Wood et al v. Green Tree Servicing LLC et al

Filing 42

MEMORANDUM OF OPINION. Signed by Judge L Scott Coogler on 5/18/2016. (PSM)

FILED
2016 May-18 AM 10:27
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
STEPHEN WOOD, and KAYE
WOOD,
Plaintiffs,
vs.
GREEN TREE SERVICING
LLC,
Defendant.

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7:14-cv-01685-LSC

MEMORANDUM OF OPINION
Before the Court is a motion for summary judgment filed by Defendant
Green Tree Servicing, LLC (“Green Tree”). Plaintiffs Stephen and Kaye Wood
(the “Woods”) filed this suit making breach of contract, negligent and wanton loan
servicing, negligent hiring, defamation, and Real Estate Settlement Procedures Act
(“RESPA”), 27 U.S.C. §§ 2601–2617, claims. These claims largely stem from
insurance proceeds that the Woods received after their house burned down. They
sent these proceeds to GMAC Mortgage LLC (“GMAC”), who was servicing
their home mortgage at the time, but GMAC—and later Green Tree when it was
servicing the mortgage—never applied the insurance proceeds to the Woods’
account. In addition to moving for summary judgment, Green Tree asks the Court
to declare that the Woods owe money on their loan.
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I.

BACKGROUND
The Woods purchased the property at issue in this case in 2004 without

financing. They later constructed a barn, pool, and shed, and they paved a road on
the property. To finance these improvements, the Woods executed a $150,000
promissory note and mortgage in June 2006 in favor of GMAC. In 2009, the
Woods experienced financial difficulties and got behind on some of their mortgage
payments. As a result, the Woods and GMAC entered into a loan modification
agreement. However, the Woods continued to miss mortgage payments even after
the loan modification.
In February 2011, the Woods’ house burned down. They made a claim for
fire damage with their insurer, Cotton States Insurance Company. Cotton States
issued a check for $152,800 jointly payable to the Woods and GMAC. The Woods
endorsed the check and sent it to GMAC in July 2011. After sending the check, the
Woods sent letters to GMAC contending that the insurance proceeds were in
excess of the remaining loan balance and demanded that they fully satisfy the loan.
The Woods did not send any more payments to GMAC or Green Tree, who
started servicing the loan in February 2013.
The mortgage agreement provided express options for how insurance
proceeds would be used. Specifically, the mortgage agreement states, “Unless
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Lender and Borrower otherwise agree in writing, any insurance proceeds . . . shall
be applied to restoration or repair of the Property, if the restoration or repair is
economically feasible and Lender’s security is not lessened.” In the same section,
the mortgage agreement states, “If the restoration or repair is not economically
feasible or Lender’s security would be lessened, the insurance proceeds shall be
applied to the sums secured by this Security Instrument, whether or not then due . .
. .” (Doc. 36-1 at 6). After the fire, the Woods did not rebuild their house or
otherwise attempt to restore it. They claim that it would not have been
economically feasible because an estimate they solicited stated that a rebuild would
cost around $260,000, although they did not provide this estimate to GMAC or
Green Tree. Because they did not rebuild, Green Tree did not dispense the funds
to cover any repair or restoration costs. Nor did Green Tree apply the insurance
proceeds to the balance of the loan. Instead, Green Tree placed the funds in an
escrow account.
In late 2012, GMAC sent various letters to the Woods notifying them that
the insurance proceeds were not sufficient to satisfy the entire loan, that their
payments were past due, and that their account was referred to foreclosure. The
Woods again sent letters demanding that the insurance proceeds satisfy the full
loan amount, and in at least one phone conversation, they stated their belief that
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over $10,000 of the proceeds should be returned to them after satisfying the loan
amount.
In June 2013, Green Tree accelerated the maturity of the loan balance and
referred their account to foreclosure counsel. The Woods’ account was in
foreclosure for over a year, although it appears that Green Tree did not invoke its
right to sell the property. The mortgage agreement provided that after acceleration
but before Green Tree sold the property, the Woods could reinstate their mortgage
if they met four conditions:
(a) pay[] Lender all sums which then would be due under this Security
Instrument and the Note as if no acceleration had occurred; (b) cure[]
any default of any other covenants or agreements; (c) pay[] all
expenses incurred in enforcing this Security Instrument, including but
not limited to reasonable attorneys’ fees, property inspection and
valuation fees, and other fees incurred for the purpose of protecting
Lender’s interest in the Property and rights under this Security
Instrument; (d) take[] such action as Lender may reasonably require to
assure that Lender’s interest in the Property and rights under this
Security Instrument . . . .
(Doc. 36-1 at 11). In June 2014, Green Tree sent a letter to the Woods that stated
that the reinstatement amount was $56,452.77. At that time, and at all other times
while the Woods’ account was in foreclosure, Green Tree was still holding the
insurance proceeds. However, the Woods did not specifically ask to reinstate their
loan using these funds, and Green Tree never reinstated the loan.

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On December 31, 2013, Green Tree sent a letter in response to a
correspondence sent by the Woods. (Doc. 36-11 at 1). In the letter, Green Tree
reiterated that the insurance proceeds were insufficient to pay off the full loan
amount and that the proceeds were being held in an escrow account in accordance
with Fannie Mae guidelines until foreclosure was completed. Id. A few months
later, in March 2014, the Woods’ attorneys sent a letter, styled as a qualified
written request, requesting four pieces of information: (1) all mortgage documents,
(2) a history of the insurance proceeds check, (3) information on whether the check
was held in an interest bearing account, and (4) a complete payment history on the
Woods account. (Doc. 37-8 at 2). The letter additionally stated that the Woods
believed that the insurance proceeds should have fully satisfied the mortgage.
However, the letter did not frame this belief as a request for information or a notice
of error. Green Tree responded to this letter, providing the requested information
and again stating that the insurance proceeds were not sufficient to pay off the loan,
as the balance was over $161,000.
In August 2014, the Woods’ attorneys sent another letter, styled as a
qualified written request, that had four notices of error and three requests for
information: (1) notice of error: the insurance proceeds should have been applied to
the Woods’ account; (2) notice of error: charging late fees and other fees to the
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Woods’ account was an error; (3) notice of error: force placing insurance on the
Woods’ account was an error; (4) notice of error: commencing foreclosure was
wrongful; (5) request for information: identify the regulations requiring the
insurance proceeds be held in escrow; (6) request for information: identify the
owner and any investor in the loan; and (7) request for information: identify any all
steps taken to ensure that the loan was serviced properly. The Woods stated that
they did not draft the letter themselves, that they did not know the letter was sent,
and that they otherwise had no knowledge of the letter’s existence. Rather, their
attorney drafted and sent the letter without specifically informing them about it.
The Woods’ attorney at the time swore in an affidavit that she mailed the
letter on August 27, 2014 to P.O. Box 6176 Rapid City, South Dakota 57709-617.
The Woods additionally provided tracking information showing that the letter was
delivered on September 5, 2014. Green Tree does not dispute that the letter was
sent to this address or that this was the proper address. However, Green Tree’s
corporate representative denied receiving this letter, stating that it was not in the
Woods’ loan file. Accordingly, Green Tree never responded to this letter.
On April 10, 2015, Green Tree retroactively applied the insurance proceeds
to the Woods’ account. Even after this, the Woods still had an unpaid principal

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balance of $12,110.63. The parties have not, however, stated how much the Woods
might owe in interest and fees.
II.

STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it “might affect the
outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). There is a “genuine dispute” as to a material fact “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Anderson, 477 U.S. at 248. The trial judge should not weigh the evidence
but must simply determine where there are any genuine issues that should be
resolved at trial. Id. at 249.
In considering a motion for summary judgment, trial courts must give
deference to the non-moving party by “considering all of the evidence and the
inferences it may yield in the light most favorable to the nonmoving party.” McGee
v. Sentinel Offender Services, LLC, 719 F.3d 1236, 1242 (11th Cir. 2013) (citing Ellis
v. England, 432 F.3d 1321, 1325 (11th Cir. 2005)). In making a motion for summary
judgment, “the moving party has the burden of either negating an essential element
of the nonmoving party’s case or showing that there is no evidence to prove a fact
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necessary to the nonmoving party’s case.” Id. Although the trial courts must use
caution when granting motions for summary judgment, “[s]ummary judgment
procedure is properly regarded not as a disfavored procedural shortcut, but rather
as an integral part of the Federal Rules as a whole.” Celotex Corp. v. Catrett, 477
U.S. 317, 327 (1986).
III.

DISCUSSION
The Woods’ Complaint alleges seven counts, including claims based on

breach of contract, RESPA, negligent loan servicing, wanton loan servicing,
negligent hiring, and defamation. However, in the response to Green Tree’s
motion for summary judgment, the Woods conceded their negligent and wanton
loan servicing, negligent hiring, and defamation claims. Therefore, those claims are
dismissed, and the only remaining claims are the breach of contract and RESPA
claims.
A.

Breach of Contract

The Woods allege that Green Tree breached their mortgage agreement in
two different ways. First, they allege that Green Tree failed to apply the insurance
proceeds to their account as required by the contract. Second, the Woods allege
that Green Tree commenced foreclosure proceedings when they should have
reinstated the mortgage agreement. The elements of a breach of contract claim are
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“(1) a valid contract binding the parties; (2) the plaintiffs' performance under the
contract; (3) the defendant's nonperformance; and (4) resulting damages.”
Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002). The parties do not
dispute that they were in a contractual relationship. Rather, they dispute the
performance or nonperformance of both the Woods and Green Tree.
1.

Failure to Apply Insurance Funds

After the Woods sent GMAC the insurance proceeds they received after
their house burned, GMAC, and later Green Tree, did not apply those proceeds to
the Woods’ account. Rather, they placed the proceeds in an escrow account,
purportedly “in accordance with Fannie Mae guidelines.” 1 (Doc. 34 at 17).
However, the mortgage agreement was clear about how Green Tree was to use the
insurance proceeds. First, if economically feasible, Green Tree would dispense the
funds to pay for the restoration or repair of the property. Second, “[i]f the
restoration or repair is not economically feasible or Lender’s security would be
lessened, the insurance proceeds shall be applied to the sums secured by this
Security Instrument, whether or not then due, with the excess, if any, paid to
Borrower.” 2 (Doc. 36-1 at 6–7). The parties do not dispute that the Woods did not
1

Green Tree has not provided the Fannie Mae guidelines to the Court, and it has not shown how
those guidelines bind the parties.
2
Although the mortgage agreement initially says, “Unless Lender and Borrower otherwise agree
in writing, any insurance proceeds . . . shall be applied to restoration or repair of the Property,” it
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attempt repairs of their house. Instead, they dispute whether restoration or repair
was economically feasible. The Woods cite a $260,000 repair estimate, arguing that
rebuilding their house would have cost over $100,000 more than the insurance
proceeds. Although Green Tree does not specifically argue that restoration was
economically infeasible, it states that the Woods never provided them with the
$260,000 estimate. Thus, Green Tree had no way to determine if the estimate was
reasonable or even if it estimated rebuilding a comparable home. As such, Green
Tree is unwilling to concede that repair or restoration was not economically
feasible—resulting in a genuine dispute of material fact.
Green Tree additionally argues that the Woods never sought to have the
insurance proceeds applied to the loan balance, but instead sought to have the
insurance proceeds fully satisfy the loan. This argument, however, is inconsistent.
The Woods always wanted to have the insurance proceeds applied to the loan
balance. Perhaps, they were mistaken about what the loan balance was and, as a
result, sought full satisfaction; yet they undisputedly indicated how they wanted
the insurance proceeds applied.

later affirmatively states that “[i]f restoration or repair is not economically feasible . . . the
insurance proceeds shall be applied to the sums secured by this instrument.” (Doc. 36-1 at 6).
Thus, the mortgage agreement appears to remove the writing requirement when applying the
insurance proceeds to the loan balance—requiring it only for other uses of the proceeds.
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Moreover, Green Tree argues that it did not apply the proceeds to the
Woods’ account in order to avoid having the check serve as an accord and
satisfaction. “An accord and satisfaction is an agreement reached between
competent parties regarding payment of a debt the amount of which is in dispute.”
Leisure Am. Resorts, Inc. v. Carbine Constr. Co., 577 So. 2d 409, 411 (Ala. 1990). In
other words, if Green Tree agreed to accept the insurance proceeds in full
satisfaction of the loan, then the parties would have reached an accord and
satisfaction.
After sending the insurance proceeds to GMAC, the Woods sent letters to
GMAC stating that the proceeds were enough to pay off the whole mortgage and
that they were due any excess. Green Tree presumably believed that applying the
proceeds to the Woods’ account would act as an implied agreement to accept the
proceeds as an accord and satisfaction. However, as with any contract, a meeting of
the minds is required for a valid accord and satisfaction. See Leisure Am. Resorts,
Inc. v. Carbine Constr. Co., 577 So. 2d 409, 411 (Ala. 1990) (“Like any other
contract, a valid accord and satisfaction requires consideration and a meeting of the
minds regarding the subject matter.”). Neither party disputes that Green Tree did
not agree to treat the insurance proceeds as an accord and satisfaction of the note
and mortgage. In fact, Green Tree sent letters to the Woods informing them that
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the insurance proceeds did not satisfy the note and mortgage. (Docs. 36-11, 36-14).
Although Green Tree feared that the Woods might sue claiming an accord and
satisfaction, it has not cited any legal authority saying that fear of litigation allowed
them to hold the insurance proceeds.
Additionally, Green Tree argues that the Woods’ failure to perform all of
their obligations prevents them from claiming breach of contract. Generally, “a
party to a contract who has caused a failure of performance by the other party
cannot take advantage of that failure.” Dixson v. C. & G. Excavating, Inc., 364 So.
2d 1160, 1162 (Ala. 1978). Here, the Woods do not dispute that they failed to make
all of their mortgage payments. Although that is a breach of the mortgage
agreement, the failure to make payments did not cause Green Tree’s potential
breach in not applying the insurance proceeds. In fact, the Woods did perform their
obligation to send any insurance proceeds to GMAC, creating a reciprocal
obligation to perform with respect to those proceeds.
2.

Reinstatement

The Woods additionally allege that Green Tree breached the mortgage by
starting the foreclosure process instead of reinstating the mortgage agreement. The
mortgage agreement gave the Woods the right to reinstate the terms of the
mortgage and avoid acceleration and foreclosure. Specifically, it states, “If
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Borrower meets certain conditions, Borrower shall have the right to have
enforcement of this Security Instrument discontinued at any time . . . .” (Doc. 36-1
at 11). Those conditions were that the Woods:
(a) pay[] Lender all sums which then would be due under this Security
Instrument and the Note as if no acceleration had occurred; (b) cure[]
any default of any other covenants or agreements; (c) pay[] all
expenses incurred in enforcing this Security Instrument, including but
not limited to reasonable attorneys’ fees, property inspection and
valuation fees, and other fees incurred for the purpose of protecting
Lender’s interest in the Property and rights under this Security
Instrument; (d) take[] such action as Lender may reasonably require to
assure that Lender’s interest in the Property and rights under this
Security Instrument . . . .
(Doc. 36-1 at 11).
The undisputed facts show that the insurance proceeds, which Green Tree
was holding, were more than sufficient to meet condition (a). Green Tree has not
argued that the Woods failed to meet the other conditions. Instead, they argue that
the Woods waived their right to reinstatement because they never expressly asked
Green Tree to reinstate their loan. However, Green Tree has not shown where the
mortgage agreement contains an implied condition requiring the Woods to notify
Green Tree that they wanted to reinstate the loan, in addition to the four specified

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conditions. 3
Alabama law does allow courts to imply notice requirements in certain
scenarios. See Cochrane Roofing & Metal Co. v. Callahan, 472 So. 2d 1005, 1007–
1008 (Ala. 1985). Specifically, “when a party to a contract assumes an express
obligation to do certain things . . . the law implies a corresponding obligation on the
other party to allow him all reasonable opportunity to perform. The cooperation may be,
as in the instant case, the giving of timely notice.” Id. at 1008 (emphasis in
original). However, Green Tree did not make that argument, and the Court will not
assume what obligations reinstatement imposes on Green Tree and what actions by
the Woods would allow Green Tree to perform those obligations. Accordingly, the
Court will, at this point, only look at the four express conditions in the mortgage
agreement, which Green Tree has not argued that the Woods did not perform.
Thus, Green Tree’s motion for summary judgment is denied as to this claim.
B.

RESPA

The Woods additionally claim that Green Tree violated RESPA by failing to
respond to their August 27, 2014 letter. RESPA is a consumer protection statute
aimed, in part, at providing “greater and more timely information on the nature

3

Perhaps, condition (d) impliedly required the Woods to communicate with Green Tree to
ascertain what other conditions they might require. However, Green Tree did not make that
argument and has not shown that the Woods failed to meet that condition.
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and costs of the [residential real estate] settlement processes.” 12 U.S.C. § 2601.
To that end, RESPA requires a loan servicer to take certain actions when a
borrower sends it a qualified written request (“QWR”). A QWR is a written
correspondence, other than a payment coupon, that identifies the name and
account of the borrower and has a statement of why the borrower believes his
account is in error or a statement of information sought. See id. at §2605(e)(1)(B).
When a loan servicer receives a QWR from a borrower, RESPA requires that the
loan servicer provide a written response acknowledging receipt within five days. See
id. at § 2605(e)(1)(A). Within thirty days of receiving the QWR, a loan servicer is
additionally required to (1) make the appropriate corrections in the borrower’s
account, (2) provide an explanation on why the loan servicer believes the
borrower’s account is correct, or (3) provide the information requested by the
borrower. See id. at § 2605(e)(2).
However, regulations promulgated by the Bureau of Consumer Financial
Protection provide that a loan servicer does not have to respond to a duplicative
QWR. See 12 C.F.R. § 1024.35(g).

If “[t]he asserted error [in a QWR] is

substantially the same as an error previously asserted by the borrower for which the
servicer has previously complied with its obligation to respond,” then the loan
servicer does not have to respond to the errors or request for information. Id.
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However, the loan servicer must respond if the QWR contains “new and material
information to support the asserted error.” Id. Additionally, the loan servicer must
provide notice that it is not required to comply with the response requirements and
state the reasons for not responding to the substance of the QWR. See id. at §
1025.35(h).
If a loan servicer fails to timely and adequately respond to a QWR or make
appropriate corrections, it may be liable for the “sum of any actual damages to the
borrower as a result of the failure . . .” 12 U.S.C. § 2605(f)(1)(A). Here, the parties
have not disputed whether Green Tree is a loan servicer subject to RESPA, and
they do not appear to dispute that the August 27, 2014 letter was a QWR. Rather,
Green Tree argues that it never received the QWR from the Woods, that the QWR
was duplicative, and further that the Woods have not shown that they have
incurred damages.
1.

Receipt of QWR

Neither RESPA nor its accompanying regulations define what constitutes
receipt of a QWR. However, in other contexts, the Eleventh Circuit has found that
a “‘presumption of receipt’ arises upon proof that the item was properly
addressed, had sufficient postage, and was deposited in the mail.” Konst v. Florida
East Coast Ry. Co., 71 F.3d 850, 851 (11th Cir. 1996) (“The common law has long
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recognized a rebuttable presumption that an item properly mailed was received by
the addressee.”). This presumption is, of course, rebuttable by the party claiming it
did not receive a correspondence. See id. The Court sees no reason why this
presumption should not apply in this context, but even if it does not, the parties
have presented facts sufficient to create a genuine dispute of material fact.
The Woods have provided evidence showing that they properly addressed
and mailed the August 27, 2014 QWR. The attorney representing the Woods at the
time swore in an affidavit that she properly addressed and mailed via certified mail
a letter to Green Tree at P.O. Box 6176, Rapid City, South Dakota 57709-6176.
(Doc. 37-11 at 11). The Woods also provided the tracking information showing the
QWR was delivered and a signature indicating receipt. (Doc. 37-11 at 9–11).
Although the QWR itself is undated, the tracking information and signature show it
was delivered on September 5, 2014. These undisputed facts are sufficient to create
a presumption of receipt.
Green Tree does not dispute that the Woods sent the QWR to the correct
address. Rather, they dispute whether they actually received it at their office,
noting that the tracking and signature do not show that the QWR was actually
delivered to the correct mailbox. Additionally, Green Tree’s Vice President of
Collections testified in his deposition that Green Tree did not have any record of
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receiving the Woods’ QWR. This testimony is enough to dispute whether Green
Tree received the QWR, resulting in a genuine issue of material fact.
2.

Duplicative

Although Green Tree argues that the August 27, 2014 QWR was duplicative,
Green Tree was still required to respond to the Woods telling them that the QWR
was duplicative and did not require a response. See 12 C.F.R. § 1025.35(h).
However, in any case, the August 27, 2014 QWR was not duplicative. The first
notice of error in the August 27, 2014 QWR asked that Green Tree apply the
insurance proceeds to the Woods’ mortgage. Importantly, this QWR did not ask
Green Tree to apply the insurance proceeds in full satisfaction of the loan—which
their previous correspondences did and which Green Tree responded to. The
difference between applying the insurance proceeds to sums owed and applying
them in full satisfaction is material. Green Tree could have complied with what the
Woods asked for in the August 27, 2014 notice of error and maintained the position
that the Woods still owed money on the loan. However, Green Tree arguably could
not have maintained that position if it responded to the Woods’ previous requests
to apply the proceeds in full satisfaction of the loan. In fact, Green Tree went to
great lengths to notify the Woods that the insurance proceeds did not fully satisfy
the loan, and it has gone to great lengths in this motion to differentiate between
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applying the insurance proceeds and accepting an accord and satisfaction. Thus,
because this notice of error in the August 27, 2014 QWR raised a new and material
issue, it was not duplicative.
The second notice of error asked that Green Tree remove late fees or other
fees applied to the Woods’ account. The third notice of error asked Green Tree to
reverse all charges for force-placed insurance, and the fourth notice of error asked
Green Tree to print a retraction of the foreclosure notice. These last three notices
of error were never addressed in previous responses by Green Tree. Perhaps, the
late fees, force-placed insurance, and foreclosure were all the result of Green Tree
not applying the insurance proceeds to the Woods’ account. However, Green Tree
has not shown how its previous responses sufficiently addressed these issues.
Additionally, the August 27, 2014 QWR requested information regarding (1)
the regulations requiring the insurance proceeds to be held in escrow, (2) the owner
and any investor in the loan, and (3) any and all steps taken to ensure that the loan
had been serviced properly by Green Tree. Green Tree did previously identify
Fannie Mae as the owner of the loan. (Doc. 36-11 at 1). However, none of Green
Tree’s other previous correspondences included information relating to the other
topics. As a result, the August 27, 2014 QWR was not wholly duplicative, and

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Green Tree was required to respond to the QWR or make the appropriate
corrections.
3.

Damages

Finally, Defendants argue that the Woods have failed to prove that they
suffered damages. A servicer who fails to respond to a borrower’s QWR under §
2605 is only liable for “any actual damages to the borrower as a result of the
failure.” § 2605(f)(1)(A). The term “actual damages” is not defined in the statute.
However, RESPA is a consumer protection statute, and courts have generally
construed consumer protection statutes liberally. See Ellis v. General Motors
Acceptance Corp., 160 F.3d 703, 707 (11th Cir. 1998) (construing the Truth in
Lending Act liberally); Carmichael v. Nissan Motor Acceptance Corp., 291 F.3d 1278,
1280 (11th Cir. 2002) (“Like the TILA, the [Consumer Leasing Act] is a consumer
protection statute which ‘is remedial in nature and therefore must be construed
liberally in order to best serve Congress’ intent.’”); Bownman v. U.S. Dep’t of
Agric., 363 F.2d 81, 85 (5th Cir. 1966) 4 (construing the Packers and Stock Yard Act
liberally). In particular, the Eleventh Circuit found that “anger, embarrassment,
and emotional distress” are actual damages under the Fair Housing Act, another
consumer statute. Accordingly, under RESPA, actual damages arguably include
4

The Eleventh Circuit adopted as binding precedent all decisions handed down by the old Fifth
Circuit before October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981).
Page 20 of 23

non-economic injuries like mental anguish or emotional distress, in addition to
economic injuries. 5
Here, the Woods have alleged that they incurred approximately $14,000 in
interest charges from February 2013 to July 2014. However, they incurred these
charges before they sent the August 27, 2014 QWR, and thus, they cannot be
attributed to any resulting RESPA violation by Green Tree. They additionally
allege that they incurred $28.25 per day in interest after August 27, 2014. The
Woods would not have incurred these interest charges if Green Tree had applied
the insurance proceeds to the Woods’ account, which was potentially an
appropriate correction. Green Tree later retroactively applied the insurance
proceeds to the sums the Woods’ owed, and these interest charges might have been
removed. However, Green Tree only brought this issue up in its reply brief, and the
Woods did not have an opportunity to respond. Thus, whether those charges were
fully removed remains disputed.
Moreover, the Woods alleged that they suffered emotional distress and
mental anguish. The Woods admitted that they did not draft the August 27, 2014
QWR, never saw it, did not have a copy, and had no knowledge of its existence.

5

In an unpublished decision, the Eleventh Circuit has said that “plaintiffs arguably may recover
for non-pecuniary damages, such as emotional distress and pain and suffering” in RESPA cases.
McLean v. GMAC Mortg. Corp., 398 Fed. Appx. 467, 471 (11th Cir. 2010).
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Although they both testified in their depositions about suffering emotional distress,
they did not mention the August 27, 2014 QWR. Rather, the Woods attributed
their distress to their house burning and to the overall dispute with Green Tree
about the mortgage. However, even though they had no knowledge of the August
27, 2014 QWR, their alleged emotional distress could have been reduced if Green
Tree had made the corrections that the QWR requested. Thus, the best way to
decide whether there is a causal link between the Woods’ emotional distress and
the alleged RESPA violation is through evidence at trial. Accordingly, a genuine
issue of material fact exists as to the damages incurred as a result of the alleged
RESPA violation.
C.

Declaratory Judgment

Green Tree also asked the Court to declare that the Woods owe Green Tree
money on the loan. The Woods do not dispute that they owe at least $12,110.63 on
the loan principal. (Docs. 34 at ¶ 28 and 37 at p. 6). However, the parties have not
submitted sufficient information regarding any interest payments, escrow
payments, or other fees that the Woods owe. Moreover, the Woods could
ultimately offset any amount they owe with possible damages. Accordingly, the
Court will not, at this point, declare what the parties potentially owe each other
beyond what is undisputed.
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IV.

CONCLUSION
For the foregoing reasons, Green Tree’s motion for summary judgment is

DENIED as to the Woods’ breach of contract and RESPA claims and GRANTED
as to their other claims. A separate order consistent with this Memorandum of
Opinion will be entered.
Done and Ordered this 18th day of May 2016.

L. SCOTT COOGLER
UNITED STATES DISTRICT JUDGE
182185

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