The opinion of the court was delivered by: Stengel, J.
This lawsuit involves allegations of unfair practices in the procurement of a residential mortgage. The plaintiffs-Choisimene Morilus, Christopher Celian, and Filonise Celian-have brought multiple federal and state claims alleging that the defendants*fn1 engaged in negligent and/or deceptive mortgage lending practices.
Defendant Countrywide has moved for summary judgment on all counts and for its counterclaims for fraud and civil conspiracy. Upon consideration of the parties' memoranda and other filings, I will grant the motion as to all counts against Countrywide and its fraud counterclaim, and deny the motion as to the civil conspiracy counterclaim.
On January 28, 2005, plaintiff Choisimene Morilus executed a home mortgage for $212,000 for a $238,000 property located in Whitehall, Pennsylvania (the Property). (See Am. Compl. ¶ 10 (Document #43).) Ms. Morilus does not read or speak English. (Pls.' Opp'n Mem. at 8 (Document #83).) Plaintiffs Christopher and Filonise Celian are husband and wife and reside at the Property; they were not signatories to the agreement. (Id.) The Celians had initially tried to secure their own mortgage but their poor credit prevented them from getting favorable terms. (Id.) Their broker, Mr. Alkhal, asked if someone else could sign the application for them. (Id.) On Mr. Alkhal's suggestion, the Celians asked Ms. Morilus to sign on their behalf. The Celians would not be leasing the Property nor would they be receiving it as a gift; instead, they would live there as if it were their own and make the mortgage payments. (Id.) Mr. Alkhal and Sunset were aware of this arrangement. (Id.)
To facilitate the loan, Mr. Alkhal, in conjunction with the other defendants, allegedly misrepresented Ms. Morilus' assets. (Id. at 9.) The appraisal price of the Property was inflated, which forced the Celians to enter into a second mortgage with the sellers to cover the shortfall. (Id.) On the day of the closing, Mr. Alkhal met with Ms. Morilus and Mr. Celian. Mr. Celian translated for Ms. Morilus. The plaintiffs contend that Mr. Alkhal made only a cursory explanation of the documents' contents. (Pls.' Resp. to Def.'s Statement of Material Facts ¶ 29.)
After the closing, many of the payments were late; Countrywide did not foreclose. (Id. ¶ 42.) Finally, due in part to the financial hardships the Celians were facing, Ms. Morilus sold the Property in April 2006 for $250,000. The plaintiffs initially filed suit in the Court of Common Pleas of Philadelphia County, Pennsylvania, on January 29, 2007. The case was removed to federal court on March 5, 2007. An amended complaint as to Countrywide was filed on September 21, 2007. The complaint included eleven counts: (I) Negligence; (II) Truth in Lending Act (TILA); (III) Home Ownership and Equity Protection Act (HOEPA); (IV) Real Estate Settlement Procedures Act (RESPA); (V) Equal Credit Opportunity Act (ECOA); (VI) Fraud; (VII) Breach of contract; (VIII) Pennsylvania Fair Credit Extension Uniformity Act (Pa. FCEUA); (IX) Pennsylvania Unfair Trade Practices and Consumer Protection Law (Pa. UTPCPL); (X) Pennsylvania Credit Services Act (Pa. CSA); and (XI) Punitive damages. It states that the "[d]efendants*fn2 conspired to unfairly and deceptively induce [them] to execute loan documents . . . premised upon a falsely inflated appraisal price" to qualify them for a loan with monthly payments they could not afford. (Am. Compl. ¶ 17.)
On May 9, 2008, Countrywide filed the pending Motion for Summary Judgment. (Def.'s Mem. for Summ. J. (Document #75).) The plaintiffs responded on June 23, 2008. (Pls.' Opp'n Mem. (Document #83).) The response withdrew Counts III (HOEPA), V (ECOA), VIII (Pa. FCEUA), and X (Pa. CSA).
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). An issue is "genuine" when a reasonable jury could return a verdict for the non-moving party based on the evidence in the record. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "material" when it could affect the outcome of the case under the governing law. Id.
A party seeking summary judgment initially bears responsibility for informing the court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the moving party's initial Celotex burden can be met simply by demonstrating "to the district court that there is an absence of evidence to support the non-moving party's case." Celotex, 477 U.S. at 325. After the moving party has met its initial burden, "the adverse party's response, by affidavits or otherwise as provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." FED. R. CIV. P. 56(e). Summary judgment is therefore appropriate when the non-moving party fails to rebut by making a factual showing that is "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." Celotex, 477 U.S. at 322.
Under Rule 56 of the Federal Rules of Civil Procedure, the court must view the evidence in the record in the light most favorable to the non-moving party and draw all reasonable inferences in favor of that party. Anderson, 477 U.S. at 255. The court must decide not whether the evidence unmistakably favors one side or the other, but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Id. at 252. If the non-moving party has produced more than a "mere scintilla of evidence" demonstrating a genuine issue of material fact, then the court may not credit the moving party's version of events against the opponent, even if the quantity of the moving party's evidence far outweighs that of its opponent. Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
A preliminary issue is whether the Celians have standing. This is a close question, but I find that they do. Standing is a fundamental justiciability principle determining "whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498 (1975). It combines constitutional and prudential limitations on the exercise of judicial power. Id. The "irreducible constitutional minimum of standing" has three elements:
First, the plaintiff must have suffered an "injury in fact" - an invasion of a legally protected interest which is (a) concrete and particularized, and (b) "actual or imminent, not 'conjectural' or 'hypothetical.'" Second, there must be a causal connection between the injury and the conduct complained of - the injury has to be "fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court." Third, it must be "likely," as opposed to merely "speculative," that the injury will be "redressed by a favorable decision."
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (citations omitted). In addition to the constitutional limitations, the Supreme Court has recognized several prudential limitations, separate and distinct from Article III's requirements. These prudential standing requirements are "judicially self-imposed limits on the exercise of federal jurisdiction." Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004). The Court has described the prudential standing requirements as "[(1)] the general prohibition on a litigant's raising another person's legal rights, [(2)] the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and [(3)] the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked." Id.
Countrywide's argument is three-fold. First, the Celians have suffered no cognizable injury. (See Def.'s Mem. for Summ. J. at 7.) They simply made payments to live in the home, which Countrywide would have the court recharacterize as a benefit. Countrywide also points out that the plaintiffs produced no evidence showing that Countrywide had "demanded payments from them, threatened to foreclose upon [the] mortgage . . . or indicated in any way that it would issue negative credit reports identifying them." (See id. at 9.) Second, even assuming that the Celians did suffer an injury, it was not causally connected to Countrywide's conduct and cannot be redressed by any finding that Countrywide breached its obligations to Ms. Morilus. (Id.) Third, Countrywide argues that Celians are attempting to raise Ms. Morilus' rights. The legal interests created with the mortgage would belong to the signing parties: Ms. Morilus and Countrywide. Because the Celians never signed any documents with Countrywide, they cannot bring suit for alleged violations relating to the mortgage.
In opposition, the Celians first contend they suffered concrete monetary damages. These would be the mortgage payments made to Countrywide, all the debt incurred in borrowing funds in conjunction with the mortgage, and their present inability to purchase a new home at their current location. (See Pls.' Opp'n Mem. at 11--12.) Second, they argue that the Celians only lack standing because the defendants intentionally kept them off of the mortgage and title documents. (Id. at 12.) Such actions, if true, could be a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL). If so, the refusal to place the Celians' name on the property papers would be a concrete injury.*fn3 Third, the Celians argue that the defendants conspired to effectuate the loan and violated various state and federal laws in doing so; Countrywide, as a co- conspirator, would bear equal responsibility for the other parties' actions. (Id.)
Assuming that the facts as stated in the complaint are true and drawing reasonable factual inferences in the non-movant's favor, I will deny the motion as to this part.*fn4
Countrywide's arguments, though persuasive, are in part premised on the fact that the Celians never signed the agreement. The plaintiffs, however, allege that the defendants' active attempts to keep them off of the documents is the very reason they lack the standing Countrywide demands.
While this by itself may not be sufficient to find standing, the plaintiffs astutely indicate that such actions violate the UTPCPL. That statute contains a "catch-all" provision that prohibits all "fraudulent or fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding." 73 PA. CONS. STAT. § 201-1-2(4)(xxi) (West 2008). The Third Circuit has interpreted the UTPCPL as requiring that a plaintiff bringing a private cause of action "show that he justifiably relied on the defendant's wrongful conduct or representation and that he suffered harm as a result of that reliance." Tran v. Metro. Life Ins. Co., 408 F.3d 130, 140 (3d Cir. 2005) (quoting Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (Pa. 2004)). Assuming the plaintiffs' factual allegations are true, the defendants did keep the Celians off of the documents. This would then form the injury causally related to the defendants' conduct, which could be redressed by this court.*fn5
B. Alkhal Acting as an Agent
Countrywide moves to dismiss any claims for which any liability is wholly dependent on Mr. Alkhal's or Sunset's actions. The issue is whether Mr. Alkhal and Sunset were acting as Countrywide's agents. I find that they were not and will grant the motion as to this part.
"The basic elements of agency are 'the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking.'" Scott v. Purcell, 415 A.2d 56, 60 (Pa. 1980) (quoting RESTATEMENT (SECOND) OF AGENCY § 1 cmt. b (1958)). Pennsylvania law requires the party asserting an agency relationship to prove its existence "by a fair preponderance of the evidence." Volunteer Fire Co. of New Buffalo v. Hilltop Oil Co., 602 A.2d 1348, 1351 (Pa. Super. Ct. 1992). While Pennsylvania law recognizes various theories of agency, express agency and apparent agency are most applicable. See id. at 1351--52. The plaintiff need not provide direct proof of authorization so long as "it can be inferred from the facts that at least an implied intention to create the relationship of principal and agent existed." B&L Asphalt Indus. v. Fusco, 2000 PA Super. 148, ¶ 11 (Pa. Super. Ct. 2000) (quoting Commonwealth v. Maker, 716 A.2d 619, 623 (Pa. Super. Ct. 1998)). Although the question of agency is normally best suited for a fact-finder, it may be resolved on a motion for summary judgment if the facts are not in dispute.
First, Countrywide argues that there was no exclusive agency relationship. It points out that the plaintiffs have produced no evidence showing that Countrywide ever manifested an intent that Sunset or Mr. Alkhal were to act as its agent or that there was ever any understanding between the parties that an agency relationship was to be formed. Indeed, Countrywide, Sunset, and Mr. Alkhal tried to make it clear to all of Sunset's clients that there was no agency relationship. (See Def.'s Mem. for Summ. J. at 11, 13--14 (describing the various loan application documents, which Ms. Morilus had signed, that indicated the applications were to Sunset specifically).)
Countrywide cites Hawthorne v. American Mortgage, Inc., 489 F. Supp. 2d 480 (E.D. Pa. 2007), in support. In that case, the Hawthornes sued both American Mortgage and Countrywide. American Mortgage was the mortgage broker, and Countrywide was the lender American Mortgage worked with to finance the Hawthornes' mortgage. Id. at 482. The Hawthornes accused Countrywide of violating federal lending laws based on American Mortgage's conduct. Id. Their claims were premised on the argument that American Mortgage and Countrywide were in an agency relationship, which would make Countrywide liable for the American Mortgage's actions. Id. at 484. The Hawthornes' agency argument was based on four facts: 1) American Mortgage used Countrywide's internal proprietary software, eApprove; 2) Countrywide let American Mortgage serve as the primary contact person for the borrowers; 3) American Mortgage was a correspondent bank that could serve as the lender itself and then place the loans with Countrywide; and 4) on occasion, Countrywide referred to American Mortgage as a "partner." Id. After considering this evidence, the court determined there was no agency and granted Countrywide's motion for summary judgment. Id. at 484--85.
The plaintiffs focus on the control element and argue that Countrywide exercised sufficient control to infer the existence of an agency relationship. They point to three specific facts: 1) the company's establishment and use of standard procedures that brokers and brokerages must follow in order to do business with it; 2) its continued monitoring of the brokers' work; and 3) its decision to terminate Mr. Alkhal for failing to follow procedures.*fn6 (See Pls.' Opp'n Mem. at 13.) The plaintiffs distinguish Hawthorne on the grounds that it was decided "just [on] the [broker's] use of Countrywide's software"; their case adds the element of Countrywide's control. (Id. at 14.)
Even after drawing all reasonable inferences in favor of the plaintiffs, I do not find that an express agency existed. While control is a key factor in determining whether an agency was intended, it must be of such a high degree that the purported agent is deemed to have had almost no independence. See Mahon v. City of Bethlehem, 888 F. Supp. 310, 312 (E.D. Pa. 1995) ("[A]n agency relationship is distinguished from an independent contractor relationship based on the amount of control one party has over the other." (quoting Jones v. Century Oil, U.S.A., 957 F.2d 84, 86 (3d Cir. 1992)); cf. Colantonio v. Hilton Intern. Co., 2004 WL 1274387, at *6 (E.D. Pa. June 8, 2004) ("The requisite inquiry is whether some nexus exists between the parent corporation and the subsidiary . . . to indicate that the latter is not independent, but rather totally under the control and dominion of the parent." (quoting Ames v. Whitman's Chocolates, 1991 WL 281798, at *7 (E.D. Pa. Dec. 30, 1991))).
Considered separately or as a whole, the plaintiffs' evidence fails to raise a genuine issue as to whether Countrywide exercised such control. For example, the plaintiffs have not distinguished Countrywide's initial application requirements for working with a new broker from any other similar application process. Common sense and experience dictate that before two parties enter into a long-term business relationship, each side will perform due diligence. Such a review is not easily characterized as "control." The plaintiffs have presented no facts from which I could reasonably infer otherwise.
The testimony regarding Countrywide's continuing activities also falls short. The plaintiffs have only shown that if a broker wished to do business with Countrywide, he would have to adhere to certain guidelines and that Countrywide would work to ensure that those requirements were being met. Simply put, Countrywide was dictating the base requirements for any business transactions. Assuming that Mr. Alkhal and Sunset were fully compliant, the fact that they may have adhered to those standards does not necessarily indicate that Countrywide "controlled" them. No facts show how Sunset's internal practices may have differed from Countrywide's. No evidence has been provided about what kinds of guidelines Countrywide ...