2010 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-22-2010

Omni Credit Alliance v. Kennedy Funding Inc

Precedential or Non-Precedential: Non-Precedential

Docket No. 08-1078

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Recommended Citation

"Omni Credit Alliance v. Kennedy Funding Inc" (2010). 2010 Decisions. Paper 1681.

http://digitalcommons.law.villanova.edu/thirdcircuit_2010/1681
 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT

__________

No. 08-1078

__________

OMNI CREDIT ALLIANCE, INC.

 v.

KENNEDY FUNDING, INC.; JOSEPH WOLFER; JEFFREY WOLFER,

 Defendants/Third-Party Plantiffs,

 v.

KENNETH REAVES,

 Third-Party Defendant,

 Kennedy Funding, Inc.,

 Appellant.

 

On Appeal from the United States District Court

for the District of New Jersey

(D. C. No. 04-cv-04764)

District Judge: Hon. Peter G. Sheridan 

 

Submitted under Third Circuit LAR

on July 16, 2009

Before: RENDELL, FUENTES and ROTH, Circuit Judges

(Opinion filed: March 22, 2010)
2

 

O P I N I O N

 

ROTH, Circuit Judge:

Omni Credit Alliance, Inc., brought suit seeking the return of $260,000 it paid to

Kennedy Funding, Inc., in application and commitment fees for a loan that never closed. 

After a bench trial, the District Court ordered rescission of the loan agreement, finding

that “both parties were engaging in subterfuge and chicanery” and had breached the

implied covenant of good faith and fair dealing. Kennedy has timely appealed.

The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have

jurisdiction pursuant to 28 U.S.C. §§ 1291. We review the District Court’s factual

findings for clear error and its evidentiary rulings for abuse of discretion. See United

States v. Igbonwa, 120 F.3d 437, 440 (3d Cir. 1997); Affiliated Mfrs., Inc. v. Aluminum

Co. of Am., 56 F.3d 521, 525–26 (3d Cir. 1995). We assume the parties’ familiarity with

the factual and procedural history, which we describe only as necessary to explain our

decision. We will affirm.

Kennedy argues, first, that the District Court erred by imposing a covenant of good

faith to its “pre-contract negotiations” with Omni. This argument does not help Kennedy

because the District Court’s decision is supported by its findings regarding Kennedy’s

post-commitment agreement behavior—to wit, its failure to negotiate a final deal in good

faith by (1) merely “deflecting Omni’s collateral proposals and rejecting them with little
3

explanation” and (2) declining to “take any reasonable steps to close the loan.” Given the

highly deferential standard of review, we will not disturb these findings.

Second, Kennedy argues that the District Court’s factual findings and credibility

determinations lacked support in the record and that the District Court improperly shifted

the burden of proof. We disagree. The District Court found that the principals of both

parties lacked credibility and based its specific factual findings on these credibility

determinations.

Third, Kennedy argues that the District Court abused its discretion in excluding

documentary evidence concerning a concurrent and parallel loan commitment agreement

in which Omni was the lender. As Omni points out, however, the District Court

permitted cross-examination about the parallel loan commitment transaction, and

Kennedy is hard-pressed to show any prejudice associated with the exclusion, particularly

given the collateral nature of the document. At most, then, exclusion was harmless error.

Finally, Kennedy argues that the District Court erred in ordering rescission because

neither party had explicitly requested that remedy. Omni’s complaint, however, invoked

the Court’s equitable jurisdiction through its general request for “other relief.” Under

these circumstances, the District Court was within its discretion to impose rescission

where, as here, “both parties were engaging in subterfuge and chicanery” and each was

“trying to scam the other.”

Accordingly, we will affirm the judgment of the District Court.