Mosley v. Quicken Loans, Inc.
| Decision Date | 09 March 2018 |
| Docket Number | Civil Action No.: 1:16-cv-00384-JMC |
| Court | U.S. District Court — District of South Carolina |
| Parties | Tyrone Mosley, Plaintiff, v. Quicken Loans, Inc., Defendant. |
Plaintiff Tyrone Mosley filed the above-captioned action against Defendant Quicken Loans, Inc. alleging claims for violation of the South Carolina Attorney Preference Statute ("SCAPS"), S.C. Code § 37-10-102 (2017), in the context of a mortgage loan closing. (ECF No. 1-1 at 7 ¶ 5-8 ¶ 12.)
This matter is before the court on Plaintiff's and Quicken Loans' Cross-Motions for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (ECF Nos. 68, 71.) The parties oppose each other's Motions respectively. (ECF Nos. 81, 86.) For the reasons set forth below, the court GRANTS Quicken Loans' Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.
Quicken Loans "is a nationwide online mortgage lender that provides, among other things, residential mortgage loan refinances." Boone v. Quicken Loans, Inc., 803 S.E.2d 707, 709 (S.C. 2017). "Under the Quicken Loans refinance procedure, the borrowers have already purchased the property and are simply seeking a new mortgage loan (presumably with more favorable terms) to replace the existing loan." Id.
On May 24, 2013, Plaintiff provided information to Quicken Loans for purposes of completing a loan application to refinance the mortgage on his primary residence located at 225 Bennett Street, Williston, South Carolina 29853.1 (ECF Nos. 68-1 at 21:14-25, 68-3 at 2 & 68-5 at 3 ¶ 5.) As a result of the information provided by Plaintiff, Defendant generated loan application documents that were mailed to Plaintiff for his review and signature. (ECF Nos. 68-1 at 29:15-18 & 68-5 at 3 ¶ 5.) In addition to the loan application package, Quicken Loans included an Attorney/Insurance Preference Checklist (the "AIPC"). (Id.; see also ECF No. 1-1 at 8 ¶ 11.) Based on the information provided by Plaintiff, the AIPC was prepopulated with the following relevant information (in bold):
1. I (We) have been informed by the lender that I (we) have a right to select legal counsel to represent me(us) in all matters of this transaction relating to the closing of this loan.
(a) I select I/We will not use the services of legal counsel.
s/Tyrone Mosley
Borrower
5-28-13
Date
/s/_________
Borrower
__________
Date
Tyrone Mosley
Borrower
__________
Date
Borrower
__________
Date
Borrower
__________
Date
Borrower
__________
Date
On May 28, 2013, Plaintiff signed the loan application documents and the AIPC. (Id.; see also ECF No. 68-5 at 3 ¶ 6.) Plaintiff returned the signed loan application documents and AIPC to Quicken Loans on May 29, 2013. (ECF No. 68-5 at 3 ¶ 6.) On August 26, 2013, Plaintiff had a telephone conversation with a Quicken Loans' representative to discuss the detailsof the loan closing, including who would be in attendance. (ECF No. 68-5 at 3 ¶ 7.) Thereafter, Plaintiff was contacted by the law firm McDonnell & Associates, P.A. "to introduce the firm, discuss the closing, confirm the scheduled closing date and location, and inform him [Plaintiff] that he needed to have a witness present." (ECF No. 68-8 at 3 ¶ 6.) On August 30, 2013, Plaintiff met with attorney Andrew Thompson of McDonnell & Associates and signed a disclosure form agreeing to the terms of McDonnell & Associates' representation at the loan closing. (ECF No. 68-8 at 3 ¶ 7, 6-8.) Afterwards, Plaintiff completed his loan closing. (ECF No. 68-1 at 25:1-26:3.)
On November 11, 2015, Plaintiff filed a Complaint against Quicken Loans in the Court of Common Pleas for Barnwell County, South Carolina alleging violation of the SCAPS.2 (ECF No. 1-1 at 8 ¶ 12.) After Quicken Loans removed the case to this court (ECF No. 1), the parties engaged in and completed discovery on March 1, 2017. (ECF No. 36.) Quicken Loans then moved for summary judgment on March 31, 2017. (ECF No. 68.) On that same day, Plaintiff filed his Cross-Motion for Summary Judgment. (ECF No. 71.)
The court heard argument from the parties on the instant Motions at a hearing on December 5, 2017. (ECF No. 127.)
The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) based on Quicken Loans' allegations that there is complete diversity of citizenship between Plaintiff and Quicken Loans, and the amount in controversy herein exceeds the sum of Seventy-Five Thousand ($75,000.00) Dollars, exclusive of interest and costs. (ECF No. 1 at 2.) QuickenLoans is a corporation organized under the laws of Michigan with its principal place of business in Detroit, Michigan. (ECF No. 1-3 at 3 ¶ 5.) Plaintiff is a citizen and resident of Barnwell County, South Carolina. (ECF No. 1-1 at 7 ¶ 1.) Moreover, the court is satisfied that the amount in controversy exceeds $75,000.00 in accordance with Defendant's representation. (ECF No. 1 at 3-11.)
Summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" if proof of its existence or non-existence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248-49 (1986). A genuine question of material fact exists where, after reviewing the record as a whole, the court finds that a reasonable jury could return a verdict for the nonmoving party. Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir. 2011).
In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123-24 (4th Cir. 1990). The non-moving party may not oppose a motion for summary judgment with mere allegations or denial of the movant's pleading, but instead must "set forth specific facts" demonstrating a genuine issue for trial. Fed. R. Civ. P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). All that is required is that "sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." Anderson, 477 U.S. at 249.
In his Motion for Summary Judgment, Plaintiff asserts that Quicken Loans violates section 37-10-102 by failing "to ascertain the preference of the South Carolina borrower that results in the attorney at the closing table not being selected by the borrower, a practice that deprives the South Carolina borrower of a statutorily guaranteed right." (ECF No. 71-1 at 10-11.) Specifically, Plaintiff asserts that asking the question "Will the borrower select legal counsel to represent them in this transaction?" does not satisfy the statute which "mandates that the creditor '...must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor in all matters related to the closing of the transaction . . . .'" (Id. at 11.) Quicken Loans "must do more than disclose to the borrower; the lender must elicit certain specific information from the borrower." (ECF No. 86 at 4.) In this regard, Quicken Loans' "form fails to ascertain the preference of the borrower if it is already prepopulated with 'I/we will not use the services of legal counsel.'" (Id. at 5.) Accordingly, Plaintiff argues that Quicken Loans' form "violates the statute and operates as an illegal waiver of the right to be represented by any attorney, much less the consumer's choice of legal counsel." (ECF No. 71-1 at 16.)
In its Motion for Summary Judgment, Quicken Loans asserts that the purpose of the SCAPS is "to protect borrowers by requiring in the credit application clear and prominent disclosure of the information necessary to ascertain the borrower's preference as to the legal counsel employed to represent the debtor in all matters relating to the closing of thetransaction[.]" (ECF No. 68 at 11 (quoting Davis v. NationsCredit Fin. Servs. Corp., 484 S.E.2d 471, 472 (S.C. 1997))). Quicken Loans further asserts that "a lender substantially complies with section 37-10-102 if the borrower receives a clear and prominent disclosure of the statutorily required information." (Id. (quoting Davis, 484 S.E.2d at 472).) Based on the foregoing, Quicken Loans argues that it complied with the SCAPS because it "clearly and prominently disclosed to Plaintiff that he had the right to express a preference for an attorney and gave him numerous opportunities to express a preference." (Id. at 11-12.) In support of its argument, Quicken Loans points out that the AIPC required Plaintiff to sign acknowledging that he has "been informed by the lender that I (we) have a right to select legal counsel to represent me(us) in all matters of this transaction relating to the closing of this loan." (ECF No. 68-6 at 2.)
Additionally, Quicken Loans argues that it has satisfied the safe harbor provisions of section 37-10-102 as to Plaintiff by providing written notice of the preference information on the AIPC within one business day. (ECF No. 68 at 14-16.)
Plaintiff brings his action pursuant to the SCAPS, which provides in pertinent part:
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