United States District Court, N.D. Alabama, Southern Division
E. OTT CHIEF UNITED STATES MAGISTRATE JUDGE.
action arises out of the servicing of Plaintiff Philip
Boler's mortgage loan by Defendants Bank of America NA
(“BANA”) and Specialized Loan Servicing, LLC
(“SLS”). The only remaining claims before the
court are for alleged violations of the Real
Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 1201, et seq. Both Defendants filed
motions for summary judgment on the remaining claims against
them. (Docs. 59 & 62). The motions have been fully briefed
(docs. 59, 62-64, 67-68, 73, 76), and are now ripe for
decision. For the following reasons, both motions are due to
be granted and this case dismissed with prejudice.
STATEMENT OF RELEVANT FACTS
moved to Birmingham in approximately 1997 and was employed by
AmSouth Bank, first in collections and then as a financial
sales representative. (Doc. 62-2 (“Boler Dep.”)
at 21-24). As a financial sales representative, Plaintiff
opened checking and saving accounts, consumer and commercial
loans,  CDs, money market accounts, and the like.
(Id. at 25). He also facilitated mortgage
applications. (Id. at 29). He remained at AmSouth
until 2002 when he took a comparable position at Compass Bank
in financial sales. (Id. at 26-27). Plaintiff
remains employed at Compass Bank as a financial sales
representative with the same general responsibilities.
(Id. at 28).
The 1st Avenue Property and Mortgage Loan
2004, Plaintiff purchased property located at 15211st Avenue
West in Birmingham, Alabama, for $1, 000. (Id. at
50-52; Doc. 59-11 (“Loan App.”) at 1). Three
years later, in 2007, Plaintiff applied for a mortgage loan
for $50, 000 on the 1st Avenue property. (Loan App.).
The loan application contains a section asking how the
“property will be” used and gives three choices
for the applicant to select: primary residence, secondary
residence or investment. (Id. at 1). The box next to
“investment” is marked on the application.
(Id.). The “purpose of the refinance” is
stated as “home improvement.” (Id.). The
acknowledgment and agreement section states “this
property will be occupied as indicated in this
application” and that the information provided is true
and correct. . . .” (Id. at 3). Additionally,
the mortgage documents contain a 1-4 Family Rider, also
entitled “Assignment of Rents, ” which is
primarily used when a borrower purchases rental property and
permits the lender to collect rent from the property if the
borrower defaults on the loan. (Doc. 59-12 at 18-19).
time he applied for the loan, Plaintiff owned at least three
other properties. Plaintiff's primary residence was
located at 900 Daniel Circle in Birmingham, Alabama. (Boler
Dep. at 40; Doc. 59-3 at 3). He also owned property located
at 2926 Avenue V in Birmingham, Alabama, and 1562 Gary Avenue
in Fairfield, Alabama. (Boler Dep. at 41-44; Doc. 59-3 at 3).
Plaintiff rented the Avenue V property and the Gary Avenue
property is a commercial building he uses for
storage. (Boler Dep. at 42-44). Regarding the 1st
Avenue property, Plaintiff testified at his deposition that
his plan was to renovate the 1st Avenue property and move
into it because it was bigger than his residence on Daniel
Circle. (Boler Dep. at 46). He then planned to rent the
Daniel Circle property. (Id.).
used a portion of the loan funds to update the 1st Avenue
property. Plaintiff testified he spent approximately $14,
550 in 2007 to make improvements such as
replacing the windows and siding, replaced about half the
roof shingles and some of the decking, replaced the hot water
tank, and renovated the bathroom. (Id. at 73-83). He
also purchased light fixtures and hardwood flooring, but he
never installed the flooring. (Id. at 78-81).
Plaintiff also used a portion of the loan funds “to
consolidate some of [his] debt.” (Id. at 84).
Specifically, Plaintiff used $21, 000 to $22, 000 to
consolidate or pay off other debts. (Id. at 85).
unclear where the remaining loan funds were spent. Plaintiff
testified he “was using that to finish other stuff that
came up” on the house, and he did some minor work in
2008 like installing molding, trim, and new doors, but stated
that by 2009 he was not doing any real work on the house.
(Id. at 86-90). In 2009, 2010 and 2011, Plaintiff
visited the property once or twice every two weeks for two
hours a visit “at the most” when he would do
“little stuff” like “cut the grass, piddle
around . . . .” (Id. at 90-92).
September 2011, the property was condemned by the City of
Birmingham. (Doc. 59-13 at 6). The City put a condemnation
notice, printed on colored paper, on the front door of the
property. (Id.). The condemnation sign stated the
City deemed the property “unsafe” and the City
prohibited its use or occupancy as of September 27, 2011.
Vandalism of the 1st Avenue House and the Insurance
months after the house was condemned, on May 20, 2012,
Plaintiff discovered the property had been vandalized. (Boler
Dep. at 103-04). Plaintiff testified that he went to the
property to cut the grass and discovered the windows, hot
water tank, and AC unit were stolen, as well as the copper
wiring. (Id. at 103). Plaintiff called the police
and filed a police report regarding the vandalism.
(Id. at 105-06). Although Plaintiff testified that
he told the officer everything that was stolen from the
property, the only thing listed in the report is damage to
three exterior windows, valued at $80.00, and also that
“[t]he inside of the house appears to have been
vandalized.” (Do. 59-14 at 1-2). The police report
notes the fact that the house had been condemned as of
September 27, 2011. (Id. at 2). Plaintiff signed the
police report affirming the information contained therein was
correct to the best of his knowledge. (Id.).
then submitted a property insurance claim under a
lender-placed insurance policy. (Boler Dep. at 118-19,
123-24). Plaintiff did not inform the insurance company that
the property had been condemned eight months earlier.
(Id. at 131). After a review of the property, the
insurance adjustor estimated the total cost of repair at $12,
252.50. (Doc. 59-5 at 11). After this amount was reduced for
depreciation and Plaintiff's deductible, the total
payment amount was $7, 482.36. (Id.). The insurance
company sent a check to SLS for $7, 482.36 on June 22, 2012.
(Doc. 59-5 at 21; Doc. 59-15).
early July 2012, Plaintiff called SLS and requested payment
of $11, 000in insurance proceeds. (Boler Dep. at
134). Pursuant to the mortgage, SLS requested information
from Plaintiff before it would release the funds, including a
signed contractor's bid for the work to be performed.
(Id. at 134-36; Doc. 59-16). Plaintiff did not send
SLS anything in response, but instead retained an attorney in
connection with the claims funds. (Boler Dep. at 137-38).
Plaintiff's attorney sent requests on his behalf
throughout late 2012 and early 2013, but Plaintiff did not
provide any of the documents required to release the funds.
(Id. at 135-53). In April 2013, his attorney
directed SLS to apply the claim funds to Plaintiff's
unpaid principal balance; however, on December 4, 2014,
Plaintiff requested SLS reverse this action and disburse the
funds directly to him so he could complete repairs to his
property. (Id. at 152-53; Doc. 59-17 at 10; Doc.
59-5 at 24). Plaintiff ultimately provided the
contractor's bid in January 2015, and SLS mailed
Plaintiff a check for $7, 482.36, the full amount of the
insurance proceeds, on April 22, 2015. (Boler Dep. at 153-55;
Doc. 59-19 at 1).
receipt of the insurance proceeds, Plaintiff did not perform
any repairs to the 1st Avenue property. Instead, Plaintiff
testified that the contractor wanted more money than
originally quoted. (Boler Dep. at 164-65). Plaintiff decided
to hold the check until he could “come up with more
money” to complete the repairs. (Id. at 165).
Demolition of the 1st Avenue House and Insurance
November 6, 2014, over three years after condemning the
property, the City of Birmingham sent Plaintiff a letter to
Plaintiff's home address stating that it found the 1st
Avenue house “to be unsafe or in a dangerous condition
to the extent that it is a public
nuisance.” (Doc. 59-5 at 26). The letter informed
Plaintiff that he needed to repair the building or have it
demolished and if he did not the City would schedule
demolition on December 9, 2014. (Id.). It also
informed Plaintiff of his rights to a hearing.
(Id.). On December 9, 2014, the City of Birmingham
sent another letter to Plaintiff's home address advising
him that it planned to demolish the 1st Avenue
home. (Doc. 59-20 at 1).
City sent another notice to Plaintiff eight months later, on
July 31, 2015, stating that demolition bids were now being
processed and any and all property needed to be
removed. (Doc. 59-5 at 29; Doc. 59-21 at 2). Upon
receipt of this notice, Plaintiff went to the City and asked
for all the documentation it had in its file. (Boler Dep. at
165-68). Plaintiff told the person at the City that he did
not want his property demolished and she told him that he
needed to speak to his lender. (Id.). Plaintiff,
however, did not do anything to resolve the issues with the
property and stop the demolition. (Id. at 169-70). A
demolition permit was issued on November 12, 2015, and the
house on the property was demolished shortly thereafter.
(Doc. 59-22 at 1).
November 16, 2015, four days after the demolition, Plaintiff
submitted an insurance claim for the property and identified
the cause of loss as “Mysterious Disappearance.”
(Boler Dep. at 233; Doc. 59-23 at 1). Plaintiff testified
that he “didn't know where the house - the house
was gone.” (Boler Dep. at 233). Even though he
acknowledged receipt of communications from the City about
demolition, he did not think the house had been demolished.
(Id. at 233-34). The claim was denied because the
City's demolition was not a covered loss. (Id.
at 234; Doc. 59-24).
Plaintiff's Letters to SLS
27, 2015, Plaintiff mailed thirteen (13) separate
letters to SLS via certified mail. (Boler Dep.
at 93-95). The letters asked SLS to provide him with a
variety of information, including, but not limited to, a
payoff statement, loan transaction history, property
inspection fees, loss mitigation options, loss mitigation
applications, the pooling and servicing agreement, a
reinstatement quote, whether SLS would foreclose, and why SLS
held the insurance proceeds. (Docs. 59-25 - 59-37). Then, on
July 29, 2015, Plaintiff mailed fifteen (15) more letters to
SLS. (Doc. 59-46). Thirteen of the fifteen letters were
identical to the letters dated May 27, 2015. (See
id.). The two new letters disputed how SLS handled the
insurance proceeds. (Id.). SLS transferred the
servicing of the loan to BANA effective December 16, 2015.
continued to mail letters to SLS after the transfer.
Plaintiff sent a letter to SLS on March 8, 2016, inquiring as
to whether SLS force placed insurance on his property and
information related to that insurance. (Doc. 59-51).
Plaintiff mailed two additional letters to SLS on June 10,
2016; one asked for information about communications between
SLS and the City of Birmingham and the other asserted
SLS's statements to the City of Birmingham were in
error. (Doc. 59-53).