United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
K. KALLON UNITED STATES DISTRICT JUDGE
receiving notice of default and a foreclosure on their
residence, James McLaughlin and Sherry McLaughlin filed this
lawsuit alleging claims under state law and federal statutes
against Ocwen Loan Servicing, LLC (“Ocwen”) and
the Bank of New York Mellon Trust Company National
Association (“Mellon”). The court has for
consideration the Defendants' Motion for Summary
Judgment, doc. 32. The motion is fully briefed, docs. 32-1,
40, and ripe for review. For the reasons explained more fully
below, except for the claim in Count XI relating to two of
the qualified written requests (QWRs), the Defendants'
motion is due to be granted. As for Count XI, to bring
finality for the parties, the court SETS
this matter for a pretrial conference on July 20, 2018 at
12:15 p.m., and for trial on August 20, 2018 at 9:00 a.m. in
Courtroom 4A of the Hugo L. Black United States Courthouse.
The parties are directed to the attached pretrial
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a), summary judgment is
proper “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.” “Rule 56(c)
mandates the entry of summary judgment, after adequate time
for discovery and upon motion, against a party who 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 Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The moving party bears the initial burden of proving the
absence of a genuine dispute of material fact. Id.
at 323. The burden then shifts to the non-moving party, who
is required to go “beyond the pleadings” to
establish that there is a “genuine issue for
trial.” Id. at 324 (internal citations and
quotation marks omitted). A dispute about a material fact is
“genuine” if “the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
court must construe the evidence and all reasonable
inferences arising from it in the light most favorable to the
non-moving party. Adickes v. S.H. Kress &
Co., 398 U.S. 144, 157 (1970); see also
Anderson, 477 U.S. at 244 (all justifiable inferences
must be drawn in the non-moving party's favor). Any
factual dispute will be resolved in the non-moving
party's favor when sufficient competent evidence supports
that party's version of the disputed facts. But see
Pace v. Capobianco, 283 F.3d 1275, 1276-78 (11th Cir.
2002) (a court is not required to resolve disputes in the
non-moving party's favor when that party's version of
events is supported by insufficient evidence). However,
“mere conclusions and unsupported factual allegations
are legally insufficient to defeat a summary judgment
motion.” Ellis v. England, 432 F.3d 1321, 1326
(11th Cir. 2005) (citing Bald Mountain Park, Ltd. v.
Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover,
“[a] mere ‘scintilla' of evidence supporting
the opposing party's position will not suffice; there
must be enough of a showing that a jury could reasonably find
for that party.” Walker v. Darby, 911 F.2d
1573, 1577 (11th Cir. 1990) (citing Anderson, 477
U.S. at 252).
March 2004, the Plaintiffs executed a mortgage on their
residence with Homecomings Financial Network, Inc. in support
of a promissory note. Docs. 32-1 at 4-5; 40 at 3. The note
passed from Homecomings through a succession of other
creditors, and eventually to Mellon. Doc. 32-1 at 5. The
original servicer, GMAC Mortgage, declared the Plaintiffs in
default after they failed to make multiple mortgage payments.
Id. Subsequently, Ocwen began servicing the loan.
Id. The Plaintiffs brought the loan current in June
2014, but subsequently fell behind again on their payments.
Id. at 6. As a result, in September 2015, Ocwen sent
the Plaintiffs a notice of default and requested a $15,
378.91 payment to cure the default, which the Plaintiffs
never fully paid off. Id. at 7. Consequently, in
January 2016, the Defendants accelerated the loan.
Id. at 8. The Plaintiffs have never attempted to
repay the full amount, and have stopped making payments.
Id. at 7-8.
the acceleration, the Plaintiffs submitted credit disputes
concerning Ocwen to the consumer reporting agencies
(“CRAs”) Experian and Equifax. Id. Ocwen
received notice of the disputes, conducted an investigation,
and subsequently deleted the disputed reporting. Id.
The Plaintiffs' counsel submitted multiple QWRs to the
Defendants. Id. at 9. The parties agree Ocwen
responded to two QWRs. Docs. 32-1 at 9; 40 at 6.
Defendants scheduled a foreclosure sale for November 2016 and
published notices in local newspapers and online. Docs. 32-1
at 9; 40 at 6. This lawsuit caused the Defendants to cancel
the foreclosure sale. Doc. 32-1 at 9-10.
Plaintiffs plead nine claims under Alabama law: negligence
(Count I), wantonness (Count II), unjust enrichment (Count
III), wrongful foreclosure (Count IV), slander of title
(Count V), breach of contract (Count VI), fraud (Count VII),
false light (Count VIII), and defamation (Count IX). Doc. 14
at 8-16, 25. The Plaintiffs also plead alleged violations of
federal laws: the Truth in Lending Act (“TILA”),
15 U.S.C. § 1601 et seq. (Count X); the Real
Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2601 et seq. (Count XI); the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. §
1681 et seq. (Count XII); the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq. (Count XIII); the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227
et seq. (Count XIV); and the Equal Credit
Opportunity Act (“ECOA”), 15 U.S.C. § 1691
et seq. (Count XV). Id. at 17-25. Finally,
the Plaintiffs plead a claim for declaratory relief (Count
XVI). Id. at 25. The Defendants contend these claims
fail for several reasons, which the court addresses in turn.
Claims Abandoned by the Plaintiffs
Plaintiffs have not responded to the Defendants'
arguments concerning Counts V, VII, XIV, XV, and XVI, other
than to note that they pleaded these claims in their
complaint. See doc. 40. But “[i]n opposing a
motion for summary judgment, a party may not rely on his
pleadings to avoid judgment against him.”
Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587,
599 (11th Cir. 1995) (citations and internal quotation marks
omitted). Moreover, “[t]here is no burden upon the
district court to distill every potential argument that could
be made based upon the materials before it on summary
judgment.” Id. Rather, “the onus is upon
the parties to formulate arguments; grounds alleged in the
complaint but not relied upon in summary judgment are deemed
abandoned.” Id.; see Wilkerson v. Grinnell
Corp., 270 F.3d 1314, 1322 (11th Cir. 2001) (finding
claim abandoned and affirming grant of summary judgment on
claim presented in complaint but not raised in initial
response to motion for summary judgment); Coalition for
the Abolition of Marijuana Prohibition v. City of
Atlanta, 219 F.3d 1301, 1325 (11th Cir. 2000) (finding
claim abandoned where it was not briefed and argued in
party's response to motion for summary judgment).
Accordingly, the motion is due to be granted as to Counts V,
VII, XIV, XV, and XVI.
The Negligence and Wantonness Claims (Counts I and
Alabama law, “[t]he elements of a negligence claim are
a duty, a breach of that duty, causation, and damage.”
Prill v. Marrone, 23 So.3d 1, 6 (Ala. 2009) (quoting
Armstrong Bus. Servs., Inc. v. AmSouth Bank, 817
So.2d 665, 679 (Ala. 2001)). “To establish wantonness,
the plaintiff must prove that the defendant, with reckless
indifference to the consequences, consciously and
intentionally did some wrongful act or omitted some known
duty.” Martin v. Arnold, 643 So.2d 564, 567
(Ala. 1994). Further, “[t]o be actionable, that act or
omission must proximately cause the injury of which the
plaintiff complains.” Id. (citing Smith v.
Davis, 599 So.2d 586 (Ala. 1992)).
to the specifics here, the Plaintiffs plead the Defendants
negligently and wantonly foreclosed on their residence and
made misrepresentations to the Plaintiffs. Doc. 14 at 8-9.
These claims fail because “Alabama law does not
recognize a cause of action for negligent or wanton mortgage
servicing, ” as there is no independent duty of care
upon which to base such a claim. Duke v. JPMorgan Chase
Bank Nat. Ass'n, No. 2:14-CV-422-RDP, 2014 WL
5770583, at *4 (N.D. Ala. Nov. 5, 2014) (quoting McClung
v. Mortg. Elec. Registration Sys., Inc., No.
2:11-CV-03621-RDP, 2012 WL 1642209, at *7 (N.D. Ala. May 7,
2012)) (internal quotation marks omitted). The duty, if any,
is contractual, as it arises from the relevant mortgage
agreement, promissory note, and any loan modifications.
Id. While the Plaintiffs contend the Defendants
breached their duty “to provide truthful and accurate
information about the status of the loan account, ”
doc. 40 at 33-34, they do not plead, however, that this duty
exists independently of the contractual duties, or cite any
cases stating they can plead negligence and wantonness claims
against a mortgage servicer. Accordingly, the motion is due
to be granted as to Counts I and II.
The Unjust Enrichment Claim (Count III)
Plaintiffs allege the Defendants improperly charged them,
resulting in unjust enrichment. Doc. 14 at 9-10. To prevail
on a theory of unjust enrichment, the plaintiff must show
“that defendant holds money which, in equity and good
conscience, belongs to plaintiff or holds money which was
improperly paid to defendant because of mistake or
fraud.” Dickinson v. Cosmos Broad. Co., 782
So.2d 260, 266 (Ala. 2000) (quoting Hancock-Hazlett Gen.
Constr. Co. v. Trane Co., 499 So.2d 1385, 1387 (Ala.
1986)) (emphasis omitted). Alabama courts will imply a
contract in law “to prevent a manifest injustice or
unjust enrichment[.]” Mantiply v. Mantiply,
951 So.2d 638, 656 (Ala. 2006) (quoting Green v. Hospital
Bldg. Auth. of Bessemer, 294 Ala. 467, 470 (1975)).
However, “[t]he existence of an express contract on a
given subject generally excludes an implied agreement on the
same subject, ” barring unjust enrichment claims.
Id. (citing Brannan & Guy, P.C. v. City of
Montgomery, 828 So.2d 914, 921 (Ala. 2002); Vardaman
v. Florence City Bd. of Educ., 544 So.2d 962 (Ala.
Defendants contend that the mortgage and promissory note
constitute an express contract. Doc. 32-1 at 12. The
Plaintiffs do not dispute this, and, indeed, base their
breach of contract claim upon that contract. See
doc. 40. In the presence of an express contract, the court
will not imply a contract in law. See Mantiply, 951
So.2d at 656. Accordingly, the motion is due to be granted as
to Count III.
The Wrongful Foreclosure Claim (Count IV)
Count IV, the Plaintiffs plead a claim for wrongful
foreclosure. “Under Alabama law, a mortgagor has a
wrongful foreclosure action whenever a mortgagee uses the
power of sale given under a mortgage for a purpose other than
to secure the debt owed by the mortgagor.”
Buckentin v. SunTrust Mortg. Corp., 928 F.Supp.2d
1273, 1282 (N.D. Ala. 2013) (quoting Reeves Cedarhurst
Dev. Corp. v. First Am. Fed. Sav. and Loan, 607 So.2d
180, 182 (Ala. 1992)) (internal citations omitted).
Critically, “in order to state a claim for wrongful
foreclosure, a foreclosure sale must have actually taken
place.” Id. (citing Hardy v. Jim Walter
Homes, Inc., 2007 WL 174391, at *6 (S.D. Ala. 2007));
see Zanaty v. Wells Fargo Bank, N.A., No.
2:16-CV-0277-VEH, 2016 WL 6610443, ...