CitiMortgage, Inc. v. Allied Mortg. Grp., Inc.
| Decision Date | 24 October 2012 |
| Docket Number | Case No. 4:10CV1863 JAR |
| Parties | CITIMORTGAGE, INC., Plaintiff, v. ALLIED MORTGAGE GROUP, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter comes before the Court on CitiMortgage, Inc.'s Motion to Exclude the Opinions of Donald Coker (ECF No. 52), Plaintiff's Motion for Summary Judgment (ECF No. 58), and Plaintiff CitiMortgage, Inc.'s Motion to Strike Affidavit of Wendy Monaco (ECF No. 76). Because the Court grants Plaintiff's Motion for Summary Judgment, the Court does not address CitiMortgage, Inc.'s Motion to Exclude the Opinions of Donald Coker and Plaintiff CitiMortgage, Inc.'s Motion to Strike Affidavit of Wendy Monaco.1
Plaintiff CitiMortgage, Inc. ("CMI") purchases closed loans from approved lenders, including lenders known as "correspondents," across the United States under its Loan Purchasing Program ("the Program"). (Plaintiff's Statement of Uncontroverted Material Facts ("SUMF"), ECF No. 60, ¶1). CMI then resells some of the loans it purchases to the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac"), andother investors in the secondary mortgage market. (Id., ¶3). For example, in 2007, CMI purchased more than 400,000 loans from numerous correspondents. (Id., ¶4).
CMI and Defendant Allied Mortgage Group, Inc. ("Allied") entered into their Correspondent Agreement Form 200 on March 26, 2004 (the "Form 200"), a Delegated Underwriting Addendum to the Form 2000, dated as March 26, 2004 (the "Addendum"), and a Bulk Purchase Agreement to the Form 200, dated as of June 8, 2006 (the "Amendment") (collectively, "the Agreement"). (Id., ¶¶8, 9). The Agreement provided the terms and conditions that governed Allied's sale of loans to CMI under the Program. (Id., ¶10). Among other requirements, the Agreement provided that, for each loan sold to CMI under the Program, Allied must deliver certain loan documents to CMI. (Id., ¶11). Under the Agreement, CMI could require Allied to repurchase any loan that CMI, in its sole and exclusive discretion, determined was defective because it was underwritten or originated or based on materially inaccurate information or material misrepresentations and/or was in violation of the terms of the Agreement and applicable underwriting guidelines and/or must be repurchased from Fannie Mae, Freddie Mac, or secondary market investor. (Id., ¶12). This cure or repurchase provision was found in Section 11 of the Form 200, which provided:
(Id., ¶14).
In addition, Section 10 of the Agreement included an indemnification provision in the event Allied breached the Agreement:
[Allied] agrees to indemnify and hold CMI harmless from any and all claims, actions and costs, including reasonable attorneys' fees and costs, arising from (i) [Allied's] performance or failure to perform under the terms, conditions or obligations of this Agreement or the CMI Manual... (ii) any fraud, misrepresentation or breach of any representation, warranty or covenant contained [in] this Agreement or the CMI Manual...
Since 2004, Allied sold over 2,560 loans to CMI pursuant to the Agreement. (SUMF, ¶20). The combined funded amount of these loans totals over $316,000,000.00. (Id.).
In this litigation, CMI asks the Court to order Allied to pay the Repurchase Price (defined herein) for nine (9) loans (collectively, the "Loans"): Alinea Loan #XXXXX2944, on 6 Kravchenok, Parlin, NJ 08859, dated November 27, 2006; Bent Loan #XXXXX3795, on 95 Topliff Street 1, Dorchester, MA 02122, dated April 27, 2007; Fernandez Loan #XXXXX8703, on 9611 RichmondAvenue, Houston, TX 77063, dated February 22, 2007; Karan Loan #XXXXX2459, on 926 Gotts Road, Davenport, FL 33837, dated February 26, 2007; Kovar Loan #XXXXX7462, on White Flower Circle, Villa Rica, GA 30180, dated February 29, 2007; Pressley Loan #XXXXX3402, on 201 ½ Philadelphia Pike Unit 103, Wilmington, DE 198809, dated November 10, 2006; Stroud III Loan #XXXXX6993, on 6640 Louisville, New Orleans, LA 70124, dated November 30, 2007; Watson Loan #XXXXX7454, on 51 Fields Avenue, Memphis, TN 38109; and Weston Loan #XXXXX6216, on 5626 Maple Tree Drive, Memphis, TN 38115, dated October 30, 2006. (Id., ¶¶21-30). After purchasing the Loans from Allied, CMI alleges that it became aware of facts indicating that certain information contained in the loan application packages for the Loans was materially inaccurate or was materially misrepresented or that the Loans were otherwise defective. (Id., ¶¶31-68).2
In its sole and exclusive discretion, CMI determined that the Loans were underwritten and/or originated based upon materially inaccurate information or material misrepresentations or were otherwise defective. (Id., ¶80). CMI notified Allied that the Loans were defective and demanded that Allied cure the defects or repurchase the Loans pursuant to the Agreement. (Id., ¶¶81-82). Allied did not cure the defects or repurchase the Loans in response to these initial requests. (Id., ¶¶83). Allied did not provide any evidence disproving the misrepresentations, misstatements, and other defects in the Loans. (Id., ¶84). Thereafter, CMI sent final notices to Allied, demanding that Allied repurchase the Loans, but Allied again did not repurchase the Loans. (Id., ¶¶85-88).
CMI calculates its damages as the "Repurchase Price," as that price is calculated in the Agreement. (Id., ¶89-91). Section 2301 of the CMI Manual defines the Repurchase Price as follows:
[T]he sum of (i) the current principal balance on the loan as of the paid-to date; (ii) the accrued interest calculated at the mortgage loan Note rate from the mortgage loan paid-to date up to and including the repurchase date; (iii) all unreimbursed advances (including but not limited to tax and insurance advances, delinquency and/or foreclosure expenses, etc.) incurred in connection with the servicing of the mortgage loan; (iv) any price paid in excess of par by CitiMortgage on the funding date; and (v) any other fees, costs, or expenses charged by or paid to another investor in connection with the repurchase of the mortgage loan from such investor but only to the extent such fees, costs and expenses exceed the total of items (i) through (iv) above.
(Id., ¶92). CMI calculates the total Repurchase Price due CMI under the nine loans at issue in this litigation is $1,084,639.05. (Id., ¶¶93-103).
On October 4, 2010, CMI commenced this breach of contract action against Allied. (ECF No. 1). CMI alleges that Allied delivered nine loans that failed to conform to the terms of the Agreement and subsequently refused to cure or repurchase these Loans, thereby breaching the contract.
The Court may grant a motion for summary judgment 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." Fed. R. Civ. P. 56©; Celotex Corp. v. Citrate, 477 U.S. 317, 322 (1986); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). The substantive law determines which facts are critical and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Onlydisputes over facts that might affect the outcome will properly preclude summary judgment. Id. Summary judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.
A moving party always bears the burden of informing the Court of the basis of its motion. Celotex Corp., 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving party...
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