Clark v. Bank of Am., N.A.
| Decision Date | 22 September 2021 |
| Docket Number | Civil Case No. SAG-18-3672 |
| Citation | 561 F.Supp.3d 542 |
| Parties | Cynthia CLARK, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. |
| Court | U.S. District Court — District of Maryland |
Anna Claire Haac, Katherine Aizpuru, Matthew Lanahan, Pro Hac Vice, Hassan A. Zavareei, Tycko & Zavareei, LLP, Washington, DC, Bradley F. Silverman, Pro Hac Vice, Todd S. Garber, Pro Hac Vice, Finkelstein Blankinship Frei-Pearson and Garber LLP, White Plains, NY, Daniel Tropin, Pro Hac Vice, Jonathan Streisfeld, Pro Hac Vice, Kopelowitz Ostrow PA, Ft. Lauderdale, FL, Jeffrey Goldenberg, Goldenberg Schneider LPA, Cincinnati, OH, for Plaintiffs.
Andrew Soukup, Pro Hac Vice, Jeffrey Huberman, Pro Hac Vice, Mark W. Mosier, Pro Hac Vice, Covington and Burling LLP, David L. Permut, Thomas M. Hefferon, Tierney Smith, Goodwin Procter LLP, Washington, DC, for Defendant.
Cynthia Clark ("Plaintiff") filed a Complaint on behalf of herself and a putative class of borrowers who entered into mortgage agreements with Bank of America ("BofA"), alleging, inter alia , that BofA is liable for failure to pay interest on escrow accounts established in connection with such agreements. Pending before this Court is BofA's Motion for Summary Judgment, ECF 105. The issues have been fully briefed, ECF 108, 122, 127, and no hearing is necessary. See Loc. R. 105.6 (D. Md. 2021). For the reasons stated below, BofA's Motion for Summary Judgment will be granted.1
The facts described herein are viewed in the light most favorable to the Plaintiff as the non-moving party.
In or about August, 1995, Plaintiff purchased a house in Westminster, Maryland. ECF 1 ¶ 27. Although Plaintiff originally financed her purchase with a loan from a different company, she refinanced her mortgage in 2005 with BofA as her new lender. ECF 105 at 3. When she did so, BofA established an escrow account on Plaintiff's behalf. ECF 105-3 at 55:21-56:14 (Ex. 1, Clark Dep.). These escrow accounts are commonly used by mortgage lenders such as BofA "to require that part of the borrower's monthly payments be set aside to make tax and insurance payments on the borrower's behalf." ECF 105 at 2 (citing H.R. Rep. No. 111-94, at 53 (2009)). At closing, Plaintiff signed an "Escrow Reserve Account or Waiver Agreement," which stated that Plaintiff would receive interest on her escrow account. ECF 105-4 (Ex. 2). Consistent with these representations, BofA paid Plaintiff interest on the escrowed funds. BofA provided periodic statements that reflected the accrual of interest to Plaintiff's escrow account. ECF 105-7 (Ex. 5). These interest payments were consistent with Maryland law, which requires lending institutions to pay specified amounts of interest on escrow account funds established in connection with a loan secured by residential first mortgages or first deeds of trust. Md. Com. Law Code § 12-109.
In March of 2010, Plaintiff refinanced her mortgage loan with BofA. ECF 105 at 4. As with her 2005 refinancing, BofA established an escrow account in connection with Plaintiff's new mortgage loan. Id. Unlike her prior loan, however, BofA did not pay interest on funds in the escrow account established in 2010. Id. BofA's failure to pay interest on Plaintiff's escrowed funds resulted from an internal policy shift implemented at some point between Plaintiff's 2005 and 2010 closings. See id. (citing ECF 105-12 at 44:20-45:1 (Ex. 10, Orriss Dep.)). BofA instituted its revised policy notwithstanding Md. Code, Comm. Law § 12-109.
In February, 2013, Plaintiff again refinanced her mortgage agreement with BofA. Plaintiff executed the mortgage agreement, in the form of a deed of trust (the "Deed of Trust"), on February 13, 2013. ECF 109-4 (Ex. A, Plaintiff's 2013 Deed of Trust). The Deed of Trust included several provisions relevant to this action. First, the Deed of Trust provided that BofA would comply with "applicable state and federal law." Id. ¶ 16. Second, it specified that "[u]nless an agreement is made in writing or Applicable Law requires interest to be paid on the [Escrow] Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds." Id. ¶ 2. Finally, the Deed of Trust stipulated that neither borrower nor lender would commence judicial action for an alleged breach of any provision without first notifying the other party of the alleged breach and giving that party a reasonable period to take corrective action. Id. ¶ 20. Around the time the Deed of Trust was executed, Plaintiff also may have received a document that BofA provided to some borrowers at closing titled Notice Concerning Your Escrow Account ("Escrow Account Notice"). ECF 105-7 (Ex. 11). The Escrow Account Notice stated in relevant part that "[t]he federal law and regulations that Bank of America and its subsidiaries are subject to do not require the payment of interest on escrow accounts." ECF 105-7 (Ex. 11).
In August, 2014, Plaintiff received an Escrow Account Disclosure Statement ("Annual Escrow Statement") from BofA, which summarized the activity in her escrow account, and reflected that no interest had been paid on her escrowed funds. ECF 109-4 (Ex. C, 2014 Escrow Account Disclosure Statement). Plaintiff received a similar Annual Escrow Statement in August of 2015, which again reported that interest had not accrued on the funds held in her escrow account. Id. at Ex. D. Plaintiff received similar Annual Escrow Statements in August of 2016, August of 2017, and August of 2018. Id. at Ex. E-G.
At some point, while reviewing one of her Annual Escrow Statements, Plaintiff noticed that interest was not accruing on her escrowed funds. Plaintiff filed this lawsuit in November, 2018 on behalf of herself and a putative class, alleging claims against BofA in connection with its failure to pay interest.
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate only "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." The moving party bears the burden of showing that there is no genuine dispute of material facts. See Casey v. Geek Squad , 823 F. Supp. 2d 334, 348 (D. Md. 2011) (citing Pulliam Inv. Co. v. Cameo Props. , 810 F.2d 1282, 1286 (4th Cir. 1987) ). If the moving party establishes that there is no evidence to support the non-moving party's case, the burden then shifts to the non-moving party to proffer specific facts to show a genuine issue exists for trial. Id. The non-moving party must provide enough admissible evidence to "carry the burden of proof in [its] claim at trial." Id. at 349 (quoting Mitchell v. Data Gen. Corp. , 12 F.3d 1310, 1315-16 (4th Cir. 1993) ). The mere existence of a "scintilla of evidence" in support of the non-moving party's position will be insufficient; there must be evidence on which the jury could reasonably find in its favor. Id. at 348 (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). Moreover, a genuine issue of material fact cannot rest on "mere speculation, or building one inference upon another." Id. at 349 (quoting Miskin v. Baxter Healthcare Corp. , 107 F. Supp. 2d 669, 671 (D. Md. 1999) ).
Additionally, summary judgment shall be warranted if the non-moving party fails to provide evidence that establishes an essential element of the case. Id. at 352. The non-moving party "must produce competent evidence on each element of [its] claim." Id. at 348-49 (quoting Miskin , 107 F. Supp. 2d at 671 ). If the non-moving party fails to do so, "there can be no genuine issue as to any material fact," because the failure to prove an essential element of the case "necessarily renders all other facts immaterial." Id. at 352 (quoting Coleman v. United States , 369 F. App'x 459, 461 (4th Cir. 2010) (unpublished)). In ruling on a motion for summary judgment, a court must view all of the facts, including reasonable inferences to be drawn from them, "in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc. , 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) ).
In her opposition, Plaintiff argues that BofA's motion should be denied for noncompliance with local rules requiring that "[i]n a two-party case, if both parties intend to file summary judgment motions, counsel are to agree among themselves which party is to file the initial motion." ECF 123 at 2 (citing Loc. R. 105.2 (D. Md. 2021)). Crucially, Plaintiff does not assert that she intended to seek summary judgment. Nor could she. As Plaintiff admits, the one-way intervention rule prohibits her from seeking summary judgment before class certification. Id. at 2 n.2. Under these circumstances, there is no basis for concluding that BofA's motion was improper or untimely. See Lupo v. JPMorgan Chase Bank, N.A. , 2015 WL 5714641, at *12 (D. Md. Sept. 28, 2015) ().
Maryland law allows parties to recover on claims for breach of contract. See, e.g. , Hoang v. Hewitt Ave. Assocs., LLC , 177 Md.App. 562, 936 A.2d 915, 934 (2007). In Count I, Plaintiff contends that BofA breached its contract by failing to pay interest on her escrow account as required by Maryland law, despite language in the Deed of Trust stating that BofA would comply with all applicable law.2 ECF 1 ¶ 45-51; see also ECF 123 at 25 (citing ECF 109-4 (Ex. A, Plaintiff's 2013 Deed of Trust, ¶ 16)). The Deed of Trust also contains a notice-and-cure provision, which provides in pertinent part that:
Neither Borrower nor Lender may commence ... any judicial action ... that alleges that the other party has...
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