Monday, June 21, 2010

Eleventh Circuit Affirms Summary Judgment Order In Favor Of Lender

In Azar v. National City Bank (09-16052), the Eleventh Circuit affirmed the district court's grant of summary judgment in favor of the lender.  The court stated:
Azar first argues that the district court erred in dismissing his claim of fraudulent inducement in count two. According to Azar, the district court ignored the misrepresentation of fact that he alleged in his complaint – namely, that Azar “qualified” for the loans and met underwriting standards for loan approval. Azar contends this misrepresentation of fact induced him to take the loans...
Here, the district court correctly found that Azar failed to plead a plausible claim of fraudulent inducement. Azar contends that, by approving his loans, National City misrepresented that he “qualified” for the loans and met underwriting standards. The mere fact that his loans were approved, however, does not constitute a false statement of fact. Otherwise, every loan approval could potentially result in a claim for fraudulent inducement. Likewise, Azar’s personal belief that the loan approvals meant the bank believed he could repay the loan does not constitute a misrepresentation of fact that was made by National City. Even if National City employees had told Azar that they believed he could repay the loan, such a statement is merely an opinion, which cannot support a cause of action for fraud.
The only false statement identified in count two of his complaint was National City’s falsification of Azar’s income on his loan applications. We agree with the district court that this misrepresentation, even if true, reflects an intent to induce the lender to grant the loan, not to entice Azar to take the loan. The only evidence of inducement in Azar’s complaint is his bare allegation that National City would financially benefit from loaning the money to him. Not only is this assertion devoid of any factual support, but it defies common sense to believe that a bank would profit from loaning money to someone it knows cannot repay it.
The remainder of the opinion, which can be viewed HERE, focused on waiver of arguments and attorneys fees.

*Disclaimer: GrayRobinson was involved in this appeal.


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