Opinion ID: 186311
Heading Depth: 2
Heading Rank: 3

Heading: Equal Credit Opportunity Act

Text: 14 Third, O'Donnell resurrects the affirmative defenses, asserted summarily in his answer, of waiver/estoppel, unclean hands and in pari delicto, each one premised on his theory that the appellees violated the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. (Act). We conclude that, under the undisputed facts, Mick's did not violate the Act and that O'Donnell's defenses therefore fail. 15 The Equal Credit Opportunity Act provides in relevant part: 16 It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction — 17 (1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); .... 18 15 U.S.C. § 1691(a). To implement this provision, the Federal Reserve Board has promulgated the following regulation: [A] creditor shall not require the signature of an applicant's spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit requested. 12 C.F.R. § 202.7(d)(1). O'Donnell claims the appellees violated the statute and the regulation by requiring O'Donnell to co-sign the sublease and the guaranty for his wife's restaurant although O'Donnell was not himself a principal of BOD. We reject O'Donnell's Equal Credit Opportunity Act claim for two reasons. 19 First, under the Act the sublease is not a credit instrument subject to 12 C.F.R. § 202.7(d)(1). The Act defines credit as the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment [sic] or to purchase property or services and defer payment therefor. 15 U.S.C. § 1691a(d) (emphasis added). Mick's did not grant any credit right to BOD under the sublease but acted simply as a sublessor of the restaurant property entitled to receive monthly rent payments for the term of the sublease. 6 Further, neither Mick's nor Morton's falls within the Act's definition of creditor as any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit. 15 U.S.C. § 1691a(e) (emphasis added). There is no evidence that either Mick's or Morton's, each of which is in the restaurant business, regularly extends or arranges credit, which, as an element of O'Donnell's affirmative defenses, he must demonstrate on summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986) ([T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.). 20 Second, the assertion made before the district court and on appeal that O'Donnell was not a principal involved in BOD's operations is at odds with O'Donnell's own representations at the time he signed the sublease and the guaranty. The two documents variously characterize O'Donnell as one of BOD's principals, Sublease at 5, § 7A, the Sublessee, id. at 9 (under O'Donnell's signature), BOD's President or Vice President, id. at 10 (in Acknowledgements by notaries public), one of BOD's two sole shareholders, directors and officers and one hav[ing] a material business interest in the Sublessor [sic], Guaranty at 1. Having represented himself to Mick's and Morton's when he signed the sublease and the guaranty as an officer and shareholder of BOD in order to secure the sublease for BOD, O'Donnell is equitably estopped from claiming otherwise now to avoid liability under the guaranty. See First Am. Disc. Corp. v. Commodity Futures Trading Comm'n, 222 F.3d 1008, 1016 (D.C.Cir.2000) (Under the doctrine of equitable estoppel, `a party with full knowledge of the facts, which accepts the benefits of a transaction, contract, statute, regulation, or order may not subsequently take an inconsistent position to avoid the corresponding obligations or effects.' (quoting Kaneb Servs. v. FSLIC, 650 F.2d 78, 81 (5th Cir.1981))).