Patterson v. CitiMortgage, Inc.
| Decision Date | 26 September 2012 |
| Docket Number | CIVIL ACTION NO. 1:11-CV-0339-CC |
| Parties | VICTOR W. PATTERSON, TOBY G. BREEDLOVE, and JEANNINE B. RULIS (f/k/a CHARLOTTE JEANNINE BREEDLOVE), Plaintiffs, v. CITIMORTGAGE, INC., and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
Pending before the Court in the above-styled action is Defendant CitiMortgage, Inc. and Mortgage Electronic Registration System, Inc.'s Motion for Summary Judgment [Doc. No. 35]. For the reasons stated below, the Court GRANTS in part and DENIES without prejudice in part the Motion for Summary Judgment.
On or about May 1, 2007, Plaintiff Toby Breedlove ("Breedlove") obtained a loan from CitiMortgage, Inc. ("CitiMortgage") in the original principal amount of $550,000 (the "Loan" or "Breedlove Loan"). At the time Breedlove obtained the Loan, he was self-employed in the field of real estate development and construction. (DSUMF ¶ 2.) In connection with the Loan, Breedlove signed a Promissory Note in favor of CitiMortgage, wherein he agreed and promised, among other things, to repay the Loan in its entirety. (DSUMF ¶ 3.) Also in connection with the Loan, Breedlove and his then-wife, Plaintiff Charlotte Jeannine Breedlove n/k/a JeannineB. Rulis, (collectively referred to herein as the "Breedloves") signed a Security Deed in favor of MERS, as nominee of CitiMortgage and its successors and assigns, wherein the Breedloves granted MERS a first priority security interest in and to the real property located at 2382 Old Fountain Road, Lawrenceville, Georgia 30043 (the "Property") to secure Breedlove's indebtedness to CitiMortgage under the Note (the "Security Deed").1 (DSUMF ¶ 4.) The Security Deed was recorded on May 15, 2007, at Deed Book 47887, Page 804 of the Gwinnett County, Georgia, real estate records. (DSUMF ¶ 5.)
Breedlove agreed and understood at the time he obtained the Loan that if he did not pay the Loan according to its terms, CitiMortgage would be authorized to foreclose on the Property. (DSUMF ¶ 6.) Breedlove fell behind on his monthly mortgage payments to CitiMortgage, and the Loan went into default. (DSUMF ¶ 7.)
In an effort to avoid foreclosure of the Property as a result of his default on the Loan, Breedlove called the telephone number off of a sign in his neighborhood for a company called "SameDayHouseBuyers" that read "We Buy Houses" to see if he could locate someone who would be interested in purchasing the Property. (DSUMF ¶ 9.) Plaintiff Victor Patterson ("Patterson"), doing business as SameDayHouseBuyers, received and returned Breedlove's telephone call regarding a potential sale of the Property. (DSUMF ¶ 10.) Patterson has a bachelor of science degree in accounting and has been employed as a certified public accountant and as a chief financial officer. (DSUMF ¶ 11.) Patterson, doing business as SameDayHouseBuyers, was in the business of purchasing distressed properties for investment, rental, and/or resale. (DSUMF ¶ 12.)
Patterson and Breedlove agreed that Breedlove would authorize Patterson to communicate directly with CitiMortgage about the Loan, and that Patterson wouldseek to purchase the Property through a negotiated "short sale" with CitiMortgage. (DSUMF ¶ 13.) Breedlove signed a letter of authorization form that authorized CitiMortgage to communicate directly with Patterson about the Loan and the potential short sale of the Property. (DSUMF ¶ 14.) The form letter of authorization Breedlove executed was one of many forms provided to Patterson by two individuals who were participating in Patterson's real estate investment endeavors, and with whom Patterson expected to share the profits he anticipated from resale or rental of the Property. (DSUMF ¶ 15.) The Breedloves were not involved with, and did not participate in, any of the communications between Patterson and CitiMortgage regarding the proposed short sale of the Property. (DSUMF ¶ 21.)
Patterson first began communicating with CitiMortgage about the Loan and the potential short sale of the Property in July 2008. (DSUMF ¶ 16.) At that time, Patterson was aware that Breedlove owed "in the five hundred thousand range" on the Loan. (DSUMF ¶ 17.)
Todd Stone ("Stone"), a short sale specialist employed by CitiMortgage in the loss mitigation department, was vested with the authority to communicate on CitiMortgage's behalf regarding payoff amounts in short sale situations. Stone initially was assigned to be the CitiMortgage representative that was responsible for communicating with Patterson about the proposed short sale of the Property. (DSUMF ¶ 18.) In his capacity as a short sale specialist, Stone was responsible for reviewing and evaluating the short sale offers that Patterson submitted for the Property to determine whether, based on the value of the Property and the outstanding balance owed on the underlying Loan for which the Property served as collateral, the net payout to CitiMortgage that was proposed within the various offers was more than CitiMortgage could reasonably expect to receive from a sale of the Property if it were to go through the foreclosure and post-foreclosuremarketing process.2 (DSUMF ¶ 19.)
Stone had several telephone conversations with Patterson between July 2008 and September 2008 regarding the proposed short sale. (DSUMF ¶ 22.) During these conversations, Stone informed Patterson that CitiMortgage would not agree to a short sale unless the net payout that CitiMortgage would receive in connection with the short sale was more than CitiMortgage could reasonably expect to receive from a sale of the Property if it were to go through the foreclosure and post-foreclosure marketing process. (Id.) Stone also informed Patterson during their telephone conversations that the amount that CitiMortgage would be willing to accept in a short sale of the Property would be based on the market value of the Property, as well as the amount of the outstanding balance that was owed on the Breedlove Loan. (DSUMF ¶ 23.) According to CitiMortgage's records, in or around August 2008, the Property was valued at approximately $600,000, but the parties dispute whether an appraisal of the Property was actually done in or around August 2008. (DSUMF ¶ 24; Pls.' Response to Defs.' Statement of Undisputed Material Facts ¶ 24.) The total outstanding balance that Breedlove owed CitiMortgage on the Loan as of August 2008 was $563,709.90. (DSUMF ¶ 25.)
In August 2008, Patterson submitted his initial short sale proposal package to CitiMortgage, at which time he offered to purchase the Property for the price of$371,000, which would have provided a net payout to CitiMortgage in the amount of $350,000 (the "First Proposal"). (DSUMF ¶ 26.) CitiMortgage rejected Patterson's First Proposal. (DSUMF ¶ 27.) CitiMortgage did not, and would not, agree to accept a net payout of $350,000 in connection with the proposed short sale of the Property because that amount was far less than the outstanding balance that was owed on the Loan (which exceeded $563,000 at that time) and because, according to CitiMortgage's records, the Property was valued at approximately $600,000 at that time. Thus, CitiMortgage believed that it could reasonably expect to receive more than $350,000 from a sale of the Property if it were to go through the foreclosure and post-foreclosure marketing process. (DSUMF ¶ 28.)
After CitiMortgage rejected Patterson's First Proposal, Patterson orally offered to purchase the Property for the purchase price of $412,000, which would have provided an approximate net payout to CitiMortgage in the amount of $391,940 (the "Second Proposal"). (DSUMF ¶ 29.) CitiMortgage rejected Patterson's Second Proposal because it was still far less than the outstanding balance that was owed on the Loan and because, based on the estimated value of the Property at that time, CitiMortgage believed that it could reasonably expect to receive more than $391,940 from a sale of the Property if it were to go through the foreclosure and post-foreclosure marketing process. (DSUMF ¶ 30.) During their negotiations about the potential short sale, Patterson disputed CitiMortgage's valuation of the Property. (DSUMF ¶ 31.)
On August 29, 2008, Stone received a facsimile from Patterson containing a third short sale proposal wherein Patterson offered to purchase the Property for a purchase price of $444,000, which would have provided a net payout to CitiMortgage in the amount of $412,620 (the "August 29 Proposal"). (DSUMF ¶ 32.) Included in Patterson's August 29 Proposal to CitiMortgage was an "Agreement to Sell Real Estate" dated August 20, 2008, and entered into by and between Breedlove and Patterson, doing business as SameDayHouseBuyers, and a proposed HUD-1settlement statement evidencing a purchase price of $444,000 with a net payout to CitiMortgage in the amount of $412,620. (DSUMF ¶ 33.) Included on the proposed HUD-1 settlement statement was a "Mortgage Tax Stamp" fee in the amount of $13,320, which was to be deducted from CitiMortgage's payout. (DSUMF ¶ 34.) Stone discussed the Mortgage Tax Stamp fee with Patterson and informed Patterson that the proposed fee in the amount of $13,320 should be reduced to $2,000, which would result in an adjustment to CitiMortgage's net payout. (DSUMF ¶ 35.) Patterson admits that he could have made an error in calculating the Mortgage Tax Stamp fee on the proposed HUD-1 settlement statement he submitted with the August 29 Proposal. (DSUMF ¶ 36.) Stone determined that if the Mortgage Tax Stamp fee was reduced from $13,320 to $2,000, the net payout to CitiMortgage would be $423,940. (DSUMF ¶ 37.)
Stone recommended to his supervisors that CitiMortgage agree to accept the August 29 Proposal, if Patterson would agree to reduce...
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