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Finster v. U.S. Bank National Association

United States District Court, M.D. Florida, Jacksonville Division

March 28, 2017

BLEU FINSTER, Plaintiff,


          Marcia Morales Howard United Slates District Judge

         THIS CAUSE is before the Court on two motions. On August 8, 2016, Defendant U.S. Bank National Association (U.S. Bank) filed a Motion to Dismiss Third Amended Complaint (Doc. 49; Motion to Dismiss), to which Plaintiff Bleu Finster responded on August 26, 2016, see Plaintiff Bleu Finster's Response in Opposition to Defendant U.S. Bank National Association's Motion to Dismiss Third Amended Complaint (Doc. 50; Response to MTD). In addition, on October 18, 2016, U.S. Bank filed Defendant's Motion for Final Summary Judgment (Doc. 65; Summary Judgment Motion). Plaintiff filed a response in opposition to the Summary Judgment Motion on November 14, 2016. See Plaintiff Bleu Finster's Response in Opposition to Defendant U.S. Bank National Association's Motion for Summary Judgment (Doc. 69; Response to MSJ). For the reasons set forth below, the Court finds that U.S. Bank is entitled to summary judgment in its favor, and therefore, the Court will deny the Motion to Dismiss as moot.[1]

         I. Standard of Review

         Under Rule 56, Federal Rules of Civil Procedure (Rule(s)), “[t]he court shall 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). The record to be considered on a motion for summary judgment may include “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Rule 56(c)(1)(A).[2] An issue is genuine when the evidence is such that a reasonable jury could return a verdict in favor of the nonmovant. See Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (quoting Hairston v. Gainesville Sun Publ'g Co., 9 F.3d 913, 919 (11th Cir. 1993)). “[A] mere scintilla of evidence in support of the non-moving party's position is insufficient to defeat a motion for summary judgment.” Kesinger ex rel. Estate of Kesinger v. Herrington, 381 F.3d 1243, 1247 (11th Cir. 2004) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)).

         The party seeking summary judgment bears the initial burden of demonstrating to the court, by reference to the record, that there are no genuine issues of material fact to be determined at trial. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “When a moving party has discharged its burden, the non-moving party must then go beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir. 1995) (internal citations and quotation marks omitted). Substantive law determines the materiality of facts, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether summary judgment is appropriate, a court “must view all evidence and make all reasonable inferences in favor of the party opposing summary judgment.” Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (citing Dibrell Bros. Int'l, S.A. v. Banca Nazionale Del Lavoro, 38 F.3d 1571, 1578 (11th Cir. 1994)).

         II. Background[3]

         On March 29, 2006, Plainiff Bleu Finster executed a Note and Mortgage as part of the purchase of real property in Duval County, Florida. See Summary Judgment Motion, Ex. 1: Affidavit of Shanan Owen (Owen Aff.), Ex. A. The investor on the loan is the Federal National Mortgage Association (Fannie Mae). See Response to MSJ at 5 (citing Excerpt of June 24, 2016 Deposition of Shanan Owen (Doc. 67-1) at 9).[4] Although Finster disputes whether U.S. Bank was validly assigned the Note and Mortgage, compare id. at 5 with Motion for Summary Judgment at 4 (citing Owen Aff. ¶ 6, Ex. B), it is undisputed that U.S. Bank services the Note and Mortgage. See Motion for Summary Judgment at 3, ¶ 1 (citing Owen Aff. ¶ 5, Ex. A); Response to MSJ at 5, ¶ 1. When Finster stopped making the required payments on the Note and Mortgage, U.S. Bank filed a foreclosure action in Florida state court against her. See Owen Aff. ¶ 7. Finster obtained legal representation from Alliance Legal Group and instructed U.S. Bank to direct all communications to her attorneys. Id. ¶ 8. On July 19, 2013, U.S. Bank obtained a final judgment of foreclosure on the property and the court set a judicial sale date of November 21, 2013. Id. ¶ 9. However, prior to the sale, Finster submitted a loan modification application to U.S. Bank, and in a letter dated September 30, 2013, U.S. Bank responded that she “may be eligible” for a loan modification. Id. ¶¶ 10-11, Ex. C. The September 30, 2013 letter instructed Finster to begin making payments at a specified amount for a three-month “trial period, ” and explained that upon receipt of the first trial period payment, U.S. Bank would suspend foreclosure. Id., Ex. C. In addition, the letter stated that:

After all trial period payments are timely made and you have submitted all the required documents, your mortgage would then be permanently modified. (Your existing loan and loan requirements remain in effect and unchanged during the trial period.) If each payment is not received by U.S. Bank Home Mortgage in the month in which is due [sic], this offer will end and your loan will not be modified under the Making Home Affordable program.

Id., Ex. C. U.S. Bank attached a list of “Frequently Asked Questions, ” to the letter which included the following:

Q. When will I know if my loan can be modified permanently . . . ? Once you make all of your trial period payments on time, we will send you a Loan Modification Agreement detailing the terms of the modified loan. The Loan Modification Agreement will become effective once you and we have signed it.

Id., Ex. C at 4. This section further instructed that: “With a Fannie Mae Loan Modification, you still have an opportunity to modify your loan provided you successfully complete a trial period, ” and “Your loan will not be permanently modified until you successfully complete the Trial Period Plan and you enter into a Loan Modification Agreement.” Id., Ex. C at 3.

         Finster accepted this offer and began making monthly trial payments. See Owen Aff. ¶ 8. Finster made all of the required trial payments. See Response to MSJ, Ex. C: Owen Dep. (Doc. 69-3) at 8. Although the parties were unable to cancel the foreclosure sale and the property was sold, U.S. Bank thereafter dismissed the foreclosure action in order to “allow the Trial Plan to continue and allow [Finster] to attempt to obtain a loan modification.” See Owen Aff. ¶ 14. U.S. Bank ultimately determined that Finster was “eligible for a permanent loan modification.” Id. ¶ 15. In a letter to Finster dated February 6, 2014, U.S. Bank stated: “We have processed your Loan Modification request. This letter will provide you with the information and instructions you need to modify your mortgage. We have enclosed two copies of a Loan Modification agreement. Instructions for completing these agreements appear below.” Id. ¶ 16, Ex. D. The letter instructed as follows:

1. All borrowers listed on the enclosed Loan Modification Agreement must sign the agreement and the signatures must be notarized.
Please note: The original agreement must have original signatures *as they are typed* and must be signed in the presence of a notary public. You should make a photocopy of the original agreement after it has been signed and keep for your records.
2. Return to the address below, BOTH signed and notarized originals of the Loan Modification Agreement and $0.00 by February 16, 2014.

Id., Ex. D. U.S. Bank enclosed with this letter two copies of a permanent “Loan Modification Agreement (Mortgage)” for Finster to sign and return. Id. ¶ 16, Ex. D (the Loan Modification Agreement). Significantly, “[t]he loan modification documents had physical ‘Sign & Date' and ‘Notarize' stickers attached to it to ensure signed [sic] and notarized the correct pages. Further, [the] cover letter accompanying the documents had a blue and red U.S. Bank Home Mortgage logo in the top left corner.” Id.[5]

         However, contrary to the instructions in the letter, Finster did not return the executed originals of the Loan Modification Agreement. Rather, she signed copies of the originals, with images of the “Sign & Date” and “Notarize” stickers copied onto the documents, and returned those documents to U.S. Bank. See Owen Aff. ¶ 18, Ex. E. Because of the embedded images of the stickers, U.S. Bank determined that it was unable to record the documents and thus, could not finalize the loan modification. Id. ¶ 19. As such, U.S. Bank did not execute the improperly signed Loan Modification Agreement. Id. On March 17, 2014, U.S. Bank sent to Finster's counsel, Alliance Legal Group, by overnight Federal Express, a second set of loan modification documents for Finster to sign. Id. ¶ 20; Owen Dep. (Doc. 59-1) at 12. However, U.S. Bank did not include any correspondence explaining why it had re-sent the documents or the error that had occurred with the previous documents. See Owen Dep. (Doc. 59-1) at 13. Instead, a representative from U.S. Bank placed two telephone calls to Alliance Legal Group on March 26, 2014, and April 16, 2014, to discuss the new documents and advise Alliance as to the issue with the previous documents. See Owen Aff. ¶ 21; Owen Dep. (Doc. 59-1) at 12. No one at Alliance answered the calls, and although the representative left recorded messages, no one ever returned the calls. See Owen Aff. ¶ 21; Owen Dep. (Doc. 59-1) at 12. Finster's counsel, David Hicks, of Alliance Legal Group, asserts that “Alliance Legal Group has no record of receiving any telephone call or telephone message from [U.S. Bank] that indicated a problem with Bleu Finster's loan modification.” See Response to MSJ, Ex. A: Affidavit of David C. Hicks (Hicks Aff.) ¶ 3.[6]

         U.S. Bank's loss mitigation records, which are maintained in the ordinary course of U.S. Bank's business practices, reflect that Finster contacted U.S. Bank by email on April 28, 2014, to inquire when her online account would be active to accept payments. See Owen Aff. ¶ 22, Ex. F. Although U.S. Bank has not provided a copy of its actual response, the loss mitigation record dated April 28, 2014, indicates that U.S. Bank took the following action:

Sent reply via MAP shared email to Mtgr/Adv online acct will not be avail until mod finalized/Adv 2nd set of mod docs sent on 3/17 to be signed and returned by 3/27/Have not rcvd yet and file getting ready to be denied/Adv if still wanting mod needs to send in docs ASAP or contact office if not rcvd.

See Owen Aff. ¶ 22, Ex. F. However, Finster avers that she has

absolutely no recollection of having received that email, or any other correspondence or communication, concerning any problem with the loan modification documents I executed and returned to U.S. Bank. If I had received any indication that there was any problem with these documents, I would have taken it seriously and made a diligent effort to correct any deficiency.

See Response to MSJ, Ex. B: Affidavit of Bleu Finster (Finster Aff.) ¶ 4. Finster further states that she reviewed her email account and was unable to locate any email messages sent by U.S. Bank on April 28, 2014. Id. ¶ 5. Thus, viewing the evidence in the light most favorable to Finster for purposes of summary judgment, the Court accepts that this email was never sent.

         Nonetheless, because U.S. Bank never received properly executed originals of the Loan Modification Agreement, U.S. Bank denied Finster the loan modification. See Owen Aff. ¶ 24. In this regard, U.S. Bank maintains that it sent a letter dated April 29, 2014, to Finster via Alliance Legal Group, stating that: “You have previously been approved to participate in a Loss Mitigation Program, however you failed to comply with the terms and conditions of that program.” See Owen Aff. ¶ 25, Ex. G. U.S. Bank attached to the letter a Loss Mitigation Review Determination Summary which stated in pertinent part that she was not approved for a standard modification because: “The signed agreements were not returned to our office by the deadline provided.” Id., Ex. G. Although the letter did not mention the clerical defects with the documents that Finster did sign, it did explain that Finster was entitled to an appeal of the determination and set forth the relevant deadlines and procedures for an appeal. Id., Ex. G. Finster did not appeal this determination. See id. ¶ 23.[7]

         Notably, Finster continued making her trial modification payments after the end of the trial period, but U.S. Bank rejected those payments. See Owen Dep. (Doc. 69-3) at 8. Despite her continuing payments, because U.S. Bank had denied the loan modification, it considered Finster to be delinquent on her mortgage payments and referred her loan to foreclosure. See Owen Aff. ¶¶ 27-28. On August 7, 2014, Alliance Legal Group, on behalf of Finster, sent a letter titled “Notice of Error under 12 CFR Section 1024.35” to U.S. Bank. See Motion, Ex. 2: Affidavit of Eric Stiff (Doc. 65-2; Stiff Aff.) ¶ 5, Ex. A. The letter identified two purported errors:

Specifically, you have moved for foreclosure judgment or order of sale or conducted a sale while the borrower is performing under an agreement on a loss mitigation option, in violation of Section 1024.41(g)(3).
Additionally, you have wrongfully terminated the borrower's loan modification while they were submitting the payments that were owed pursuant to the plan within the deadline established, without providing them a reasonable period of time to fulfill any remaining requirements of the servicer, in violation of ยง1024.41(e)(ii). The borrower was making timely payments which were rejected by you only because ...

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