Family Home and Finance Center, Inc. v. Federal Home Loan Mortgage Corporation
Filed May 7, 2008
Cite as 06-56521

Decision on Request to Defer Ruling on Summary Judgment Affirmed

Family Home and Finance Center, Inc. is doing business as Park Place Funding, along with Daisy J. Phillips and Mark Gallagher (collectively referred as Park Place).

Park Place operates a mortgage broker business that initiates loan applications from prospective borrowers and presents said applications to lenders for processing and potential funding.

National City Mortgage Company (NCMC) is the one that processed and funded many Park Place’s loan applications and sold said loans to Freddie Mac (Mac). In turn, Freddie Mac would sell Participation Certificates or interests in its mortgage pools.

When a capital market investor notified Mac of its reduced anticipated rate of interest, Mac contacted NCMC to look into the pools with rapid prepayment rates. Mac and NCMC investigated Park Place’s prepayment activity.

After investigation, NCMC terminated its mortgage broker contract with Parks Place. On the other hand, Mac included Park Place in its Exclusionary List.  The List is published only to those lenders who sell or service loans to Mac. Consequently, Park Place was prohibited to participate in business transactions with him. It was also denied access to the principal market for the loans it was writing.

Park Place filed an amended complaint in the district court seeking damages for intentional interference with contract, unfair competition, and defamation. It made the following allegations:

• Mac intentionally interfered with its contract to broker mortgage loans to NCMC.


• By placing it on the Exclusionary List, Mac engaged in unfair competition and defamation.

The district court granted summary judgment in favor of Mac on this claim because Park Place had no admissible evidence that Mac influenced or caused NCMC to terminate its contract with Park Place or intended that result.

The court denied Park Place’s request to defer ruling on the summary judgment by holding as follows:

• Park Place failed to articulate the facts it hoped to elicit and did not show how such facts would defeat summary judgment


• Park Place failed to file timely motions to compel discovery or extend the discovery cutoff date

Hence, Park Place appealed.

U.S. Ninth Circuit Court of Appeals affirmed the judgment. It ruled that the district court did not err in granting summary judgment based on the following grounds:

• Park Place could not produce any evidence that Mac influenced or caused NCMC to terminate contract with it, intentionally or otherwise;


• With respect to unfair competition, there was no dispute that Park Place’s repetitive refinancing strategy caused Mac to lose money on loans;


• With respect to defamation, Park Place could not show malice on part of Mac under the "common interest" privilege;


• Denial of request to defer ruling on summary judgment under Federal Rule of Civil Procedure 56(f) was correctly held. Park Place failed to show how evidence it sought to determine was "essential" to oppose summary judgment and failed to file timely motions to compel and extend discovery.