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Erdberg v. Five Brothers Mortgage Company Services and Securing, Inc.

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

March 1, 2019

MARK ERDBERG, et al., Plaintiffs,
v.
FIVE BROTHERS MORTGAGE COMPANY SERVICES AND SECURING, INC., et al., Defendants.

          MEMORANDUM OPINION

          STACI G. CORNELIUS U.S. MAGISTRATE JUDGE.

         [1]This matter is before the court on the motions for summary judgment filed by the defendants, Cenlar, F.S.B. (Doc. 39); Five Brothers Mortgage Company Services and Securing, Inc. (Doc. 40); and Creditsouth Financial Services, Inc. (Doc. 38). The motions are fully briefed and are ripe for adjudication. (Docs. 41-46). For the reasons explained below, the motions are due to be granted.

         I. FACTS

         This lawsuit concerns residential property located on Cromwell Drive in Mountain Brook, Alabama ("Cromwell Drive" or the "Property"), and purchased by the plaintiffs, Mark and Jaime Erdberg, in March 2016. (Doc. 42 at 3). Plaintiffs did not move into the Property; instead they planned renovations and continued living in a separate residence they owned. (Doc. 42 at 2-3; Doc. 39 at 2). On June 22, 2016, Plaintiffs executed a mortgage loan (the "Mortgage") on the Property from non-party, Bryant Bank. (Doc. 39 at 2; Doc. 42 at 2-3). Plaintiffs informed Anthony Robbins, the Bryant Bank mortgage banker, that their planned renovations were extensive and they would continue living at their other residence until the work at Cromwell Drive was complete. (Doc. 42 at 2; see Doc. 42-2 at 3). Plaintiffs and Robbins contend these conversations made it obvious that the renovations at Cromwell Drive would take more than sixty (60) days to complete. (Doc. 42 at 2; Doc. 42-2 at 3). At some point after executing the Mortgage, Plaintiffs decided to demolish the existing house and construct a new one. (Doc. 42 at 2-3).

         The Mortgage: (1) allowed the lender-and/or its agents-to "make reasonable entries upon and inspections of" the Property; and (2) required Plaintiffs to occupy Cromwell Drive as their primary residence for one year, beginning within sixty (60) days (the "Occupancy Requirement") of its execution. (Doc. 39-1 at 6). The Mortgage also allowed the mortgage servicer to inspect Cromwell Drive-either because of Plaintiffs' breach or to ensure the Property was being properly maintained-and, if necessary, enter the interior of the house "to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off." (Id.). On August 1, 2016, Bryant Bank transferred the Mortgage to Cenlar, a mortgage servicing company. (Doc. 42 at 3; Doc. 42-4 at 2). The transfer of the Mortgage to did not affect its terms. (Doc. 42-4 at 2).[2]

         Plaintiffs made timely Mortgage payments but on September 28, 2016, learned[3] Cenlar believed they had defaulted by failing to make payments. (Doc. 42 at 4). Mr. Erdberg responded on the same day, using his law firm letterhead and providing copies of checks and receipts confirming the Mortgage payments were current. (Id.; Doc. 42-5). During this correspondence, no one at Cenlar inquired whether Plaintiffs were residing at Cromwell Drive. (Doc. 42 at 4).

         In October 2016, Cenlar contacted Five Brothers, a company which "coordinates securing and preservation services for lenders, mortgagees and mortgage servicers." (Doc. 40 at 2-3). Cenlar requested Five Brothers to conduct an initial "make contact" visit at Cromwell Drive. (Id. at 5). Five Brothers, in turn, engaged a non-party contractor to perform the visit. (Id.). On October 22, 2016, the contractor visited the Property. (Doc. 40 at 5; see Doc. 42 at 4; Doc. 39 at 4). The contractor did not enter the house but inspected and photographed the exterior. The contractor reported Cromwell Drive as vacant, which is obvious from the photos. (Doc. 40 at 5; see Doc. 40-2 at 22-25; Doc. 39 at 4). During the October 22, 2016 inspection, the contractor left a "calling card" on the front door, instructing Plaintiffs to contact Cenlar. (Doc. 40 at 6; Doc. 40-2 at 17-18, 23).

         On October 25, 2016, Cenlar sent a letter to Plaintiffs at Cromwell Drive, noting Cenlar's conclusion the Property was vacant and stating it would protect the house from vandalism and freeze damage by changing locks and taking "reasonable action to protect and preserve" it. (Doc. 39-3 at 2; Doc. 42 at 5). The letter further noted that Plaintiffs were required to present any "unusual circumstances" to Cenlar within two business days. (Doc. 39-3 at 2; Doc. 42 at 5). On October 28, 2016, Cenlar confirmed it wanted Five Brothers to proceed with securing Cromwell Drive. (Doc. 40 at 6; Doc. 40-2 at 26).

         Five Brothers contracted with Creditsouth to secure the Property. (Doc. 40 at 7). Creditsouth is a "property preservation company" which regularly performed initial secures in Jefferson County at the request of Five Brothers. (Doc. 38 at 3). On November 1, 2016, Creditsouth conducted an "initial secure" by entering the interior of Cromwell Drive, winterizing the plumbing, changing the locks on the exterior carport door, installing a lockbox, and mowing the yard. (Doc. 38 at 3-4). Creditsouth also disconnected the power and water supply to Cromwell Drive and affixed bright orange stickers-announcing the utilities were off and the house was winterized-to the exterior of the carport door and front window. (Doc. 42 at 5-6).

         Plaintiffs arrived at Cromwell Drive later on November 1, 2016, and discovered the orange stickers, the disconnected utilities, and the changed locks. (Doc. 42 at 6). While there, Plaintiffs found Cenlar's October 25, 2016 letter in the mailbox. (Id.). Mr. Erdberg called Five Brothers and spoke with an employee; the employee stated the initial secure was performed due to non-payment on the Mortgage. (Doc. 42 at 7-8; see Doc. 40 at 8). During the phone conversation, the Five Brothers employee gave Mr. Erdberg the code for the lockbox so Plaintiffs could access the house through the carport door. (Doc. 40 at 8).

         On November 7, 2016, Cenlar sent another letter to Cromwell Drive, stating Plaintiffs had defaulted on the Mortgage. (Doc. 42 at 8). After the events giving rise to this lawsuit, Cenlar determined it had misapplied Plaintiffs' Mortgage payments and stated in a letter to Plaintiffs-addressed to Mr. Erdberg's law firm-that it regretted the error. (Doc. 42 at 8). Ultimately, Plaintiffs paid off the loan in full; the Mortgage was released on May 18, 2017. (Doc. 39 at 6).

         II. PROCEDURAL HISTORY

         Plaintiffs filed the initial complaint in this matter on November 22, 2016, naming Five Brothers and Cenlar as defendants and invoking both diversity and federal question jurisdiction. (Doc. 1). Five Brothers answered, and Plaintiffs voluntarily dismissed Cenlar pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure. (Docs. 7, 8, 9). In April 2017, the court ordered Plaintiffs to allege diversity jurisdiction more specifically; Plaintiffs responded by requesting leave to file a first amended complaint (“FAC”). (Docs. 19, 20). The court granted the motion, and Plaintiffs filed the FAC on May 1, 2017. (Docs. 22, 23).

         The FAC alleged federal jurisdiction solely on the basis of a federal question, reinstated Cenlar as a defendant, and added Creditsouth as a defendant. (Doc. 23). The FAC asserted violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA"), as well as claims for trespass, negligence, wantonness, negligent and wanton training and supervision, and invasion of privacy. Creditsouth answered, and Cenlar responded by filing a motion to dismiss pursuant to Rule 12(b)(6). (Docs. 30, 31). In briefing the motion to dismiss, Plaintiffs conceded their FDCPA, negligence, and wantonness claims against Cenlar. (Doc. 37). As to the remaining claims against Cenlar, the court dismissed the invasion of privacy claim but denied the motion as to trespass. (Doc. 47).

         Prior to the court's ruling on Cenlar's motion to dismiss, the defendants filed the instant motions for summary judgment. Briefing on the pending motions has clarified the sole remaining FDCPA claim is asserted against Creditsouth. (See Doc. 40-1 at 17; see generally Doc. 41). Accordingly, Creditsouth faces all of the claims asserted in the FAC, while Five Brothers faces only the claims for trespass, negligence, wantonness, and invasion of privacy. Following the court's ruling on the motion to dismiss, trespass is the only claim surviving against Cenlar.

         III. STANDARD OF REVIEW

         Under Rule 56(c) of the Federal Rules of Civil Procedure, 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 affidavits, depositions, answers to interrogatories, or admissions on file, designate specific facts showing 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.

         IV. DISCUSSION

         Each theory of liability asserted in the FAC is addressed in turn.

         A. Trespass

         Under Alabama law, "trespass to property is a wrong against the right of possession or entry." Boyce v. Cassese,941 So.2d 932, 945 (Ala. 2006). "If a party enters property . . . under a legal right, entry . . . pursuant to that right cannot constitute a trespass." Id; see also Central Parking Sys. v. Steen, 707 So.2d 226, 228 (Ala. 1997) (defining trespass as "any entry on the land of another without express or implied authority"). Here, Cenlar contends it cannot be liable for trespass because it-and its ...


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