Childress v. Bank of Am.
| Decision Date | 19 January 2022 |
| Docket Number | Civil Action 18-154-DLB-CJS |
| Court | U.S. District Court — Eastern District of Kentucky |
| Parties | KIMBERLY CHILDRESS PLAINTIFF v. BANK OF AMERICA, N.A. DEFENDANT |
This matter is before the Court on a number of Motions related to Plaintiff's Fair Debt Collections Practices Act case. First, Plaintiff filed a Daubert Motion to preclude Defendant's expert, Robert Shober, from testifying. (Doc # 67). Plaintiff then filed a Motion for Summary Judgment (Docs. # 68 and 69), and Defendant filed a cross-Motion for Summary Judgment. (Doc. # 70). Following the filing of Defendant's Motion for Summary Judgment, Plaintiff filed a Motion to Strike Defendant's Motion. (Doc. # 72). The Motions have been fully briefed, (Docs. # 74, 77, 79, 81, 83, 84, 85, and 86), and are now ripe for the Court's review. For the reasons set forth herein, Defendant's Motion for Summary Judgment is granted (Doc. # 70), Plaintiff's Motions for Summary Judgment (Doc. # 68 & 69) are denied, the other motions referenced above are denied, and this case is dismissed in its entirety.
Plaintiff Kimberly Childress filed the instant action in this Court asserting a Fair Debt Collections Practices Act (“FDCPA”) claim (Count I), as well as breach of contract (Count II), negligent misrepresentation (Count III), fraud (Count IV), constructive fraud (Count V), breach of duty of good faith and fair dealing (Count VI), breach of fiduciary duty (Count VII), and punitive damages claims (Count VIII). (Doc. # 1 ¶¶ 97-189). However, at the Motion to Dismiss stage, three of these Counts (Count V, VI, and VII) were dismissed entirely, and Count I was dismissed except for Plaintiff's claims under 15 U.S.C. § 1692c(2). (Doc. # 17).
While the Court previously explained the factual background of this case in detail, following discovery, a new account of the underlying facts is warranted. This case stems from Childress's mortgage agreement with Security Atlantic Mortgage Company, Inc. for her home located on 812 Dalewood Drive, Villa Hills, Kentucky, 41017, executed in September of 2008. (Doc. # 1 ¶¶ 6-7). In July 2008, prior to the first mortgage payment being due, Countrywide Home Loans Servicing began servicing Plaintiff's mortgage. (Doc. # 70-2 at 31); (see also Doc. # 1-6 at 1). After a year and a half of paying her mortgage in full, Childress began missing or paying only part of her monthly payments. (Doc. # 1 ¶¶ 8-10). On September 22, 2011, Security Atlantic Mortgage Company executed an assignment of mortgage transferring the mortgage to Bank of America. (Doc. # 1-6 at 1-2).
After Childress's loan was transferred to Bank of America, she asked for a modification on her mortgage so that she could more easily make her mortgage payments in full. (Doc. # 1 ¶ 12). Bank of America approved Childress for a Workout Assistance Program and requested she fill out a number of documents and provide a cashier's check for $1, 095.36, which Childress alleges she mailed on or about June 3, 2010. (Id. ¶¶ 1316). Approximately a month later, Childress requested a status update as to her modification, and Bank of America said it never received her modification documents, although it cashed the cashier's check accompanying the documents. (Id. ¶¶ 18-20). On July 2, 2010, Childress faxed Bank of America the modification documents, but Childress's mortgage modification was never recorded, as required, with the Kenton County Clerk's Office. (Id. at ¶¶ 21, 24). Bank of America asserts that Plaintiff never signed the modification agreement, but that it implemented the terms of the 2010 modification as if she had. (Docs. # 1-5 at 2 and 9-1 at 2).
Under the terms of the 2010 modification, Bank of America capitalized the interest arrearage of $9, 622.20 and the delinquent escrow of $1, 532.34, resulting in a new principal loan balance of $149, 296.39. (Docs. # 1-5 at 2 and 1-11 at 4). In layman's terms, capitalizing these amounts simply means adding the unpaid interest and delinquent escrow to the principal balance of the loan. Ultimately, the modification set a new interest rate of 5.375% with a monthly payment of $1, 095.36. (Doc. # 1-5 at 2-3).
On September 22, 2011, Bank of America recorded an Assignment of Mortgage to acquire Childress's home. (Doc. # 1 ¶ 37). While Childress attempted to contact Bank of America's representatives and continued paying her mortgage, Bank of America “called her continuously, sent her repeated delinquent notices, and otherwise harassed her in every fathomable way for years.” (Id. ¶¶ 40-42). While Childress states that she was current on her mortgage payments, (id. ¶¶ 27, 38), Bank of America alleges that between July 2010 and April 2012, she missed a number of payments or otherwise did not pay her mortgage in full. (Doc. # 70-1 at 5).
In April of 2012, at Bank of America's request, Childress completed a trial payment period of three months so that a second modification agreement could be approved.
(Docs. # 1 ¶¶ 43-45 and 70-2 at 102, 117). In the letter approving Childress's second modification in February of 2013, Bank of America informed Childress that there was an error in the 2010 modification documents. (Docs. # 1 ¶ 46 and 70-2 at 117). Plaintiff executed the 2013 modification at this time, and rectified the error in the 2010 modification. (Docs. # 1 at 46-53, 1-10 at 3, and 1-11). The modification agreement related to the 2010 modification was “not identical” to the agreement presented to Childress in 2010. (Docs. # 9-1 at 3 and 65-1 at 17); (see also Docs. # 1-5 and 1-11).
The 2013 loan modification resulted in a principal loan balance of $157, 559.54. (Doc. # 1-10 at 3). Ultimately, the 2013 modification set a total monthly payment amount of $1, 119.81 with a 4.5% interest rate. (Id.).
During this time, Childress was unaware that two separate 2013 loan modification agreements were recorded with the Kenton County Clerk's Office. (Docs. # 1 ¶¶ 53-54 and 70-2 at 153-161). Childress was under the impression that the 2013 modification documents were not for a second modification, but were instead a correction of the 2010 modification documents. (Docs. # 77 at 5-6 and 65-1 at 17).
While Childress initially assumed that her modification was resolved, on August 7, 2013, she received two identical letters from Bank of America threatening to foreclose on her home as it did not receive her July and August payments. (Id. ¶ 64). The “missed” payments were automatically withdrawn from her checking account. (Id. ¶ 65). When Childress asked Bank of America about these letters, she was informed that the payments were applied to “other deferred amounts” on her account of $7, 424.19; she alleges management informed her that these amounts should have been zeroed out during the modification process. (Docs. # 1 ¶¶ 66-68 and 1-9).[1] At the end of September 2013, Childress received a letter informing her that her “other deferred amount” actually only totaled $3, 422.71. (Docs. # 1 ¶ 70 and 1-14).
This $3, 422.71 amount was ultimately determined to be based on payments Bank of America had advanced to the owner of the loan on behalf of Childress to cover her mortgage during the time it took to process the 2013 loan modification. (Docs. # 77 at 7 and 70-1 at 7-8). As explained in Bank of America's February 8, 2013 letter to Childress, during the time necessary to process the 2013 loan modification, Childress had failed to pay her mortgage in full. (Doc. # 1-9 at 1). This shortfall, once Bank of America took into account the payments Childress had made, totaled $3, 422.71. (Doc. # 1-14 at 1-2). Bank of America's September 28, 2013 letter lists the $3, 422.71 amount as “other deferred amounts, ” which are required to be paid at the maturity of the loan. (Id. at 2).
Since 2013, Childress has paid her mortgage while receiving no information regarding the mortgage modifications and being threatened with foreclosure. (Docs. # 1 ¶¶ 77-81 and 9-1 at 5); (see also Doc. # 1-17). In September 2017, Childress retained counsel, and counsel notified Bank of America of their representation of Childress. (Doc. # 1 82-83). Even after retaining counsel, Bank of America contacted Childress about foreclosure or signing another modification. (Id. ¶ 86).
In March of 2018, Childress filed a complaint with the Consumer Financial Protection Bureau, but according to Plaintiff, Bank of America “refus[ed] to truly investigate or attempt[ed] to cover up the serious issues caused by Bank of America.” (Id. ¶¶ 88-91).
Federal Rule of Civil Procedure 26(a)(1)(i) requires parties in their initial disclosure to provide the name of individuals “likely to have discoverable information.” In conjunction with this rule, Federal Rule of Civil Procedure 37(c)(1) provides that “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion . . . unless the failure was substantially justified or is harmless.” “‘[H]armless' involves an honest mistake on the part of a party coupled with sufficient knowledge on the part of the other party.” Vance, by and through Hammons v. United States, 182 F.3d 920, 1999 WL 455435, at *5 (6th Cir. June 25, 1999) (table opinion).
Plaintiff moves to strike Bank of America's Summary Judgment Motion in its entirety, (Doc. # 71), and to specifically strike the affidavit of Ryan Dansby, Bank of America's corporate representative, (Doc. # 71-2). (Doc. # 72). Plaintiff...
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