Hall et al v. Nationstar Mortgage
MEMORANDUM OPINION. Signed by Chief Judge Karon O Bowdre on 7/25/2016. (AVC)
2016 Jul-25 PM 02:08
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
CHARLES & SUZIE HALL,
NATIONSTAR MORTGAGE LLC, et
CASE NO.: 2:14-cv-01893-KOB
This matter is before the court on the Joint Motion for Summary Judgment of Defendants
Nationstar Mortgage and U.S. Bank National Association as Trustee. (Doc. 22).
This case centers on Plaintiffs Charles and Suzie Hall's allegations that the Defendants
have failed to honor the Halls' loan modification agreement. The Halls contend that they had a
binding loan modification agreement with their previous loan servicer, First Franklin Corp.,
which Nationstar, the Plaintiffs' current loan servicer, has refused to honor. The Halls also allege
that the Defendants have misrepresented the amount of the Halls' debt and have failed to
adequately respond to the Halls' requests for additional information about their account.
The Halls have asserted claims against the Defendants for violation of the Fair Debt
Collection Practices Act; violation of the Real Estate Settlement Procedures Act; Breach of
Contract; Breach of the Implied Covenant of Good Faith and Fair Dealing; Promissory Estoppel;
Fraudulent Concealment; and Unjust Enrichment. Defendants Nationstar Mortgage and U.S.
Bank as Trustee have moved for summary judgment on each of these claims.
For the reasons stated in this Memorandum Opinion, the court will GRANT the
Defendants' Motion for Summary Judgment IN PART and will DENY it IN PART. Specifically,
the court will GRANT the Defendants' Motion as to all of the Halls' claims against Defendant
U.S. Bank; will GRANT the Defendants' Motion as to Counts III-VII of the Halls' Complaint
against Defendant Nationstar; and will DENY the Defendants' Motion as to Counts I and II of the
Halls' Complaint against Defendant Nationstar.
Summary judgment allows a trial court to decide cases when no genuine issues of
material fact are present and the moving party is entitled to judgment as a matter of law. See Fed.
R. Civ. P. 56. When a district court reviews a motion for summary judgment, it must determine
two things: (1) whether any genuine issues of material fact exist; and if not, (2) whether the
moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c).
The moving party “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
demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986) (quoting Fed. R. Civ. P. 56).
Once the moving party meets its burden of showing the district court that no genuine
issues of material fact exist, the burden shifts to the non-moving party to produce sufficient
favorable evidence “to demonstrate that there is indeed a material issue of fact that precludes
summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “If the
evidence [on which the nonmoving party relies] is merely colorable, or is not significantly
probative, summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
249–50 (1986) (internal citations omitted).
In ruling on a motion for summary judgment, the court should view all evidence and
inferences drawn from the underlying facts in the light most favorable to the non-moving party.
See Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). The evidence of
the non-moving party “is to be believed, and all justifiable inferences are to be drawn in [its]
favor.” Anderson, 477 U.S. at 255. “If reasonable minds could differ on the inferences arising
from undisputed facts, then a court should deny summary judgment.” Allen v. Tyson Foods, Inc.,
121 F.3d 642, 646 (11th Cir. 1997) (internal quotation marks and citations omitted). This
standard exists because “the drawing of legitimate inferences from the facts are jury functions,
not those of a judge.” Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000)
(quoting Anderson, 477 U.S. at 255).
After both parties have addressed the motion for summary judgment, the court must grant
the motion only if no genuine issues of material fact exist and if the moving party is entitled to
judgment as a matter of law. Fed. R. Civ. P. 56.
On October 6, 2014, Plaintiffs Charles and Suzie Hall brought this action against
Defendants Nationstar Mortgage, LLC and U.S. Bank National Association as Trustee. The Halls
asserted claims for violation of the Fair Debt Collection Practices Act; violation of the Real
Estate Settlement Procedures Act ("RESPA"); Breach of Contract; Breach of the Implied
Covenant of Good Faith and Fair Dealing; Promissory Estoppel; Fraudulent Concealment; and
From August 20, 2015 to October 30, 2015, the court suspended the deadlines in this case
to allow the Halls to submit a loan modification application and supporting documents to
Nationstar. However, Nationstar was ultimately unable to approve the Halls for a modification,
and the court set new deadlines to move the case forward.
On January 8, 2016, Defendants Nationstar and U.S. Bank filed the Motion for Summary
Judgment that is the subject of this Opinion. That Motion has been fully briefed.
Statement of Facts 1
In July of 2007, the Halls purchased a home. To finance the home, the Halls executed a
promissory note and mortgage and borrowed $550,000 from First Franklin Financial Corp. The
note indicates that the Halls' monthly payments would be in the amount of $4,806.33. U.S. Bank
National Association, as Trustee for Merrill Lynch First Franklin Mortgage Loan Trust,
Mortgage Loan Asset-Backed Certificates, Series 2007-5 is the owner and holder of the Halls'
note and mortgage.
The Halls submitted the monthly mortgage payments due to First Franklin for the first
two years of the agreement, but then began experiencing financial difficulties and began missing
On September 21, 2010, First Franklin approved the Halls for a permanent loan
modification under the Home Affordable Modification Program ("HAMP"). First Franklin sent
the Halls a letter indicating that, to accept the modification offer, the Halls should return signed
copies of the agreement to First Franklin by October 1, 2010. The agreement indicated that under
the modification, the Halls' new principal balance would be $564,324.38 and that their new
monthly payments would be $4,735.80.
In their brief, the Plaintiffs failed to respond to the Defendants' Statement of Undisputed
Facts. Therefore, the Defendants' facts are deemed admitted for the purposes of summary
judgment, as set out in the court's requirements for summary judgment briefs in Appendix II,
available at www.alnd.uscourts.gov under the court information for Judge Bowdre.
Additionally, in Plaintiffs' Statement of Facts, some of the citations do not correspond to
the facts that are being asserted. Other facts are supported only with a citation to a paragraph in
the Plaintiffs' Complaint. Allegations in a Complaint are not evidence, and the court has not
considered any of Plaintiffs' proffered facts that are not supported by evidence.
Additionally, the agreement stated that the Halls' loan would "not be modified unless and
until [they] receive[d] from the Lender a copy of this Agreement signed by the Lender." (Doc.
24-5, at 6). The agreement further provided that if the Halls needed to make any corrections to
the agreement, a corrected agreement would be provided to them and that the current agreement
would be void and of no legal effect.
Mrs. Hall testified that she returned of a signed copy of the First Franklin modification.
She was not, however, able to produce a copy of the signed version of the document. She also did
not receive a signed copy back from First Franklin. Mrs. Hall further testified that before
returning the modification agreement, she made handwritten alterations to the principal balance
in the agreement because she believed it was incorrect.
On October 1, 2010, servicing of the Hall's note and mortgage was transferred from First
Franklin to BAC Home Loans Servicing. On July 1, 2011, servicing of the note and mortgage
was transferred from BAC, a subsidiary of Bank of America, to Bank of America, the parent
company. Bank of America offered the Halls a trial period modification, which the Halls
rejected. (See Doc. 24-8 (March 31, 2012 letter from Bank of America to the Halls stating that
the Halls were not being considered for a modification "because after being offered a Trial Period
Plan or modification, [the Halls] notified [Bank of America] that [they] did not wish to accept the
offer.")). The Halls' monthly payments under this trial period modification were to be $4,649.96.
Between August 2010 and September 2011, the Halls sent, and their loan servicers
accepted, monthly payments in the amount of $4,649.96. The August and September 2010
payments were autodrafted from the Halls' checking account by First Franklin, while the October
to September 2011 payments were made by check written to Bank of America Home Loan.
On July 1, 2013, servicing of the note and mortgage was transferred again from Bank of
America to Nationstar. On July 12, 2013, Nationstar sent the Halls a letter informing them that
the servicing rights to their note and mortgage had been transferred to it. In this letter, Nationstar
provided the Halls with a breakdown of the debt owed at that time.
Nationstar offered the Halls a trial period modification on October 15, 2013. This
modification agreement indicated that the Halls' new principal balance would be $693,581.62
and that their new monthly payments would be $4,595.24. The Halls rejected the Nationstar trial
modification. Mrs. Hall explained that she thought the principal balance shown in the Nationstar
modification was too high.
In her deposition, Mrs. Hall admitted that when she called and asked questions regarding
her loan modification, she called and spoke to representatives at First Franklin and Bank of
America, not Nationstar. Mrs. Hall testified that the only personal communication she had with
Nationstar was in response to Nationstar's 2013 modification offer. Mrs. Hall further admitted
that the alleged misrepresentations that she mentioned in her Complaint were made by Bank of
America, not Nationstar. Mrs. Hall stated that the only alleged misrepresentation she could
attribute to Nationstar was that Nationstar offered the Halls a modification, but then later
"reneged" on it. However, Mrs. Hall acknowledged that she did not complete or return the
Nationstar modification paperwork.
In her deposition, Mrs. Hall also stated that as far as she was concerned, all of her loan
servicers -- Nationstar, Bank of America, and First Franklin -- were the same company.
Nationstar, however, is not a subsidiary, agent, or business entity related in any way to First
Franklin or Bank of America.
On October 28, 2013 and November 5, 2013, counsel for the Halls sent Nationstar letters
purporting to be qualified written requests ("QWRs")2 under RESPA. On November 12, 2013,
Nationstar sent a letter to the Halls' counsel acknowledging receipt of the QWR. On November
15, 2013, Nationstar followed up with a substantive response with details about the Halls' loan.
On February 14, 2014 and April 14, 2014, counsel for the Halls sent Nationstar letters
purporting to be notices of error ("NOEs")3 under Regulation X of RESPA. In these letters, the
Halls' counsel explained that the Halls believed that Nationstar had failed to provide them with
accurate and complete information as to the loss mitigation options available to them. On April
18, 2014, Nationstar sent a letter to the Halls' counsel acknowledging receipt of the NOE. On
May 2, 2014, Nationstar followed up with a substantive response about the modifications that
had been offered to the Halls.
On July 23, 2014, counsel for the Halls sent Nationstar a letter purporting to be a debt
verification request under the FDCPA.4 Nationstar responded to the debt verification request on
August 8, 2014, and then followed up with a more substantive response on August 20, 2014.
A "qualified written request" is "a written correspondence, other than notice on a
payment coupon or other payment medium supplied by the servicer, that . . . includes, or
otherwise enables the servicer to identify, the name and account of the borrower, and . . . includes
a statement of the reasons for the belief of the borrower, to the extent applicable, that the account
is in error or provides sufficient detail to the servicer regarding other information sought by the
borrower." 12 U.S.C. § 2605(e)(1)(B).
A "notice of error" is "any written notice from the borrower that asserts an error and
includes the name of the borrower, information that enables the servicer to identify the
borrower's mortgage loan account, and the error the borrower believes has occurred." 12 C.F.R. §
Under the FDCPA, 15 U.S.C. § 1692g(b), if a consumer notifies the debt collector in
writing within thirty days of an initial notice of debt that he disputes his debt, the debt collector
must "cease collection of the debt, or any disputed portion thereof, until the debt collector obtains
verification of the debt or a copy of a judgment, or the name and address of the original creditor,
and a copy of such verification or judgment, or name and address of the original creditor, is
mailed to the consumer by the debt collector."
As of February 2016, a billing statement from Nationstar indicates that the Halls' regular
monthly payment amount is currently $5,460.76 and that the Halls owe $333,175.99 in overdue
Claims Against Defendant U.S. Bank as Trustee
The Halls brought this action against Defendant Nationstar, the current servicer of their
loan, and Defendant U.S. Bank, as Trustee of their loan.
Count I of the Halls' Complaint explicitly refers to Defendant Nationstar only. It does not
mention Defendant U.S. Bank. Accordingly, the court interprets Count I of the Halls' Complaint
to apply only to Defendant Nationstar.
To which Defendant(s) the remaining Counts apply is less clear. In Counts II-VII, the
Halls assert claims against the "Defendant," without indicating whether they are referring to
Defendant Nationstar, Defendant U.S. Bank, or both. The Halls do not refer to either Defendant
by name in Counts II-VII.
The factual allegations and the context of the claims do not help to clarify which claims
apply to U.S. Bank. All of the Halls' factual allegations relate only to Defendant Nationstar, or to
previous servicers, who are not parties to this action. In the Halls' Complaint, Defendant U.S.
Bank is mentioned only in the case style and in the introduction of the parties. The Halls have
pled no factual allegations that relate to Defendant U.S. Bank. The Halls have also asserted no
theory of liability as to Defendant U.S. Bank in any of their Counts.
Now, at the summary judgment stage, the Halls have likewise failed to offer any evidence
relating to Defendant U.S. Bank's actions.
Accordingly, the court finds that the Halls' allegations and evidentiary submissions are
insufficient to create a genuine issue of material fact as to any of the claims they have asserted
against U.S. Bank. Consequently, the court will GRANT the Defendants' Motion for Summary
Judgment as to the claims asserted against Defendant U.S. Bank and will DISMISS all claims
against Defendant U.S. Bank.
Claims Against Defendant Nationstar
Next, the court will address the extent to which genuine issues of material fact exist as to
the Halls' claims against Defendant Nationstar, the servicer of their loan.
Count I - Fair Debt Collection Practices Act Violation
In Count I of their Complaint, the Halls allege that Nationstar violated several sections of
the FDCPA. The Halls contend that Nationstar violated 15 U.S.C. § 1692f "by using unfair and
unconscionable means to collect the debt owed by the Halls;" § 1692e(2) "by misrepresenting the
character, amount and legal status of the Plaintiff's debt;" §§ 1692e(5) and 1692f(6) "by
threatening to foreclose on the Halls' home even though Defendant Nationstar has no present
right to possession of the property under its security agreement;" and § 1692g(a)(1) "by failing to
accurately and fully state in communication to the Halls 'the amount of the debt'." (Doc. 1, ¶¶ 8082).
The court finds that genuine issues of material fact exist as to whether Defendant
Nationstar complied with these provisions of the FDCPA. In her deposition, Mrs. Hall testified
that the amount of the principal balance shown in the Nationstar modification offer was inflated.
Mrs. Hall stated that Nationstar represented her balance to be "six hundred and something
thousand," while she believed her balance should have been $550,000. (Doc. 24-21, 48:7-18).
Mrs. Hall explained that her initial balance was $550,000, but that she had made some payments
before the modification, which she believed would have brought her balance to roughly
$535,000. Mrs. Hall acknowledged that she would likely incur some penalties and interest for her
missed payments, but said that she thought these penalties would take her balance back up to
about $550,000, not the $693,581.62 that Nationstar represented her balance to be. (Id., 48:2349:10).
On July 23, 2014, counsel for the Halls sent Nationstar a letter requesting verification of
the Halls' debt, pursuant to the FDCPA. Nationstar responded to this letter on August 8, 2014,
and then followed up with a more substantive response on August 20, 2014. The August 20 letter
says that it contains, as enclosures, a copy of the Plaintiffs' complete Payment History, as well as
several other documents, including Plaintiffs' most recent billing statement, Plaintiffs' servicing
transfer notices, and Plaintiffs' payoff quote. These enclosures, however, were not included in the
evidence Defendants offered to the court.
Nationstar contends that it complied with all of the provisions of the FDCPA. However,
without the enclosures sent to the Plaintiffs, the court is unable to verify whether Nationstar did
in fact provide the Plaintiffs with a complete payment history and the other documents referenced
in its letter, in satisfaction of the FDCPA. The court is also unable to confirm whether the
amount of the debt that Nationstar claims it is owed matches the records in the Plaintiffs'
Consequently, Mrs. Hall's deposition testimony creates a genuine issue of material fact as
to whether Nationstar complied with the provisions of the FDCPA. See, e.g., Feliciano v. City of
Miami Beach, 707 F.3d 1244, 1253 (11th Cir. 2013) ("As a general principle, a plaintiff's
testimony cannot be discounted on summary judgment unless it is blatantly contradicted by the
record, blatantly inconsistent, or incredible as a matter of law, meaning that it relates to facts that
could not have possibly been observed or events that are contrary to the laws of nature."); Price
v. Time, Inc., 416 F.3d 1327, 1345 (11th Cir. 2005) ("Courts routinely and properly deny
summary judgment on the basis of a party's sworn testimony even though it is self-serving.")
(citations omitted). Because no evidence in the record blatantly contradicts Mrs. Halls' deposition
testimony, the court may not discount it.
Accordingly, the court will DENY the Defendants' Motion for Summary Judgment as to
the Halls' FDCPA claim against Defendant Nationstar.
Count II - Real Estate Settlement Procedures Act
Next, in Count II of their Complaint, the Halls allege that, on multiple occasions, they,
through counsel, sent Nationstar "qualified written requests," as defined in RESPA, 12 U.S.C. §
2605(e)(1)(B), and that Nationstar failed to adequately respond to these QWRs.
The Halls specifically allege that Nationstar violated RESPA, 12 U.S.C. § 2605(e)(2)(A)
"by failing to make appropriate correction to the Plaintiff's account in response to the qualified
written request;" § 2605(e)(2)(C) "by failing to provide the Plaintiff with the information and
documentation requested;" § 2605(e)(2) "by refusing to cease its collection efforts and
foreclosure proceedings after receiving the Plaintiff's qualified written request;" and
§ 2605(e)(3) "by providing information to consumer credit reporting agencies regarding overdue
payments allegedly owed by the Plaintiff that were related to the qualified written request."
As discussed previously, Mrs. Hall testified in her deposition that the amount of the
principal balance shown in the Nationstar modification offer was inflated.
Based on this belief that the balance shown was too high, counsel for the Halls sent
Nationstar letters purporting to be QWRs on October 28, 2013 and November 5, 2013.
Nationstar responded to the Halls on November 12, 2013, and November 15, 2013. In its
November 15 letter, Nationstar indicated that it was enclosing a number of documents, including
a copy of the Halls' payment history. However, these enclosures were not presented to the court
On February 14, 2014 and April 14, 2014, counsel for the Halls sent Nationstar letters
purporting to be NOEs under Regulation X of RESPA. Nationstar responded to the Halls on
April 18, 2014 and May 2, 2014. In its May 2 letter, Nationstar indicated that it was enclosing
documents such as the Nationstar servicing transfer notice, the 2013 proposed Nationstar
modification agreement, and the 2014 modification denial letter. Again, these enclosures were
not provided to the court as evidence.
Without these enclosures, the court is unable to assess whether Nationstar did in fact
provide complete responses that complied with the provisions of RESPA. The court is also
unable to determine whether the amount of the Halls' principal balance and total debt, as
represented by Nationstar, was supported by Nationstar's records and the Halls' payment history,
or whether Nationstar should have made a correction to the Plaintiffs' account, as required by
Accordingly, the court finds that genuine issues of material fact exist regarding whether
Defendant Nationstar complied with the provisions of RESPA. Therefore, the court will DENY
the Defendants' Motion for Summary Judgment as to the Halls' RESPA claim against
As discussed above, the court finds that the Halls have not presented evidence sufficient
to create a genuine issue of material fact as to their claims against Defendant U.S. Bank.
However, even if the Halls had presented some evidence related to Defendant U.S. Bank, their
RESPA claim against U.S. Bank would fail as a matter of law because RESPA only places
obligations on the servicer to respond to QWRs. See 12 U.S.C. § 2605(e)(1)(A); see also Jesse v.
Wells Fargo Home Mortg., 882 F. Supp. 2d 877, 881 (E.D. Va. 2012). The Halls have not
alleged that U.S. Bank serviced their loan.
Count III - Breach of Contract
In Count III of their Complaint, the Halls assert that Nationstar breached its contract with
the Halls by failing to provide them with the loan modification to which they claim they are
Under Alabama law, the elements of a breach of contract claim are: "'(1) a valid contract
binding the parties; (2) the plaintiffs' performance under the contract; (3) the defendant's
nonperformance; and (4) resulting damages.'" Shaffer v. Regions Fin. Corp., 29 So. 3d 872, 880
(Ala. 2009) (quoting Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002)). A valid
contract requires: "'an offer and acceptance, consideration, and mutual assent to the terms
essential to the formation of a contract.'" Ex parte Grant, 711 So. 2d 464, 465 (Ala. 1997)
(quoting Strength v. Ala. Dep't of Fin., Div. of Risk Mgmt., 622 So. 2d 1283, 1289 (Ala. 1993)).
In this case, the Halls' breach of contract allegations are premised on Nationstar's failure
to honor the modification First Franklin offered to the Halls. However, this claim fails because
the Halls are unable to demonstrate that the First Franklin modification became a valid, binding
Mrs. Hall testified that, upon receiving the First Franklin modification documents, she
signed and returned the documents to First Franklin. Nationstar has no record of First Franklin
receiving a signed copy of the documents from Mrs. Hall, and Mrs. Hall is likewise unable to
produce a signed copy of the agreement.
However, even if the court takes Mrs. Hall's assertion that she signed and returned the
agreement as true, the Halls have failed to demonstrate that the First Franklin modification
agreement was a valid, binding contract because they have failed to show that a condition
precedent in the First Franklin agreement was met. The First Franklin modification agreement
stated that the Halls' loan would "not be modified unless and until [they] receive[d] from the
Lender a copy of this Agreement signed by the Lender." (Doc. 24-5, at 6). The Halls did not
receive a copy of the modification signed by First Franklin. Because the Halls did not receive a
copy of the modification signed by First Franklin, this condition precedent was not met, and a
valid contract was not formed. See, e.g., Ex parte Payne, 741 So. 2d 398, 403 (Ala. 1999) ("In
negotiating a contract the parties may impose any condition precedent, the performance of which
is essential before they become bound by the agreement; in other words, there may be a condition
precedent to the existence of a contract.") (citations omitted).
Additionally, the First Franklin modification did not become a valid, enforceable contract
because Mrs. Hall admitted that she made handwritten alterations to the modification agreement.
Alabama law provides that "[o]ne party cannot unilaterally alter the terms of a contract . . . . Both
parties must mutually assent to a modification." Ex parte Amoco Fabrics & Fiber Co., 729 So.
2d 336, 340 (Ala. 1998) (citations omitted). Because Mrs. Hall altered the principal balance
contained in the modification agreement, no mutual assent existed, and the agreement did not
become a binding contract.
The First Franklin modification agreement also fails to satisfy the statute of frauds.
Alabama law provides that "[e]very agreement or commitment to lend money, delay or forebear
repayment thereof or to modify the provisions of such an agreement or commitment" must be in
writing and signed by the party against whom enforcement is sought. Ala. Code § 8-9-2(7).
Alabama courts have specifically held that loan modification agreements are subject to the statute
of frauds. See, e.g., Coleman v. BAC Serv., 104 So. 3d 195, 207 (Ala. Civ. App. 2012); see also
Manker v. Citimortgage, Inc., No. 2:10-CV-1012-WKW[WO], 2012 WL 999611, at *5 (M.D.
Ala. March 23, 2012) (finding that "[t]he lack of signatures on the purported contracts is fatal to
Plaintiffs' breach of contract claim"). Because the Halls have not provided any evidence that the
contract was signed by First Franklin, the contract is void and unenforceable under the statute of
The Halls contend that the doctrine of partial performance applies as an exception to the
statute of frauds because they made payments in accordance with the First Franklin modification
offer. However, the partial performance doctrine applies only to oral agreements for the sale of
land. See, e.g., Branch Banking & Trust Co. v. EBR Investments LLC, No. 2:14-CV-01578WMA, 2015 WL 225457, at *2 (N.D. Ala. Jan. 16, 2015) ("Although Alabama courts have long
recognized a 'part performance' exception to the statue of frauds under Ala. Code § 8-9-2(5) for
oral agreements to buy or sell land, Darby v. Johnson, 477 So. 2d 322, 326 (Ala.1985), Alabama
courts have declined to expand the exception beyond subsection (5). Mantiply v. Mantiply, 951
So. 2d 638, 652–53 (Ala.2006)."). The Halls have cited, and the court knows of, no authority to
the contrary. Accordingly, the partial performance exception to the statute of frauds does not save
the Halls' breach of contract claim.
Because the Halls cannot show that the First Franklin modification was a valid,
enforceable contract, which complies with the statute of frauds, their breach of contract claim
fails. Therefore, the court will GRANT the Defendants' Motion for Summary Judgment as to
Count III of the Halls' Complaint.
Count IV - Breach of the Implied Covenant of Good Faith and Fair
In Count IV of their Complaint, the Halls allege that Nationstar breached the implied
covenant of good faith and fair dealing.
The court finds that this claim fails as a matter of law because Alabama law does not
recognize a cause of action for breach of good faith and fair dealing in the context of a dispute
regarding a mortgage loan. See, e.g., Wallace v. SunTrust Mortg., Inc., 974 F. Supp. 2d 1358,
1368 (S.D. Ala. 2013) ("Defendant is correct that Alabama has refused to recognize a tort claim
for breach of the duty of good faith outside the insurance context.") (citing Lake Martin/Ala.
Power Licensee Ass'n, Inc. v. Ala. Power Co., 601 So. 2d 942, 944 (Ala. 1992)); Buckentin v.
SunTrust Mortg. Corp., 928 F. Supp. 2d 1273, 1287 (N.D. Ala. 2013) ("Because the contract at
issue is not an insurance contract, Plaintiff's breach of implied covenant of good faith and fair
dealing claim fails as a matter of law . . . ."); Grant v. Butler, 590 So. 2d 254, 256 (Ala. 1991)
("Although every contract contains either an express or an implied covenant that the parties will
act in good faith in performing the contract, in Alabama only insurance contracts give rise to a
duty imposed by law on which a tort claim for bad faith performance can be based.").
Accordingly, the court will GRANT the Defendants' Motion for Summary Judgment as to
Count IV of the Halls' Complaint.
Count V - Promissory Estoppel
The Halls next assert a claim against Nationstar for promissory estoppel. The Halls allege
that the "Defendant intentionally represented that Plaintiffs could obtain loan modifications, and
that Plaintiffs could make modified, reduced payments that would satisfy existing loan
obligations for the terms set forth in the loan modification agreements, if they followed the
requirements specified in Defendant's offer." (Doc. 1, ¶ 109).
In Alabama, to state a claim for promissory estoppel, a plaintiff must show: "(1) that the
defendant made a promise (2) that the defendant should have reasonably expected to induce
action or forbearance of definite and substantial character; (3) the promise did, in fact, induce
action or forbearance; (4) and injustice can be avoided only by enforcing the promise." Sykes v.
Payton, 441 F. Supp. 2d 1220, 1224 (M.D. Ala 2006) (citing Bush v. Bush, 177 So. 2d 568, 570
The Halls fail to offer evidence sufficient to create a genuine issue of material fact as to
the first element of their claim. The Halls have failed to show that Nationstar made them a
In their Complaint, the Halls assert that the "Defendant" made representations to them
regarding their loan modification, without specifying which defendant made those
representations or when those representations were made. Accordingly, the court is unclear as to
what the Halls intended to assert as the basis for their promissory estoppel claim against
However, the Halls' pleading deficiencies aside, in reviewing the evidence before it, the
court can find the existence of no promise by Nationstar that would support a claim for
Nationstar's 2013 modification offer was not a promise. It was an offer that was rejected
by the Halls. Accordingly, that offer cannot serve as the basis for the Halls' promissory estoppel
First Franklin's modification was also not a promise. As discussed above, the First
Franklin modification offer was never fully executed and did not become a binding contract. No
evidence exists to suggest that First Franklin or Nationstar promised to carry out the loan
modification agreement as modified by the Halls or promised to unilaterally modify the loan
agreement. The Halls have not identified any other promises made by First Franklin that would
support a claim for promissory estoppel.
Additionally, Nationstar's alleged statements or promises to accept reduced payments
from the Halls would be void under the statute of frauds. Under Alabama law, Plaintiffs may not
circumvent the statute of frauds by asserting their reliance on unsigned or unwritten statements in
a promissory estoppel claim. See, e.g., Bruce v. Cole, 854 So. 2d 47, 58 (Ala. 2003) ("[A]n oral
promise that is void by operation of the Statute of Frauds will not support an action against the
promisor for promissory fraud."); Durham v. Harbin, 530 So. 2d 208, 213 (Ala. 1988)
("Although allowing a plaintiff's reliance on nonfraudulent representations to abrogate the Statute
of Frauds is a widespread phenomenon . . . Alabama has rejected this approach to date.").
Accordingly, the Halls' claim for promissory estoppel fails because the Halls have not
offered any evidence to show that a promise to accept reduced payments existed and because any
such promise to modify the Halls' loan would be void and unenforceable under Alabama's statute
of frauds. Therefore, the court will GRANT the Defendants' Motion for Summary Judgment as to
Count V of the Halls' Complaint.
Count VI - Fraudulent Concealment
In Count VI of their Complaint, the Halls allege that the Defendant committed fraud "by
promising [the Halls] opportunities for loan modifications when they had no intention of
providing such permanent modifications." (Doc. 1, ¶ 114).
The Halls' fraud claim falls short of the heightened pleading standard for fraud in Rule
9(b) of the Federal Rules of Civil Procedure, which states that, "[i]n alleging fraud or mistake, a
party must state with particularity the circumstances constituting fraud or mistake." (emphasis
When pleading a fraud claim, to satisfy the requirements of Rule 9(b), “a plaintiff must
allege: ‘(1) the precise statements, documents, or misrepresentations made; (2) the time, place,
and person responsible for the statement; (3) the content and manner in which these statements
misled the [p]laintiff; and (4) what the defendants gained by the alleged fraud.’” Am. Dental
Ass’n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010) (quoting Brooks v. Blue Cross &
Blue Shield of Fla., Inc., 116 F.3d 1364, 1380-81 (11th Cir. 1997)).
The Halls have failed to satisfy these requirements. The Halls have brought their fraud
claim against the "Defendant," without specifying to which Defendant they are referring -- be it
Nationstar, U.S. Bank, or one of the previous loan servicers who are not parties to this suit. The
Halls have also failed to state in specific terms what statements or omissions they contend were
fraudulent. In their Complaint, the Halls simply allege that the "Defendant used fraud and artifice
to induce Plaintiffs to enter and keep Plaintiffs in default" and that the "Defendant did not
disclose to Plaintiffs its motives." (Doc. 1, ¶¶ 115, 117). These general allegations are
insufficient to sustain a claim for fraud.
Moreover, now, at the summary judgment stage, the Halls have presented no evidence of
specific statements or omissions by Nationstar or U.S. Bank that would support a fraud claim. In
her deposition, Mrs. Hall admitted that any alleged misrepresentations referenced in her
Complaint were made by Bank of America, not Nationstar. Mrs. Hall testified that the only
alleged misrepresentation or concealment she could attribute to Nationstar was that Nationstar
offered the Halls a loan modification and then later reneged on it. However, Mrs. Hall
acknowledged that the real reason the Nationstar trial modification was not implemented was
that the Halls had refused to accept the offer and did not sign and return the documents.
Nationstar's retraction of a rejected offer does not constitute fraud.
Accordingly, the court finds that the Halls have failed to offer evidence sufficient to
create a genuine issue of material fact as to their fraudulent concealment claim. The court will,
therefore, GRANT the Defendants' Motion for Summary Judgment as to Count VI of the Halls'
Count VII - Unjust Enrichment
Finally, in Count VII of their Complaint, the Halls allege that the "Defendant was unjustly
enriched at the expense of each of the Plaintiffs." (Doc. 1, ¶ 126).
Under Alabama law, "[t]o prevail on a claim of unjust enrichment, the plaintiff must
show that the defendant holds money which, in equity and good conscience, belongs to the
plaintiff or holds money which was improperly paid to the defendant because of mistake or
fraud." Scrushy v. Tucker, 955 So. 2d 988, 1011 (Ala. 2006) (internal quotations and citations
omitted) (emphasis in original).
The Halls premise their unjust enrichment claim on the First Franklin modification. The
Halls contend that Nationstar was unjustly enriched because it prevented the Halls "from making
reduced monthly payments and by failing to honor the First Franklin Modification and by failing
to offer the Halls a permanent modification." (Doc. 26, at 42); see also (Doc. 1, ¶¶ 127-28).
As set out above, the Halls have neither demonstrated that the First Franklin entered into
a binding modification agreement with the Halls, nor that First Franklin made a promise to
accept reduced payments from the Halls. The Halls have also failed to show that Nationstar
entered into a binding contract or made a promise to accept reduced payments from the Halls.
Accordingly, Nationstar was not obligated to allow the Halls to make reduced monthly
payments. The Halls have asserted no other basis for an unjust enrichment claim.
Consequently, the court will GRANT Defendants' Motion for Summary Judgment as to
Count VII of the Halls' Complaint.
For the reasons stated in this Opinion, the court will GRANT the Defendants' Motion for
Summary Judgment IN PART and will DENY it IN PART.
The court will GRANT the Defendants' Motion as to all claims against Defendant U.S.
The court will GRANT the Defendants' Motion as to Counts III-VII of the Halls'
Complaint against Defendant Nationstar. The court will, however, DENY the Defendants'
Motion as to Counts I and II of the Halls' Complaint against Defendant Nationstar because the
court finds that genuine issues of material fact exist regarding whether Nationstar complied with
the provisions of the FDCPA and RESPA.
The only claims remaining in this action will be the Halls' claims in Counts I and II of
their Complaint, alleging violations of the FDCPA and RESPA by Defendant Nationstar.
The court will enter a separate Order along with this Opinion.
DONE and ORDERED this 25th day of July, 2016.
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE
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