FRANCHESCHI v. SERVICING
| Decision Date | 14 April 2011 |
| Docket Number | Civil Action No. 3:09-CV-1667-K |
| Parties | ROBERT DE FRANCHESCHI, ET AL., Plaintiffs, v. BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING, LP, ET AL.,Defendants. |
| Court | U.S. District Court — Northern District of Texas |
OPINION TEXT STARTS HERE
Before the court is Defendants' Motion for Summary Judgment, filed November 19, 2010. After consideration of the motion, response, reply, summary judgment record, and the applicable law, the court grants the motion, and dismisses Plaintiffs' claims with prejudice.
The majority of the facts presented herein are undisputed; however, where they are disputed, they are presented in the light most favorable to Plaintiffs. In January 2007, Plaintiffs Robert DeFranceschi and Elena Riedo (collectively, "Plaintiffs") purchased a property located at 3741/43 Northridge Drive, Irving, Texas (the "Property"). The purchase price for the Property was $232,500. Plaintiffs provided a $58,150 down payment, and financed the remainder of the purchase price with a$174,350 loan from Greenpoint Mortgage Funding, Inc. ("Greenpoint"). Plaintiffs' monthly payments on the promissory note to Greenpoint were $1,130.83. In conjunction with the purchase of the Property, Plaintiffs also executed a Loan Agreement Addendum providing that "[t]he rights and obligations of Borrower and Lender shall be determined solely from the written Loan Agreement" and that "[t]he Loan Agreement may not be varied by any oral agreements or discussions that occur before, contemporaneously with, or subsequent to the execution of the Loan Agreement."
Plaintiffs' loan was assigned to U.S. Bank in January 2007, and in December 2008, Defendant BAC became the loan servicer for the loan. At that point, Plaintiffs had failed to make at least one monthly principal and interest payment, and the loan was in default. Meanwhile, Plaintiffs contend that during 2008, BAC incorrectly charged them for force-placed insurance coverage on the property, causing the monthly payments to increase. After Plaintiffs complained, BAC eventually removed the force-placed insurance, but Plaintiffs state that BAC never fully credited their account for this error. In 2009, Plaintiffs were again charged for force-placed insurance, although they already had coverage on the Property. Plaintiffs state that they were never fully reimbursed for these charges.
On January 5, 2009 and February 17, 2009, BAC sent letters to DeFranceschi informing him that he was in default on the loan payments. DeFranceschi received both of these letters. The letters stated that if he did not cure the default on the loan, thedebt would be accelerated and the Property could be sold at a foreclosure sale. The letters also outlined various loss mitigation options, and instructed DeFranceschi to contact BAC immediately if he wanted to pursue these options. Plaintiffs made a payment of $3,070.74 on their mortgage account in February 2009, but this payment did not bring their account completely current.
DeFranceschi called BAC two times in February 2009 to discuss his mortgage account, and informed BAC that Plaintiffs were looking at options for bringing their mortgage current. At that time, he did not commit to one of the loss mitigation options offered by BAC. By June 2009, BAC had hired Barrett Daffin as its foreclosure counsel, and on June 5, 2009, Barrett Daffin sent DeFranceschi a letter informing him that the outstanding debt on the loan was approximately $27,000. Then, on June 15, 2009, Barrett Daffin sent DeFranceschi a letter notifying him that the loan had been accelerated and that a foreclosure sale on Property was scheduled for July 7, 2009.
On June 16, 2009, Plaintiffs re-contacted BAC to discuss a loan modification. At that time, they were instructed to fax in certain financial information. Plaintiffs misplaced the fax number, and called BAC again on June 22, 2009. They spoke to BAC employee Isabel Barber ("Barber"), and were again instructed to fax the information in. Plaintiffs faxed the information to the fax number provided by Barber. The information BAC received from Plaintiffs was incomplete and/or incorrect, and on June 26, 2009, BAC denied Plaintiffs' application for a loan modification.
Plaintiffs called BAC on July 2, 2009 to make sure the Property would not be sold on July 7th. BAC representative Joshua Castro ("Castro") told them that their loan modification request had been denied because their supporting documentation was incomplete. Castro told Plaintiffs that the fax number Barber had given to them was incorrect. After consulting with his supervisor, Castro asked Plaintiffs to re-submit their loan modification documentation, and told Plaintiffs that while a loan modification was not guaranteed, BAC would not foreclose while the loan modification was being reviewed. Plaintiffs also requested a reinstatement amount from BAC, but were told that amount would have to be obtained from BAC's attorneys. Plaintiffs never re-submitted any of the needed documentation to BAC, and the Property was sold to U.S. Bank at a foreclosure sale on July 7, 2009.
During June 2009, BAC obtained three different Broker Price Opinions ("BPO") concerning the Property. Those BPOs valued the Property at $150,000, $170,000, and $211,900. At the foreclosure sale, the Property was sold for $153,000. At the time of the foreclosure sale, the total amount of the debt on the property was approximately $197,000.
Plaintiffs brought suit against BAC and U.S. Bank in state court in August 2009, bringing claims for slander of title and wrongful foreclosure, breach of contract, unreasonable collection efforts, and under the Texas Finance Code. Plaintiffs also sought an accounting, and alleged additional claims under the Texas Property Code andfor common law fraud. Defendants now move for summary judgment on all of Plaintiffs' claims.
Summary judgment is appropriate when the pleadings, affidavits and other summary judgment evidence show that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2551 (1986). The moving party bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 322-25, 106 S.Ct. at 2551-54. Once a movant makes a properly supported motion, the burden shifts to the nonmovant to show that summary judgment should not be granted; the nonmovant may not rest upon allegations in the pleadings, but must support the response to the motion with summary judgment evidence showing the existence of a genuine fact issue for trial. Id. at 321-25, 106 S.Ct. at 2551-54; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 25557, 106 S.Ct. 2505, 2513-14 (1986). All evidence and reasonable inferences must be viewed in the light most favorable to the nonmovant. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993 (1962).
Defendants assert that there is no genuine issue of material fact regarding any of Plaintiffs' claims, and that therefore they are entitled to judgment as a matter of law.
The court will consider each of Plaintiffs' claims below. A. Agency
Defendants first contend that all of Plaintiffs' claims against U.S. Bank should be dismissed, because Plaintiffs have not alleged any independent wrongdoing by U.S. Bank, and base all of their claims against U.S. Bank on the alleged actions of BAC. Conversely, Plaintiffs argue that as the loan servicer, BAC was acting as U.S. Bank's agent, and thus U.S. Bank is liable to them for BAC's alleged conduct.
The law does not presume agency. Tex. Cityview Care Ctr., L.P. v. Fryer, 227 S.W.3d 345, 352 (); Lifshutz v. Lifshutz, 199 S.W.3d 9, 22 (Tex.App.-San Antonio 2006, pets. denied). The party alleging agency has the burden to prove its existence. Tex. Cityview Care Ctr.,227 S.W.3d at 352; Lifshutz, 199 S.W.3d at 22. Absent actual or apparent authority, an agent cannot bind a principal. Tex. Cityview Care Ctr., 227 S.W.3d at 352; Lifshutz, 199 S.W.3d at 22. Therefore, the court must look to the summary judgment record to determine whether Plaintiffs have set forth evidence raising a genuine issue of material fact whether BAC was acting as U.S. Bank's agent.
Actual authority includes both express and implied authority and usually denotes the authority a principal 1) intentionally confers upon an agent; 2) intentionally allows the agent to believe he possesses; or 3) by want of due care allows the agent to believe he possesses. Tex. Cityview Care Ctr., 227 S.W.3d at 352; 2616 S. Loop L.L.C. v. HealthSource Home Care, Inc., 201 S.W.3d 349, 356 (Tex. App. -Houston [14th Dist.] 2006, no pet.); Lifshutz, 199 S.W.3d at 22. Actual authority is created through conduct of the principal communicated to the agent. Tex. Cityview Care Ctr.,227 S.W.3d at 352; Lifshutz, 199 S.W.3d at 22.
Apparent authority arises through acts of participation, knowledge, or acquiescence by the principal that clothe the agent with the indicia of apparent authority. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 672 (Tex.1998); Tex. Cityview Care Ctr.,227 S.W.3d at 353. Certain limitations apply in determining whether apparent authority exists. Tex. Cityview Care Ctr.,227 S.W.3d at 353; Lifshutz, 199 S.W.3d at 22. First, apparent authority is determined by looking to the acts of the principal and ascertaining whether those acts would lead a reasonably prudent person using diligence and discretion to suppose the agent had the authority to act on behalf of the principal. Tex. Cityview Care Ctr.,227 S.W.3d at 353; Lifshutz, 199 S.W.3d at 22. Only the conduct of the principal may be considered; representations made by the...
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