Ditech Fin. v. Snyder
| Decision Date | 20 July 2022 |
| Docket Number | 2022-UP-308,Appellate Case 2019-000575 |
| Parties | Ditech Financial, LLC, Respondent, v. Kevin G. Snyder, individually and as Personal Representative of the Estate of Mary Snyder, Appellant. |
| Court | South Carolina Court of Appeals |
Ditech Financial, LLC, Respondent,
v.
Kevin G. Snyder, individually and as Personal Representative of the Estate of Mary Snyder, Appellant.
No. 2022-UP-308
Appellate Case No. 2019-000575
Court of Appeals of South Carolina
July 20, 2022
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
Heard February 10, 2022
Appeal From Charleston County Mikell R. Scarborough, Master-in-Equity
Jason Scott Luck, of Luck VI Ltd. Co. d/b/a Jason Scott Luck, Attorney at Law, of Bennettsville, for Appellant.
George Benjamin Milam and Jonathan Edward Schulz, both of Bradley Arant Boult Cummings, LLP, of Charlotte, North Carolina; and Michael Casin Griffin, of Waxhaw, North Carolina, all for Respondent.
PER CURIAM.
In this foreclosure action, Kevin G. Snyder appeals the master-in-equity's (the master's) orders granting Ditech Financial, LLC's (Ditech's)
motion to amend the case caption, denying his motion to compel discovery, and granting partial summary judgment in favor of Ditech; and the master's order and judgment of foreclosure and sale. Snyder argues the master erred in finding Ditech did not violate the South Carolina Supreme Court's Administrative Order on Mortgage Foreclosure Actions[1] (the Administrative Order); denying Snyder's motion to compel discovery when Ditech waived its objections and the materials sought were discoverable under South Carolina law; granting Ditech's motion to amend when Ditech failed to provide Snyder with notice of the motion and the amendment was unsupported by the record; striking Snyder's attorney preference statute[2] defense; and, proceeding with the final foreclosure hearing after Snyder filed his initial notice of appeal. We affirm.
FACTS AND PROCEDURAL HISTORY
This case arises out of a mortgage foreclosure action brought by Ditech against Snyder. In April 2005, Snyder executed a promissory note (the Note) payable to Gateway Funding Diversified Mortgage Services L.P. (Gateway) for $135,000, at an interest rate of 7.5% per annum. Along with the Note, Snyder executed an "Attorney/Insurance Preference Form." The Note was subsequently endorsed to Countrywide Home Loans, Inc. (Countrywide Inc.) and thereafter, endorsed in blank. To secure the Note, Snyder and his wife, Mary Snyder (collectively, the Snyders), executed a real estate mortgage encumbering real property (the Mortgage).[3] The Note came into default for Snyder's failure to make any payments in September 2008, and all subsequent months.
In April 2010, BAC Home Loans Servicing, LP (BAC)[4] sent Snyder a notice of intent to accelerate. Thereafter, in September 2010, BAC filed a foreclosure action against Snyder, alleging the Note and Mortgage came into default in September 2008.[5] In December 2012, BAC filed and served upon Snyder a notice of
foreclosure intervention pursuant to the Administrative Order. Because Snyder failed to submit the documents BAC required to consider loan modification, BAC filed and served upon Snyder a notice of denial of loan modification or other means of loss mitigation in April 2013.
In May 2013, Snyder's counsel filed and served a notice of appearance directing that all correspondence concerning the foreclosure matter be served at an address in Charleston, South Carolina. Snyder's counsel gave additional notice of two address changes in March 2015 and December 2016.
On June 3, 2013, Snyder filed an answer and counterclaims, asserting several defenses against BAC, including violation of the Administrative Order, violation of the Attorney Preference Statute as to Mary, and claiming BAC lacked standing to bring the foreclosure action. Snyder alleged he was entitled to setoff or recoupment for violation of the Attorney Preference Statute. Snyder asserted several counterclaims, including civil compensatory contempt for failure to comply with the Administrative Order and quiet title, seeking dismissal of the complaint based on civil compensatory contempt and quiet title. Additionally, Snyder alleged BAC engaged in unconscionable conduct that was "both described in [the pleadings] and to be determined after a reasonable period of discovery," and he asserted this barred BAC's claims.
In June 2013, Green Tree notified Snyder that it had assumed the servicing of the Mortgage and the total amount due and owing on the Note was $204,798.56. Thereafter, Snyder's counsel contacted Green Tree to inquire about Snyder's options for foreclosure modification or intervention. In August 2013, Green Tree's counsel provided Snyder's counsel with a loss mitigation package and gave Snyder thirty days to provide required forms and documents. In October 2013, the master issued an order staying the proceeding pending foreclosure intervention.
In December 2014, Green Tree approved a trial modification plan for Snyder, which he rejected in March 2015. Foreclosure intervention efforts on the part of Snyder, Green Tree, and Ditech[6] continued through June 2017, when Ditech ultimately determined Snyder was ineligible for loan modification.
In response to Snyder's second set of interrogatories and requests to produce, Green Tree argued, inter alia, the requests were overbroad and irrelevant. In
November 2018, Snyder filed a motion to compel discovery, arguing the materials requested were relevant; obtaining them would not burden Green Tree; and, the requested attorney's fee agreement was not privileged. Snyder sought several documents in connection with a Federal Trade Commission (FTC) action filed against Green Tree in the United States District Court of the District of Minnesota. Specifically, he requested accounting records "showing the revenues from all goods or services sold, all costs incurred in generating those revenues, and the resulting net profit or loss"; personnel records for four specific Green Tree employees, all employees who interacted with the Snyders and their attorneys, and those employees who reviewed the Snyders' loss mitigation applications; and, copies of all scripts and training materials related to Green Tree's collection of debts. The employee records Snyder sought included employees' addresses, telephone numbers, job titles, dates of service, and reasons for termination. After hearing the motion, the master summarily denied the Snyders' motion to compel by order dated March 18, 2019.
In February 2019, Ditech filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York. On March 1, 2019, Ditech filed a notice of bankruptcy filing and imposition of automatic stay and amended its filing in May 2019. The bankruptcy court issued an order granting limited relief from the automatic stay to permit actions "for the sole purpose of defending, unwinding, or otherwise enjoining or precluding any foreclosure . . . and [those that] do not have an adverse effect on any of Ditech's assets." The order specifically provided that claims against Ditech seeking monetary relief of any kind were stayed.
On March 11, 2019, Ditech moved for summary judgment in the foreclosure action. As to Snyder's counterclaim for quiet title, Ditech argued that, to the extent Snyder alleged the Mortgage was invalid because Mary did not sign an attorney preference form, the claim failed because Mary was not a "borrower" under section 37-10-102. As to Snyder's claim for civil compensatory contempt, Ditech argued that it complied with the Administrative Order; compliance with the order was a condition precedent to a foreclosure action; and, the Administrative Order did not create a private right of action or form the basis of a counterclaim.
Snyder moved for partial summary judgment as to his claims for civil compensatory contempt and quiet title. He argued Ditech failed to act in good faith in violation of the Administrative Order and requested the master strike Ditech's amended complaint and reply to Snyder's counterclaims. Additionally, Snyder sought relief either by dissolution of Ditech's lien or rescission of the Note and Mortgage. In the alternative, Snyder requested the master strike Ditech's
demand for damages and deficiency judgment due to the unnecessary delay in proceedings resulting from Ditech's consideration of Snyder's loan modification application.
The master heard the motions for summary judgment on March 18, 2019. In its March 27, 2019 order, the master found Snyder's counterclaim for quiet title was not stayed by the bankruptcy filing but his counterclaim for civil compensatory contempt was stayed to the extent it sought a monetary award. The master further found Ditech acted in good faith and complied with the Administrative Order and granted partial summary judgment in favor of Ditech as to the non-stayed portions of Snyder's claim for civil compensatory contempt. Finally, the master struck Snyder's Attorney Preference Statute defense as to Mary, concluding she was not a borrower within the meaning of section 37-10-102. The master scheduled the trial of Ditech's foreclosure claim and Snyder's quiet title claim for April 1, 2019.
Snyder filed a notice of appeal with this court on April 1, 2019, appealing the master's March 12, 2014 order amending the caption, March 18, 2019 order denying Snyder's motion to compel, and March 27, 2019 summary judgment order.
At the foreclosure hearing, Ditech conceded it would be improper for the master to schedule a foreclosure sale before this court determined whether Snyder's appeal could proceed. Ditech emphasized it was only asking the master to decide all of the factual and legal issues that were not determined at the summary judgment stage so that all of the issues could be raised together on appeal.
The master issued an order and judgment of foreclosure and sale on April 26, 2019. The master determined he had the authority to proceed with the...
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