Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-98-07105/USCOURTS-caDC-98-07105-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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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.

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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 summary judgment in an action for discriminatory mortgage

denial and negligent house appraisal. Appellee Signet Mortgage Corporation, formerly a subsidiary of appellee Signet

Bank, (collectively referred to as Signet)1 denied the Crawfords' application for a home mortgage refinance loan on the

asserted ground that the Crawfords' home equity was insufficient 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 management company engaged by Signet. The district court concluded 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 affirm 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 judgment 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 underwriter 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 assigned the appraisal to Fenning who performed a "walkthrough" home-comparison appraisal and prepared a report

dated April 8, 1994 that valued the house at $190,000.

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Bass told the Crawfords the amount of the appraisal and

asked for any information they had to support their representation 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, requesting 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 justified 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

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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).

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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 qualified, 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 qualifications, 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 circumstantial, 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.

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The Signet loan approval was by its terms contingent upon

"[r]eceipt and review of satisfactory subject property appraisal 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 acknowledged 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 appraisal "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 concluded, counts 3 and 4, alleging negligence by Signet, Steele,

Capitol and Fenning, required expert testimony on the standard 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 standard 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.

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average layperson, expert testimony is usually required to

prove the standard of care.") (internal quotations omitted).

None was offered. Further, because the Crawfords established 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.

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