White v. BAC Home Loans Servicing, LP

JOHN JAMES WHITE, Plaintiff,

v. BAC HOME LOANS SERVICING, LP,f/k/aCOUNTRYWIDE HOME LOANS SERVICING, LP, Defendant.

CIVIL ACTION NO. 2:10-CV-0119-RWS

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA GAINESVILLE DIVISION

SO ORDERED: September 26, 2011

ORDER

This case comes before the Court on Plaintiff John James White's Motion for Summary Judgment [24] and Defendant BAC Home Loans Servicing, LP's Motion for Summary Judgment [25]. After a review of the record, the Court enters the following Order.

I. Statement of Facts

In May 2006, Plaintiff John James White ("Plaintiff") entered into a mortgage loan agreement with Countrywide Home Loans, Inc. ("CHL, Inc."), pursuant to which he signed a promissory note and security deed. Def.'s SMF, Dkt. No. [25-3] at ¶ 1. In June 2006, CHL, Inc. sold the loan to FederalNational Mortgage Association ("FNMA"). Id. at ¶ 17. CHL, Inc. also transferred the loan servicing rights to CHL, Inc.'s affiliate, Countrywide Home Loans Servicing, LP, which subsequently changed its name to BAC Home Loans Servicing, LP ("Defendant").¹ Id. at ¶ 10. As the servicer of the loan, Defendant had sole responsibility for collecting Plaintiff's monthly payments on the loan, seeking delinquent payments, taking collection actions, initiating foreclosure proceedings, negotiating loan modifications, and otherwise acting on behalf of FNMA, the owner or investor of the loan. Id. at ¶¶ 13, 17-18.

This original loan was in the amount of $130,000, had an interest rate of 8.25%, and was secured by real property located at 400 Little Bushy Head Road in Blue Ridge, Georgia. Id. at ¶¶ 2-3. The promissory note obligated Plaintiff to make a payment of $976.65 on his loan by the first day of each month and provided that failure to do so would constitute a default on the loan. Id. at ¶¶ 4-5. Plaintiff defaulted on the loan each month between October 2006 and April 2007, between November 2007 and January 2008, and again at least once in thespring of 2008. Id. at ¶¶ 38-40. During this time Plaintiff received multiple "Notices of Default and Acceleration" from Defendant. Id. at ¶¶ 39-40. After the spring of 2008, Plaintiff made no payments on the original loan. Id. ¶ 41.

On July 14, 2009, Defendant mailed Plaintiff two documents, one of which was entitled "Loan Modification Agreement." Pl.'s SMF, Dkt. No. [24-1] at ¶ 2. The other document² shows in the top left corner of the first page the name "Bank of America Home Loans," its corporate logo,³ and Defendant's address, and it is internally directed to the attention of Defendant's "Home Retention Division." Ex. to Pl.'s Mot. Summ. J., Dkt. No. [24-2] at p. 14. It reads, "IMPORTANT MESSAGE ABOUT YOUR LOAN," and continues,

"We are pleased to advise you that your loan modification has been approved. In order for the modification to be valid, the encloseddocuments need to be signed and returned. The following amounts will be added to your current principal balance, resulting in a modified principal balance of $148,955.61 prior to your first payment date. . . . Your new modified monthly payment will be $1,044.33,⁴ effective with your September 1, 2009 payment. . . . Your current interest rate is 8.250%. Your new interest rate will be 6.250%. . . ."

Id. The document also states a new loan maturity date of August 01, 2049. Id. The second page of this document reads at the top, "WHAT YOU SHOULD DO," and then states, "Please sign, date and return one (1) complete set of the enclosed documents to us . . . and mail no later than August 13, 2009 to [Defendant's address]." Id. at p. 15. It further provides: "This offer is contingent upon [Defendant] receiving relief from the Automatic Stay for any bankruptcy in which the property referred to in the Loan Modification Agreement is included at the time of the modification,"⁵ and Plaintiff must "fulfill ALL of the terms and conditions of this letter no later than August 13, 2009, [or] [Defendant] will continue [its] collection action, including foreclosure." Id. Finally, the document states that the enclosed "Modification Agreement" must be signed in the presence of a notary, and that the notaryacknowledgment must be signed in "recordable form." Id. The document is closed, "THANK YOU FOR YOUR BUSINESS," "The HOPE Team," under which is written, "[Defendant] is required by law to inform you that this communication is from a debt collector." Id.

As stated above, enclosed with this document was another document entitled "Loan Modification Agreement." Id. at pp. 16-17. The document reads at the top:

"This Loan Modification Agreement ("Agreement"), made this 14th day of July, 2009, between JOHN JAMES WHITE, and BAC Home Loans Servicing, LP a subsidiary of Bank of America, N.A. (Lender), amends and supplements (1) the Mortgage, Deed of Trust or Deed to Secure Debt (the Security Instrument), dated the 16th day of May, 2006 and in the amount of $130,000 and (2) the Note secured by, the Security Investment, which covers the real and personal property . . . located at 400 LITTLE BUSHY HEAD RD, BLUE RIDGE, GA 30513."

Id. at 16. Consistent with the document reading on page one "IMPORTANT MESSAGE ABOUT YOUR LOAN," the Loan Modification Agreement recites a modified loan balance of $148,955.61 and a monthly payment of principal and interest in the amount of $845.68. Id. at 16, ¶¶ 1-2.

Plaintiff signed the Loan Modification Agreement, had it notarized, and returned it to Defendant before August 13, 2009. Pl.'s SMF, Dkt. No. [24-1] at¶¶ 5-6; Def.'s SMF, Dkt. No. 25-3 at ¶ 27. The certification shows the signature of the Notary Public, Joyce Frye, as well as her seal, which clearly shows her name and expiration date. Pl.'s SMF, Dkt. No. [24-1] at ¶ 5. The Loan Modification Agreement provided two blank spaces in the certification for the Notary Public to first write the date and then her name. Ex. to Pl.'s Mot. Summ. J., Dkt. No. [24-2] at p. 17. These spaces were not filled in correctly: the day ("10th") was written in the first blank, and the month and year ("August 2009") were written in the second blank, where the Notary Public's name should have been written. Def.'s SMF, Dkt. No. [25-3] at ¶ 28. Defendant never signed the Loan Modification Agreement. Id. at ¶ 29.

On August 13, 2009, Defendant sent Plaintiff a letter stating that it had received the executed loan modification but that it was "unable to process the modification" due to the following: "Incorrect or Incomplete Notary Signature (Example: Missing Notary Public signature, Missing Notary Public stamp or seal)" and "Note Modification Return Date Expired (Example: Postmark date of returned loan modification exceeds the cutoff date referenced in the cover letter)." Ex. to Pl.'s Mot. Summ. J., Dkt. No. [24-2] at p. 18. The Property wassubsequently sold at a foreclosure sale on May 4, 2010. Def.'s SMF, Dkt. No. [25-3] at ¶ 54.

Plaintiff filed suit in the Superior Court of Gilmer County for breach of contract and wrongful foreclosure, arguing that the Loan Modification Agreement was a binding contract that precluded Defendant from foreclosing on Plaintiff's property, despite his default on the original loan. Defendant removed the case to this Court on the basis of diversity jurisdiction. Both parties now move for summary judgment as to Plaintiff's breach of contract claim. Defendant additionally asks this Court to find as a matter of law that Plaintiff is not entitled to damages for wrongful foreclosure, nor to attorney's fees.

II. Discussion

A. Summary Judgment Standard

Federal Rule of Civil Procedure 56 requires that summary judgment be granted "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 responsibility of informing the . . . court of the basis for its motion, and identifying those portions of the pleadings,depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.'" Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotations omitted)). Where the moving party makes such a showing, the burden shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).

The applicable substantive law identifies which facts are material. Id. at 248. A fact is not material if a dispute over that fact will not affect the outcome of the suit under the governing law. Id. An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. at 249-50.

In resolving a motion for summary judgment, the court must view all evidence and draw all reasonable inferences in the light most favorable to the non-moving party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296 (11th Cir. 2002). But, the court is bound only to draw those inferences which are reasonable. "Where the record taken as a whole could not lead a rational trierof fact to find for the non-moving party, there is no genuine issue for trial." Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (internal citations omitted); see also Matsushita, 475 U.S. at 586 (once the moving party has met its burden under Rule 56(a), the nonmoving party "must do more than simply show there is some metaphysical doubt as to the material facts").

Finally, the filing of cross-motions for summary judgment does not give rise to any presumption that no genuine issues of material fact...