Teeuwissen v. JP Morgan Chase Bank, N.A.

• Decision Date: 17 November 2011
• Docket Number: Civil Action No. 3:11CV46TSL–FKB.
• Citation: 902 F.Supp.2d 826
• Parties: Pieter TEEUWISSEN and Lisa M. Teeuwissen, Plaintiffs, v. JP MORGAN CHASE BANK, N.A. a/k/a Chase Home Finance, LLC, and Nationwide Trustee Services, Inc., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

902 F.Supp.2d 826

Pieter TEEUWISSEN and Lisa M. Teeuwissen, Plaintiffs,

v.JP MORGAN CHASE BANK, N.A. a/k/a Chase Home Finance, LLC, and Nationwide Trustee Services, Inc., Defendants.

Civil Action No. 3:11CV46TSL–FKB.

United States District Court,

S.D. Mississippi,

Jackson Division.

Nov. 17, 2011.

Anthony R. Simon, Anthony R. Simon, PLLC, Dale Danks, Jr., Danks, Miller & Cory, Lara E. Gill, Jackson, MS, for Plaintiffs.

Ian J. McCutchen, Johnson & Freedman, LLC, Atlanta, GA, for Defendants.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

Plaintiffs Pieter and Lisa Teeuwissen originally filed this action in the Chancery Court of Hinds County, Mississippi on December 7, 2010 seeking, first, to enjoin the imminent foreclosure of their home by defendantsJP Morgan Chase Bank, N.A. a/k/a Chase Home Finance, LLC(Chase) and Nationwide TrusteeServices, Inc.(Nationwide), and also asserting a variety of claims for affirmative relief relating to Chase's alleged improper handling of their mortgage loan.Plaintiffs were unable to get a hearing scheduled on their request for an injunction prior to the date and time of the scheduled foreclosure,¹ and the foreclosure sale went forward on December 21, 2010, at which Chase purchased the property.On December 22, 2010, a hearing was held in chancery court on plaintiffs' complaint for injunctive relief, following which the chancellor enjoined Chase and Nationwide were enjoined from taking any action against plaintiffs“related to or in any way connected with foreclosure of the Plaintiffs' real property” pending a hearing on the merits of the case, which was set for January 10, 2011.However, prior to the date of the scheduled hearing, Chase removed the case to this court on the basis of diversity jurisdiction under 28 U.S.C. § 1332, and federal question jurisdiction under 28 U.S.C. § 1331.The case is now before the court on a motion by Chase to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, or in the alternative, for summary judgment pursuant to Rule 56.Plaintiffs have responded in opposition to the motion, and the court, having considered the memorandaof authorities submitted by the parties, concludes the motion should be granted in part and denied in part, as set forth herein.

The Teeuwissens' claims in this case all ultimately stem from Chase's decision in April 2009 to establish an escrow account for the payment of plaintiffs' property taxes on their Jackson, Mississippi home and its eventual foreclosure of their home.While plaintiffs' deed of trust required that their monthly mortgage payment include “a sum ... to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over” the deed of trust as a lien or encumbrance on the property, it provided for a waiver of this requirement, as follows: “Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items.”The Teeuwissens had been granted such a waiver.The deed of trust recited:

In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require.Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed a covenant and agreement contained in this Security Instrument, as the phrase “covenant and agreement” is used in Section 9.If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount.Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required under this Section 3.

In March 2009, Chase, which held the note and deed of trust on plaintiffs' Jackson, Mississippi residence, received notice that the 2008 real property taxes on the property were delinquent.²On March 26, 2009, Chase wrote to plaintiffs, advising that under the terms of their mortgage, plaintiffs were responsible for the timely payment of all real property taxes and providing Chase with verification of such payment.Chase wrote:

If you have not paid these taxes, you are responsible for remitting payment to the taxing authority's office immediately....

Your failure to pay outstanding taxes within fifteen (15) days from the date of this letter may result in Chase's establishing an escrow account on your behalf and a subsequent increase in your mortgage payment amount.The increased amount will include the delinquent tax payments and funds for the payment of all future real estate tax bills.

Please note that if any taxes remain delinquent, Chase may immediately establish an escrow account and pay the taxes on your behalf.

Subsequently, by letter dated April 15, 2009, Mr. Teeuwissen forwarded to Chase a copy of a receipt from the Hinds County Tax Collector reflecting the Teeuwissens' payment at 3:27 p.m. on that date of the outstanding taxes on the subject property, in the amount of $2,908.77.However, on April 16, 2009, Chase sent plaintiffs a second notice of delinquency,³ advising that Chase had transmitted payment of the taxes totaling $2,824.05 to Hinds County for their delinquent taxes, and informing plaintiffs as follows:

As permitted under the terms of your mortgage Note, Chase has established an escrow account to make this and all future tax payments on your behalf for your property....Chase will complete an escrow analysis, and you will receive a new mortgage statement that includes your adjusted mortgage payment amount....

Thereafter, in July, Chase notified plaintiffs of the amount they were required to pay for escrow.However, taking the position that Chase had no legitimate basis for requiring payment into escrow for taxes since the property tax had already been paid, the Teeuwissens refused to pay the additional amount assessed by Chase for the escrow of property taxes and instead, continued to remit their regular monthly mortgage payment of $739.19.As a result, on September 4, 2009, Chase sent notice to plaintiffs that they were in default on their mortgage.In response, plaintiffs, through their attorney, notified Chase that they disputed Chase's purported attempt to collect and disputed that they were in default.Over the next few months, plaintiffs continued to make the monthly payment of $739.19.And during this time, plaintiffs' attorney repeatedly wrote to Chase, advising that plaintiffs disputed the validity of the debt, as well as Chase's imposition of and/or calculations of escrow.Eventually, according to plaintiffs, Chase informed Mr. Teeuwissen in a December 2009 phone call that it would no longer accept a monthly payment of $739.19, and that the Teeuwissens would be required to pay the additional amount to cover the escrow for taxes.From that point forward, the Teeuwissens, maintaining their position that Chase had no authority to impose an escrow requirement, stopped making mortgage payments, which ultimately culminated in Chase's proceeding to foreclose on the property.

According to plaintiffs, they learned in late November of 2010 that their property was scheduled to be sold through foreclosure.They allege in this regard that while Chase did not provide them with notice of foreclosure as required by law, they received a solicitation from a third-party law firm in late November 2010 offering to assist them in avoiding foreclosure.This letter prompted them to investigate, and on December 4, 2010, their attorney located a November 30, 2010 publication of a Substitute Trustee's Notice of Foreclosure Sale showing that a foreclosure sale was scheduled for December 21, 2010.The Teeuwissens responded by initiating the present action in Hinds County Chancery Court with the filing of their Complaint for Wrongful Foreclosure, to Set Aside Foreclosure Sale, for Preliminary Injunction (Temporary) Injunction, Permanent Injunction, Accounting and Other Relief.

As previously indicated, the court entered an order on December 23, one day after the foreclosure sale, purporting to grant the plaintiffs injunctive relief “in the form of a limited preliminary (temporary) injunction” against Chase preventing it from taking any actions to effectuate the foreclosure, conditioned upon the Teeuwissens paying into the registry of the court an amount equal to the delinquency (without escrow), as well as posting of a personal bond.Plaintiffs allege that notwithstanding the court's order, Chase wrote to them in March 2011 demanding that they vacate the premises and threatening to take action to have them removed from the home if they failed to do so.

Based on these allegations, plaintiffs have asserted putative claims in this cause for wrongful foreclosure, breach of contract, breach of the covenant of good faith and fair dealing, negligence, failure to provide accounting, misrepresentation, violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., violations of injunction/ contempt, declaratory judgment and gross negligence.By its motion, Chase seeks dismissal and/or summary judgment as to each of these claims.

Chase moves for dismissal under Federal of Civil Procedure12(b)(6) or summary judgment under Rule 56.Under Rule 12(b)(6), a claim should not be dismissed unless the court determines that it is beyond doubt that the plaintiff cannot prove a plausible set of facts that support the...