United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION [1]
JOHN
H. ENGLAND, III, UNITED STATES MAGISTRATE JUDGE.
Plaintiff
Federal Home Loan Mortgage Corporation
(“Plaintiff” or “Freddie Mac”)
brought this action against Defendants Robert B. Capps and
Brenda N. Capps (“Defendants” or “the
Capps”) in the Circuit Court of Jefferson County,
seeking possession of real property the Capps had allegedly
refused to vacate after foreclosure. (Doc. 1-1 at 2-10). The
Capps initially answered, (doc. 1-1 at 19-24), but then
amended their answer and counterclaimed against Freddie Mac
and other entities, (id. at 32-67). The Capps last
amended their counterclaim on September 19, 2016, asserting
claims against: Freddie Mac; Mortgage Electronic Registration
Systems, Inc. (“MERS”); New Penn Financial LLC,
both individually and d/b/a Shellpoint Mortgage Servicing;
Shellpoint Mortgage Servicing; and Shellpoint Partners,
LLC[2]
(all collectively, the
“Counter-Defendants”).[3](Doc. 1-5 at 48-84). On
October 20, 2016, Freddie Mac removed the action to this
court. (Doc.1).
Counter-Defendants
have now moved for summary judgment on the Capps'
counterclaim. (Doc. 32). The Capps have responded in
opposition, (doc. 38), [4] and Counter-Defendants have submitted a
reply brief, (doc. 39). The motion is fully briefed and ripe
for review. For the reasons stated more fully below,
Counter-Defendants' motion for summary judgment is
GRANTED IN PART and DENIED IN
PART
I.
Standard of Review
Under
Rule 56(a) of the Federal Rules of Civil Procedure, 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, 447 U.S. 317, 322 (1986).
The moving party bears the initial burden of proving the
absence of a genuine issue of material fact. Id. at
323. The burden then shifts to the nonmoving party, who is
required to “go beyond the pleadings” to
establish that there is a “genuine issue for
trial.” Id. at 324. (citation and internal
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).
The
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 255 (all justifiable inferences must be drawn in the
non-moving party's favor). Any factual disputes will be
resolved in Plaintiff's favor when sufficient competent
evidence supports Plaintiff's version of the disputed
facts. 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 the 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) (per
curiam) (citing Bald Mtn. Park, Ltd. v. Oliver, 836
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 the 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).
II.
Summary Judgment Facts[5]
On
March 5, 2009, Robert Capps executed and delivered a note in
the original principal amount of $245, 000.00, (doc. 32-2),
to MetLife Home Loans, secured by a real estate mortgage
executed by the Capps for the real property located at 3200
Cahaba Brook Circle, Birmingham, Alabama, 35242 (“the
Property”), (doc. 32-3). (Doc. 1-5 at ¶ 5; doc.
32-18 at 4-5 (32:12-33:17), 6 (37:10-38:15)). The mortgage
was assigned to JPMorgan Chase Bank, N.A.
(“Chase”), effective December 12, 2013. (Doc.
32-19 at 2). Servicing of the loan transferred to Chase on
March 1, 2013. (Doc. 32-18 at 8 (45:10-46:15)). Chase then
assigned the mortgage to Shellpoint, effective July 20, 2013.
(Doc. 32-1[6] at ¶ 7; doc. 32-4). Servicing of the
loan was transferred to Resurgent Mortgage Servicing
(“Resurgent”) effective July 17, 2013. (Doc. 32-1
at ¶ 8; doc. 32-5). Resurgent was subsequently acquired
by Shellpoint, and servicing of the loan transferred to
Shellpoint effective March 1, 2014. (Doc. 32-1 at ¶ 9;
doc. 32-6).
The
Capps fell behind on their loan payments and were in default
for most of the period that Resurgent and Shellpoint serviced
the loan. (Doc. 32-18 at 7 (41:11-14); doc. 32-7). The Capps
requested, applied for, and were reviewed for loss mitigation
on the loan several times during this period. (Doc. 32-18 at
11 (43:5-9), 14 (55:5-56:21), 16 (63:7-64:17), 17-18
(68:8-70:9)).
On
March 3, 2014, Shellpoint offered the Capps a temporary
repayment plan, attempting to allow them to cure their
default. (Doc. 32-1 at ¶ 11; doc. 32-8; doc. 32:18 at 16
(63:7-64:17)). The Capps ultimately failed to make the
payments required under the temporary repayment plan, and it
was cancelled on September 5, 2014. (Doc. 32-1 at ¶ 12;
doc. 32-9; doc. 32-18 at 16-17 (64:18-65:20)).
The
Capps made their last payment on the loan on October 13,
2014, in the amount of $6, 121.44; this was applied as three
regular monthly payments of $2, 040.48, but the Capps'
payment for September 1, 2014 remained due and their loan
remained in default. (Doc. 32-1 at ¶ 13; doc. 32-7; doc.
32-18 at 28-29 (135:13-137:17)). The Capps have made no
further payments on the loan. (Doc. 32-1 at ¶ 13; doc.
32-7)).
On
October 16, 2014, Shellpoint sent a Notice of Default and
Intent to Accelerate to the Capps. (Doc. 32-1 at ¶ 14;
doc. 32-10; doc. 32-18 at 13 (66:20-67:17)). The notice
informed the Capps that their loan was in default, with $4,
540.08 required to bring the loan current. (Id.).
Shellpoint
sent a Streamlined Modification Solicitation Letter to the
Capps on January 30, 2015. (Doc. 32-1 at ¶ 15; doc.
32-11). However, the Capps failed to respond to this letter
and did not accept the modification offer. (Doc. 32-1 at
¶ 15; doc. 32-18 at 14 (69:20-72:6)).
On
September 18, 2015, Shellpoint sent the Capps a letter
informing them of their options for loss mitigation
assistance and how to apply for that assistance. (Doc. 32-1
at ¶ 16; doc. 32-12). On November 6, 2015, Shellpoint
sent another letter to the Capps stating “Shellpoint
Mortgage Servicing has reviewed you request for a loan
modification in addition to other loss mitigation options. We
are unable to offer you a loss mitigation option because you
did not provide us with the documents we requested.”
(Doc. 32-1 at ¶ 17; doc. 32-13; doc. 32-18 at 16
(78:8-79:10)).
On
January 5, 2016, Shellpoint sent a Notice of Acceleration to
the Capps via certified mail and regular mail. (Doc. 32-1 at
¶ 19; doc. 32-16). In the notice, Shellpoint stated it
had accelerated the payments on the loan and scheduled a
foreclosure sale for February 10, 2016. (Doc. 32-16).
The
Capps faxed an application for loss mitigation assistance and
other documents to Shellpoint on January 27, 2016. (Doc. 32-1
at ¶ 18; doc. 32-14; doc. 32-18 at 16-17 (82:15-85:8)).
Shellpoint sent a letter to the Capps the next day, denying
this request on the basis that the Property was set for
foreclosure sale. (Doc. 32-1 at ¶ 18; doc. 32-15; doc.
32-18 at 17 (85:9-86:23))
Shellpoint
published the Notice of Sale for three consecutive weeks
— January 6, 13, and 20, 2016 — in the Alabama
Messenger. (See doc. 32-20). On February 10, 2016,
the mortgage was foreclosed; as Freddie Mac was the highest
bidder at the foreclosure sale, it became the owner of the
Property. (Doc. 32-1 at ¶ 20; doc. 32-17). However, the
Capps never vacated the property, and they continue to occupy
it. (Doc. 32-18 at 22 (88:6-10)).
III.
Analysis
The
Capps' second amended counterclaim, [7] the operative
pleading in this action, contains the following counts: Count
I, for negligence, asserted against all Counter-Defendants,
(doc. 1-5 at ¶¶ 19-22); Count II, for wantonness,
asserted against all Counter-Defendants, (id. at
¶¶ 23-28); Count III, for unjust enrichment,
asserted against Shellpoint, (id. at ¶¶
29-32); Count IV, for wrongful foreclosure, asserted against
Shellpoint and Freddie Mac, (id. at ¶¶
33-36); Count V, for slander of title, asserted against
“Counter-Defendants, Freddie Mac & Shellpoint,
” (id. at ¶¶ 37-39); Count VI, for
breach of contract, asserted against all Counter-Defendants,
(id. at ¶¶ 40-48); Count VII, for fraud,
asserted against all Counter-Defendants, (id. at
¶¶ 49-53); Count VIII, for false light, asserted
against all Counter-Defendants, (id. at ¶¶
54-59); Count IX, for defamation asserted against Shellpoint,
[8]
(id. at ¶¶ 60-68); Count X, for unfair and
deceptive trade practices, asserted against Shellpoint,
(id. at ¶¶ 69-70); Count XI, for breach of
the covenant of good faith and fair dealing, asserted against
Shellpoint, (id. at ¶¶ 71-72); Count XII,
for violations of the Fair Debt Collection Practices Act
(“FDCPA”), asserted against Shellpoint,
(id. at ¶¶ 73-80); Count XIII, for
violations of the Fair Credit Reporting Act
(“FCRA”), asserted against Shellpoint,
(id. at ¶¶ 81-92); and Count XIV, for
declaratory relief, asserted against no specific
Counter-Defendants but referencing
“Counter-Defendants” actions, (id. at
¶¶ 93-94).[9] Counter-Defendants seek summary judgment
on and/or dismissal of each of these counts. (See
doc. 32).
A.
Unjust Enrichment (Count III), Fraud (Count VII), False Light
(Count VIII), Deceptive Trade Practices (Count X), and FCRA
(Count XIII)
The
Capps do not respond to Counter-Defendants' arguments
supporting dismissal of their unjust enrichment, fraud, false
light, deceptive trade practices, or FCRA counts. Therefore,
the Capps have abandoned those claims, and they are due to be
dismissed. See Coalition for the Abolition of Marijuana
Prohibition v. City of Atlanta, 219 F.3d 1301, 1326
(11th Cir. 2000) (“The appellants' failure to brief
and argue this issue during the proceedings before the
district court is grounds for finding that the issue has been
abandoned.”); Bush v. J.P. Morgan Chase Bank,
N.A., No. 2:15-CV-00769-JEO, 2016 WL 324993, at *6 (N.D.
Ala. Jan. 27, 2016); Boyd v. Daniels, No.
2:13-CV-354-MEF, 2014 WL 1245885, at *3 (M.D. Ala. Mar. 24,
2014) (dismissing claims on motion to dismiss for failure to
respond); Joseph ex rel. Joseph v. Allen, No.
CV-13-S-695-NE, 2013 WL 3712334, at *5 (N.D. Ala. July 12,
2013) (dismissing claims on motion to dismiss for failure to
respond); Hooper v. City of Montgomery, 482
F.Supp.2d 1330, 1334 (M.D. Ala. 2007) (same) (citing
Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587,
599 (11th Cir. 1995) (dismissing undefended claims on summary
judgment)); Hudson v. Norfolk S. Ry. Co., 209
F.Supp.2d 1301, 1324 (N.D.Ga. 2001) (“When a party
fails to respond to an argument or otherwise address a claim,
the Court deems such argument or claim abandoned.”).
B.
Negligence and Wantonness (Counts I and II)
To
prevail on a negligence claim under Alabama law, a plaintiff
must show “(1) a duty to a foreseeable plaintiff; (2) a
breach of that duty; (3) proximate causation; and (4) damage
or injury.” Martin v. Arnold, 643 So.2d 564,
567 (Ala. 1994) (citation omitted). “To establish
wantonness, [a] plaintiff must prove that the defendant, with
reckless indifference to the consequences, consciously and
intentionally did some wrongful act or omitted some known
duty. To be actionable, that act or omission must proximately
cause the injury of which the plaintiff complains.”
Id.
Counter-Defendants
contend the Capps' negligence and wantonness counts are
not cognizable under Alabama law because Alabama does not
recognize a cause of action for negligent or wanton mortgage
servicing when a plaintiff alleges only economic damages.
(Doc. 32 at 12-13). The Capps make a token effort at saving
the negligence claim (but not the wantonness claim) by
folding it into an argument that Alabama law recognizes a
tort of wrongful foreclosure with nonspecific elements. (Doc.
38 at 46-47). To the extent the Capps' contend their
negligence and wantonness claims duplicate their wrongful
foreclosure claim, Count IV is discussed separately.
As for
their other allegations, the Capps' second amended
counterclaim states the Counter-Defendants “negligently
serviced the loan made the basis of this suit, negligently
attempted to collect sums not owed by the Counter-Plaintiffs,
negligently caused their property insurance to be canceled,
negligently defaulted the Counter-Plaintiffs, negligently
conducted a foreclosure sale on Counter-Plaintiff' [sic]
property, were negligent by failing to make sure that
information disseminated to others (including the national
credit bureaus and those credit grantors likely to use the
information provided by those bureaus) was not false, neither
libelous nor slanderous, and rose to the level of maximum
accuracy; negligent by failing to properly train their
employees on the thorough investigation of disputed accounts;
negligent by failing to properly train, and/or supervise
their employees and agents with regard to the handling of
Plaintiff's [sic] loan account and failing to remove the
adverse reporting from Plaintiff's [sic] credit once she
[sic] disputed ...