United States District Court, N.D. Alabama, Northwestern Division
R. DAVID PROCTOR, District Judge.
This matter is before the court on the following motions: Defendants Household Finance Corporation of Alabama ("HFC") and HSBC Mortgage Services Inc.'s ("HMSI") Motion to Compel Arbitration (Doc. 9); and Defendants Caliber Home Loans, Inc. ("Caliber"), U.S. Bank, N.A., and U.S. Bank Trust, N.A., as trustee for LSF9 Master Participation Trust's ("U.S. Bank Trust") Motion to Join the Motion to Compel Arbitration (Doc. 13). The motions have been fully briefed (Docs. 15, 21, 22). For the reasons outlined below, and after careful consideration of the record and briefs, the court concludes that the Defendant's motions to compel arbitration (Docs. 9, 13) are due to be granted.
I. FACTS AND PROCEDURAL HISTORY
On November 14, 2002, HFC and Robert Beckwith signed a Loan Repayment and Security Agreement ("Note"), in which HFC agreed to loan Beckwith $106, 751.18. (Doc. 9-1, Ex. 1). The Note stated, "ALTERNATIVE DISPUTE RESOLUTION AND OTHER RIDERS. The terms of the Arbitration Agreement and any other Riders signed as part of this loan transaction are incorporated into this Agreement by reference." ( Id. at 3). HFC and Beckwith also signed a mortgage contract securing the loan with property located at 775 Ebony Road, Tuscumbia, Alabama 35674, where Beckwith resided. ( Id. at 4-7; see Doc. 13-1, Ex. A; Doc. 1-2 at 3, ¶ 6). The mortgage contract stated, "The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower..." (Doc. 9-1, Ex. 1 at 6, ¶ 11). It also stated, "Arbitration Rider to Note. The Arbitration Rider attached to and made a part of the Note is hereby incorporated by reference and made a part of this Mortgage." ( Id. at 7, ¶ 20).
HFC and Beckwith signed the arbitration agreement, which stated,
This Arbitration Rider is signed as part of your Agreement with Lender and is made a part of that Agreement. By signing this Arbitration Rider, you agree that either Lender or you may request that any claim, dispute, or controversy (whether based upon contract; tort, intentional or otherwise; constitution; statute; common law; or equity and whether pre-existing, present or future), including initial claims, counter-claims, and third party claims, arising from or relating to this Agreement or the relationships which result from this Agreement, including the validity or enforceability of this arbitration clause, any part thereof or the entire Agreement ("Claim"), shall be resolved, upon the election of you or us, by binding arbitration...
(Doc. 9-1, Ex. 2 at 1). The Note indicated that "Lender" and "us" referred to HFC. (Doc. 9-1,
Ex. 1 at 1). The servicer of the loan was HMSI. ( See Doc. 1-2, at ¶ 7). On October 1, 2014, LSF9 Master Participation Trust, which is represented here by U.S. Bank Trust, purchased the loan and Caliber became the new servicer of the loan. (Doc. 13-1, Ex. A).
On March 3, 2015, Beckwith filed suit in the Circuit Court of Colbert County Alabama against HFC, HMSI, Caliber, U.S. Bank, N.A., and U.S. Bank Trust. (Doc. 1-2). He alleges that he filed Chapter 13 bankruptcy in September 2008. ( Id. at 3, ¶ 8). The Bankruptcy Court discharged his bankruptcy on February 11, 2014, after he had made all of the payments due under the confirmed Chapter 13 plan, including payments due to Defendants. ( Id. ¶ 10). On March 29, 2014, Defendants sent him a notice of default on the mortgage payments. ( Id. ¶ 11). He alleges that he sent monthly payments to Defendants from March 2014 to January 2015. ( Id. at 3-4, ¶¶ 11-13). Beckwith also claims that Defendants sent some of the payments back, accepted some (but did not cash them), and cashed some (but did not apply all of the cashed payments to his account). ( Id. at 4, ¶¶ 13-14).
Beckwith further alleges that Defendants improperly instituted foreclosure proceedings on the property on October 1, 2014. ( Id. ¶ 15). He contends that from September 2014 to February 2015, Defendants published in the newspaper false information in a notice of the foreclosure. ( Id. at 4-5, ¶ 18). They also reported to national credit bureaus false information regarding his default. ( Id. ). He further alleges that "the attempted sale was wrongful, illegal, in violation of law and the documents governing the relationship between Beckwith and the owners of the note and mortgage[, ]... that he was not behind in his payments on the mortgage[, ] and that he was improperly defaulted[, ] and that the note was improperly accelerated." ( Id. at 5, ¶ 20). Based on these factual allegations, Plaintiff asserts fourteen claims against Defendants.
( See id. at 5-20). He claims that Defendants negligently serviced the loan, attempted to collect sums not due, improperly declared him to be in default on the loan, unlawfully attempted foreclosure proceedings, and disseminated false information regarding his default (Count One); acted with reckless indifference in doing the same (Count Two); were unjustly enriched through the attempted foreclosure (Count Three); wrongfully initiated foreclosure proceedings (Count Four); slandered the title to the property through the attempted foreclosure (Count Five); breached the terms of the mortgage contract (Count Six); misrepresented that he was in default and disseminated inaccurate information regarding his credit history (Count Seven); "in association with the servicing of the loan account, " held him in a false light regarding his default (Count Eight); engaged in defamation, libel, and slander by publishing that he was in default and that the property would be foreclosed on (Count Nine); violated the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., by failing to make the required disclosures when entering into the mortgage contract and by charging fees not authorized by the mortgage contract (Count Ten); violated the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2602 et seq., by failing to provide him with information regarding his loan payments and default (Count Eleven); violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., by inaccurately reporting that he was in default (Count Twelve); and violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., by demanding that he pay amounts not due under the mortgage contract (Count Thirteen). ( Id. ). Finally, he sought, based on Defendants' breach of the mortgage contract, an order declaring that he was not in default and that Defendants should not have (and cannot) institute foreclosure proceedings (Count Fourteen). ( Id. at 20).
HFC and HMSI have moved the court to compel arbitration of the claims against them and to dismiss them from the case. (Doc. 9). Caliber, U.S. Bank, N.A., and U.S. Bank Trust have sought to join in the motion to compel. (Doc. 13). Beckwith has responded, presenting several arguments in opposition to the motions. (Doc. 15). The court addresses each of these matters below.
A. Retroactive Application of 15 ...