White-Lett v. Bank of N.Y. Mellon Corp. (In re Lett)

Decision Date07 September 2021
Docket NumberAdversary Proceeding 20-6031-BEM,10-61451-BEM
CourtU.S. Bankruptcy Court — Northern District of Georgia



This matter is before the Court on motions for summary judgment filed by Plaintiff Shirley White-Lett ("Plaintiff") [Doc. 72] and Defendant Newrez, LLC d/b/a Shellpoint Mortgage Servicing ("Shellpoint") [Doc. 78]. Plaintiff seeks summary judgment against Shellpoint as well as Defendants Bank of New York Mellon Corporation ("BONYMC") and Select Portfolio Servicing, Inc. ("SPS" and with BONYMC and Shellpoint, the "Defendants"). Each motion has been fully briefed by the parties and is ripe for determination.[1] This Order will address Plaintiff's motion against BONYMC and Shellpoint; her motion against SPS will be addressed by separate order.

Plaintiff initiated this proceeding by filing a complaint on February 6, 2020. [Doc. 1]. In the complaint, Plaintiff seeks a determination that her personal liability on her mortgage debt was discharged and requests sanctions for Defendants' violation of the discharge injunction in 11 U.S.C. § 524. The Court has jurisdiction pursuant to 28 U.S.C. § 157(b)(2)(O).

I. Summary Judgment Standard

Motions for summary judgment are governed by Federal Rule of Civil Procedure 56, made applicable in adversary proceedings by Federal Rule of Bankruptcy Procedure ("Rule") 7056. Rule 56 requires the Court to grant summary judgment "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." Rule 56(a). When, "the nonmoving party bears the burden of proof at trial, the moving party may discharge this 'initial responsibility' by showing that there is an absence of evidence to support the nonmoving party's case or by showing that the nonmoving party will be unable to prove its case at trial." Hickson Corp. v. Northern Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir. 2004). The movant is required to file a separate statement of facts, numbered separately, as to which it contends there are no genuine issues to be tried. BLR 7056-1(a)(1). Facts set forth in the statement of facts must be supported by "citing to particular parts of materials in the record, including … affidavits …." Rule 56(c)(1)(A). Affidavits "must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." Rule 56(c)(4).

The respondent is required to file a statement of facts, numbered separately, "to which the respondent contends a genuine issue exists to be tried." BLR 7056-1(a)(2). The respondent "may not rest upon the mere allegations or denials in its pleadings" but "must set forth specific facts showing that there is a genuine issue for trial. A mere 'scintilla' of evidence supporting the opposing party's position will not suffice[.]" Walker v. Darby, 911 F.2d 1573, 1576-77 (11th Cir. 1990) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106. S.Ct. 2505, 2512 (1986)). Any material facts not controverted by the respondent are deemed admitted. BLR 7056-1(a)(2).

The Court will only grant summary judgment when the evidence viewed in the light most favorable to the nonmoving party, shows no genuine dispute of material fact. Tippens v. Celotex Corp., 805 F.2d 949, 953 (11th Cir. 1986). A fact is material if it "might affect the outcome of the suit under the governing law …." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A dispute of material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. At the summary judgment stage the Court "'must not resolve factual disputes by weighing conflicting evidence.'" Tippens, 805 F.2d at 953 (quoting Lane v. Celotex Corp., 782 F.2d 1526, 1528 (11th Cir. 1986)). Further, "the court may consider any admissible facts and disregard any inadmissible statements occurring in the same affidavit." Devan v. Zamoiski Southeast, Inc. (In re Merry Go Round Enter., Inc.), 272 B.R. 140, 145 (Bankr. D. Md. 2000); see also Peterson v. Board of Trustees of the Univ. of Ala., 644 Fed.Appx. 951, 954 (11th Cir. 2016).

The standard for granting summary judgment is not affected by the filing of cross-motions for summary judgment. "The court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." 10A C. Wright, A. Miller & M. Cane, Fed. Prac. & Proc., § 2720 (4th ed. Apr. 2021 update).

II. Material Facts Not in Dispute

Plaintiff filed with her motion for summary judgment a Statement of Material Facts Not Genuinely Disputed, to which BONYMC and Shellpoint responded. [Docs. 73, 87-1]. Plaintiff's Statement of Facts contains numerous opinions, conclusions, and characterizations, none of which are facts and, thus, will not be considered as facts. Shellpoint filed with its motion for summary judgment a Statement of Material Facts, and Plaintiff filed a response. [Doc. 78-1 Ex. A, Doc. 90 at 21].

A. The Home Loan and Initial Servicing

In May 2005 Plaintiff executed an adjustable rate note to Aegis Wholesale Corporation in the amount of $636, 000 to refinance her home at 456 North Saint Mary's Lane, in Cobb County, Georgia. [Docs. 73[2] ¶ 1, 87-1 ¶ 1]. On January 19, 2010, Plaintiff filed Chapter 7 case no. 10-61451 (the "Main Case"). [Docs. 73 ¶ 2, 87-1 ¶ 2]. As part of the filing, she listed BAC Home Loans ("BAC") on Schedule D as a "secured creditor" as she then supposed the meaning of the term to be. [Id.]. Plaintiff also filed a Statement of Intention seeking to have her mortgage loan reaffirmed. [Docs. 73 ¶ 3, 87-1 ¶ 3]. At the time Plaintiff filed the Main Case, she was not in default on her mortgage payments. [Id.].

On October 27, 2010, BAC Home Loans Servicing LP, on behalf of the Bank of New York Mellon (the "Bank") and as its servicer, filed a motion for relief from the automatic stay in Plaintiff's bankruptcy case. [Docs. 73 ¶ 10, 87-1 ¶ 10; Main Case Doc. 14]. The Bank is a bank incorporated under the laws of New York. [Doc. 77-1 ¶ 2; Doc. 79].[3] The Bank is not a Defendant in this proceeding. Defendant BONYMC is a Delaware corporation that owns the Bank. [Doc. 72 n.1; Doc. 77-1 ¶ 1, 3; Doc. 79]. BAC subsequently withdrew the motion for stay relief on January 21, 2011. [Doc. 73 ¶ 10, 87-1 ¶ 10; Main Case Doc. 22]. On February 25, 2011, the Bankruptcy Court entered an order granting Plaintiff a discharge, which was served to BAC on February 28, 2011. [Docs. 73 ¶ 11; 87-1 ¶ 11; Main Case Docs. 23, 24].

B. Servicing by SPS

In November 2013, Plaintiff received notice from SPS that SPS would be the new servicer of her mortgage loan and informing her of the opportunity to apply for a loan modification. [Docs. 73 ¶ 24, 87-1 ¶ 24]. Plaintiff applied for a loan modification. [Docs. 73 ¶ 26; 87-1 ¶ 26]. SPS sent monthly statements to Plaintiff from December 2013 through September 2016. [Docs. 73 ¶ 27; 87-1 ¶ 27; 111 Ex. 1]. The monthly statements dated December 4, 2013 and January 8, 2014 included a payment due date, amount of past due payments, a payment coupon specifying the amount due, and notice that "this statement is an attempt to collect a debt." [Doc. 111 Ex. 1 at 103-111]. The monthly statements dated February 10, 2014 through September 14, 2016 included a payment due date, amount of past due payments, total amount due, a payment coupon that specified the amount due and the due date, and a notice that "[t]his is an attempt to collect a debt." [Id. at 7-102].

Upon receiving the mortgage statements Plaintiff experienced despair, anger, anxiety, and other emotional distress. [Docs. 73 ¶ 28-29; 87-1 ¶ 28-29]. By early 2015, Plaintiff noticed a worsening of headaches and ability to breathe and experienced for the first time chest pains and dizziness. [Docs. 73 ¶ 30, 87-1 ¶ 30]. Plaintiff sought medical attention in or around March 2015, at which time she was diagnosed with a thoracic-aortic aneurysm. [Docs. 73 ¶ 32, 87-1 ¶ 32]. Through 2011, Plaintiff had been routinely working an average of 40 hours per week and had no medical issues affecting her life or ability to work. [Docs. 73 ¶ 31; 87-1 ¶ 31]. As a result of the diagnosis and per instructions from her treating physician and the medication he prescribed, Plaintiff felt physically unable to work and did not attempt to work in 2015. [Docs. 73 ¶ 32; 87-1 ¶ 32].

The loan modification process with SPS continued throughout most of 2016. [Docs. 73 ¶ 36, 87-1 ¶ 36]. During 2016, Plaintiff's medical condition stabilized and she was able to work more hours. [Docs. 73 ¶ 38, 40; 87-1 ¶ 38, 40]. SPS transferred servicing to Shellpoint in December 2016. [Docs. 73 ¶ 37; 87-1 ¶ 37].

C. Servicing by Shellpoint

Shellpoint began servicing Plaintiff's loan in December 2016. [Doc 78-1 ¶ 4; Doc. 90 at 24 ¶ 4]. Shellpoint sent Plaintiff no monthly statements during the period from December 2016 to December 2017. [Doc. 78-1 ¶ 5; Doc. 90 at 24 ¶ 5]. From April to July 2017 Plaintiff had been working 30 hours per week. [Docs. 73 ¶ 41; 87-1 ¶ 41]. On July 19, 2017, Plaintiff sent Shellpoint an application for a loan modification. [Doc. 78-1 ¶ 13; Doc. 90 at 26 ¶ 13]. Shellpoint sent Plaintiff a letter dated July 21, 2017 (the "July 21 Letter") that stated Shellpoint had received her request for a loss mitigation program, that her application was incomplete, and that requested additional information. [Doc. 78-1 ¶ 15; Doc. 90 at 26-7 ¶ 15; Doc. 111 Ex. 2]. The July 21 Letter advised Plaintiff of...

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