UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SIGNET MORTGAGE CORPORATION,

Plaintiff-Appellee,

v.

No. 96-2810

THE HUNTINGTON MORTGAGE

COMPANY,

Defendant-Appellant.

SIGNET MORTGAGE CORPORATION,

Plaintiff-Appellee,

v.

No. 97-1011

THE HUNTINGTON MORTGAGE

COMPANY,

Defendant-Appellant.

Appeals from the United States District Court

for the Eastern District of Virginia, at Richmond.

Richard L. Williams, Senior District Judge.

(CA-96-418-3)

Argued: October 2, 1997

Decided: October 24, 1997

Before LUTTIG and MOTZ, Circuit Judges, and MICHAEL,

Senior United States District Judge for the

Western District of Virginia, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: Alan Durrum Wingfield, MAYS & VALENTINE,

L.L.P., Richmond, Virginia, for Appellant. Earle Duncan Getchell,

Jr., MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P., Richmond,

Virginia, for Appellee. ON BRIEF: Stephen A. Northrup, MAYS &

VALENTINE, L.L.P., Richmond, Virginia, for Appellant. J. William

Boland, H. Carter Redd, MCGUIRE, WOODS, BATTLE &

BOOTHE, L.L.P., Richmond, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Huntington Mortgage Corporation appeals from the district court's

order granting summary judgment in favor of Signet Mortgage Corporation. We affirm.

Huntington and Signet entered into a loan purchasing agreement

(Agreement) in which Huntington agreed to sell to Signet the servicing rights to 13,781 mortgage loans. One of these mortgage loans was

originally created between U.S. Funding, Inc. of America and homeowner Donald Tucker. U.S. Funding loaned Tucker $105,000 secured

by a mortgage creating a first lien on Tucker's home. Huntington

thereafter acquired from U.S. Funding the servicing rights to the

Tucker loan and then sold those rights to Signet pursuant to the

Agreement.

In anticipation of a foreclosure action by Signet, Tucker notified

Signet by letter that he was rescinding the mortgage and security

interest in his house. Tucker based his right to rescind the mortgage

on certain alleged defects in the original loan with U.S. Funding,

which he asserted violated the Truth in Lending Act. Upon receipt of

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Tucker's rescission letter, Signet demanded that Huntington assume

the defense of Tucker's claim pursuant to the Agreement. Huntington

refused.

Signet then filed this action for a declaratory judgment, requesting

that the court find Huntington obligated to assume the costs of Signet's defense of Tucker's claims under the Agreement. On crossmotions for summary judgment, the district court ruled in favor of

Signet.

We review a district court's grant of summary judgment de novo.

Jakubiak v. Perry, 101 F.3d 23, 26 (4th Cir. 1996).

In ¶ 8.1 of the Agreement, Huntington promised to indemnify and

provide legal counsel to Signet to defend against any material breach

of warranty. In ¶ 3.9(a) of the Agreement, Huntington warranted that:

The Mortgage Loans are valid and enforceable in accordance with their terms and the laws of the jurisdiction in

which the properties securing the Mortgage Loans are

located.

In ¶ 3.9(h) of the Agreement, Huntington also warranted that:

Seller and to the best of Seller's knowledge any other party

originally named as payee under the promissory notes with

respect to the Mortgage Loans have complied in all material

respects with, and Seller will continue to so comply through

the Transfer Date(s) with every applicable federal, state or

local law, statute, and ordinance, and any rule, regulation, or

order issued thereunder . . . including, without limitation,

. . . truth-in-lending . . . and also including, without limitation, . . . Truth-in-Lending Law, in particular, Regulation Z

as amended . . . .

Signet argues that Huntington breached the warranty provided in

¶ 3.9(a) of the Agreement because Tucker's rescission claims, if successful, would render the loan invalid and unenforceable. Huntington

responds that because it neither caused nor knew about the alleged

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Truth-in-Lending violations of the original payee, U.S. Funding,

which form the basis of Tucker's rescission claim, Huntington did not

breach the warranty set forth in ¶ 3.9(h). Furthermore, Huntington

contends that because ¶ 3.9(a) and ¶ 3.9(h) directly conflict, and

¶ 3.9(h) is more specific than the general warranty provision in

¶ 3.9(a), only ¶ 3.9(h) applies to the Tucker loan. We disagree.

After careful reading of the Agreement as a whole, it is clear that

the warranties provided in ¶¶ 3.9(a) and 3.9(h) afford Signet separate

and distinct protections, and thus do not directly conflict. Paragraph

3.9(a) warrants that all loans are valid and enforceable, whereas

¶ 3.9(h) warrants that Huntington, itself, neither committed nor knew

of any violations of the myriad laws mentioned in¶ 3.9(h). It is clear

that each warranty offers Signet different protections when considering that not all violations of laws covered in ¶ 3.9(h) would render the

loan invalid or unenforceable under ¶ 3.9(a). Indeed, Signet clearly

demonstrated, in its brief and at oral argument, that ¶ 3.9(a) and

¶ 3.9(h) could be reconciled in this manner, and Huntington does not

successfully challenge this analysis. Thus, Signet could encounter situations where Huntington may have breached its warranty under

¶ 3.9(h) by knowingly committing a violation of law with respect to

a particular loan that does not render that same loan invalid or unenforceable under ¶ 3.9(a).

Here, neither party disputes that the Tucker claim, if successful,

would make the loan invalid and unenforceable, constituting a breach

of the warranty set forth in ¶ 3.9(a) of the Agreement. The Tucker

claim does not trigger ¶ 3.9(h); however, this is just one of the many

other, distinct warranty provisions included in the Agreement that

may not be triggered by the Tucker claim. Accordingly, the judgment

of the district court is

AFFIRMED.

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