Free Order - District Court of Connecticut - Connecticut

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_ j. i I Case 3:03-cv-01016-WWE Document 120 Filed O2/11/2005 Page, (/2jO jb {gf.-{ 1
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TJ E December 15, 2004 ,1.,,,,,,},,,,,},-,,,,_,,,,2
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rj Hon. Donna F. Martinez is I Q3 " Fl
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4; ; Re: Miller v. Merrill Lynch Credit Corp. Hm ' l
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§ E 3.03-CV-1016 (RNC)(])FM)
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O Dear Judge Martinez: y
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2 9 This firm represents plaintiff, Julie Miller, in this action. I write pursuant to t e Court’s
ji Superseding Scheduling Order dated November 16, 2004, in order to request a prefiling onference
—g jj for plaintif:l”s summary judgment motion.
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.2 3 \ I have conferred with Thomas Friedman, counsel for MLCC, regarding M . Miller’s
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S 3 _@\proposed motion, in a good faith effort to clarify the issues and reduce the area of contro ersy. Our
U U; \ discussions were unsuccessful. Among other things, I suggested that Ms. Miller would e willing
@7 N to forego seeking summary judgment if MLCC were willing to do the same, but Mr. Friedman
U § declined.
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it . » We intend to seek summary judgment on two primary aspects of this case.
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_ First, we will move for summary judgment on Ms. Miller’s conversion claim, ari ing out of
ri E ._ LCC’s freezin and sale of almost $5 million in laintiff s securities. As the led e rreement
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§ 2 §der which MLCC purported to act was executed by Ms. Miller’s then—accountant, ML C’s rights
iw ___m gn on the validity and scope ofthe power of attorney under which that accountant purpo ed to act.
W S _ CC has the burden of establishin the existence, and sco e of the accountant’s a nc . The
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—¤" J5 Mgidence demonstrates that: the power of attorney was substantially modified by a broke working
ci { ay 1-. LC©"s affiliate, Merrill L nch, Pierce, Fenner & Smith, after it had been s' ned and
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qi .= q., pntrcziggd, tlrejreby invalidating rt; and, even if it were valid, all of the versions of th power of
ij 3 ll 2 _drQr1ey(i__g., agsi by Ms. Miller and as changed by the broker) make clear that the ac ountant’ s
fj E_l@rity£tJid ngjtfirngllude pledging Ms. Miller’s securities.
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E 4% g Q S§§OHdf,`WC·;W1llmOVG for summary judgment on several of MS.M1ll€T,S defensest MLCC s
foreclosriffe counterclaim. One such defense is that the accountant had no authority to e ecute the
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· r A `·~` “ Case 3:03-cv-01016-WWE Document 120 Filed O2/11/2005 Page % of 2 [
B ‘ Hon Donna . Martinez
H Bscos st Honcm, LLP Dwrmb I5, 2004 l
Page 2 i
mortgage on which MLCC’s counterclaim is based, due to the invalidity of the power l` attorney,
as discussed above.
Two additional defenses raise claims of unconscionability and unclean hands. riefly, the
evidence demonstrates that MLCC approved a $7,500,000 loan to Ms. Miller despite kn wing (and
not disclosing to Ms. Miller) that: the house on which it was taking a mortgage was orth only
$3,800,000; and Ms. Miller did not have sufficient income to make the required monthl payments a
on that loan. Indeed, MLCC’ s own underwriting documents demonstrate that the loan-to- alue ratio
for the loan was almost 200% (where 75% or so is the norm), and the obligations-to-in ome ratio
was greater than 100% (where a ratio below 40% is required by virtually every reputable ank). The
transaction was also procedurally unconscionable due to the events surrounding the cl sing, and
MLCC’s decision not to communicate any information about the loan to Ms. Mil er. Under
guidelines jointly issued by various federal agencies (including the FDIC and the Federa Reserve),
MLCC’s loan was predatory; and, under clear Connecticut precedent, the trans tion was
unconscionable.
Re y submitted, `
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Pairick w. Be q
PWB:mtf
ce: Thomas P. Friedman, Esq. (by telecopier)