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Staten v. D.R. Horton Inc.

United States District Court, N.D. Alabama, Southern Division

July 13, 2018

WALTER L. STATEN, et al., Plaintiffs,
v.
D.R. HORTON, INC. BIRMINGHAM, Defendant.

          MEMORANDUM OPINION [1]

          STACI G. CORNELIUS U.S. MAGISTRATE JUDGE

The court has before it the January 8, 2018 motion for summary judgment filed by Defendant D.R. Horton, Inc.-Birmingham (“DRH”). (Doc. 22). Pursuant to the court's initial order and the January 26, 2018 order, the motion was under submission as of February 19, 2018. (Docs. 15, 25). After consideration of the briefs and evidence, the motion is due to be granted for the following reasons.

         I. STATEMENT OF FACTS

         DRH is an Alabama corporation engaged in the homebuilding business. (Doc. 23-37 at 2). DRH constructed a spec home located at 9318 Doss Ferry Lane in Kimberly Alabama. (Id. at 3). In July 2015, DRH reduced the asking price for the home to $209, 900.00 because the house had been on the market for a certain period of time and had not sold. (Id.). On August 8, 2015, Plaintiffs Walter L. Staten[2] and Sandra Staten, an African-American married couple, executed a purchase agreement to buy the home from DRH for the asking price. (Id.; Doc. 23-1 at 12; Doc. 23-35 at 22; Doc. 23-11 at 1-10). DRH accepted the agreement on August 11, 2015. (Doc. 23-11 at 9-10).

         The purchase agreement was conditioned on the Statens obtaining a loan in the principal amount of the purchase price. (Id. at 1). Further, the agreement required the Statens to provide DRH with written evidence of loan approval within twenty-one days of DRH's acceptance of the agreement. (Id. at 2). The Statens sought financing through DHI Mortgage Company, Ltd. (“DHI Mortgage”), and Mr. Staten also sought financing through Regions Mortgage. (Doc. 23-18 at 1-4; Doc. 23-35 at 24, 30; Doc. 23-36 at 1).

         During DHI Mortgage's investigation of the loan application, questions arose regarding the income and credit worthiness of the Statens. (Doc. 23-35 at 26; Doc. 23-37 at 31). DHI Mortgage obtained credit reports on the Statens from EGS Credit Services. (Id.). The credit scores showed no credit for Mrs. Staten and also showed that Mr. Staten did not have sufficient credit to sustain the loan. (Doc. 23-35 at 42; Doc. 23-36 at 2). Specifically, Mr. Staten's report stated that the Experian score was affected, among other factors, by the “number of accounts with delinquency” and that both the Equifax and TransUnion scores were impacted, among other factors, by “derogatory public record or collection filed.” (Doc. 23-31 at 1-2). Mrs. Staten's report stated her credit score was “not available from the consumer reporting agency because they may not have enough information about [her] credit history to calculate a score.”[3] (Doc. 23-34 at 1).

         By mid-August 2015, the Statens were aware of the issues regarding their ability to receive a loan from DHI Mortgage, and Mrs. Staten informed DRH they were going to see if their bank would loan them more money. (Doc. 23-35 at 25-26; Doc. 23-37 at 34). Mr. Staten applied for a VA mortgage through Regions Mortgage in the full amount of the purchase price. (Doc. 23-38 at 14-24). The Statens remained in communication with DRH throughout the loan process. (Doc. 23-37 at 33-38).

         On August 29, 2018, DHI Mortgage sent letters to both Mr. Staten and Mrs. Staten stating, “[W]e are unable to provide you financing at this time based on your current credit profile.” (Doc. 23-14 at 1; Doc. 23-15 at 1). DHI Mortgage also issued credit denial, termination or change notices showing the Statens' request for credit was denied. (Doc. 23-16 at 1-3; Doc. 23-17 at 1-3). The addresses on both the letters and the notices from DHI Mortgage contained the wrong address. (Doc. 23-35 at 26-27). The Statens never lived at the address contained on the documents, and Mrs. Staten testified she did not receive any of the documents or know they existed until the lawsuit. (Id.). Mr. Staten did, however, own the property where the documents were mailed. (Id. at 31).

         On August 26, 2015, Regions sent a letter to Mr. Staten advising him of the denial of his credit application.[4] (Doc. 23-19 at 1-2). Mrs. Staten testified she did not know about the decision from Regions. (Doc. 23-35 at 38). On August 31, 2015, Regions notified DRH it did not approve the loan to Mr. Staten “due to credit.” (Doc. 23-37 at 40).

         Because the Statens were unable to obtain financing as required by the purchase agreement, DRH sent them a letter with a termination and release agreement on October 1, 2015. (Doc. 23-22 at 1-3; Doc. 23-35 at 36; Doc. 23-37 at 4). The letter asked the Statens to sign and return the termination and release agreement to DRH within five business days. (Doc. 23-22 at 1). The agreement stated DRH would refund the earnest money deposited under the purchase agreement and required both Mr and Mrs. Staten's signatures. (Id. at 2). When the Statens did not sign the termination and release agreement, DRH sent additional copies of the termination and release agreement to them in early January 2016.[5] The Statens refused to sign the agreement. (Doc. 23-37 at 5).

         After both DHI Mortgage and Regions denied the Statens applications for credit to purchase the home, DRH renewed its attempts to sell the home. (Id.). DRH again reduced the price and eventually sold the home to a Caucasian individual who qualified for financing. (Id.).

         II. STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 56(c), summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party asking for summary judgment always bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings or filings which it believes demonstrate the absence of a genuine issue of material fact. Id. at 323. Once the moving party has met its burden, Rule 56(e) requires the non-moving party to go beyond the pleadings and by his own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing there is a genuine issue for trial. See Id. at 324.

         The substantive law identifies which facts are material and which are irrelevant. See Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at ...


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