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Boler v. Bank of America NA

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

February 27, 2019

PHILIP BOLER, Plaintiff,



         This 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[1] before the court[2] 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).[3] 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.


         Plaintiff 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, [5] 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).

         A. The 1st Avenue Property and Mortgage Loan

         In 2004, Plaintiff purchased property located at 15211st Avenue West in Birmingham, Alabama, for $1, 000.[6] (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[7] 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.[8] (Doc. 59-12 at 18-19).

         At the 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.[9] (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.).

         Plaintiff used a portion of the loan funds to update the 1st Avenue property. Plaintiff testified he spent approximately $14, 550[10] 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).

         It is 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).

         In 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. (Id.).

         B. Vandalism of the 1st Avenue House and the Insurance Claim

         Eight 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.).

         Plaintiff 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).

         In early July 2012, Plaintiff called SLS and requested payment of $11, 000[11]in 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).

         After 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).

         C. Demolition of the 1st Avenue House and Insurance Claim

         On November 6, 2014, over three years after condemning the property, the City of Birmingham sent Plaintiff a letter to Plaintiff's home address[12] 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.”[13] (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.[14] (Doc. 59-20 at 1).

         The 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.[15] (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).

         On 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).

         D. Plaintiff's Letters to SLS

         On May 27, 2015, Plaintiff mailed thirteen (13) separate letters[16] 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. (Doc. 59-50).

         Plaintiff 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.[17] (Doc. 59-53).

         E. ...

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