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Bias v. Cenlar Agency Inc.

United States District Court, N.D. Alabama, Southern Division

May 24, 2018

LEONA BIAS, Plaintiff,
CENLAR AGENCY, INC., et al., Defendants.



         The court has before it the February 1, 2018 motion for summary judgment filed by Defendants Cenlar Agency, Inc. and Cenlar FSB (collectively “Cenlar”). (Doc. 49). Pursuant to the court's initial order and February 28, 2018 order, the motion is fully briefed and under submission as of March 30, 2018. (Docs. 8, 49-51, 53-55). The motion is due to be granted for the following reasons.


         In October 2005, Cenlar began servicing a mortgage loan originally executed by Plaintiff Leona Bias in October 1998. (Doc. 50-1 at 2, 4). In connection with the loan, Bias executed a promissory note in the amount of $114, 000.00 in favor of New South Federal Savings Bank. (Id. at 3, 10-12). The note was secured by a mortgage on certain real property located in Jefferson County, Alabama, at 5424 Wesley Drive, Birmingham, Alabama, 35228. (Id. at 3, 14-20). The mortgage loan is currently owned by Federal Home Loan Mortgage Corporation (“Freddie Mac”), and the loan documents, consisting of the note and mortgage, are held by Bank of New York Mellon. (Id. at 3). In December 2009, New South Federal Savings Bank was closed by the Office of Theft Supervision, and the Federal Deposit Insurance Corporation (“FDIC”) was named receiver of the bank's assets. (Id. at 4). On August 5, 2013, the FDIC assigned the Bias mortgage to Cenlar FSB. (Id. at 4, 33).

         Bias began having trouble making her monthly mortgage payments around May 2014. (Id. at 4). Bias admitted she is not current as to the loan because she ran into financial trouble after she stopped working in December 2012. (Doc. 50-2 at 11). She testified she does not recall making a mortgage payment since June 2014. (Id. at 10-11).

         On May 8, 2014, Cenlar sent Bias a letter stating her mortgage payment was thirty-seven days late and her loan was in default. (Id. at 35). The letter discussed options for Bias to consider regarding the default and attached information on how to receive help. (Id. at 35-52). On May 22, 2014, Bias called Cenlar and spoke to a Cenlar representative as to her payment issues. (Doc. 50-1 at 4). As part of the call, Bias authorized a partial payment of $516.24. (Id. at 4, 54; Doc. 50-3 at 17, 27). Bias explained she could not afford to make a full payment at the time but she would call back in June and make another $500.00 payment to complete the full monthly payment. (Doc. 50-2 at 11; Doc. 50-3 at 27, 29). Bias testified she did not receive anything in writing accepting the partial payment. (Doc. 50-2 at 31).

         The day after the call, on May 23, 2014, the $516.24 partial payment was reversed and placed in suspense because it was insufficient to constitute a full payment. (Doc. 50-1 at 5). On June 6, 2014, Cenlar returned the $516.24 partial payment to Bias via check. (Id.; Doc. 50-2 at 11-12). Bias did not make the $500.00 follow-up payment as discussed on the telephone call. (Doc. 50-3 at 17, 29-30).

         On July 23, 2014, Cenlar sent Bias a notice of default letter to the property address. (Doc. 50-1 at 8, 57-58). The letter detailed a cure amount of $1, 920.13 as to the default. (Id.). Bias did not timely satisfy the cure amount. (Id. at 8; Doc. 50-2 at 19-20). Then, on September 15, 2014, Cenlar sent Bias a letter offering her the opportunity to enter into a trial period plan to potentially modify the loan and cure her default. (Doc. 50-1 at 5, 60-66). Three days later, on September 18, 2014, Cenlar sent Bias another letter discussing payment default and other options for Bias to consider. (Doc. 50-1 at 5, 68-85). There is no evidence Bias did anything in response to the letters.

         On October 22, 2014, counsel for Cenlar sent Bias two letters. (Id. at 5, 87-91). The first letter, entitled “Notice of Acceleration of Promissory Note and Mortgage, ” informed Bias the mortgage was in default, the amount due and payable as of that date was $85, 155.95, and Cenlar was “commencing foreclosure under the terms of the [m]ortgage.” (Doc. 50-1 at 87-89). Enclosed with the letter was a copy of the foreclosure notice noting the sale was scheduled for November 24, 2014. (Id.). The second letter also noted the foreclosure, discussed ways to avoid it, and included contact information for Bias to discuss possible alternatives. (Id. at 91). Notice of the November 24, 2014 foreclosure sale as to the property was published in the Alabama Messenger on October 25, November 1, and November 8, 2014. (Doc. 50-1 at 96).

         On October 28, 2014, Cenlar sent a letter to State Farm Fire & Casualty, Bias' homeowner's insurance provider, notifying State Farm “a foreclosure action ha[d] commenced on behalf of the insured mortgagee against the above referenced property.” (Id. at 5, 93-94). In response, State Farm contacted Bias by phone and told her that her homeowner's insurance would be cancelled. (Doc. 50-2 at 33). Bias told State Farm her insurance should not be cancelled because she was still living in the property. (Id.). State Farm confirmed the insurance coverage would not be cancelled. (Id.). Bias did not know if there was ever a lapse in coverage and stated she did not suffer any damage to the property and never submitted an insurance claim during this period of time. (Id.).

         On November 21, 2014, counsel for Bias sent Cenlar's lawyer a letter stating Bias denied Cenlar was the holder or owner of the mortgage or note, disputed the amount of debt, and requested the foreclosure sale be stopped. (Id. at 6, 98). That same day, counsel for Bias sent Cenlar a qualified written request (“QWR”) under section 6(e) of the Real Estate Settlement Procedures Act (“RESPA”). (Id. at 6, 100). In response to the letters, Cenlar postponed the foreclosure sale, sent a letter to Bias acknowledging receipt of her recent correspondence, and sent a letter to counsel for Bias identifying Freddie Mac as the owner of the loan. (Id. at 6, 103, 105).

         On January 12, 2015, Cenlar sent counsel for Bias a QWR response letter. (Id. at 6, 107-08). Among other documents included with the QWR response, Cenlar enclosed a payoff quote, as well as a reinstatement quote, which were good through January 30, 2015. (Id. at 110-14). Bias did not submit sufficient funds to reinstate or pay off the loan. (Id. at 7; Doc. 50-2 at 24).

         On February 19, 2015, Cenlar sent a letter to Bias, in care of her attorney, re-noticing the foreclosure sale for March 18, 2015. (Doc. 50-1 at 7, 118-19). Notice of the mortgage foreclosure sale was published in the Alabama Messenger on February 21 and 28, and March 7, 2015. (Id. at 121). The foreclosure sale was cancelled in response to the filing of this action against Cenlar. (Id. at 8). Cenlar has not foreclosed the mortgage. (Doc. 50-3 at 22).

         Additionally, Bias testified that before she filed her complaint, she pulled her credit report and recalled a reference related to Cenlar stating “foreclosure.” (Doc. 50-2 at 29). Bias did not contact the national credit reporting bureaus to dispute the foreclosure reference on her credit report. (Id.). She testified, however, she was denied a credit card in late 2014, but could not recall which company issued the denial. (Id. at 29-30). Bias did not produce the credit report or any documentation regarding the denial of a credit card despite being asked by Cenlar for documents supporting her claim.


         Under Federal Rule of Civil Procedure 56(c), summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party asking for summary judgment always bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings or filings which it believes demonstrate the absence of a genuine issue of material fact. Id. at 323. Once the moving party has met its burden, Rule 56(e) requires the non-moving party to go beyond the pleadings and by his own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing there is a genuine issue for trial. See Id. at 324.

         The substantive law identifies which facts are material and which are irrelevant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. See id. at 249.


         Plaintiff's complaint asserts fourteen claims against Defendants. (Doc. 1-1 at 3-20). In her brief in opposition to summary judgment, Plaintiff concedes Defendants are entitled to summary judgment on her claims for slander of title (Count Five) and fraud (Count Seven). (Doc. 54 n.2-n.3). The following twelve claims remain: negligence (Count One); wantonness (Count Two); unjust enrichment (Count Three); wrongful foreclosure (Count Four); breach of contract (Count Six); false light (Count Eight); defamation, libel and slander (Count Nine); violations of the Truth in Lending Act (“TILA”) (Count Ten); violations of the RESPA (Count Eleven); violations of the Fair Credit Reporting Act (“FCRA”) (Count Twelve); violations of the Fair Debt Collection Practice Act (“FDCPA”) (Count Thirteen); and a claim for declaratory relief (Count Fourteen). The majority of these claims are brought pursuant to Alabama law. For the following reasons, Defendants are entitled to summary judgment as to each claim.

         A. Plaintiff's negligence and wantonness claims are not cognizable under Alabama law.

         In Counts One and Two of the complaint, Bias alleges Cenlar engaged in negligent and wanton conduct regarding the servicing of her loan, attempted to collect funds not owed, caused her property insurance to be cancelled, negligently defaulted Bias, and attempted to complete a foreclosure sale. (Doc. 1-1 at 6-8). Additionally, Bias claims Cenlar negligently and wantonly failed to prevent the dissemination of inaccurate and libelous information to others, including the credit bureaus and the general public. (Id.). Finally, Bias contends Cenlar negligently and wantonly trained and supervised the employees responsible for her mortgage account. (Id.). Cenlar contends these claims fail as a matter of law because Alabama law does not recognize a cause of action for negligent or wanton servicing of a mortgage account. (Doc. 49 at 13).

         “To establish negligence, [a] plaintiff must prove: (1) a duty to a foreseeable plaintiff; (2) a breach of that duty; (3) proximate causation; and (4) damage or injury.” Martin v. Arnold, 643 So.2d 564, 567 (Ala. 1994) (quoting Albert v. Hsu, 602 So.2d 895, 897 (Ala. 1992)). “To establish wantonness, [a] plaintiff must prove that the defendant, with reckless indifference to the consequences, consciously and intentionally did some wrongful act or omitted some known duty. To be actionable, that act or omission must proximately cause the injury of which the plaintiff complains.” Id. “To establish a claim for negligent, reckless or wanton supervision, a plaintiff must show that ‘(1) the employee committed a tort recognized under Alabama law, (2) the employer had actual notice of this conduct or would have gained such notice if it exercised due and proper diligence, and (3) the ...

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