Senst v. Flagstar Bank, FSB

Filing 37

ORDER granting in part and denying in part 25 Motion for Summary Judgment. 1. Flagstar's Motion for Summary Judgment as to each of Counts I, II, III, and VII is GRANTED. Counts I, II, III, and VII are DISMISSED with prejudice. 2. The Motio n for Summary Judgment as to Count IV is: a. GRANTED, in part, as set forth in the Opinion above (Count IV(a) for violation of the STFA). Count IV(a) is DISMISSED with prejudice. b. DENIED, in part, as set forth in the Opinion (Claim IV(b), for breac h of the implied covenant of good faith and fair dealing). 3. The Motion fort Summary Judgment on Count V and on Count VI is DENIED. 4. By separate order, the Court will schedule a preliminary pretrial conference and establish associated deadlines. Signed by Judge Sam E Haddon on 2/1/2017. (ELL) Modified on 2/1/2017 to correct text (ELL).

FILED
FEB 0 1 2017
Clerk, U.S. District Court
District Of Montana
Helena

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BUTTE DIVISION
KENNETH SENST,
Plaintiff,

No. CV-16-29-BU-SEH

vs.

OPINION AND ORDER
FLAGSTAR BANK F.S.B. AND
DOES I-V,
Defendants.

Before the Court is Defendant Flagstar Bank F.S.B.'s ("Flagstar") Motion
for Summary Judgment. 1 For the stated reasons which follow, the motion is
granted in part and denied in part.

1

Doc. 25.

Background

This case arises from allegations that Flagstar, as lender, mishandled the
servicing, modifying, and eventual foreclosure of Plaintiff Kenneth Senst' s
("Senst") mortgage, which secured property located at 129 Kountz Road in
Whitehall, Montana ("Property").
Senst and his then-wife closed the mortgage loan with Flagstar on May 19,
2009. 2 His troubles with the loan began shortly thereafter. The loan was never
current. 3 By August 19, 2009, Flagstar had informed Senst, in writing, that the
loan was in default. 4 The Property was eventually sold at foreclosure sale over
three years later on November 5, 2012. 5
Senst asserts that he made numerous attempts with Flagstar to negotiate a
loan modification of the defaulted mortgage or for other relief between June 2011
and the foreclosure in November 2012. 6 A part of these ongoing negotiations
included a forbearance agreement between Senst and Flagstar on October 25,
2

Doc. 31at2 (Defendant Flagstar's Statement of Undisputed Facts, and Plaintiffs
Responses ("SUF") if 1); Doc. 28-1 (Deed of Trust) (The parties do not dispute the authenticity
and accuracy of the copy filed in the record.).
3

Doc. 31 at 2 (SUF if 4).

4

Doc. 31 at 2 (SUF if 3).

5

Doc. 31 at 4 (SUF if 17).

6

See generally Doc. 11; see also Doc. 31 at 3-5 (SUF iii! 6, 9, 13, 20, 22).
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2011, which itself allowed Senst to remain delinquent on the loan for several
months. 7
Later, on February 15, 2012, Senst was separately approved for a loan
modification. 8 In March of 2012, Flagstar learned of several tax liens recorded
against the Property. 9 It requested Senst remove them. 10 Senst, without removal of
the liens, submitted a final loan modification application on July 18, 2012. 11 On
August 1, 2012, Flagstar informed Senst that he could not receive a loan
modification until the tax liens on the Property were released. 12 The liens were
never released before the Property was sold at foreclosure sale on November 5,
2012. 13
Senst asserts that Flagstar mishandled the servicing of his mortgage
throughout a time period starting in June 2011 by: (1) not providing accurate

7

Doc. 31 at 3 (SUF iii! 6, 7).

Doc. 31 at 3 (SUF if 9) (Although Plaintiff marked this fact as "Disputed," in substance
he does not dispute that he was approved for the loan modification, only that he never received it,
a fact not even advanced by Flagstar).
8

9

Doc. 31at4 (SUF if 10).

10

Doc. 31 at 4 (SUF if 11 ).

11

Doc. 31 at 4 (SUF if 13).

12

Doc. 31 at 4 (SUF if 14).

13

Doc. 31 at 4 (SUF if 17).
-3-

information; (2) cutting off Senst's calls; (3) transferring calls to incorrect
departments; (4) delaying his loan modification process long enough to ensure that
his application would "time out" and he would have to restart the process; and ( 5)
by giving Senst inaccurate information on removing the tax liens from the
Property. 14
This case was commenced in Montana state court on October 30, 2015. 15 A
First Amended Complaint ("Amended Complaint") 16 was filed in state court on
March 30, 2016. Seven claims were asserted: Count I (violation of the Montana
Unfair Trade Practices and Consumer Protection Act of 1973 ("MCPA") 17); Count
II (negligence arising from: (a) Flagstar's mishandling of Senst's loan
modifications; (b) Flagstar's violation of the Small Tract Financing Act
("SFTA"); 18 and (c) Flagstar's negligent hiring and staffing); Count III (tortious
breach of the implied covenant of good faith and fair dealing); Count IV (breach
of contract (Deed of Trust) arising from (a) Flagstar's violation of the SFTA; and
(b) breach of the implied covenant of good faith and fair dealing); Count V
14

Doc. 31at6-7 (Disputed Facts iii! 5-7, 9, 10).

15

See Doc. 1-2 at 2.

16

Doc. 11.

17

Mont. Code Ann.§§ 30-14-101-157.

18

Mont. Code Ann.§§ 71-1-301-321.
-4-

(breach of contract (Forbearance Agreement)); Count VI (violation of the Equal
Credit Opportunity Act ("ECOA") 19); and Count VII 20 (punitive damages).
Flagstar timely removed to this Court21 and moved, on June 13, 2016, to
dismiss for failure to state a claim, asserting "all but two of Plaintiffs claims are
barred by the statute of limitations. " 22 Senst responded to the motion by presenting
numerous matters outside the pleadings. 23 Accordingly, the Court ordered
Flagstar' s pending Rule 12(b)( 6) Motion to Dismiss24 be treated as a motion for
summary judgment under Fed. R. Civ. P. 12(d). 25 Additional filings followed.
A Motion for Summary Judgment ("Motion"), 26 supporting brief, 27 and
statement of undisputed facts 28 was filed by Flagstar on November 18, 2016,

19

15 U.S.C. §§ 1691-91f.

20

The Amended Complaint repetitiously labels the seventh count as "Count VI" in error.
The Court will refer to it as Count VII.
21

Doc. 1.

22

Doc. 3 at 1.

23

See Doc. 12.

24

Doc. 3.

25

Doc. 19.

26

Doc. 25.

27

Doc. 26.

28

Doc. 27.
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seeking summary judgment on all seven counts. Senst responded. 29 Flagstar
replied. 30 The Court conducted a hearing on the Motion on January 31, 201 7. The
matter is fully submitted and ripe for decision.
Legal Standard

Summary judgment is appropriate when the record establishes there is no
genuine issue of material fact and that the moving party is entitled to judgment as
a matter of law. 31 "[S]ubstantive law [identifies] which facts are material. Only
disputes over facts that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment." 32 A dispute about a
material fact is genuine "if the evidence is such that a reasonable jury could return
a verdict for the nonmoving party." 33 The evidence of the nonmovant is to be
believed, it is to be viewed in the light most favorable to the nonmovant, and all
justifiable inferences are to be drawn in its favor. 34 "'In order to carry its burden of

29

Doc. 30.

30

Doc. 32.

31

Fed. R. Civ. P. 56.

32

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

33

Id

34

Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014) (citing Anderson, 477 U.S. at 255);
McSherry v. City ofLong Beach, 584 F.3d 1129, 1135 (9th Cir. 2009).
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production, the moving party must either produce evidence negating an essential
element of the nonmoving party's claim or defense or show that the nonmoving
party does not have enough evidence of an essential element to carry its ultimate
burden of persuasion at trial. "'35
Discussion
I

Senst' s first claim pleads violation of the MCPA. The operative language of
that statute provides: "Unfair methods of competition and unfair or deceptive acts
or practices in the conduct of any trade or commerce are unlawful." 36 Flagstar
argues the claim is barred by the applicable two-year statute of limitations. 37
In Osterman v. Sears, Roebuck & Co. ,38 the Montana Supreme Court held
that claims brought under the MCPA are limited by the two-year statute of
Montana Code Annotated§ 27-2-21 l(l)(c), which provides in pertinent part:
(1) Within 2 years is the period prescribed for the commencement of
an action upon:

35

Jones v. Williams, 791F.3d1023, 1030-31 (9th Cir. 2015) (quoting Nissan Fire &
Marine Ins. Co. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000)).
36

Mont. Code Ann.§ 30-14-103.

37

Mont. Code Ann.§ 27-2-21 l(l)(c).

38

80 P.3d 435, 441 (Mont. 2003).

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(c) a liability created by statute ....
The Amended Complaint asserts a non-exclusive list ofFlagstar's alleged
acts that are claimed to give rise to the MCPA claim:
a. Serially "losing" or mishandling the Senst's application documents,
resulting in Senst having to send in multiple sets of the same documents;
b. Regularly providing Senst with conflicting and inconsistent information.
c. Failing to timely evaluate Senst for a loan modification;
d. Charging fees and/or other charges in violation of the Small Tract
Financing Act;
e. Withholding information that Senst needed to complete his loan
modification application;
f. Failing to accurately inform Senst of any and all loss mitigation options
available or not available prior to foreclosure; and
g. "Dual tracking" Senst's loan by simultaneously working with him on a
modification while commencing foreclosure. 39
All of the alleged events outlined above occurred in 2011 and 2012 and prior to
the foreclosure sale ofNovember 5, 2012. 40 Senst's original complaint was filed
on October 30, 2015, at the very least, over a year after the two-year statute of
limitations had run.

39

Doc. 11 at 8.

40

See id at 3-7; see also Doc. 31 at 3-5 (SUF iii! 6, 9, 13, 20, 22).
-8-

Senst engaged with Flagstar for nearly two years in 2011 and 2012 in efforts
to obtain a loan modification or some other relief from the defaulted mortgage. 41
Flagstar's allegedly incompetent conduct during that time period was or should
have been readily apparent to Senst; or at a minimum, would have put a reasonable
person on inquiry. Senst contacted no less than three separate attorneys during this
time period to seek advice related to his dealings with Flagstar. 42 No reasonable
person, on the record before the Court, could have reached the conclusion that
Senst was without knowledge ofFlagstar's allegedly incompetent acts during the
relevant time period.
Moreover, missing from Senst's response to the Motion is any argument
directed specifically to his MCPA claim. He provided nothing by way of evidence
to show Flagstar's actions were concealed or that otherwise provided a basis for
tolling the statute of limitations. No reasonable jury could have found Senst filed
the MCPA claim within the two-year statute of limitations.
II

Senst's second count is negligence. He asserts three actions by Flagstar that
give rise to the claim: (a) that Flagstar negligently mishandled Senst's applications

41

See Doc. 31 at 3-6 (SUF iii! 6, 9, 13, 20, 22; Disputed Facts iii! 3, 5-7, 8).

42

Doc. 31 at 5 (SUF if 18).
-9-

for loan modification; (b) that Flagstar failed to comply with the STF A by not
naming "the original beneficiary in the deed of trust in the notice of trustee's
sale[;]" and (3) that Flagstar negligently trained its loss mitigation staff. 43 Flagstar
argues all the claims are barred by the applicable statute of limitations.
Montana Code Annotated§ 27-2-204(1) provides:
[T]he period prescribed for the commencement of an action upon a
liability not founded upon an instrument in writing is within 3 years.
Montana Code Annotated§ 27-2-102(1)(a) provides:
[A] claim or cause of action accrues when all elements of the claim or
cause exist or have occurred, the right to maintain an action on the
claim or cause is complete, and a court or other agency is authorized
to accept jurisdiction of the action[.]
Put simply, "a right of action in tort accrues upon injury." 44
Under Montana law, negligence has four elements: "'(1) the defendant owed
the plaintiff a legal duty, (2) the defendant breached that duty, (3) the breach was
the actual and proximate cause of an injury to the plaintiff, and (4) damages
resulted."' 45 Senst's negligence claims must have accrued after October 30, 2012,

43

Doc. 11 at 8-9.

44

Montana Pole & Treating Plant v. IF Laucks and Co., 775 F. Supp. 1339, 1346 (D.
Mont. 1991 ).
45

Not Afraid v. State, 362 P.3d 71, 74 (Mont. 2015) (quoting Peterson v. Eichhorn, 189
P.3d 615, 621 (Mont. 2008)).
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to be actionable within the three-year statute of limitations, which ended October
30, 2015. None did.
a. Count II(a)

Senst asserts he submitted his first loan modification application in June of
2011. 46 The undisputed facts show, however: (1) that Senst's last application for a
loan modification was not complete until July 18, 2012; 47 (2) that on October 16,
2012, Flagstar told Senst he had until October 18, 2012, to remove the tax liens on
his property; 48 (3) that the liens were never removed; 49 and (4) that the Property
was sold in foreclosure sale on November 5, 2012. 50 October 16, 2012, is the last
date of record in which Flagstar took action on Senst' s loan modification
application.
The uncontested allegations of the Amended Complaint and the undisputed
facts belie any conclusion that Senst's negligence claim accrued only upon
foreclosure. Senst, in fact, claims Flagstar negligently mishandled his loan
modification applications over a period of nearly two years starting in 2011. He
46

Doc. 11 at 4.

47

Doc. 31at4 (SUF ~ 13).

48

Doc. 31at4 (SUF ~ 16).

49

Doc. 31 at 4 (SUF ~ 17).

so Id.

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specifically alleges that his damages include "his lost time; incidental costs of
applying for a modification ... damage to his credit; and emotional distress." 51 All
such events giving rise to a negligence claim, if they occurred at all, took place
more than three years before suit was filed on October 30, 2015.
b. Count II(b)

Senst claims Flagstar violated the STFA by "failing to note the name of the
original beneficiary in the deed of trust in the notice of trustee's sale. " 52 This
allegation, however, is contradicted by other evidence of record.
The portion of the STFA relevant to Senst's claim states:
(3) the trustee or beneficiary shall have filed for record in the
office of the clerk and recorder in each county where the property
described in the indenture or some part thereof is situated a notice of
sale, duly executed and acknowledged by such trustee or beneficiary,
setting forth:
(a) the names of the grantor, trustee, and beneficiary in the trust
indenture and the name of any successor trustee[.] 53
The STF A defines "Beneficiary" as: "[T]he person named or otherwise
designated in a trust indenture as the person for whose benefit a trust indenture is

51

Doc. 11 at 7.

52

Id at 9.

53

Mont. Code Ann.§ 71-1-313(3)(a) (emphasis added).
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given or the person's successor in interest, who may not be the trustee." 54 In an
unrelated case, Pilgeram v. Greenpoint, the Montana Supreme Court ruled that the
Beneficiary of a deed of trust "is the entity to whom the secured obligation flows"
and in that case, Mortgage Electronic Registration Systems, Inc. ("MERS") was
not appropriately a Beneficiary under the STF A. 55
In this case, MERS was named in the Deed of Trust as the "Beneficiary
under the Security Agreement." 56 Such designation was erroneous. The Deed of
Trust correctly identified Flagstar as the "Lender." 57 Flagstar, as Lender, was in
fact "the entity to whom the secured obligation flow[ ed]" and thus should have
been named as the Beneficiary of the Deed of Trust. 58
The Notice of Trustee's Sale contained the notification that: "The beneficial
interest is currently held by Flagstar Bank, FSB," and, although the notice did not
literally identify Flagstar as the "Beneficiary," it, without doubt, put Senst on

54

Mont. Code Ann.§ 71-1-303(1).

55

313 P.3d 839, 843 (Mont. 2013)

56

Doc. 28-1 at 2.

51

Id

58

Interpretation of the Deed of Trust, as a contract, is a question of law for the Court.
Ophus v. Fritz, 11 P .3d 1192, 1195 (Mont. 2000).
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notice that Flagstar held the beneficial interest in the Property. 59 The Notice of
Trustee's Sale appropriately provided the notice obligations mandated by the
STFA. No conclusion is warranted that conduct of the sale was flawed by the
manner in which notice of sale obligations of the STFA were carried out.
Moreover, Senst did not file the STF A claim within the applicable statute of
limitations. The Notice of Trustee's Sale was executed on June 27, 2012. Any
claim arising from an alleged violation of the notice requirements of that statute60
must have occurred within two years of the notice, 61 in this case, by June 27, 2014.
The Court has made no ruling on whether a violation of the STFA would give rise
to a negligence action, but even if it did, the last available date to file such a claim
would have been June 27, 2015, a date which passed more than four months
before suit was filed.
c. Count II(c)
The statute of limitations analysis for Senst's negligent training mirrors the
analysis of Count II( a) above. All the events giving rise to this claim occurred

59

Doc. 31-3 at 1 (Notice of Trustee's Sale of June 27, 2012) (The parties do not dispute
the authenticity and accuracy of this copy.).
60

Mont. Code Ann.§ 71-1-313(3).

61

Mont. Code Ann.§ 27-2-21 l(l)(c).
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before October 30, 2012. Suit commenced on October 30, 2015, was not timely
filed within the three-year statute of limitations.
Senst further claims the "discovery doctrine" in Montana Code Annotated §
27-2-203 62 should toll the statute of limitations of his negligent training claim but
provides no justification for why that claim should be tolled by a statute governing
claims of fraud and mistake.
Continuing Tort

A separate argument is advanced by Senst that the statute of limitations on
all tort-based claims should be tolled under the continuing tort doctrine. Flagstar
responds that the doctrine is inapplicable to such claims.
The continuing tort doctrine in Montana historically has applied only to
nuisance and trespass actions, although the Montana Supreme Court has applied
the doctrine to other theories of liability. 63 The distinguishing characteristic of a
continuing tort was described as one that "can be reasonably abated." 64 However,
"If the continuing tort doctrine were applied in cases where abatement is only

62

"The period prescribed for the commencement of an action for relief on the ground of
fraud or mistake is within 2 years, the cause of action in such case not to be deemed to have
accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake."
63

See, e.g., Christian v. Atlantic Richfield Co., 358 P.3d 131, 149-151(Mont.2015).

64

Id. at 151.
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possible through the payment of money for past wrongs, any suit seeking damages
would arguably qualify as a continuing tort. " 65
Senst argues Flagstar's actions were reasonably abatable because at any
time it could have given Senst a loan modification. "Were the Court to conclude
that a tort is continuing because a defendant can always choose to stop acting in
the manner which a plaintiff alleges is tortious, the continuing tort exception
would see a vast expansion and would subvert the purpose of statutes of
limitations." 66 Such is not the law. The continuing tort doctrine does not apply to
Senst's claims.

III
Senst's third claim is tortious breach of the covenant of good faith and fair
dealing. Flagstar argues the claim is barred by the three-year statute of limitations.
'" [T]he covenant [of good faith and fair dealing] is a mutual promise
implied in every contract that the parties will deal with each other in good faith,
and not attempt to deprive the other party of the benefits of the contract through
dishonesty or abuse of discretion in performance. "' 67 "The standard of conduct
65

Id

66

Knight v. Wells Fargo Bank, No. CV 15-56-M-DLC, 2016 WL 3221593, at *6 (D.
Mont. June 8, 2016).
67

Phelps v. Frampton, 170 P.3d 474, 482 (Mont. 2007) (quoting Beaverhead Bar Supply
v. Harrington, 805 P.2d 560, 564 (Mont. 1991)).

-16-

imposed by the implied covenant is 'honesty in fact and the observance of
reasonable commercial standards of fair dealing in the trade. "'68
Breach of the implied covenant of good faith and fair dealing customarily
sounds in contract. However, such a breach can be tortious if the parties are in a
"special relationship," 69 in which case the claim is governed by the three-year
statute of limitations generally applicable to tort claims. 70 In that setting, the
Montana Supreme Court endorses "the rule that '[i]n torts arising from contract [,]
the statute of limitations has been held to begin to run at the time of the breach of
duty constituting the tort and not when damages ensue. "' 71
Senst's claim for tortious breach of the implied covenant of good faith and
fair dealing are claimed to have arisen from the same events as those in Counts
II(a) and II(c), all of which occurred prior to October 30, 2012. In the end, the
continuing tort doctrine has no application to this claim.

68

Bertelsen v. Citimortgage, Inc., No. CV 16-2-BU-JCL, 2016 WL 3282189, at *8 (D.
Mont. June 14, 2016) (quoting McCoy v. First Citizens Bank, 148 P.3d 677, 681 (Mont. 2006)).
69

Story v. City ofBozeman, 791 P.2d 767, 776 (Mont. 1990), overruled on other grounds
by Arrowhead Sch. Dist. No. 75 v. Klyap, 79 P.3d 250 (Mont. 2003).
70

Mont. Code Ann. § 27-2-204.

71

Walch v. University of Montana, 861 P .2d 179, 182 (Mont. 1993) (quoting Martin v.
Special Resource Mgmt, Inc., 803 P.2d 1086, 1088 (Mont. 1990)).
-17-

IV

Senst's fourth claim is breach of the Deed of Trust. Flagstar responds that
the claim, although labeled breach of contract, is merely a statutory claim under
the STFA and therefore barred by the two-year statute of limitations in Montana
Code Annotated§ 27-2-21 l(l)(c). In reality, Count IV asserts both: (a) a breach
based on Flagstar's alleged failure to comply with the STF A; and (b) a breach of
the implied covenant of good faith and fair dealing. 72
a. Count IV(a)

As stated above, Flagstar did not violate the STFA.
b. Count IV(b)

The breach of the implied covenant of good faith and fair dealing pleaded in
Count IV is a breach of contract governed by the eight-year statute of limitations
in Montana Code Annotated§ 27-2-202(1).

v
Senst's fifth claim is for breach of the forbearance agreement. He asserts
Flagstar breached the agreement by failing to accept or account for a particular
payment he made under that agreement. Flagstar responded that its only obligation

72

See Doc. 11 at 10.
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under the agreement was to allow the loan to remain delinquent during the agreed
upon three-month period, and having done so, there is no breach.
The record before the Court on this issue at this point is incomplete. One
part of that record is a letter dated October 2, 2015, which begins: "Please accept
this letter as a formal agreement outlining the reinstatement arrangements
previously made with Flagstar Bank. This agreement confirms the details of the
agreed upon payment arrangements. " 73 However, nothing establishes the letter
was a complete integration of the parties' previous reinstatement arrangements.
Without such information, any ruling as to the terms and the interpretation of the
contract is premature.
Flagstar also argues that Senst's deposition testimony negates an essential
element of the breach of the forbearance agreement claim. That testimony, quoted
extensively by Flagstar in its brief, established no more than that Senst did not
know if a payment he claims to have made under the forbearance agreement was
ever accepted or accounted for. 74 Evidence that Flagstar did in fact accept or
account for the payment is missing.

73

Doc. 28-5 at 2.

74

See Doc. 32-3 at 2-3.
-19-

VI
Senst's sixth claim is violation of the ECOA. 75 Flagstar responds Senst has
failed to come forth with any evidence that it failed to provide notice to Senst as
required by the ECOA.
15 U.S.C. § 1691(d)(l) provides:
Within thirty days ... after receipt of a completed application for
credit, a creditor shall notify the applicant of its action on the
application.
He also asserts that such violation gave rise to liability:
Any creditor who fails to comply with any requirement imposed
under this subchapter shall be liable to the aggrieved applicant for
any actual damages sustained by such applicant acting either in an
individual capacity or as a member of a class[.]76
The Amended Complaint claims three separate instances: July 19, 2011;
May 1, 2012; and June 12, 2012, on which Flagstar failed to notify Senst within
30 days of its action on his completed application for credit. 77 The record, at this
point, is incomplete and fails to disclose whether or not the several applications
were responded to within 30 days.

75

15 u.s.c. §§ 1691-91f.

76

15 U.S.C. § 1691e(a).

77

Doc. 11 at 4-5.
-20-

VII
Senst's seventh claim is for punitive damages under Montana Code
Annotated§§ 27-1-220, 221. However, as outlined above, all tort-based claims
capable of supporting recovery of punitive damages are to be dismissed. The
punitive damage claim fails.

VIII
Senst argues, finally, Montana Code Annotated§ 27-2-409 should toll the
statute of limitations:
( 1) An acknowledgment or the part payment of a debt is sufficient
evidence to cause the relevant statute of limitations to begin running
anew.
(2) An acknowledgment must be contained in some writing signed by
the party to be charged thereby.
(3) Part payment is any payment of principal or interest. 78
Flagstar correctly argues in response that the statute does not apply to the facts
before the Court.
Senst claims the payment he received from Flagstar on October 2, 2015,
triggered§ 27-2-409. 79 However, the plain language of that statute contemplates

78

Mont. Code Ann.§ 27-2-409.

79

See Doc. 31-4 (Senst received part of a settlement arising from a Consumer Financial
Protection Bureau investigation into Flagstar).
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that it applies to "acknowledgment or the part payment of a debt." 80 A settlement
reached between Flagstar and a government agency, without Senst's knowledge,
participation, or consent, cannot be said to have been an acknowledgment of a part
payment of a debt by Flagstar. 81 No acknowledgment of part payment contained in
a writing signed by Flagstar as required by Montana Code Annotated 27-2-409(2)
was produced or even claimed to exist. Montana Code Annotated§ 27-2-409 does
not apply.
ORDERED:
Flagstar' s Motion for Summary Judgment82 is GRANTED in part and
DENIED in part as set forth below:
1.

Flagstar's Motion for Summary Judgment as to each of Counts I, II,

III, and VII is GRANTED. Counts I, II, III, and VII are DISMISSED with
prejudice.

Ill
Ill
Ill

80

Mont. Code Ann.§ 27-2-409(1).

81

See Doc. 11 at if 40.

82

Doc. 25.
-22-

2.

The Motion for Summary Judgment as to Count IV is:
a.

GRANTED, in part, as set forth in the Opinion above 83 (Count

IV(a), for violation of the STFA). Count IV(a) is DISMISSED with
prejudice.
b.

DENIED, in part, as set forth in the Opinion above 84 (Claim

IV(b ), for breach of the implied covenant of good faith and fair
dealing).
3.

The Motion for Summary Judgment on Count Vandon Count VI is

DENIED.
4.

By separate order, the Court will schedule a preliminary pretrial

conference and establis~ociated deadlines.
DATED this /--clay ofFebruary, 2017.

~~u«u1c1~
United States District Judge

83

Opinion at 18.

84

Jd
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