McGee v. JP Morgan Chase Bank, N.A.
| Decision Date | 12 November 2015 |
| Docket Number | CIVIL ACTION NO. 3:14cv523-DPJ-FKB |
| Court | U.S. District Court — Southern District of Mississippi |
| Parties | ARTHUR K. MCGEE and RHONDA R. MCGEE PLAINTIFFS v. JP MORGAN CHASE BANK, N.A.; FEDERAL NATIONAL MORTGAGE ASSOCIATION; JOHNSON FREEDMAN, LLC; CHRISTOPHER A. COLLINS, ESQ.; and JOHN/JANE DOES 1 5 DEFENDANTS |
This mortgage-loan dispute is before the Court on Defendant Johnson Freedman, LLC's ("J&F") Motion for Summary Judgment [69] pursuant to Federal Rule of Civil Procedure 56. The Court has considered the parties' submissions, and though the alleged conduct seems egregious, Plaintiffs have not linked it to J&F. The Motion is therefore granted for the reasons set forth in this Order.
The general facts are documented in the Court's December 3, 2014 Order [46] granting Defendant JP Morgan Chase Bank's Motion to Dismiss and are incorporated herein by reference. McGee v. JPMorgan Chase Bank, N.A., No. 3:14cv523 DPJ FKB, 2014 WL 6871270, at *1 (S.D. Miss. Dec. 3, 2014). That said, certain more particularized facts have now become relevant and will be addressed.
In February 2005, Plaintiffs Arthur K. McGee and Rhonda R. McGee signed a promissory note and deed of trust on their home; JP Morgan Chase ("Chase") assumed the loan in 2006. Compl. [3-1] ¶¶ 10 11. In June 2010, the McGees submitted a request for loan modification under the Home Affordable Modification Program ("HAMP"). Id. ¶ 13. Although Chase acknowledged this request, their home was scheduled for a foreclosure sale on July 7, 2010. Id. ¶¶ 14 15. Chase also indicated that the matter was being handled by J&F. McGee Dep. [73-2] at 19, 32. On July 6, Rhonda McGee spoke with Laquenia Trezevant, who McGee believed to be employed by Nationwide Trustee Services, Inc., the substitute trustee. McGee Dep. [73-2] at 27 28. Trezevant confirmed that "the foreclosure was postponed." Id. ¶ 18. Yet on July 7, Christopher Collins, an agent of J&F, sold the McGees' home at a foreclosure sale to Federal National Mortgage Association ("Fannie Mae"). Id. ¶ 19. The McGees believe J&F is responsible for Trezevant's misrepresentation.
When Defendants refused to rescind the sale, the McGees filed suit in state court, claiming, among other things, that they relied on Trezevant's representations and therefore did not take steps to prevent foreclosure. Id. ¶ 21. JP Morgan Chase removed the case to this Court and filed a Motion to Dismiss [32], which the Court granted on December 3, 2014. All defendants other than J&F have been dismissed, and J&F now seeks summary judgment [69] claiming that it has no responsibility for Trezevant's alleged breach. The Court has personal and subject-matter jurisdiction and is prepared to rule.
Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil Procedure when evidence reveals no genuine dispute regarding any material fact and that the moving party is entitled to judgment as a matter of law. The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party'scase, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. The nonmoving party must then "go beyond the pleadings" and "designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citation omitted). In reviewing the evidence, factual controversies are to be resolved in favor of the nonmovant, "but only when . . . both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the court may "not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments have never constituted an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); Little, 37 F.3d at 1075; SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993).
At the outset, it is necessary to clarify which claims remain operative as against J&F. Although Plaintiffs initially pleaded at least six separate claims, their Response to the instant Motion specifically abandons the claims for wrongful foreclosure, fraudulent misrepresentation, and intentional infliction of emotional distress as to J&F. Pls.' Resp. [74] at 2 n.1. Furthermore, the Response only substantively addresses the negligent-misrepresentation claim and contains no argument or reference to record evidence to refute a simple negligence claim. Consequently, theCourt assumes that Plaintiffs have abandoned all claims against J&F other than their negligent-misrepresentation claim and have chosen to proceed solely on that ground.
In their Complaint, the McGees aver that J&F, through Trezevant, represented that the foreclosure sale had been postponed when it knew or should have known that it had not been. Compl. [3-1] ¶ 24. To establish a claim for negligent misrepresentation under Mississippi law, a plaintiff is required to prove the following elements:
(1) a misrepresentation or omission of a fact; (2) that the representation or omission is material or significant; (3) that the person/entity charged with the negligence failed to exercise that degree of diligence and expertise the public is entitled to expect of such persons/entities; (4) that the plaintiff reasonably relied upon the misrepresentation or omission; and (5) that the plaintiff suffered damages as a direct and proximate result of such reasonable reliance.
Hopson v. Chase Home Fin. LLC, 14 F. Supp. 3d 774, 793 (S.D. Miss. 2014) (citing Hazlehurst Lumber Co. v. Miss. Forestry Comm'n, 983 So. 2d 309, 313 (Miss. 2008)). "This rule permits parties who are foreseeable recipients of a professional opinion and who detrimentally rely on that opinion in their business affairs to recover from the person offering the opinion." Strickland v. Rossini, 589 So. 2d 1268, 1277 (Miss. 1991) (emphasis added).
J&F contends that summary judgment is appropriate as to this claim because the McGees "have failed to identify J&F as the entity responsible for making a representation to them and failed to provide factual evidence of . . . negligence on J&F's behalf." Def.'s Mem. [70] at 6. In support of this argument, J&F relies primarily on affidavits from Joel Freedman, J&F's Managing Partner, and LaQuenia Thompson (formerly LaQuenia Trezevant) stating that at all times relevant to this litigation, Trezevant was employed by Prommis Solutions, LLC ("Prommis") and not J&F. See Def.'s Mem. [70-1], Ex. A ¶ 9 10; Def.'s Mem. [70-3], Ex. C ¶2. Prommis was the parent corporation for Nationwide, the entity Chase Bank designated as the substitute trustee. See Def.'s Mem. [70-1], Ex. A ¶ 9; Def.'s Rep. [75-1], Ex. D.
The McGees essentially concede that Trezevant was technically employed by Prommis at all relevant times. So they argue instead that "under the general rules of agency law, J&F is liable for the admitted misrepresentation made by its out-sourced paralegal who had apparent authority to act on behalf of J&F." Pls.' Resp. [74] at 7.
Under Mississippi law, "a principal is bound by the actions of its agent within the scope of that agent's real or apparent authority." Andrew Jackson Life Ins. Co. v. Williams, 566 So. 2d 1172, 1180 (Miss. 1990). More specifically, "a principal is liable for the misrepresentations or frauds of his agent so long as the agent was acting within the scope of his authority, even if the principal had no knowledge thereof and did not benefit therefrom." Christian Methodist Episcopal Church v. S & S Constr. Co., Inc., 615 So. 2d 568, 572 73 (Miss. 1993) (citing Andrew Jackson, 556 So. 2d at 1180). Thus, the ultimate question for the Court is whether the McGees have created a material question of fact regarding Trezevant's apparent authority to act for J&F. The Court finds that Plaintiffs have not met that burden.
Whether or not an agent possesses apparent authority turns on the reasonable expectations of the party transacting with the agent it exists when "a reasonably prudent person, having knowledge of the nature and usages of the business involved, would be justified in supposing, based on the character of the duties entrusted to the agent, that the agent has the power he is assumed to have." Ford v. Lamar Life Ins. Co., 513 So. 2d 880, 888 (Miss. 1987) (citations omitted). Thus, to recover under a theory of apparent authority, a plaintiff must show the following: "(1) acts or conduct on the part of the principal indicating the agent's authority, (2)reasonable reliance on those acts, and (3) a detrimental change in position as a result of such reliance." Andrew Jackson, 566 So. 2d at 1180(citations omitted).
The McGees contend that three categories of acts by J&F create a question of fact as to whether Trezevant acted with apparent authority from J&F: (1) they received correspondence on J&F letterhead; (2) Trezevant worked for J&F at some point and has always worked at the same location; and (3) another Prommis paralegal, Lisa Payne, testified regarding J&F's oversight of Prommis employees. See Pls.' Resp. [74] at 8 9.1
Starting with the letterhead issue, Plaintiffs more particularly claim that "[a]ll correspondence received by the McGees relating to the foreclosure sale and subsequent eviction proceeding was printed on J&F letterhead and signed by one or more of...
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