Prather et al v. Bank of America, N.A.
ORDER granting 41 Motion for Summary Judgment; denying as moot 47 Motion in Limine. Signed by Judge Dana L. Christensen on 5/9/2017. (ASG)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BANK OF AMERICA, N.A.,
Before the Court is Defendant Bank of America, N.A.'s ("BANA") motion
for summary judgment. For the reasons explained below, the Court grants the
In the spring of 2008, Plaintiffs Ryan and Carey Prather (the "Prathers")
bought a home in Frenchtown, Montana ("Property"). To finance their purchase,
the Prathers entered into a mortgage loan with Countrywide Bank, FSB. The
Prathers borrowed $243 ,079 .00 from Countrywide Bank, FSB, executing a
promissory note ("Note") and a Deed of Trust ("Deed"). Shortly after closing,
Countrywide Bank, FSB, assigned the Note to BANA.
During BANA's servicing of the loan, the Prathers defaulted by failing to
make a mortgage payment between August 23, 2013 and October 21, 2013.
BANA continued to service the Prather's loan until the loan was paid off in
From 2013 through 2015, a BANA property inspector visited the Property
to conduct inspections. Although the inspector took pictures of the exterior of the
Prathers' home, he never entered or attempted to enter the home or garage. On
occasion, the inspector would walk to the front door and leave a door hangar. The
exterior of the home is highly visible and "there isn't a whole lot" of privacy.
(Doc. 45 at 5.) The Prathers have not posted any signage or otherwise restricted
the ability of delivery drivers, postal workers, or other service providers from
entering onto the Property.
On Decemeber 14, 2015, the Prathers filed suit in this Court alleging
BANA's misconduct during the servicing of the Prathers' home loan. BANA
moved to dismiss and the Court granted the motion in part. Prathers' claims for
trespass and invasion of privacy are the only surviving claims.
Summary judgment is appropriate "if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law." Fed. R. Civ. P. 56(a). The movant bears the initial burden of
informing the Court of the basis for its motion and identifying those portions of
"the pleadings, depositions, answers to interrogatories, and admissions on file
together with the affidavits, if any, which it believes demonstrate the absence of a
genuine issue of material fact." Celotex Corp. v. Cartrett, 477 U.S. 317, 323
(1986) (internal quotation marks omitted). The movant' s burden is satisfied when
the documentary evidence produced by the parties permits only one conclusion.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
Where the moving party has met its initial burden, the party opposing the
motion "may not rest upon the mere allegations or denials of his pleading, but ...
must set forth specific facts showing that there is a genuine issue for trial." Id. at
248 (internal quotation marks omitted). "Only disputes over facts that might affect
the outcome of the suit under the governing law will properly preclude the entry of
summary judgment." Id.
A federal court sitting in diversity applies the substantive law of the forum
state to state law claims. Mason & Dixon lntermodal, Inc. v. Lapmaster Int'! LLC,
632 F.3d 1056, 1060 (9th Cir. 2011). Because, the Prathers' claims are premised
on state law, the Court decides this motion pursuant to Montana law.
BANA moves for summary judgment on the Prathers' trespass claim
arguing that BANA, pursuant to the Deed, had a legal right to enter the Property
once the Prathers defaulted on their loan in October 2013. The Prathers counter
that the clause in the Deed allowing BANA to enter the Property is void because it
conflicts with 24 C.F .R. § 203 .3 77.
Specifically, the Prathers' claim that BANA violated the Housing and Urban
Development ("HUD") regulation 24 C.F .R. § 203 .3 77, which would supersede
any contractual right BANA had in the Deed. BANA argues that under the
National Housing Act, 12 U.S.C. § 1701, et seq., there is no private right of action
available to a mortgagor for a mortgagee's noncompliance. The Court agrees with
"The question whether a statute creates a cause of action, either expressly or
by implication, is basically a matter of statutory construction." Opera Plaza
Residential Parcel Homeowners Ass'n v. Hoang, 376 F.3d 831, 834 (9th Cir.
2004). By its structure, the National Housing Act "govem[s] relations between the
mortgagee and the government, and give[ s] the mortgagor no claim for duty owed
or for the mortgagee's failure to follow" the statute or its implementing
regulations. Mitchell v. Chase Home Finance LLC, 2008 WL 623395, at *3 (N.D.
Tex. 2008). Consequently, courts have held that the National Housing Act
generally does not contain a private right of action. See City ofRohnert Park v.
Harris, 601F.2d1040, 1046-47 (9th Cir. 1979); Inman v. Suntrust Mortg., Inc.,
2010 WL 3516309, *2 (E.D. Cal. 2010); Gaitan v. Mortg. Elec. Reg. Sys., 2009
WL 3244729, *9 (C.D. Cal. 2009); Saratoga Sav. & Loan Ass'n v. Fed. Home
Loan Bank ofSan Francisco, 724 F.Supp. 683, 690 (N.D. Cal. 1989). The
provision asserted by the Prathers is no exception. Thus, it is improper for the
Prathers to base their claim of trespass on a HUD violation rather than the
contractual obligation found in the Deed. Based upon this case law, the Court
concludes that the Deed is not superseded by the HUD regulations.
Next, BANA argues that the Prathers' claim for trespass fails as a matter of
law because the Deed explicitly allows for trespass if the homeowner is in default.
In Montana,"one is subject to liability to another for trespass ... if he intentionally
(a) enters land in possession of the other, or causes a thing or third person to do so,
or (b) remains on the land, or ( c) fails to remove from the land a thing which he is
under a duty to remove." Martin v. Artis, 290 P.3d 687, 691 (Mont. 2012) (citing
Branstetter v. Beaumont Supper Club, 727 P.2d 933, 935 (1986) (quoting
Restatement (Second) of Torts§ 158 (1965)). Restated, Montana "defines a
trespass as an intrusion on a party's right to exclusive possession of her property."
Burley v. Burlington Northern & Santa Fe Ry. Co., 273 P.3d 825, 828 (Mont.
2012). A homeowner may not have exclusive possession over their property if a
mortgage servicer is expressly authorized to enter onto a homeowner' s property
upon breach of a promissory note or deed of trust. Paatalo v. J.P. Morgan Chase
Bank, NA., 2012 WL 2505742, *10 (D. Mont. 2012).
Here, BANA does not deny that its agents entered the Prathers' Property but
rather argues that the Prathers lacked exclusive possession after the Deed was
breached. The Deed grants BANA a contractual right to enter and inspect the
Prathers' property ifit is vacant or abandoned or the loan is in default. (Doc. 42-2
at 12.) The Prathers have admitted that they missed a payment and were in default
beginning in October 2013. (Doc. 45 at 3, ~ 6.) There no longer exists a dispute
as to whether the Prathers defaulted on their loan at the time BANA entered the
Property. Therefore, as articulated in Paatalo, because there is no dispute of fact
that the loan was in default at the time BANA's agents entered onto the property,
the Court finds that as matter of law, BANA is entitled to summary judgment on
the Prathers' claim for trespass.
Intrusion upon Seclusion
The Prathers' claim argues that BANA tortiously intruded upon their
privacy. The Prathers argue that under the Montana Constitution they had an
objectively reasonable expectation of privacy in their home and the curtilage
outside the home. Further, the Prathers' claim that when the inspectors would take
photos or place door hangars on their home it caused them distress, anxiety and
loss of sleep.
The Prathers rely heavily upon State v. Bullock to show that they had a
reasonable expectation of privacy in the curtilage around their home. In State v.
Bullock, the Montana Supreme Court extended Montana's constitutional right to
privacy to the curtilage around a home if reasonable steps were taken to express a
expectation of privacy. 901 P.2d 61 (Mont. 1995). However, "the privacy section
of the Montana Constitution contemplates privacy invasion by state action only."
State v. Long, 700 P.2d 153, 157 (Mont. 1985). Because the Prathers sued BANA
and not the State, they cannot invoke a constitutional claim for violation of
privacy. Therefore, the Court does not address whether the Prathers' expectation
of privacy in the curtilage was reasonable because these cases apply a
constitutional right to privacy rather than a common law claim for intrusion upon
seclusion, which, upon a liberal reading of the Complaint, is the appropriate claim
in this case.
Montana has defined the common law cause of action for intrusion upon
seclusion as a "wrongful intrusion into one's private activities in such a manner as
to outrage or cause mental suffering, shame or humiliation to a person of ordinary
sensibilities." Deserly v. Dept. of Corrections, 995 P.2d 972, 977 (Mont. 2000)
(citations omitted). "To prevail on the tort of intrusion upon seclusion, a plaintiff
must show: (a) an actual, subjective expectation of seclusion or solitude, and (b)
that the expectation was objectively reasonable" Mortensen v. Bresnan Commun.,
2010 WL 5140454, *5 (D. Mont 2010) (citations omitted). For example, "[p]hone
tapping of private, confidential conversations constitutes a wrongful intrusion into
one's private activities in a manner likely to cause outrage, mental suffering,
shame, or humiliation to an ordinary person." Rucinsky v. Hentchel, 881 P.2d 616,
618 (Mont. 1994).
Montana has not recognized this common law tort to include intrusion upon
land in public view. Rucinsky v. Hentchel, 881P.2d616 (Mont. 1994) (phone
tapping private conversations constitutes a wrongful intrusion); Miller v. Great
Falls Athletic Club, LLC, 2012 WL 3122633 (Mont. 2010) (photographing
persons exercising at a membership fitness facility does not constitute a wrongful
intrusion upon a private activity); Sistok v. Northwestern Tel. Systems, Inc., 615
P.2d 176 (Mont. 1980) (recognizing the common law action for invasion of
privacy to the field of telecommunications); Deering v. CenturyTel, Inc., 2011 WL
1842859 (D. Mont. 2011) (collection of customers' internet communications does
not constitute wrongful intrusion if the customer consented); Mortensen v.
Bresnan Communications, L.L.C., 2010 WL 5140454 (D. Mont. 2010) (stating
that individuals may not reasonably expect privacy in electronic transmissions
over the internet given that notice was provided); State Bd. ofDentistry v.
Kandarian, 886 P.2d 954 (Mont. 1994) (attempt to obtain a list of patients does
not constitute a common law claim for invasion of privacy). Notably, none of the
above cases involve intrusion upon secluded land, rather they involve an
individual's private communications or activities.
The Restatement is instructive on what may constitute as a wrongful
intrusion upon seclusion. The Restatement (Second) of Torts provides that:
The invasion may be by physical intrusion into a place in which the
plaintiff has secluded himself, as when the defendant forces his way
into the plaintiffs room in a hotel or insists over the plaintiffs
objection in entering his home. It may also be by the use of the
defendant's senses, with or without mechanical aids, to oversee or
overhear the plaintiffs private affairs, as by looking into his upstairs
windows with binoculars or tapping his telephone wires. It may be by
some other form of investigation or examination into his private
concerns, as by opening his private and personal mail, searching his
safe or his wallet, examining his private bank account, or compelling
him by a forged court order to permit an inspection of his personal
Restatement (Second) of Torts§ 652B cmt. B. The Restatement continues by
stating, "Nor is there liability for observing him or even taking his photograph
while he is walking on the public highway, since he is not then in seclusion, and
his appearance is public and open to the public eye." Id. at cmt C. It is clear from
the facts that BANA's entry upon the Property did not intrude into the Prathers'
private activities. The Prathers thus fail to show that they had any expectation of
seclusion in the open, apparent and freely accessible area of their Property.
Further, the tort of intrusion upon seclusion requires some form of
concealment from the public. BANA was taking photos of the exterior of their
home, which was freely accessible and viewable to the public. Although the
Prathers' felt this was an invasion of their privacy, the exterior of their home
cannot be considered a secluded area because it is in public view. The Prathers'
own testimony clearly states that the exterior of their Property is high visible from
the public street and that there is very little privacy in their cul-de-sac. Therefore,
the Prathers' Property is not secluded from the public. Further, any photos taken
of the Prathers were taken while the family members were in their yard, well
within public view. BANA never entered the home or had their inspector take
photos of inside their home, which may be considered an intrusion into a secluded
area. Thus, the Prathers can not satisfy the requirement of seclusion. Therefore,
the Prathers' claim for intrusion upon seclusion is not applicable as a matter of
law. BANA is entitled to summary judgment on the Prathers' claim for intrusion
Accordingly, IT IS ORDERED that Defendant's motion for Summary
Judgment (Doc. 41) is GRANTED.
IT IS FURTHER ORDERED that Defendant's Motion in Limine (Doc. 47)
is DENIED AS MOOT.
This case is CLOSED.
q~ day ofMay, 2017.
Dana L. Christensen, Chief Judge
United States District Court
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