J-S33010-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

MANUFACTURERS AND TRADERS TRUST                  IN THE SUPERIOR COURT OF
COMPANY,                                               PENNSYLVANIA

                            Appellant

                       v.

KELLY JUSTOFIN,

                            Appellee                 No. 2045 MDA 2016


              Appeal from the Judgment Entered January 10, 2017
                In the Court of Common Pleas of Luzerne County
                       Civil Division at No(s): 2015-00977


BEFORE: BENDER, P.J.E., OTT, J., and STRASSBURGER, J.*

MEMORANDUM BY BENDER, P.J.E.:                          FILED JUNE 21, 2017

        Appellant, Manufacturers and Traders Trust Company (“M&T Bank”),

appeals from the judgment entered on January 10, 2017, in the Court of

Common Pleas of Luzerne County, following a non-jury verdict in favor of

Appellee, Kelly Justofin.1 After careful review, we affirm.
____________________________________________


*
    Retired Senior Judge assigned to the Superior Court.
1
   M&T Bank purports to appeal from the November 21, 2016 order denying
its motion for reconsideration. However, “an appeal to this [C]ourt can only
lie from judgments entered subsequent to the trial court’s disposition of
post-verdict motions, not from the order denying post-trial motions.”
Fanning v. Davne, 795 A.2d 388, 392 (Pa. Super. 2002) (citing Johnston
the Florist, Inc. v. TEDCO Constr. Corp., 657 A.2d 511, 514 (Pa. Super.
1995)). Nevertheless, a final judgment entered during pendency of an
appeal is sufficient to perfect appellate jurisdiction.   Drum v. Shaull
Equipment and Supply, Co., 787 A.2d 1050 (Pa. Super. 2001).
Accordingly, by order dated January 4, 2017, we directed M&T Bank to
(Footnote Continued Next Page)
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      On or about October 17, 2016, the trial court issued the following

Findings of Fact and Conclusions of Law, which the court adopts as its

Pa.R.A.P. 1925(a) opinion for purposes of this appeal:

                                     Findings of Fact

      1. On April 24, 2006, Christopher Justofin applied for a loan with
         M&T Bank on behalf of Christopher D. Justofin, D.O., P.C.

      2. Christopher Justofin and Kelly Justofin [(“Appellee”)] were
         husband and wife at all times relevant to the loan transaction
         of Christopher D. Justofin.

      3. On April 24, 2006, Christopher Justofin had a face-to-face
         meeting with bank employee James Minniti.

      4. Prior to the April 24, 2006 meeting, Christopher Justofin
         supplied M&T Bank with a business tax return, joint income
         tax returns for [Appellee] and himself, and a Personal
         Financial Statement of Christopher Justofin and [Appellee].
         Minniti used these documents to complete the loan
         application.   M&T Bank never sought, nor received, any
         individual or separate financial information for Christopher
         Justofin and [Appellee].

      5. [Appellee] was not present when Christopher Justofin met
         with Minniti on April 24, 2006[,] regarding the proposed loan.

      6. Later, [Appellee] signed the second page of a document
         entitled “M&T Bank QuikCredit Application” (the “Credit
         Application”), but took no part in the preparation of, nor did
         she read, the document.

      7. In the Credit Application, [Appellee] was simply labeled
         “spouse” and, on the lines for personal net worth and
                       _______________________
(Footnote Continued)

praecipe for entry of judgment as required by Pa.R.A.P. 301. M&T Bank
complied, and a judgment was entered on January 10, 2017. In accordance
with Pa.R.A.P. 905(a), we treat the notice of appeal previously filed as
having been filed after the entry of judgment and on the date of entry.
Hence, no jurisdictional defects impede our review.



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        personal net income, no amounts were given other than
        reference to Christopher Justofin’s amounts listed above
        those lines.

   8.   Minitti [sic] testified that, from the Credit Application, he
        believed Christopher and [Appellee] held joint assets;
        however, he could not identify which assets he believed were
        joint or provide any evidence to support his assumption.

   9.   Further, Minitti [sic] indicated that he could not determine
        from the joint tax return provided by Christopher Justofin
        whether [Appellee] had any individual income.

  10.   According to Minitti [sic], he included [Appellee] with
        Christopher Justofin’s income information because she was
        his spouse.

  11.   [Appellee] is not a shareholder or officer of her husband’s
        professional corporation, she did not receive any of the
        proceeds of the loan, she did not apply for the loan to her
        husband or her husband’s corporation, and she prepared no
        personal financial statement.

  12.   On May 9, 2006, M&T Bank loaned Christopher Justofin the
        principal amount of $205,000.00 with interest, in accordance
        with the terms and conditions of the Note that he executed at
        that time.

  13.   Also[,] on May 9, 2006, [Appellee] executed a Guaranty and
        Co-Signor Notice regarding Christopher Justofin’s obligations
        under the Note.

  14.   At no time between April 24, 2006[,] and the loan closing on
        May 9, 2006[,] was [Appellee] ever advised that she was
        required to guaranty the loan of her husband.

  15.   At no time[,] in the spring of 2006[,] was [Appellee] ever
        advised by any employee of M&T Bank that she was required
        to sign a personal guaranty of any loan made to her husband,
        Christopher Justofin, or his corporation, until the closing on
        May 9, 2006.

  16.   On May 9, 2006, [Appellee] accompanied her husband to a
        closing of his loan at M&T Bank, not knowing that her
        attendance was required. At the closing, she was advised for
        the first time of the requirement that she sign a personal
        guaranty of the loan and that, without that signature, the

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        loan would not be closed. She complied with that request to
        accommodate her husband, and also signed a mortgage on
        the vacant building lot she and her husband owned, the only
        asset she owned jointly with her husband.

  17.   On May 9, 2011, the 2006 Note was amended and
        restructured in the amount of $103,889.93, the outstanding
        balance on the 2006 Note.

  18.   Also[,] on May 9, 2011, [Appellee] executed a guaranty of the
        Amended Note.

  19.   No payments have been made on the loan by either
        Christopher Justofin or [Appellee] since August 9, 2013.

  20.   In April[] 2006[,] and continuing through May[] 2011, all of
        Christopher Justofin’s financial assets, other than a jointly
        titled piece of real property, were titled solely in his name or
        in the name of his professional corporation.

  21.   In April[ of] 2006, [Appellee] had no assets other than a
        vacant building lot she owned with her husband, which was
        mortgaged in the May 9, 2006 transaction, and an individual
        personal checking account with an average balance of
        $100.00.

  22.   At no time in April[] 2006, May[] 2006, or May[] 2011[,] was
        [Appellee] ever advised that Christopher Justofin was
        required to have an additional party guaranty his loan or that
        he was not creditworthy.

  23.   Further, in April[] 2007, Christopher D. Justofin qualified for,
        and was granted, a $311,000.00 loan from M&T Bank.
        [Appellee] did not qualify for the credit and was not required
        to sign a Promissory Note imposing personal liability or to
        guaranty the loan.      In connection with that transaction,
        [Appellee] signed only a mortgage necessary to encumber the
        property.

  24.   The evidence reflects that Christopher Justofin was
        independently creditworthy at the time of the closing of the
        loan. Further, M&T Bank required [Appellee] to execute a
        guaranty of the loan solely due to her status as Christopher’s
        spouse and despite the fact that she had no independent
        wealth or income.



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                           Conclusions of Law

     1. The Equal Credit Opportunity Act (ECOA) of 1974, (15 U.S.C.
        § 1691 et seq. (2010)), as implemented by the Federal
        Reserve’s Regulation B (12 C.F.R. Part 202), applies to the
        instant matter where a spouse who provided a guaranty is
        asserting the ECOA as a defense to collection of the
        underlying debt.    See Silverman v. Eastrich Multiple
        Investor Fund, L.P., 51 F.3d 28 (3rd Cir. 1995); see also
        Southwestern Pennsylvania Regional Council, Inc. v.
        Gentile, 776 A.2d 276, 282 (Pa. Super. 2001).

     2. The ECOA states, “[i]t shall be unlawful for any creditor to
        discriminate against any applicant, with respect to any aspect
        of a credit transaction … on the basis of … marital status.” 15
        U.S.C. § 1691(a)(1)(2010).

     3. Generally, Regulation B prohibits a creditor from requiring
        “…the signature of an applicant’s spouse or other person,
        other than a joint applicant, on any credit instrument[,] if the
        applicant qualifies under the creditor’s standards of
        creditworthiness for the amount and terms of the credit
        requested.” 12 C.F.R. § 202.7(d)(1)(2016).

     4. The spouse-guarantor rule, as adopted by the United States
        Court of Appeals for the Third Circuit in Silverman, allows a
        spouse-guarantor to assert the ECOA as a defense against an
        action to collect an underlying debt. Silverman, 51 F.3d 28.

     5. “To prove a violation of the spouse-guarantor rule, a spouse-
        guarantor need only prove that her spouse applied for credit,
        and either the creditor required the signature of the
        applicant’s spouse if the applicant was individually
        creditworthy, … or the creditor required that the spouse be
        the additional party when it determined that the applicant
        was not independently creditworthy and would need the
        support of an additional party.” RL BB Acquisition, LLC v.
        Bridgemill Commons Dvelopment [sic] Group, LLC, 754
        F.3d 380, 389 (6th Cir. 2014) (internal citations omitted).

     6. Once a spouse-guarantor has met his/her burden of proving
        such a violation, the burden of proof then shifts to the
        creditor to demonstrate that an exception to the general
        prohibition applies. Id. (internal citations omitted); 12 C.F.R.
        § 202.7(d)(2)-(4).


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      7. The record in the instant matter reflects that [Appellee] was
         required to sign the guaranty to close the loan to her
         husband, despite the fact that Christopher Justofin was
         independently creditworthy. See RL BB, 754 F.3d at 389.

      8. Additionally, there is no evidence that [Appellee] was an
         additional party necessary to render Christopher Justofin
         creditworthy where she had no income and no accumulated
         wealth. See RL BB, 754 F.3d at 389.

      9. Furthermore, M&T Bank has failed to meet its burden of
         proving that any of the relevant exceptions to the ECOA apply
         in this case. See 12 C.F.R. § 202.7(d)(2)-(4).

    10. [Appellee’s] guaranty was not necessary to reach any
        property held jointly by Christopher and [Appellee] in the
        event of the death of, or default by, Christopher Justofin. 12
        C.F.R. § 202.7(d)(2). The only property held jointly by
        Christopher and [Appellee] was encumbered by a mortgage
        that [Appellee] executed in favor of M&T Bank.

    11. [Appellee’s] testimony is credible.

    12. [M&T Bank’s] action is dismissed, and judgment is entered for
        [Appellee].

    13. Having satisfied the burden of the proof for her ECOA
        Counterclaim, [Appellee] is entitled to an award of attorney
        fees.

Trial Court Opinion (“TCO”), 10/17/16, at 1-7.

      On October 19, 2016, M&T Bank filed a motion for reconsideration,

arguing that the award of attorneys’ fees was inappropriate and that non-

applicant guarantors are not entitled to the protections of the ECOA.        The

trial court issued an order on November 21, 2016, striking Conclusion of Law

No. 13 with regard to attorneys’ fees, and denying M&T Bank’s motion with

respect to whether a guarantor is entitled to protection under the ECOA.

M&T Bank filed a notice of appeal on December 16, 2016, followed by a

timely,   court-ordered   Pa.R.A.P.   1925(b)   concise   statement   of   errors

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J-S33010-17



complained of on appeal. M&T Bank now presents the following issue for our

review:    “Are guarantors who are not loan applicants entitled to the

protection of the Equal Credit Opportunity Act?” M&T Bank’s Brief at 5.

     In a non-jury case such as this, our standard of review is,

          limited to a determination of whether the findings of the
          trial court are supported by competent evidence and
          whether the trial court committed error in the application
          of law. Findings of the trial judge in a non-jury case must
          be given the same weight and effect on appeal as a verdict
          of a jury and will not be disturbed on appeal absent error
          of law or abuse of discretion. When this Court reviews the
          findings of the trial judge, the evidence is viewed in the
          light most favorable to the victorious party below and all
          evidence and proper inferences favorable to that party
          must be taken as true and all unfavorable inferences
          rejected.

     Hart v. Arnold, 884 A.2d 316, 330-31 (Pa. Super. 2005),
     appeal denied, 587 Pa. 695, 897 A.2d 458 (2006) (citations
     omitted). “The trial court’s findings are especially binding on
     appeal, where they are based upon the credibility of the
     witnesses, unless it appears that the court abused its discretion
     or that the court’s findings lack evidentiary support or that the
     court capriciously disbelieved the evidence.”       Id. (citations
     omitted). “Conclusions of law, however, are not binding on an
     appellate court, whose duty it is to determine whether there was
     a proper application of law to fact by the lower court.” Taliati v.
     Nationwide Insurance Co., 720 A.2d 1051, 1053 (Pa. Super.
     1998), appeal denied, 559 Pa. 706, 740 A.2d 234 (1999). “With
     regard to such matters, our scope of review is plenary as it is
     with any review of questions of law.” Id.

Christian v. Yanoviak, 945 A.2d 220, 224-25 (Pa. Super. 2008).

     M&T Bank argues that “the [ECOA] does not apply to non-applicant

loan guarantors because[,] by the plain terms of the statute, a guarantor is

not an ‘applicant’ for purposes of the statute.” M&T Bank’s Brief at 9. Its


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argument, however, relies solely on a decision by the 8th Circuit Court of

Appeals, Hawkins v. Community Bank of Raymore, 761 F.3d 937 (8th

Cir. 2014) (concluding that a guarantor is not protected from marital-status

discrimination by the ECOA). M&T Bank cites the Hawkins opinion at length

in support of its position and notes that Hawkins was affirmed by an equally

divided United States Supreme Court.2 See Appellants’ Brief at 10-13. The

Hawkins decision, however, has no precedential effect on this Court.

       It is well-established that this Court is not bound by decisions of

federal courts inferior to the United States Supreme Court. See Schiavone

v. Aveta, 41 A.3d 861, 870 n.4 (Pa. Super. 2012). Moreover, it has long

been held that “the legal significance of per curiam decisions is limited to

setting out the law of the case. Our Supreme Court has made it clear that

per curiam orders have no stare decisis effect.”           Commonwealth v.

Thompson, 985 A.2d 928, 937 (Pa. 2009) (citing Commonwealth v.

Tilghman, 673 A.2d 898, 904 (Pa. 1996) (holding that only if a per curiam

order expressly affirms on the basis of the lower court opinion does the

order have precedential force)).

       After careful review, we conclude that the trial court’s findings of facts

in the instant case are well-supported by the record, and that the trial court


____________________________________________


2
  The United States Supreme Court issued a per curiam opinion stating only:
“The judgment is affirmed by an equally divided Court.” See Hawkins v.
Community Bank of Raymore, 136 S.Ct. 1072 (2016).



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properly applied the relevant law in this matter. “The ECOA was enacted to

ensure fairness in creditors’ consideration of credit applications.”   Gentile,

776 A.2d at 281. Accordingly, the ECOA provides that “it shall be unlawful

for any creditor to discriminate against any applicant, with respect to any

aspect of a credit transaction[,] on the basis of … marital status[.]”      15

U.S.C. § 1691(a)(1).     Federal regulations implementing the ECOA further

provide:

      Signature of spouse or other person—

             (1)   Rule for qualified applicant. Except as provided in
                   this paragraph, a creditor shall not require the
                   signature of an applicant’s spouse or other person,
                   other than a joint applicant, on any credit instrument
                   if the applicant qualifies under the creditor’s
                   standards of creditworthiness for the amount and
                   terms of the credit requested. A creditor shall not
                   deem the submission of a joint financial statement or
                   other evidence of jointly held assets as an
                   application for joint credit.

12 C.F.R. § 202.7(d)(1).

      Contrary to M&T Bank’s assertions, this Court has expressly held that

“[g]uarantors are considered ‘applicants,’ and thus are protected by the

ECOA.”     Gentile, 776 A.2d at 282 (emphasis added).       “A guarantor may

assert an ECOA violation as a defense to a state-court confession of

judgment. If the defense is successful, the guarantor’s obligation is voided,

but the underlying debt and any other guarantees are not voided.”           Id.

(citations omitted).

      As we have previously explained:


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         When determining whether a creditor has violated the ECOA by
         requiring a spousal signature, it is critical to determine whether
         the husband and wife were joint applicants on the loan. …
         [L]enders are permitted to require spousal signatures where the
         spouses are joint applicants. 12 C.F.R. 202.7(d)(1); Midlantic
         Nat’l Bank v. Hansen, 48 F.3d 693, 699 (3rd Cir. 1995), cert.
         denied, 515 U.S. 1184, 116 S.Ct. 32, 132 L.Ed.2d 914 (1995).
         “A joint applicant is ‘someone who applies contemporaneously
         with the applicant for shared or joint credit’ and not someone
         ‘whose signature is required by the creditor as a condition for
         granting the credit requested.’” Midlantic, 48 F.3d at 699,
         citing, Official Staff Interpretation to 12 C.F.R. § 202.7(d)(1)….

Id. at 282. Moreover, “[W]here a married person seeks individual credit and

is individually creditworthy, a lender violates the ECOA if it nevertheless

enforces a blanket policy to require a spousal signature.” Id.

         Here, based on the trial court’s findings of fact, it is clear that Appellee

was not a joint applicant on the loan made by M&T Bank to Christopher

Justofin or his corporation.          Additionally, the trial court found that

Christopher Justofin was independently creditworthy, and that M&T Bank

required Appellee to execute a guaranty of the loan solely due to her status

as Christopher’s spouse.       Thus, we agree with the court’s conclusion that

Appellee is entitled to protection under the ECOA, and we discern no abuse

of discretion.

         Judgment affirmed.

         Judge Ott joins this memorandum.

         Judge Strassburger files a concurring memorandum in which Judge Ott

joins.




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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 6/21/2017




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