Opinion ID: 2789954
Heading Depth: 1
Heading Rank: 4

Heading: The Commonwealth Summary Judgment

Text: Ruling on cross motions for summary judgment, the district court dismissed Streambend’s ILSA claims against Commonwealth because, as escrow and disbursing agent, Commonwealth did not act as a “developer or agent” within the meaning of 15 U.S.C. § 1703(a)(2). The ILSA defines “developer” as “any person who, directly or indirectly, sells or leases, or offers to sell or lease, or advertises for sale or lease any -15- lots in a subdivision.” 15 U.S.C. § 1701(5). The statute defines an agent as “any person who represents, or acts for or on behalf of, a developer in selling or leasing, or offering to sell or lease, any lot or lots in a subdivision,” excluding attorneys providing solely legal services. § 1701(6). The district court concluded that Commonwealth served in neither capacity in the transactions at issue: It is undisputed that Commonwealth did not sell or offer to sell the condominiums to [Streambend]; that [Streambend] executed purchase agreements; that Commonwealth did not execute the purchase agreements; that [Streambend] paid earnest money to Commonwealth as contemplated by the purchase agreements; that Commonwealth deposited the earnest money in trust accounts; and that Commonwealth subsequently disbursed funds from the accounts. . . . Nothing about Commonwealth’s role as escrow agent indicates that Commonwealth represented, or acted for or on behalf of, a developer in selling or offering to sell the condominiums to [Streambend]. Nothing about Commonwealth’s agreement in December 2005 to supervise the disbursement of loan funds under the construction loan agreement reveals that Commonwealth represented, or acted for or on behalf of, a developer in selling or offering to sell the condominiums to [Streambend]. Reviewing the district court’s ruling de novo, we agree. There is no evidence that Commonwealth made any representations or even became involved in the sales until after Streambend signed the purchase agreements. The only involvement of Commonwealth, a title company, was to accept earnest money deposits after sales were negotiated, and to disburse those funds for construction costs in accordance with the purchase agreements. On these undisputed facts, Commonwealth cannot be deemed an agent or developer because it did not, directly or indirectly, sell or offer to sell Ivy Tower condominium units, or represent a developer in doing so, as the statutory definitions require. Streambend argues that Commonwealth’s “status as an agent is undisputed.” That may be true, but Streambend still must prove that Commonwealth acted as agent “in selling or offering to sell” two units to Streambend. -16- “It is axiomatic that the statutory definition of the term excludes unstated meanings of that term.” Meese v. Keene, 481 U.S. 465, 484 (1987). Alternatively, Streambend argues, as it did to the district court, that Commonwealth may be liable because it aided and abetted violations of the ILSA. The district court assumed that a defendant may be liable for aiding and abetting an ILSA violation. The court then concluded “that [Streambend] failed to direct the Court to evidence that raises a genuine issue of material fact as to whether Commonwealth aided and abetted a developer’s violation of the [ILSA].” On appeal, Streambend argues the legal issue at length. As to the factual record, Streambend notes only that Commonwealth’s improper disbursing of escrow funds long after Streambend entered into the purchase agreements aided and abetted the developers’ “wrongful conduct.” But this was not evidence that Commonwealth aided or abetted a violation of § 1703(a)(2) “with respect to the sale” of any property. Thus, assuming without deciding the question of aiding and abetting liability, we affirm the district court’s grant of summary judgment on this issue.