Crawford v. Franklin Credit Management Corp.
2014 U.S. App. LEXIS 13179
| 2d Cir. | 2014Background
- Crawford borrowed against her Paradise Ave home; Tribeca loaned via Tribeca Mortgage, with Franklin as parent/servicer; Koller allegedly pitched a bridge loan and forged signatures for a $504,000 mortgage; closing occurred at JFK with Crawford signing multiple pages; laters payments funded payoff of existing debts and fees were charged; Crawford filed 2006 Chapter 13 bankruptcy omitting present claims; bankruptcy petition dismissed in 2007; Crawford later sued in 2008 alleging RICO, ECOA, TILA, GBL 349, and fraud; district court granted Franklin/Tribeca summary judgment on standing/collateral estoppel, leaving Lenders First Choice unserved; on appeal the district court’s standing rulings are reviewed along with remaining claims; the court vacates part of the judgment to address TILA and common-law fraud claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing due to bankruptcy dismissal revesting | Crawford's 2006 claims revested upon dismissal, giving standing | Unscheduled assets revest only by operation of law; equity concerns bar standing | Crawford has standing |
| Whether there was a valid pattern and conspiracy under RICO | Evidence shows ongoing fraudulent mortgage scheme and conspiratorial acts | Insufficient pattern/continuity and no agreement to commit RICO offenses | Summary judgment for RICO affirmed; no RICO pattern or conspiracy proven |
| TILA and common-law fraud claims survive | Disclosures were deficient; reliance established; signature bridge loan scheme alleged | Lenders argue lack of proper disclosures and no reliance/calculated damages | TILA and fraud claims survive to trial; issues of material fact remain |
| ECOA, NY GBL 349, and negligent misrepresentation dismissed | Discrimination, deceptive practices, and misrepresentation occurred | Insufficient evidence of discrimination, consumer-oriented practice, or privity-based duty | Affirmed dismissal of ECOA, GBL 349, and negligent misrepresentation claims |
Key Cases Cited
- Chartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116 (2d Cir. 2008) (undisclosed assets and bankruptcy context discussed)
- Kunzica v. St. Jean Financial, Inc., 233 B.R. 46 (S.D.N.Y. 1999) (bankruptcy revesting on dismissal principles (bankruptcy context))
- Cofacrèdit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229 (2d Cir. 1999) (continuity and pattern requirements for mail/wire fraud)
- New Hampshire v. Maine, 532 U.S. 742 (2001) (judicial estoppel framework and inconsistency analysis)
- GICC Capital Corp. v. Technology Fin. Group, Inc., 67 F.3d 463 (2d Cir. 1995) (continuity assessment for pattern of racketeering)