Collins et al v. BSI Financial Services et al

Filing 108

MEMORANDUM OPINION AND ORDER GRANTING the Defendants' 97 MOTION for Summary Judgment; A separate final judgment will follow. Signed by Chief Judge Emily C. Marks on 12/19/2019. (am, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
MARIANN COLLINS and
RICK COLLINS
Plaintiffs,
v.
BSI FINANCIAL SERVICES; SERVIS
ONE INC.; MCM CAPITAL
PARTNERS LLC; and
VENTURES TRUST 2013-I-H-R,
Defendants.

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CASE NO. 2:16-CV-262-ECM
(WO)

MEMORANDUM OPINION AND ORDER
I.

INTRODUCTION

Pending before the Court is Defendants BSI Financial Services; Servis One Inc.;
MCM Capital Partners; and Ventures Trust 2013-I-H-R’s Motion for Summary Judgment.
For the reasons stated below, this motion is due to be granted.
II.

PROCEDURAL FACTS

The Plaintiffs filed their initial mortgage foreclosure Complaint against the various
servicers and holders of their mortgage. The Court gave the Plaintiffs two opportunities to
amend their deficient complaint. (Docs. 12, 35). The Court then granted the Defendants’
Partial Motion to Dismiss Plaintiffs’ Second Amended Complaint and denied the
Plaintiffs’ request to further amend their complaint. (Doc. 59). This left only a breach of
contract claim against the various defendants. The Plaintiffs and Defendant CitiMortgage
filed a stipulation of dismissal (doc. 103), leaving only a breach of contract claim against

BSI Financial Services; Servis One Inc.; MCM Capital Partners LLC; and Ventures Trust
2013-I-H-R (“the Defendants”).
III.

SUBSTANTIVE FACTS

Default and Repayment Plan with CitiMortgage 1

A.

In 2000, the Plaintiffs and Ronnie Miskelly, Jr., an individual who is not part of the
present dispute, entered into a real estate mortgage agreement. Plaintiff Mariann Collins
signed a promissory note in favor of Miskelly. The substantive portion of the mortgage
agreement is only 3-pages long. At some point, CitiMortgage assumed the Plaintiffs’
mortgage, and in 2012, CitiMortgage and the Plaintiffs entered into a forbearance
agreement, apparently due to the Plaintiffs falling behind on their mortgage. (Doc. 97-2 at
49–50).

Throughout 2013, the Plaintiffs were to pay a higher monthly mortgage

payment—approximately $920, instead of the normal $783—in order to bring their account
current. (Id. at 50–51). Based on various representations from CitiMortgage, Ms. Collins
was under the impression that their monthly payment amount would return to the lower
monthly payment amount in January 2014, after they successfully made the twelve monthly
payments. (Id. at 50).
In March of 2013, the Plaintiffs’ bank did not honor the check they wrote to pay the
mortgage, presumably due to insufficient funds. (Id. at 121). Thus, while the Plaintiffs
attempted to make a timely payment, they did not pay CitiMortgage until April 1, 2013.

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CitiMortgage and the Plaintiffs have resolved their dispute, the remaining Defendants are BSI
Financial Services; Servis One Inc.; MCM Capital Partners; and Ventures Trust 2013-I-H-R.

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(Id. at 62). According to the terms of their repayment agreement, this payment was one
day late. (Doc. 97-4 at 4).
Plaintiffs continued making timely payments of $920 under the forbearance
agreement, May through December, under the impression that the agreement was not
modified or cancelled. (Doc. 97-2 at 63–64, 124).

In December of 2013, Ms. Collins

called CitiMortgage to confirm that the December payment would be the last payment
under the repayment plan and that the regular payment amount would start again in January
2014. (Id. at 64). Ms. Collins represents that CitiMortgage confirmed that was accurate.
(Id).
In January and February 2014, Plaintiffs made timely payments of $783 of their
mortgage. Around that time, CitiMortgage informed Ms. Collins that the account was short
$180 and that the January and February payments were not applied to the loan but were
being held in a separate account. (Id. at 63–64). When, on February 26, 2014, Plaintiffs
received a defaulted mortgage letter, Ms. Collins again called CitiMortgage. (Id. at 65).
CitiMortgage informed her that the account was short $177.60. (Id).
Plaintiffs tried to make payments until March 2014 when they retained an attorney.
(Id. at 67). At first, Ms. Collins made the payment to her attorney, who tried to ensure that
CitiMortgage received and appropriately applied the payment. (Id. at 70).

Since

CitiMortgage stopped accepting her payments, Ms. Collins believes the last time the she
personally tried to make a payment was March 2014. (Id. at 70–72).

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B.

Defendants Assigned the Loan
According to Ms. Collins, she began communicating with a representative from

Defendant BSI Financial Services in August 2015. (Id. at 127). Supporting documents
indicate that CitiMortgage assigned the mortgage to Ventures Trust 2013-I-H-R in October
2015 (Doc. 97-5), and that BSI Financial Services, Inc. began servicing the loan on
September 22, 2015. (Doc. 97-1). In their Second Amended Complaint the Plaintiffs assert
that BSI assumed the loan in November 2015. While the specific dates the Defendants
assumed responsibility for the loan is unclear, the record reflects that it was sometime
between August and November of 2015. 2
Ms. Collins claims that when the Defendants assumed the mortgage, they
immediately demanded $15,000 to bring her account current or else they would foreclose.
(Doc. 97-2 at 157). In the Plaintiffs’ response brief, without citing the record, the Plaintiffs
claim that the Defendants initiated foreclosure proceedings in February 2016. (Doc. 104 at
7). Ms. Collins asserts that she informed the Defendants of the history with CitiMortgage,
but that they made no attempts to remedy the issue. (Id. at 158). Ms. Collins, however,
admits that she never paid or attempted to pay the Defendants any money. The Plaintiffs
also fail to provide any documentation of the communication that occurred between
themselves and the Defendants, and they fail to provide their own accounting of their loan.
In short, the Plaintiffs appear to largely fault the Defendants for failing to work out a

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The record is also not entirely clear which of the Defendants are responsible for certain acts. The
Defendants did not make individual arguments that they should be dismissed, and the Court did not need
to reach that issue. Accordingly, the Court simply refers to the Defendants collectively.

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repayment plan after they allege that CitiMortgage committed certain accounting errors.
However, the Plaintiffs fail to adequately support their assertion that these Defendants
breached any contract provisions.
IV.

LEGAL STANDARD

Under Rule 56(a) of the Federal Rules of Civil Procedure, a reviewing court shall
grant a motion for “summary judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed. R.
Civ. P. 56(a).

The party asking for summary judgment “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 demonstrates the absence of a
genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (citing
Fed. R. Civ. P. 56)).

The movant can meet this burden by presenting evidence

demonstrating there is no dispute of material fact, or by showing that the non-moving party
has failed to present evidence in support of some element of her case on which she bears
the ultimate burden of proof. Id. at 322–23. Only disputes about material facts will
preclude the granting of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). “An issue of fact is ‘genuine’ if the record as a whole could lead a
reasonable trier of fact to find for the nonmoving party. An issue is ‘material’ if it might
affect the outcome of the case under the governing law.” Redwing Carriers, Inc. v.

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Saraland Apartments, 94 F.3d 1489, 1496 (11th Cir. 1996) (citing Anderson, 477 U.S. at
248).
Once the movant has satisfied this burden, the non-moving party “must do more
than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Nonmovants must support their assertions “that a fact cannot be or is genuinely disputed” by
“citing to particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations[ ], admissions,
interrogatory answers, or other materials” or by “showing that the materials cited do not
establish the absence or presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(A) & (B).
In determining whether a genuine issue for trial exists, the court must view all the
evidence in the light most favorable to the non-movant. McCormick v. City of Fort
Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003). Likewise, the reviewing court must
draw all justifiable inferences from the evidence in the nonmoving party’s favor.
Anderson, 477 U.S. at 255.

However, “mere conclusions and unsupported factual

allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England,
432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam).
A reviewing court is restrained during summary judgment proceedings from making
the sort of determinations ordinarily reserved for the finder of fact at a trial. See Strickland
v. Norfolk Southern Ry. Co., 692 F.3d 1151, 1154 (11th Cir. 2012) (citations and quotations
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omitted) (“Credibility determinations, the weighing of the evidence, and the drawing of
legitimate inferences from the facts are jury functions, not those of a judge, whether he is
ruling on a motion for summary judgment or for a directed verdict.”). After the nonmoving
party has responded to the motion for summary judgment, the court must grant summary
judgment if there is no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(a).
V.

DISCUSSION

The Defendants have three main arguments for why they should prevail on summary
judgment: (1) CitiMortgage appropriately applied the Plaintiffs’ payments; (2) the
Defendants should not be responsible for the accounting errors of the prior loan-holder;
and (3) the Plaintiffs failed to meet their contractual obligations by failing to make
payments. The Plaintiffs’ response brief primarily focuses on the purported misdeeds of
CitiMortgage in failing to properly apply payments and wrongly rejecting the Plaintiffs’
payment attempts. While the record before the Court suggests there may be a genuine
dispute of fact regarding irregularities in the accounting while CitiMortgage held the
Plaintiffs’ loan, the Plaintiffs do not establish that the Defendants breached their contract.
Additionally, the Plaintiff largely failed to follow the Court’s order that “[i]n all
briefs filed by any party relating to the [dispositive] motion, the discussion of evidence in
the brief must be accompanied by a specific reference, by page and line, to where the
evidence can be found in a supporting deposition or document.” (Doc. 73 at 2). Despite
this deficiency, the Court reviewed all the evidence presented, including Mariann Collins’s
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deposition transcript. In rendering this opinion, the Court gives due weight to the testimony
of Ms. Collins. 3
While the Court carefully considered Ms. Collins’s testimony in light of the
arguments made by counsel, the Court did not “attempt to distill every potential argument
that could be made based on the materials before it on summary judgment.” Solutia, Inc.
v. McWane, Inc., 672 F.3d 1230, 1239 (11th Cir. 2012). The “onus is on the parties to
formulate arguments.” Id.; Resolution Trust Corp. v. Dummar Corp., 43 F.3d 587, 599
(11th Cir. 1995); A.L. v. Jackson Sch. Bd., 635 F. App’x 774 (11th Cir. 2015). The
Plaintiffs primarily focused the arguments in their response brief on the purported wrongful
acts of CitiMortgage. The Plaintiffs failed to adequately explain how the Defendants
purportedly breached the contract, they failed to provide the court with a defined timeline,
and they failed to cite specific factual evidence in the record to support their positions. In
short, the Plaintiffs are unable to meet their burden to demonstrate that there is a genuine
dispute as to the material facts as to these defendants.

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The Defendants suggest in their reply brief that Mariann Collins’s deposition testimony does not
qualify as evidence. See doc. 105 at 1–2 (stating that the Plaintiffs failed to “attach any evidence creating a
genuine issue of material fact that prior servicer CitiMortgage, Inc. (“Citi”) failed to apply any payments
Plaintiff made to Citi” and that “Plaintiffs make generic arguments that are completely unsupported by
evidence”). The Defendants correctly observe that the Plaintiffs do not attach their own exhibits to their
Motion for Summary Judgment, instead relying almost exclusively on Ms. Collins’s deposition testimony,
which the Defendants provided to the Court.
Which party filed the deposition is immaterial, it is now part of the record before the Court, and
nothing prevents the Plaintiffs from citing that document. The law in the Eleventh Circuit is clear that “a
litigant’s self-serving statements based on personal knowledge or observation can defeat summary
judgment.” United States v. Stein, 881 F.3d 853, 857 (11th Cir. 2018) (citing Feliciano v. City of Miami
Beach, 707 F.3d 1244, 1253 (11th Cir. 2013)); Price v. Time, Inc., 416 F.3d 1327, 1345 (11th Cir.) modified
on other grounds on denial of reh’g, 425 F.3d 1292 (11th Cir. 2005). Accordingly, Ms. Collins’s testimony
relating facts she observed is properly considered by this Court.

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A.

Defendants persuasively argue that the Plaintiffs failed to uphold their
end of the bargain, precluding the Plaintiffs from asserting a breach of
contract under Alabama law.
Defendants correctly state that the elements of breach of contract under Alabama

law are (1) a valid binding contract; (2) the plaintiff’s performance; (3) the defendant’s
nonperformance; and (4) resulting damages. (Doc. 97 at 7) (citing Reynolds Metals Co. v.
Hill, 825 So. 2d 100, 105 (Ala. 2002)). Defendants argue that because the Plaintiffs
undisputedly stopped making mortgage payments, the Plaintiffs cannot establish their own
performance under the contract. The Defendants assert that they are entitled to summary
judgment because the Plaintiffs fail to prove this essential element.
Without citing to the record, the Plaintiffs assert that the Defendants never applied
some payments and wrongly rejected other payments. (Doc. 104 at 13). The Plaintiffs
specifically mention a November 2013 payment that was returned to them. However, the
record is undisputed that it was not the Defendants that took those actions because Ms.
Collins admitted that she never paid or attempted to pay the Defendants any money, and
the Defendants did not assume the mortgage until 2015. The Plaintiffs further claim that
the amount owed was inflated when the “Note was accelerated,” without specifying what
entity accelerated the note or how much the amount was inflated.
Without pointing to any supporting evidence, Ms. Collins asserts that the
Defendants demanded $15,000 immediately upon assuming responsibility for the loan.
(Doc. 97-2 at 130). The undisputed record, however, evidences that the Plaintiffs had not

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successfully made a payment since April of 2014. 4 By February of 2016, the date when
the Plaintiffs assert that they sent the Defendants a letter disputing the default, acceleration,
and foreclosure sale (doc. 104 at 7), the Plaintiffs had failed to make twenty-two payments.
The Plaintiffs owed $783 a month and by February 2016, they would have owed more than
$17,000 of missed payments. The Plaintiffs do not attempt to argue that CitiMortgage’s
purported errors completely absolved them of their mortgage responsibility, and instead
assert that they tried to set aside their monthly mortgage payment even when CitiMortgage
was rejecting those payments. (Doc. 97-2 at 161–62). The Plaintiffs agree that they never
paid or attempted to pay the Defendants, even though they agree that they had not
successfully made a payment in well over a year by the time the Defendants assumed the
mortgage.
The Plaintiffs blame CitiMortgage for rejecting payments that resulted in the
Plaintiffs falling behind in their payments, but do not point to any wrongful action on the
part of the Defendants which would constitute breach of contract. The contract gives the
lienholder the right to foreclose after any missing or late payments. The Plaintiffs admit
that, in February 2016, when the Plaintiffs allege that the Defendants commenced
foreclosure proceedings, they had not made a mortgage payment in nearly two years and
that they had not paid the Defendants any money. While Ms. Collins vaguely asserts that
they did not owe the full $15,000, she fails to provide any support for this bare allegation

4

In her deposition, Ms. Collins suggests that she had last made a successful payment in March of
2014, but the Defendants’ records indicate that it was April.

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and the undisputed record reflects otherwise. Accordingly, the Plaintiffs breach of contract
claim fails on this point.
B.

The Plaintiffs do not have a viable breach of contract claim for a
purported REPSA violation.
As stated above, the only remaining claim is a breach of contract claim. However,

the Plaintiffs appear to have attempted to recast their breach of contract claim as a Real
Estate Settlement Procedures Act (“RESPA”) claim. Specifically, in their response brief,
the Plaintiffs assert that “[b]ecause the [RESPA] regulations cited above required the new
servicers, the Defendants, to investigate, fix, and/or respond to the errors cited by the
Plaintiffs, the Defendants clearly had a contractual obligation to address and or correct
these account errors even if caused by the CitiMortgage.” (Doc. 104 at 21). The contract
does not incorporate any statutes by reference and does not mention RESPA or its
requirements. Moreover, the Court previously dismissed the Plaintiffs’ RESPA claim.
(Doc. 35 at 6–8). This argument further fails because nowhere in the section of their
response brief addressing the alleged RESPA violation do the Plaintiffs provide any
evidentiary support for this position.

While the Plaintiffs assert that they sent the

Defendants a Qualified Written Report (“QWR”), they do not provide a copy of the
purported QWR or describe the contents of that document.
In addition to failing to support this claim with any evidence, the Plaitniffs fail to
provide relevant legal support. The Plaintiffs cite an Eleventh Circuit case to support their
contention that statutory requirements are incorporated into mortgage contracts. (Doc. 104
at 15) (citing Bates v. J.P. Morgan Bank, N.A., 768 F.3d 1126 (11th Cir. 2014)). In Bates,
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the plaintiff sought to hold the bank liable for breach of contract for failure to comply with
certain regulations promulgated by HUD. Id. “The regulations were incorporated into her
deed as conditions precedent to the power to accelerate and the power of sale.” Id. at 1130.
The court further explained that “the language clearly makes compliance with HUD
regulations a condition precedent to the bank’s right to accelerate the debt or exercise the
power of sale.” Id. at 1132. Thus, the court determined that Georgia courts would likely
enforce the provision of the contract that specified compliance with HUD regulations was
a condition precedent of the bank’s right to accelerate. Id. at 1133. 5
Here, the Plaintiffs appear to seek to impose new and different obligations beyond
those which are required in the contract. Unlike the contract in Bates, the contract here
does not incorporate statutory obligations by reference or even mention any statutory
obligations. The contract does not state how or even if the lender should respond to an
accounting request. The only notice requirements are those related to foreclosure and
which provide for publication in a local newspaper. (Doc. 97-1 at 9).

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The Plaintiffs also cite a First Circuit case that endorsed the practice of relying upon a statute to
interpret contract claims and resolve contractual ambiguities. See Young v. Wells Fargo, N.A. 717 F.3d 224
(1st Cir. 2013). In Young, in reviewing the district court’s decision on the defendant’s motion to dismiss,
the First Circuit observed that the Home Affordable Modification Program (“HAMP”) federal initiative and
the statutes that create HAMP could be used as extrinsic evidence to interpret ambiguous contract terms.
Id. at 237. There, the plaintiffs did not attempt to dispute the district court’s determination that there was
no private right of action under HAMP. First, this case serves only for its persuasive value. Second, here,
the Plaintiffs do not attempt to interpret ambiguous contractual terms. Moreover, while there is a private
right of action available under RESPA, the Court already deemed this claim insufficiently pled. It cannot
now be revived as a contractual obligation.

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The Court also already determined that the Plaintiffs failed to state a RESPA
violation in their First Amended Complaint and dismissed that claim with prejudice. 6 (Doc.
35 at 6). Specifically, the Court observed that the Plaintiffs did not attach the alleged
Qualified Written Report and “have not alleged a single fact regarding the content of the
alleged QWRs.” (Doc. 35 at 7). Even if this claim were not already dismissed, the record
before the Court is no better than it was at the pleading stage, and the Court would again
be compelled to find that the claim was not adequately supported.
VI.

CONCLUSION

For the reasons stated above, the Defendants’ Motion for Summary Judgment (Doc.
97) is GRANTED. A separate final judgment will follow.
DONE this 19th day of December, 2019.

/s/ Emily C. Marks
EMILY C. MARKS
CHIEF UNITED STATES DISTRICT JUDGE

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The Second Amended Complaint does not contain a RESPA claim because it was dismissed with
prejudice from the First Amended Complaint. See (doc. 35 at 27-28).

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