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BLEDSOE v. FULTON BANK

September 26, 1996

CONSTANCE TAGUE OTLEY BLEDSOE
v.
FULTON BANK



The opinion of the court was delivered by: JOYNER

 JOYNER, J.

 SEPTEMBER 26, 1996

 Plaintiff Constance Tague Otley Bledsoe instituted this action (1) to obtain a declaration that Defendant Fulton Bank violated federal law by requiring her to guaranty a loan to her former husband and (2) to enjoin the enforcement of the confessed judgments obtained in two state courts pursuant to the allegedly unlawful guaranty agreement. Presently before this Court is Defendant's Motion to Dismiss the Complaint on the grounds that federal adjudication of Plaintiff's claim would interfere with the collection actions now pending in the state courts. Specifically, Defendant contends that the federal declaratory judgment and injunction that Plaintiff seeks would violate the Anti-Injunction Act and Younger abstention doctrine, and would not be a sound exercise of our discretion under the Declaratory Judgment Act. For the reasons that follow, the Motion is granted.

 BACKGROUND

 The facts relevant to the instant motion are not disputed. In 1988, Defendant extended a line of credit to Plaintiff's former husband, Rodger Bledsoe, *fn1" to fund his used automobile business. Both Mr. and Mrs. Bledsoe signed an unlimited guaranty for the debt incurred on this line of credit. The loan went into default and, on or about July 26, 1995, Defendant confessed judgment against the Bledsoes under the guaranty agreement in the amount of $ 81,035.89 in the Courts of Common Pleas of Lancaster and Chester Counties. In the collection actions now pending in each of these courts, Plaintiff Mrs. Bledsoe has petitioned to strike and/or open the confessed judgments on the grounds that Defendant obtained the guaranty from her in violation of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691, et seq., and Federal Reserve Board Regulation B ("Regulation B"), 12 C.F.R. § 202.7(d), promulgated pursuant to the ECOA. Execution of the judgments has been stayed pending resolution of the petitions.

 Plaintiff now seeks to litigate these claims in federal court. In particular, Plaintiff asks this Court to declare that the guaranty agreement is null and void as between her and Fulton, to enjoin Fulton from "further collection activity under the Guaranty and the judgments obtained thereunder," and to order Fulton to "take immediate steps to mark satisfied and/or stricken the judgments entered... in Lancaster and Chester Counties." (Pl.'s Compl. at P 22, 25). As in the petitions filed in state court, Plaintiff's claims rest on the ECOA and Regulation B.

 DISCUSSION

 Defendant argues that we should dismiss Plaintiff's Complaint on any of three distinct and alternative bases: the Anti-Injunction Act, the Younger abstention doctrine, and the discretion afforded under the Declaratory Judgment Act itself. Because we agree that the Anti-Injunction Act bars the relief sought by Plaintiff in this case, we do not reach the other two contentions. We must first address, however, Plaintiff's contention that the Third Circuit's decision in Silverman v. Eastrich Multiple Investor Fund, L.P., 51 F.3d 28 (3d Cir. 1995), controls our disposition of this motion.

 I. The Silverman Decision

 The facts of Silverman are strikingly similar to this case in that there, as here, plaintiff (an aggrieved spouse) sought federal declaratory and injunctive relief from a confessed judgment entered in state court under a guaranty agreement allegedly obtained in violation of the ECOA and Regulation B. The district court dismissed the action as barred by the statute of limitations, finding that the ECOA's two-year statute of limitations for bringing an affirmative claim under the act also barred its defensive use more than two years after the date of the last alleged violation. Silverman v. Eastrich Multiple Investor Fund, L.P., 857 F. Supp. 447, 453 (E.D.Pa. 1994). The Third Circuit reversed this determination. Noting that Pennsylvania's confession of judgment provisions do not permit the debtor or guarantors to respond when judgment is entered, the court reasoned that "plaintiff's alleged ECOA violation [is] asserted as a defense to the state confession of judgment." 51 F.3d at 32. The court thus held that the purposes of the "broad remedial provision" of the ECOA were best served by permitting the act to be used defensively even after the statute had run. Silverman, 51 F.3d at 33. The court concluded:

 
accordingly, we will remand to the district court for a hearing to determine, factually and legally, whether Atlantic violated the ECOA in requiring plaintiff's signature... On the basis of these findings, if appropriate, the district court should reconsider granting the request for injunctive relief.

 Id. at 33-34.

 Plaintiff argues that the factual similarity of the Silverman plaintiff's legal claim, and the Third Circuit's decision to allow her action to proceed, compels a similar result in this case. Though Plaintiff concedes that neither the district court nor the Third Circuit discussed the Anti-Injunction Act or other possible grounds for abstention, she contends that "presumably, if there was something improper or inappropriate about proceeding this way, the Third Circuit would not have so plainly recognized [the plaintiff's] right to bring her claims in federal court in response to the state court confession of judgment." (Pl.'s Supp. ...


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