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Dobson v. Commonwealth Funding Group

December 1, 2009


The opinion of the court was delivered by: Judge Conner


Plaintiffs Anthony and Jessica Dobson (collectively "plaintiffs") bring this action alleging unfair and deceptive business practices in relation to their purchase of a home in Portage, Pennsylvania. Defendants have filed two motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. (See Docs. 41, 45.) For the reasons that follow, both motions will be granted.

I. Statement of Facts

The material facts underlying this matter are almost wholly undisputed.*fn1 In the spring of 2006, plaintiffs retained the services of defendants Commonwealth Funding Group, Incorporated ("CFG") and Matt Gisler ("Gisler") in order to assist them in financing the purchase of a new home. (Doc. 42 ¶ 5; Doc. 57 at 2 ¶ 5.) CFG is a mortgage brokerage licensed by the Pennsylvania Department of Banking. (Doc. 46 ¶ 5; Doc. 57 at 10 ¶ 5.) At the time in question, Gisler was branch manager of CFG's office in Johnstown, Pennsylvania. (Doc. 46 ¶ 6; Doc. 57 at 10 ¶ 6.)

Shortly after they retained his services, Gisler collected plaintiffs' credit information and set about soliciting potential creditors. (See Doc. 46 ¶¶ 11-15; Doc. 57 at 11 ¶¶ 11-15.) Three lenders in particular were contacted-Homecoming Financial, Decision One, and defendant Equifirst Corporation ("Equifirst"). (Doc. 48, Ex. A at 23-24.) Each company offered similar financing options based upon plaintiffs' credit history:*fn2 (1) a "fixed rate" option featuring an unchanging interest rate over a thirty-year term, or (2) an "adjustable rate" option requiring a comparatively lower interest rate for the loan's first two years, followed by a twenty-eight year term in which the rate on the note would be subject to periodic adjustment. (See Doc. 42 ¶¶ 38-39; Doc. 46 ¶ 17; Doc. 48, Ex. A at 23-24; Doc. 57 at 4 ¶¶ 38-39; id. at 12 ¶ 17.) Gisler selected Equifirst to fund the loan. (Doc. 46 ¶ 18; Doc. 57 at 12 ¶ 18.)

Over the next several weeks, Gisler spoke with plaintiffs on over twenty occasions.*fn3 (Doc. 42 ¶ 36; Doc. 46 ¶ 9; Doc. 57 at 4 ¶ 36; id. at 11 ¶ 9.) He specifically explained the two financing options offered by Equifirst, and he discussed the ramifications of the couple's credit history. (See Doc. 42 ¶ 38; Doc. 46 ¶ 24; Doc. 57 at 4 ¶ 38; id. at 12 ¶ 24.) Although plaintiffs initially told Gisler that they would prefer to obtain a fixed rate mortgage, (see Doc. 46 ¶ 23; Doc. 48, Ex. A at 14-15; Doc. 57 at 12 ¶ 23), Gisler testified that over time the adjustable rate option became more attractive to them. He explained:

GISLER: [W]hen we first talked, she [Jessica] was very adamant about a fixed-rate loan. . . .

QUESTION: Did that at some point change?


QUESTION: When did that change?

GISLER: We had a conversation several weeks into the loan process. . . . And we were going over the numbers and the payments. And at that point, she-we had discussed about her credit score at the time. . . . And so I said, here's your rate at a fixed rate for 30 years, here's your payment. Here's an option. And I said, I know . . . you wanted a fixed [rate], but here's your option. There are two-there is the 2/28, and that's fixed for two years and then adjustable. The payment is slightly lower than on the fixed rate. She then relayed to me that she wasn't planning on staying in the home-or keeping that loan, excuse me, for an extended amount of time, more than two years. So that's where the conversation went as far as, well, why would I pay the higher rate for two years if I'm just going to plan on refinancing after I get my credit back to where it should be. (Doc. 48, Ex. A at 14-16.) According to Gisler, the Dobsons intended to improve their credit score over the two years following their purchase, and to refinance the loan once their score was sufficiently enhanced. (Doc. 48, Ex. A at 16, 60.) Plaintiffs baldly deny that they made any such representations, (see Doc. 57 at 12 ¶ 27), but they admit that they voluntarily selected the adjustable rate mortgage option offered by Equifirst, (see Doc. 50, Ex. F ¶ 16*fn4 ). Gisler thereafter submitted a loan application on plaintiffs' behalf for an adjustable rate mortgage in the amount of $87,000. (Doc. 46 ¶ 21; Doc. 57 at 10 ¶ 4.)

On June 28, 2006, plaintiffs closed on the purchase of their home. (Doc. 46 ¶ 7; Doc. 57 at 10 ¶ 7.) Neither Gisler or any representative from Equifirst was present at the closing; rather, plaintiffs hired a third party, Anchor Realty Services ("Anchor"), to perform the necessary settlement services. (See Doc. 42 ¶¶ 13-14; Doc. 57 at 3 ¶ 13-14.) Prior to executing the adjustable rate mortgage note, an Anchor employee confirmed plaintiffs' understanding that they were receiving an adjustable rate mortgage. (See Doc. 46 ¶ 67; Doc. 57 at 15 ¶ 67.) In addition, plaintiffs signed numerous documents that visibly indicated that their loan was of the adjustable rate variety.*fn5 (See Doc. 42 ¶¶ 7-8, 17-18, 21; Doc. 46 ¶¶ 50-51, 57; Doc. 57 at 2-3 ¶¶ 7-8, 17-18, 21; id. at 14 ¶¶ 50-51, 57.) Plaintiffs acknowledge that they reviewed each of the documents that they signed and had an opportunity to pose questions if they so desired. (Doc. 42 ¶ 88; Doc. 57 at 9 ¶ 88.) Plaintiffs concede, however, that they asked few if any questions and voluntarily executed all documents required of them to close the purchase. (See Doc. 42 ¶ 88; Doc. 57 at 9 ¶ 88.)

At some point subsequent to the closing date, plaintiffs grew unhappy with the terms of their adjustable rate mortgage and commenced the instant litigation.

Plaintiffs' complaint contains twenty-six counts, six of which state a cause of action arising under federal law. (See Doc. 23.) The crux of these allegations is that plaintiffs were seeking a fixed rate mortgage but were somehow tricked into executing a mortgage with an adjustable rate. (See Doc. 57 at 19-21.) In plaintiffs telling, they "were never advised that they were in fact receiving an adjustable rate mortgage." (Id. at 23.) Twenty-four of the twenty-six counts were voluntarily waived during discovery, leaving only two claims for the court's disposition. (See id. at 22.) The first of these asserts a federal cause of action against Equifirst for purported violations of the Equal Credit Opportunity Act, 15 U.S.C. ยง 1691; the second alleges violations under the Pennsylvania Unfair Trade Practices and Consumer Protection ...

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