Brothers et al v. Saag

Filing 43

MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 12/19/2014. (JLC)

FILED
2014 Dec-19 AM 09:35
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
MIDDLE DIVISION
PASCHAL PAUL AND SHARON J. )
STARGELL BROTHERS,
)
)
Plaintiffs,
)
) Case No.: 4:13-CV-466-VEH
v.
)
)
ANDY SAAG,
)
)
Defendant.
)

MEMORANDUM OPINION
This is a civil action filed by the pro se plaintiffs, Paschal Paul Brothers, and
Sharon J. Stargell Brothers, alleging that the defendant, Andy Saag, violated the Fair
Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., in his
communications with the plaintiffs. The surviving counts1 in the Amended Complaint
allege false and misleading misrepresentations “in violation of 15 U.S.C. § 1692e”
(Count Two), and unfair practices in violation of 15 U.S.C. § 1692f (Count Three).
The case comes before the court on the defendant’s motion for summary
judgment. (Doc. 31). For the reasons stated herein, the motion will be GRANTED,
and this case will be DISMISSED with prejudice.
1

In an order dated March 4, 2014, this court dismissed the plaintiff’s “overshadowing”
claims set out in Count One. (Doc. 23).

I.

STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 56, summary judgment is proper if there

is no genuine dispute as to any material fact and the moving party is entitled to
judgment as a matter of law. FED. R. CIV. P. 56(a); see also Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986) (“[S]ummary judgment is proper if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”) (internal quotation
marks and citation omitted). The party requesting summary judgment always bears
the initial responsibility of informing the court of the basis for its motion and
identifying those portions of the pleadings or filings that it believes demonstrate the
absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once the
moving party has met its burden, Rule 56(e) requires the non-moving party to go
beyond the pleadings in answering the movant. Id. at 324. By its own affidavits – or
by the depositions, answers to interrogatories, and admissions on file – it must
designate specific facts showing that there is a genuine issue for trial. Id.
The underlying substantive law identifies which facts are material and which
are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All
reasonable doubts about the facts and all justifiable inferences are resolved in favor
2

of the non-movant. Chapman, 229 F.3d at 1023. Only disputes over facts that might
affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment. Anderson, 477 U.S. at 248. A dispute is genuine “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. If the evidence presented by the non-movant to rebut the moving party’s
evidence is merely colorable, or is not significantly probative, summary judgment
may still be granted. Id. at 249.
How the movant may satisfy its initial evidentiary burden depends on whether
that party bears the burden of proof on the given legal issues at trial. Fitzpatrick v.
City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). If the movant bears the burden
of proof on the given issue or issues at trial, then it can only meet its burden on
summary judgment by presenting affirmative evidence showing the absence of a
genuine issue of material fact – that is, facts that would entitle it to a directed verdict
if not controverted at trial. Id. (citation omitted). Once the moving party makes such
an affirmative showing, the burden shifts to the non-moving party to produce
“significant, probative evidence demonstrating the existence of a triable issue of fact.”
Id. (citation omitted) (emphasis added).
For issues on which the movant does not bear the burden of proof at trial, it can
satisfy its initial burden on summary judgment in either of two ways. Id. at 1115-16.
3

First, the movant may simply show that there is an absence of evidence to support the
non-movant’s case on the particular issue at hand. Id. at 1116. In such an instance, the
non-movant must rebut by either (1) showing that the record in fact contains
supporting evidence sufficient to withstand a directed verdict motion, or (2)
proffering evidence sufficient to withstand a directed verdict motion at trial based on
the alleged evidentiary deficiency. Id. at 1116-17. When responding, the non-movant
may no longer rest on mere allegations; instead, it must set forth evidence of specific
facts. Lewis v. Casey, 518 U.S. 343, 358 (1996). The second method a movant in this
position may use to discharge its burden is to provide affirmative evidence
demonstrating that the non-moving party will be unable to prove its case at trial.
Fitzpatrick, 2 F.3d at 1116. When this occurs, the non-movant must rebut by offering
evidence sufficient to withstand a directed verdict at trial on the material fact sought
to be negated. Id.
II.

FACTS
A.

Facts Deemed To Be Admitted

The following facts are deemed to be admitted as they were set out in the
movant’s initial brief, and have not been disputed:2

2

On October 2, 2014, after the instant motion was filed, the court entered an order which
in part stated:
4

1.
On December 20, 2004, Countrywide Home Loans, Inc.
(“Countrywide”) loaned the [p]laintiffs $47,500.00 (the “Loan”). In
exchange, the [p]laintiffs executed a promissory note (the “Note”).
2.
As security for the indebtedness represented by the Note, the
[p]laintiffs executed a Mortgage (the “Mortgage”). The Mortgage
created a lien on certain real property located at 2370 Gamble Road,
Horton, Alabama 35980 (the “Property”).
3.
The current owner of the Note is Federal National Mortgage
Association. Bank of America, N.A., successor by merger to BAC Home
Loans Servicing, LP (“Bank of America”), has serviced the Loan since
December 27, 2004.
4.
An assignment of mortgage was executed on or around March 2,
2010, which assigned the Mortgage to BAC Home Loans Servicing, Inc.
(the “Assignment of Mortgage”). On or around November 14, 2012, a
The purpose of this order is to notify the plaintiffs of their right to file
affidavits or other materials in opposition to the motion and to notify the plaintiffs
of the consequences of default. It does not change any of the requirements of
Appendix II to the court’s Uniform Initial Order (doc. 4 at 14), which was previously
entered in this case. The plaintiffs are notified that, in responding to the motion for
summary judgment, they must comply with ALL of the requirements of Appendix
II[.]
(Doc. 34 at 1-2). Appendix II provides:
The first section [of the non-moving party’s brief in opposition to the motion for
summary judgment] must consist of only the non-moving party’s disputes, if any,
with the moving party’s claimed undisputed facts. The non-moving party’s response
to the moving party’s claimed undisputed facts shall be in separately numbered
paragraphs that coincide with those of the moving party’s claimed undisputed facts.
Any statements of fact that are disputed by the non-moving party must be followed
by a specific reference to those portions of the evidentiary record upon which the
dispute is based. All material facts set forth in the statement required of the moving
party will be deemed to be admitted for summary judgment purposes unless
controverted by the response of the party opposing summary judgment.
(Doc. 4 at 17) (italics in original).
5

Corrective Assignment of Mortgage (the “Corrective Assignment of
Mortgage”) was executed for purpose of correcting the assignee name
on the Assignment of Mortgage.
5.
Based on certain defaults under the Mortgage and Note by the
[p]laintiffs, Bank of America referred the Loan to foreclosure and
retained the law firm of Sirote & Permutt P.C. to facilitate the
foreclosure.
6.
The [d]efendant Andy Saag is an attorney at Sirote & Permutt,
P.C. A significant portion of Mr. Saag’s practice involves mortgage
foreclosures conducted pursuant to Alabama law. Mr. Saag has been
handling mortgage foreclosures for over five years.
7.
In that capacity, Mr. Saag was tasked with the responsibility of
handling the foreclosure of the Property on behalf of Bank of America.
As part of the foreclosure referral, Mr. Saag was given the Note,
Mortgage, and the Assignment of Mortgage by Bank of America. Mr.
Saag also drafted for execution the Corrective Assignment of Mortgage.
8.
In order to foreclose the Mortgage on behalf of Bank of America,
Mr. Saag drafted and sent several letters to the [p]laintiffs (the
“Letters”).
9.
Specifically, Mr. Saag sent a “Notice of Acceleration of
Promissory Note and Mortgage” letter to the [p]laintiffs on January 24,
2013. The January 24 letter was sent in order to provide the [p]laintiffs
with certain required notices as a prerequisite to foreclosure of the
Mortgage.
10. Mr. Saag also sent a letter dated January 31, 2013[,] to the
[p]laintiffs which acknowledged receipt of a January 29, 2013[,] letter
from the [p]laintiffs in which the [p]laintiffs disputed the Mortgage debt.
In the January 31 letter, Mr. Saag explained to the [p]laintiffs that
foreclosure proceedings would cease until written verification of the
debt was provided to the [p]laintiffs.

6

11. After Mr. Saag received notice from Bank of America that
verification of the debt was provided to the [p]laintiffs, he sent a letter
to the [p]laintiffs notifying them that foreclosure proceedings would
resume. The letter also made reference to a revised publication notice.
12. Mr. Saag sent the Letters to the [p]laintiffs “purely for the
purposes of (1) foreclosing the Mortgage pursuant to its terms and in
line with Alabama law on behalf of Bank of America, and (2) complying
with any other relevant laws.” [(Doc. 33-2 at 5, ¶11).]
13. Mr. Saag “relied upon [his] experience as an attorney with
mortgage foreclosures, the loan documents provided to [him] by Bank
of America, and Bank of America’s foreclosure referral in determining
that Bank of America had standing to foreclose on the Mortgage.”
[(Doc. 33-2 at 5, ¶12).]
14. On April 3, 2013, the Property was sold to Federal National
Mortgage Association pursuant to a non-judicial foreclosure sale in
Marshall County, Alabama.
(Doc. 32 at 1-5).
The defendant represents to the court that:
15. On July 31, 2014, Mr. Saag served written discovery requests
upon the [p]laintiffs. The requests were emailed to the [p]laintiffs with
an explanatory letter, and were placed in the mail to the Property
address.
16. Mr. Saag’s written discovery requests contained Requests for
Admissions. For ease of reference, they are reproduced here:
a.

Admit that you signed [the Mortgage] . . ..

b.

Admit that you signed [the Note] . . ..

c.

Admit that you signed [the Mortgage] . . . in order to obtain
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a home loan.
d.

Admit that you signed [the Note] . . . in order to
obtain a home loan.

e.

Admit that after you signed [the Mortgage and the
Note], you obtained a home loan.

f.

Admit that you can read, write, and understand the
English language.

g.

Admit that you read [the Mortgage] . . . prior to
signing it.

h.

Admit that you read [the Note] . . . prior to signing
it.

I.

Admit that you have never spoken to Mr. Saag
personally, whether on the phone or in person.

j.

Admit that other than the documents attached as
Exhibit A, Exhibit C, and Exhibit D to your
Amended Complaint (Doc. 12), you received no
other correspondence from Mr. Saag prior to this
lawsuit.

17. Mr. Saag never received a response to the written discovery
requests.
(Doc. 32 at 5-7). These additional facts are deemed to be admitted.3

3

Rule 36 (a)(3) provides that when a party is served with a request for admission, “[the]
matter is admitted unless, within 30 days after being served, the party to whom the request is
directed serves on the requesting party a written answer or objection addressed to the matter and
signed by the party or its attorney.” FED. R. CIV. P. 36(a)(3). Based on the representations in the
defendant’s motion for summary judgment, the court deems the facts labeled a. - j. to be
admitted.
8

B.

Attachments to the Complaint4

Attached to the Amended Complaint as Exhibit A is a January 24, 2013, letter,
from the defendant to the plaintiffs, the full text of which reads:
RE:

NOTICE OF ACCELERATION OF PROMISSORY NOTE AND
MORTGAGE

YOU ARE HEREBY NOTIFIED that the terms of the Promissory Note
and Mortgage for the above referenced loan dated the 20th day of
December, 2004, are in default. By virtue of default in the terms of said
Note and Mortgage, Bank of America, N.A., hereby accelerates to
maturity the entire remaining unpaid balance of the debt, including
attorney’s fees, accrued interest, and other lawful charges. The amount
due and payable as of the date of this letter is $43,533.46. This payoff
amount will change on a daily basis. If you wish to pay off your
mortgage, please call our office at [phone] to obtain an updated
figure. Additionally, if you are interested in foreclosure alternatives,
please contact your servicer, Bank of America at 1-800-699-6650.
We are at this time commencing foreclosure under the terms of the
Mortgage, and enclosed is a copy of the foreclosure notice. Please note
that the foreclosure sale is scheduled for February 28, 2013. For further
information regarding this matter, please call [phone].
If you have received a discharge of this debt in bankruptcy or are
currently in a bankruptcy case, this notice is not intended as an attempt
to collect a debt. Our client has a security interest in the property and
will only exercise its rights as against the property.
We will assume this debt to be valid unless it is disputed within thirty
days after you receive this letter. If you do dispute this debt or any
portion thereof, we will obtain and mail you a verification of the debt or

4

The authenticity and contents of these attachments are not in dispute. No objection to
their consideration has been made.
9

a copy of any judgment if you send us a written request within this
thirty-day period. Also, upon written request within this thirty-day
period, we will provide you with the name and address of the original
creditor, if different from the current creditor. This communication is an
attempt to collect a debt and any information obtained will be used for
that purpose.
(Doc. 12 at 10) (emphasis in original).
Exhibit B to the Amended Complaint is an undated “Notice of Impending
Injury From Andy Sagg Notice of Liability” to the defendant. (Doc. 12 at 2, 11; doc.
13-1 at 4-7). In that notice, the plaintiffs requested verification of the debt owed.
(Doc. 12 at 2).
Exhibit C to the Amended Complaint is a January 31, 2013, letter responding
to the plaintiffs, where the defendant wrote:
Re:

Property Address: 370 Gamble Road, Horton, AL 35980
Our Client: Bank of America, N.A.
Loan Number: 83658532

This letter is to acknowledge receipt of your letter received in my office
on January 29, 2013, disputing the above-referenced debt. I have
forwarded a copy of your letter to Bank of America for its review. Please
note that we have ceased foreclosure proceedings until written debt
verification is provided to you.
Please do not hesitate to contact my office at [phone] should you
have any questions.
This communication is from a debt collector.
(Doc. 12 at 12).
10

On February 25, 2013, the defendant again wrote the plaintiffs,5 stating:
The terms of the Promissory Note and Mortgage loan with Bank of
America, N.A. are currently in default. Due to the default in the terms of
the Note and Mortgage, we have been instructed to foreclose the
property described in the enclosed revised publication notice.
The foreclosure sale is scheduled for March 28, 2013. If you are
interested in foreclosure alternatives, please contact your servicer, Bank
of America at 1-800-669-6650.
For further information regarding this matter, please contact our office
at [phone].
If you have received a discharge of this debt in bankruptcy or are
currently in a bankruptcy case, this notice is not intended as an attempt
to collect a debt. Our client has a security interest in the property and
will only exercise its rights as against the property.
This communication is from a debt collector.
(Doc. 12 at 13). This letter is attached to the Amended Complaint as Exhibit D.
C.

The Affidavit of William McCaffrey

The following facts appear in the McCaffrey affidavit attached to the Amended
Complaint:
The subject property: 370 GAMBLE ROADHORTON, AL 35980
was secured in favor of COUNTRYWIDE HOME LOANS INC.
DECEMBER 20, 2004. The corresponding Mortgage has a Mortgage
Identification Number (“MIN”) of 1001337-0000256507-8.

5

The defendant says in his affidavit that he wrote them again only after receiving notice
that verification of the debt had been provided. (Doc. 33-2 at 5). The plaintiffs do not claim that
his contact in this new letter violated the law, only that the representations contained therein do.
11

[T]he loan has been securitized which is the process of
aggregating a large number of Notes in what is called a mortgage pool
and then selling security interests in that pool of mortgages to investors.
These sales have fractionalized possession of the Note over many
different investors.
The subject NOTE or Loan of said property was bundled with
many other loans, sold to investors and ultimately placed into a
COUNTRYWIDE RESECURITIZATIONS COUNTRYWIDE TRUST
(“CWT08034") referred to as the ISSUING ENTITY and formed
pursuant to the Trust Agreement among the Seller, Depositor, Servicer,
the Trust Oversight Manager and the Trustee. HERE, the Depositor is
CWALT SECURITIES and the Trust has a closing date of March 25,
2008.
The Trust is also a REAL ESTATE MORTGAGE INVESTMENT
CONDUIT (REMIC) within the meaning of 860D of the Internal
Revenue Code as amended in 1986 (The Code), which governs the rules
of the subject trust. BANK OF AMERICA Acts as current servicer of
the mortgage loans and BANK OF NEW YORK MELLON acts as
Trustee of the Trust on behalf of the investors.
(Doc. 12 at 16) (capitalization in original).
Further, McCaffrey offers several expert opinions.6 He identifies the property
which was the subject of the foreclosure, identifies facts which pertain to the
disposition of the mortgage and note after its execution, and then states that his
“research” reveals, among other things: that Bank of America cannot foreclose on the
6

At the motion dismiss stage, the court refused to consider these opinions. (See doc, 23
at 15 (“The motion to strike will be GRANTED as to all opinions stated in the affidavit. It will
be DENIED as to factual statements contained therein.”) (emphasis in original). The defendant
challenges these opinions again at the summary judgment stage. The court will not address that
challenge in light of its ultimate holding.
12

property (doc. 12 at 16-17); that Bank of America is not a holder in due course on the
loan (doc. 12 at 17); that Bank of America has suffered no financial loss because of
the loan (doc. 12 at 17); and that Bank of America does not possess legal standing to
foreclose (doc. 12 at 18).
III.

ANALYSIS
As stated previously, the complaint alleges false and misleading

misrepresentations “in violation of 15 U.S.C. § 1692e” (Count Two). The statute
provides, in pertinent part, that
[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.
Without limiting the general application of the foregoing, the following
conduct is a violation of this section: . . . (2) The false representation of–
(A) the character, amount, or legal status of any debt . . . . (5) The threat
to take any action that cannot legally be taken or that is not intended to
be taken. . . . (10) The use of any false representation or deceptive means
to collect or attempt to collect any debt or to obtain information
concerning a consumer.
15 U.S.C.A. § 1692e.
In the plaintiffs’ response to the motion for summary judgment, they rely
primarily on the McCaffrey affidavit’s conclusions that the “securitization” of the
Note eliminated Bank of America’s right to foreclose.7 The plaintiffs argue:

7

The court will not address any arguments in the plaintiffs’ brief relating to
“overshadowing,” as that claim has been dismissed.
13

In accord with the plain language of Alabama Code 35-10a-2, Country
Wide Home Loans as the transferor of the Brothers’ purported note and
mortgage to the REMIC Trust CWT 08034 lost any right, title or interest
in the note and mortgage purportedly signed by Paschal Paul and Sharon
Jane Brothers. Therefore Country Wide Home Loans did not have any
authority whatsoever after the securitization transaction to transfer,
assign or convey any rights, title or interest in the purported note and
mortgage to Bank of America or Federal National Mortgage
Association. Without this authority Country Wide Home Loans, Bank
of America and/or Federal National Mortgage lacked proof of claim
and/or standing to hold a foreclosure sale and convey any rights, title or
interest in Brothers’ property.
(Doc. 35 at 2).8 They then argue that:
– “[The defendant’s] client had no immediate right to foreclose[,] therefore Mr.
Saag’s written assertions that his client possessed standing to initiate
foreclosure were false and misrepresenting statements” in violation of 15
U.S.C. § 1692e. (Doc. 35 at 4, 5).9
– “Mr. Saag threatened to take non judicial action to dispossess the [plaintiffs]
of their property when his client had no immediate right to possession.” (Doc.
35 at 5).
– “Mr. Saag furthered the fraud committed upon the [plaintiffs] by initiating
an action that his client had no authority to take.” (Doc. 35 at 5).

8

The court had previously stated that it would consider court documents 38 and 39 as the
plaintiffs’ response to the motion for summary judgment. (Doc. 41 at 2). However, document 35
includes substantially the same arguments as those other two documents. Accordingly, for the
sake of brevity, the court will cite only to document 35.
9

The court notes that the plaintiffs also write that “Mr. Saag represented to the Brothers
in his 1/24/2013 letter that his client had a security interest in the Brothers[’] property.” (Doc. 35
at 4). The defendant considers this a separate claim of misrepresentation. (Doc. 32 at 9). In the
context of the plaintiffs’ argument, it is clear that this statement is merely another way of saying
the defendant’s client had no right to foreclose.
14

– “Mr. Saag threatened to take non judicial action to dispossess the [plaintiffs]
of their property without authority to do so and that he made false and
misleading statements in respect to who lawfully owns the purported debt.”
(Doc. 35 at 6).
In response, the defendant goes to great lengths to demonstrate that his client did have
the authority to foreclose, and moves to strike the opinions and facts stated in the
McCaffrey affidavit.
The burden is on the plaintiffs to show that, because Saag’s client had no right
to foreclose, Saag’s statements that his client would foreclose violated the FDCPA.
Despite all of their arguments, at the end of the day it is undisputed that a foreclosure
sale took place on March 28, 2013 (doc. 33-3), and a foreclosure deed dated April 3,
2013, appears in the record (doc. 33-3). The plaintiffs have presented no evidence
showing that the sale has been found to be void, was set aside, or was even
challenged.10 Since the only evidence before the court reflects a valid foreclosure sale
conducted on behalf of Bank of America, the defendant’s representations to the
plaintiffs that his client had the right to foreclose were true, and there was no
violation of the FDCPA.
The Amended Complaint also contains a claim for unfair practices in violation

10

Further, the foreclosure has not been attacked in this case, and the parties to the
foreclosure are not parties in this case. Under these circumstances, it would be inappropriate to
collaterally review the foreclosure.
15

of 15 U.S.C. § 1692f (Count Three). That statute prohibits a debt collector from
“[t]aking or threatening to take any nonjudicial action to effect dispossession or
disablement of property if– . . . there is no present right to possession of the property
claimed as collateral through an enforceable security interest.” 15 U.S.C. §
1692f(6)(A). That count fails for the same reasons Count Two fails.
IV.

CONCLUSION
For the reasons stated herein, the defendant’s motion for summary judgment

will be GRANTED, and this case will be DISMISSED with prejudice.
DONE and ORDERED this 19th day of December, 2014.

VIRGINIA EMERSON HOPKINS
United States District Judge

16