Fahey v. Am. Home Mortg. Servicing, Inc.
| Decision Date | 10 December 2012 |
| Docket Number | Case No. 11-62544-Civ-SCOLA |
| Parties | DANA FAHEY and JEROME PETRISKO, Plaintiffs, v. AMERICAN HOME MORTGAGE SERVICING, INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS MATTER is before the Court on the Plaintiffs' Motion for Summary Judgment (ECF No. 22). Through the Motion, the Plaintiffs have moved for summary judgment on their statutory claim for a violation of the Real Estate Settlement Procedures Act and for civil theft. For the reasons explained in this Order, the Motion for Summary Judgment is denied.
This lawsuit involves a dispute over the treatment of a surplus in the Plaintiffs' escrow account, associated with their home mortgage. Plaintiffs, Dana Fahey and Jerome Petrisko, husband and wife, accepted a loan that was secured by a mortgage on their home in Fort Lauderdale, Florida. Defendant Deutsche Bank Trust Company Americas is the current holder of Plaintiffs' note. Defendant American Home Mortgage Servicing, Inc. is the current loan servicer.
In November 2009, Fahey executed a loan modification agreement.2 Through the loan modification agreement, Fahey borrowed an additional $119,414.28, which represented past due amounts and other charges that were outstanding. Of these newly borrowed funds, $40,807.47 was allocated to the Plaintiffs' escrow account, which was established for the purpose of ensuring the payment of taxes, insurance premiums, and other charges with respect to themortgaged property. The Plaintiffs' escrow account balance was $73,139.41, after these additional funds were placed in the account. American Home Mortgage Servicing disbursed $48,080.58 from the Plaintiffs' escrow account in 2009 to cover taxes and insurance.
In October 2010, American Home Mortgage Servicing withdrew $39,095.46 from the Plaintiffs' escrow account and applied that same amount to the principal balance of the Plaintiffs' loan. Throughout the spring and summer of 2011, before this lawsuit was filed, the Plaintiffs contacted both Defendants numerous times requesting that the escrow surplus be refunded to them. The Defendants have refused to refund the escrow surplus to the Plaintiffs. It is the Defendants' position that these escrow surplus should not be refunded to the Plaintiffs, but rather should be applied to the principal balance, because the surplus is attributable to the loan modification agreement.
Through Count I of their Amended Complaint, the Plaintiffs have alleged that the Defendants violated Section 10 of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2609 (2006) ("RESPA"). Counts II and III allege that the Defendants, respectively, committed civil theft by wrongfully withdrawing and converting the escrow surplus.
Under Federal Rule of Civil Procedure 56, "summary judgment is appropriate where there 'is no genuine issue as to any material fact' and the moving party is 'entitled to a judgment as a matter of law.'" Alabama v. North Carolina, 130 S. Ct. 2295, 2308 (2010) (quoting Fed. R. Civ. P. 56(a)). Rule 56 requires a court to enter summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
"The moving party bears the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial . . . [o]nly when that burden has been met does the burden shift to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Rule 56[(c)] "requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is agenuine issue for trial." Celotex, 477 U.S. at 324 (internal quotation marks omitted). Thus, the nonmoving party "may not rest upon the mere allegations or denials of his pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks omitted); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1984) ().
The Court must view the evidence in the light most favorable to the nonmoving party, and summary judgment is inappropriate where a genuine issue material fact remains. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970). "An issue of fact is 'material' if, under the applicable substantive law, it might affect the outcome of the case." Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir.2004). "An issue of fact is 'genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Id. at 1260. A court may not weigh conflicting evidence to resolve disputed factual issues; if a genuine dispute is found, summary judgment must be denied. Skop v. City of Atlanta, Ga., 485 F.3d 1130, 1140 (11th Cir. 2007).
A lender, in connection with a federally related mortgage loan, may not require the borrower . . . to deposit in any escrow account which may be established in connection with such loan for the purpose of assuring payment of taxes, insurance premiums, or other charges with respect to the property . . . an aggregate sum (for such purpose) in excess of a sum that will be sufficient to pay such taxes, insurance premiums and other charges . . . plus one-sixth of the estimated total amount of such taxes, insurance premiums and other charges . . . .
12 U.S.C. § 2609(a).
For each escrow account, the servicer shall conduct an escrow account analysis to determine whether a surplus, shortage or deficiency exists. . . . . If an escrow account analysis disclosed a surplus, the servicer shall, within 30 days from the date of the analysis, refund the surplus to the borrower if the surplus is greater than or equal to 50 dollars ($50).
If any servicer of a federally related mortgage loan receives a qualified written request from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall . . . (A) make appropriate corrections in the account of the borrower . . . ; [or] (B) after conducting an investigation, provide the borrower with a written explanation or clarification that includes to the extent applicable, a statement of the reasons for which the servicer believes that account of the borrower is correct as determined by the servicer.
12 U.S.C. § 2605(e).
Since Fahey has not pleaded a claim for the violation of Section 6 of RESPA, summary judgment cannot be entered on this issue. In moving for summary judgment, Fahey argues that the Defendants violated RESPA by failing to adequately respond to their written request for information relating to the servicing of their loan. (Mot. Summ. J. 7-9, ECF No. 22.) RESPA requires a loan servicer to respond to a borrower's "qualified written request" for information relating to the servicing of the loan. 12 U.S.C. § 2605(e). Specifically, in response to such an inquiry, a loan servicer must respond by either making the appropriate corrections to the borrower's account, or by providing the borrower with a written explanation that includes "a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer." 12 U.S.C. § 2605(e)(2).3
The requirement that loan servicers respond to borrower inquiries is found in Section 6 of RESPA, which was codified to 12 U.S.C. § 2605. As the Defendants have pointed out, the Plaintiffs have expressly not alleged a violation of RESPA Section 6. Instead, both the complaint and the summary judgment motion are focused on an alleged Section 10 violation. (Am. Compl. ¶¶ 31, 33, and p.12 (Wherefore Clause), ECF No. 12; see also Mot. Summ. J. 8-10, ECF No. 22.) The Plaintiffs have not moved for leave to amend their complaint. Since there isno claim before the Court for a RESPA violation under 12 U.S.C. § 2605 (RESPA Section 6), the Court cannot grant summary judgment on this issue.
This Court cannot grant summary judgment on Fahey's claim under Section 10 of RESPA because there is no private right of action under this section of RESPA. Fahey argues that summary judgment should be granted against the Defendants for violating RESPA in failing to return their escrow surplus. (Mot. Summ. J. 7-9, ECF No. 22.) There is no factual dispute over what happened to the surplus from the Plaintiffs' escrow account - the Defendants did not return the money to Fahey, but rather applied it to the principal of the loan. (Defs.' Stmt. Material Fact ¶ 14, ECF No. 29.) However, the Defendants argue that there is no private right of action for the alleged violation.
Certain sections of RESPA contain express private rights of action. See, e.g., 12 U.S.C. § 2605(f) (). Other RESPA provisions contain an express governmental right of action. See, e.g., 12 U.S.C. § 2609(d) (...
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