Crawford, George v. Signet Bnk Inc

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 11, 1999 Decided June 25, 1999

No. 98-7105

George W. and Harriet M. Crawford,
Appellants

v.

Signet Bank, et al.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(No. 96cv02398)

George W. Crawford argued the cause for the appellants.

Gary C. Tepper argued the cause for appellees Signet Bank
and Signet Mortgage Corporation. Samuel K. Charnoff was
on brief.

Stephen A. Fennell argued the cause for appellee Steele
Software System Corporation. Brian J. Leske was on brief.

 Jack A. Gould and Matthew W. Lee were on brief for
appellees Capitol Appraisal Service, Inc. and Stephen F.
Fenning.

Before: Henderson, Randolph and Garland, Circuit
Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: George W. and
Harriet M. Crawford appeal the district court's adverse sum-
mary judgment in an action for discriminatory mortgage
denial and negligent house appraisal. Appellee Signet Mort-
gage Corporation, formerly a subsidiary of appellee Signet
Bank, (collectively referred to as Signet)1 denied the Craw-
fords' application for a home mortgage refinance loan on the
asserted ground that the Crawfords' home equity was insuffi-
cient based on an appraisal by appellee Stephen F. Fenning,
an employee of appellee Capitol Appraisal Service (Capitol).
The appraisal was contracted to Capitol by appellee Steele
Software Systems Corporation (Steele), an appraisal manage-
ment company engaged by Signet. The district court con-
cluded that the Crawfords neither established a prima facie
case of discrimination nor articulated a standard of care for
the appraisal profession, the breach of which could support a
negligence claim. We agree with these conclusions and af-
firm the summary judgment.2

__________
1 Signet has since been merged into First Union Corporation.
See Signet's Certificate as to Parties, Rulings and Related Cases
(filed as part of Signet's brief on Feb. 26, 1999).

2 We also affirm the district court's denial of the Crawfords'
motion to extend discovery because the Crawfords did not inform
the court when the defendants filed their summary judgment
motions that additional facts were needed to oppose the motions, as
required by Fed. R. Civ. P. 56(f) ("Should it appear from the
affidavits of a party opposing the motion that the party cannot for
reasons stated present by affidavit facts essential to justify the
party's opposition, the court may refuse the application for judg-
ment or may order a continuance to permit affidavits to be obtained
or depositions to be taken or discovery to be had or may make such
other order as is just.") (emphasis added). See Strang v. United

I.

In February 1994 Lonnie Bass, a Signet employee, solicited
the Crawfords by telephone to refinance their house. In
March 1994 the Crawfords submitted an application for a loan
in the amount of $233,000, representing the value of their
house as $325,000.

On March 24, 1994 Connee Piercy, a Signet loan underwrit-
er approved a loan for $233,000 conditioned on, inter alia,
receiving an appraisal value for the Crawfords' house of at
least $311,000. Signet then contacted Steele which arranged
for Capitol to appraise the Crawfords' house. Capitol as-
signed the appraisal to Fenning who performed a "walk-
through" home-comparison appraisal and prepared a report
dated April 8, 1994 that valued the house at $190,000.

Bass told the Crawfords the amount of the appraisal and
asked for any information they had to support their represen-
tation that the house was worth $325,000. The Crawfords
sent Bass two earlier appraisals: one dated August 23, 1990
for $304,000 and one dated August 10, 1993, for $340,000.3

Jack May, a senior appraiser at Signet, notified Steele of
the disputed valuation and Steele informed Capitol, request-
ing a review of Fenning's appraisal. In a letter dated April
19, 1994 Capitol reported that Fenning's estimate was "at the
high end for the neighborhood" and concluded it "was justi-
fied and well supported." Appendix Exhibits (App. Exhs.) 46.
On April 26, 1994 Steele informed May of the review of
Fenning's appraisal and of the drive-by appraisal value. May
"deferred to Capitol and Steele's conclusion that the Capitol
appraisal was well-founded and that the 1990 and 1993 ap-

__________
States Arms Control & Disarmament Agency, 864 F.2d 859, 861
(D.C. Cir. 1989) (citing rule 56(f) to affirm denial of discovery
extension where plaintiff "never stated concretely why she could
not, absent discovery, present by affidavit facts essential to justify
her opposition to [defendant's] summary judgment motion").

3 The Crawfords did not mention two lower appraisals: one dated
February 27, 1989 for $225,000 and one dated June 22, 1992 for
$235,000.

praisals were not." Id. 339. Accordingly, he recommended
to Piercy that Signet "should continue to rely on the Capitol
appraisal." Id. 339-40. On May 4, 1994 Piercy notified the
Crawfords that the loan was denied because of "[i]nadequate
collateral." Id. 51.

The Crawfords filed this action on October 17, 1996. The
second amended complaint (filed July 2, 1997) alleges seven
counts: (1) racially discriminatory "redlining"4 in violation of
42 U.S.C. s 1981; (2) conspiring to redline in violation of 42
U.S.C. s 1985(3); (3) negligent review of Fenning's appraisal
by Signet; (4) negligent appraisal by Steele, Capitol and
Fenning; (5) vicarious liability against Signet for Steele's and
Capitol's negligence; (6) vicarious liability against Steele for
Capitol's negligence; and (7) vicarious liability against Capitol
for Fenning's negligence. App. Exhs. 75-87. The district
court granted summary judgment in the defendants' favor in
an unpublished memorandum and opinion filed April 16, 1998.
The Crawfords appeal the court's judgment.

II.

"We review grants of summary judgment de novo; a party
is only entitled to summary judgment if the record, viewed in
the light most favorable to the nonmoving party, reveals that
there is no genuine issue as to any material fact." Aka v.
Washington Hosp. Ctr., 156 F.3d 1284, 1288 (D.C. Cir. 1998)
(en banc). Applying this standard, we affirm the district
court.

First, we conclude the Crawfords failed to make out a
prima facie case of discrimination in violation of 42 U.S.C.
s 1981 or s 1985(3). Under the familiar burden shifting
scheme of McDonnell Douglas Corp. v. Green, 411 U.S. 792
(1973), a prima facie case of discrimination requires a showing
"that a qualified plaintiff who is a member of a protected class
was disadvantaged in favor of a person who is not a member

__________
4 "Redlining" is "the practice of financial institutions intentionally
not lending to certain neighborhoods or parts of a community."
H.R. Rep. No. 104-193 at 177 (1995).

of the protected class." Whitacre v. Davey, 890 F.2d 1168,
1169-70 (D.C. Cir. 1989); see, e.g., Kolstad v. American
Dental Ass'n, 108 F.3d 1431, 1436 (D.C. Cir. 1997) ("Where
sex discrimination in promotion is alleged, a plaintiff proves
her prima facie case by showing that she is female, that she
was refused a position for which she applied and was quali-
fied, and that the employer filled the position with a male.");
Paquin v. Federal Nat'l Mortgage Ass'n, 119 F.3d 23, 26
(D.C. Cir. 1997) ("In the [Age Discrimination in Employment
Act] context a complainant makes his required prima facie
showing if he (i) belongs to the protected age group, (ii) was
qualified for the position, (iii) was terminated and (iv) was
replaced by a younger person."). Assuming the framework
applies in a redlining case,5 the Crawfords were required to
show inter alia that they were "qualified" for the loan they
were denied. Accord Latimore v. Citibank, F.S.B., 979
F. Supp. 662, 665 (N.D. Ill. 1997) ("[I]n a case where the
plaintiff alleges that her loan application was discriminatorily
denied, she must prove (1) that she is a member of a
protected class, (2) that she applied for and was qualified for
a loan, (3) that the loan was rejected despite her qualifica-
tions, and (4) that the defendants continued to approve loans
for applicants with qualifications similar to those of the
plaintiff.") (citing Thomas v. First Fed. Sav. Bank, 653
F. Supp. 1330, 1338 (N.D. Ind. 1987); Gross v. United States
Small Bus. Admin., 669 F. Supp. 50, 52-53 (N.D.N.Y. 1987);
Bell v. Mike Ford Realty Co., 857 F. Supp. 1550, 1556 (S.D.
Ala. 1994)). They failed to make such a showing.

__________
5 The Seventh Circuit has concluded the McDonnell Douglas
framework is not "available" in a mortgage discrimination suit and
that therefore a plaintiff in such a case is required to "try to show
in a conventional way, without relying on any special doctrines of
burden-shifting, that there is enough evidence, direct or circumstan-
tial, of discrimination to create a triable issue." Latimore v.
Citibank, Fed. Sav. Bank, 151 F.3d 712, 715 (7th Cir. 1998). We
need not resolve this issue here because, as we explain, assuming
that the framework does apply, the Crawfords have failed to meet
their burden under it.

 The Signet loan approval was by its terms contingent upon
"[r]eceipt and review of satisfactory subject property apprais-
al to support a minimum fair market value of $311,000."
Signet Supplemental App. at 11. The only appraisal report
meeting this value requirement, the one dated August 24,
1993, was not "satisfactory" because, as the Crawfords ac-
knowledged at oral argument, as of April 1994 it was eight
months old and it had not been recertified by an appraiser
within the previous four months as required by the Federal
National Mortgage Association (FannieMae). See FannieMae
Appraisal Guide s 201 (App. Exhs. 414-15) (providing "the
property must have been appraised within the 12 months that
precede the date of the note and mortgage" and when ap-
praisal "will be more than four months old on the date of the
note and mortgage," appraiser "must inspect the exterior of
the property and review current market date" and provide a
"certification" that "he or she believes that the property has
not declined in value");6 see also App. Exhs. 338-39 (affidavit
of Jack May). Because there was no evidence before the
district court of an appraisal satisfying the loan approval
conditions, we conclude the Crawfords failed to show they
were qualified for the loan they sought and therefore did not
establish a prima facie case of discrimination.

The Crawfords also failed to produce evidence to support
their remaining claims. As the district court correctly con-
cluded, counts 3 and 4, alleging negligence by Signet, Steele,
Capitol and Fenning, required expert testimony on the stan-
dard of care governing the appraisal profession. See District
of Columbia v. Hampton, 666 A.2d 30, 35 (D.C. 1995) ("The
plaintiff in a negligence action bears the burden of proving
the applicable standard of care, a deviation from that stan-
dard by the defendant, and a causal relationship between that
deviation and the plaintiff's injury. Furthermore, if the
subject in question is so distinctly related to some science,
profession, or occupation as to be beyond the ken of the

__________
6 The Crawfords agreed at oral argument that if appraisers
followed the FannieMae guidelines, they would be "okay," that is
nondiscriminatory.

average layperson, expert testimony is usually required to
prove the standard of care.") (internal quotations omitted).
None was offered. Further, because the Crawfords estab-
lished no underlying negligence as alleged in counts 3 and 4,
summary judgment was properly granted on counts 5
through 7 alleging vicarious liability for the negligence.
"[V]icarious liability is not an independent cause of action, but
rather is a legal concept used to transfer liability from an
agent to a principal at trial." Young v. 1st American Fin.
Servs., 977 F. Supp. 38 (D.D.C. 1997). In the absence of
agent liability, therefore, none can attach to the principal.

For the foregoing reasons, the judgment of the district
court is

Affirmed.