United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-3153
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Anitra D. Davis, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
U.S. Bancorp, doing business as *
U.S. Bank National Association; *
John Doe; Mary Roe; Persons *
Unknown, *
*
Appellees. *
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Submitted: June 16, 2004
Filed: September 10, 2004
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Before WOLLMAN, HEANEY, and BOWMAN, Circuit Judges.
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WOLLMAN, Circuit Judge.
Anitra D. Davis appeals from the district court1 order granting summary
judgment to U.S. Bancorp (U.S. Bank) in her lawsuit alleging violations of numerous
1
The Honorable Paul A. Magnuson, United States District Judge for the District
of Minnesota.
statutes, fraud, and negligent misrepresentation by the bank in its handling of her loan
application. We affirm.2
I.
We view the facts in a light most favorable to Davis. Davis met with U.S.
Bank loan officer Russ Douville in February 2000 to apply for a mortgage. She
informed the bank that she was participating in a Consumer Credit Counseling
Service (CCCS) payment plan. Davis filled out and completed an application packet.
Upon approval by Cendant Mortgage Services (Cendant), the underwriter for the
loan, she received a commitment letter for a 30-year FHA mortgage in the amount of
$77,330. As the homes Davis was interested in required more financing, she began
exploring additional financing options. She eventually found a home that would also
provide her income from a renter and intended to convert her FHA loan to a
Minnesota Housing Finance Agency (MHFA) conventional loan. Her real estate
agent, Tim Renn, contacted Douville on May 18, 2000 to request a pre-approval letter
for a specific piece of property, as he had done each time Davis desired to make an
offer on a home. Douville faxed a credit pre-approval letter that made the following
statements:
Based upon the information [Davis] has supplied . . . , the borrower
qualifies for an MHFA Conventional CASA loan amount sufficient to
purchase the property . . . .
2
We briefly address the parties’ post-argument motions here. We deny Davis’s
July 26, 2004, motion to supplement the record, as well as her motion to strike U.S.
Bank’s 28(j) letter of June 16, 2004. We note, however, that 28(j) letters are to be
used only to call our attention to significant authorities unknown to the parties pre-
argument, and should not contain argument. Fed. R. App. P. 28(j); Home Builders
Ass’n v. L&L Exhibition Mgmt., Inc., 226 F.3d 944, 951 (8th Cir. 2000). The
authorities cited should consist of “intervening decisions or new developments.” 8th
Cir. R. Appx. III(I)(2) (2004). We disregard the parties’ submissions insofar as they
include material outside these limitations.
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The above determination would be subject to full verification of the
items stated above . . . , as well as the selection of an approvable
property . . . .
This letter is not to be construed as a commitment letter but a credit pre-
approval based on an in-file credit report.
Appellant’s App. at 188. Davis successfully bid on the property and scheduled a
closing for July 20, 2000. Davis then paid U.S. Bank a $375 loan application fee and
continued to make preparations for moving.
Cendant, the processor and underwriter for Davis’s MHFA conventional loan
application, requested more information from Davis. Kim Parker, a Cendant
employee who worked on Davis’s case and with whom Davis had numerous contacts,
requested the final items in July 2000, and Davis faxed them on July 14. On July 18,
after Cendant had become aware that the application was for a conventional loan
instead of an FHA loan, it declined the conventional loan application, stating that
Davis was ineligible because of her involvement in CCCS. On July 21, Douville e-
mailed Davis, explaining the situation and making other recommendations on how
to proceed. He told Davis that his bank was trying to process an FHA loan but
needed to address the seller’s concerns about such loans; he also mentioned the
possibility of a purchase rehab loan. In a later conversation, Douville offered Davis
a Home Advantage loan through U.S. Bank, for which the bank had agreed to
override the credit requirements. Davis declined the Home Advantage offer because
it was a market rate loan and would require a higher monthly payment. As a result,
Davis had to cancel the purchase agreement and quickly search for a new apartment
to rent.
Davis filed complaints with both the Office of the Comptroller of the Currency
and the Better Business Bureau of Minnesota on July 25. She received
communication from U.S. Bank in response to her complaint, and informed U.S.
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Bank of her change of address. On August 22, a notice of adverse action was sent
from Cendant on behalf of U.S. Bank, indicating that the loan was not granted on the
terms requested. Davis did not receive the notice, which was mailed to her former
address.
Davis filed a claim in state court, which was removed to federal court.
Following discovery, U.S. Bank moved for summary judgment on all claims and
submitted several affidavits in support of its motion. Davis moved to strike one of
the affidavits. The district court denied the motion to strike and granted the motion
for summary judgment.
II.
Davis argues that summary judgment is inappropriate on her claims because
material issues of fact remain as to whether a notice of adverse action was properly
and timely sent to her and whether U.S. Bank knowingly made misrepresentations to
her. We review a grant of summary judgment de novo. Evergreen Invs., LLC v. FCL
Graphics, Inc., 334 F.3d 750, 753 (8th Cir. 2003). Summary judgment is proper if,
after viewing the evidence and construing it in a light most favorable to the
nonmoving party, there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. Id. Once the moving party meets its burden
to show that there is no issue of material fact, the plaintiff may not then simply point
to allegations made in her complaint, but must “provide evidence of ‘specific facts
creating a triable controversy.’” Howard v. Columbia Pub. Sch. Dist., 363 F.3d 797,
800 (8th Cir. 2004) (quoting Jaurequi v. Carter Mfg. Co., 173 F.3d 1076, 1085 (8th
Cir. 1999)); Fed. R. Civ. P. 56(e) (2003).
As a preliminary matter, Davis argues that the district court erred in denying
her motion to strike the affidavit of Cendant Vice President Laurie Marrone and the
August 22, 2000, notice of adverse action that U.S. Bank submitted when it moved
for summary judgment. Davis contends that U.S. Bank violated discovery rules by
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not disclosing Laurie Marrone as a source of information in its initial rule 26
disclosure. Fed. R. Civ. P. 26(a)(1)(A). She therefore asserts that the district court
should have refused to consider the evidence in connection to the motion for
summary judgment. See Fed. R. Civ. P. 37(c)(1). We review a district court’s
discovery ruling for abuse of discretion. Land Inv. Club, Inc. v. Lauer (In re Lauer),
371 F.3d 406, 415 (8th Cir. 2004). We will reverse a decision to exclude or admit
only if the court based its decision on “‘an erroneous view of the law or a clearly
erroneous assessment of the evidence,’” Trost v. Trek Bicycle Corp., 162 F.3d 1004,
1008 (8th Cir. 1998) (citation omitted), such that to affirm would result in
“fundamental unfairness.” Lauer, 371 F.3d at 415.
Rule 37 does not provide for mandatory sanctions, and the district court may
find that a party’s failure to include a witness in the initial Rule 26(a)(1) disclosures
was substantially justified or harmless. Rule 37(c)(1); Trost, 162 F.3d at 1008. Here
the district court reasonably found that there was no unfair surprise because Davis
had knowledge of Cendant’s role in the processing of her loan and because U.S. Bank
was unaware of Laurie Marrone as a potential witness until May 2003. Davis has
failed to explain how an earlier disclosure of Laurie Marrone’s testimony “would
have enabled her to avoid summary judgment.” Tenkku v. Normandy Bank, 348 F.3d
737, 743 (8th Cir. 2003). The district court therefore did not abuse its discretion
when it denied the motion to strike.
A.
Davis argues that the district court erred in granting summary judgment for
U.S. Bank on her claims under the Equal Credit Opportunity Act (ECOA), 15 U.S.C.
§ 1691 (2000). ECOA, along with the corresponding Regulation B, 12 C.F.R. § 202
(2000), is intended to curb discrimination by creditors. In addition to a generalized
prohibition of discrimination, it also establishes procedural requirements for
extending credit and communicating with applicants. See 12 C.F.R. § 202.1(b)
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(outlining the purpose of the regulation). One such requirement is that of notice.
ECOA states:
Within thirty days (or such longer reasonable time as specified in
regulations of the Board for any class of credit transaction) after receipt
of a completed application for credit, a creditor shall notify the applicant
of its action on the application.
15 U.S.C. § 1691(d)(1). Davis argues that a material issue of fact exists as to whether
notice was sent to her because she never received it and that, even if notice was sent,
it was untimely.3
Davis asserts that Marrone’s affidavit alone provides inadequate evidence that
the notice was in fact sent to her. We disagree. We apply a presumption that a
properly mailed document is received by the addressee. Kerr v. Charles F. Vatterott
& Co., 184 F.3d 938, 947 (8th Cir. 1999). That presumption may arise based on
circumstantial evidence, including testimony by someone familiar with company
procedures and practices that the letter was sent. See Kennell v. Gates, 215 F.3d 825,
829-30 (8th Cir. 2000). The Marrone affidavit asserts that the notice conformed with
Cendant underwriting procedures used for U.S. Bank loan applications and was sent
“[o]n or about August 22, 2000.” Appellant’s App. at 320-21. Absent contradictory
evidence, the affidavit is sufficient to establish that the notice was sent, implicating
the presumption that it was also received.
Summary judgment was proper however, only if the notice that was sent was
timely. Davis asserts that the 30-day limit specified in 15 U.S.C. § 1691(d)(1) applies
in this context and that the notice was thus untimely sent. She states that she applied
for the conventional loan on May 18, 2000, and that the notice was not sent until 96
3
We conclude that the content of the August 22, 2000, notice of adverse action,
on its face, meets the requirements of 15 U.S.C. § 1691(d)(2).
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days later. U.S. Bank asserts, however, that Davis’s application was not complete
until July. It argues that because it extended a counteroffer within thirty days, it had
an additional ninety days from the date of the counteroffer within which to send the
notice of adverse action. See 12 C.F.R. § 202.9.
The statute states that the thirty days begin to run once the application is
complete. 15 U.S.C. § 1691(d)(1). The application is deemed complete “[o]nce a
creditor has obtained all the information it normally considers in making a credit
decision.” 12 C.F.R. Pt. 202, Supp. I, comment 9(a)(1)-1 (2000) (Federal Reserve
Board official staff interpretation of Regulation B). An inquiry about credit may
become an application, but it “depends on how the creditor responds to the applicant,
not on what the applicant says or asks.” 12 C.F.R. Pt. 202, Supp. I, comment 2(f)-3
(2000).
No genuine issue of material fact exists as to whether U.S. Bank violated the
ECOA time frame. Having already secured approval for a $77,330 FHA loan, Davis
inquired into other loan options in April and May 2000. She began to seek a
conventional loan in May 2000, but U.S. Bank and Cendant did not have all the
information necessary to process her new application until mid-July 2000. The pre-
qualification letter issued in May 2000 did not convert the conversation of May 18
into a completed application. The letter expressly stated that it was “not to be
construed as a commitment letter but a credit pre-approval” and that it was “subject
to full verification.” Appellant’s App. at 188. We therefore conclude that Davis’s
application for a conventional loan was complete in mid-July.
ECOA and Regulation B both state that, once the application for credit is
complete, a creditor has thirty days to either approve, deny or make a counteroffer on
the application. 12 C.F.R. § 202.9(a)(1)(i). In this case, undisputed testimony
establishes that, between July 19-22, shortly after U.S. Bank found out that Cendant
could not approve Davis for a conventional loan, it offered her a Home Advantage
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loan that included a higher interest rate and a waiver of certain credit requirements.
That counteroffer was made approximately one week after the application was
completed, well within the thirty-day limit.
Regulation B provides that, once a counteroffer has been made, the time limit
for sending a notice of adverse action begins anew, and the creditor then has ninety
days to send a notice of adverse action to the applicant if she does not accept or use
the new credit offered. 12 C.F.R. § 202.9(a)(1)(iv). The adverse action notice of
August 22, 2000, therefore satisfies the timeliness requirement, and summary
judgment was appropriate as a matter of law on the ECOA claim.
B.
We also affirm summary judgment on the remaining state statutory and
common law claims.
Davis may not bring claims under the Minnesota statutes she has addressed
unless she has prudential standing as a party intended to be included as a claimant
under the private attorney general statute, Minn. Stat. § 8.31, subd. 3a.4 Prudential
principles of standing are statutorily imposed jurisdictional limitations separate from
and in addition to constitutional standing requirements. Friends of the Boundary
Waters Wilderness v. Dombeck, 164 F.3d 1115, 1125 (8th Cir. 1999). U.S. Bank
challenged Davis’s standing, and the district court concluded that Davis failed to meet
the threshold requirement “that her causes of action benefit the public.” D. Ct. Order
of July 23, 2003, at 7. Even if U.S. Bank had not raised the argument, it was
appropriate for the district court to determine whether each claim is properly before
it by asking “‘whether the interest sought to be protected by the complainant is
4
Davis’ complaint raised claims under the Minnesota Residential Mortgage
Originator and Servicer Licensing Act, Minn. Stat. § 58.13; the Minnesota Consumer
Fraud Act, Minn. Stat. § 325f.68; and the Uniform Deceptive Trade Practices Act,
Minn. Stat. § 325d.43.
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arguably within the zone of interests to be protected or regulated by the statute or
constitutional guarantee in question.’” Bennett v. Spear, 520 U.S. 154, 163 (1997)
(quoting Ass’n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153
(1970)). We look to “the language of the statutory provision at issue” to determine
the intended breadth of the provision, Dombeck, 164 F.3d at 1125, in this case as
interpreted by the Minnesota Supreme Court.
Minnesota’s private attorney general statute, Minn. Stat. 8.31 subd. 3a, allows
individuals to seek damages by standing in place of the attorney general to enforce
certain laws regarding “unfair, discriminatory, and other unlawful practices in
business, commerce or trade” that the state attorney general is charged with
enforcing. Minn. Stat. § 8.31 subd.1. The Minnesota Supreme Court has ruled that
such private actions may be brought only if they benefit the public. Ly v. Nystrom,
615 N.W.2d 302, 314 (Minn. 2000). Litigation over an alleged misrepresentation that
was made only to one person “does not advance state interests and enforcement has
no public benefit.” Ly, 615 N.W.2d at 314; see also Collins v. Minn. Sch. of Bus.,
655 N.W.2d 320, 330 (Minn 2003) (finding that, because the misrepresentations
about educational programs were made to the public at large in a television
advertisement, successful prosecution of the claims would therefore benefit the
public).
Davis argues that her case is distinguishable from Ly because her experience
with U.S. Bank reflects its broad treatment of others. That argument, however, is the
very foundation for the limitation elaborated in Ly. 615 N.W.2d at 314. The class
of plaintiffs under the private attorney general statute would be limitless if we
assumed that one individual’s negative experience with a company was necessarily
duplicated for every other individual and on that basis treated personal claims as
benefitting the public. Such an assumption might well render nearly every private
suit alleging fraud a public benefit case. Davis had a private transaction with U.S.
Bank in which poor communication and confusion on both sides resulted in the
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cancellation of a purchase agreement. But Davis can complain only about her
individual experience with U.S. Bank, and she has not presented evidence that
misrepresentations were made to the public at large. She is therefore barred from
raising her claims under the particular state statutes she alleges were violated.
Davis’s common law fraud and misrepresentation claims also fail.5 Summary
judgment was appropriate because Davis’s allegations and evidence after discovery
have left “a complete failure of proof concerning [ ] essential element[s]” in the torts,
entitling U.S. Bank to judgment as a matter of law. See Celotex Corp v. Catrett, 477
U.S. 317, 322-23 (1986). Summary judgment is appropriate when the nonmoving
party has failed to establish an element essential to the prima facie case on which she
will bear the burden of proof at trial. Id. at 322.
In order to make a fraud claim, a plaintiff must demonstrate:
[T]hat [the] defendant (1) made a representation (2) that was false (3)
having to do with a past or present fact (4) that is material (5) and
susceptible of knowledge (6) that the representor knows to be false or
is asserted without knowing whether the fact is true or false (7) with the
intent to induce the other person to act (8) and the person in fact is
induced to act (9) in reliance on the representation [and] (10) that the
plaintiff suffered damages (11) attributable to the misrepresentation.
Heidbreder v. Carton, 645 N.W.2d 355, 367 (Minn. 2002) (quoting M.H. v. Caritas
Family Servs., 488 N.W.2d 282, 289 (Minn. 1992)) (alteration in original). Davis has
failed to provide evidence that the representations on May 18 were false or that U.S.
Bank intended to induce her to act on a mistaken belief. U.S. Bank never said that
5
Insofar as Davis can be construed as having raised a promissory estoppel
claim, we hold that, as a matter of law, the facts as alleged do not rise to the level of
promissory estoppel. See Martens v. Minnesota Mining & Mfg. Co., 616 N.W.2d
732, 746 (Minn. 2000) (describing a prima facie case for promissory estoppel).
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Davis was approved for the loan, but merely indicated that she was qualified based
on the data it had at the time. It is undisputed that the May 18 letter stated that it was
not a commitment letter. Viewing the facts in Davis’s favor, they are insufficient as
a matter of law to support a claim of fraud.
“A misrepresentation is made negligently when the misrepresenter has not
discovered or communicated certain information that the ordinary person in his or her
position would have discovered or communicated.” Florenzano v. Olson, 387
N.W.2d 168, 174 (Minn. 1986). U.S. Bank owed Davis a duty of care because she
was already a client who had applied for a prior loan and U.S. Bank was providing
information for guidance in “a transaction in which [she had] a pecuniary interest.”
Id. at 174 n.3. Davis, however, has failed to provide evidence that the specific
information given to her was false or that she was justified in relying on her
perception that she was approved for the loan. The May 18 letter communicated to
Davis and her real estate agent that Davis was qualified for the conventional loan,
based on the information the Bank had at the time. The letter clearly stated, however,
that the request was not yet approved and was conditioned on “full verification” and
“the selection of an approvable property.” Appellant’s App. at 188. Based on the
undisputed facts, no reasonable jury could conclude that U.S. Bank committed fraud
or was guilty of negligent misrepresentation.
The judgment is affirmed.
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