U.S. Supreme Court tie leaves verdict intact in local loan dispute

A complicated legal case surrounding bank loans and a Missouri housing development has prompted the first tie vote in the U.S. Supreme Court since the death of Justice Antonin Scalia — and a legal defeat for two area women.

In a one sentence ruling Tuesday, the eight justices said they were evenly split on a case that started in Raymore. The split leaves intact a lower court decision against the spouses of two Missouri developers.

In the mid-2000s, Gary Hawkins and Chris Patterson borrowed more than $2 million to build a housing subdivision. Their wives, Valerie Hawkins and Janice Patterson, guaranteed the loans at the request of the lender, the Community Bank of Raymore.

The loans defaulted in 2012 and the bank sought repayment from the women. They sued, saying the guarantees were unenforceable and discriminatory.

A federal judge ruled in favor of the bank. The 8th U.S. Circuit Court of Appeals upheld that ruling, finding that federal rules prohibiting loan discrimination only apply to people who actually ask for loans, not for people who guarantee them.

The Obama administration sided with the women, arguing lenders can’t require guarantees from spouses solely because of marital status.

The Supreme Court heard the case last October, when Scalia was still alive. Lawyers from Overland Park and Lawrence argued before the court.

Lawyers and bankers hoped a decision in the case would clarify loan discrimination rules for the nation. Since the Supreme Court tied, however, the ruling only applies in the 8th Circuit — Missouri and six other states. At least one other circuit has reached a different conclusion.

That makes it likely the Supreme Court will hear a similar appeal in the future, if and when the Senate confirms a new justice.

This story was originally published March 22, 2016 at 2:19 PM with the headline "U.S. Supreme Court tie leaves verdict intact in local loan dispute."