Ocwen Loan Servicing, LLC v. Washington
Decision Date | 17 March 2006 |
Docket Number | 1041631. |
Citation | Ocwen Loan Servicing, LLC v. Washington, 939 So.2d 6 (Ala. 2006) |
Parties | OCWEN LOAN SERVICING, LLC, as successor in interest to Ocwen Federal Bank, FSB v. Willie Mae WASHINGTON. |
Court | Alabama Supreme Court |
John E. Goodman, Benjamin M. Moncrief, and Brian M. Blythe of Bradley Arant Rose & White, LLP, Birmingham, for appellant.
R. Cooper Shattuck and Jane L. Calamusa of Rosen, Cook, Sledge, Davis, Shattuck & Oldshue, P.A., Tuscaloosa, for appellee.
Ocwen Loan Servicing, LLC, as successor in interest to Ocwen Federal Bank, FSB("Ocwen"), appeals from the trial court's order denying its motion to compel arbitration.We affirm.
Willie Mae Washington owned her residence in Greensboro free and clear of any encumbrances.She contacted Malone-Gordon Mortgage and Investments, Inc.("Malone-Gordon"), a mortgage broker in Tuscaloosa, in September 1998 based upon advertisements she had heard on the radio and sought a loan.Malone-Gordon secured a loan for Washington with Morcap, Inc., and she thereafter executed a promissory note in favor of Morcap secured by a mortgage on her residence in Greensboro.Washington says that shortly after the loan closing Morcap assigned, sold, or transferred her note to an entity that remains unknown to her.She says that Southern Pacific Funding initially serviced her loan, followed by Aurora Loan Services.Ocwen began servicing the loan in September 1999.
Washington was advised in September 1999 to send payments on her loan to Ocwen.She says that Ocwen threatened her with foreclosure numerous times while it was servicing her loan.Washington received at least two letters from Ocwen notifying her that she was in default on the promissory note and that she had the right to bring a court action to assert the nonexistence of the default or to assert any other defenses to foreclosure and the acceleration of the note.Further, Ocwen's attorneys sent Washington several letters stating that her note had been accelerated and that she had the right to assert in the foreclosure proceeding the nonexistence of a default or any other defense she had to the acceleration of the note and the foreclosure sale.Washington disputed the amounts Ocwen said she owed.Washington says that several times the foreclosure process proceeded to the point that Ocwen published notice of foreclosure in a newspaper published in Hale County.
Washington sued Ocwen, the attorneys representing Ocwen, and Malone-Gordon in the Hale Circuit Court on June 3, 2004, asserting a variety of claims relating to the propriety and disclosure of fees, penalties, and finance charges assessed and collected in originating and servicing her mortgage loan.Service was never perfected on Malone-Gordon, and Washington has dismissed her claims against the attorneys representing Ocwen; Ocwen is the only defendant remaining in the case.1On September 27, 2004, Ocwen removed the action to the United States District Court for the Southern District of Alabama.Washington's motion to remand was granted on January 19, 2005.On March 23, 2005, Ocwen filed a motion to compel arbitration, relying upon the arbitration agreement executed between Washington and Morcap.Washington opposed the motion to compel arbitration, contending that it did not apply to her claims because: (1) the agreement was not sufficiently broad to include her claims against Ocwen; (2) Ocwen had waived its right to arbitrate; (3) the origination and servicing of her mortgage loan did not involve interstate commerce;2 and (4) the agreement itself was unconscionable.The trial court denied Ocwen's motion to compel arbitration, without explanation.Ocwen appealed.SeeRule 4(d), Ala. R.App. P.
"`[T]he standard of review of a trial court's ruling on a motion to compel arbitration at the instance of either party is a de novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review.'"Vann v. First Cmty. Credit Corp.,834 So.2d 751, 752-53(Ala.2002)(quotingEx parte Roberson,749 So.2d 441, 446(Ala.1999)).Accord, General Motors Corp. v. Stokes Chevrolet, Inc.,885 So.2d 119, 121(Ala.2003).
Ocwen contends that it satisfied its burden of establishing that Washington's claims against it are governed by an enforceable arbitration agreement.Washington responds by arguing that the references to the defined terms "you" and "we" in the arbitration agreement restrict the right to arbitrate only to disputes between Washington and Morcap.Washington thus contends that the arbitration agreement does not permit Ocwen to enforce its provisions.Washington argues in her brief that "[t]here is no evidence before this Court, there was no evidence before the trial court, and Ocwen cannot show any evidence that it was an assignee of Morcap."Yet on the same page of her brief Washington also states: "The servicing rights [under the promissory note] were transferred to Aurora Loan Services and then to Ocwen Federal Bank."Washington thus concedes that Ocwen is an assignee of an assignee of Morcap.
As a general rule, an assignee stands in the shoes of the assignor and may enforce an arbitration agreement entered into between the assignor and another party.SeeNissan Motor Acceptance Corp. v. Ross,703 So.2d 324, 326(Ala.1997), and authorities cited therein.Washington has not cited any authority, and we are aware of none, that supports the proposition that an assignee of an assignee in a transaction such as this one which specifically contemplates the existence of assignees, does not stand in the shoes of either the original assignee or, for that matter, the original assignor.We therefore conclude that Ocwen is entitled to assert the rights conferred upon Morcap under the arbitration agreement.
The arbitration agreement, as previously noted, provides that certain disputes are not subject to arbitration, including "any judicial or non-judicial foreclosure proceeding ... whether by the exercise of any power of sale ... under applicable law."Ocwen contends in its principal brief that nothing in the foregoing language is inconsistent with "the parties' shared right under the Arbitration Agreement to submit a dispute to arbitration `at your option or ours.'"Ocwen then concedes in that brief:
(Emphasis in original.)
Washington responds by stating that the underlying action here is indeed a court action brought to assert a defense to foreclosure.Washington then quotes from her affidavit submitted in opposition to Ocwen's motion to compel arbitration in which she stated that Ocwen threatened to foreclose, that she was afraid she would lose her house, and that everyone in Greensboro knew that her house was being foreclosed upon.As previously noted, Ocwen had commenced publication of its notice of foreclosure in the Greensboro newspaper before the commencement of this action.Washington then asserts that the evidence before the trial court was sufficient to authorize the conclusion that the present action was brought in response to the foreclosure proceedings being brought by Ocwen.Washington...
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