Federal Home Loan Mortgage Corporation v. Pugh
MEMORANDUM OPINION. Signed by Magistrate Judge T Michael Putnam on 8/11/15. (MRR)
2015 Aug-11 AM 10:12
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DIVISION OF ALABAMA
FEDERAL HOME LOAN
BENNYE T. PUGH,
U.S. BANCORP; U.S. BANK
NATIONAL ASSOCIATION; and
U.S. BANK HOME MORTGAGE,
Case No. 2:14-cv-138-TMP
This cause is before the court on the cross motions for summary judgment
(docs. 13, 15) filed December 29, 2014, by the plaintiff, Federal Home Loan
Mortgage Corporation (AFHLMC@), and by the defendant/counterclaimant, Bennye
T. Pugh. The action arises from the 2011 foreclosure of a home purchased by Pugh
in 2005. After purchasing the home at the foreclosure sale, FHLMC filed this
action in state court in November 2012, seeking ejectment after Pugh remained in
the home after the foreclosure sale and after her subsequently signed lease
agreement expired. The action was removed to this court on January 23, 2014, on
the basis of federal question jurisdiction after the plaintiff filed counterclaims arising
under federal law. FHLMC seeks summary judgment on its claim for ejectment,
and, along with the counterclaim defendants (collectively AU.S. Bank@), on all of the
counterclaims asserted by the defendant, arguing that the claims are without merit.
Pugh seeks summary judgment on her claims for breach of contract and wrongful
Pugh=s motion seeks summary adjudication of her claims for Abreach of contract and
wrongful foreclosure.@ (Doc. 16, p. 2). She also asks for a Adeclaration that the foreclosure is
null and void.@ Id. Additional counterclaims set forth in the Amended Answer and
Counterclaim (doc. 2) are for negligence; wantonness; unjust enrichment; abuse of process;
slander of title; negligent and/or wanton hiring, supervision, and/or training; intentional and/or
malicious conduct; trespass; declaratory judgment; violation of the Truth in Lending Act; violation
of the Real Estate Settlement Procedures Act; and violation of the Fair Debt Collection Practices
Act. Her response to the plaintiff=s motion for summary judgment discusses the alleged breach of
contract, which she argues is evidence that the foreclosure was wrongful and entitles her to a
declaration that the foreclosure is null and void. Her response does not address any of the
plaintiff=s and counterclaim defendants= arguments relating to any of the other eleven counts
contained in her Amended Answer and Counterclaim. Pugh has effectively abandoned these
The motions for summary judgment have been fully briefed. The parties
have consented to the full dispositive jurisdiction of the undersigned Magistrate
Judge pursuant to 28 U.S.C. ' 636(c).
SUMMARY JUDGMENT STANDARD
Under Federal Rule of Civil Procedure 56(a), summary judgment is proper Aif
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.@ Fed. R. Civ. P. 56(a). The
party asking for summary judgment Aalways 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.@ Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(quoting former Fed. R. Civ. P. 56(c)). The movant can meet this burden by
presenting evidence showing there is no dispute of material fact, or by showing that
the nonmoving party has failed to present evidence in support of some element of its
case on which it bears the ultimate burden of proof. Celotex, 477 U.S. at 322-23.
There is no requirement, however, Athat the moving party support its motion with
affidavits or other similar materials negating the opponent=s claim.@ Id. at 323.
Once the moving party has met his burden, Rule 56 Arequires the nonmoving
party to go beyond the pleadings and by her own affidavits, or by the >depositions,
answers to interrogatories, and admissions of file,= designate >specific facts showing
that there is a genuine issue for trial.=@ Id. at 324 (quoting former Fed. R. Civ. P.
56(e)). The nonmoving party need not present evidence in a form necessary for
admission at trial; however, he may not merely rest on his pleadings. Celotex, 477
U.S. at 324. A[T]he plain language of Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon motion, 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.@
Id. at 322.
After the plaintiff has properly responded to a proper motion for summary
judgment, the court must grant the motion if there is no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). The substantive law will identify which facts are material and which are
irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute
is genuine Aif the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.@ Id. at 248. A[T]he judge=s function is not himself to weigh the
evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.@
Id. at 249. His guide is the same standard necessary to
direct a verdict: Awhether the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one party must prevail as a
matter of law.@ Id. at 251-52; see also Bill Johnson=s Restaurants, Inc. v. N.L.R.B.,
461 U.S. 731, 745 n.11 (1983). However, the nonmoving party Amust do more than
show that there is some metaphysical doubt as to the material facts.@ Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). If the
evidence is merely colorable, or is not significantly probative, summary judgment
may be granted. Anderson, 477 U.S. at 249 (citations omitted); accord Spence v.
Zimmerman, 873 F.2d 256 (11th Cir. 1989). Furthermore, the court must Aview the
evidence presented through the prism of the substantive evidentiary burden,@ so
there must be sufficient evidence on which the jury could reasonably find for the
plaintiff. Anderson, 477 U.S. at 254; Cottle v. Storer Communication, Inc., 849
F.2d 570, 575 (11th Cir. 1988).
Nevertheless, credibility determinations, the
weighing of evidence, and the drawing of inferences from the facts are the function
of the jury, and therefore the evidence of the non-movant is to be believed and all
justifiable inferences are to be drawn in his favor. Anderson, 477 U.S. at 255. The
non-movant need not be given the benefit of every inference but only of every
reasonable inference. Brown v. City of Clewiston, 848 F.2d 1534, 1540 n.12 (11th
For purposes of determining the defendant=s motion for summary judgment
on the ejectment claim and Ms. Pugh=s affirmative defense that the Mortgage is void,
the following facts are undisputed:
On August 24, 2005, Ms. Pugh purchased a house located on Willow Glen
Drive in Birmingham, Alabama. She obtained two loans to finance the purchase,
only one of which is at issue in this case. She signed a promissory note for
$99,120.00, with an interest rate of 6.25% per annum for a 30-year term (Athe
Note@). The Note was assigned to counterclaim defendant U.S. Bank. On the
same date, Ms. Pugh executed a mortgage securing the Note (Athe Mortgage@). U.S.
Bank serviced the Mortgage and collected Ms. Pugh=s mortgage payments. When
Ms. Pugh entered into the Mortgage she understood that U.S. Bank could foreclose
and sell the property if she defaulted on her payment obligations.
The Note contains the following provision at paragraph 6(c):
If I am in default, the Note Holder may send me a written notice
telling me that if I do no pay the overdue amount by a certain date, the
Note Holder may require me to pay immediately the full amount of the
Principal which has not been paid and all the interest that I owe on that
amount. That date must be at least 30 days after the date on which the
notice is mailed to me or delivered by other means.
The Mortgage contains the following provision at paragraph 22:
Acceleration; Remedies. Lender shall give notice to Borrower
prior to acceleration following Borrower=s breach of any covenant or
agreement in this Security Instrument (but not prior to acceleration
under Section 18 unless Applicable Law provides otherwise). The
notice shall specify: (a) the default; (b) the action required to cure the
default; (c) a date, not less than 30 days from the date the notice is given
to the Borrower, by which the default must be cured; and (d) that failure
to cure the default on or before the date specified in the notice may
result in acceleration of the sums secured by the Security Instrument
and sale of the Property. The notice shall further inform the Borrower
of the right to reinstate after acceleration and the right to bring a court
action to assert non-existence of a default or any other defense of
Borrower to accelerate and sale. If the default is not cured on or before
the date specified in the notice, Lender at its option may require
immediate payment in full of all sums secured by this Security
Instrument without further demand and may invoke the power of
expenses incurred in pursuing the remedies provided under Section 22,
including, but not limited to, reasonable attorneys= fees and costs of title
In April 2008, Ms. Pugh entered into a modification of the Note. Under the
2008 modification, Ms. Pugh=s delinquent payments were incorporated into a new
principal balance of $101,499.89, and the maturity date was extended to May 1,
2038. Her interest rate remained at 6.25 percent.
Ms. Pugh again defaulted on her mortgage at some time after 2008, and
applied for another modification. In September 2009, Ms. Pugh and U.S. Bank
entered into a modification of her mortgage loan under the Home Affordable
Modification Plan (AHAMP@).
The HAMP modification incorporated unpaid
amounts on the Note into a new principal balance of $107,200.37. The interest rate
was set at 4.5 % for the first five years, and at 5 % thereafter. The maturity date was
extended until April 1, 2039.
Pugh did not make a mortgage payment in August 2010, September 2010, or
October, 2010. On August 23, 2010, U.S. Bank sent Pugh a letter that informed her
that she was Ain breach of the mortgage for your failure to pay the monthly
installments due.@ (Doc. 13-3, Ex. A). The letter informed her that she could cure
the breach by sending certified funds of $1,478.54 for payments and $27.60 for late
charges, plus any additional payments that come due, within 30 days of the date of
the letter. The letter also warned: AIf you fail to bring this account current, the full
balance of the loan will be accelerated.@ Id. The letter informed her of the right to
reinstate the Mortgage after acceleration, and the right to assert in any foreclosure
action the non-existence of default or any other defense. Id. Ms. Pugh does not
recall receiving that letter. (Depo. of Pugh, Doc. 13-1, pp. 22-23). During that
time, however, she understood that she was behind on her mortgage payments. Id.
She frequently talked on the telephone with both a credit counselor and U.S. Bank
between June 2010 and August 2011. Id.
On September 30, 2010, U.S. Bank sent Ms. Pugh a letter stating that AThere
may be alternatives available to you when your mortgage is delinquent and
foreclosure is imminent,@ and suggesting that she call the number provided for Aone
of our loan workout programs.@ (Doc. 13-2, p. 45). She recalls that she received
that letter. (Depo. of Pugh, Doc. 13-1, p. 23). At that time she was Aworking [with
U.S. Bank and a credit counselor] to prevent foreclosure.@ Id.
On November 10, 2010, an attorney from Sirote & Permutt, representing U.S.
Bank, sent Ms. Pugh a letter stating that Ms. Pugh was in default of the terms of the
Note and Mortgage, and that U.S. Bank accelerated to maturity the entire unpaid
balance of the debt on the Note. (Doc. 13-4, Ex. A). The letter specifically stated
that it was a ANOTICE OF ACCELERATION OF PROMISSORY NOTE AND
MORTGAGE.@ Id. The letter further informed Ms. Pugh that, as of the date of the
letter, her payoff amount was $110,355.43. Id. Ms. Pugh Athinks@ she received the
letter, and she understood what the letter meant, which is that Athey were going to B
going to foreclose.@ (Depo. of Pugh, Doc. 13-1, p. 24).
More than seven months later, on June 29, 2011, the attorney from Sirote &
Permutt sent Ms. Pugh a letter which stated that the last payment received from Ms.
Pugh was on May 5, 2010, and that the Atotal amount necessary to reinstate this loan
through June 30, 2011, is $9,526.60.@ (Doc. 13-2, pp. 55-56). The letter also
noted that she would be notified Aonce a foreclosure sale is scheduled.@ Id. Ms.
Pugh received the letter, and talked with her credit counselor and with U.S. Bank
about being Areviewed@ for another loan modification.
On July 6, 2011, another ANOTICE OF ACCELERATION@ letter was sent to
Ms. Pugh, notifying her of her default and advising her that Athe foreclosure sale is
scheduled for August 8, 2011.@ (Doc. 13-4, Ex. B). Ms. Pugh was advised: AIf you
wish to avoid losing the property, you must contact us immediately; otherwise, the
foreclosure sale will take place as set forth ... and we will take legal action to obtain
possession of the subject property.@ Id.
Notice of the foreclosure sale was
published in the Alabama Messenger on July 9, 2011, July 16, 2011, and July 23,
2011. (Doc. 13-4, Ex. B). Ms. Pugh received the letter, but did not receive the
enclosed notices of publication; however, she understood that the foreclosure sale
had been scheduled. (Depo. of Pugh, Doc. 13-1, pp. 30-31). She called her credit
counselor, who said the house would be foreclosed on. The credit counselor
advised her to go ahead and move out of the house. Id. Ms. Pugh talked with
someone on the phone at U.S. Bank at some time in July 2011, who told her she still
was Aunder review,@ and Anothing would happen while you=re under review.@ Id. at
On July 8, 2011, U.S. Bank sent Ms. Pugh a letter that stated that she was
Abeing reviewed for default resolution workout options.@ (Doc. 13-2, p. 61). The
letter also advised that Aforeclosure activity will continue.@ Id. Ms. Pugh received
that letter, and understood that her loan was in active foreclosure at that time.
(Depo. of Pugh, Doc. 13-1, p. 32).
On August 9, 2011, the attorney from Sirote & Permutt sent a certified mail
letter to Ms. Pugh titled ADEMAND FOR POSSESSION.@ The letter informed her
that the property had been foreclosed, and that FHLMC was the new owner of the
property; it further directed her to deliver possession to the new owner within 10
days. (Doc. 13-4, Ex. C). Ms. Pugh received the letter, but did not move from the
house. (Depo. of Pugh, Doc. 13-1, p. 33).
On August 12, 2011, attorneys representing FHLMC sent Ms. Pugh a letter
offering her two options: (1) a cash payment toward relocation expenses if she
would vacate the property and take all of her personal belongings, or (2) a chance to
remain in the house by entering into a month-to-month lease agreement. (Doc.
13-2, pp. 68-69). She entered into a lease agreement in September, 2011. (Depo.
of Pugh, Doc. 13-1, p. 36). She continued to live in the house, and she paid rent in
the amount of $690 each month for a year. Id.
On October 22, 2012, FHLMC terminated the lease by sending Ms. Pugh a
letter. (Doc. 13-2, p. 73). The letter notified Ms. Pugh that FHLMC Anow owns
the property@ at 2040 Willow Glen Drive, and that attorneys had been retained to
Aproceed with an eviction proceeding.@ Id. FHLMC stated in the letter that the
lease was terminated Aeffective 30 days from October 22, 2012.@ Ms. Pugh did not
understand that FHLMC owned the house. (Depo. of Pugh, pp. 36-37). FHLMC
filed the instant action for ejectment on November 26, 2012. Ms. Pugh, as of the
date this matter was briefed, remained in the house, and had made no further
Plaintiff FHLMC seeks summary adjudication of its claim for ejectment.
Ms. Pugh has responded that FHLMC is not entitled to judgment because it cannot
show that U.S. Bank, the servicer of the note and mortgage, complied with Athe
terms of the ‘Note’ at paragraph 6(c), and paragraph 22 of the Mortgage.@ (Doc. 21,
FHLMC asserts that it has produced all the documents necessary to
demonstrate an entitlement to ejectment, and that Ms. Pugh has failed to
demonstrate any defect in the foreclosure process that would impair FHLMC=s title.
Under Alabama law, a plaintiff proves a prima facie case for ejectment by
producing a Atrue and correct copy of the foreclosure deed and a demand for
possession letter.@ Berry v. Deutsche Bank National Trust Co., 57 So. 3d 142, 145
(Ala. Civ. App. 2010). The purchaser of a property at a foreclosure sale is entitled
to immediate possession of the property sold, Asubject only to the right of
redemption.@ Palmer v. Resolution Trust Corp., 613 So. 2d 373, 375 (Ala. 1993).
Once a prima facie case is set forth, the burden shifts to the defendant to Aproduce
substantial evidence that there was a wrongful foreclosure@ such that the plaintiff is
estopped from contending that it has a valid title to the property. Berry, 57 So. 3d at
The Alabama Court of Civil Appeals has determined which defects in a
foreclosure process can provide a valid defense to an action for ejectment, 2 stating:
In Alabama, the following circumstances may render a
foreclosure sale void: (1) when the foreclosing entity does not have the
legal right to exercise the power of sale, as, for example, when that
entity is neither the assignee of the mortgage, nor the holder of the
promissory note, at the time it commences the foreclosure proceedings;
(2) when Athe debt secured by the mortgage was fully paid prior to
foreclosure@; (3) when the foreclosing entity failed to give notice of the
time and place of the foreclosure sale, ... and (4) when the purchase
price paid is A>so inadequate as to shock the conscience, it may itself
raise a presumption of fraud, trickery, unfairness, or culpable
mismanagement, and therefore be sufficient ground for setting the sale
Campbell v. Bank of America, N.A., 141 So.3d 492, 495-96 (Ala. Civ. App.
2012)(internal citations omitted).
In an ejectment action, where there is a collateral attack on the foreclosure process, only
a wrongful foreclosure that renders the sale void B as opposed to merely voidable B can overcome
the right to assert ejectment. Campbell v. Bank of America, N.A., 141 So.3d 492, 495 (Ala. Civ.
App. 2012). As to plaintiff FHMLC, the attack on the foreclosure process is a collateral attack
asserted as a defense to the ejectment action. In her counterclaims against the U.S. Bank entities,
Ms. Pugh attempts to directly attack the foreclosure proceedings. Those claims will be addressed
In this case, FHLMC has provided authenticated copies of the mortgage, the
foreclosure deed, the special warranty deed, and the demand for possession.
Moreover, FHLMC has demonstrated that the foreclosing entity, U.S. Bank, had the
legal right to sell the properly as the assignee of the Mortgage and the holder of the
Ms. Pugh does not argue that the mortgage was paid in full prior to
foreclosure. To the contrary, she concedes that she had not made a mortgage
payment in over a year. She admits that she received timely notice of the time and
place of the foreclosure sale, and she raises no issue that the purchase price paid by
FHLMC was in any way inadequate.
Because FHLMC has established that it has superior title to the property, and
has a right to immediate possession, the burden of proving the invalidity of the
foreclosure and FHLMC’s entitlement to possession of the property shifts to Ms.
Pugh to show by substantial evidence some invalidity in the process.
B. Wrongful Foreclosure and Breach of Contract
Defendant/Counterclaimant Pugh seeks summary adjudication in her favor on
her counterclaims for wrongful foreclosure, breach of contract, and a declaration
that the foreclosure sale is void. In her counterclaims against U.S. Bank, and as
defenses against the ejectment claim, Ms. Pugh asserts that the foreclosure was
wrongful in that U.S. Bank failed to give her notice of the intent to accelerate as
required under paragraph 22 of the Mortgage. In her brief in support of the motion,
Ms. Pugh simply alleges that A[t]he lender/successor failed to give notices as
required by the contract (Note and Mortgage).@ (Doc. 15, p. 3). She further argues
that A[n]either the lender nor its servicer provided a Notice of Intent to Accelerate the
Debt as required by the Contract.@ Id. at pp. 3-4.3
In support of her argument that the counterclaim defendants breached the
contract and wrongfully foreclosed, she simply states that no Notice of Intent to
Accelerate was provided. She does not provide any affidavit or other evidence
establishing that she did not receive such notice; she does not assert that the address
used for correspondence from the lender, servicer, or attorneys was not her correct
address; nor does she point to any facts that would dispute the clear evidence that the
letter dated August 23, 2010 (doc. 13-3, Ex. A, p. 5) was mailed to her at her home
Ms. Pugh also makes a passing reference to paragraph 6(c) of the Note as a basis fro her
claim of breach of contract, but she makes an argument only in support of the assertion that the
plaintiff and counterclaim defendants violated paragraph 22 of the Mortgage. For example, her
argument consists of a long quotation from Jackson v. Wells Fargo Home Mortgage, 90 So. 3d 168
(Ala. 2012), which is focused exclusively on language identical to paragraph 22 at issue in the
instant case. Nothing in the quotation or her argument sets forth the contention that
paragraph 6(c) of the Note provides an independent basis for relief. Moreover, any argument that
the plaintiff and counterclaim defendants failed to comply with paragraph 6(c) is factually
unsupported. Plaintiff and counterclaim defendants have offered an authenticated copy of a letter
mailed to Ms. Pugh on August 23, 2010, notifying her that she was in default under the Note, and
giving her thirty days to cure the default. (Doc. 13-3, Ex. A). Because defendant was given
notice of default under paragraph 6(c), that claim of a breach of contract is meritless.
address. 4 The August 23 letter not only notified her of the default, but plainly
stated, “If you fail to bring this account current, the full balance of the loan will be
accelerated.” The letter is authenticated by the affidavit of Leanne Little, who
testified that the letter was kept in the ordinary course of business at U.S. Bank, and
that U.S. Bank records reflect that the letter was sent on August 23, 2010, via first
class mail, to Ms. Pugh at the correct address of the Property. Ms. Pugh does not
even rely upon her own testimony (a copy of which was provided by the plaintiff), in
which she stopped short of asserting that she did not receive the letter. Instead, she
testified that she did not recall whether she received the letter. (Depo. of Pugh,
Doc. 13-1, pp. 22-23). Her failure to recall receiving the letter, where evidence
shows that the letter was sent, does not create a genuine issue of material fact as to
whether the letter was sent.5
While the court must view the facts in the light most favorable to Ms. Pugh in
determining FHLMC=s motion, the facts are viewed in the light most favorable to FHLMC for
purposes of Ms. Pugh=s motion. Accordingly, even for purposes of the plaintiff=s motion, the
court must assume that the letter of notice of intent was mailed, but that Ms. Pugh does not recall
whether she received the letter. In any event, she has the burden of proving an invalidity in the
foreclosure process, which her failure recall simply cannot carry.
The contractual provisions cited by Ms. Pugh require that the Note holder Asend [her] a
written notice@ and that the notice be Amailed@ or Adelivered by other means.@ There is no
requirement, and no allegation, that the letter be sent by certified mail, or that the receipt of the
letter be verified in any way. In this case, U.S. Bank has demonstrated that it mailed a written
notice to Ms. Pugh within the time frame set forth. While it could be true that the letter was never
received, it is the act of sending the letter that fulfills the contractual obligation. See Jackson v.
The only law cited by Ms. Pugh in support of her motion is Jackson v. Wells
Fargo Bank, N.A., 90 So. 3d 168 (Ala. 2012) (AJackson I@). That case does stand
for the proposition that the failure to send a notice of intent to accelerate can be a
breach of contract where the contract contains a provision virtually identical of
Paragraph 22 of the instant Mortgage. However, the basis for the decision in that
case rests upon the absence of any evidence that such a notice of intent was ever
sent. Ms. Pugh fails to address the ultimate disposition of that issue. After the
state supreme court in Jackson I reversed the summary judgment that was issued in
favor of the foreclosing bank because the bank had failed to submit any evidence
that the notice of intent was sent, the case was remanded, and the bank filed a new
motion for summary judgment. This time the motion was accompanied by a copy
of the notice of intent, with evidence that the requisite notice was mailed to the
borrower=s address. Jackson v. Wells Fargo Home Mortgage, N.A., 159 So. 3d 58
(Ala. Civ. App. 2014)(AJackson II@). The court held that the letter provided ample
evidence to support the summary adjudication in favor of the bank, even though the
borrowers asserted that they did not receive the letter. 159 So. 3d at 62-63.
Wells Fargo Home Mortgage, 159 So. 3d 58, 66 (Ala. Civ. App. 2014) (holding that evidence that
mortgagor did not receive a letter failed to create genuine issue regarding the mailing of the letter).
In this case, the August 23 letter is in the record, proving notification to Ms.
Pugh of U.S. Bank’s intention to accelerate the Note balance if the default was not
cured. The default was not cured, and the Note was accelerated on November 10,
2010. Ms. Pugh=s allegation that she does not recall receiving the letter does not
entitled her to summary judgment in her favor on the breach of contract claim, or on
the claim for wrongful foreclosure. Accordingly, Ms. Pugh=s motion for summary
judgment on the wrongful foreclosure claim, the breach of contract claim, and her
claim for a declaratory judgment is due to be denied. Likewise, because she has
failed to show any invalidity in the foreclosure process, plaintiff’s motion for
summary judgment on its ejectment claim is due to be granted.
Distinct from claims related to the foreclosure of the Mortgage, Ms. Pugh also
has asserted a number of additional claims. The counterclaim defendants seek
summary adjudication on all of Ms. Pugh=s counterclaims. They assert that Ms.
Pugh has failed to show that the contract was breached, or that the foreclosure was
wrongful. They assert that the TILA, RESPA, and FDCPA claims are time-barred
and are without merit; that the negligence and wantonness claims are without merit
because there was no duty owed and because there is no evidence that the
foreclosure was held for any purpose other than to secure repayment of the debt; and
that Ms. Pugh cannot prove elements of her claims for unjust enrichment, abuse of
process, slander of title, negligent hiring, intentional or malicious conduct, or
trespass. In the absence of any evidence of wrongful foreclosure, they argue, the
claim for declaratory judgment also is due to be dismissed. The counterclaim
plaintiff has failed to offer any evidence or argument in response to these arguments.
Her brief focuses only on the breach of contract and wrongful foreclosure claims.
1. TILA, RESPA, and FDCPA
The counterclaims asserting violations of TILA and RESPA arise from the
execution of the Note and Mortgage in August 2005. The counterclaim defendants
point out that TILA requires that claims be brought Awithin one year from the date of
the occurrence of the violation@ pursuant to 15 U.S.C. ' 1640(e).
RESPA requires that claims be brought within one year. See, e.g., Smith v. Ocwen
Financial, 488 Fed. App=x 426 (11th Cir. 2012).
The counterclaim asserting
violations of FDCPA is based on actions that occurred no later than 2011. The
counterclaim defendants point out that FDCPA imposes a similar one-year statute of
limitations. 15 U.S.C. ' 1692(k)(d). This conclusion is supported by Eleventh
Circuit law. See, e.g., Coursen v. Shapiro, 588 Fed. App=x 882, 885-86 (11th Cir.
The court agrees that all of Ms. Pugh’s claims arising under the federal
statutes are time-barred, and that the counterclaim defendants are entitled to
summary judgment in their favor on these claims. 6
2. Negligence and Wantonness
U.S. Bank asserts that the negligence and wantonness claims, to the extent
that they refer to conduct relating to the foreclosure, are subsumed into the wrongful
foreclosure claim, as determined by the Alabama Supreme Court in Jackson, 90
So. 3d at 170. The court agrees, and the only other claims of negligence or
wantonness relate to the servicing of the mortgage or the handling of payments.
The last payment made on the mortgage was processed in May 2010. Alabama law
dictates that such claims are barred by the two-year statute of limitations governing a
negligence action. Alabama Code ' 6-2-38(l). Furthermore, such claims are not
viable because AAlabama law does not recognize a cause of action for negligent or
wanton mortgage servicing.@ Blake v. Bank of American, N.A., 845 F. Supp. 2d
1206, 1210-11 (M.D. Ala. 2012). Finally, the wantonness claim also must fail
because Ms. Pugh has admitted that she has no evidence that the actions taken by
Because they are time-barred, the court need not address them on the merits, but does
note that the counterclaim complaint appears to be a mere recitation of TILA, RESPA, and/or
FDCPA terms without sufficient factual allegations to sustain them.
U.S. Bank were motivated by any ill will, and that the actions were taken only in an
effort to collect the debt she owed. (Depo. of Pugh, Doc. 13-1, pp. 4-5). For all of
these reasons, U.S. Bank=s motion for summary judgment is due to be granted, and
the claims of negligent or wanton conduct are due to be dismissed.
3. Intentional Conduct, Abuse of Process, and Slander of Title
Ms. Pugh has asserted several intentional torts, including Aintentional conduct
or maliciousness,@ abuse of process, and slander of title. U.S. Bank alleges that
there is no recognized tort in Alabama of Aintentional conduct or maliciousness.@
The court agrees. To the extent that Ms. Pugh may be attempting to state a claim
for intentional infliction of emotional distress, the conduct complained of is simply
insufficient to sustain such a claim. See, e.g., Little v. Robinson, 72 So. 3d 1168,
(Ala. 2011), citing American Road Serv. Co. v. Inmon, 394 So. 2d 361 (Ala. 1980)
(noting that outrage applies only to Aunprivileged, intentional or reckless conduct of
an extreme and outrageous nature@ and is an Aextremely limited cause of action@).
Even if a tort for Aintentional conduct@ exists under Alabama law, each of the claims
discussed herein requires as an element a showing that the actor possessed some
malice or ill will. 7 In this case, Ms. Pugh has testified that she has no evidence that
The elements of an abuse of process claim are: A1) the existence of an ulterior purpose;
2) a wrongful use of process; and 3) malice. Kizer v. Finch, 730 So. 2d 1197, 1200 (Ala. Civ.
any party acted maliciously or with ill will. (Depo. of Pugh, Doc. 13-1, pp. 4-5).
Accordingly, all of the claims asserting intentional or malicious conduct, including
her claim for slander of title and abuse of process, are due to be dismissed.
4. Unjust Enrichment
U.S. Bank seeks summary adjudication of the unjust enrichment claim
because Ms. Pugh has conceded that she did not pay any money to U.S. Bank that
she did not owe pursuant to her Note and Mortgage. (Depo. of Pugh, Doc. 13-1, p.
40). Similarly, the only payments made to FHLMC were made pursuant to the
lease agreement that she entered into after the foreclosure sale. Under Alabama
law, an unjust enrichment claim requires a showing that the defendant Aholds money
which, in equity and good conscience, belongs to the plaintiff or holds money which
was improperly paid to defendant because of mistake or fraud.@ Federal Home
Loan Mortgage Corp. v. Anchrum, 2015 WL 2452775 (N.D. Ala. May 22, 2015),
citing Dickinson v. Cosmos Broad. Co., 782 So. 2d 260, 266 (Ala. 2000) (quoting
HancockBHazlett Gen. Constr. Co. v. Trane Co., 499 So. 2d 1385, 1387 (Ala.1986)).
The court in Anchrum discussed that the very essence of an unjust enrichment claim
App. 1998), citing Caldwell v. City of Tallassee, 679 So. 2d 1125 (Ala. Civ. App. 1996).
Similarly, elements of a slander of title claim include falsity and a malicious intent motivating the
publication of the false information. Roden v. Wright, 646 So. 2d 605, 611 (Ala. 1994). In this
case, Ms. Pugh admits that she was in default, that the purpose behind the foreclosure was to
collect the debt, and that she has no evidence of malice or ill will.
is that the defendant obtained money through some wrongful means, and that to keep
the money would be unjust to the plaintiff. Here, Ms. Pugh simply made some -B
though certainly not all -- of the mortgage payments that she owed pursuant to the
Note and Mortgage. She then made rent payments that she owed under the lease
agreement that she entered after she refused to vacate the premises after the
foreclosure sale. 8 She does not allege that the payments were obtained through any
fraud or deception. (Depo. of Pugh, Doc. 13-1, pp. 35, 40). Ms. Pugh has failed to
demonstrate that any payments received by U.S. Bank or FHLMC did not comport
with her contractual obligation to pay; accordingly, the motion for summary
judgment is due to be granted in favor of the counterclaim defendants.
5. Negligent Hiring
Ms. Pugh asserts as a counterclaim against U.S. Bank that the company
Ahired, supervised, and/or trained incompetent agents or employees who committed
some or all of the wrongful acts.@ (Doc. 2, p. 11). As U.S. Bank points out, this
claim must fail if Ms. Pugh has failed to demonstrate that any agent or employee of
It has also been argued, and there is authority to support the proposition, that claims
arising under a mortgage or other contract are governed by contract law, and equitable relief
cannot be granted under the unjust enrichment theory. See, e.g., 946 F. Supp. 2d 1224, 1230-31
(N.D. Ala. 2013), citing Vardaman v. Florence City Board of Educ., 544 So. 2d 962, 965 (Ala.
1989). Insofar as Ms. Pugh argues that plaintiff or counterclaim defendants enriched themselves
by taking her real property, this is another attempt to argue the invalidity of the foreclosure.
There simply is no evidence that the foreclosure was wrongful or defective.
U.S. Bank is liable for any underlying tort. See, e.g., McCaulley v. Harvard Drug
Group, LLC, 992 F. Supp. 2d 1192 (N.D. Ala. 2014); Buckentin v. SunTrust
Mortgage Corp., 928 F. Supp. 2d 1273, 1288 (N.D. Ala. 2013). In order to
establish this claim, Ms. Pugh must be able to offer substantial evidence that some
employee of U.S. Bank committed a tort against her. IN the absence of some
wrongful conduct by such an employee, there is no proof that U.S. Bank improperly
hired, supervised, or trained an “incompetent” employee. Ms. Pugh has not offered
any evidence or argument that U.S. Bank negligently hired, supervised or retained
any incompetent employee.
As discussed supra, none of the torts claims is
supported by any evidence, and cannot survive the well-supported motion for
Ms. Pugh asserts that U.S. Bank is liable for trespass because the bank Asent in
a realtor to trespass on Defendant property under the guise and deception of
‘showing’ the home.@ (Doc. 2, p. 12). Under Alabama law, a trespass is generally
defined as a wrong against the right of possession, and requires a showing that the
alleged trespasser intentionally invaded the property and adversely affected the
plaintiff=s Aexclusive possession@ of the property. AmSouth Bank, N.A. v. City of
Mobile, 500 So. 2d 1072, 1075 (Ala. 1986). Once a foreclosure sale has been
completed, entry onto the property cannot be deemed a trespass:
In Alabama, however, a title dispute cannot be tried in a trespass
action. See Griffin v. Bozeman, 173 So. 857, 860 (Ala.1937) (stating
that A[t]his action [of trespass] cannot be used to try disputed title@);
Sadler v. Ala. Great S. Ry. Co., 85 So. 380 (Ala.1920) (stating A[t]he
title to the land in question cannot be tried or determined in a personal
action like this [trespass]@). Under Alabama law, when a bank
forecloses on property, the mortgagor has the right to redeem the
property, but the bank retains the title to the property and has the right
to possession of the property, and the right to enter the mortgaged
property at will. Accordingly, upon foreclosure, a bank's Atitle and
right to possession are an absolute defense to an action for trespass.@
Mann, 694 So.2d at 1385. And, as discussed above, even where the
validity of the foreclosure is challenged, the vehicle for that challenge
is a suit for wrongful foreclosure/breach of the mortgage contract, not
trespass. See Griffin, 173 So. at 860; see also Am. Jr. 2d Trespass ' 62
(stating A[e]ven one who holds a property under a colorable claim of
ownership is not subject to a trespass action by the true owner@).
Dysart v. Trustmark Nat=l Bank, 2014 WL 3543698 (N.D. Ala. July 15, 2014).
The court already has determined, in examining the claims for wrongful
foreclosure and breach of contract, that the foreclosure was proper, and Ms. Pugh
thereafter did not own the property.
The counterclaim defendants also have
demonstrated that, while Ms. Pugh occupied the house pursuant to a lease
agreement, the lease agreement and addendum provided for FHLMC to enter the
property Afor viewing and inspection by prospective purchasers@ and other reasons
relating to the typical landlord-tenant agreement. (Doc. 13-2, p. 79). Accordingly,
the trespass claim is due to be dismissed.
7. Declaratory Judgment
The counterclaim asserted by Ms. Pugh for declaratory judgment is nothing
more than a restatement of her allegations for breach of contract: She seeks a
declaration that the counterclaim defendants Afailed to comply with the notice
requirements of the Note and Mortgage.@ (Doc. 2, p. 12). Ms. Pugh is not entitled
to any such declaration. As discussed at length supra, the letters sent to Ms. Pugh
provided the proper notice of an intent to accelerate the loan, notice that the loan was
accelerated, and notice of the foreclosure sale. Accordingly, the claim seeking a
declaratory judgment is without merit and is due to be dismissed.
Accordingly, consistent with the foregoing discussion of the evidence
presented and the governing case law, and in light of Ms. Pugh=s failure to establish
a prima facie case of her federal statutory claims, her state-law contract claims, or
her tort claims, this court determines that the plaintiff=s motion for summary
judgment (doc. 13) against Pugh is due to be GRANTED, and the plaintiff is entitled
to summary judgment in its favor on the claim for ejectment. Ms. Pugh=s motion
for summary judgment on her counterclaims (doc. 15) is due to be DENIED. The
motion for summary judgment by plaintiff and counterclaim defendants against
Pugh’s counterclaims is due to be GRANTED, and all of Ms. Pugh=s counterclaims
are due to be DISMISSED WITH PREJUDICE.
A separate order will be entered in accordance with the findings set forth
DATED the 11th day of August, 2015.
T. MICHAEL PUTNAM
UNITED STATES MAGISTRATE JUDGE
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