Hutter v. Countrywide Bank, N.A., 09-cv-10092 (NSR)

NANCE HUTTER, Plaintiff, v. COUNTRYWIDE BANK, N.A., a subsidiary of COUNTRYWIDE FINANCIAL CORPORATION;WATERMARK CAPITAL, INC.; and EVOLUTION MORTGAGE, INC., Defendants.

No. 09-cv-10092 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 14, 2015

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

This action was originally commenced in October 2009. The Court presumes that the parties are familiar with the protracted procedural history in this matter, including Plaintiff Nance Hutter's numerous amendments to her complaint. Plaintiff's Third Amended Complaint ("TAC") alleges the following: (1) Countrywide Bank, N.A., which has been acquired by Bank of America, N.A. ("Countrywide"), violated the Truth in Lending Act, 15 U.S.C. §§ 1601-1607f ("TILA"), by failing to give Plaintiff proper notice of her right to cancel a loan she obtained from Countrywide (the notice is hereafter referred to as the "NRC"); (2) Countrywide, Watermark Capital, Inc. ("Watermark"), and Evolution Mortgage, Inc. ("Evolution") (collectively, the "Defendants") violated N.Y. General Business Law §§ 349 to 350-e ("GBL") by engaging in unfair and deceptive conduct aimed at consumers that was misleading in a material way; (3) Countrywide and Evolution violated the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-2617 ("RESPA") because Countrywide paid Evolution kickbacks and unearned fees; and (4) Watermark violated the New York Licensed Mortgage Bankers Law, N.Y. Banking Law §§ 589-599 ("Banking Law"), by brokering Plaintiff's mortgage loan even though it was neitherlicensed by the State of New York nor exempt from the licensing requirement. Plaintiff seeks monetary damages and rescission of the $1.785 million mortgage loan provided to her by Countrywide on December 11, 2006 (the "Loan").

Before the Court are motions for summary judgment filed individually by each of the Defendants seeking dismissal of all claims asserted by Plaintiff, as well as Countrywide's motion for summary judgment on cross-claims asserted by Evolution and Watermark. For the following reasons, the Defendants' motions for summary judgment are GRANTED in part and DENIED in part.

BACKGROUND

As an initial matter, Plaintiff's Local Rule 56.1 statements and supporting documents submitted in opposition to the Defendants' motions for summary judgment are not accompanied by an affidavit, declaration, or other form of attestation. "Where a party wishes to have a court consider documents which are not yet part of the court's record, the documents must be attached to and authenticated by an appropriate affidavit and the affiant must be a competent witness through whom the documents could be received into evidence at trial." New York ex rel. Spitzer v. Saint Francis Hosp., 94 F. Supp. 2d 423, 426 (S.D.N.Y. 2000) (citing Crown Heights Jewish Community Council, Inc. v. Fischer, 63 F. Supp. 2d 231 (E.D.N.Y. 1999)). Thus, to the extent that the documents proffered by Plaintiff in opposition to the instant motions are not self-authenticating, see Fed. R. Evid. 902, or are not otherwise found in the Court's record, the Court will not consider them.

The following facts, unless otherwise noted, are based on the undisputed facts in this matter or support Plaintiff's version of events.

In or about the summer and fall of 2006, Todd Matthews, a mortgage broker located in California, discussed with Plaintiff's husband, Gerhard Hutter ("Mr. Hutter"), the possibility of refinancing the mortgages on Plaintiff's home. (Hutter's Response to Evolution Mortgage's Statement of Material Facts in Its Motion for Summary Judgment ("Pl.'s Evolution 56.1") ¶ 7; Declaration of Michael Janus ("Janus Decl."), Docket No. 185, Ex. 5, 17-18.)¹ During the course of negotiating the Loan, Mr. Hutter spoke only with Matthews, (Pl.'s Evolution 56.1 ¶ 11), and did not speak with anyone else from Evolution, Watermark, or Countrywide. (Id.; Pl.'s Countrywide 56.1 ¶ 10.) Plaintiff did not have any contact with Countrywide prior to the closing of the Loan (Pl.'s Countrywide 56.1 ¶ 8); did not have contact with Evolution or any of its personnel (Pl.'s Countrywide 56.1, Ex. I ¶ 6)²; and aside from a single "sales pitch" conversation with Matthews, who may or may not have been an employee of Watermark at the time, did not otherwise have any contact with Watermark or its employees. (Hutter's Response to Watermark Capital's Statement of Material Facts in Its Motion for Summary Judgment ("Pl.'s Watermark 56.1") ¶ 22; Declaration of John T. Serio ("Serio Decl."), Docket No. 194, Ex. H, 254-256.) Plaintiff also acknowledged that her husband negotiated all of the loans on Plaintiff's property. (Serio Decl., Ex. H, 256:5-6.)

Although there is limited evidence in the parties' Local Rule 56.1 statements and supporting documents explaining how the Loan was referred from Matthews to Charles Dragna, purportedly a principal of Watermark, it is without dispute that Evolution was the broker of record for the Loan. (Pl.'s Watermark 56.1 ¶ 7; Serio Decl., Ex. F at 14:17-24, Ex. N at 44:10-20.) It appears that Matthews, Dragna, and Watermark were not licensed to conduct business in New York, (Watermark Mot. at 10-11), so the Loan was referred to Joseph Sciacca at Evolution. (Serio Decl., Ex. F.)

During the course of the Loan negotiations, three good-faith estimates were prepared for the Loan - two by Evolution and one by Watermark. (Pl.'s Countrywide 56.1, Ex. D; Countrywide 56.1, Exs. 15-16.) Plaintiff received one or both of Evolution's good-faith estimates, (Pl.'s Evolution 56.1 ¶ 13), and recalls that her husband received a good-faith estimate, but does not recall whether he received an estimate from Watermark. (Pl.'s Countrywide 56.1 ¶ 16.) Each of the good-faith estimates provided an estimate for a type of adjustable rate mortgage or "ARM," and listed an interest rate of 1.5%. (Pl.'s Countrywide 56.1, Ex. D; Countrywide 56.1, Exs. 15-16.)

Plaintiff closed on the Loan on December 11, 2006 - a "Monthly Adjustable Rate Pay-Option Note" (the "Note") with an initial yearly interest rate of 8.125% and an initial minimum payment interest rate of 1.5%. (See Countrywide 56.1, Ex. 23 at 2(A); Pl.'s Countrywide 56.1, Ex. E.) The interest rate was subject to change based on the terms of the Note. (Id.) At the closing, Plaintiff signed two copies of an acknowledgement that stated she received two copies of a notice of her right to cancel the Loan. (Pl.'s Countrywide 56.1 ¶ 40, Ex. I ¶ 14; Countrywide 56.1, Ex. 25.) Plaintiff contends that she actually received only one copy of the NRC, (Pl.'s Countrywide 56.1 ¶ 40, Ex. I ¶ 14), and asserts that she signed the two acknowledgments because she "was forced to sign many documents without being given time to read them." (Id. ¶ 15.) Plaintiff also signed a loan application at the closing, which stated that she had a monthly income of $38,500. (Pl.'s Countrywide 56.1 ¶¶ 30-31.) Plaintiff concedesthat she had no income at that time. (Id. ¶ 32.) Plaintiff claims that she did not understand the loan application when she signed it. (Id. ¶ 33.)

STANDARD ON A MOTION FOR SUMMARY JUDGMENT

Rule 56 of the Federal Rules of Civil Procedure provides: "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the initial burden of pointing to evidence in the record, "including depositions, documents [and] affidavits or declarations," id. at 56(c)(1)(A), "which it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may also support an assertion that there is no genuine dispute by "showing . . . that [the] adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(B). If the moving party fulfills its preliminary burden, the onus shifts to the non-moving party to identify "specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal citation and quotation marks omitted). A genuine dispute of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248; accord Benn v. Kissane, 510 F. App'x 34, 36 (2d Cir. 2013) (summary order). Courts must "constru[e] the evidence in the light most favorable to the non-moving party and draw[ ] all reasonable inferences in its favor." Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d Cir. 2010) (internal quotation marks omitted). In reviewing the record, "the judge's function is not himself to weigh the evidence and determine the truth of the matter," nor is it to determine a witness's credibility. Anderson, 477 U.S. at 249. Rather, "[t]he inquiry performed is the threshold inquiry of determining whether there is the need for a trial." Id. at 250.

Summary judgment should be granted when a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. The party asserting that a fact is genuinely disputed must support their assertion by "citing to particular parts of materials in the record" or "showing that the materials cited do not establish the absence . . . of a genuine dispute." Fed. R. Civ. P. 56(c)(1). "Statements that are devoid of any specifics, but replete with conclusions, are insufficient to defeat a properly supported motion for summary judgment." Bickerstaff v. Vassar Coll., 196 F.3d 435, 452 (2d Cir. 1999). The nonmoving party "may not rely on conclusory allegations or unsubstantiated speculation." FDIC v. Great Am. Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010) (internal citation and quotation marks omitted). Moreover, "[a non-moving party's] self-serving...