Steadman v. Green Tree Servicing, LLC

ADRIAN STEADMAN, Plaintiff, v. GREEN TREE SERVICING, LLC, Defendant.

CASE NO. C14-0854JLR

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

May 5, 2015

ORDER GRANTING IN PART AND DENYING IN PART SUMMARY JUDGMENT

I. INTRODUCTION

This matter comes before the court on Defendant Green Tree Servicing, LLC's ("Green Tree") motion for summary judgment. (See Mot. (Dkt. # 24).) This action arises out of Green Tree's servicing of Plaintiff Adrian Steadman's loan. Having considered the submissions of the parties, the balance of the record, and the relevant law, and deeming oral argument unnecessary, the court grants in part and denies in part the motion.

II. BACKGROUND

In March 2003, Mr. Steadman obtained a loan for $190,000.00, which was secured by the property at 9015 171st Ave NE, Redmond, WA, 98052, and evidenced by a Note and Deed of Trust. (See Hamm Decl. (Dkt. # 25) Ex. 1 ("Note"), Ex. 2 ("Deed of Trust").) This loan required Mr. Steadman to pay the noteholder monthly payments of $1109.79 for 30 years. (Id.) The servicing rights for the loan were eventually transferred to Bank of America, N.A. ("BoA"). (See generally Ford Decl. (Dkt. # 26) Ex. 2 at 67-82 ("Mod. Agreement").)

In 2010 and 2011, Mr. Steadman struggled to make payments on the loan. (See Ford Decl. Ex. 2 at 45-49.) Beginning early 2012, Mr. Steadman worked with BoA representative Eric Ngo to apply for a loan modification under the federal Home Affordable Modification Program ("HAMP"). (Ford Decl. Ex. 3 ("2d Steadman Dep.") at 13:1-14:21, Ex. 4 at 180-87 (1/17/12 email from Mr. Ngo requesting that Mr. Steadman provide documents necessary to apply for a loan modification), Ex. 2 at 50-53 (final HAMP application signed by Mr. Ngo and Mr. Steadman).) At the time, Mr. Ngo's title was Assistant Vice President, Mortgage Service Specialist II, at BoA's downtown Seattle branch office. (See id. at Ex. 4 at 180-87.)

In April 2012, BoA offered Mr. Steadman the opportunity to participate in a Trial Period Plan ("Trial Period") to determine whether Mr. Steadman was eligible under HAMP. (Id. at 55-65 ("Trial Offer").) The Trial Period consisted of three monthly modified payments of $732.86. (Id.) If Mr. Steadman successfully completed thepayments, BoA would send him a modification agreement offering new terms for his loan. (Id.) BoA wrote to Mr. Steadman:

Once you have successfully made each of the payments above by their due dates, you have submitted two signed copies of your modification agreement, and we have signed the modification agreement, your mortgage will be permanently modified in accordance with the terms of your modification agreement.

(Id.)

Mr. Steadman accepted the offer for a Trial Period and successfully completed the Trial Period payments. (Steadman Dep. at 92:10-14; Mod. Agreement.) On August 18, 2012, BoA approved Mr. Steadman's application for a loan modification and sent him a modification agreement. (Id. ("Thank you for applying for a loan modification. We are pleased to inform you that you have been approved and your mortgage will soon be permanently modified to provide you with an affordable monthly payment.").) Among other things, the modification agreement reduced Mr. Steadman's monthly payments to $724.00. (Id.)

BoA's offer letter stated: "The enclosed Modification Agreement reflects the new terms of your modified mortgage that will go into effect once you complete and return the enclosed documentation." (Id.) BoA's offer letter included the following instructions on how to accept the offer of modification:

How to Accept This Offer:

To accept this modification offer, you must sign two copies of the Modification Agreement and return both copies to use by 08/28/2012. Please sign and return both copies to us, using the enclosed pre-paid envelope to mail the documents to:

Bank of America, N.A.

11802 Ridge Parkway, Ste 100 HRM

HOME RETENTION

Broomfield, CO 80021

(Id.)

Mr. Steadman did not comply with the acceptance instructions: he did not sign and mail two copies of the modification agreement to the specified address by August 28, 2012. (Ford Decl. Ex. 1 ("Steadman Dep.") at 104:2-106:20.) Instead, he signed the modification agreement and delivered it to Mr. Ngo at the BoA Seattle office on August 27, 2012.¹ (Id. at 105:2-7.) Mr. Steadman claims that Mr. Ngo "told [him that he] could submit the final loan modification documents by bringing them to his office in downtown Seattle." (Steadman Decl. (Dkt. # 32) at 2.) He claims that Mr. Ngo "informed [him] that [his] actions were sufficient to accept the loan modification offer." (Id.) It was his understanding that Mr. Ngo faxed the documents to the appropriate location. (Steadman Dep. at 105:17-22.) It was also his understanding that Mr. Ngo would sign the final modification paperwork on behalf of BoA. (Steadman Decl. at 2.)

After delivering the signed modification agreement, Mr. Steadman began paying the modified monthly loan payments to BoA. (Steadman Decl. at 1-2.) He submitted timely payments in the amount of $724.00 from September 2012 through May 2012 by calling BoA and paying over the phone. (Id. at 2; Steadman Dep. at 116:11-16.)

On October 18, 2012, Mr. Steadman received a letter from BoA stating that it was "no longer considering your request for a modification because . . . you notified us on October 3, 2012, that you did not wish to accept the offer." (Steadman Dep. at 113:19-25; Ford Decl. Ex. 2 at 84-85.) Mr. Steadman denies declining the offer. (Steadman Dep. at 113:25.) On October 23, 2013, Mr. Steadman received another letter from BoA stating that the payment it had recently received "was less than the total amount needed to bring your loan up to date," and if BoA did not receive the total amount by the specified acceleration date, "foreclosure proceedings may begin." (Steadman Dep. at 116:18-117:8; Ford Decl. Ex. 2 at 87-88.)

Mr. Steadman states that after he received these letters, he called and visited Mr. Ngo and other BoA representatives multiple times to inquire as to the status of his modification. (Steadman Dep. at 113:13-117:11; Steadman Decl. at 2-3.) Mr. Steadman claims that the BoA representatives reassured him that his modification had been approved, and he was only receiving the letters because their system was behind in formally processing the approval. (Steadman Dep. at 113:13-117:11; Steadman Decl. at 2-3.) Mr. Steadman claims that the representatives advised him to keep making payments on the loan, which he did. (Steadman Dep. at 116:11-16.) Nonetheless, on May 15, 2013, BoA sent Mr. Steadman a letter informing him of his homeowner's rightsand stating, "If you do not respond within 30 days, a notice of default may be issued and you may lose your home in foreclosure." (Ford Decl. Ex. 2 at 95-96; Steadman Dep. at 135:16-25.)

On June 1, 2013, BoA transferred the servicing of Mr. Steadman's loan to Green Tree. (Ford Decl. Ex. 2 at 90-93 ("1st Transfer Letter"), 100-01 ("2d Transfer Letter").) Green Tree's notice of the transfer stated that, according to its records, Mr. Steadman's monthly payment was $1,165.08. (2d Transfer Letter.) Mr. Steadman attempted to make a payment to Green Tree in June 2012, but was informed that Green Tree was unable to locate his loan and "could not accept payments" on his account at that time. (Steadman Decl. at 3.) It was September before Mr. Steadman was able to submit payments to Green Tree. (Steadman Decl. at 3.) Mr. Steadman made payments in the modified amount to Green Tree from September 2013 to December 2013. (Id.)

In December 2013, Green Tree initiated foreclosure action against Mr. Steadman's property. (Ford Decl. Ex. 2 at 129, 134-36.) Mr. Steadman received a notice of foreclosure and a notice of a trustee's sale, which indicated that the amount outstanding on his loan was over $20,000.00. (Ford Decl. Ex. 2 at 138-39, 141-144.) When Mr. Steadman contacted Green Tree, he was informed that Green Tree did not have a copy of the loan modification agreement. (Steadman Decl. at 3.) Mr. Steadman submitted his copy of the modification agreement, but Green Tree would not accept it because it was not signed by BoA. (Id.; Steadman Dep. at 30:1-34:25.) Mr. Steadman contacted Mr. Ngo and other BoA representatives by phone and email and requested that they provide him or Green Tree with a signed copy of the modification agreement. (Steadman Decl. at3.; Steadman Dep. at 30:1-34:25;Ford Decl. Ex. 4 at 191-197 (emails).) BoA never provided a signed modification agreement; the copies it did provide were missing the last page that contained the place for a signature by a BoA representative. (Steadman Decl. at 3; Ford Decl. Ex. 4 at 191-197; Steadman Dep. at 35:1-17.) BoA also did not provide a signed copy in response to Mr. Steadman's discovery requests. (Steadman Dep. at 35:1-17.)

Because Green Tree would not acknowledge his alleged loan modification, Mr. Steadman filed this action. (See Compl. (Dkt. # 1).) Mr. Steadman brings claims against Green Tree for breach of contract, breach of the implied duty of good faith and fair dealing, negligence, violation of the Washington Consumer Protection Act ("CPA"), RCW 19.86 et seq., and violation of the Washington Mortgage Loan Servicing Act ("MLSA"), RCW 19.148.030. (See Am. Compl. (DKt. # 29).) Green Tree moves for summary judgment on all claims. Green Tree's motion is now before the court.

III. ANALYSIS

A. Summary Judgment Standard

Federal Rule of Civil Procedure 56 permits a court to grant summary judgment where the moving party demonstrates (1) the absence of a genuine issue of material fact and (2) entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Galen v. Cnty. of L.A., 477 F.3d 652, 658 (9th Cir. 2007). The moving party bears the initial burden of showing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323.

If the moving party does not bear the ultimate burden of persuasion at trial, it can show the...