Memhardt v. Nationstar Mortg., LLC
| Decision Date | 13 November 2018 |
| Docket Number | No. 4:17-CV-01411-AGF,4:17-CV-01411-AGF |
| Parties | KAREN MEMHARDT, Plaintiff, v. NATIONSTAR MORTGAGE, LLC, and BANK OF AMERICA, N.A., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on the motions (ECF Nos. 61 and 70) for summary judgment filed by Defendants Bank of America, N.A. ("BANA") and Nationstar Mortgage, LLC ("Nationstar"). For the reasons set forth below, BANA's motion for summary judgment will be granted, and Nationstar's motion for summary judgment will be granted in part and denied in part.
For the purpose of these motions, the record establishes the following. On June 21, 1993, Plaintiff obtained title to property at 530 Beacon Point Lane, Wildwood, Missouri 63040 ("the property"). On November 12, 2001, Plaintiff conveyed the property to her step-mother, Charlyne T. Skelton, via quit claim deed, with a transfer on death clause to Christopher Memhardt (Plaintiff's son).
Defendants presented evidence that on June 28, 2004, Skelton obtained a loan in the amount of $175,040 and executed a Note evidencing the loan. The funds were used, in part, to satisfy Plaintiff's prior loan on the property. The interest rate on the Note was 6.625% fixed and the term was 30 years. ECF No. 65-4. As security for the Note, Skelton executed a Deed of Trust naming BANA as the Lender.1 ECF No. 63-5. The Deed of Trust contains a "no oral modification clause, which provides:
Notice. Oral agreements or commitments to loan money, extend credit or to forebear from enforcing repayment of debt including promises to extend or renew such debt are not enforceable. To protect you (Borrower(s)) and us (Creditor) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it.
Id. at ¶ 27. Skelton also executed the Uniform Residential Loan Application, which stated that she was the only borrower, the sole owner of the property, and only her income was used to underwrite the loan. ECF No. 63-6.
Plaintiff contends that she and Skelton intended to be co-borrowers on the loan. Plaintiff would be making all of the payments on the loan. ECF No. 80-2 at 176. However, the loan documents presented at the closing only listed Skelton as the borrower, and it is undisputed that Plaintiff knew that she was not listed as a borrower on the loan documents. Skelton executed the documents provided to her, and Plaintiff was never later added to the loan as a co-borrower. ECF No. 80-1 at 105-106; ECF No. 80-7 at ¶ 5.
On April 6, 2009, Skelton transferred the property back to Plaintiff by quit claim deed, which Plaintiff did not immediately record. The loan, however, remained inSkelton's name. Skelton died on September 14, 2009. Plaintiff testified that she wished to obtain a loan modification under the federal Home Affordable Modification Program ("HAMP"). She testified that BANA representatives told her over the telephone that she would qualify for loan modification, but first had to assume the loan. ECF No. 80-2 at 51.
On September 16 and 17, 2009, BANA sent letters addressed to Charlyne Skelton with instructions on how a non-borrower can assume the loan, which included the completion of a "Simple Assumption Agreement" and the provision of a copy of a "letter signed by the court appointing an executor." ECF No. 63, BANA SOF at ¶ 9. The Simple Assumption Agreement provided, inter alia, that "[the] Owner assumes the obligation to make payments due, and to perform all obligations of a borrower or mortgagor under the terms of the Note and Security Instrument executed in connection with the Loan . . . ." Id.
Plaintiff provided several of the loan assumption documents to BANA, including the Simple Assumption Agreement, but she never submitted the requisite probate document. Plaintiff asserts that Skelton's will was not probated because Skelton did not have any real property in her possession at the time of her death. BANA contends that assumption did not take place while BANA was servicing the loan, and Plaintiff has not presented evidence to the contrary. Plaintiff recorded the Quit Claim Deed executed by Skelton on November 22, 2010.
Servicing of the loan was transferred to Nationstar effective April 1, 2013. Plaintiff requested that her name be added to the account and provided Nationstar withthe Simple Assumption Agreement that she had previously executed for loan assumption with BANA. On July 9, 2014, Nationstar granted her request by letter stating: "Based on the information you provided, the name on your account has been updated to add Karen Menhardt [sic] to the loan per the Simple Assumption." ECF No. 73-14.
Thereafter, Plaintiff applied for a loan modification. Plaintiff maintains that she was told by Nationstar representatives over the telephone that she would receive a modification under HAMP or a loan modification with a reduced rate. On July 15, 2014, Nationstar advised Plaintiff that she was not eligible for a HAMP loan modification. Then, on July 24, 2014, Nationstar offered Plaintiff a trial payment plan ("TPP") for a "standard modification."
On two separate occasions, Nationstar provided Plaintiff with permanent loan modification documents, and Plaintiff made several revisions, including revising the proposed interest rate. In March 2015, Plaintiff acknowledged she had been told there would be no rate reduction. On April 25, 2015, Nationstar denied Plaintiff's request for a loan modification because Plaintiff, by making revisions to material terms, had rejected Nationstar's modification offer.
Plaintiff's loan eventually went into default. In her invasion of privacy claim, Plaintiff asserts Nationstar made harassing collection calls to her. Plaintiff stated in her deposition that the collection calls took place at "various times over the loan," and that she was "absolutely" called by Nationstar more than ten times. ECF No. 80-2 at 119-120. She testified that the calls took place while she was in the process of applying for loan modification, and that the loan modification department was not communicatingwith the collections department, which was demanding payment. Id. at 124. On April 5, 2017, Nationstar notified Plaintiff that it intended to foreclose on the property based on her default under the terms of the Deed of Trust.
On April 27, 2017, Plaintiff filed this lawsuit against Nationstar in state court. On May 1, 2017, the lawsuit was removed to this Court, and Plaintiff thereafter amended her complaint to join BANA to the lawsuit. She asserts the following in her amended complaint: (1) Violation of the Real Estate Settlement Procedures Act ("RESPA") (Nationstar only); (2) Violation of the Missouri Merchandising Practices Act ("MMPA") (both Defendants); (3) Violation of the Fair Debt Collection Practices Act ("FDCPA") (Nationstar only); (4) Invasion of Privacy (Nationstar only); (5) Wrongful Foreclosure - Anticipated (Nationstar only); and (6) Breach of Contract (both Defendants). ECF No. 20.
On May 5, 2017, the parties filed a joint motion (ECF No. 8) to enter an agreed order for preliminary injunction, which the Court granted on May 8, 2017 (ECF No. 9). Under the agreed order, Nationstar was enjoined from initiating foreclosure proceedings during the pendency of the lawsuit. Plaintiff was ordered to pay into the Court registry $1,200 every month until the injunction is lifted.
Nationstar argues that Plaintiff failed to identify any violation under RESPA because the statute does not require Nationstar to retroactively review and grant Plaintiff a loan modification request or correct damage done to Plaintiff's credit rating. Next, Nationstar argues that summary judgment is warranted on Plaintiff's MMPA claimbecause, inter alia, the MMPA does not apply to Nationstar; Plaintiff lacks standing to bring claims under the MMPA; loan modification negotiations do not give rise to an MMPA claim; and her claims are barred by the no oral modification clause contained in the Deed of Trust. As for the FDCPA claim, Nationstar contends it does not fall within the statute's definition of a debt collector and Plaintiff was not a consumer under the FDCPA.
Nationstar further argues that it is entitled to summary judgment on Plaintiff's invasion of privacy claim because its collection efforts did not rise to the level of "highly offensive" intrusion under Missouri law, and Plaintiff failed to present sufficient evidence in support of her claim. Nationstar argues that it should prevail on Plaintiff's anticipated wrongful foreclosure claim because no such cause of action exists under Missouri law. Lastly, with respect to the breach of contract claim, Nationstar contends that Plaintiff cannot present any evidence that Nationstar breached the terms of the Note or Deed of Trust, or that she was ever promised a modification with a reduced interest rate.
BANA contends that it is also entitled to summary judgment on Plaintiff's MMPA claim for reasons similar to those asserted by Nationstar; and to summary judgment on Plaintiff's breach of contract claim because no contract ever existed between BANA and Plaintiff.
In response, Plaintiff argues that there are genuine issues of material fact because Skelton's signature on the Deed of Trust is a forgery. Plaintiff asserted that the signature was a forgery for the first time in response to Defendants' motions for summary judgment. She made no such assertion in the complaint or during the course ofdiscovery. Plaintiff points to the fact that the Deed of Trust is signed "Charlyne T.S. Kelton,"2 whereas all other signatures of Skelton are signed either "Charlyne T. Skelton" or "Charlyne Skelton." Plaintiff maintains that because Skelton's signature was forged, Defendants cannot rely on the no oral modification clause contained...
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