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Harris v. JP Morgan Chase Bank

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

January 15, 2019




         This case concerns defendant JP Morgan Chase Bank N.A.‘s attempted foreclosure sale of a house in Colbert County, Alabama.[1] The mortgagors of the house, plaintiffs Rufus and Rosetta Harris, filed this lawsuit to avoid the foreclosure and secure their interest in the house. By previous order, the Court dismissed the Harrises‘ state law claims for negligence, wantonness, unjust enrichment, wrongful foreclosure, slander of title, and fraud and the Harrises‘ federal statutory claims under TILA, TCPA, and ECOA. (Doc. 27). Pursuant to Federal Rule of Civil Procedure 56, Chase asks the Court to enter judgment in its favor on the Harrises‘ remaining claims. (Doc. 53). For the reasons explained more fully below, the Court grants Chase‘s motion.


         “The court shall grant summary judgment 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). To demonstrate that there is a genuine dispute as to a material fact that precludes summary judgment, a party opposing a motion for summary judgment must cite "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). When considering a summary judgment motion, a district court must view the evidence in the record and draw reasonable inferences in the light most favorable to the non-moving party. Asalde v. First Class Parking Sys. LLC, 898 F.3d 1136, 1138 (11th Cir. 2018). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).


         On August 12, 2005, Mr. and Mrs. Harris executed a mortgage on their Muscle Shoals residence with Long Beach Mortgage Company in support of a promissory note. (Doc. 52-1, pp. 3-4, ¶¶ 3-4; Doc. 52-1, pp. 15-18, 20-28). The note passed from Long Beach through a succession of creditors until Chase acquired the Harrises‘ note. (Doc. 52-1, pp. 3-4, ¶ 5). In October 2009, Chase notified the Harrises that it would be servicing their loan. (Doc. 52-1, p. 30). In January 2013, Chase became the mortgagee on the Muscle Shoals property pursuant to an assignment of mortgage. (Doc. 52-1, p. 4, ¶ 7; Doc. 52-1, pp. 61-62).

         The Harrises missed their monthly mortgage payment in April 2010, and the Harrises did not make another monthly payment until July 2013. (See Doc. 52-1, p. 5, ¶ 8; Doc. 52-1, pp. 32-59). Under a trial modification, the Harrises made a mortgage payment in July 2013, and they made a double payment in September 2013.[2] The Harrises acknowledge that they have made no other mortgage payments since April 2010, but they remain in possession of the house. (Doc. 52-1, p. 6, ¶ 12; Doc. 52-2, p. 13, tpp. 45-46; Doc. 52-2, p. 49, tp. 189).[3]

         In September 2010, after the Harrises missed six mortgage payments, Chase sent Mr. Harris a notice of intent to foreclose if Mr. Harris did not cure the default by October 30, 2010. (Doc. 52-1, pp. 64-65). Mr. Harris did not make a payment after receiving Chase‘s letter. (Doc. 52-1, p. 54). As a result, on November 24, 2010, Chase gave Mr. Harris written notice that the company was accelerating the unpaid balance of the debt and was preparing to begin foreclosure proceedings. (Doc. 52-1, p. 5, ¶ 10; Doc. 52-1, pp. 67-68).

         Mr. Harris requested mortgage assistance on October 1, 2013, on May 30, 2014, on June 4, 2014, and on March 18, 2015. (Doc. 52-1, pp. 7-9, ¶¶ 14-17; Doc. 52-1, pp. 84-98, 100-13, 115-30, 132-48). For each of the four requests for assistance, Chase requested a fully executed 4506T-EZ form and other documentation. (Doc. 52-1, p. 6, ¶ 13; Doc. 52-1, pp. 150-205).[4] Because Chase did not receive the required information, Chase denied the Harrises‘ request for loan modification. (Doc. 52-1, pp. 7-9, ¶¶ 14-17; Doc. 52-1, pp. 207-10, 211-22, 222-30).

         On June 8, 2015, Mr. Kenneth Lay, the Harrises‘ attorney, sent a qualified written request or QWR to Chase seeking information about the loan. (Doc. 52-1, p. 9, ¶ 19; Doc. 52-1, pp. 232-33). Chase wrote to Mr. Harris advising him that Chase needed his authorization to release confidential information to Mr. Lay. (Doc. 52-1, pp. 9-10, ¶ 20; Doc. 52-1, pp. 237-40; Doc. 52-2, p. 34, tpp. 130-31). In addition, between November 2015 and January 2016, Chase emailed Mr. Lay five times requesting a signed authorization. (Doc. 52-8, pp. 4-9). Chase responded to the June 8, 2015 QWR on February 8, 2016. Chase‘s response includes copies of the Harrises‘ loan transaction history, note, security instrument, payoff quote, and mortgage assignment and information about the unpaid principal balance and accrued interest. (Doc. 52-1, p. 10, ¶21; Doc. 52-1, pp. 242-78).

         The Harrises allege that they submitted three more QWRs for information to Chase between February 2016 and July 2016. (Doc. 20, ¶ 93). Chase does not have records of these requests, but Mr. Lay produced the letters during discovery, and the three letters are exhibits to Mr. Harris‘s deposition. (Doc. 52-1, p. 10, ¶22; Doc. 52-2, pp. 269-74). Mr. Harris testified that he is sure that Mr. Lay sent the February 2016 QWR to Chase, but he has no personal knowledge regarding the June 2016 or July 2016 QWRs that Mr. Lay wrote. (Doc. 52-2, pp. 35-36). Chase‘s records indicate that it received a second request for information from Mr. Lay in October 2016. (Doc. 52-1, p. 10, ¶ 22; Doc. 52-1, pp. 280-81).[5] Chase received and responded to the October 2016 QWR. (Doc. 52-1, p. 11, ¶ 24; Doc. 52-1, pp. 283-84, 288-329).

         On August 11, 2016, Chase notified the Harrises of its intent to accelerate and foreclose on their home. (Doc. 52-1, ¶ 25). Chase informed the Harrises that if they did not cure their mortgage default within 35 days then Chase would accelerate the loan. (Doc. 52-1, pp. 326-29). Chase then accelerated the loan, scheduled a foreclosure sale, and published notices in the Colbert County Reporter. (Doc. 52-8, p. 10). In an effort to stop the November 2, 2016 foreclosure sale the Harrises filed this action in state court. (Doc. 1-1). This lawsuit caused Chase to suspend foreclosure proceedings. (Doc. 52-1, ¶ 26). To date, the Harrises have neither attempted to repay the full amount due on the promissory note nor resumed making monthly payments. (Doc. 52-2, p. 12, tpp. 43-44; Doc. 52-2, p. 46, tpp. 178-79).


         Chase moves for summary judgment on all of the Harrises‘ remaining causes of action: (1) breach of contract (Count Six), (2) false light (Count Eight), (3) defamation, libel, slander (Count Nine), (4) violation of the Real Estate Settlement Procedures Act (Count Eleven), (5) violation of the Fair Credit Reporting Act (Count Twelve), (6) violation of the Fair Debt Collection Practices Act (Count Thirteen), and (7) declaratory relief (Count Sixteen). The Court addresses each claim in turn.

         A. Breach of Contract Claim

          The Harrises contend that Chase breached their mortgage contract by failing to provide a notice of default, failing to provide a proper notice of intent to accelerate, and failing to properly credit payments made towards the mortgage. (Doc. 20, ¶¶ 47-54). The Harrises also allege that Chase failed to abide by the terms of the temporary loan modification agreement. (Doc. 20, ¶ 53).

         The elements of a breach of contract claim under Alabama law are (1) a valid contract binding the parties; (2) the plaintiffs‘ performance under the contract; (3) the defendant‘s nonperformance; and (4) resulting damages. Reynolds Metals Co. v. Hill, 825 So.2d 100, 105 (Ala. 2002). The Harrises have not offered evidence of their performance under the mortgage contract. See Hammett v. Paulding Cty., 875 F.3d 1036, 1049 (11th Cir. 2017) (“Although all reasonable inferences are to be drawn in favor of the nonmoving party, 'an inference based on speculation and conjecture is not reasonable‘”) (quoting Ave. CLO Fund, Ltd. v. Bank of Am., N.A., 723 F.3d 1287, 1294 (11th Cir. 2013) (quotation omitted)). The Harrises state in their complaint that "[e]ven if [they] are in default, ” Chase is liable for breach of contract. (Doc. 1, p. 15, ¶ 53). That is a misstatement of Alabama law. "[T]o establish that a defendant is liable for a breach of a bilateral contract, a plaintiff must establish that he has performed, or that he is ready, willing, and able to perform under the contract.” Winkleblack v. Murphy, 811 So.2d 521, 529 (Ala. 2001). To maintain their breach of contract claim, the Harrises must demonstrate their performance under the contract.

         Chase has submitted evidence of the Harrises‘ default. Mr. Harris admitted in his deposition that he has not made a mortgage payment in seven years. (Doc. 52-2, pp. 46-47, tpp. 178-81; Doc. 52-2, p. 13, tp. 45). Mr. Harris testified: "Q: Okay. And so even though you haven‘t been making [mortgage payments], you‘ve lived in the home the whole time? A: Yeah.” (Doc. 52-2, p. 46, tp. 180). Mr. Harris also affirmed: “Q: So from the time you stopped making those payments in 2010 to now where you lived in the home, you would have owed around $146, 599; right? A: Yes. Q: Okay. And you haven‘t made any of those payments? A: Huh? No.” (Doc. 52-2, p. 46, tp. 178-79). This Court ordered the Harrises to deposit monthly mortgage payments with the Court. (Doc. 63). The Harrises have not complied with the order. (Doc. 64).

         The Harrises did not comply with the terms of the 2013 loan modification. The trial modification required the Harrises to make three consecutive mortgage payments. (Doc. 52-2, ¶ 11; Doc. 52-2, p. 79). The Harrises were obligated to make the trial payments on time; they didn‘t. The first modification payment was due on July 1, 2013. (Doc. 52-2, pp. 79, 90). Western Union wire records show that the Harrises‘ payment was sent July 15, 2013. (Doc. 52-5, p. 7). The second payment was due on August 1, 2013. (Doc. 52-2, pp. 79, 90). The Harrises did not send a payment. (See Doc. 52-5, p. 7). The third payment under the modification plan was due September 1, 2013. (Doc. 52-2, pp. 79, 90). On September 11, 2013 the Harrises sent Chase $2, 466.18. (Doc. 52-5, pp. 7-9). Each of these payments was late and breached the terms of the loan modification.

         The Harrises have not offered evidence to rebut the evidence that Chase provided in support of its summary judgment motion. Therefore, the Harrises‘ breach of contract claim fails as a matter of law, and the Court grants Chase‘s summary judgment motion as to that claim.

         B. False Light Claim

         In Count Eight, the Harrises claim that Chase placed them in a false light by "either speaking or writing undesirable and negative character and reputation remarks about Harrises[.]” (Doc. 20, ¶ 61). Under Alabama law:

One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other ...

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