O'Steen et al v. Wells Fargo Bank, N.A. et al

Filing 103

ORDER denying 66 Motion to Strike. It is herebyORDERED that Rushmore's Motion to Strike Plaintiffs' Demand for a Jury Trial (Doc. 66) is DENIED. Signed by Judge Gregory A. Presnell on 10/13/2017. (MAF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JULIE O’STEEN and CHRISTOPHER
O’STEEN,
Plaintiffs,
v.

Case No: 6:17-cv-849-Orl-31KRS

WELLS FARGO BANK, N.A., WELLS
FARGO HOME MORTGAGE, INC. and
RUSHMORE LOAN MANAGEMENT
SERVICES, LLC,
Defendants.

ORDER
This matter comes before the Court on the Motion to Strike Plaintiff’s Demand for a Jury
Trial (Doc. 66) filed by the Defendant, Rushmore Loan Management Services, LLC
(“Rushmore”); and the Memorandum in Opposition (Doc. 69) filed by the Plaintiffs.
I.

Background
On April 5, 2005, Julie O’Steen executed a Note in the amount of $82,400 with Wells

Fargo Home Mortgage, Inc.1, secured by a mortgage which was contemporaneously executed by
both Julie O’Steen and her spouse, Christopher O’Steen. Penno Decl., Doc. 84-1 at 1. The
Mortgage document contained a provision entitled “Jury Trial Waiver,” which reads as follows:
The Borrower hereby waives any right to a trial by jury in any action, proceeding,
claim, or counterclaim, whether in contract or tort, at law or in equity, arising out of
or in any way related to this Security Instrument or the Note.

1

Wells Fargo Bank, N.A., and Wells Fargo Home Mortgage, Inc. are hereinafter referred
to as “Wells Fargo,” collectively.

Doc. 18-2 at 17. That particular page of the Mortgage document was initialed by the Plaintiffs, and
their signatures appear at the end of the Mortgage document. Id. at 17-18. Rushmore apparently
became the loan servicer for the Mortgage on April 5, 2016. Sutton Aff., Doc. 82 at 4. The subject
property was sold to a third party at a foreclosure auction on March 1, 2017. See Homeowner’s
Obj. to Sale, Doc. 81-8 at 2. However, it is unclear what roles Rushmore and Wells Fargo played
with respect to the ultimate foreclosure sale. It appears that Rushmore was the Plaintiffs’ loan
servicer during the time leading up to foreclosure. Still, Wells Fargo moved to reset the
foreclosure sale on May 23, 2016, after it alleges it was no longer servicing the Plaintiffs’ loan.
See Mot. to Reset Foreclosure Sale, Doc. 81-6 at 2-3.
On March 15, 2017, the Plaintiffs filed their Second Amended Complaint (Doc. 43),
alleging six counts: Count I alleges breach of contract by Wells Fargo; Count II alleges breach of
contract by Rushmore; Count III alleges violation of Regulation X, 12 C.F.R. § 1024.41(d) by
Wells Fargo; Count IV alleges violation of Regulation X, 12 C.F.R. § 1024.41(g) by Wells Fargo;
Count V alleges violation of Regulation X, 12 C.F.R. § 1024.41(g) by Rushmore; and Count VI
seeks declaratory relief against Rushmore. On May 12, 2017, this case was transferred from the
Tampa Division to the Orlando Division. Doc. 72.
Rushmore filed the Motion to Strike the Plaintiffs’ Jury Trial Demand on April 28, 2017.
Doc. 66. The Court has since granted summary judgment in favor of Rushmore as to Count II, and
denied summary judgment on Counts V and VI against Rushmore. Additionally, the Court granted
Wells Fargo’s Motion to Strike the Plaintiffs’ Jury Trial Demand on October 13, 2017. Doc. 102.
II.

Legal Standards
Here, Rushmore has moved to strike the Plaintiffs’ demand for jury trial on the basis of

waiver. In order to protect the fundamental right to trial by jury, courts “indulge every reasonable

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presumption against waiver.’” Mega Life & Health Ins. Co. v. Pieniozek, 585 F.3d 1399, 1403
(11th Cir. 2009) (quoting LaMarca v. Turner, 995 F.2d 1526, 1544 (11th Cir. 1993) (alteration
and internal quotations omitted).
III.

Analysis
The Plaintiffs do not dispute that they executed a mortgage containing a jury trial waiver,

nor do they contend that the waiver was invalid. Instead, they argue that (1) the Jury Trial Waiver
(‘Waiver”) in the Mortgage did not survive the entry of the foreclosure judgment; (2) that their
claims arising from violations of RESPA are outside the scope of the Waiver; and (3) that
Rushmore, as a loan servicer who was not a party to the Mortgage contract, lacks standing to
invoke the Waiver.
Generally, a contractual jury waiver cannot be invoked by a non-party. Courts in the
Middle and Southern Districts of Florida have found that non-party loan servicers lacked standing
to invoke jury waiver provisions of mortgage documents. See Shallenburg v. PNC Bank, N.A., No.
8:16cv810, 2016 WL 3525203, at *2 (M.D. Fla. June 28, 2016) (citing Omega v. Deutsche Bank
Tr. Co. Ams., 920 F. Supp. 2d 1298, 1300 (S.D. Fla. 2013); Hamid v. Owcwen Loan Servicing,
LLC, No. 13-62821-CIV, 2014 WL 766659, at *1 (S.D. Fla. 2014, Feb. 26, 2014)). Rushmore
argues that, as the loan servicer, it is an intended third party beneficiary, and is able to invoke the
Waiver. Rushmore cites no cases that address the issue of whether a non-party has standing to
invoke a jury trial waiver provision of a mortgage agreement. Cf. Shallenburg, 2016 WL 3525203,
at *2 (noting that cases that did not “squarely confront the issue of whether non-parties have
standing to invoke jury trial waivers contained within a mortgage” were “of little benefit” to the
loan servicer’s arguments in that case). Rushmore does not give any satisfactory explanation as to

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why it should be entitled to invoke the Waiver in spite of its non-party status. Accordingly,
Rushmore has failed show that the Plaintiffs’ jury trial demand should be stricken.
IV.

Conclusion

In consideration of the foregoing, it is hereby
ORDERED that Rushmore’s Motion to Strike Plaintiffs’ Demand for a Jury Trial (Doc.
66) is DENIED.
DONE and ORDERED in Chambers, Orlando, Florida on October 13, 2017.

Copies furnished to:
Counsel of Record
Unrepresented Party

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