CitiMortgage, Inc. Plaintiff - Appellant
Equity Bank, N.A. Defendant-Appellee CitiMortgage, Inc. Plaintiff - Cross Appellee
Equity Bank, N.A. Defendant - Cross Appellant
Submitted: January 17, 2019
from United States District Court for the Eastern District of
Missouri - St. Louis
LOKEN, GRASZ, and STRAS, Circuit Judges.
appeal involves a dispute over twelve residential-mortgage
loans that CitiMortgage, Inc. purchased from Equity Bank,
N.A. After discovering problems with the loans, CitiMortgage
demanded that Equity repurchase them and then sued when
Equity refused. A magistrate judge,  acting by consent of the
parties, ruled that Equity's duty to repurchase was
limited to the six loans that had not gone through
foreclosure. We affirm.
the years, CitiMortgage purchased hundreds of
residential-mortgage loans from Equity. Rather than negotiate
a new deal each time, the parties entered into one
overarching contract (the "Agreement"). Generally
speaking, the Agreement placed the risk of loss on Equity by
requiring it to abide by a long list of representations and
warranties, granting CitiMortgage the "sole and
exclusive discretion" to identify defects in the loans,
and giving CitiMortgage considerable rights if it did. In
fact, the Agreement made clear that CitiMortgage had no
obligation to review the loans, either at the time of
purchase or at any point thereafter, and that its
"review of, or failure to review, all or any portion of
the Loan documentation [would] not affect" its rights.
twelve loans at issue here, CitiMortgage notified Equity of
the defects in writing. It informed Equity that it needed to
take action under the Agreement's
"cure-or-repurchase" provision, which obligated
correct or cure [the] defect within the time prescribed by
[CitiMortgage] to the full and complete satisfaction of
[CitiMortgage]. If, after receiving . . . notice from
[CitiMortgage], [Equity] [wa]s unable to correct or cure such
defect within the prescribed time, [Equity had to], at
[CitiMortgage's] sole discretion, either (i) repurchase
such defective Loan from [CitiMortgage] at the price required
by [CitiMortgage] ("Repurchase Price") or (ii)
agree to such other remedies (including but not limited to
additional indemnification and/or refund of a portion of the
Loan purchase price) as [CitiMortgage] . . . deem[ed]
time CitiMortgage demanded that Equity buy back six of the
loans, the mortgages securing them had already been through
Equity refused to act, CitiMortgage sued. Both sides
requested summary judgment, and the magistrate judge analyzed
the loans differently based on whether foreclosure had
occurred. For the six in which it had not, the judge ruled
that Equity breached the Agreement. For the other six,
however, the judge determined that Equity owed nothing to
CitiMortgage. Equity and CitiMortgage both appeal the
portions of the decision that they lost and raise issues of
contractual interpretation that we review de novo. See
Hudson Specialty Ins. Co. v. Brash Tygr, LLC, 769 F.3d
586, 590 (8th Cir. 2014).
Agreement contained a Missouri choice-of-law provision that
the parties acknowledge applies here. See BancorpSouth
Bank v. Hazelwood Logistics Ctr., LLC, 706 F.3d 888, 893
(8th Cir. 2013). Our task is to interpret the Agreement by
examining "the plain and ordinary meaning of the
language used" to determine the parties'
obligations, both for the loans that had gone through
foreclosure and those that had not. Whelan Sec. Co. v.
Kennebrew, 379 S.W.3d 835, 846 (Mo. banc 2012) (internal
quotation marks and citation omitted).
address the latter category first. Equity does not dispute
that all six loans in this group were defective and that it
refused to cure or repurchase them. Rather, it argues that
CitiMortgage's letters lacked the necessary detail to
trigger its duty to perform and that CitiMortgage waited too
long to exercise its rights. On both points, we disagree.
insists that it did not need to act because
CitiMortgage's letters never specified the repurchase
prices of any of the loans, which it characterizes as a
condition precedent to its own performance. It is true that
CitiMortgage's letters omitted the repurchase prices.
Even so, Missouri law "does not favor conditions
precedent and courts will not construe contract
provisions" to include them "unless required to do
so by plain, unambiguous language or by necessary
implication." Kan. City S. Ry. Co. v. St. Louis-S.F.
Ry. Co., 509 S.W.2d 457, 460 (Mo. 1974). The
cure-or-repurchase provision did not contain any
language suggesting that inclusion of the repurchase price
was necessary to trigger Equity's obligation to perform,
much less include typical "conditional language such as
'provided that' or 'on condition.'"
James E. Brady & Co. v. Eno, 992 F.2d 864, 869
(8th Cir. 1993) (citation omitted). If disclosure of the
repurchase price was not a condition precedent to
Equity's performance, then Equity had to hold up its end
of the bargain.
other line of argument is that CitiMortgage delayed too long
before acting, first by waiting before demanding that Equity
repurchase the loans and later by failing to sue in a timely
fashion. CitiMortgage took its time, to be sure, waiting more
than two years in some cases to demand action from Equity.
But nothing in the Agreement required it to act any sooner.
Agreement itself did not require CitiMortgage to exercise its
rights any more swiftly under the cure-or-repurchase
provision than it did. It is true that, in the face of
contractual silence, courts will sometimes presume that an
option or a right "must be exercised within a reasonable
time." Venture Stores, Inc. v. Pac. Beach Co.,
980 S.W.2d 176, 183 (Mo.Ct.App. 1998) (per curiam) (internal
quotation marks and citation omitted); see also Magee v.
Mercantile-Commerce Bank & Tr. Co., 124 S.W.2d 1121,
1124-25 (Mo. 1938); Weis v. Wanstrath, 149 S.W.2d
442, 445-46 (Mo.Ct.App. 1941). But we must also be
"leery of imposing time limits" when there is
evidence that the "parties to the contract
bargained" against them. Venture Stores, 980
S.W.2d at 183; cf. Johnson v. Mo.-Kan.-Tex. R. ...