On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. No. 94-cv-2881).
Before: Scirica, Roth, and Sarokin, Circuit Judges.
Plaintiff Janice Silverman appeals the dismissal of her complaint claiming violations of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691 et. seq., and the denial of her motion for declaratory and injunctive relief. Plaintiff alleges that she was required to guaranty a loan for the benefit of her spouse in violation of the ECOA. Assuming, without deciding, that plaintiff's right to initiate an action for damages based upon such alleged violation is barred by the statute of limitations, no such bar exists to asserting such violation as a defense to efforts to collect on said guaranty. Plaintiff did not forfeit her right to raise such defense merely by her failure to institute an independent action to assert it. Accordingly, we reverse the district court's dismissal of plaintiff's complaint and denial of declaratory and injunctive relief and remand for further proceedings for the reasons hereinafter set forth.
I. Facts and Procedural History
In February of 1986, Hunt's Pier Associates ("Hunt's Pier"), a New Jersey general partnership, borrowed $10,000,000 (the "Loan") from Atlantic Financial Federal ("Atlantic"). Atlantic required all Hunt's Pier partners to guaranty the repayment individually, jointly, and severally. Plaintiff, one of the partners' wives, was required to sign the Guaranty Agreement ("Guaranty").
In January of 1990, Atlantic was declared insolvent, and the Resolution Trust Corporation ("RTC") took control of the Loan. Hunt's Pier defaulted and ultimately filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code on October 23, 1991. The RTC approved and supported the Third Amended Plan of Reorganization ("Reorganization Plan" or "Plan"), and in February of 1993, the bankruptcy court confirmed it. The Plan extended the payment period upon the Loan, expressly leaving the Guaranty intact.
Eastrich Multiple Investor Fund, L.P. ("Eastrich") subsequently acquired the RTC's right, title, and interest in the Loan. On April 21, 1994, Eastrich confessed judgment against the Loan's guarantors, including plaintiff, in state court.
On May 9, 1994, plaintiff filed suit in federal court, alleging Atlantic and Eastrich violated her rights under the ECOA: (1) Atlantic, by requiring her signature on the Guaranty although she allegedly had no other connection to the transaction and (2) Eastrich, by instituting state collection proceedings against her. In Count II of her complaint, plaintiff alleged the Reorganization Plan altered the Guaranty to her detriment and without securing her approval, which should have resulted in discharge of her guaranty.
Silverman moved for injunctive relief in federal court,*fn1 requesting Eastrich be enjoined from executing on the $10,000,000 state court confession of judgment against her. In addition to her claims against Atlantic and Eastrich, she also argued that the RTC violated the ECOA and its implementing regulations by approving the Reorganization Plan and failing to reevaluate the legality of her obligation under the Guaranty. Eastrich filed a motion to dismiss plaintiff's complaint for failure to state a claim. On July 13, 1994, the district court denied injunctive and declaratory relief and granted Eastrich's motion to dismiss. Plaintiff filed a timely notice of appeal.
II. Jurisdiction and Standard of Review
The district court exercised jurisdiction under 28 U.S.C. § 1331. This court has jurisdiction over the district court's final judgment pursuant to 28 U.S.C. § 1291.
We have plenary review of the district court's dismissal of the complaint. Moore v. Tartler, 986 F.2d 682, 685 (3d Cir. 1993). We review the denial of injunctive and declaratory relief for abuse of discretion, and in making this determination we will exercise plenary review over the district court's Conclusions of law. Natural Resources Defense Council, Inc. v. Texaco Refining & Marketing, Inc., 906 F.2d 934, 937 ...