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Defame Game

Mortgage Broker David Carey Fles Suit Against Former Customer David Esteppe

By Edward Ericson Jr. | Posted 8/8/2007

A prominent Canton-area mortgage broker has sued a property investor for defaming him in a Feb. 21 City Paper article. David Carey filed a complaint July 12 in Baltimore City Circuit Court, claiming defamation, “false light,” “injurious falsehood,” and illegal wiretapping by David Esteppe, a former friend and loan customer who told City Paper that Carey and another man, Matt Reimer, ruined him financially through unfair lending and bad contracting. Carey’s suit demands $1.5 million in damages. Esteppe, a mortgage broker who lost two houses to foreclosure this year after borrowing heavily against them from other lenders and finding himself unable to sell them for what he owed, calls the lawsuit “bogus and frivolous” and declined further comment, saying he needed to consult a lawyer. The lawsuit makes numerous references to City Paper and this reporter, who profiled Carey in 6,600-word article (“Where Credit Is Due,” Feature, Feb. 21), but does not name them as defendants. Frank L. Kollman, a partner with the Baltimore firm Kollman and Saucier, suggests the newspaper could be sued later. “We’re not interested in talking to the City Paper at this time,” Kollman said in a phone message returning a reporter’s call for comment about the lawsuit. “As you know, we didn’t enjoin you or the City Paper as a defendant because we’re assuming, until we learn to the contrary, that you were accurately reporting what was said to you. And since we haven’t been able to determine that, we decided that it would be inappropriate, one, for us to talk to a potential defendant and, two, that it would be inappropriate, at least at this point, to further the story since we don’t want to be a party to any further publication of what we consider to be defamation.” Carey co-owns and operates multiple businesses, including Equitable Trust Mortgage Corp. and 1st Equitable Funding LLC, both lenders; and Canton Kitchens, a cabinet retailer. He also acts as a general contractor and design professional, and his wife and a business partner are real-estate agents. Reimer operates Bayside Properties, a home builder and rehabber that has done hundreds of houses in Southeast Baltimore, including many financed through Carey’s companies. An investigator with the city inspector general’s office asked the Maryland Home Improvement Commission to “review” Bayside’s home improvement license this year, citing “a pattern of flagrant disregard for the regulations governing safe construction within the City of Baltimore" (“Not Up to Code,” Mobtown Beat, Feb. 21). In June an inspector with the U.S. Department of Housing and Urban Development’s Office of Inspector General subpoenaed documents from Equitable Trust as part of an investigation into that company’s lending practices (“HUD-aches,” Mobtown Beat, July 4). In recent months Carey has foreclosed on at least three properties, according to court and auction company records. Reimer, meanwhile, has sold his storefront, formerly located at 3235 Eastern Ave., and moved to other quarters, while Carey foreclosed on his former construction manager, Greg Morris (“On the Block,” Quick and Dirty, April 11). Carey’s former construction manager, Mark T. Hendricks of 3-d Concepts LLC, sent City Paper an April 9 e-mail stating that he had severed all ties with Carey. In the lawsuit, Carey claims Esteppe falsely told City Paper that Carey “engaged in illegal conduct in connection with his mortgage broker and business activities, committed fraud and otherwise engaged in unethical, improper and illegal business practices.” It says Esteppe intended to defame Carey with these false statements, and that he repeated them “in the last five months at various times throughout the Canton area, including but not limited to retail establishments frequented by Carey and his customers.” The suit claims that Esteppe’s statements, including those published by City Paper, harmed Carey’s reputation and caused him to suffer “mental anguish and personal humiliation.” The suit claims that the statements caused Carey to lose “prospective income which he would have earned.” The suit also claims that Esteppe “stated to various individuals that he surreptitiously tape-recorded conversations he had with” Carey, in violation of the “Maryland Wiretapping and Electronic Surveillance Act as improper interception of oral communication.” Maryland law requires that both parties consent to be taped, and violation of the act is a felony punishable by up to five years in prison. Esteppe says he has no response to the wiretapping allegation.

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