HENOK v. CHASE HOME FINANCE, LLC et al

Filing 36

MEMORANDUM OPINION AND ORDER denying plaintiff's motion 18 for partial summary judgment and entering judgment for Chase concerning the notice of default claim and denying plaintiff's motions 24 , 25 for sanctions. Signed by Judge Richard W. Roberts on 2/26/13. (lcrwr1)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_______________________________
)
ARAYA HENOK,
)
)
Plaintiff,
)
)
v.
)
Civil Action No. 12-336 (RWR)
)
CHASE HOME FINANCE, LLC,
)
et al.,
)
)
Defendants.
)
_______________________________)
MEMORANDUM OPINION AND ORDER
Pro se plaintiff Araya Henok brings this action against
Chase Home Finance, LLC (“Chase”), Shapiro & Burson, LLP
(“Shapiro”), and Fannie Mae, challenging the legality of the
foreclosure on a property he owned on 16th Street N.E. in
Washington, D.C. (“the property”).

Henok moves for partial

summary judgment against Chase arguing that Chase and Shapiro
failed to send to Henok valid notice of default and notice of
foreclosure.

Henok also moves for sanctions against Chase and

Shapiro and their counsel.

Because Henok has failed to show that

he is entitled to judgment as a matter of law, his motion for
partial summary judgment will be denied and judgment as to the
notice of default will be entered for Chase since the undisputed
material facts entitle it to such a judgment as a matter of law.
Because Henok has not met the requirements of Rule 11 or shown
that the defendants committed sanctionable conduct, Henok’s
motions for sanctions will be denied.

-2BACKGROUND
Henok purchased the property in 2006 with financing from JP
Morgan Chase Bank.

Pl.’s Mot. for Partial Summ. J. (“Pl.’s Summ.

J. Mot.”), Exs. 2-3; Defs. Chase & FNMA’s Mem. of Law in Opp’n to
Pl.’s Second Mot. for Partial Summ. J. (“Chase’s Opp’n to Pl.’s
Summ. J. Mot.”) ¶ 2.

In August of 2009, Chase returned his

monthly payment and “stated that [his] property [was] going into
foreclosure.”
Mot. ¶ 8.

Am. Compl. ¶ 8; Chase’s Opp’n to Pl.’s Summ. J.

Fannie Mae bought the property in a foreclosure sale

on November 18, 2009.

Pl.’s Summ. J. Mot. ¶ 16, Ex. 1; Chase’s

Opp’n to Pl.’s Summ. J. Mot. ¶ 16, Ex. 2.
Henok filed a complaint in D.C. Superior Court challenging
the foreclosure in February 2012 and the defendants removed the
case to federal court and answered the complaint.

Henok v. Chase

Home Finance, LLC, Civil Action No. 12-336 (RWR), 2013 WL 167941,
at *1 (D.D.C. Jan. 16, 2013).

Henok moved for partial summary

judgment arguing that Chase and Shapiro breached the contract by
failing to provide notice of default and failing to mail to the
correct address the notice of foreclosure.
at 6-9.

Pl.’s Summ. J. Mot.

Further, Henok moved for sanctions against Chase’s

attorneys, Shapiro’s attorneys, Chase employee Kevin Johnson and
Shapiro employee Brett Callahan claiming that Chase and Shapiro
intentionally made false representations that they did not
receive letters Henok had sent them by certified mail.

Mot. for

-3Sanctions Against Shapiro at 1; Mot. for Sanctions Against Chase
at 1.
DISCUSSION
I.

PARTIAL SUMMARY JUDGMENT
Summary judgment is warranted on an individual claim or part

of a claim if “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 party asserting that a fact cannot be

or is genuinely disputed must support the assertion by . . .
citing to particular parts of materials in the record, including
. . . documents, . . .

declarations, . . . or other materials;

or . . . showing that the materials cited do not establish the
absence or presence of a genuine dispute[.]”
56(c)(1).

Fed. R. Civ. P.

A party may not rely merely upon denials in pleadings

to show a genuine dispute, but must come forward with specific
evidence that reveals a genuine factual dispute.

Rogers v.

District of Columbia, 880 F. Supp. 2d 163, 165-66 (D.D.C. 2012);
Ali v. District of Columbia Gov’t, 810 F. Supp. 2d 78, 82-83
(D.D.C. 2011).

At the summary judgment stage, “‘[t]he evidence

of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.’”

Feirson v. District

of Columbia, 506 F.3d 1063, 1066 (D.C. Cir. 2007) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
Where there are no disputed facts to resolve regarding a claim,

-4and it is the non-movant who is entitled to judgment as a matter
of law, judgment may be entered for the non-movant on that cause
of action.

Henok v. Chase Home Finance, LLC, Civil Action No.

12-335 (RWR), 2013 WL 525696, at *4 (D.D.C. Feb. 13, 2013).
Henok’s motion for partial summary judgment argues in part
that Chase never gave him the required advance notice of default,
Pl.’s Summ. J. Mot. at 6-7, and that he never received such a
notice, id. at 7-9.

The deed of trust securing Henok’s mortgage

required Chase before foreclosing to “give notice to Borrower
. . . [that] shall specify (a) the default; (b) the action
required to cure the default; (c) a date, not less than 30 days
from the date the notice is given to Borrower, by which the
default must be cured; and (d) that failure to cure the default
on or before the date specified in the notice may result in
acceleration of the sums secured by this Security Instrument and
sale of the Property.”

Id., Ex. 3 ¶ 22.

The deed also provided

that “[a]ll notices given by Borrower or Lender in connection
with this Security Instrument must be in writing.

Any notice to

Borrower in connection with this Security instrument shall be
deemed to have been given to Borrower when mailed by first class
mail or when actually delivered to Borrower's notice address if
sent by other means.”

Id., Ex. 3 ¶ 15.

These provisions impose a duty upon Chase to “give notice”
of default to Henok.

Here, Chase supplied with its opposition to

Henok’s motion a declaration under the penalty of perjury from

-5its Assistant Secretary and Operations Unit Manager that Chase
indeed gave Henok advance notice of default that fully complied
with the requirements of the deed of trust.

The declaration

attaches a copy of a letter Chase sent Henok on April 4, 2009 to
his address at 1800 New Jersey Avenue, N.W., Washington, D.C.,
20001, advising Henok “[y]ou are in default because you have
failed to pay the required monthly installments [as of April 4,
2009]”; “[y]ou must pay [$4,167.00] within thirty-two days . . .
in order to cure this default”; and “[i]f you fail to cure the
default . . ., Chase Home Finance LLC will accelerate the
maturity of the Loan, . . . and commence foreclosure
proceedings[.]”
Ex. B.

Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1 ¶ 3,

This notice of default was sent to Henok after Henok

informed Chase in a 2008 letter that his address was 1800 New
Jersey Avenue, N.W., Washington, D.C., 20001, id., Ex. 1 ¶ 2,
Ex. A, and Henok confirmed that the 1800 New Jersey Avenue, N.W.,
Washington D.C., 20001 address was accurate in a May 21, 2009
letter, id. ¶ 4, Ex. C.

These letters were sent before Henok

first allegedly informed Chase in an August 13, 2009 letter of
his new address on New Hampshire Avenue, N.W.
Mot. ¶ 12, Ex. 4.

Pl.’s Summ. J.

Therefore, the April 4, 2009 notice of default

was addressed to Henok’s “last known address” before Henok
allegedly sent Chase a notice changing his address to the New
Hampshire Avenue address.

-6Henok has not rebutted this evidence that Chase gave the
notice of default required by the deed in the way the deed
allowed it to be given.

Henok may not simply rely upon denials

to raise a genuine dispute of fact about whether Chase complied
with its duty to provide notice of default.

Because there are no

disputed facts to resolve regarding that duty, and it is Chase
that is entitled to judgment as a matter of law, judgment will be
entered for Chase on that cause of action.

See Henok, 2013 WL

525696, at *4.
Henok’s motion for partial summary judgment further argues
that neither Chase nor Shapiro ever sent the required advance
notice of foreclosure to him at his correct address, Pl.’s Summ.
J. Mot. at 6-7, 9; Ex. 1, and that he never received a copy of
the notice of foreclosure recorded on October 15, 2009, id. at 79.

The deed of trust securing Henok’s mortgage states that if

Chase sought to conduct a foreclosure sale, Chase was required to
“send written notice as prescribed by Applicable Law to
Borrower[.]”

Id., Ex. 3 ¶ 22.

Under D.C. law in effect at the

time of the foreclosure, the holder of a note had to give written
notice to the owner of the property at least 30 days in advance
of any foreclosure sale at the borrower’s “last known address[.]”
D.C. Code § 42-815(b) (2001).

Further, the deed provides that

when the lender sends a notice to the borrower, “[t]he notice
address shall be the Property Address unless Borrower has

-7designated a substitute notice address by notice to Lender.”
Pl.’s Summ. J. Mot., Ex. 3 ¶ 15.
The dispute centers on whether Chase sent Henok the notice
of foreclosure at his last known address.

Henok provides a copy

of a letter that he says he sent to Chase by certified mail on
August 13, 2009 notifying Chase that his new mailing address was
“908 New Hampshire Ave, NW #400, Washington D.C. 20037.”
Summ. J. Mot. ¶ 12, Ex. 4.

Pl.’s

He provides with it copies of the

accompanying certified mail receipt and the signed return receipt
acknowledging delivery on August 17, 2009.

Chase responds that

Henok’s 2008 letter and May 21, 2009 letter informing Chase that
his address was the one on New Jersey Avenue were the last
notices regarding Henok’s address received by Chase from the
plaintiff.

Chase’s Opp’n to Pl.’s Summ. J. Mot. ¶¶ 3-5; Ex. 1

¶¶ 2, 4, 7, Exs. A, C.

Shapiro also argues that the notice of

foreclosure was proper claiming that it was sent to Henok at his
last known address.

Shapiro Opp’n to Pl.’s Summ. J. Mot. at 5-6.

Chase and Shapiro have submitted declarations under penalty of
perjury which state that the business records of each party
reflect that those parties did not receive Henok’s August 13,
2009 notice that his address had changed to 908 New Hampshire
Ave., N.W.

Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1, ¶ 7;

Shapiro’s Opp’n to Pl.’s Summ. J. Mot., Ex. A, ¶ 4(g), (j).
Therefore, Chase and Shapiro argue that they sent proper notice
to Henok’s last known address by sending it to the New Jersey

-8Avenue address.

Chase’s Opp’n to Pl.’s Summ. J. Mot. at 7-9;

Shapiro’s Opp’n to Pl.’s Summ. J. Mot. at 5-7.1
Henok has not shown that summary judgment is appropriate
because there is a genuine issue of material fact: whether Chase
received the change of address notice which would have required
Chase to send the notice of foreclosure to the 908 New Hampshire
Avenue address.

Because the evidence of the defendants is to be

believed at this stage, and all justifiable inferences are to be
drawn in their favor, summary judgment on this issue is not
appropriate.

Therefore, Henok’s motion for partial summary

judgment will be denied as to this claim.
II.

SANCTIONS
Henok moves under Rule 11(b) for sanctions against Chase’s

attorneys, Shapiro’s attorneys, Chase employee Kevin Johnson and
Shapiro employee Brett Callahan claiming that Chase and Shapiro
made intentionally false representations to the court.

Rule 11

sanctions may be imposed where a party files a pleading, motion
or other paper with the court for an improper purpose, that is
unwarranted by existing law, or that is lacking in evidentiary
support.

1

Fed. R. Civ. P. 11(b)(1)-(3).

“‘[T]he district court

Curiously, the defendants have made no effort here to
rebut the evidence Henok produced that suggested the defendants
did know of his later change of address to New Hampshire Avenue.
Henok's motion attaches a copy of a notice of foreclosure on a
Chase note for a different property sent from Shapiro that was
addressed to Henok on New Hampshire Avenue bearing the same date
and signatures of the same noteholder's agent and notary as
appear on the foreclosure notice for the property in this case.
Pl.’s Summ. J. Mot., Ex. 1A.

-9is accorded wide discretion’ in determining whether sanctions are
appropriate.”

Gomez v. Aragon, 705 F. Supp. 2d 21, 23 n.2

(D.D.C. 2010) (quoting Westmoreland v. CBS, Inc., 770 F.2d 1168,
1174 (D.C. Cir. 1985)).

“‘Rule 11 sanctions are an extreme

punishment for filing pleadings that frustrate judicial
proceedings.’”

Brown v. FBI, 873 F. Supp. 2d 388, 408 (D.D.C.

2012) (quoting Wasserman v. Rodacker, Civil Action No. 06-1005
(RWR), 2007 WL 2071649, at *7 (D.D.C. July 18, 2007)).

“‘The

test [for sanctions] under Rule 11 is an objective one: that is,
whether a reasonable inquiry would have revealed that there was
no basis in law or fact for the asserted claim.’”

Sharp v. Rosa

Mexicano, D.C., LLC, 496 F. Supp. 2d 93, 100 (D.D.C. 2007)
(quoting Reynolds v. U.S. Capitol Police Bd., 357 F. Supp. 2d 19,
23 (D.D.C. 2004)).

Further, Rule 11 includes a “safe harbor

provision” which requires that the motion must be first served on
the non-movant to allow an opportunity to withdraw the challenged
assertion.

Fed. R. Civ. P. 11(c)(2).

“This procedural rule must

be satisfied before the Court considers the substantive aspects
of plaintiff’s motion.”

Brown, 873 F. Supp. 2d at 408.

The essence of Henok’s argument is that Chase and Shapiro
falsely represented that they never received Henok’s letters2
regarding the property, that these defendants’ attorneys “failed

2

Henok specifies that he is referring to correspondence to
Chase from August 2009 to December 2009 and correspondence to
Shapiro from August 2009 to May 2010. Mot. for Sanctions Against
Chase at 1; Mot. for Sanctions Against Shapiro at 1.

-10to do any reasonable inquiry” as to whether Henok’s letters were
delivered, Mot. for Sanctions Against Chase at 1-2; Mot. for
Sanctions Against Shapiro at 1-2, and that Chase and Shapiro
falsely represented that Henok received notices, Mot. for
Sanctions Against Chase at 3; Mot. for Sanctions Against Shapiro
at 3.3
Henok has not complied with the safe harbor provision of
Rule 11.

Henok’s motions include a certificate of service which

states that the motions were served by first class mail on August
2, 2012, which was the same day that the motions were filed on
the public docket.
Even if Henok had complied with the procedural rule,
sanctions are not appropriate in this case.

With regard to both

defendants, Henok seems to be referring to his letters requesting
cure amounts attached to Henok’s partial summary judgment motion.
See Pl.’s Summ. J. Mot., Exs. 4-7.

In particular, Henok alleges

that Chase and Shapiro stated in filings that they did not
receive Henok’s letters.

Mot. for Sanctions Against Chase at 3;

Mot. for Sanctions Against Shapiro at 3.

As to Chase, Johnson

signed a declaration that states that his review of Chase’s
records revealed a December 1, 2008 change of address
notification from Henok, but “no record in its file for this Loan

3

Henok also alleges that Chase and Shapiro provided two
notes and falsely stated that the notes were true and correct
copies. No sanctions can be imposed where Henok neither
identifies the subject notes nor provides any factual support for
the allegation of falsity.

-11of receiving a letter from Plaintiff dated August 13, 2009” and
“Chase did not receive any cure payments from Plaintiff at any
time between August 13, 2009 and November 18, 2009, or at any
time thereafter.”
¶¶ 2, 5, 7.

Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1

Similarly, for Shapiro, Callahan signed a

declaration that states that his review of Shapiro’s business
records revealed that Shapiro received a November 4, 2009 phone
message requesting a return call and that Shapiro “did not
receive a change of address from the borrower in connection with
the Property” and that “no other communications, such as requests
for loan payoffs or reinstatement figures, were received by
[Shapiro] from [Henok] in connection with the Property prior to
the Sale.”
(g), (j).

Shapiro’s Opp’n to Pl.’s Summ. J. Mot., Ex. A ¶ 4(c),
Henok’s certified mail receipts for his letters

reflect that the first letter was signed for on August 17, 20094,
and the third and fourth letters were signed for on November 6,
2009 and December 28, 2009.
7.

See Pl.’s Summ. J. Mot., Exs. 4, 6,

However, Henok has not alleged or shown that Johnson’s and

Callahan’s declarations falsely state the contents of Chase’s and
Shapiro’s business records and what letters from Henok were
contained in them.

Further, “[t]he Court must also take into

consideration that Rule 11 sanctions are a harsh punishment, and
what effect, if any, the alleged violations may have had on

4

The second letter was not sent by certified mail and the
receipt does not reflect any signature. See Pl.’s Summ. J. Mot.,
Ex. 5.

-12judicial proceedings.”

Sharp, 496 F. Supp. 2d at 100 (internal

quotation marks omitted).

The discrepancy between Chase and

Shapiro’s business records and Henok’s certified mail receipts do
not justify the “harsh punishment” of Rule 11 sanctions.
CONCLUSION AND ORDER
A genuine dispute exists about whether Henok was given the
notice of foreclosure to which he was contractually entitled, but
it is undisputed that Henok was given the required notice of
default.

Thus, Henok’s motion for partial summary judgment will

be denied, but judgment will be entered for Chase on Henok’s
contract claim regarding the notice of default.

Because Henok

has not met the procedural requirements of Rule 11 or shown that
the defendants have committed sanctionable conduct, the
plaintiff’s motions for sanctions will be denied.

Accordingly,

it is hereby
ORDERED that plaintiff’s motion [18] for partial summary
judgment be, and hereby is, DENIED, and that judgment be, and
hereby is, ENTERED for Chase concerning the notice of default
claim.

It is further

ORDERED that plaintiff’s motions [24, 25] for sanctions
against Chase and Shapiro and their counsel be, and hereby are,
DENIED.

-13SIGNED this 26th day of February, 2013.

/s/
RICHARD W. ROBERTS
United States District Judge