Buckentin v. SunTrust Mortg. Corp.

• Decision Date: 04 March 2013
• Docket Number: Case No. 2:11–CV–00532–RDP.
• Citation: 928 F.Supp.2d 1273
• Parties: Michael BUCKENTIN and Mary Buckentin, Plaintiffs, v. SUNTRUST MORTGAGE CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Alabama

928 F.Supp.2d 1273

Michael BUCKENTIN and Mary Buckentin, Plaintiffs,

v.SUNTRUST MORTGAGE CORPORATION, Defendant.

Case No. 2:11–CV–00532–RDP.

United States District Court,

N.D. Alabama,

Southern Division.

March 4, 2013.

Richard Allan Rice, Vulcan Legal Group LLC, Birmingham, AL, for Plaintiffs.

Richard C. Keller, Zachary D. Miller, Burr & Forman LLP, Birmingham, AL, for Defendant.

MEMORANDUM OPINION

R. DAVID PROCTOR, District Judge.

This case is before the court on Defendant's Motion for Summary Judgment (Doc. # 44). The Motion has been fully briefed. (Docs. # 45, 48, 52). For the reasons discussed below, the court concludes the Motion is due to be granted.

I. INTRODUCTION

This case concerns a mortgage on Plaintiffs' home, and whether Plaintiffs had an obligation to continue to pay that mortgage while in protracted litigation with a manufacturer of defective drywall (related to defects which made the home uninhabitable). The drywall manufacturer is not a party to this litigation.

Plaintiff's Amended Complaint (Doc. # 18) asserts the following claims against Defendant SunTrust Mortgage, the mortgage servicer:

1. Count One—Wrongful Foreclosure

2. Count Two—Fraud

3. Count Three—Breach of Contract

4. Count Four—Breach of Implied Covenant of Good Faith and Fair Dealing

5. Count Five—Intentional Infliction of Emotional Distress

6. Count Six—Negligent and/or Wanton Hiring, Training, and/or Supervision

7. Count Seven—Negligence

8. Count Eight—Wantonness

9. Count Nine—Slander of Title

10. Count 10—RESPA

11. Count 11—FDCPA

(Doc. # 18).

II. FACTS¹

In November 2007, Plaintiffs purchased land and a house located at 4033 Butler Springs Place, Hoover, Alabama 35226 (the “Property”) for approximately $900,000.00. (Doc. # 46, Ex. A at 37, 44). Plaintiffs financed the purchase of the Property with a loan from Wells Fargo Bank, N.A. (Doc. # 46, Ex. A at 44).

After several years, Plaintiffs began looking to refinance their Wells Fargo loan with one from another bank. (Doc. # 46, Ex. A at 46); (Doc. # 46, Ex. B at 41–42). Plaintiffs eventually decided to refinance with a loan from GenEquity Mortgage. (Doc. # 46, Ex. B at 42). On March 27, 2009, Plaintiffs signed a promissory note (the “Note”) in favor of GenEquity in the amount of $416,874.00. (Doc. # 46, Ex. A at 53–54, Ex. 6 thereto). Plaintiffs also executed a mortgage (the “Mortgage”), providing the Property as security for their loan. (Doc. # 46, Ex. A, Ex. 6 thereto). On or about May 1, 2009, the servicing rights to collect on Plaintiffs' Note were assigned to SunTrust. (Doc. # 46, Ex. A, Ex. 9 thereto).

From the time that Plaintiffs purchased the Property, they had problems with appliances failing in the house. (Doc. # 46, Ex. A at 37–38). The presence of Chinese Drywall was officially confirmed in Plaintiffs' home during the spring of 2010. (Doc. # 46, Ex. A at 37–38). Shortly thereafter, Plaintiffs filed suit against Knauf, the manufacturer of their drywall, and that case was centralized as part of Multi–District Litigation in New Orleans, Louisiana. (Doc. # 46, Ex. A at 40). Plaintiffs have entered into a tentative settlement in the Knauf case that will eventually result in Plaintiffs' home being remediated. (Doc. # 46, Ex. A at 41–43); (Doc. # 46, Ex. B at 34–35).

In late July or early August of 2010, Michael Buckentin called SunTrust to request a forbearance from paying mortgage payments because of the presence of Chinese Drywall. (Doc. # 46, Ex. A at 63 –64). On August 17, 2010, SunTrust offered, and ultimately the Buckentins accepted, a forbearance agreement which contained the following language:

FORBEARANCE AGREEMENT

Loan 0212774582

09–01–10

10–01–10

11–01–10

This forbearance allows for non-payment of the mortgage for the dates listed above.

...

All of the provisions of the note and security instrument, except as herein provided, shall remain in full force and effect. Upon the breach of any provision of this agreement, SunTrust Mortgage may terminate this agreement and institute foreclosure proceedings in accordance with the terms of the security instrument without regard to this agreement.

* *Note: On or before 11–01–10, you must send updated financials. At that time, your account will be reviewedfor a possible Loss Mitigation workout.* *

(Doc. # 46, Ex. A at 65, Ex. 11 thereto) (emphasis in original).

By December 2010, the parties had not agreed on an additional forbearance. (Doc. # 46, Ex. A at 69–70). However, Plaintiffs did not make their December mortgage payment, nor have they made any mortgage payments since that time. (Doc. # 46, Ex. A at 99). The last payment made by Plaintiffs on their Mortgage was in August 2010. (Doc. # 46, Ex. A at 99).

In December 2010, Plaintiffs moved out of the Property and into an apartment. (Doc. # 46, Ex. A at 62). They also had a number of discussions with SunTrust about obtaining a further forbearance. (Doc. # 48–3, Ex. P). On December 14, 2010, Plaintiffs provided updated information to SunTrust, including the fact that Mr. Buckentin was not currently working and was seeking employment. (Doc. # 48–1, Ex. F). And, on or about December 27, 2010, Plaintiffs' loan was approved for foreclosure. (Doc. # 48–3, Ex. P).

Starting on December 31, 2010 and continuing into January 2011, Plaintiffs had several discussions with SunTrust regarding their loan. (Doc. # 46, Ex. A at 68; Doc. # 48–3, Ex. P). During one of these discussions—with an individual who Plaintiffs state was named “Derek”—SunTrust retroactively offered Plaintiffs an additional two months forbearance, which would expire on February 1, 2011. (Doc. # 46, Ex. A at 88–92). Mr. Buckentin described the verbal agreement as follows:

Q. And then you stated that at some point you were informed that the forbearance was extended; is that correct?

A. Yes.

Q. Okay. Who informed you of that?

A. On January 4th, the previous day, which, I believe, was Monday, the 3rd of January, I had called again, trying to figure out what's going on. And I had talked to somebody named Derek.

Q. And what did Derek say?

A. ... [O]n the following day, he actually called me back and said that from his team lead, who I believe was like a supervisor, he said that they had decided to extend the forbearance until—until—that they had actually extended the forbearance until February 1st....

...

A. It also says they will correct the delinquent payment issue with the Credit Bureau....

(Doc. # 46, Ex. A at 88–90).

Plaintiffs claim they relied upon the information provided by “Derek” about the second, verbal forbearance agreement and further testified that they had no reason to believe he would not follow through on their discussion:

Q. Okay. When Derek made the initial statement to you on January 4th, do have any reason to believe that he was lying?

A. No.

Q. Do you believe that Derek thought that it would not be reported as delinquent?

A. an you re-state that question, please.

Q. Do you have any evidence that Derek knew that your account was going to be reported as delinquent but was not telling you the truth?

A. No.

(Doc. # 46, Ex. A at 125–26). As of March 4, 2011, SunTrust was reporting Plaintiffs' credit as current. (Doc. # 46, Ex. C at ¶¶ 7–8; Ex. A thereto).

After Plaintiff's mortgage had been approved for foreclosure, SunTrust retained the services of Johnson & Freedman, LLC (“Johnson & Freedman”) to initiate the foreclosure proceedings. (Doc. # 46, Ex. C at ¶ 4). In connection with the foreclosure proceedings, on January 27, 2011, Johnson and Freedman sent an acceleration letter and foreclosure notice to Plaintiffs stating that a foreclosure sale was scheduled for Plaintiffs' Property on February 17, 2011. (Doc. # 46, Ex. A at 94; Doc. # 18–1, Ex. J). After receiving the acceleration letter, Plaintiffs made additional phone calls to SunTrust and retained legal counsel. (Doc. # 46, Ex. A at 94–98).

On February 3, 2011, Plaintiffs sent a letter to the President of SunTrust, informing him of the Chinese Drywall issues and asking several questions related to their mortgage loan. (Doc. # 18–1, Ex. K). Plaintiffs' February 3, 2011 requested the following information:

• “How can SunTrust agree to forbearance and at the same time foreclose on my house?

• How can my house that is involved in Toxic Chinese Drywall Litigation be considered for foreclosure when both Fannie and Freddie say that it should not be reported as delinquent?

(Doc. # 48–1, Ex. K).

On March 7, 2011, in response to Plaintiffs' February 3 letter, Cora–Semmes Bryce, a representative of SunTrust, sent a detailed letter to Plaintiffs' counsel explaining the forbearance agreements between the parties and requesting additional information regarding Plaintiffs' Chinese Drywall lawsuit. (Doc. # 18–1, Ex. M). The March 7, 2011 letter explained that the initial three-month forbearance period (September, October and November 2010) expired without a request to extend the forbearance and the account was referred to outside counsel for foreclosure proceedings. (Doc. # 48–1, Ex. M). The letter further explained that, after the Buckentins requested a further forbearance period, it was granted retroactively by Fannie Mae until February 1, 2011. (Doc. # 48–1, Ex. M).

In the interim, on February 18, 2011, SunTrust sent Plaintiffs a written offer for an additional two months of forbearance. (Doc. # 48–4, Ex. Q). Plaintiffs rejected the offer of an additional forbearance period. (Doc. # 46, Ex. A at 97–98; Ex. 23 thereto).

Although a foreclosure sale was scheduled, it never occurred. SunTrust has never foreclosed on the Property. (Doc. # 46, Ex. A at 122–23).²

III. SUMMARY JUDGMENT STANDARD

Under Federal Rule of Civil Procedure 56(c), 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, ...