Schneider v. CitiMortgage, Inc.
| Decision Date | 19 September 2018 |
| Docket Number | No. 13-4094-SAC,13-4094-SAC |
| Parties | RANDALL A. SCHNEIDER and AMY L. SCHNEIDER Plaintiffs, v. CITIMORTGAGE, INC., et. al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Finding its repeated admonitions for adherence to the letter and spirit of Fed. R. Civ. P. 1 ignored, the court again is inundated with filings whose number and length are excessive, redundant, and unnecessary. These filings plainly reflect the negative aspects of the parties' and counsels' overly litigious and contentious behavior throughout this suit's history. The court's time and effort expended on this case has greatly exceeded what should have been expected from this litigation if the spirit of Rule 1 had governed the communication, cooperation and conduct of all involved. The other significant drain upon the court's resources has been the plaintiffs' failure to present their claims and arguments consistently, clearly and concisely. Contentious behavior and inferior presentations are an aggravating combination.
For the sake of efficiency and expedition, the court will limit its order to discussing only the most central facts and to ruling only on those legal issues and arguments controlling in its judgment. The parties rightly should assume that the factual issues and legal contentions not appearing in this order were still considered and researched but were found to be non-essential in resolving the summary judgment motions. The court sets out the following factual context to serve as a simple background for its rulings, and it reserves fuller discussion of the more specific and essential facts when it addresses the pending motions in the order in which they were filed.
SUMMARY JUDGMENT STANDARDS
Ultimately, a court grants summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see Fed. R. Civ. P. 56. But first, the movant "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. This does not mean the moving party must negate the other side's claims or defenses through affidavits. Id. Upon a properly supported motion for summary judgment, the nonmoving party must gobeyond the pleadings, that is, mere allegations or denials, and set forth specific facts showing a genuine issue of material fact for trial, relying upon the types of evidentiary materials contemplated by Rule 56. Id.
A court decides the motion "through the prism of the substantive evidentiary burden." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). So, a factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Id. at 248. To be genuine, a factual dispute requires more than a mere scintilla of evidence in support of a party's position. Id. at 252. This means that the purpose of Rule 56 "is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). At the same time, the summary judgment stage does not authorize the court's weighing of the evidence, crediting some over other, or determining the truth of disputed matters, but it shall decide whether a genuine issue of material fact for trial exists. Tolan v. Cotton, --- U.S. ----, 134 S.Ct. 1861, 1866, (2014). The court performs this task with a view of the evidence that favors most the party opposing summary judgment. Id. Summary judgment may be granted if the nonmoving party's evidence is merely colorable or is not significantly probative. Liberty Lobby, 477 U.S. at 250-51. Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to requiresubmission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505.
FACTUAL BACKGROUND
The plaintiffs' residence in Nortonville, Kansas, was subject to a residential mortgage loan they had with the lender Citicorp Trust Bank, f.s.b. a/k/a Citibank, N.A. ("Citibank"). They refinanced their loan with Citibank on September 17, 2007, with the plaintiffs executing a promissory note for $107,996.88 for a term of 10 years and executing a mortgage that granted Citibank a first-priority lien and security interest in the Nortonville residence. Both the note and the mortgage defined Citibank as the "Lender." (Pretrial Order ECF# 519, Stip. 1-6). The mortgage conveyed a lien to Citibank and the recorded mortgagee was Citibank.
During the relevant time that the plaintiff's mortgage loan existed, Citicorp was a federal savings bank regulated by the federal Office of Thrift Supervision. Citicorp's business included originating home mortgage loans for Kansas borrowers. A merger in January of 2012 resulted in Citicorp Trust Bank being known as Citibank, and it is regulated by the federal Office of the Comptroller of the Currency.
Included as voluntary features to the plaintiffs' refinanced loan was a Payment Waiver Protection Program ("Payment Waiver Program" or "PWP") and an Equity Builder Interest Rate Discount Program ("Equity Builder Program" or "EBP"). The PWP covered only Randall Schneider andprovided for the payment of scheduled mortgage payments if he became disabled or involuntarily unemployed. At the closing on September 17, 2007, the plaintiffs received a document entitled, "Addendum to Note Payment Waiver Protection Program" and signed the same that day. Id. Stips. 10 and 11. Approximately six months later, Amy Schneider timely submitted PWP documents for Randall Schneider's disability. The PWP "ultimately addressed plaintiffs' responsibility to make mortgage payments from April 2008 through March 21, 2010." Id. Stip. 12.
Citibank serviced the plaintiffs' loan after origination, but CitiMortage began servicing the loan on or after June 11, 2008. Servicing the "loan included collection of payments, administration of features of the loan, communicating with plaintiffs, processing payments, calculating payments, creating payoff statements on the loan." Id. Stip. 17. Citibank's letter to the plaintiffs explained that this change of servicer would "not affect the terms and conditions of your loan documents." ECF# 524-19, p. 1.
CLAIMS
As summarized in the pretrial order, the plaintiffs withdrew their counts under the Equal Credit Opportunity Act and the Real Estate Settlement Procedures Act, and the court already dismissed the plaintiffs' counts for conversion, fraud, and breach of contract events occurring before May 24, 2008. Broadly stated, the plaintiffs' remaining claims are either for breaches of the implied covenant of good faith and fair dealing and/or theexpress contracts, or for violations of unconscionable and deceptive practices according to the Kansas Consumer Protection Act, K.S.A. 50-623 et seq. ("KCPA"). ECF# 519, pp. 15-16.
As set out in the pretrial order, the plaintiffs allege a number of breaches related to the 2007 contractual agreements contained in their promissory note, mortgage, Payment Waiver Protection Program ("PWP"), the Equity Builder Interest Rate Discount, the Equity Builder bi-weekly program, and the $.M.A.R.T. loan plan. The conduct alleged to be in breach of these agreements includes: interest rates being increased and overcharged, payments not being properly credited, fees being posted, unearned fees (including PWP fees) being assessed and collected, benefits of PWP not being fully provided, late charges being assessed when not owed or when PWP was covering loan payments, and pre-payment penalty being imposed. ECF# 519, p. 16-18.
As set out in the pretrial order, the plaintiffs allege the following legal theories for the 2010 attempted refinance. ECF# 519, pp. 14-15, 18-20. They worked with Kerry Cobb of Primerica in applying to refinance their loan with Citibank. They allege that Primerica and Citibank concealed their eligibility for refinancing, did not offer them alternative financing programs for which they were eligible, and denied their refinancing application. The plaintiffs allege that Primerica contracted with them in a mortgage brokeragreement and disclosure that revealed Primerica's exclusive relationship with the Citi defendants.
In their summary judgment filings, the plaintiffs purport to bring contractual and KCPA claims based on the defendants' using interest rates that allegedly exceeded Kansas Usury laws. The defendants contend the plaintiffs may not bring such claims now. While Kansas recognizes an action for usury, the defendants argue that the plaintiffs failed to allege this claim in their complaint and that the plaintiffs' recent efforts to add such a claim were denied at the pretrial conference. ECF# 519, p. 38. The defendants ask the court to keep the plaintiffs from making "an end-run" through recasting their untimely usury claims into another alleged breach of contract or violation of the KCPA. The court sustains the defendants' objection. The plaintiffs have not timely pleaded their usury claims and will not be allowed to evade the consequences through new theories for contractual breaches or KCPA violations. Indeed, the plaintiffs' usury theory is not properly articulated and disclosed in the pretrial order as part of their remaining claims. The pretrial order does not preserve a claim for usury law violations constituting a breach of the implied covenant of good faith and fair dealing. ECF# 531, p. 18 n. 2. The pretrial order supersedes all pleadings and controls the subsequent course of the case. Fed. R. Civ. P. 16(d); ...
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