Implied Terms Where Public Policy So Requires

[David A. Szwak]

Gonzalez v. Old Kent Mortg. Co.
Not Reported in F.Supp.2d, 2000 WL 1469313
E.D.Pa.,2000.
September 21, 2000

II. Count Seven-Breach of Contract

*4 In Count 7 of the Amended Complaint, the plaintiff alleges that, pursuant to the FTC Holder Rule, Old Kent is liable for the claims that the plaintiff has against Quality Builders. Old Kent makes three arguments against this proposition. First, it argues that there is simply no contract in existence between itself and the plaintiff under which the plaintiff can hold Old Kent liable for any damages caused by Quality's conduct. Second, Old Kent claims that the FTC Holder Rule would not apply to this set of facts, even if a contract based on the Holder Rule did exist. Finally, Old Kent argues that the Holder Rule does not authorize the type of relief sought by the plaintiff. On all three counts, Old Kent is incorrect.

First and foremost, there is a contract here between Old Kent and the plaintiff. That contract consists of the loan agreement and promissory note themselves. Plaintiff alleges (and for Rule 12(b)(6) purposes we must presume this allegation to be correct) that “Old Kent failed to include in its promissory note the Notice of Preservation of Claims and Defenses required by the Federal Trade Commission regulation, 16 C.F.R. § 433.2 (the “FTC Holder Ruleâ€