of your approval below. This is me
milking every dollar possible AND getting an exception to
only use 2019 returns. If we average 2018 and 2019, you
wouldn’t qualify due to your 2018 income being under 40k.
Please note Max Debt Ratio can only be 50%. You are at
49.50% and that is with you paying down your car to under
$3400 balance AND fixing your escrow shortage. Your
required forms and docs will follow. I felt it prudent to show
you this.
Beginning on December 30, 2020 and concurrently with his
communications with Defendant about refinancing the Existing NAF Loan,
Plaintiff was communicating with Guaranteed Rate in pursuit of a loan
application to refinance the Existing NAF Loan. On January 25, 2021, at
10:21 am, Plaintiff sent Brian Augustine (“Augustine”) of Guaranteed Rate
an email stating,
Brian, Thanks for your help but I got a call late Friday from
[Defendant] that I am approved so I’m gonna go with them[.]
When you called me I said I had applied with them and
Plaintiff has since supplemented the interrogatory responses “to include
1. paying off the escrow shortage on the Chicago [P]roperty,” “2. foregoing renting
the unit he occupied in the Chicago [P]roperty to increase his income,” and
“3. foregoing [f]iling his 2020 taxes in consultation with an accountant and being
less aggressive in his deductions.” ECF No. 31 at 16 n.1.
4

Page 7 of 30

would go with whoever could get it done first. I will keep you
in mind for future referrals. Thanks again Brian.
That same day, Augustine replied, “Dave, Do you mean you are
closing? You are already approved with us! Just need to sign loan docs. Are
you sure Dave?” Plaintiff responded to Augustine, stating, “Your email this
morning said you are preparing the file for underwriting? How can I be
approved if the file hasn’t gone to underwriting?” Augustine responded,
“Approved via automated underwriting. Locked. You are basically doing
a no cost refi with us at 2.875. Let us know if you want us to send to
underwrite to validate the findings, it takes about 24 hours for UW to
review once subbed to them.” Plaintiff replied to Augustine, stating: “I’ll
stick with New American. I don’t want to waste your time. I will refer you
though. Thanks.”
On the evening of January 25, 2021, after the Alleged Contract was
purportedly confirmed by Dao’s “good and approved” email, Plaintiff
emailed Augustine and stated, “Go ahead and submit the loan. The guy
from New American called me this evening looking for more information
and telling me ‘he’ approved the loan . . . .”
On January 27, 2021, Plaintiff electronically signed and submitted his
application with Guaranteed Rate to refinance the Existing NAF Loan (the
“Guaranteed Rate Application”). On February 11, 2021, Augustine
informed Plaintiff that Plaintiff did not qualify for the loan being
considered under the Guaranteed Rate Application. ECF No. 26-9 at 2.
Plaintiff agreed to withdraw the Guaranteed Rate Application.
On or about January 27, 2021, Defendant sent Plaintiff disclosures
concerning Plaintiff’s request to refinance the Existing NAF Loan. Included
in these disclosures was a form titled “Borrower’s Certification &

Page 8 of 30

Authorization,” which Plaintiff executed on January 27, 2021. Per the
“Borrower’s Certification & Authorization,” Plaintiff certified, in part, that:
“[I] understand and agree that [Defendant] reserves the right to change the
mortgage loan review process to a full documentation program. This may
include verifying the information provided on the application with the
employer and/or the financial institution.” In the “Borrower’s Certification
& Authorization,” Plaintiff also authorized the release of information from
third-parties to facilitate his application to refinance the Existing NAF Loan,
including the statement that: “As part of the application process,
[Defendant] may verify information contained in [Plaintiff’s] loan
application and in other documents required in connection with the loan,
either before the loan is closed or as part of its quality control program.”
Also included in the January 27, 2021 disclosures was a new “Loan
Estimate Disclosure.” According to the new Loan Estimate Disclosure, the
estimated terms for a potential refinance of the Existing NAF Loan included
a 2.625% interest rate, an original principal loan amount of $311,000, closing
costs in the amount of $5,228, and origination charges in the amount of
$1,629. Plaintiff signed and submitted a “Uniform Residential Loan
Application” aligning with these terms on January 28, 2021. ECF No. 26-1
at 45–50.
Defendant’s records show that on February 6, 2021, one of its
underwriters, Pamela Bailey (“Bailey”), entered the comment “unable to
proceed as 2nd home as borrower claims the subject property a rental on
his 1040s.” ECF No. 34 at 2. Defendant requested additional information
and documents from Plaintiff on multiple occasions after the disclosures
provided on January 27, 2021. On February 11, 2021, Defendant requested
a copy of the Chicago Loan Modification. Defendant’s records include a
Page 9 of 30

note dated February 15, 2021 stating, “UW wants to remove the ‘dispute’
verbage [sic] from old loan. Working on that now.” Plaintiff provided
Defendant with a copy of the Chicago Loan Modification on March 5, 2021.
Defendant’s records show a March 5, 2021 note stating, “dispute removed.”
On March 5, 2021, Dao emailed Plaintiff stating, “Underwriting
confirmed it’s a Fannie and Freddie Guideline added during COVID.”
Plaintiff has not located any Fannie and Freddie Guideline added during
the COVID-19 pandemic that would require Defendant to request the
Chicago Loan Modification. ECF No. 34 at 4. On March 10, 2021, Dao sent
an email to other employees of Defendant stating,
Hello Team, Credit has been cleared of disputes and [the
Chicago Loan Modification] agreement is in the file. Can you
please advise why income was cut? I did some due diligence
on this file with Lisa for income at the beginning. AUS only
requires one most recent year of income. I’ve included that
email. Can this be reviewed now? Thank you??
On March 12, 2021, Bailey replied to Dao’s email, writing,
Hi Jay. I just tried to call you. I haven’t heard back from her
yet, but I did a little research. I’m afraid she may have
inadvertently pulled the wrong figure. Per our Sam
worksheet (attached), we must deduct Meals from the
borrower[’]s income. Doing so reduces the borrower[’]s
income to $4,561.92, giving us a 68.134% DTI. This is resulting
in refer DU findings. I'm attaching the updated 1008 for your
review, and am sending the loan back to processing to
restructure. Please let me know if you have any questions.
Thanks!
Defendant admits that it incorrectly calculated Plaintiff’s income. ECF No.
34 at 2. On March 15, 2021 Dao emailed Plaintiff, stating,
It seems I keep coming into hurdles on this loan. No[w] we
are faced with the issue of having to adjust your debt ratio
due to the future payment of your loan Mod agreement. As

Page 10 of 30

you recall, we were on the brink of qualifying to begin with.
I’m trying to navigate these waters.
On March 15, 2021, Plaintiff replied to Dao, writing “I caught up with
the escrow shortage and with the increased interest rate I’m still less than
the monthly payment I needed to be at. Can we talk tomorrow? I think I can
explain the numbers. Thanks Jay.” On March 16, 2021, Plaintiff emailed
Dao, stating “My property taxes on my house with the loan modification
went down 12% which is $91 a month—almost a wash on the increase in
payment starting in June per the modification. I can send the assessor’s
paperwork when I get back to the office. Thanks.” Later the same day,
Plaintiff again emailed Dao, writing,
Here are the documents showing that my taxes were reduced
on [the Chicago Property]. In Cook County we are always a
year behind on our property taxes. That is why I included the
2019 tax bill. That is the last full year tax bill. I will see the
savings in the second installment 2020 tax bill which won't
come out till the end of the summer or early fall. Hopefully
our last hurdle. Give me a call to discuss . . . . Thanks for all
your hard work.
On March 17, 2021, Plaintiff emailed Dao, writing, “I’m just checking
in to see how things are going and to make sure you received my email with
the reduced property tax information. Thanks.” On March 17, 2021,
Defendant’s records include the note, “NO CANCEL—ETA FIX 3/22.” On
March 18, 2021, Dao replied to Plaintiff, stating, “Hi David I am working on
it.” Defendant’s records show a March 24, 2021 note, stating,
“Withdrawn . . . Comments: Borrower communicated to [Defendant] that
they are not ready to move forward with the loan application.” Plaintiff
never communicated to Defendant that he did not want to proceed with
refinancing the Existing NAF Loan. ECF No. 34 at 5.

Page 11 of 30

On March 22, 2021, Dao emailed Plaintiff, stating,
I have been back and forth with u/w on this. And we cannot
approve you. Two things that are in issue, currently the
payment is still $1736 AND the loan mod listed the payment
that will take affect [sic]. Because it’s an upcoming
adjustment, I have to use these figures. Having accounting for
all this, we cannot approve your loan at this time.
That same day, Plaintiff replied to Dao, writing, “The payment is not $1736.
I had the escrow corrected. The current payment is $772.20. Take a look at
the re run credit.” Dao responded: “I see $772, but escrows for taxes and
insurance needs [sic] to be added to liability. If I am missing something,
please let me know.” Plaintiff replied the same day, writing,
You are. The [$]772 includes the escrow for insurance. The
taxes without the reduction are $9,100. That’s $758 plus $772
= $1530. With the tax reduction which has been approved the
taxes are $8,008 = 667 plus 772= $1439. Even if you use the new
payment starting July 1 that’s 790.23 plus 92 (insurance) plus
667.33 (taxes) = $1549.56 My payment was higher because the
escrow was short from previous years. That has been
corrected and these numbers are based on current known
numbers.
On March 24, 2021, Dao emailed Plaintiff, stating,
I just went over what’s needed. Now it looks like you are short
a little on income. For example, if your income was
5900/month in taxable income plus your rental unit on top,
you would then be eligible. This has to be backed up with
1040s and 3 months business bank accts supporting income
along with audited or unaudited P&L.
On March 29, 2021, Plaintiff tendered a letter to Defendant demanding that
Defendant close on his refinance loan application. On April 9, 2021,
Defendant’s counsel responded to Plaintiff’s letter and further detailed the
reason for the denial of the application to refinance the Existing NAF Loan.

Page 12 of 30

Plaintiff did not attempt to apply with any other lender following
Defendant’s denial of his application to refinance the Existing NAF Loan.
Plaintiff’s claim for actual damages on both his remaining claims is the
difference between the monthly payments of principal and interest on the
Existing NAF Loan and what Plaintiff claims to be the principal and interest
payments if the Existing NAF Loan had been refinanced at 2.625%,
amortized over 30 years, and the lost opportunity to use and invest this
difference in loan payments.
3.

ANALYSIS
3.1

Breach of Contract

The Court begins with Plaintiff’s claim for breach of contract. “The
elements for a breach of contract in Wisconsin are familiar; the plaintiff
must show a valid contract that the defendant breached and damages
flowing from that breach.” Matthews v. Wis. Energy Corp. Inc., 534 F.3d 547,
553 (7th Cir. 2008) (citing Nw. Motor Car, Inc. v. Pope, 187 N.W.2d 200, 203
(Wis. 1971)). A valid contract must be supported by an “offer, acceptance,
and consideration.” Runzheimer Int’l, Ltd. v. Friedlen, 862 N.W.2d 879, ¶ 20
(Wis. 2015) (citing Rosecky v. Schissel, 833 N.W.2d 634, ¶ 57 (Wis. 2013)).
Regulation Z, the implementing regulation for the Truth in Lending
Act, 15 U.S.C. § 1601 et seq., defines “consummation” of a loan as “the time
that a consumer becomes contractually obligated on a credit transaction.”
12 C.F.R. § 1026.2(a)(13). The official commentary provides that
[w]hen a contractual obligation on the consumer’s part is
created is a matter to be determined under applicable law;
Regulation Z does not make this determination. A contractual
commitment agreement, for example, that under applicable
law binds the consumer to the credit terms would be
consummation.

Page 13 of 30

Id., Supplement I, Commentary 2(a)(13), Consummation. Reviewing this
provision, the Second Circuit concluded under similar facts that, because
New York law provides that “the consumer’s acceptance of a lender’s
commitment offer constitutes a binding contract” and “[f]or such a
commitment contract to exist it is only necessary that the borrower and
lender concur as to the essential terms of the future mortgage transaction,”
the contract was valid and binding. Murphy v. Empire of Am., 746 F.2d 931,
934 (2d Cir. 1984) (citing Regulation Z, Supplement I, Commentary 2(a)(13)
(at p. 684 of 12 C.F.R. Parts 200–299 (1984), Avalon Constr. Corp. v. Kirch
Holding Co., 175 N.E. 651, 652 (N.Y. 1931), Zelazny v. Pilgrim Funding Corp.,
244 N.Y.S.2d 810, 816 (Nassau Cnty. 1963), and Dubin Weston, Inc. v. Louis
Capano & Sons, Inc., 394 F. Supp. 146, 155 (D. Del. 1975)).
As the Court explained in its order granting in part and denying in
part Defendant’s motion to dismiss, like under New York law, breach of
contract claims like Plaintiff’s are cognizable under Wisconsin law. ECF No.
10 at 21–22 n.5. In Hardscrabble Ski Area, Incorporated. v. First National Bank of
Rice Lake, the Wisconsin Supreme Court reviewed a similar set of facts to
those here. 166 N.W.2d 191 (Wis. 1969). There, the plaintiff contacted the
Small Business Administration (“SBA”) for a loan to make improvements
to his company and to install equipment for making artificial snow. Id. at
193. He then contacted the defendant bank to see whether it would extend
part of the loan. Id. The defendant bank agreed, and the plaintiff submitted
his application to the SBA, ordered the snow-making equipment, and
arranged for installation and delivery of the equipment. Id. at 193–94. The
SBA later contacted the defendant bank to convey its opinion that the
plaintiff needed a higher loan and inquiring whether the defendant bank
would participate given the increase. Id. at 194. The defendant bank agreed,
Page 14 of 30

and the SBA approved the loan. Id. The equipment arrived and was held in
storage pending completion of documents by the defendant bank, which
needed to be sent to the SBA. Id. The defendant bank delayed completing
the documents, and by the time the equipment was released, the plaintiff
was unable to timely install it for the ski season and suffered financial loss
as a result. Id.
On review of the defendant bank’s motion for summary judgment,
the court was faced with competing affidavits. The defendant bank said that
it had never commented, promised, or represented to the plaintiff when it
would make the loan and, if made, when the loan would be closed. Id.
Conversely, the plaintiff said that he had many conversations with the
defendant bank regarding timing and that the defendant bank had
reassured him multiple times that timing would not be an issue. Id. The
court found that it could not resolve the factual conflict on summary
judgment and that the breach of contract claim would proceed. Id. at 196–
97. It further declared that the rule in Wisconsin is that “a bank may sustain
liability as a result of a failure to lend money in accordance with a contract
into which it has entered.” Id. at 196 (citing 7 Am. Jur., Banks, § 646). On the
facts presented, the court found an offer, an acceptance, and consideration
because “it is possible for a change of financial position to the borrower’s
disadvantage to constitute a consideration for a contract, if this situation is
fully known to the lender.” Id. at 196.
Years later, in Schwartz v. Federated Realty Group, Incorporated, the
Wisconsin Court of Appeals confronted similar facts to those here and in
Hardscrabble. 436 N.W.2d 34 (Wis. Ct. App. 1988). There, the plaintiffs
applied for a mortgage loan with the defendant lender. Id. at 34. The
plaintiffs paid a nonrefundable application fee and communicated the
Page 15 of 30

closing date for the associated real estate purchase—upon which obtaining
a mortgage loan was contingent—to the lender. Id. at 34–35. The plaintiffs
provided financial information with their application and thereafter
contacted the defendant lender several times to inquire whether any
additional information was needed. Id. at 35. The defendant lender told the
plaintiffs that all information had been received and that they should expect
a decision within several days. Id. Relying on these representations, the
plaintiffs vacated their prior home and prepared for the real estate closing.
Id. Three days before closing, the defendant lender requested tax returns
from the plaintiffs, which they were not able to provide in time. Id. The
closing did not take place, and the plaintiffs forfeited their earnest money.
Id.
The court summarized Hardscrabble as “hold[ing] that the type of
action alleged by the [plaintiffs], if properly pled, sounds in contract.” Id.
(citing Kukuska v. Home Mut. Hail-Tornado Ins. Co., 235 N.W. 403, 405 (Wis.
1931)). The court agreed with the defendant that it never agreed to make a
mortgage loan to the plaintiffs; however, the court framed the complaint
instead as one for breach of an “agreement between the parties . . . for a
timely processing of the application in light of [the defendant’s] awareness
of the closing deadline and its reassurances to the [plaintiffs] that all
requisite information was in hand.” Id. Although the parties did not enter
into a written agreement, the circumstances of their exchanges created an
implied contract in fact. Id. at 35–36 (“Kukuska is particularly instructive
because it holds that under certain circumstances and absent a written
agreement, an application can create a contractual duty to act with
dispatch.”) (citing Kukuska, 235 N.W. at 405 and Theuerkauf v. Sutton, 306
N.W.2d 651, 656 (Wis. 1981)). Under the facts at bar, where the defendant
Page 16 of 30

accepted the plaintiffs’ mortgage loan application and fee with knowledge
of the pertinent term—the impending closing date—and gave assurances
that all requisite information was received, the plaintiffs adequately stated
a claim for breach of contract. Id. at 36.
Since Hardscrabble and Schwartz, the Wisconsin Court of Appeals has
again reiterated that a lender may be liable in contract for failing to lend
money that it had agreed to lend. See Goossen v. Est. of Standaert, 525 N.W.2d
314, 318 (Wis. Ct. App. 1994) (“The elements of an enforceable contract,
‘offer,’ ‘acceptance’ and ‘consideration’ are present: The [plaintiffs] offered
to borrow money, the bank accepted their offer by processing the loan, and
the [plaintiffs] provided consideration by paying the bank a loan
origination fee.”) (citing NBZ, Inc. v. Pilarski, 520 N.W.2d 93, 96 (Wis. Ct.
App. 1994)).
Citing Hardscrabble, Schwartz, and Goosen, the Court concluded when
it granted in part and denied in part Defendant’s motion to dismiss that
“Plaintiff alleges that his loan application was the offer, Dao’s emails
regarding approval and closing were the acceptance, and Plaintiff’s refusal
to entertain other offers, allegedly to his detriment, is sufficient to plead
consideration.” ECF No. 10 at 23 n.5. In its motion for summary judgment,
Defendant argues that discovery has revealed that Plaintiff is unable to
show the existence of a valid contract because (1) the terms of the Alleged
Contract were not definite, (2) the Alleged Contract lacked consideration,
(3) the Alleged Contract was an unexecuted bilateral agreement, (4) the
Alleged Contract was against public policy, and (5) any oral agreements as
to the Alleged Contract are barred by the statute of frauds. ECF No. 29 at
12–13. None of these arguments persuades the Court that its prior holding
was incorrect, nor are these arguments successful on summary judgment.
Page 17 of 30

First, Defendant argues that the Alleged Contract was merely a
preliminary agreement to refinance the Existing NAF Loan because “at the
time of the Alleged Contract, Plaintiff had not even submitted a loan
application to [Defendant].” Id. at 14. Plaintiff pleads in the amended
complaint that he “formally applied for the refinance in the first week of
January 2021,” well before Dao’s “good and approved” email on January
25, 2021. ECF No. 15 at 2. Recall that Plaintiff also pleads—and the Court
found in its prior order—that the “good and approved” email, together
with the subsequent emails regarding the closing timeline, constituted
Defendant’s acceptance of the Alleged Contract. ECF No. 10 at 22–23 n.5.
Discovery has revealed that Plaintiff did not formally apply to refinance the
Existing NAF Loan until January 28, 2021. ECF No. 27 at 2; ECF No. 26-1 at
45–50. As a result of this discrepancy, and the fact that Plaintiff did not
receive an application and disclosures reflecting Plaintiff’s understanding
of the terms of the Alleged Contract until after the acceptance emails,
Defendant contends that the terms of the Alleged Contract were indefinite
at the contract forming moment. ECF No. 29 at 15–16.
However, first, Defendant does not point to any authority holding
that an offer needs to be in the form of a written loan application, and
Hardscrabble, Schwartz, and Goosen do not so hold. In fact, the authority
Defendant does cite—that the December 31, 2020 disclosures that it
provided to Plaintiff are required “prior to proceeding with the review of a
consumer’s application under the Truth in Lending Act . . . and its
implementing regulation”—suggests that it viewed Plaintiff as having
applied at that time. ECF No. 29 at 15 (emphasis added). Defendant also
consistently refers to December 30, 2020 as the date of “Plaintiff’s
application.” See, e.g., ECF No. 27 at 2.
Page 18 of 30

In any event, second, it is undisputed that Defendant sent Plaintiff
disclosures on December 31, 2020 with estimated terms to refinance the
Existing NAF Loan with a 2.875% interest rate, a loan amount of $310,000,
closing costs in the amount of $4,835, and origination charges in the amount
of $1,629. The same day, Plaintiff signed and submitted to Defendant
several forms indicating his intent to proceed with refinancing the Existing
NAF Loan. The fact that the terms reflected in the application and
disclosures that Defendant sent to Plaintiff after acceptance—which
included, for example, a 2.625% interest rate—are slightly different does not
mean that the terms were indefinite at the contract forming moment,
particularly given, as discussed infra, the parties’ clear intent to contract
here. See Herder Hallmark Consultants, Inc. v. Regnier Consulting Grp., Inc., 685
N.W.2d 564, ¶ 10 (Wis. Ct. App. 2004) (“[W]e may discern a contract where
the parties’ conduct evidences sufficient definiteness of an intent to
contract, even if an essential term is left vague or indefinite.”). For both of
these reasons, Defendant’s argument fails.
Next, Defendant argues that, following discovery, Plaintiff is no
longer able to present evidence of consideration for the Alleged Contract
because “he did not forbear from pursuing alternative financing” given his
“additional application for refinance with Guaranteed Rate.” ECF No. 29 at
17. Although this was the consideration that the Court found in its prior
order, ECF No. 10 at 23 n.5, Plaintiff also pleads in the amended complaint
that he “agree[d] to pay down his car payment to satisfy his debt to income
ratio” and that he “inform[ed] Dao that he could reduce his other mortgage
payment by $200.00 per month by paying his property tax escrow shortage
on his other mortgage payment.” ECF No. 15 at 2. Dao’s January 25, 2021
email to Plaintiff explaining that he had to use Plaintiff “paying down [his]
Page 19 of 30

car . . . AND fixing [his] escrow shortage” in order for Plaintiff to qualify is
sufficient to create a genuine dispute of fact on the issue of consideration.
See Hardscrabble, 166 N.W.2d at 197. Importantly, while Defendant contends
that Plaintiff raises this notion “for the first time” in his opposition brief, the
record flatly contradicts that assertion. ECF No. 33 at 8. Plaintiff pleaded
the pertinent facts in his amended complaint, and the fact was included as
a disputed fact with Defendant’s own submissions at the time the summary
judgment motion was filed. ECF No. 27 at 4.
Defendant’s third argument, that the Alleged Contract is a mere
unexecuted bilateral contract because it “rests solely upon the future
performance of . . . Plaintiff and [Defendant],” is also unsuccessful. ECF No.
29 at 19. Defendant cites First Wisconsin National Bank of Milwaukee v. Oby,
where the parties entered a contract whereby “the plaintiff [bank] would
make available to [the] defendant and her husband a line of credit . . . which
they could draw upon by using special check forms provided by [the]
plaintiff.” 188 N.W.2d 454, 455 (Wis. 1971). The contract included a
termination clause providing that it could “be terminated at any time by
either party.” Id. at 456. The plaintiff honored eleven checks, but at a certain
point, the defendant and her husband failed to make payments. Id. While
the contract was executory at the time of execution, at the time the action
was brought, “the plaintiff had fully or partially executed the act which
formed the basis for the defendant’s promise,” which rendered its promise
“no longer . . . executory and illusory . . . but . . . executed [and] sufficient
consideration.” Id. at 458–59. The termination clause did not override that
fact. Id. at 456.
The same is true here; at a minimum, Plaintiff avers that he caught
up on his escrow shortage and emailed Dao paperwork proving the same.
Page 20 of 30

ECF No. 26-21 at 2-3. Again, Dao’s January 25, 2021 email explaining this
necessity in order to qualify for the refinance is sufficient to create a genuine
issue of material fact on the issue of consideration, even considered together
with the fact that the loan disclosures that Defendant provided to Plaintiff
informed him that he “d[id] not have to accept th[e] loan because [he had]
signed or received th[e] form.” ECF No. 29 at 19 (quoting ECF No. 26-1 at
56).
Fourth, Defendant argues that the Alleged Contract is against public
policy because adhering to it “would require that [Defendant] violate the
ability-to-repay rule (‘ATR Rule’) enacted by Regulation Z.” Id. at 15. The
ATR Rule provides that “[a] creditor shall not make a loan . . . unless the
creditor makes a reasonable and good faith determination at or before
consummation that the consumer will have a reasonable ability to repay the
loan according to its terms.” 12 C.F.R. § 1026.43(c)(1). This determination
requires the creditor to consider, inter alia, “[t]he consumer’s current or
reasonably expected income or assets,” “[t]he consumer’s monthly
payment for mortgage-related obligations,” and “[t]he consumer’s monthly
debt-to-income ratio.” 12 C.F.R. § 1026.43(c)(2).
As a disputed fact, Defendant proffers that, as of January 25, 2021
(the date of the “good and approved” email), it “had not verified the
information contained in Plaintiff’s December 30, 2020 application” and it
“had not completed its review of . . . Plaintiff’s application or approved the
application to proceed with closing.” ECF No. 27 at 2. It also submits as a
disputed fact that its “underwriters . . . did not begin the review of the
Refinance Application until after receipt of the executed Refinance
Application” on January 28, 2021. Id. at 2–3. Defendant further argues that
Dao’s January 25, 2021 “good and approved” email was generated based
Page 21 of 30

on the “Fannie May Desktop Underwriting Program” without independent
underwriter verification. ECF No. 29 at 21.
These facts are contradicted by the record, making summary
judgment for Defendant inappropriate on this basis. For example, Dao
referred to a “note out to the underwriter” in a January 15, 2021 email, as
well as a “decision” from underwriting later that same day. He also referred
to a “zoom meeting with the u/w” on January 22, 2021. These
communications logically could not have been with a program and,
moreover, suggest that underwriting review of Plaintiff’s application was
well underway, if not complete, at the time of the “good and approved”
email. While one email from Dao sent after the “good and approved” email
included a screenshot from the “Fannie May Desktop Underwriting
Program,” this is insufficient to carry Defendant’s public policy argument
across the finish line in the face of the record as a whole.
Fifth and finally, Defendant asserts that the statute of frauds set forth
in Wis. Stat. §§ 706.001(1) and 706.02(1) bars the Alleged Contract. ECF No.
29 at 22. Those provisions provide that “every transaction by which any
interest in land is . . . mortgaged” is invalid unless “evidenced by a
conveyance that satisfies all of the following”:
(a) Identifies the parties; and
(b) Identifies the land; and
(c) Identifies the interest conveyed, and any material term,
condition, reservation, exception or contingency upon which
the interest is to arise, continue or be extinguished, limited or
encumbered; and
(d) Is signed by or on behalf of each of the grantors; and
(e) Is signed by or on behalf of all parties, if a lease or contract
to convey; and
....
Page 22 of 30

(g) Is delivered.
A conveyance may satisfy the above-listed requirements “[b]y several
writings which show expressly on their faces that they refer to the same
transaction, and which the parties have mutually acknowledged by
conduct or agreement as evidences of the transaction.” Wis. Stat. § 706.02(c).
Preliminarily, Defendant has waived the statute of frauds
affirmative defense because Defendant did not plead the defense in its
answer to the amended complaint. ECF No. 16; ECF No. 29 at 22 (arguing
that Defendant raises the statute of frauds “as an affirmative defense”)
(citing Supeview Network, Inc. v. SuperAmerica, a Div. of Ashland Oil, Inc., 827
F. Supp. 1392 (E.D. Wis. 1993)); see also Dresser Indus., Inc. v. Pyrrhus AG, 936
F.2d 921, 928 (7th Cir. 1991) (holding that the statute of frauds is an
affirmative defense which, as a general matter, must be pleaded to avoid
waiver thereof) (citing De Valk Lincoln Mercury, Inc. v. Ford Motor Co., 811
F.2d 326, 334 (7th Cir. 1987) and Bull’s Corner Rest., Inc. v. Dir. of Fed.
Emergency Mgmt. Agency, 759 F.2d 500, 502 (5th Cir. 1985)). Although
Defendant raised the defense in the motion for summary judgment itself,
allowing Plaintiff an “attempt to respond,” Plaintiff “was still at a serious
disadvantage [because] [t]he notice came after the parties had completed
discovery.” Reed v. Columbia St. Mary’s Hosp., 915 F.3d 473, 482 (7th Cir.
2019) (citing Venters v. City of Delphi, 123 F.3d 956, 967–69 (7th Cir. 1997)).
Even if the defense were not waived, however, the argument is
unavailing. Defendant argues that the Alleged Contract fails under the
statute of frauds because “there is no written memorandum of the
agreement which contains or incorporates all of the material terms.” ECF
No. 29 at 22. Defendant again contends that the December 31, 2020

Page 23 of 30

disclosures included slightly different terms than those that Plaintiff
understood to have been accepted by the “good and approved” email. Id.
at 23. Moreover, Plaintiff—as the “grantor” in this transaction—did not sign
and return an application with the December 31, 2020 disclosures, as he
only formally applied on January 28, 2021. Id.
Nonetheless, Plaintiff did sign and return several forms in
connection with the December 31, 2020 loan disclosures. When he received
a “Notice of Incomplete Application,” he submitted further documentation.
He then exchanged weeks—if not months—worth of emails with Dao
regarding the underwriting process and commemoration of Plaintiff’s
statements that he was willing to pay off his car and escrow shortage. The
January 25, 2021 “good and approved” email was followed two days later
with loan disclosures reflecting the exact terms that Plaintiff understood to
have been accepted by the email, and which Plaintiff signed and returned
on January 28, 2021. Together, these writings are sufficient to satisfy the
statute of frauds under § 706.02(c). See Kovarik v. Vesely, 89 N.W.2d 279, 283
(Wis. 1958) (“The fact that the buyers’ mortgage loan application came into
existence subsequent to the date on which the contract was signed by the
parties is . . . immaterial.”) (collecting sources). Even if the “good and
approved” email were read in a vacuum with only the preceding
communications and the terms set forth in the December 31, 2020
disclosures, the factfinder, as discussed infra, “could [find] modification by
conduct based on the parties’ [subsequent] email exchange[s]” and the
updated January 27, 2021 disclosures. See DRM, Inc. v. BLM Land, LLC, No.
14-CV-754-WMC, 2017 WL 3588491, at *5 (W.D. Wis. July 11, 2017) (citing
Wis. Stat. § 706.02(2)(c)).

Page 24 of 30

In sum, for all these reasons, the Court finds Defendant’s legal
arguments as to the validity of the Alleged Contract unsuccessful, and
further finds that genuine disputes of material fact exist as to the matter of
consideration.
Similarly, there are genuine disputes of material fact regarding
whether Defendant breached the Alleged Contract. Defendant argues that,
even assuming that the Alleged Contract was “fixed” and binding as of the
January 25, 2021 “good and approved” email and subsequent emails
regarding the closing timeline, the parties modified the contract through
the January 27, 2021 disclosures. ECF No. 29 at 24–25. As part of those
disclosures,

Plaintiff

executed

the

“Borrower’s

Certification

&

Authorization,” in which he certified that he “underst[ood] and agree[d]
that [Defendant] reserve[d] the right to change the mortgage loan review
process to a full documentation program” and that “[Defendant] may verify
information contained in [Plaintiff’s] loan application and in other
documents required in connection with the loan, either before the loan is
closed or as part of its quality control program.” Thus, after this
“modification,” Defendant claims that the Alleged Contract included an
agreement between the parties that allowed Defendant “to proceed to
verify the information” that Plaintiff submitted when he formally applied
on January 28, 2021 before the loan was closed or as part of its quality
control program. Id. at 25.
As the Court explained above, there are sufficient facts in the record
to create, at a minimum as to breach, a genuine issue of disputed fact
regarding whether the verification process was complete at the time of the
“good and approved” email. A jury, assuming it finds a valid contract, must
review the record to determine (1) whether the verification process was
Page 25 of 30

complete at the time of the “good and approved” email and whether the
subsequent verifications and requests for further documents were a result
of and/or an attempt to cover up Defendant’s own mistake in calculating
Plaintiff’s income, as Plaintiff contends, or (2) whether the parties modified
the contract to allow for further verification with the January 27, 2021
disclosures. See Carnes Co. v. Stone Creek Mech., Inc., 412 F.3d 845, 852 (7th
Cir. 2005) (“Whether a contract has been modified is a question of fact . . .”)
(citing Am. Suzuki Motor Corp. v. Bill Kummer, Inc., 65 F.3d 1381, 1386 (7th
Cir. 1995) and Kohlenberg v. Am. Plumbing Supply Co., 263 N.W.2d 496, 500
(Wis. 1978)). Therefore, Defendant’s motion for summary judgment on
Plaintiff’s breach of contract claim is denied.
3.2

Wis. Stat. § 100.18

Plaintiff’s § 100.18 claim is, in substance, that Dao misrepresented to
Plaintiff that the loan was in underwriting, then “good and approved,” and
then heading towards closing, upon which statements Plaintiff relied until
he was later told that Dao had purportedly approved the loan himself. ECF
No. 10 at 14; ECF No. 15 at 6–7.
As the Court explained at the motion to dismiss juncture, ECF No.
10 at 4, “[c]laims arising under [§ 100.18] have three required elements:
‘(1) the defendant made a representation to the public with the intent to
induce an obligation, (2) the representation was untrue, deceptive or
misleading, and (3) the representation materially induced (caused) a
pecuniary loss to the plaintiff.’” Weaver v. Champion Petfoods USA Inc., 3
F.4th 927, 934 (7th Cir. 2021) (quoting Novell v. Migliaccio, 749 N.W.2d 544,
¶ 44 (Wis. 2008)). With respect to the first element, “Wisconsin courts have
consistently held that ‘a plaintiff remains a member of “the public” unless

Page 26 of 30

a particular relationship exists between him . . . and the defendant.’” ECF
No. 10 at 4 (quoting Chris Hinrichs & Autovation Ltd. v. DOW Chem. Co., 937
N.W.2d 37, ¶ 62 (Wis. 2020)). “The only clear line is that a party is not a
member of the public under § 100.18 once it enters into a contract with the
defendant.” Prosynthesis Lab’ys, Inc. v. Eurofins Microbiology Lab’ys, Inc., No.
22-CV-655-SLC, 2023 WL 3377494, at *5 (W.D. Wis. May 11, 2023) (citations
omitted).
Defendant previously moved to dismiss Plaintiff’s § 100.18 claim on
the basis that Plaintiff was not a member of “the public” at the time of the
alleged misrepresentations. ECF No. 10 at 4–6. The Court reasoned that,
“while timing ultimately may become an issue for Plaintiff, at the motion
to dismiss juncture, his claim survive[d].” Id. at 6. This was so largely
because Plaintiff pleaded that Dao contacted him via a “cold call” about
refinancing that “was completely separate from and had nothing to do with
[the Existing NAF Loan]”; the parties had only been communicating for
approximately one month at the time of the alleged misrepresentations; and
several of the alleged misrepresentations took place before the contract
forming moment 5 and while Plaintiff was ostensibly considering
refinancing with other lenders. Id. at 2, 5–7.

It bears noting that, at the motion to dismiss juncture, the Court held that
it had “serious concerns regarding allowing Plaintiff to proceed on both [an]
intentional misrepresentation claim and [a] breach of contract claim.” ECF No. 10
at 21. The Court found Plaintiff’s allegations that “he was induced to decline a
separate offer (or put another way, to not withdraw his existing offer to
Defendant) by Dao’s allegedly intentional misrepresentations [regarding approval
and the closing timeline] and that the same representations constituted acceptance
of his offer (the loan application) and formed the contract” could not “both . . .
simultaneously be true,” both legally and factually. Id. at 10, 21–22, 23. Because
Plaintiff could not “legitimately [be] in doubt about his own impressions of Dao’s
emails”—in other words because he “either believe[d] a contract came into
5

Page 27 of 30

However, discovery has revealed that Defendant’s contact with
Plaintiff was not truly a “cold call,” leading the Court to conclude that no
reasonable juror could deem Plaintiff a member of “the public” at the time
of the alleged misrepresentations. See Bates v. Wisconsin-Dep't of Workforce
Dev., 636 F. Supp. 2d 797, 811 (W.D. Wis. 2009), aff’d, 375 F. App’x 633 (7th
Cir. 2010) (concluding on summary judgment that the undisputed facts
established that the plaintiff was not a member of “the public” for purposes
of § 100.18).
Defendant contacted Plaintiff numerous times by email and phone
and referred in those communications to the Existing NAF Loan and
opportunities to save with respect to the Existing NAF Loan. Plaintiff then
contacted Defendant to follow-up on these communications. These facts
remove Plaintiff from “the public” and make clear that the Existing NAF
Loan was not just an “isolated” purchase or too remote “to establish a
particular relationship” at the time of Defendant’s outreach regarding
refinancing. K & S Tool & Die Corp. v. Perfection Mach. Sales, Inc., 732 N.W.2d
792, ¶ 32 (Wis. 2007); cf. Gifford v. PHH Mortg. Corp., No. 18-CV-260-SLC,
2018 WL 6047061, at *7 (W.D. Wis. Nov. 19, 2018) (where the only
communications supporting the “particular and ongoing relationship” are
existence at th[e] point [of the intentional misrepresentations] or he d[id] not”—
the Court ordered Plaintiff to choose only one of the claims on which to proceed.
Id. at 24–25. Plaintiff chose to plead the breach of contract claim in his amended
complaint and omitted the intentional misrepresentation claim. ECF No. 15.
At that time, the Court only had before it the amended complaint, which,
with respect to the § 100.18 claim, pleads multiple alleged misrepresentations,
some of which occurred before the contract forming moment. ECF No. 10 at 6. For
others, it was unclear when they occurred. Id. Now that discovery has been
completed, there is no evidence that any of these statements took place before the
contract forming moment, which removes Plaintiff from the ambit of the “public”
on that independent basis as well.

Page 28 of 30

the “exchange[] of [loan] disclosures,” the plaintiff alleges enough facts to
survive a motion to dismiss).
By way of further example, in Bates, the plaintiff sought the
defendant’s “help finding a job.” 636 F. Supp. 2d at 811. The parties
developed a relationship with respect to assistance finding the plaintiff
employment. Id. Two years later, the plaintiff decided to become selfemployed, and the defendant agreed to provide him with services to reach
self-employment.

Id.

During

these

discussions,

“potential

misrepresentations were made about providing plaintiff funds for office
space and equipment.” Id. At that time, the plaintiff’s “relationship with
[the defendant] was particular enough to distinguish him from ‘the public,”
and “[a]ny statements [the] defendant[] made to [the] plaintiff regarding . . .
funding . . . occurred after he had accepted [the defendant’s] general
services . . . .” Id.
The facts here are materially indistinguishable from Bates. Discovery
has made clear that Defendant’s outreach regarding refinancing was related
to the parties’ ongoing relationship as to the Existing NAF Loan. Although
refinancing is a separate service, like funding to support self-employment
is separate from assistance finding employment, the language used in
Defendant’s communications to Plaintiff shows that those communications
were based on the existing relationship. Cf. Fricano v. Bank of Am. NA, 875
N.W.2d 143, ¶ 30 (Wis. Ct. App. 2015) (“Presumably, if [the plaintiff] had
refused the additional terms . . . the [defendant] would have moved on to
the next highest bidder of the thirteen other bids that had been made. In
other words, there was nothing particular about the relationship between
[the parties] at that moment.”). Thus, because no reasonable juror could
find that Plaintiff was a member of “the public,” his § 100.18 claim fails.
Page 29 of 30

Defendant’s motion for summary judgment is granted as to Plaintiff’s
§ 100.18 claim.
4.

CONCLUSION
For the reasons explained above, the Court grants Plaintiff’s motion

for leave to file his summary judgment response brief instanter. ECF No.
30. The Court grants in part and denies in part Defendant’s motion for
summary judgment. ECF No. 25. The Court dismisses Plaintiff’s claim for
violations of Wis. Stat. § 100.18 with prejudice. Plaintiff’s breach of contract
claim will proceed to trial in accordance with the trial scheduling order
entered contemporaneously with this Order.
Accordingly,
IT IS ORDERED that Plaintiff David P. Gaughan’s motion for leave
to file his summary judgment response brief instanter, ECF No. 30, be and
the same is hereby GRANTED;
IT IS FURTHER ORDERED that Defendant New American
Funding, LLC’s motion for summary judgment, ECF No. 25, be and the
same is hereby GRANTED in part and DENIED in part; and
IT IS FURTHER ORDERED that Plaintiff David P. Gaughan’s claim
for violations of Wis. Stat. § 100.18, ECF No. 15 at 6–7, be and the same is
hereby DISMISSED with prejudice.
Dated at Milwaukee, Wisconsin, this 24th day of September, 2024.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

Page 30 of 30