Gibson v. Mortg. Elec. Registration Sys., Inc.
| Decision Date | 19 May 2014 |
| Docket Number | No. 11–2173–STA–cgc.,11–2173–STA–cgc. |
| Citation | 23 F.Supp.3d 895 |
| Parties | Suzanne GIBSON and Ralph Gibson, Plaintiffs, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; GMAC Mortgage LLC of TN; Residential Funding Corporation; Residential Funding Company LLC, Defendants. |
| Court | U.S. District Court — Western District of Tennessee |
Ralph T. Gibson, Everett B. Gibson, Bateman Gibson & Childers, Memphis, TN, for Plaintiffs.
Christopher E. Thorsen, Bradley Arant Boult Cummings LLP, Nashville, TN, for Defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
ORDER DENYING PLAINTIFFS' CROSS–MOTION FOR SUMMARY JUDGMENT
Before the Court is Defendants Mortgage Electronic Registration Systems, Inc.; GMAC Mortgage, LLC; and Residential Funding, LLC f/k/a Residential Funding Corporation's Motion for Summary Judgment (D.E. # 51) filed on February 17, 2014. Plaintiffs Ralph and Suzanne Gibson have filed a Cross–Motion for Summary Judgment (D.E. # 61). The Cross–Motions for Summary Judgment are now fully briefed and therefore ripe for disposition. For the reasons set forth below, Defendants' Motion is GRANTED, and Plaintiffs' Motion is DENIED.
The following facts are not in dispute for purposes of the Cross–Motions for Summary Judgment unless otherwise noted. Plaintiffs Ralph and Suzanne Gibson signed a Note dated January 3, 2003, in favor of National Bank of Commerce in the amount of $360,000.00. (Defs.' Statement of Undisputed Fact ¶ 1.) In connection with their loan, Plaintiffs also executed a Deed of Trust dated January 3, 2003, whereby Plaintiffs pledged their property located at 4450 Park Avenue, Memphis, Tennessee 38117 (“the property”) as security for the Deed of Trust and payment of the Note. (Id. ¶ 3.) National Bank of Commerce endorsed the Note to Residential Funding Corporation. (Id. ¶ 5.) National Bank of Commerce also executed an Assignment of Mortgage, assigning the Deed of Trust to Residential Funding Corporation. (Id. ¶ 6.) Residential Funding Company, LLC then succeeded Residential Funding Corporation by merger. (Id. ¶ 7.)
Plaintiffs dispute the assertion that Residential Funding Company, LLC succeeded Residential Funding Corporation by merger. Plaintiffs argue that Defendants have adduced no documentary proof of any merger of the two entities, only the declaration of Frederick Denson, a former GMAC employee. Denson's declaration simply states that the merger occurred and that Denson's knowledge of the declaration is based on the contents of the files of Ocwen Loan Servicing, LLC, Denson's current employer and the holder of the loan servicing rights to Plaintiffs' mortgage since February 2013.1 The Court finds no support for Plaintiffs' argument that Defendants must also adduce documentary proof of the merger. The Federal Rules of Evidence do not require a party to introduce additional documentary support for a fact simply because “the document contains facts that are also testified to by a witness.”2 Plaintiffs further object to Defendants' assertion about the merger because there was no assignment of the Deed of Trust from Residential Funding Corporation to Residential Funding Company, LLC. The Court finds that this is actually an additional fact and that Plaintiffs' claim does not demonstrate why a genuine dispute exists concerning the fact of the merger. Therefore, the Court finds that the merger is undisputed for purposes of summary judgment.
As of August 2010, Plaintiffs were in default of their Note and Deed of Trust by failing to make payments as required under the Note. (Id. ¶ 8.) Plaintiffs admit that while Defendants considered their loan to be in default at that time, Plaintiffs were seeking an accounting from Defendants concerning $15,000 in overcharges on their loan. On or about August 5, 2010, GMAC in its capacity as loan servicer referred Plaintiffs' loan to foreclosure counsel to proceed with foreclosure of the property. (Defs.' Statement of Undisputed Fact ¶ 9.) On August 13, 2010, Patrick Taggart, foreclosure counsel for GMAC, forwarded a notice of default to Plaintiffs. (Id. ¶ 10.) Thereafter, Plaintiffs did not cure their default, and on August 20, 2010, Taggart forwarded Plaintiffs a notice of foreclosure sale via first class regular and certified mail. (Id. ¶ 11.)3 The notice included a letter from Mr. Taggart informing Plaintiffs that the lender had accelerated the amounts due under the Note and was invoking the power of sale as set forth in the Deed of Trust. (Id. )
The notice also provided a copy of the notice of Substitute Trustee's Sale scheduled for September 16, 2010, 12:00 p.m. at the Southwest Corner, Adams Avenue Entrance to the Shelby County Courthouse, Memphis, Tennessee. (Id. ¶ 12.) The notice further advised as follows: “Substitute Trustee reserves the right to adjourn the day of the sale to another day, time and place certain without further publication, upon announcement at the time and place for the sale set forth above.” (Id. ¶ 13.)4 Notice of the trustee's sale was published in The Commercial Appeal on August 23, 2010, August 30, 2010, and September 6, 2010. (Id. ¶ 14.)
Prior to the original foreclosure sale set for September 16, 2010, Plaintiffs submitted a loan modification application under the federal HAMP loan modification program. (Id. ¶ 15.) Plaintiffs' application was denied in late August 2010, and the foreclosure sale was postponed and rescheduled for September 30, 2010. (Id. ¶ 16.) Foreclosure paralegal Carolyn Bernard attended the cry of the original sale date on September 16, 2010, where she announced that the sale was postponed and rescheduled for September 30, 2010, 12:00 p.m. at the same location. (Id. ¶ 17.)5 Plaintiffs then submitted a second HAMP loan modification application prior to the foreclosure sale set for September 30, 2010. (Id. ¶ 18.) As a result, the September 30, 2010 foreclosure sale was postponed until November 4, 2010, while Plaintiffs' application was pending. (Id. ¶ 19.) At the September 30, 2010 cry, Ms. Bernard again attended and announced that the sale had been postponed and rescheduled for November 4, 2010, 12:00 p.m. at the same location. (Id. ¶ 20.) Plaintiffs' second loan modification application was subsequently denied. (Id. ¶ 21.)
The foreclosure sale was postponed and rescheduled a final time for December 9, 2010. (Id. ) At the November 4, 2010 cry, Ms. Bernard announced that the sale had been postponed and rescheduled for December 9, 2010, 12:00 p.m. at the same location. (Id. ¶ 22.) At the December 9, 2010 sale, the Property was sold to Defendant RFC, as evidenced by the Substitute Trustee's Deed. (Id. ¶ 23.) Plaintiffs add that the property was sold to Residential Funding Company, LLC and that this entity never had an interest in the property.
Plaintiffs have submitted their own statement of undisputed facts in support of their Cross–Motion for Summary Judgment. With respect to the notice issue, Plaintiffs state that they decided to take advantage of the HAMP modification program in 2010 after unsuccessfully attempting to get GMAC to conduct a proper accounting of the overcharges on Plaintiffs' loan. (Pls.' Statement of Undisputed Fact ¶ 1.) Plaintiffs concluded that the terms of a modified loan would be more advantageous than a refund of the overcharges. (Id. ) While Plaintiffs' request for modification was under consideration by GMAC in August 2010, Plaintiffs received notice of the foreclosure sale set for September 16, 2010. (Id. ) Plaintiffs immediately contacted GMAC and received assurances that the foreclosure was cancelled and not merely postponed. (Id. ) Defendants dispute the admissibility of Plaintiffs' claims about their contact with GMAC, arguing that Plaintiffs have failed to provide the particulars of the conversation with GMAC in August 2010. Defendants argument, however, is premised on the pleading requirements for claims sounding in fraud set forth in Federal Rule of Civil Procedure 9(b), and not the burden of proof at summary judgment. Defendants further argue that the foreclosure sale complied with the notice requirements of the Deed of Trust and Tennessee's foreclosure statute. These are questions of law for the Court to decide, and not issues of fact. Therefore, the Court finds that Plaintiff's contentions are undisputed for purposes of summary judgment.
On at least three occasions throughout 2010, Plaintiffs submitted requests for loan modification under HAMP. (Pls.' Statement of Undisputed Fact ¶ 2.) GMAC rejected Plaintiffs' first modification request on the grounds that Plaintiffs' income was too high under the terms of the program. (Id. ) GMAC rejected Plaintiffs' second modification request because Plaintiffs' income was too low for a modification. (Id. ) On December 5, 2010, Plaintiffs submitted a third request for modification to GMAC after receiving encouragement from a representative in GMAC's loss mitigation department. (Id. ¶ 3.) On December 6, 2010, Plaintiffs contacted GMAC to verify that their request was received, at which time Plaintiffs were informed for the first time that a foreclosure sale was set for December 9, 2010. (Id. ) Plaintiffs had not received mailed, written notice of the December 9, 2010 foreclosure sale. (Id. ¶ 4.) The GMAC representatives with whom Plaintiffs spoke assured Plaintiffs that their loan modification request would be reviewed to see if the foreclosure sale could be cancelled while the request for modification was under consideration. (Id. ) On December 7, 2010, Plaintiffs again contacted GMAC and received assurances that the foreclosure sale was cancelled and that GMAC would render a decision on their loan modification request within 30 days. (Id. ¶ 5.)6 Plaintiffs believed that because GMAC had cancelled the September 2010 sale as promised, GMAC would likewise cancel the December 2010 as promised. (Id. )7
Plaintiffs first learned that the ...
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