Omni Credit Alliance, Inc v. Kennedy Funding, Inc.; Joseph Wolfer; Jeffrey Wolfer

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 08-1078
__________
OMNI CREDIT ALLIANCE, INC.
v.
KENNEDY FUNDING, INC.; JOSEPH WOLFER; JEFFREY WOLFER,
Defendants/Third-Party Plantiffs,
v.
KENNETH REAVES,
Third-Party Defendant,
Kennedy Funding, Inc.,
Appellant.
On Appeal from the United States District Court
for the District of New Jersey
(D. C. No. 04-cv-04764)
District Judge: Hon. Peter G. Sheridan
Submitted under Third Circuit LAR
on July 16, 2009
Before: RENDELL, FUENTES and ROTH, Circuit Judges
(Opinion filed: March 22, 2010)

-- 1 of 3 --

2
O P I N I O N
ROTH, Circuit Judge:
Omni Credit Alliance, Inc., brought suit seeking the return of $260,000 it paid to
Kennedy Funding, Inc., in application and commitment fees for a loan that never closed.
After a bench trial, the District Court ordered rescission of the loan agreement, finding
that “both parties were engaging in subterfuge and chicanery” and had breached the
implied covenant of good faith and fair dealing. Kennedy has timely appealed.
The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have
jurisdiction pursuant to 28 U.S.C. §§ 1291. We review the District Court’s factual
findings for clear error and its evidentiary rulings for abuse of discretion. See United
States v. Igbonwa, 120 F.3d 437, 440 (3d Cir. 1997); Affiliated Mfrs., Inc. v. Aluminum
Co. of Am., 56 F.3d 521, 525–26 (3d Cir. 1995). We assume the parties’ familiarity with
the factual and procedural history, which we describe only as necessary to explain our
decision. We will affirm.
Kennedy argues, first, that the District Court erred by imposing a covenant of good
faith to its “pre-contract negotiations” with Omni. This argument does not help Kennedy
because the District Court’s decision is supported by its findings regarding Kennedy’s
post-commitment agreement behavior—to wit, its failure to negotiate a final deal in good
faith by (1) merely “deflecting Omni’s collateral proposals and rejecting them with little

-- 2 of 3 --

3
explanation” and (2) declining to “take any reasonable steps to close the loan.” Given the
highly deferential standard of review, we will not disturb these findings.
Second, Kennedy argues that the District Court’s factual findings and credibility
determinations lacked support in the record and that the District Court improperly shifted
the burden of proof. We disagree. The District Court found that the principals of both
parties lacked credibility and based its specific factual findings on these credibility
determinations.
Third, Kennedy argues that the District Court abused its discretion in excluding
documentary evidence concerning a concurrent and parallel loan commitment agreement
in which Omni was the lender. As Omni points out, however, the District Court
permitted cross-examination about the parallel loan commitment transaction, and
Kennedy is hard-pressed to show any prejudice associated with the exclusion, particularly
given the collateral nature of the document. At most, then, exclusion was harmless error.
Finally, Kennedy argues that the District Court erred in ordering rescission because
neither party had explicitly requested that remedy. Omni’s complaint, however, invoked
the Court’s equitable jurisdiction through its general request for “other relief.” Under
these circumstances, the District Court was within its discretion to impose rescission
where, as here, “both parties were engaging in subterfuge and chicanery” and each was
“trying to scam the other.”
Accordingly, we will affirm the judgment of the District Court.

-- 3 of 3 --