Higgins v. First Horizon National Corp. et al

Filing 102

FINDINGS OF FACT AND CONCLUSIONS OF LAW, JUDGMENT AND ORDER. 1) The Court hereby enters judgment on behalf of Defendants; 2) The Court further orders that each side shall bear its own fees and costs; 3) This judgment is final and disposes of all clai ms and all parties and shall be appealable; 4) Pursuant to Fed. R. Civ. P. 58, the Court orders that the Clerk of Court shall enter judgment by separate document according to the terms outlined above; and, 5) the Clerk of Court shall notify the parties of the making of this Order. Signed by Judge Brian Morris on 3/8/2018. (SLR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION
PATRICK HIGGINS,

CV-15-101-GF-BMM

Plaintiff,
vs.

FINDINGS OF FACT AND
CONCLUSIONS OF LAW

FIRST HORIZON NATIONAL
CORP, et al.,
Defendants.

The Court heard this matter, sitting without a jury, on March 8, 2017, in
Great Falls, Montana. Helge Naber represented Plaintiff Patrick Higgins
(“Higgins”). Michelle Sullivan and Adrian Miller represented Defendants First
Horizon National Corporation, Nationstar Mortgage Holding Inc., and Metlife
Home Loans LLC (collectively “Defendants”). The Court twice ordered the parties
to participate in settlement conferences after the trial. Both efforts failed to resolve
the dispute.
Having heard the evidence and reviewed the trial briefs of both parties, the
Court makes the following:

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FINDINGS OF FACT
1. The events leading to this action took place primarily in Cascade County,
Montana.
2. Higgins brought claims against Defendants on April 21, 2014, in the Eighth
Judicial District Court, Cascade County, Montana.
3. Defendants removed the action to this Court on November 13, 2015.
4. Higgins alleged various violations of Montana’s Consumer Protection Act,
§ 30-14-101, et seq., several breaches of the covenant of good faith and fair
dealing, and unjust enrichment.
5. Higgins contends that Defendants improperly handled a forbearance
agreement that he entered with First Horizon Home Loans in 2009. Higgins
alleges in his Complaint, in part, that Defendants provided the wrong
payment address related to a forbearance agreement that the parties
attempted to enter in 2009.
6. Higgins alleges that Defendants violated the covenant of good faith and fair
dealing when Defendants failed to credit properly payments that Higgins
attempted to tender to First Horizon Home Loans under the forbearance
agreement. Higgins further alleges that First Horizon Home Loans failed to
comply with its obligations under the forbearance agreement.

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7. Higgins alleges that Defendants violated the Montana Consumer Protection
Act relating to conduct surrounding a foreclosure sale that Defendants
threatened in 2012. Defendants had sent Higgins a notice of a foreclosure
sale scheduled for March 26, 2012. Higgins attempted to stave off the
foreclosure sale through a loan modification. Higgins contends that
Defendants refused to cancel the foreclosure sale as required by the loan
modification program once he had filed a completed application with the
accompanying financial information on March 14, 2016. Higgins contends
that Defendants instead continued to threaten to proceed with the foreclosure
sale unless Higgins reinstated his loan obligations. Higgins argues that these
improper actions by Defendants wrongly coerced him into mailing a
payment of $187,823.13, on March 16, 2012.
8. Higgins’s unjust enrichment claim arises from these same two events.
9. Defendants denied all of the allegations in Higgins’s complaint. Defendants
asserted an affirmative defense under the statute of limitations with respect
to the Montana Consumer Protection Act claims.
10. Defendants also claimed that Higgins had named as defendants several
parties who played no role in these events. Defendants filed a motion before
trial to dismiss a number of these parties. The Court took the matter under
advisement.
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11. The parties presented evidence at trial related to the two central disputes of
the bungled forbearance agreement in 2009 and the run-up to the foreclosure
sale scheduled for March 26, 2012.
Events in 2006
12. Higgins purchased 870 acres of property in Cascade County. Higgins
recorded a Warranty Deed dated October 17, 2006, as Document No.
R0138008 in the records of the Cascade County Clerk & Recorder. Higgins
took out a loan from Rocky Mountain Bank to finance the purchase.
13. Higgins signed a loan application to secure financing from First Horizon
Home Loan Corporation for a house and 20 acres of the 870-acre parcel on
November 13, 2006. The Rocky Mountain Bank loan would secure the
remaining 850 acres of Higgins’s 870 total acres.
14. Higgins executed a promissory note in favor of First Horizon Home Loan
Corporation in the principal amount of $395,000.00 on November 13, 2006.
The promissory note required monthly payments of principal and interest of
$2,761.90 over a 30-year period. The promissory note also required Higgins
to make payments each month to an escrow account to cover taxes,
insurance, and mortgage insurance. The escrow payment brought Higgins’s
total monthly payments for the promissory note to $4,041.16.

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15. Higgins also executed a deed of trust to secure repayment of the promissory
note on November 13, 2006. The deed of trust encumbers a 20-acre parcel of
land that includes a house and out buildings. The 20-acre parcel and the out
buildings formerly had been attached to the 870 acres transferred by the
Warranty Deed dated October 17, 2006.
16. The resulting 20-acre parcel is identified as follows:
A tract of land in the E1/2E1/2 of Section 21 and the W1/2W1/2 of
Section 22, Township 19 North, Range 2 West, M.P.M., Cascade County,
Montana, described as follows:
Commencing at the N1/4 of Section 20, Township 19 North, Range 2
West, M.P.M., which is a found stone as described in the original GLO
notes; thence N89˚50’55”E, along the record North line of Section 20 and
21 a distance of 7958.61 feet to the Northeast Corner of Section 21;
thence S00˚24’42”E, a distance of 2640.04 feet along the record East line
of Section 21 to the E1/4 of said Section 21; thence S00˚24’42”E along
said East line a distance of 675.39 feet to a point on said East line of
Section 21, that point being the point of beginning of the parcel herein
described;
Thence along the North right-of-way of a county roadway N68˚35’57”W,
a distance of 296.99 feet to the P.C. of a curve; thence along a circular
curve, concave south with a central angle of 15˚18’12”, a radius of
712.00 feet, an arc distance of 190.17 feet; thence N35˚25’21”E, a
distance of 777.69 feet; thence N90˚00’00”E, a distance of 899.60 feet;
thence S00˚00’00”E, a distance of 785.72 feet; thence S89˚48’44”W, a
distance of 854.35 feet to the point of beginning. According to Certificate
of Survey No. S-0004426M.
The above-described parcel is hereafter referred to as the “Property”.
17. Higgins recorded the deed of trust identified above (hereafter referred to as
the “Deed of Trust”) as Document No. R0138012 in the records of the
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Cascade County Clerk & Recorder on November 15, 2006. The Court will
refer to the Deed of Trust and the promissory note hereafter collectively as
the “Loan.”
18. Similar to many mortgages issued during this period, First Horizon Home
Loan Corporation sold the loan on the secondary market to Federal National
Mortgage Association (“Fannie Mae”) at some point shortly after the loan
originated. This sale introduced many new parties to this saga, including
lenders, loan servicing companies, and various subsidiaries of these
companies. These other parties include the following: First Horizon Home
Loan Corp., First Tennessee Bank National Association, Metlife Home
Loans, Nationstar Mortgage Holdings, Inc., and Nationstar Mortgage LLC.
19. Fannie Mae constitutes a government sponsored enterprise (“GSE”). The
Fannie Mae Single Family 2012 Servicing Guide governed the servicing of
Higgins’s Loan in 2012.
20. Higgins’s loan with Rocky Mountain Bank to finance the original purchase
of the 870-acre parcel had closed before Higgins received the loan from First
Horizon Home Loan Corporation. Higgins did not disclose the monthly loan
payment owed to Rocky Mountain Bank on his application for the loan from
First Horizon Home Loan Corporation.

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21. Defendants presented evidence at trial regarding Higgins’s apparent failure
to disclose his financial obligations under the loan with Rocky Mountain
Bank at the time that he closed on the Loan at issue. Defendants presented
this evidence in an attempt to demonstrate that Higgins’s alleged omission
constituted a breach under the terms of the Loan that would have
disqualified him for the Loan, as well as any programs to modify the terms
of the Loan under a variety of programs that emerged during the time period
in question.
22. The Deed of Trust includes the following language at Section 8 of that
document:
Borrower shall be in default if, during the Loan application process,
Borrower or any persons or entities acting at the direction of Borrower or
with Borrower’s knowledge or consent gave materially false, misleading,
or inaccurate information or statements to Lender (or failed to provide
Lender with material information) in connection with the Loan.
23. The Court finds no need to resolve the question of whether Higgins failed to
disclose the existence of the Rocky Mountain Bank loan at the time that he
obtained the Loan at issue and whether this omission constituted a material
breach of the terms of the Loan. The record indicates that Defendants took
no steps to foreclose on Higgins’s Loan based upon the alleged omission.
The record further indicates that Defendants’ refusal to modify Higgins’s
Loan, either through the forbearance agreement or any other programs,
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related in no way to their discovery of Higgins’s alleged omission. The
evidenced developed at trial instead shows that Defendants possessed no
knowledge of Higgins’s alleged omission until preparing for trial in this
matter in late 2016 and early 2017.
Events in 2007
24. Higgins paid on the Loan as promised for the remainder of 2007.
Events in 2008
25. Higgins fell a payment or two behind on his Loan by May 2008.
26. First Horizon Home Loans and Higgins communicated regarding the Loan
in 2008. First Horizon Home Loans initiated foreclosure proceedings on the
Property in November 2008.
27. Higgins sent a cashier’s check payable to Metlife Home Loans LLC in the
amount of $26,066.56, on or about December 22, 2008. Metlife Home Loans
LLC subserviced Higgins’s loan on behalf of First Horizon Home Loans at
that time.
28. Higgins’s $26,066.56 payment fully reinstated his loan and successfully
avoided a foreclosure sale of the Property. Higgins’s payments on the Loan
remained current at the end of 2008.
Events in 2009
29. Higgins fell two months behind on his loan payments by February 2009.
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30. First Horizon Home Loans sent a letter to Higgins dated June 19, 2009. The
letter informed Higgins that he had been denied a modification pursuant to
the Home Affordable Modification Program. (Doc. 78-8.)
31. First Horizon Home Loans informed Higgins in the same letter, however,
that he could participate in the HomeSaver Forbearance program. The letter
explained that Higgins would be required to make reduced monthly
payments for up to six months. First Horizon Home Loans further informed
Higgins that it would “work with” him “to find a long-term solution that
allows you to avoid foreclosure.” Id.
32. First Horizon Home Loans directed Higgins to notify it by July 3, 2009,
whether he agreed to participate in the forbearance program. The letter
directed Higgins to sign and return “the enclosed Forbearance Agreement no
later than 07/03/2009.” Id.
33. The letter further directed Higgins to include with the signed Forbearance
Agreement “his first monthly payment as established by the Forbearance
Agreement.” Id. The attached Forbearance Agreement identified the first of
six equal payments of $2,275.57, to be paid by July 19, 2009. (Doc. 78-9)
34. Higgins testified that he never received the Forbearance Agreement until
September 10, 2009. The record contains no definitive evidence as to the
date that Higgins received the Forbearance Agreement.
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35. All parties agree that Higgins signed the HomeSaver Payment Forbearance
Agreement (“Forbearance Agreement”) on September 11, 2009. (Doc. 78-9.)
Higgins returned the executed Forbearance Agreement that same day along
with a check intended to cover one of the six payments contemplated under
the Forbearance Agreement.
36. First Horizon Home Loans finally executed the Forbearance Agreement on
September 21, 2009, after it had received the signed agreement from
Higgins. Confusion exists as to what caused the apparent delay in Higgins
receiving the Forbearance Agreement.
37. All parties agree that Higgins sent three payments to First Horizon Home
Loans in an attempt to comply with the Forbearance Agreement. All parties
agree that First Horizon Home Loans received these payments and returned
all three checks to Higgins. The record contains no evidence that Higgins
sent any of the three attempted payments to the wrong address.
38. The Forbearance Agreement required Higgins to make a payment of
$2,275.57 by July 19, 2009. Despite not yet having received the Forbearance
Agreement, Higgins sent First Horizon Home Loans a payment under the
Forbearance Agreement of $2,020.58 by check dated August 1, 2009.
Higgins testified that he sent this check based upon advice that he received

10

in a series of telephone calls with representatives of First Horizon Home
Loans.
39. First Horizon Home Loans returned this payment to Higgins with a letter
dated August 17, 2009. The letter informed Higgins that the payment had
been returned as untimely as the first payment had been due on “06/29/09.”
(Doc. 78-20.) This attempted payment also fell $254.99 short of the
$2,275.57 payment required under the terms of the Forbearance Agreement.
40. The Forbearance Agreement required Higgins to make a second payment of
$2,275.57 by August 1, 2009. Higgins testified that he did not receive the
Forbearance Agreement, of course, until September 10, 2009. Higgins
testified that he immediately executed the Forbearance Agreement and
returned to First Horizon Home Loans on September 11, 2009, with a check
in the amount of $2,275.57. First Horizon Home Loans returned this
payment to Higgins along with a letter dated September 24, 2009. The letter
informed Higgins that his check was being returned as “[p]lan broke in
July.” (Doc. 78-21.)
41. The Forbearance Agreement required Higgins to make a third payment of
$2,275.57 by September 1, 2009. Higgins sent First Horizon Home Loans a
third payment of $2,275.57 by check dated October 21, 2009. First Horizon

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Home Loans returned this payment to Higgins in a letter dated October 26,
2009. The letter failed to specify a reason for the return. (Doc. 78-22.)
42. Higgins sent no further payments to First Horizon Home Loans under the
Forbearance Agreement.
43. The Forbearance Agreement required First Horizon Home Loans to
“suspend any scheduled foreclosure sale” during the deferral period. The
Forbearance Agreement defined the “deferral period” as ending on the
earlier of (i) January 1, 2010; (ii) upon the execution of an agreement for
another resolution of Higgins’s default under the Loan, such as a
modification, a pre-foreclosure sale, or a deed-in-lieu of foreclosure; or (iii)
Higgins’s default under the Forbearance Agreement. (Doc. 78-9 at 2.)
44. First Horizon Home Loans took no steps to foreclose on the Property before
January 1, 2010. The record contains no evidence that Higgins and First
Horizon Home Loans executed any agreement to resolve Higgins’s default
under the Loan during the deferral period.
45. The Forbearance Agreement also required First Horizon Home Loans to
“review Higgins’s Loan to determine whether additional default solution
assistance” could be offered to Higgins. Id.
46. The Forbearance Agreement expressly provided that one of the following
outcomes would ensue at the end of the six-month deferral period: (1)
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Higgins would be required to recommence his regularly scheduled payments
and to make additional payments, on terms to be determined by First
Horizon Home Loans, until all past due amounts owed under the Loan
documents have been paid in full; (2) Higgins would be required to reinstate
his loan in full; (3) First Horizon Home Loans would offer to modify
Higgins’s Loan; (4) First Horizon Home Loans would offer Higgins some
other form of payment assistance or alternative to foreclosure, on terms to be
determined solely by First Horizon Home Loans with the approval of the
investor or insurers on Higgins’s Loan; or (5) if no feasible alternative could
be identified, First Horizon Home Loans could commence or continue
foreclosure proceedings or exercise other rights and remedies provided First
Horizon Home Loans under the Loan Documents. Id. at 2-3.
47. Higgins’s Complaint focused on Defendants’ alleged failure to identify a
long-term solution to his struggle to make the required monthly payments
under the original Loan. Higgins admitted that the Forbearance Agreement
permitted him to make discounted monthly payments of $2,275.57 for six
months as opposed to the $2,761.90 monthly payment of principal and
interest required under the Loan.
48. As discussed in Paragraph 37, Higgins attempted to make three payments
during the deferral period under the Forbearance Agreement. First Horizon
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Home Loans returned all three checks – nearly $6,600 – that Higgins
attempted to pay.
49. Higgins argues that First Horizon Home Loans’ decision to return these
three payments, and not accept the remaining three payments required under
the Forbearance Agreement, left him further in arrears. Higgins seems to
argue that he could have stayed current on the Loan after the deferral period
if First Horizon Home Loans had accepted the three attempted payments.
Nothing in the record establishes why the parties did not execute the
Forbearance Agreement until September 11, 2009.
50. The record further establishes that First Horizon Home Loans returned all
three checks to Higgins. Higgins does not allege that First Horizon Home
Loans misapplied these payments. It appears, therefore, that Higgins
remained free to use these funds to make payments on the Loan after the
default period in the Forbearance Agreement.
51. Higgins submitted a hardship letter to First Horizon Home Loans on
November 6, 2009. Higgins asked First Horizon Home Loans to lower his
monthly mortgage payments in “these tough economic times.” Higgins
explained the decrease in his income from 2007 through 2009. (Doc. 78-24.)
52. Higgins sent another letter on December 3, 2009, along with a profit and
loss statement, expense statement, and other information to further support
14

his request for assistance. Higgins’s letter expressly noted that he had
provided a profit and loss statement “per phone call with Cynthia on 23 Nov
2009.” (Doc. 78-25.)
53. First Horizon Home Loans did not approve Higgins’s Loan for any type of
modification in late 2009 or early 2010.
54. By its terms, the Forbearance Agreement expired on January 1, 2010. The
Forbearance Agreement did not forgive any payments on Higgins’s Loan.
The Forbearance Agreement did not modify Higgins’s Loan, the promissory
note, or the Deed of Trust.
55. First Horizon Home Loans argues that it fulfilled its obligations under the
terms of the Forbearance Agreement when it refrained from seeking to
foreclose Higgins’s Loan during the six-month deferral period. The Court
finds that First Horizon Home Loans took no steps to foreclose on Higgins’s
Loan before January 1, 2010.
56. First Horizon Home Loans admitted that it did not offer Higgins any further
default assistance as contemplated by Paragraph 2(C) of the Forbearance
Agreement. As the record indicates, however, it does not appear that either
party performed under the terms of the Forbearance Agreement. Higgins
attempted to make only three of the six required payments. First Horizon
Home Loans returned all three of Higgins’s attempted payments.
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Events in 2010
57. Higgins made no payments on the Loan in 2010.
Events in 2011
58. Higgins and his wife, Jeanine, executed a Buy/Sell Agreement for the
Property on March 2, 2011. The Buy/Sell Agreement listed the intended
purchaser of the Property listed as “Steven Boettger, LLC.” Steven Boettger
is the son of Jeanine Higgins. The Buy/Sell Agreement listed the sale price
as $325,000.00. (Doc. 78-10.)
59. First Horizon Home Loans approved a short sale of the Property to Steven
Boettger, individually, for $325,000.00 on or about March 10, 2011. (Doc.
78-11.) The sale did not go through. Higgins presented no evidence that First
Horizon Home Loans, or any Defendants, interfered in the completion of
this attempted short sale.
60. First Horizon Home Loans approved a short sale of the Property to Paul
Feikert for $325,000.00 on or about April 26, 2011. (Doc. 78-12.) The sale
did not go through. Higgins presented no evidence that First Horizon Home
Loans, or any Defendants, interfered in the completion of this attempted
short sale.
61. Nationstar Mortgage LLC assumed responsibility for servicing Higgins’s
Loan on August 1, 2011.
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62. Higgins had not made a payment since December 2008 at the time that
Nationstar Mortgage LLC took over servicing Higgins’s Loan. Higgins was
overdue on the Loan on August 1, 2011, for all 12 payments in 2009, all 12
payments in 2010, and eight payments in 2011.
63. Higgins’s scheduled monthly payments on the Loan between January 1,
2009, and August 1, 2011, should have been $4,041.16. This total included
$2,761.90 in monthly principal and interest payments as contemplated by the
Note, and $1,279.26 in escrow expenses.
64. The amount overdue on the Loan totaled $159,281.20 on August 1, 2011.
This overdue amount included the following: the 32 payments of $4,041.16,
for principal, interest, and escrow, for a total of $129,317.12; $24,930.25 in
additional escrow advances; $4,315.23 in corporate advances; and $718.60
in late charges.
65. In November 2011, Nationstar Mortgage LLC scheduled a trustee’s sale of
the Property to take place on March 26, 2012.
Events in 2012
66. Higgins apparently communicated by telephone with Nationstar Mortgage
LLC employees in early 2012 about a possible short sale. Higgins also raised
the issue of a potential loan modification.

17

67. Higgins understood at that time that foreclosure sale would occur if
Northstar Mortgage LLC did not approve the short sale or the loan
modification.
68. Higgins owed $387,434.74 in principal on January 17, 2012. Higgins owed
another $88,068.19 in accrued interest. Higgins stood 37 payments behind
on the Loan by January 17, 2012.
69. Higgins acknowledged that Nationstar Mortgage LLC had no obligation to
approve a short sale of the Property at the terms that he requested.
70. Nationstar Mortgage LLC’s loan notes reflect that Higgins spoke with
Nationstar Mortgage LLC on January 30, 2012, about a possible loan
modification. Higgins agreed in the conversation to send a packet of
financial documentation to Nationstar Mortgage LLC by February 2, 2012.
71. Nationstar Mortgage LLC reviewed the documents from Higgins on
February 6, 2012. Higgins failed to include pay stubs and bank statements in
the financial documents.
72. Higgins’s financial package apparently remained incomplete on February
13, 2012. Nationstar Mortgage LLC informed Higgins that it still needed
Higgins’s two most recent pay stubs, a pension award letter, and two bank
statements that would show deposits of Higgins’s pension. (Doc. 73 at 1415.)
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73. Higgins had not provided the missing information to Nationstar Mortgage
LLC by February 22, 2012. Northstar Mortgage LLC informed Higgins that
it would not consider a loan modification request for Higgins until it
received this information. (Doc. 73 at 15.)
74. Nationstar Mortgage LLC’s loan notes reflect that it informed Higgins on
February 23, 2012, that his income did not support a loan modification.
Nationstar Mortgage LLC informed Higgins that his actual income would
need to be double what he reported in order to qualify for a modification.
The loan notes further reflect that Nationstar Mortgage LLC told Higgins
that his debt-to-income ratio exceeded 100%. Higgins claimed in response
that he may have understated his income. Id.
75. Nationstar Mortgage LLC received documentation from Higgins for a loan
modification on March 7, 2012. The loan notes reflect that Higgins sent
bank statements to Nationstar Mortgage LLC on March 7, 2012. Higgins
failed to provide, however, his profit-and-loss statements for his farming and
real estate income for the last quarter, or for the year-to-date. Id.
76. Nationstar Mortgage LLC sent a letter to Higgins on March 7, 2012. (Doc.
62-19.) The letter indicated that Nationstar Mortgage LLC would strive to
expedite the request if Higgins submitted a complete Borrower Response
Package (“BRP”) fewer than 37 days before a scheduled foreclosure sale
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date. The letter explained that no guarantee existed, however, that Nationstar
Mortgage LLC would be able to complete the evaluation in time to stop the
scheduled foreclosure sale. Id.
77. Nationstar Mortgage LLC previously had scheduled the foreclosure sale for
the Higgins Property on March 26, 2012. This date fell 19 days after Higgins
had provided the incomplete loan modification paperwork to Nationstar
Mortgage LLC.
78. Nationstar Mortgage LLC received Higgins’s profit-and-loss statement,
along with a letter from United States Senator Jon Tester on March 14, 2012.
Higgins testified that a Nationstar Mortgage LLC agent, Mr. Fernandez,
informed him in a telephone conversation that the foreclosure sale would
proceed as scheduled unless Higgins made a full payment to reinstate the
Loan.
79. Higgins called Nationstar Mortgage LLC on March 16, 2012, to confirm its
receipt of the profit-and-loss statement. Higgins further advised Nationstar
Mortgage LLC of the “need to bump this up a couple of notches” due to the
fact that “we are dealing with the Senator here.” Higgins further highlighted
his approaching foreclosure sale date of March 26, 2012. (Doc. 73 at 16.)
80. Nationstar Mortgage LLC’s loan notes reflect that Higgins indicated that he
would be sending a check for $187,823.13 to Nationstar Mortgage LLC.
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Higgins contends that Nationstar Mortgage LLC’s receipt of his completed
loan modification package on March 14, 2012, should have triggered the
requirement under the Making Home Affordable program that Nationstar
Mortgage LLC suspend the scheduled foreclosure sale. Id.
81. As noted in Paragraph 75, however, Nationstar Mortgage LLC informed
Higgins that he had failed to include his recent profit-and-loss statement for
his farming and real estate income. Higgins finally provided the missing
information on March 14, 2016 – twelve days before the scheduled
foreclosure sale. Nationstar Mortgage LLC cited to its letter of March 7,
2012, in which it explained its inability to complete a full review in such a
shortened time frame. (Doc. 62-19.)
82. Nationstar Mortgage LLC declined to suspend the foreclosure sale until
Higgins had paid the entire reinstatement amount.
83. Higgins reinstated his loan when he sent a cashier’s check to Nationstar
Mortgage LLC on March 16, 2012. Higgins sold some of his remaining land
not subject to this action in order to raise sufficient funds. Nationstar
Mortgage LLC finally cancelled the foreclosure sale after it received the
cashier’s check from Higgins on March 20, 2012.

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84. Higgins contends that this reinstatement amount had been inflated due to
Defendants’ wrongful failure to accept the three payments that he had
attempted to make back in 2009 as part of the Forbearance Agreement.
85. The Deed of Trust executed by Higgins provides for the application of loan
payments as follows:
2. Application of Payments or Proceeds. Except as otherwise described in
this Section 2, all payments accepted and applied by Lender shall be
applied in the following order of priority: (a) interest due under the Note;
(b) principal due under the Notes; (c) amounts due under Section 3. Such
payments shall be applied to each Periodic Payment in the order in which
it became due. Any remaining amounts shall be applied first to late
charges, second to any other amounts due under this Security Instrument,
and then to reduce the principal balance of the Note.
86. Nationstar Mortgage LLC applied Higgins’s payment of $187,823.13 as
follows: $148,377.51 to 40 missed payments (in turn allocated to principal in
the amount of $15,416.26; interest in the amount of $95,059.74; and escrow
in the amount of $37,901.51); $6,104.50 to late charges; $4,437.23 for
corporate advances; and $28,903.89 to additional principal payment. The
$187,823.13 payment applied in accordance with the terms of the Deed of
Trust as set forth above.
87. Higgins offered no evidence to show Nationstar Mortgage LLC improperly
applied his payment, or that the payment should have been applied
differently, or contrary to the terms of the Loan. Higgins simply suggests
that the amounts in arrears would have been less had Defendants accepted
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his attempted payments in 2009 during the deferral period of the
Forbearance Agreement. As noted in Paragraph 48, however, it appears that
Higgins retained the nearly $6,600.00 that he attempted to pay under the
Forbearance Agreement. Higgins should have been able to use these same
funds to make part of the reinstatement amount.
88. Higgins owed $343,114.58 in principal following the $187,823.13 payment.
89. Nationstar Mortgage LLC cancelled the foreclosure sale set for March 26,
2012, after Higgins had reinstated the Loan with the $187,823.13 payment.
90. Nationstar Mortgage LLC finally denied Higgins’s application for Making
Home Affordable (“MHA”) relief in a letter dated June 26, 2012. (Doc. 6221.) The letter noted that Higgins remained current on his mortgage loan at
that time. Nationstar Mortgage LLC offered no explanation for the apparent
delay in notifying Higgins of his ineligibility for relief under the MHA.
91. The record contains no evidence of whether the information that Higgins
provided to Nationstar Mortgage LLC on March 14, 2016, should have been
sufficient to halt or delay the foreclosure sale scheduled for March 26, 2016.
92. The Court finds that Nationstar Mortgage LLC’s notification of Higgins’s
ineligibility for relief under the MHA June 26, 2012, constitutes the last act
alleged by Higgins that violated the Montana Consumer Protection Act. This
act falls within the two-year statute of limitations under Montana law as
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Higgins filed his Complaint on April 21, 2014. See Mont. Code Ann. § 27-2211.
93. Nationstar Mortgage LLC reviewed the financial information that Higgins
provided. Nationstar Mortgage LLC determined that Higgins had failed to
document financial hardship that reduced his income or increased his
expenses. Nationstar Mortgage LLC determined that Higgins lacked
sufficient net income to pay his current mortgage payment. Nationstar
Mortgage LLC further determined that Higgins possessed the ability to pay
his current mortgage payment by the use of his cash reserves or other assets.
94. Higgins remained current on his loan payments through November 2012.
Events in 2013
95. Higgins owed $338,710.67 in principal on January 20, 2013.
96. Nationstar Mortgage LLC initially recommended that it initiate foreclosure
proceedings on the Property in June 2013. Nationstar Mortgage LLC
apparently halted the foreclosure sale when it determined that Higgins could
qualify for an alternative modification program.
97. Higgins qualified for an alternative modification program on August 26,
2013. His first modified payment under the trial plan was due by September
1, 2013. Higgins timely made all three of his modified payments under the
trial plan in the fall of 2013.
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98. Higgins executed the Loan Modification Agreement on November 27,
2013. (Doc. 78-18.) The Loan Modification Agreement provided that the
unpaid principal balance of the loan would be $373,920.00. The Loan
Modification Agreement required Higgins to begin making monthly
principal and interest payments in the amount of $1,562.76 on January 1,
2014. Id. Higgins testified that he would have accepted this same
modification program in 2009 if it had been offered to him at that time.
99. Nationstar Mortgage LLC executed the Loan Modification Agreement on
November 30, 2013. Id.
Events in 2014
100. Higgins made one $1,562.76 payment on the Loan pursuant to the terms of
the Loan Modification Agreement on February 1, 2014. Higgins’s Loan
again went into default under the Loan Modification Agreement.
101. Higgins acknowledged in early 2014 that he had fallen behind on Loan
payments. Higgins reported to Nationstar Mortgage LLC that he had listed
the Property for sale. The Loan had an unpaid principal balance of
$373,228.64 by 2014.
102. Higgins paid the following amounts on the Loan:
2006

3 payments

$4,4041.16

$12,123.48

2007

12 payments

$4,041.16

$48,493.92

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2008

3 payments

$4,041.16

1 payment

$26,066.56

2011

4 payments

$4,041.16

$16,164.64

2012

1 payment

$187,823.13

$187,823.13

2013

3 payments

$1,562.76

$4,688.28

2014

1 payment

$1,562.76

$1,562.76

TOTAL

$38,190.04

$309,046.25

Defendants applied these amounts pursuant to the terms specified in the
Loan and the Loan Modification Agreement.
CONCLUSIONS OF LAW
1. The Court possesses jurisdiction over the subject matter and parties pursuant
to 28 U.S.C. § 1332(a).
2. Venue is proper in the Great Falls division pursuant to 28 U.S.C. §
1391(b)(2), as the property in question sits in Cascade County and Cascade
County falls within the Great Falls Division.
Breach of the Covenant of Good Faith and Fair Dealing
3. Every enforceable contract “contains an implied covenant of good faith and
fair dealing.” Knucklehead Land Co., Inc. v. Accutitle, Inc., 2007 MT 301, ¶
18, 340 Mont. 62, 172 P.3d 116. Higgins’s Loan and accompanying
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promissory note constitute enforceable contracts under Montana law. The
Loan and promissory note contain an accompanying “implied covenant of
good faith and fair dealing.” Id.
4. The covenant constitutes 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.” Phelps v. Frampton, 2007 MT 263, ¶ 29, 339
Mont. 330, 170 P.3d 474.
5. The standard of conduct imposed by the implied covenant maintains
“honesty in fact and the observance of reasonable commercial standards of
fair dealing in the trade.” McCoy v. First Citizens Bank, 2006 MT 307, ¶ 21,
335 Mont. 1, 148 P.3d 677.
6. Higgins alleged in his Complaint that Defendants had provided him “with a
false payment address” to send his payments under the Forbearance
Agreement. The evidence indicated, however, that Defendants received
Higgins’s three attempted payments under the Forbearance Agreement.
7. In fact, Defendants returned each of the three attempted payments in separate
letters that explained the reason for the refusal of the payment. As these
letter explain, Higgins’s first attempted payment fell short of the amount
stated in the Forbearance Agreement. This first attempted payment by
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Higgins, along with the second and third attempted payments, also was
received late by First Horizon Home Loans.
8. The record fails to establish why Higgins returned the signed Forbearance
Agreement in September 2009. Neither party offered any evidence to explain
clearly the delay between when First Horizon Home Loans sent the
Forbearance Agreement to Higgins on June 19, 2009, and Higgins’s
apparent acceptance of the Forbearance Agreement on September 11, 2009.
9. Defendants have not violated the implied covenant of good faith and fair
dealing under these circumstances.
Montana Consumer Protection Act
10. To prove his Montana Consumer Protection Act claim under the Montana
Consumer Protection Act, Higgins must prove the following elements:
a. That he should be considered a consumer as defined in Mont. Code
Ann. § 30-14-102(1);
b. That he suffered an ascertainable loss of money or property, real or
personal; and
c. That the loss of money or property existed as a result of the use or
employment by another person of a method, act, or practice declared
unlawful by Mont. Code Ann. § 30-14-103.
11. Section 103 declares unlawful “unfair methods of competition and unfair or
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deceptive acts or practices in the conduct of any trade or commerce.” Mont.
Code Ann. § 30-14-103.
12. An unfair act or practice offends established public policy and constitutes an
act or practice deemed either immoral, unethical, oppressive, unscrupulous
or substantially injurious to consumers. Rohrer v. Knudson, 2009 MT 35, ¶
31, 349 Mont. 197, 205, 203 P.3d 759, 764.
13. Higgins offers no evidence that any of the Defendants acted in a way that
“offends established public policy or in a way that should be considered
either immoral, unethical, oppressive, unscrupulous or substantially injurious
to consumers.”
14. Higgins alleged that Defendants violated the Montana Consumer Protection
Act when they refused to cancel the foreclosure sale scheduled for March 26,
2012, even after he had submitted his complete package of financial
information on March 14, 2012. He testified that the submitted the
$187,823.13 only after Defendants continued to threaten to proceed with the
foreclosure sale unless Higgins tendered the full amount of the deficiency.
15. Higgins offered no evidence that any of the Defendants acted in a manner
that breached the Montana Consumer Protection Act. As the letter of March
7, 2012, from Nationstar Mortgage LLC to Higgins explained, Nationstar
Mortgage LLC could not guarantee that it would be able to suspend the
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scheduled foreclosure sale if he submitted his financial information fewer
than 37 days before the March 26, 2012, foreclosure sale. Higgins submitted
his complete financial information on March 14, 2012.
16. The Fannie Mae Single Family 2012 Servicing Guide governed the
servicing of Higgins’s Loan in 2012. Servicers must acknowledge to the
borrower the receipt of a BRP.
17. This acknowledgment by loan servicers must include the following
information:
a. The servicer’s evaluation process and response time frame;
b. An explanation of the foreclosure process, including an explanation
that the foreclosure process may continue during the evaluation, and
that foreclosure referral will not occur if the servicer reviews a
complete BRP or has extended an offer and the borrower’s response
time for acceptance has not lapsed;
c. For borrowers who submit a complete BRP fewer than 37 days before
a scheduled foreclosure sale, an explanation of the servicer’s plan for
evaluating the borrower for a foreclosure prevention alternative and
suspending the foreclosure sale, if appropriate; and
d. Appropriate disclosures required by applicable federal, state, or local
law.
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See Fannie Mae Single Family 2012 Servicing Guide,
https://www.fanniemae.com/content/guide/svc031412.pdf, at p. 702-12.
18. The Fannie Mae Single Family 2012 Servicing Guide provides that the
“servicer may, but is not required to,” send an Incomplete Information
Notice to a borrower who submits incomplete documentation fewer than 37
days before a scheduled foreclosure sale. Id. at 702-14.
19. Higgins did not provide a complete BRP more than 37 days before the
scheduled March 26, 2012, foreclosure sale. Higgins would not have been
entitled to, or guaranteed, an evaluation of the materials that he submitted on
March 14, 2012, or of his loss of mitigation options.
20. Higgins offered no evidence of an ascertainable loss of money or property
as the result of the actions of any of the Defendants related to their refusal to
cancel the foreclosure sale until Defendants had received Higgins’s payment
on March 20, 2012. The Court cannot determine that Defendants violated the
Montana Consumer Protection Act when they refused to guarantee to
Higgins that submission of his completed package of financial information
on March 14, 2012, twelve days before the scheduled foreclosure on March
16, 2012, would halt the foreclosure sale.
21. Higgins’s claim for breach of the Montana Consumer Protection Act fails.

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Unjust Enrichment
22. Finally, the evidence shows that Defendants properly have accounted for all
payments that Higgins submitted. The evidence further indicates that
Defendants properly have applied every payment submitted by Higgins
pursuant to the terms of the Loan.
23. Higgins has failed to demonstrate that Defendants have been unjustly
enriched as a result of their conduct. Higgins’s claim for unjust enrichment
fails.
Motion to Dismiss
24. The Court finds no need to address Defendants’ pending motion to dismiss
a number of parties, including First Horizon National Corp and Nationstar
Mortgage Holding, Inc. Higgins has failed to set forth sufficient evidence to
support a finding of liability for any of the Defendants under the implied
covenant of good faith and fair dealing, Montana’s Consumer Protection
Act, or a theory of unjust enrichment.
JUDGMENT & ORDER
1. The Court hereby enters judgment on behalf of Defendants.
2. The Court further orders that each side shall bear its own fees and costs.
3. This judgment is final and disposes of all claims and all parties and shall be
appealable.
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4. Pursuant to Fed. R. Civ. P. 58, the Court orders that the Clerk of Court shall
enter judgment by separate document according to the terms outlined above.
5. The Clerk of Court shall notify the parties of the making of this order.
DATED this 8th day of March, 2018.

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