M & I Marshall & Ilsley Bank v Nunnery (WI)

Summary: A failure to pay the same amount and defaulting at the same time is not enough by itself to establish a prima facie case that two parties are similarly situated.

M & I Marshall & Ilsley Bank v Nunnery, 2011 AP 1987 (Wis. Ct. App., 2012).

Facts: Willie and Judy Nunnery (Nunnerys) borrowed $243,000 from Marshall & Ilsley Bank (M&I) to purchase their home. Per the terms of their mortgage, the Nunnerys were required to pay their property taxes. In the event that the Nunnerys failed to pay their property taxes, M&I was allowed to pay the taxes, with the payment becoming part of the Nunnerys debt. In December of 2008, M&I informed the Nunnerys that their failure to pay their property tax for 2005, 2006, and 2007 constituted a default on their mortgage.

In April of 2009, David Roberts (Roberts) of M&I decided to pay $56,427.03 to the Dane County treasurer for real estate taxes and special assessments on the Nunnerys’ property. Subsequently, an unidentified M&I employee decided to set the amortization period for the $56,427.03 for 12 months, raising the Nunnerys’ monthly payments from 1,605.75 to $7,555.95. The Nunnerys failed to keep up with the new payment schedule, and M&I filed a foreclosure action.

The Nunnerys, who are both black, responded and alleged racial discrimination. The Nunnerys based this claim on information they found which revealed that in the same month that M&I paid the Nunnerys taxes, it also paid property taxes for a white borrower in the amount of $52,000, but offered a four year amortization schedule to the white borrower as opposed to the one year schedule offered to the Nunnerys. The Nunnerys’ counterclaim was based on federal law. 42 U.S.C. §§ 1981, 1982. M&I made a summary judgment motion based upon the assertion that Roberts, who made the decision to pay the taxes and require payment, was unaware of the Nunnerys’ race. The Nunnerys replied that Roberts did not set the 12 month amortization period, and therefore the bank did not establish a prima facie entitlement to summary judgment. The circuit court granted summary judgment in favor of M&I, holding that M&I had established a prima facie case, and therefore the burden of proof switched back to the Nunnerys. The court further held that whether Roberts set the amortization period was not a material factual dispute, and that the Nunnerys were unable to produce enough evidence to overcome the summary judgment motion. The Nunnerys appealed.

Holding: Affirmed. The two methods of proving discrimination are accomplished by offering direct proof of the discriminatory intent or indirect proof. Direct proof does not impose an initial burden. Indirect proof requires the plaintiff to initially establish a prima facie case that the reasons offered by the defendant were a pretext for discrimination. The court assumed, without deciding, that the Nunnerys accurately summarized federal law on the direct and indirect method. The Nunnerys asserted that direct evidence is tantamount to “an outright admission that an action was taken for discriminatory reasons” or circumstantial evidence that creates a convincing mosaic of evidence of substantially similarly situated people being treated differently which points directly towards a discriminatory reason.

The court of appeals found that the relationship between the Nunnerys and the white borrower was scant and did not show a convincing mosaic. The only facts showing similarity between the Nunnerys and the white borrower were that they both defaulted around the same time and both failed to pay approximately the same amount of taxes. The Nunnerys failed to show the criteria for determining the amortization period, and failed to show any similarity in regard to current income, other assets, other liabilities, and their loan payment history that might indicate that they were similarly situated with the white borrower. For the same reason that the court decided there was no convincing mosaic, it decided that the Nunnerys did not establish a prima facie showing of discrimination. Therefore, even if the person who set the amortization schedule knew the Nunnerys’ race, the Nunnerys failed to establish that they were similarly situated with the white borrower. For this reason, summary judgment for M&I was appropriate, and the holding of the circuit court was affirmed.

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By: ATG Underwriting Department | Posted on: Thu, 10/11/2012 - 9:42am