Golden v. FNF Servicing, Inc., CASE NO.: 1:13-cv-33 (WLS)
| Decision Date | 10 September 2015 |
| Docket Number | CASE NO.: 1:13-cv-33 (WLS) |
| Court | U.S. District Court — Middle District of Georgia |
| Parties | NATASHA GOLDEN, personal representative and administratrix of the estates of James L. Kerfoot and Sylvia F. Kerfoot, and JOY R. WEBSTER, as trustee in bankruptcy for James and Sylvia Kerfoot, Plaintiffs, v. FNF SERVICING, INC. (d/b/a LOAN CARE SERVICING CENTER, INC.), a foreign corporation, Defendant. |
Before the Court are FNF Servicing, Inc. (hereinafter LoanCare)'s Motion for Summary Judgment and Motion to Exclude the Expert Testimony of Dr. Arthur R. Holt, Jr. at Trial. (Docs. 71, 75.) On May 20, 2015, the Court ordered supplemental briefing on the Motion for Summary Judgment, which the Parties submitted on June 5, 2015. (Docs. 115, 116, 117.) Additionally, on September 3, 2015, Defendant LoanCare filed a notice of supplemental authority discussing an August 28, 2015 order issued by Judge Clay D. Land as well as a notice of the death of Plaintiff James L. Kerfoot. (Doc. 118.) On September 4, 2015, Plaintiffs moved to substitute Natasha Golden for James Kerfoot and filed a response to LoanCare's notice of supplemental authority. (Docs. 119, 120.) On September 9, 2015, the Court granted Plaintiffs' Motion to Substitute Natasha Golden for James Kerfoot. (Doc. 121.) The Court finds that the Motion for Summary Judgment (Doc. 71) and Motion to Exclude (Doc. 75) are now ripe for review.
FACTUAL HISTORY
The following facts are derived from LoanCare's Statement of Material Facts (Doc. 71-1) and Plaintiffs' Statements of Facts (Docs. 98-1, 98-5), all of which were submitted in compliance with Local Rule 56, and the record in this case. Where relevant, the factual summary also contains undisputed and disputed facts derived from the pleadings, the discovery and disclosure materials on file, and any affidavits submitted, all of which are construed in a light most favorable to the nonmoving party. See Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). For reasons that follow, the Court finds that this case does not contain a genuine dispute of material fact.
Plaintiffs Natasha Golden, the personal representative and administratrix of Sylvia and James Kerfoot's estates, and Joy Webster, trustee in bankruptcy for the Kerfoots, bring this case against Defendant FNF Financing, Inc., doing business as Loan Care Servicing Center, Inc. ("LoanCare"), for its attempts to collect payment on an allegedly fraudulent loan. Plaintiffs assert claims against LoanCare under the Georgia RICO statute and the Real Estate Settlement Procedures Act and for intentional infliction of emotional distress.
On March 14, 2006, James and Sylvia Kerfoot, both of whom are now deceased, obtained a home loan from CIT Group/Consumer Finance, Inc. for $76,000 ("the CIT loan"). On October 30, 2009, the Kerfoots refinanced their home loan with Lend America. The Lend America loan was in the amount of $102,055 and was secured by a security deed, recorded in Lee County, Georgia. As a part of the refinancing agreement, Lend America promised to pay the Kerfoots' debts in the amount of $9,109.05; pay the remaining balance on the CIT loan, which was $73,863.63; and pay the Kerfoots cash in the amount of $10,732. Lend America paid the $9,109.05 in debts and the $10,732 cash to the Kerfoots. But unbeknownst to the Kerfoots, Lend America never paid off the CIT loan. On December 2, 2009, the Kerfoots made their first payment on the Lend America loan.
In mid-October 2009, an Assistant U.S. Attorney for the Eastern District of New York moved for injunctive relief against Lend America based on allegations that Lend America had falsely certified that borrowers met Federal Housing Administration (FHA) requirements. (Doc. 39-7 at 2.) By December 1, 2009, Lend America had ceased operations andborrowers were alleging that Lend America had failed to pay off prior mortgages that they had refinanced with Lend America. (Id. at 2-3.) On December 16, 2009, the Government National Mortgage Association ("Ginnie Mae") defaulted Lend America as a loan servicer, and the next day Ginnie Mae contracted with LoanCare to service Lend America's loans. As a result of the default, Ginnie Mae became the sole owner of the Kerfoots' Lend America loan. As the master subservicer of the formerly Lend America loans, LoanCare was tasked with collecting monthly payments, providing customer service to borrowers, pursuing delinquent and/or outstanding balances, and handling property disposition on behalf of Ginnie Mae. Because LoanCare did not hold a security interest in the loans, LoanCare was not authorized to cancel, release, or extinguish any of the formerly Lend America loans without Ginnie Mae's authorization. In 2011, Michael Primeau, Lend America's president pleaded guilty to one count of bank fraud, 18 U.S.C. §§ 1344.2, 3551, in connection with Lend America's double loan scheme in which "Lend America officers directed that the first mortgages not be paid, as required, at the mortgage loan closings for the Lend America refinanced mortgages, and, instead, used the funds to pay Lend America's operative expenses, including its payroll." (Doc. 71-8 at 4.) The dates of that scheme, as stated in the information to which Primeau pleaded guilty, were January 2009 to February 2010. (Id.) Thus, the scheme was ongoing at the time the Kerfoots refinanced their mortgage with Lend America.
LoanCare asked Ginnie Mae for authorization to conduct title reviews on the Lend America loans in order to determine which loans were "double loans," or loans that had not been paid off by Lend America. Ginnie Mae denied this request; Loan Care, therefore, did not know which Lend America loans, of the 6,000 in the Lend America portfolio, were double loans until the borrowers informed Lend America. However, sometime on or before June 1, 2010, Ginnie Mae began pursuing a title claim with respect to the Kerfoots' Lend America loan. On June 1, 2010, LoanCare sent a letter to a title insurer making a claim on Ginnie Mae's behalf on the Kerfoots' Lend America loan.
The Court finds that the following facts regarding the communication between the Kerfoots and LoanCare are established in the record. On January 5, 2010, the Kerfoots made their second and final payment on the Lend America loan to LoanCare. Because LendAmerica had not paid off the Kerfoots' CIT Loan, CIT and Vericrest began calling and sending letters to the Kerfoots and threatening foreclosure. On January 6, 2010, Sylvia Kerfoot called LoanCare and stated that Lend America had not paid off the CIT Loan. LoanCare told Mrs. Kerfoot that it would research the issue. On January 12, 2010, Mrs. Kerfoot again called LoanCare and told the representative with whom she spoke that the CIT loan had not been paid off. On January 15, 2010, Mrs. Kerfoot called LoanCare and stated that the CIT loan had not been paid off and that the Kerfoots would not be making anymore payments to LoanCare. On January 19, 2010, Mrs. Kerfoot called LoanCare, reiterated that she and her husband would not be making any more payments to LoanCare, and provided LoanCare information on the CIT loan, including an estimated payoff amount and the contact information for CIT/Vericrest. On January 21, 2010, LoanCare called the Kerfoots and stated that it was aware that the Kerfoots would be making payments on the CIT loan and not on the Lend America loan until the double loan situation was resolved. On January 22, 2010, Mrs. Kerfoot called LoanCare and gave LoanCare authorization to speak to her niece Natasha Golden. On January 28, 2010, Mrs. Kerfoot called LoanCare and stated that the Kerfoots' home would be foreclosed on the next month by CIT/Vericrest; LoanCare advised that the double loan issue was still being researched.
On February 5, 2010, LoanCare called the Kerfoots and asked them to provide the payoff amount for the CIT loan. On February 22, 2010, the Kerfoots called LoanCare to inquire about their loan number. On March 3, 2010, the Kerfoots called LoanCare to inquire about their loan number. On April 26, 2010, the Kerfoots again called LoanCare. At some point, LoanCare employee Dominique Flores was designated as the Kerfoots' single point of contact at LoanCare. Flores spoke with Mrs. Kerfoot on August 6, 2010. Mrs. Kerfoot advised Flores that she would provide LoanCare a payoff statement from CIT and that the Kerfoots preferred to keep their CIT loan because they could not afford the payments under the Lend America loan. Flores' notes also reflect that she spoke with the Kerfoots' attorney, Christopher Solomon, on August 10, 2010.
Additionally, LoanCare sent monthly billing statements to the Kerfoots until the Lend America loan was released, except for during the months the Kerfoots were in bank-ruptcy proceedings. These statements contained instructions for recipients such as, "Return this part with your payment;" "Include late payment of [specified amount] if paid after [due date];" and "Please make checks payable to LoanCare . . . ." At the time LoanCare sent the monthly statements, LoanCare did not know how Ginnie Mae would decide to resolve the Kerfoots' double loan issue.
On February 17, 2011, the Kerfoots filed for Chapter 7 bankruptcy. Consequently, LoanCare transferred the servicing of the Kerfoots' loan to LoanCare's bankruptcy department. On February 21, 2011, LoanCare's bankruptcy department sent the Kerfoots' bankruptcy attorney a form letter regarding the status of the loan and possible loan modification options. LoanCare's bankruptcy department, through counsel, filed a Motion for Relief from Stay and Waiver of Thirty-Day Requirement in the Kerfoots' bankruptcy case in order to protect the Lend America security deed. In the motion, LoanCare erroneously stated that the Lend America loan was first in priority and that there were no other secured claims against the Kerfoots' property. The Kerfoots filed a response to LoanCare's motion and...
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