UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 95-1148
YVONNE RAMSDELL,
Plaintiff - Appellant,
v.
ERSKINE BOWLES, ET AL.,
Defendants - Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Morton A. Brody, U.S. District Judge]
[Hon. Eugene W. Beaulieu, U.S. Magistrate Judge]
Before
Boudin, Circuit Judge,
Campbell, Senior Circuit Judge,
and Schwarzer,* Senior District Judge.
Ralph A. Dyer, with whom Law Offices of Ralph A. Dyer, P.A.,
was on brief for appellant.
Stephen G. Morrell, with whom Judy A.S. Metcalf and Eaton,
Peabody, Bradford & Veague, P.A., were on brief for appellees.
August 30, 1995
* Of the District of Northern California, sitting by
designation.
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SCHWARZER, District Judge. Yvonne Ramsdell brought suit
SCHWARZER, District Judge
against Machias Savings Bank and its directors (collectively the
Bank ) alleging claims arising out of a series of loan
transactions in which the Bank provided financing to Ramsdell
Construction Company ( Ramsdell ), owned by Mrs. Ramsdell s
husband and son. Because Mrs. Ramsdell alleged a violation of
the Equal Credit Opportunity Act (the ECOA ), 15 U.S.C. 1691-
1693 (1988), the district court had jurisdiction over that claim
under 28 U.S.C. 1331 and over the supplemental state law claims
under 28 U.S.C. 1367. Mrs. Ramsdell now appeals the district
court s grant of the Bank s motion for summary judgment. We have
jurisdiction under 28 U.S.C. 1291 and affirm.
Ramsdell Construction Company was engaged in the
construction business in Machias, Maine. In 1989 and 1991, it
obtained loans from the Bank to finance its operations. In early
1992, having defaulted on the loans, Ramsdell decided to obtain
additional financing to enable it to complete a construction
project for which it had a contract with the Town of Lubec,
Maine. The Bank agreed to make the loan on the condition that
the loan would be guaranteed by the Small Business Administration
(the SBA ) and that Mrs. Ramsdell would also sign a personal
guarantee. This loan, sometimes referred to as the SBA loan,
closed in June 1992. Meanwhile Ramsdell continued work on the
Lubec project with interim financing from the Bank. At the
closing, $75,000 of the loan proceeds was used to set off
advances the Bank had made in the interim to finance the work.
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Notwithstanding this infusion of funds, Ramsdell defaulted on the
Lubec contract in the fall of 1992 and went into bankruptcy.
Foreclosure proceedings were brought in the state court against
Mrs. Ramsdell and others who were borrowers or guarantors of the
loans. Apparently, discovery taken in the state court action was
later used by the parties in the instant action.
PROCEDURAL BACKGROUND
PROCEDURAL BACKGROUND
The complaint, filed on April 14, 1994, alleged that the
Bank had violated the ECOA (Count I), breached the loan agreement
with Ramsdell (Count II), interfered with plaintiff s and
Ramsdell s advantageous relationships (Counts IV, VI and VII),
violated its duty of good faith and fair dealing (Count V), and
acted negligently (Count VIII). It also alleged that individual
defendants had aided and abetted the breach (Count III) and had
interfered with advantageous relationships (Counts IV and VII).
Additional counts have been abandoned on appeal. Originally, the
complaint also named the SBA as a defendant; however, the claims
against the SBA were later dismissed.
The Bank filed a motion for summary judgment on
November 2, 1994. Mrs. Ramsdell moved for an extension of time
to file her opposition until November 21, 1994 (the date on which
it would have been due, in any event, under Local Rule 19(c) of
the District of Maine). She filed her opposition on November 22,
1994, one day late. On December 2, 1994, the Bank moved to
strike the opposition as untimely and further asked that certain
marked material be struck as immaterial or as barred by an
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earlier confidentiality order issued by the court. On December
6, 1994, the magistrate judge granted the motion to strike,
before objections had been filed; on December 8, 1994, he filed
his recommended decision granting summary judgment. After
receiving the objections, the magistrate judge treated them as a
motion for reconsideration, which he denied by order of December
12, 1994. Mrs. Ramsdell then filed a brief seeking de novo
review of the magistrate judge s recommended decision; on January
3, 1995, the district court issued its order adopting the
recommended decision and granting judgment for the Bank.
THE MOTION TO STRIKE
THE MOTION TO STRIKE
In his initial order granting the motion to strike, the
magistrate judge, relying on the court s inherent power to
enforce its rules, concluded that although the court is usually
generous to those who miss by slight amounts various limitations
on pleadings . . . Plaintiff s response to the Motion for Summary
Judgment is properly stricken. (R. 102.) The magistrate judge
found that a chart Mrs. Ramsdell offered in support of the
opposition was not authenticated and ha[d] no evidentiary value
and that the opposition was replete with immaterial, irrelevant
and prejudicial statements. (R. 100-01.) On reconsideration,
the magistrate judge applied the seven factors we suggested
district courts examine when exercising their discretion in
ruling on a motion for reconsideration of a dismissal order
entered due to a plaintiff s failure to file a timely opposition
to a motion, viz:
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(1) the nature of the case, (2) the degree
of tardiness, (3) the reasons underlying the
tardiness, (4) the character of the
omission, (5) the existence vel non of
cognizable prejudice to the nonmovant in
consequence of the omission, (6) the effect
of granting (or denying) the motion on the
administration of justice, and (7) whether
the belated filing would, in any event, be
more than an empty exercise.
United States v. Roberts, 978 F.2d 17, 21-22 (1st Cir. 1992).
Acknowledging the district court s great leeway in the
application and enforcement of its local rules, we held in
Roberts that a refusal to grant relief on reconsideration is
reviewed for abuse of discretion. Id. at 20. In making
discretionary judgments, a district court abuses its discretion
when a relevant factor deserving of significant weight is
overlooked, or when an improper factor is accorded significant
weight, or when the court considers the appropriate mix of
factors, but commits a palpable error of judgment in calibrating
the decisional scales. Id. at 21.
We are satisfied that the magistrate judge gave
appropriate consideration to each of the relevant factors.
First, we note that here, unlike in Roberts, there was no
question about Local Rule 19(c) s interpretation or its
application to the facts of the case. Compare Roberts, 978 F.2d
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at 19-20. Although Mrs. Ramsdell argued in her reply brief that
her opposition was in fact filed in a timely manner under Local
Rule 19(c) and Fed. R. Civ. P. 6(a), she waived that argument
both by failing to raise it in the district court and by failing
to raise it in her opening brief on appeal. See, e.g., Aetna
Casualty Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1571 (1st Cir.
1994) (appellant failed to preserve issue for appeal by failing
to raise it at trial and by failing to raise it in opening brief
on appeal); Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d
1, 3 (1st Cir. 1983) (arguments not presented in initial brief on
appeal are waived).1
Moreover, we note that Mrs. Ramsdell was represented by
Maine counsel who was on notice that Local Rule 19 was being
strictly enforced and that neglect was not an acceptable excuse.
See Cardente v. Fleet Bank of Maine, Inc., 146 F. Supp. 13, 20-22
(D. Me. 1993); Winters, 812 F. Supp. at 4; Greene v. Union Mut.
Life Ins. Co. of Am., 764 F.2d 19, 23 (1st Cir. 1985) (district
court reasonably found breakdown of counsel s office procedures
not an adequate excuse for late filing).
1 Even if Mrs. Ramsdell had preserved the issue of whether her
opposition was in fact timely filed under Local Rule 19(c) and
Fed. R. Civ. P. 6(a), her application of the rules is incorrect.
Regarding the operation of Local Rule 19(c), the District of
Maine has previously held that although the prescribed 10-day
response period excludes weekends and holidays per Fed. R. Civ.
P. 6(a), the three-day mailing period does not. See, e.g.,
Winters v. F.D.I.C., 812 F. Supp. 1, 4 (D. Me. 1992). The three
extra days for mailing objections filed pursuant to Local Rule
19(c) are "clearly calendar days." Id. Mrs. Ramsdell s argument
that her opposition was due November 22, 1994, depends on a
calculation that excludes weekend days from the three-day mailing
period. Thus her argument fails.
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Finally, Mrs. Ramsdell failed to show that she suffered
prejudice as a result of the magistrate judge striking her
opposition to the motion for summary judgment. The magistrate
judge acted pursuant to Local Rule 19(c), which states in
relevant part:
Unless within ten (10) days after the
filing of a motion the opposing party files
written objection thereto, incorporating a
memorandum of law, the opposing party shall
be deemed to have waived objection.
Following the interpretation of Local Rule 19(c) previously
explicated by the District of Maine in F.D.I.C. v. Bandon
Assocs., 780 F. Supp. 60, 62 (D. Me. 1991), the magistrate judge
ruled that the penalty embodied in Rule 19(c) amounts to only a
limited waiver: [A] failure to respond to a Motion for Summary
Judgment does not amount to a waiver of Plaintiff s objection . .
. . [A] party who fails to object in a timely fashion is deemed
to have consented to the moving party s statement of facts to the
extent that statement is supported by appropriate record
citations. (R. 103, citation and internal quotation marks
omitted.) And, as the judge further observed, summary judgment
is appropriate only if the record before the court establishes
that the moving party is entitled to judgment as a matter of law.
See Winters, 812 F. Supp. at 2. Therefore, the striking of Mrs.
Ramsdell s opposition did not bar her from obtaining a favorable
ruling based on issues of law presented by the motion if she was
entitled to one. Moreover, had the judge ignored disputed
material issues of fact as a result of striking the opposition,
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she could have called them to our attention in her brief on
appeal; but she failed to do so.
We conclude that the magistrate judge did not abuse his
discretion in striking the opposition.
THE SUMMARY JUDGMENT
THE SUMMARY JUDGMENT
We turn then to review of the judgment below on the
merits, pursuant to the applicable de novo standard of review.
E.H. Ashley & Co. v. Wells Fargo Alarm Services, 907 F.2d 1274,
1277 (1st Cir. 1990).
The ECOA Violations
The ECOA Violations
Count I of the complaint alleges that the Bank violated
the ECOA by demanding that Mrs. Ramsdell guarantee each of the
three loan transactions between the Bank and the Ramsdells. The
ECOA makes it unlawful for any creditor to discriminate against
any applicant, with respect to any aspect of a credit
transaction--(1) on the basis of . . . marital status . . . .
15 U.S.C. 1691 (a)(1) (1988). The first two loan transactions
in which the Bank demanded guarantees from Mrs. Ramsdell occurred
in 1989 and 1991; thus, the alleged violations based thereon
occurred more than two years before Mrs. Ramsdell filed her
complaint. See Farrell v. Bank of N.H.--Portsmouth, 929 F.2d
871, 873 (1st Cir. 1991) (violation deemed to occur when lender
makes demand for spouse s signature). The ECOA provides that no
. . . action shall be brought more than two years from the date
of the occurrence of the violation . . . . 15 U.S.C. 1691e(f)
(1988).
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Mrs. Ramsdell does not dispute that the statute has run
but argues that equitable tolling is available under the ECOA to
avoid an onerous two year limitation period . . . .
(Appellant s Br. at 32.) As we noted in Farrell, however,
Congress in 1976 extended the limitations period from one to two
years to afford claimants a reasonable time to bring an action.
Farrell, 929 F.2d at 874. In light of Congress deliberate
exercise of its judgment regarding what is a reasonable time
limit, that limit should not lightly be circumvented as onerous.
While equitable tolling may be available in a proper case, see
id., the mere fact that plaintiff has let the time to file run is
not sufficient to invoke equitable intervention. Mrs. Ramsdell
has come forward with no facts on which equitable intervention
might be grounded.
The third loan transaction took place in May 1992,
within the two year period. At the closing, the Bank required
Mrs. Ramsdell to sign both a note evidencing the loan and a
guarantee. The regulations issued by the Board of Governors of
the Federal System interpreting the ECOA provide in relevant part
that a creditor shall not require the signature of an
applicant s spouse . . . on any credit instrument if the
applicant qualifies under the creditor s standards of
creditworthiness for the amount and terms of the credit
requested. 12 C.F.R. 202.7(d)(1) (1992) (emphasis added).
The district court found that Ramsdell and Mr. Ramsdell were not
qualifie[d] under the creditor s standards of creditworthiness
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for the amount and terms of the credit requested. (R. 107,
175.) The court based this finding on three observations: (1)
that the Bank had issued notices of default on the 1989 and 1991
loans; (2) that the Bank had insisted that $75,000 of the 1992
SBA loan be applied to the defaulted loans; and (3) that there
was no evidence to the contrary. Id.
Mrs. Ramsdell now challenges the court s finding on two
grounds. First, she argues that there was no question of
creditworthiness because the $75,000 payment was intended to
cover the Bank s risk under the new loan. But the complaint
itself alleges that the existing loans had an outstanding
principal balance of $900,000, and the Bank s directors
authorized the additional working capital line only on the
condition that the Bank s overall loss exposure not be increased.
Given that exposure, Ramsdell s lack of creditworthiness was an
issue not reasonably disputable.
Second, citing 12 C.F.R. 202.2(p), Mrs. Ramsdell
argues that the burden of proving lack of creditworthiness was on
the Bank. But that section defines credit scoring systems and
says nothing about the burden of proof under the ECOA. Section
202.7(d)(1) triggers liability under the act by specifying the
condition under which it is unlawful to require the signature of
an applicant s spouse, viz, when the applicant is creditworthy.
We do not read that section as creating an affirmative defense
for banks premised on their proving lack of creditworthiness.
Thus, the burden was on Mrs. Ramsdell to come forward with proof
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that Ramsdell and Mr. Ramsdell were creditworthy. She offered
none.
Breach of Contract
Breach of Contract
Count II of the complaint alleges that SBA loan
proceeds were improperly diverted by the Bank for its benefit in
breach of the loan agreement. The loan agreement, by its terms,
unambiguously provided that interim financing utilized for the
[Lubec contract and working capital] may be repaid from loan
proceeds. (Complaint 36.) The court determined that interim
financing referred to the $75,000 that the Bank had advanced to
Ramsdell prior to the closing of the loan to enable Ramsdell to
continue work on the Lubec contract. If interim financing was
intended to exclude the $75,000 advance, the burden was on
Mrs. Ramsdell to come forward with facts creating a triable
issue. She did not do so.
Aiding and Abetting Breach of Contract
Aiding and Abetting Breach of Contract
Count III charges the Bank s directors with authorizing
and directing the diversion of the $75,000. In view of our
disposition of the diversion claim, this claim also fails.
Interference with Advantageous Contractual Relations
Interference with Advantageous Contractual Relations
Count IV alleges that the Bank interfered with
Mrs. Ramsdell s contract with the SBA by wrongfully diverting
proceeds from the SBA loan. In view of our disposition of the
diversion claim, this claim fails.
Breach of Contract -- Bad Faith
Breach of Contract -- Bad Faith
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Count V alleges that the Bank violated its duty of good
faith and fair dealing owed to Mrs. Ramsdell by diverting
proceeds from the SBA loan and interfering with Ramsdell s
financial affairs. Maine recognizes that the Uniform Commercial
Code imposes a duty of good faith and fair dealing on banks,
requiring honesty in fact in the conduct or transaction
concerned. First NH Banks Granite State v. Scarborough, 615
A.2d 248, 250 (Me. 1992); see also Diversified Foods, Inc. v.
First Nat. Bank of Boston, 605 A.2d 609, 614 (Me. 1992) (no
evidence that banks acted dishonestly, with ulterior motives, or
for anything other than business reasons in exercising their
rights under the loan agreement ). No facts appear here to
support a claim that the Bank acted dishonestly or otherwise
improperly with respect to its contract with Mrs. Ramsdell.
Interference with Advantageous Contractual Relations
Interference with Advantageous Contractual Relations
Counts VI and VII allege interference with the
contractual relations between Ramsdell and the Town of Lubec.
Mrs. Ramsdell argues, in her reply brief, that these counts are
tort actions for interference with a property right. They are
not claims for breach of contract. (R. Br. 21.) But she has
failed to establish a property right of her own in the contract
between Ramsdell and the Town of Lubec to support such a claim.
See Harmon v. Harmon, 404 A.2d 1020, 1024 (Me. 1979) (requiring
proof that plaintiff, but for tortious interference of another,
. . . would in all likelihood have received a gift or a specific
profit from a transaction . . . . ). Lacking such proof, she
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attempts to rely, presumably by analogy, on third party
beneficiary principles, claiming to be a beneficiary of the Lubec
contract. Under Maine law, however, a person must demonstrate
that she is an intended beneficiary of a contract to maintain an
action for its breach. F.O. Bailey Co. v. Ledgewood, Inc., 603
A.2d 466, 468 (Me. 1992) (emphasis added). The Ledgewood court,
following the Restatement (Second) of Contracts 302, held that
it is not enough for a plaintiff to show that she benefitted from
a contract; she must come forward with evidence of a clear and
definite intent on the promisee s part that the plaintiff
receive an enforceable benefit under the contract. Id. No such
evidence has been offered here.
Negligence
Negligence
Count VIII makes two allegations: (1) that the Bank
negligently underestimated Ramsdell s cash requirement, thereby
causing the SBA to lend Ramsdell less than the SBA would have
been willing to lend and ultimately causing Ramsdell s business
to fail; and (2) that Mrs. Ramsdell executed the guarantee in
reliance on the Bank s representations that the Lubec contract
would generate sufficient cash to repay the SBA loan. As
interpreted in her brief, the count alleges a failure by the Bank
to prepare cash projections, a business plan, and loan analysis
in a professional manner. While those allegations might
withstand a motion to dismiss, in opposing a motion for summary
judgment the adverse party may not rest upon the mere
allegations . . . of the . . . adverse party s pleading but . . .
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must set forth specific facts showing that there is a genuine
issue for trial. Fed. R. Civ. P. 56(e). Her brief offers none.
AFFIRMED.
AFFIRMED
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