good morning your honour's would like to ask for two minutes for rebuttal star dixon urges this court to find that the district court's interpretation of the equal credit opportunity act and the regulations there under work was und restrictive when the court ruled that an affirmative defense could not be raised as a matter of wall to a vote as a result of a violation of the equal credit opportunity act on a suit only guarantee that was  basis we also urge the court to grant summary judgment in this matter as the facts are the material facts are not in genuine dispute i might briefly discuss those facts from the john brian's affidavit who was the loan officer at b b and t who made the loan in the spring of two thousand and eight b b and t was approached for too long by mr dixon from baff of his real estate developments first one was bridge mail which was a six point four million dollar loan the other one was the mayberry forms which was a three point two billion dollars loan after discussing these loans the decision was they needed more collateral so they came up with two point four a guarantee putting up their asses and then the husband then the wife here decided they didn't want the daughters to do it so the wife put up her guarantee and her s s is that the way it happened well i think i read his affidavit he saying that they first were studying that they then got the additional collateral which was another six hundred sixty two thousand dollars of minor stock when they evaluated the appraisals they then decided that they needed additional items and that was when they got asked for the guarantees according to mr bryan they asked for the debt guarantees as you're all reported out for the doors who have wealth of their own and discrimination against this spouse who presumably is normally female but it doesn't for better or say that if the worthy under two zero two point seven deewar and that's of the c f o r's if the loan is credit worthy otherwise one of the bank standards in this loan was because they only made the bridge mill loan they only made a six point four million loan according to mr bryant's affidavit they had the bridge mill property worth praise for five point six five million they had the two point four million dollars of b b and t stock and they had the six hundred sixty two thousand five million for a six point four million dollars loan used to say what exactly who says what is credit worthy and what it is well the banks credit worthy standards that they have a stamp place that's what the regulations deal with that's what mr bryant testified that's what the may second two thousand and eight letter setting out what the requirements were for that loan was a seventy five percent loan to value and as a result underlying assets and whether they are likely or risky is the problem of getting the bank getting paid and that would vary tremendously with the nature of the assets that are underlying the that are providing security for the law but i can't just say in all cases sixty five percent or seventy five percent or whatever he is a figure that is great where some bankers got to make a judgment about that but each bank has a stamp a list they entered for credit worthiness i represent banks to sort of go both sides the banks will take anything and everything they can these regulations or design and to prevent them from taking it and requiring a wife's guarantee so really because she's married to the owner of the business that's what they're aimed at and that regulation that i mentioned says that if the loan is otherwise credit worthy then the bank it is unauthorized for them to request a guarantee  s court no here on the banks the bank has their own standards and this loan the bank standards according to mr bryant's affidavit in this case says that a seventy five percent loan john bryan the loan officer that made the loan second this case yes your honor seventy five percent was the loan to value give us the record of paragraph eighteen of them of the affidavit your honor and i would call a court's attention it's interesting because of his statements about the credit worthiness of this loan had to do with the too long the decision was made after they get her guarantee your agreement to do that guarantee they're only going to but the bridge built on it changed they'd never revisited the issue of credit worthiness the regulations say that they can't take a guarantee if the loan is otherwise care credit worthy from the spouse or other person the reason that it says that is because they can't do indirectly that try to do address directly they can't do it indirectly if it's not credit worthy the regulation and that's not the case here the regulations say they can't require the spy also they can ask for somebody else that's what that goes to the issue of asking the the doors to separate but here we're and the protected class you know if they ask the what exactly in paragraph eighteen so that the guarantee of the wife was demand again eighteen i was addressing the issue of seventy five percent of low night banco so i don't understand what part of the affidavit that supports your position that we could grant summary judgment here but they still do the regulations prevent the taking  i guarantee if the loan is otherwise credit worthy now you can always have an it discrimination action of course because a son or daughter or a mother or a father those are not within the protected class regulation two zero two point seven d one says that it's an unauthorized activity to require a guarantee by the spouse or other person different thing to require a guarantee than to accept a that paragraph fifteen he says i told him that he bridge bill and or a third party would have to pledge additional collateral to secure the new loan that's what he did wife has to do it great then he goes on the next paragraph is where he says well they can assume th we talked about and then that's when they asked for and demanded an additional guarantee is the language that they demanded a guarantee from you just got through telling us that you had a document that said that yes you you to read the language of the document that says that to back up the statement you just made to the court this is from the record number three eighty nine may second two thousand and eight letter requirement summary b b and t lo requirements number one this is dixon will be required to cosign the notes with her future release subject to negotiation the bottom of that says must not exceed seventy five percent of the clabber value after appraisals this was done when they were going to make both loans when they decided not to do both loans it suddenly changed dramatically there were loaned to bank you own the collateral they still kept the two point four million dollars of b b and t stock they still kept the pannier and they still can't miss is dixon's guarantee that they no longer require because the loan was then credit worthy that's why i say that before the court today the credit i don't think so i think that they done the mayberry loan too because the problem with maybe it was not appraised enough there was a that they didn't have enough appraised value for the real estate and that's in and that that has been one of my questions throughout it's early should be ok for amending agency to require a guarantee from somebody if there isn't enough in the way of assets and if there's but the question is how does how is the bank requiring stars guaranteed here in violation of the corporate credit opportunity act when they made the loan they handed enough collateral for bridge meal you're saying it was read it necessary for them to get a guarantee and that's what the statute did they the regulations are geared to they can't accept the wife's guarantee if she chooses to give a guarantee not impractical banking no one is offering guarantee that nobody nobody chooses to come in and say i really would like to guarantee this loan my problem with your argument that you're entitle to summary judgment favor we take all of the facts in the light most favorable to your opponent mr bryant his bank robbery side is you know again i don't read that because you know he says i didn't speak to her but in paragraph sixteen he makes it clear he was requiring and this letter that i just read the requirements for it that's what number twenty is actually addressing is this provision of this document when he says mrs dixon will be required to anyone that started some would have to service here but he's addressing the other prohibited transaction in the in the e c zero way or the regs which is if it's not credit worthy which is not the case here you can't require the spammer's what bankers do they say well we need another guarantor can you come up with somebody well i've got small well that's ok that's ok if it's offered up that's in a different rig that's entirely different we your honor sam ziegler here on behalf of the apple e r o b b acquisition l c we started off jumping on the facts all briefly address those your honour's to judge mary's point it's not true that all spousal guarantees are ipso facto invalid under the act or regulation b in fact a bank any kind of lender can accept a spousal guarantee provided that certain certain required requirements were independently creditworthy therefore b b and c the original lender cannot accept cannot take cannot require the wife's guaranty started the appellant well that's no one the record it's a misstatement mr bryant's affidavit again john bryant was the originating loan officer for b b n c mr brian unequivocally says paragraph fourteen of his affidavit which is page three seventy eight of the record that he concluded for the bank that bridge mill and how dixon we're not independently credit worthy into mr ray's argument about how this loan to value ratio the amount of collateral that's being put up for the loan the seventy five percent figure well that was a minimum but not necessarily sufficient condition of making glom that was one part of the credit analysis and as again as mr bryant's affidavit states and that was uncontested testimony i would add your honors there was no deposition of mr bryant for whatever reason starr dixon chose not to depose him so that stands uncontested below that in fact under b b and t standards of credit worthiness she did not or how dixon rather was not independently credit worthy so this whole notion that the court here at this at this posture of the case can grant summary judgment for starr dixon it just that there is no merit to it at this point so at that at the reason conclusion that looking at the plain terms of the statute there is no room there is no language there is nothing that indicates or suggests that a spousal guarant can void their entire guaranty liability if there is a violation again we're assuming a violation thing that prohibits this being used as an affirmative defense there is no prohibition so there is no language why wouldn't it be within the purpose of the statute to allow an affirmative defense akin to recoupment because it does not affect the way the purposes of the statute the status statute and all and all i'll quote here from this court's opinion amid kiff the adams county regional water district the easy easier ways purpose is to eradicate credit discrimination waged against women especially married women who creditors traditionally refused to consider for individual credit to judge say that this deal was voided because it was purposely discriminatory under the act how could you administer that act if that were allowed to that is you could five years later the spouse could not set up a defense based upon the violation of the act here is my answer that your hon first of all that's limited to the sneer that we have before the court today which is a spousal guarantee ok so the act obviously covers more evils if you will than just the spousal guarantees the classical case if you will is a married woman who goes to apply for a loan and a lender says we need your husband to apply to ok or else we're not going to give you the loan well there you're not going to have a lawsuit down the road you're going to have the the wife  aggrieved applicant under the statute filing a lawsuit of her own that's why there's affirmative claims underneath the statute so we're talking about a a smaller universe of potential e c away by the primarily this act to protect and that's what is being claimed in this case and what i'm saying is how could you administer the act if five years after were some period of time when there was a default and the spouse female spouses commonsense matter how are you going to carry out the purposes of the act in that situation if the females is no longer able in our legal procedure to set up the violation of act as a defense you can't at that point your honor under she is just too bad the ag didn't call for it so you can't do it that's correct your honor any circumstances so the spouse can come back and essentially set off or wipe out the guarantee liability under that theory if i can make what's wrong with that theory what's wrong with that theory is it it's not well that there's a there's a fundamental problem in this case with it because my client is a successor institution to the original lender and actually if it leaves a third circuit pointed this potential problem with the recoupment siri is using  your successor and that's a problem what's wrong with the courts that it reached the opposite result than what you're arguing because it's not envisioned in the statute so basically you're saying that the purpose of the statute was to protect married women who are trying to get their own loans and read the statute doesn't apply to married women who are hypothetically forced to give guarantees in order for their husbands to get a  lot yes that's right your honor that's and where do you go to say that is the purpose of the statute the congressional findings and statement of purpose in the original act of nine hundred seventy four and that's public law ninety three dash four ninety five title five section five zero two at the in the last sentence which is the operative purpose statement quote it is the purpose of the act to require that financial institutions and other firms and gauge an extension of credit make that credit available available equally available to all credit worthy customers without regard to sex or marital status you know since that time and see how the cases have applied that language that you mentioned and you know what there's other language about things that you're hiding in the language of all but and we have three cases that seem to go the opposite way is there a case that goes your way if there's a number of district court opinions that are cited in the brief from circuits outside of the first and third circuit there's the rig's decision from the eastern district of virginia there's the best final decision that the rig's decision was about twenty years ago a lot of these are from the ninety's for whatever reason but there's more recent for you the best final decision from the district of utah in two thousand and thirteen the western district of missouri would we need and obviously are looking at those cases for their persuasive value so so hypothetically let's let's make the argument that you need to respond to which is that the equal credit opportunity act should have a broad prophylactic purpose and why is this hypothetical broad prophylactic purpose not appropriate here in the case of a guarantee because while there is a broad prophylactic purpose it's a remedial statute the sky is not the limit ok and here's why i say that the remedies are explicit in the statute  sixty nine to one and i'm not going to walk through every one of those there's well i guess i will actual damages punitive damages cost attorneys fees and then this is where the hook where most of these courts or finding a firm a defense equitable and declaratory relief and that of course manifest the remedial nature of the statute but but it's not just any equitable declaratory relief and this is i'm quoting now from the statute and the regs simply restate the statute it's equitable and declared to relieve quote as is necessary to enforce the requirements imposed under the act in quote now i suppose that might beg the question well what or what is necessary in opposition is in a court of district  the pain of the district court below is it's not necessary to this she ate a three million dollars worth of liability on the scarcity because that's what happens if in fact the appellant's argument wins the day and she can actually facts so then a bit worse than it looks like you have to get to the facts let me tell you that most judges would be pleased not to have to get into factual disputes or whether a bag of call guarantees or i mean you know we don't know anything about that have no expertise in it and don't want to be in it so  but we do have to carry out this statute and the implications that are clear as the first circuit in the third circuit described but i don't see how this statute can be implemented unless this woman can at least claim that the firm of the defense that she was discriminated against on the statute doesn't seem like to me she's going to be able to show that just right all but that's another question that's true your honor i guess what one one point i want to sort of underscore here and that may be on  your honor's minds is well if in fact injunctive and declared where relief would not include avoiding the guarantee liability will what could include well again assuming a timely  compulsory counterclaim or independent claim have been made it could include a declaration that the banks credit underwriting procedures or in violation of the act and it can include a mandatory injunction and in fact there are  horities that they have done this case of doneness requiring the bank to amend its policies too so as to comply with the act that is that's that's the kind of thing that's necessary to force requirements impose into the act i would also remind the court that in two thousand and ten congress extended the statue of limitations for claims of the act of five years from two years now it's an open question i think in this case whether the five year to year  case they didn't follow the compulsory counterclaim when they should have thank you thank you your hon but for the discrimination they would not have had a guarantee it would not be proper to allow enforcement of any ill gotten guarantee when they obtain the end and that would be under the equitable remedies otherwise it's a toothless statute that's the problem addressing the specifics of what the guard those of mr bines affidavit again paragraph fourteen it does say that mr dixon was not and bridgeville were not credit worthy but it says to refinance the region's loan and may brief forms loan paragraph twenty that judge moore was addressing a minute ago it says in there this underwriting requirement referenced in the may second two thousand and eight was in place only after mr dixon they've chosen to present this is dixon as opposed to any other guarantor they had a requirement that's consistent with paragraph fourteen where they required a guarantee that it here graft twenty hurts you because it's mr dixon had chosen to present this sticks again they're addressing not to be asian or prohibited transactions one they're trying to address they are the paragraph number fact which basically is to prevent them from doing what they did here that is you can't require a guarantee when the loan is otherwise credit worthy anybody including the spiles now nobody else can avoid it you kena build the lane if it's the father or the son or of other big prohibits you from requiring a guarantee if you have a credit worthy and seeking the guarantee of some other person or wife to owe two point seven d one it says the spouse or other person and that's designed to prevent them asking for this and indirectly getting the spammer's the reason though you can't bring an action bam father or somebody else's they're not within the protected category they're not being discriminated against based ball marital status statute and the regulations limited the way they did their red light thank you very much thank you both for your argument the case will be submitted