Bainbridge v. U.S. Bank, N.A.

CHRISTOPHER BAINBRIDGE & KELLY BAINBRIDGE,Individually and as His Wife, Plaintiffs v. U.S. BANK, N.A. as Trustee for the C-BASS Mortgage Loan Trust Asset-BackedCertificates, Series 2007-CB6, et al., Defendants

CIVIL ACTION NO. 3:16-411

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA

March 12, 2021

(JUDGE MANNION)

MEMORANDUM

Pending before the court is a motion for summary judgment filed by defendants U.S. Bank, N.A., as Trustee for the C-BASS Mortgage Loan Trust Asset-Backed Certificates, Series 2007-CB6 ("U.S. Bank") and Ocwen Loan Servicing, LLC ("Ocwen") (Doc. 95), as well as a motion for partial summary judgment by the plaintiffs (Doc. 98). Based upon the court's review of the motions and related materials, the defendants' motion will be GRANTED and the plaintiffs' motion will be DENIED.

I. LEGAL STANDARD

Summary judgment is appropriate "if the pleadings, the discovery [including, depositions, answers to interrogatories, and admissions on file] and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if a reasonable jury could find for the non-moving party, and is material if it will affect the outcome of the trial under governing substantive law. Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248 (1986); Aetna Cas. & Sur. Co. v. Ericksen, 903 F. Supp. 836, 838 (M.D. Pa. 1995). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249; see also Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (a court may not weigh the evidence or make credibility determinations). Rather, the court must consider all evidence and inferences drawn therefrom in the light most favorable to the non-moving party. Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).

To prevail on summary judgment, the moving party must affirmatively identify those portions of the record which demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323-24. The moving party can discharge the burden by showing that "on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party." In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003); see also Celotex, 477 U.S. at 325. If the moving party meets this initial burden, the non-moving party "must do more than simply show that there is some metaphysical doubt as to material facts," but must show sufficient evidence to support a jury verdict in its favor. Boyle v. County of Allegheny,139 F.3d 386, 393 (3d Cir. 1998) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). However, if the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to [the non-movant's] case, and on which [the non-movant] will bear the burden of proof at trial," Rule 56 mandates the entry of summary judgment because such a failure "necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 322-23; Jakimas v. Hoffman-LaRoche, Inc., 485 F.3d 770, 777 (3d Cir. 2007).

The summary judgment standard does not change when the parties have filed cross-motions for summary judgment. Applemans v. City ofPhila.,826 F.2d 214, 216 (3d Cir. 1987). When confronted with cross-motions for summary judgment, as in this case, "the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the summary judgment standard." Marciniak v. Prudential Financial Ins. Co. of America, 2006 WL 1697010, at *3 (3d Cir. June 21, 2006) (citations omitted) (not precedential). If review of cross-motions reveals no genuine issue of material fact, then judgment may be entered in favor of the party deserving of judgment in light of the law and undisputed facts. Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998) (citation omitted). See Nationwide Mut. Ins. Co. v. Roth, 2006 WL 3069721, at *3 (M.D. Pa. Oct. 26, 2006) aff'd, 252 Fed. App'x. 505 (3d Cir. 2007).

II. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

In support of their motion for summary judgment, the defendants have provided a statement of material facts, the following of which are not in dispute. After his grandmother died, the plaintiff, Christopher Bainbridge, inherited a 16% share in his grandparents' former vacation and fishing property located at 25 5^th Street, Hawley, Pennsylvania. Mr. Bainbridge bought his cousins' share of the property, so that he would own the entireproperty himself. At the time, the property was valued at $60,000. Although there was a structure on the property when he inherited it, Mr. Bainbridge described the structure as "a shack."

In 2005, Mr. Bainbridge built a new house on the property, financed with his own savings, spending approximately $145,000 or $150,000 to build the new structure. Subsequently, on March 28, 2007, Mr. Bainbridge and his wife, Kelly Bainbridge, signed a mortgage with Imperial Lending, LLC, in the amount of $120,000 for the property, which Mr. Bainbridge testified he took to pay off debt and rebuild his personal finances that were depleted by the construction of the new home on the property. The mortgagee listed on the mortgage was Mortgage Electronic Registration Systems, Inc. ("MERS"). On the same day, the Bainbridges also signed an adjustable rate note promising that they would repay the $120,000 with interest over a 30-year term. Paragraph 7(B) of the note provides "If I do not pay the full amount of each monthly payment on the date it is due, I shall be in default." On August 10, 2010, MERS assigned the mortgage to U.S. Bank.

Although Imperial Lending had originated the loan, records from Litton Loan Servicing demonstrate that it was the first loan servicer on the mortgage. Litton sent the Bainbridges an introductory letter on May 2, 2007, and the Bainbridges began paying shortly thereafter. As of July 31, 2007, theBainbridges were current on their payments on the mortgage. In fact, there is no dispute that the loan was current and not in default when Litton first began servicing the mortgage in 2007.

In April 2010, however, the Bainbridges stopped making their monthly payments to Litton on the mortgage. Mr. Bainbridge testified that, although he and his wife could cover their mortgage payments, upon advice of counsel, they withheld payments because Mr. Bainbridge had a dispute with Litton regarding the proper amount of escrow on the mortgage. The Bainbridges held their mortgage payments for eight or nine months before they filed for Chapter 13 bankruptcy in November 2010.

On November 17, 2010, Litton filed a proof of claim on behalf of U.S. Bank. The proof of claim listed a total arrearage in the amount of $14,607.81, primarily owing from the Bainbridges' having withheld eight months of $1,602.25 payments. The proof of claim also listed the current monthly payment on the mortgage as $1,407.08. The Bainbridges' original proposed bankruptcy plan conflicted with the proof of claim stating that they only owed $12,600 in arrearages and a $1,160.00 monthly payment going forward. On December 7, 2010, U.S. Bank objected to the Bainbridges' original proposed plan, noting that the amounts relating to the mortgage on that document were incorrect.

On April 15, 2011, the Bainbridges submitted a first amended plan, which lists the amounts owed to U.S. Bank on the mortgage consistent with the proof of claim. On June 23, 2011, Judge Robert N. Opel, II, confirmed the Bainbridges' first amended plan. Section 2(B) of the confirmed amended plan states that the Bainbridges owed $1,407.08 directly to Litton each month after they filed for bankruptcy. Section 2(C) of the confirmed amended plan states that the Bainbridges missed a total of $14,607.81 in payments to Litton prior to filing for bankruptcy.

In the first two months after the Bainbridges filed for bankruptcy, they did not make their full monthly payment of $1,407.08 that they owed to Litton. Mr. Bainbridge testified that a payment summary was prepared by one of his attorneys, although he was unsure which attorney. Mrs. Bainbridge testified that the summary was created by one of their attorneys, Douglas Lally, who is not counsel of record in this action.¹ Mrs. Bainbridge agreed that by December 2010, she would have known that the monthly mortgage payment was actually $1,407.08 a month. Despite this, the Lally Payment Summary reflects, consistent with other documentation of record, that the Bainbridges made short payments of $1,400 in December 2010 and $1,160 in January2011. When asked why she made short payments in those months, Mrs. Bainbridge testified that her husband told her to do it. Under Paragraph 7(B) of the Note, the Bainbridges' failure to pay the December 2010 and January 2011 payments in full and on time constituted a default.²

Although the Lally Payment Summary was accurate with respect to the shorted payments in December 2010 and January 2011, it included certain inaccuracies. For example, it showed a payment being made on November 28, 2011 in the amount of $1,407.08. However, as the Lally Payment Summary itself states, there were no supporting records available to demonstrate that the November 28, 2011, payment had been issued and cashed by the mortgagee or its loan servicer. Moreover, another payment summary prepared by the Bainbridges' attorney, Robert P. Cocco, does not include the November 28, 2011, payment. Mrs. Bainbridge agreed that the Cocco Payment Summary reflected that the Bainbridges missed their December 2011...