Heinemann v. Jim Walter Homes, Inc., Civ.A.2:98CV34.

• Decision Date: 13 November 1998
• Docket Number: No. Civ.A.2:98CV34.,Civ.A.2:98CV34.
• Citation: 47 F.Supp.2d 716
• Parties: Jerome E. HEINEMANN and Patricia A. Heinemann, Husband and Wife, Plaintiffs, v. JIM WALTER HOMES, INC., A Florida corporation, Mid-State Trust IV, A Delaware Business Trust, Samuel A. St. Clair, Individual and Official Capacity, and William D. Levine, Individual and Official Capacity, Defendants.
• Court: U.S. District Court — Northern District of West Virginia

47 F.Supp.2d 716

Jerome E. HEINEMANN and Patricia A. Heinemann, Husband and Wife, Plaintiffs, v. JIM WALTER HOMES, INC., A Florida corporation, Mid-State Trust IV, A Delaware Business Trust, Samuel A. St. Clair, Individual and Official Capacity, and William D. Levine, Individual and Official Capacity, Defendants.

No. Civ.A.2:98CV34.

United States District Court, N.D. West Virginia.

November 13, 1998.

Jerome E. Heinemann, Patricia A. Heinemann, Dunmore, W VA, pro se.

William David Levine, St. Clair and Levine, Huntington, W VA, for Defendants.

ORDER

MAXWELL, District Judge.

Plaintiffs, proceeding pro se, allege that the defendants violated their procedural due process rights and transgressed established substantive law by wrongfully foreclosing on property owned by plaintiffs in Pocahontas County, West Virginia. On June 8, 1998, the defendants filed a Motion to Dismiss, supported by a memorandum of law and several exhibits. Plaintiffs filed a memorandum in opposition to the motion to dismiss which also included numerous exhibits. Thereafter, the defendants filed a reply brief which contained several additional exhibits.

By Order entered August 26, 1998, the Court determined that the motion to dismiss would be construed as a Motion for Summary Judgment and considered pursuant to Rule 56, Federal Rules of Civil Procedure. Noting that the parties had already presented an abundance of material in support of and in opposition to the motion, the Court, nevertheless, provided the parties with notice and an additional opportunity to present any material made pertinent to the motion by Rule 56 of the Federal Rules of Civil Procedure.

On September 11, 1998, plaintiffs filed a supplemental memorandum of law in opposition to the motion for summary judgment. The Court has reviewed all matters of record and finds that the matter is mature for disposition and that summary judgment in favor of defendants is appropriate.

From the text of Rule 56(c) of the Federal Rules of Civil Procedure, it is clear that a summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Motions for summary judgment impose a difficult standard on the movant; for, it must be obvious that no rational trier of fact could find for the nonmoving party. Miller v. Federal Deposit Ins. Corp., 906 F.2d 972, 974 (4th Cir.1990).

However, the "mere existence of a scintilla of evidence" favoring the nonmoving party will not prevent entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To withstand such a motion, the nonmoving party must offer evidence from which "a fair-minded jury could return a verdict for the [party]." Id. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987). Such evidence must consist of facts which are material, meaning that the facts might affect the outcome of the suit under applicable law, as well as genuine, meaning that they create fair doubt rather than encourage mere speculation. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Ross v. Communications Satellite Corp., 759 F.2d 355, 364 (4th Cir.1985). It is well recognized that any permissible inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The material facts are not in dispute although the parties disagree as to the inferences to be drawn from some of the facts and the relative importance of certain facts to the claims alleged by plaintiffs in this lawsuit. These disagreements do not, however, preclude summary judgment.

On or about August 15, 1990, plaintiffs husband and wife entered into a building contract with defendant Jim Walter Homes, Inc. ("JWH"), in which JWH agreed to construct and finance a residence on plaintiffs' property in Pocahontas County, West Virginia. The purchase price of $78,070.00 was secured by a deed of trust.¹

Construction neared completion in March 1991; however, between March 1991 and May 1991, plaintiffs expressed considerable dissatisfaction for the quality of certain building materials, incomplete work, and construction deficiencies. Plaintiffs further allege that these construction deficiencies ultimately led to severe structural defects in the floors and walls.

At about this same time, plaintiffs began to suffer financial hardships. They had anticipated receiving a loan from a local bank for the purpose of purchasing building supplies for their home. The supplies were purchased, delivered, and used; however, the loan was ultimately not approved.² In addition, plaintiffs' T-shirt manufacturing business closed.

In the Fall of 1991, plaintiffs consulted with counsel regarding possible bankruptcy proceedings. Although plaintiffs and their counsel communicated with each other regarding bankruptcy and prepared various bankruptcy documents in 1991 and 1992, it is apparent that a Chapter 13 petition was not filed on behalf of plaintiffs until January 15, 1993.

By this time, plaintiffs were in serious default of their obligation to make payments to defendant JWH. By letter dated October 29, 1992, a notice of default was sent to plaintiffs by defendant Levine. Plaintiffs did not cure the default. By letter dated December 21, 1992, a Notice of Trustees Sale was sent to plaintiffs by defendant Levine. The sale was scheduled for January 15, 1993. As previously noted, plaintiffs, represented by counsel, filed their Chapter 13 petition on January 15, 1993, in the United States Bankruptcy Court for the Southern District of West Virginia.

On January 18, 1993, defendant JWH filed a Motion for Relief from the Automatic Stay. In its motion, defendant JWH represented that it had purchased the property at the Trustees Sale on January 15, 1993, prior to learning that plaintiffs had filed their Chapter 13 petition. Defendant JWH further represented that the Trustees had not executed a deed nor filed a report of sale in light of the pending bankruptcy proceeding.

On February 17, 1993, the parties appeared in the Bankruptcy Court for a hearing on defendant JWH's Motion for Relief from Automatic Stay. At that time, the parties announced to the Court that they had agreed to compromise the motion and jointly moved the Bankruptcy Court to enter an Order effectuating that compromise. By Order entered April 26, 1993, pursuant to the agreement of the parties, the Bankruptcy Court ordered:

1. That Jim Walter Homes will reinstate the debtors' account as being current with respect to monthly payments. The debtors shall pay the balance of their obligation to Jim Walter Homes, Inc., in accordance with the note and deed of trust executed in connection therewith, that being the sum of $669.00 per month, which payments are due on the 15th day of each month, until the balance of their obligation to Jim Walter Homes is paid in full.

2. The existing note and deed of trust will remain in full force and effect and the debtors will comply with each and every term thereof including but not limited to provisions relating to the payment of taxes and insurance.

3. The debtors' arrearage in insurance payments, that being the sum of $1,826.00, shall be re-paid at the rate of $20.00 per month.

4. The automatic stay is hereby lifted. In the event that the debtors default in any of their obligations to Jim Walter Homes, Inc., Jim Walter Homes may take whatever action is permitted pursuant to the laws of the State of West Virginia, to initiate proceedings to cause its Trustees to sell that property as provided in the deed of trust.

5. Before taking any action in the event of a default, Jim Walter Homes will provide debtors with a notice of their right to cure that default as provided by § 46A-2-106, a copy of which should also be sent to debtors' attorney, George L. Lemon.

Plaintiffs do not dispute that, subsequent to the execution of this agreement, they once again defaulted on their obligation to make monthly payments to JWH. By letter dated November 5, 1993, defendant Levine notified plaintiffs that they were five months in arrears and owed other sums pursuant to the bankruptcy agreement. A copy of this letter was sent to plaintiffs' counsel. Plaintiffs did not cure the default.

By letter date November 15, 1993, a Notice of Trustees Sale was sent to plaintiffs by defendant Levine. A copy of the Notice was sent to plaintiffs' counsel. The sale was scheduled for December 10, 1993. At that time, the Trustees sold the property to defendant JWH. A deed was executed on December 13, 1993. In February 1994, defendants filed suit in the Circuit Court of Pocahontas County, West Virginia, to evict plaintiffs from the property.

In March 1994, plaintiffs, represented by counsel, began to negotiate with JWH to re-purchase the property. The record before this Court reflects that JWH would only finance the purchase for plaintiffs if plaintiffs could provide clear title to the third parcel of real estate owned by plaintiffs (consisting of 83 acres) and grant JWH a first lien on said parcel which would secure a new deed of trust. Plaintiffs undertook efforts to obtain clear title to this third parcel of property; however, it was not until August 1994 that plaintiffs succeeded.

In the meantime, JWH proceeded in the Circuit Court of Pocahontas County. On August 15, 1994, the circuit court heard argument on JWH's motion for summary judgment. Plaintiffs were present in person and represented by counsel. The circuit court granted the motion and ordered plaintiffs to vacate the premises no later than ...