United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION & ORDER
G. CORNELIUS U.S. MAGISTRATE JUDGE
before the undersigned is an unopposed motion for summary
judgment filed by defendant Wells Fargo Bank, National
Association. (Doc. 46; see Docs. 47-48). Also
pending before the undersigned is a motion to approve a
proposed settlement between the plaintiff and defendant
Donald R. Carr, filed by Michael K. Beard, who serves as Mr.
Carr’s appointed counsel and guardian ad
litem. (Doc. 48). For the reasons discussed below, both
motions are due to be granted and this action is due to be
Carr owns a home in Adamsville, Alabama (the
“Property”). (Doc. 46 at 2). Standard Fire issued
an insurance policy to Mr. Carr, providing coverage for fire
damage sustained by the Property and its contents (the
“Insurance Policy”). (Id. at 3). Wells
Fargo Bank, National Association, holds a mortgage secured by
the Property (the “Mortgage”). (Id. at
occurred at the Property on February 19, 2016. (Id.
at 4). According to Standard Fire, Donna K. McCullars, acting
under a power-of-attorney granted her by Mr. Carr, submitted
one or more claims under the Insurance Policy on Mr.
Carr’s behalf for damage to the Property and personal
property belonging to her and Steve A. Millwood, allegedly
located within the Property. (Doc. 1). Wells Fargo also
submitted a claim to Standard Fire for damage to the
Property. (Doc. 46 at 5). Faced with competing claims to
proceeds of the Policy, Standard Fire interpleaded the sum of
$27, 657.73, which represents the amount required to pay off
the Mortgage, pursuant to 28 U.S.C. § 1335. (Docs. 1, 5,
Fire also seeks declarations regarding coverage due Mr. Carr,
Ms. McCullars, and Mr. Millwood under the Insurance Policy,
based in part on misrepresentations made regarding the
personal property alleged to have been damaged by the fire.
(Doc. 1). According to Standard Fire, much of the personal
property belonging to Ms. McCullars and Mr. Millwood had been
removed from the Property or sold before the fire.
(Id.). Ms. McCullars and Mr. Millwood were each
indicted by the Jefferson County, Alabama Grand Jury on one
count of arson and one count of insurance fraud related to
the fire. See State of Alabama v. Millwood,
01-CC-2016-003670.00 at Doc. 2; State of Alabama v.
McCullars, 01-CC-2016-003671.00 at Doc. 2. Since
Standard Fire brought suit in this district court, Ms.
McCullars and Mr. Millwood have pleaded guilty to the
insurance fraud charges, and the arson charges have been
dismissed. See State of Alabama v. Millwood,
01-CC-2016-003670.00 at Doc. 70; State of Alabama v.
McCullars, 01-CC-2016-003671.00 at Docs. 39; 47.
undersigned appointed Mr. Beard to serve as counsel and
guardian ad litem for Mr. Carr after determining Mr.
Carr is not capable of protecting his interests in this
action. (Docs. 32, 41). Mr. Beard, on behalf of Mr. Carr, has
asserted a counterclaim against Standard Fire, alleging any
wrongful acts committed by Ms. McCullars and Mr. Millwood
should not be imputed to Mr. Carr and that as an innocent
insured Mr. Carr is entitled to benefits recoverable under
the Insurance Policy. (Doc. 40).
Relevant Procedural History
McCullars and Mr. Millwood, proceeding pro se,
appeared in this action initially but subsequently failed to
appear at multiple settings where their presence was
required. These failures are documented in an order dated
January 24, 2019. (Doc. 41). That order advised Ms. McCullars
and Mr. Millwood their failure to appear at future settings
could result in their dismissal from this action without
further notice. (Id.). Orders entered in this action
have been sent to Ms. McCullars and Mr. Millwood through both
the United States Postal Service and e-mail. The physical
address and e-mail addresses to which orders have been sent
were provided to the court by Ms. McCullars and Mr.
Millwood. The undersigned has confirmed the accuracy
of the addresses on multiple occasions and also confirmed
that e-mail is the best way to deliver notices regarding this
case to Ms. McCullars and Mr. Millwood.
McCullars and Mr. Millwood have failed to participate in
these proceedings beyond failing to appear at settings in the
case. Neither of these defendants participated in the
planning meeting conducted pursuant to Rule 26 of the
Federal Rules of Civil Procedure, (Doc. 44 at 1), or
responded to Wells Fargo’s motion for summary judgment
motion for summary judgment filed by Wells Fargo and the
motion for approval of a proposed settlement filed on Mr.
Carr’s behalf were set for hearing on August 20, 2019.
(Doc. 49). Each party was required to attend the hearing
through counsel or, if not represented by counsel, on his or
her own behalf. (Id.). The parties were also warned
the consequence of a failure to appear
would be dismissal from this action
without further notice. (Id.). The hearing was reset
for Monday, September 9, 2019, after Mr. Beard informed the
undersigned Mr. Carr was unable to be present on August 20,
2019 for health reasons. (Doc. 50). The parties were again
reminded attendance at the hearing was required and that
failure to attend would result in
dismissal without further notice. (Id.). The order
resetting the hearing was served on Ms. McCullars and Mr.
Millwood via Certified Mail and e-mail at the addresses
provided by these defendants. (Id.). The court
received a return receipt for the order sent to Mr. Millwood
by Certified Mail. (Doc. 51). The order sent to Ms. McCullars
by Certified Mail was returned to the court as undeliverable
on the date of the hearing. (Doc. 52).
morning of the hearing, which was scheduled to begin at 10:00
A.M., the undersigned received a phone call from Mr. Beard,
stating he had just learned from Ms. McCullars that Mr. Carr
had been hospitalized over the weekend and would not be able
to attend the hearing. Ms. McCullars and Mr. Millwood did not
attend the hearing, either.
Wells Fargo’s Motion for Summary Judgment
Fargo seeks entry of judgment in its favor based on the terms
of the Insurance Policy and the Mortgage. (Doc. 46). The
Insurance Policy provides, “If a mortgagee is named in
this policy, any loss payable under Coverage A or B shall be
paid to the mortgagee and [the mortgagor/insured], as
interests appear.” (Id. at 3). It identifies
Wells Fargo as the first and only mortgagee. (Id. at
Mortgage provides that insurance proceeds “shall be
applied to restoration or repair of the Property, if the
restoration or repair is economically feasible and [Wells
Fargo’s] security interest is not lessened, ” but
that “[i]f the restoration or repair is not
economically feasible or [Wells Fargo’s] security would
be lessened, the insurance proceeds shall be applied to the
sums secured [under the Mortgage], whether or not then due,
with the excess, if any, paid to [Mr. Carr].”
(Id. at 3). The Mortgage also gives Wells Fargo the
right of foreclosure upon the breach of any term, including
the obligation to make loan payments when due. (Id.
at 5). Mr. Carr defaulted on the ...