Redmond et al v. Green Tree Servicing, LLC
ORDER GRANTING 32 Defendant's Motion for Summary Judgment; DENYING 34 Plaintiff's Motion for Partial Summary Judgment; GRANTING 35 Plaintiff's Motion for Leave to File Phyiscal Exhibit; and GRANTING 42 Motion to Seal Document /Substitute. Plaintiffs are ordered to substitue the redacted version of Exhibit C of Plaintiff's Motion for Partial Summary Judgment submitted by Green Tree in support of its motions to substitute within five days of this order. The Exhibit C provisionally filed by the plaintiffs under seal shall remain sealed. The clerk is directed to enter judgment accordingly and to close this file after the appropriate substitution is made. Signed by US District Judge Terrence W. Boyle on 3/25/2014. (Fisher, M.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
TIMOTHY and COLLEEN REDMOND,
GREEN TREE SERVICING, LLC,
This matter is before the Court on the defendant's motion for summary judgment [DE
32], plaintiffs' motion for partial summary judgment [DE 34], plaintiffs motion for leave to file
physical evidence [DE 35], and defendant's motion to substitute [DE 42]. For the reasons stated
herein, the defendant's motion for summary judgment is GRANTED, plaintiffs' motion for
partial summary judgment is DENIED, plaintiffs' motion to file is GRANTED and defendant's
motion to substitute is GRANTED.
On or about March 18, 2000, Lawrence F. Dudley entered into a manufactured home
loan agreement ("Dudley Debt") with defendant Green Tree Servicing, LLC ("Green Tree"). At
some point thereafter, Mr. Dudley passed away leaving the Dudley Debt to his wife Carolyn
Dudley. Prior to January 2012, the Dudley Debt went into default and remains in default
presently. Prior to January 2012, Plaintiffs Timothy and Colleen Redmond entered into a
residential lease agreement with Ms. Dudley and concerning the mortgaged property. The
plaintiffs never entered into any agreement with defendant Green Tree and did not agree to
assume any portion of the Dudley Debt. On January 1, 2012, Colleen Redmond delivered the
rent check to Ms. Dudley who accepted it.
Shortly thereafter, plaintiffs received a letter from Ms. Dudley written on a Green Tree
account statement in which Ms. Dudley confessed that she had taken plaintiffs' recent rent
checks and spent the money on living expenses, rather than on paying the Dudley Debt. She
suggested plaintiffs contact Green Tree to work out an arrangement to remain in the secured
After receiving the letter from Ms. Dudley, Timothy Redmond called Green Tree on January
13, 2012. He called to find out how he could purchase the house and inquired about the
possibility of assuming the Dudley Debt. Green Tree investigated the matter and called Timothy
to inform him that because Green Tree was the lienholder, not the owner, and because Green
Tree did not have a power of attorney from Ms. Dudley, it was not in a position to sell or lease
him the manufactured home. According to Timothy, Green Tree told him that the best they could
do was to allow him to stay in the home if the mortgage account was returned to a current status.
He then told Green Tree that he would inquire about purchasing the home from Ms. Dudley and
that he would let Green Tree know any developments.
Nevertheless, at various times throughout 2012 defendant Green Tree contacted the plaintiffs
numerous times in order to find out when and if plaintiffs were planning on moving out of the
home. On or about February 20, 2012 plaintiffs' sister, who is not a party to this litigation, made
a payment to Green Tree that made the account current. However, when no further payments
came, Green Tree resumed its attempts to contact plaintiffs to learn of their plans. Plaintiffs
moved out ofthe home on May 20, 2012. From January 1, 2012 until the date of their departure,
plaintiffs paid no rent to their landlord and made no payments to Green Tree. Plaintiffs had no
further contact with Green Tree after leaving the home.
On September 5, 2012, the plaintiffs filed the instant lawsuit alleging that the defendant had
violated provisions of the North Carolina Debt Collection Act ("NCDCA") and the Telephone
Consumer Protection Act ("TCPA") 47 U.S.C. § 227(b)(1)(A)(iii). On April22, 2013, this Court
denied the defendant's motion to dismiss. [DE 18].
Plaintiffs' motion for leave to file physical evidence is granted and plaintiffs are allowed
to physically file the recordings of voicemail messages left by defendant for plaintiffs and the
Court has considered this evidence in ruling on the motions for summary judgment.
Defendant's motion to substitute a redacted version of exhibit C to plaintiffs' motion for
summary judgment is granted. This exhibit is a copy of Green Tree's Account Servicing Notes
which includes telephone numbers, some identifying personal information, and the names of
third parties not directly related to this litigation. Plaintiffs have not objected to the motion and
for good cause shown the Court grants defendant's motion. Exhibit C to plaintiffs' motion for
summary judgment shall be replaced by the redacted version submitted by Green Tree in support
of its motions to substitute and the exhibit C provisionally filed by plaintiffs under seal shall
remain sealed. Plaintiffs are directed to file the new version of exhibit C within five days of the
entry of this order.
SUMMARY JUDGMENT MOTIONS.
A motion for summary judgment cannot be granted unless there are no genuine issues of
material fact for trial.
R. CIV. P. 56; Celotex Corp. v. Catrett, 4 77 U.S. 317, 322-23 (1986).
The moving party must demonstrate the lack of genuine issue of fact for trial and ifthat burden is
met, the party opposing the motion must "go beyond the pleadings" and come forward with
evidence of a genuine factual dispute. Celotex, 477 U.S. at 324. The Court must view the facts
and the inferences drawn from the facts in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). Conclusory
allegations are insufficient to defeat a motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986) ("[T]he mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported motion for summary judgment.")
(emphasis in original).
Telephone Consumer Protection Act Claim.
The defendant has adequately established that there is no issue of material fact
concerning plaintiffs' TCP A claim. The uncontroverted evidence shows that Green Tree's
telephone system was not an automated telephonic dialing system and therefore, Green Tree
could not have been in violation of 47 U.S.C. § 227(b)(1)(A). Further, plaintiffs raised no
opposition to defendant's argument on this claim in their response brief, and have effectively
conceded that Green Tree is entitled to summary judgment on this claim. Accordingly, summary
judgment in favor of defendant is granted on plaintiffs' TCPA claim.
North Carolina Debt Collection Act Claims.
Conduct by debt collectors in North Carolina is governed by the NCDCA. Reid v. Ayers,
531 S.E.2d 231, 233 (N.C. App. 2000) (citing N.C. Gen. Stat. §§ 75-51 to 75-55). To
claim under the NCDCA, three "threshold" requirements must be satisfied" (1) the obligation
owed must be a "debt," (2) the one owing the obligation must be a "consumer," and (3) the one
trying to collect the obligation must be a "debt collector." !d. In addition to these requirements,
plaintiffs must meet the generalized requirements of the North Carolina Unfair and Deceptive
Trade Practices Act ("UDTPA"). Ross v. Wash. Mut. Bank, 566 F. Supp. 2d 468, 479 (E.D.N.C.
2008, aff'd, Ross v. FD.lC., 625 F.3d 808 (4th Cir. 2010)). Plaintiffs must forecast evidence of
an unfair act, in or affecting commerce, that has proximately caused plaintiffs' injuries. Id
Plaintiffs argue that the 2009 amendments to the NCDCA removed the requirement that
plaintiffs show they are consumers who have incurred a debt and therefore they do not need to
show that they meet the generalized elements of a UDTP A claim. Further they argue that Reid is
no longer good law. This is plainly not the case. First, the NCDCA itself plainly requires that
plaintiffs meet these elements. N.C. Gen. Stat. § 75-50 defines the terms "consumer" and "debt"
and the remainder of the NCDCA is tied directly to these definitions. Further, since 2009, state
and federal courts in North Carolina have continued to recognize that plaintiffs bringing NCDCA
claims must first meet the threshold requirements explained in Reid Simmons v. Kross
Lieberman & Stone, Inc., 746 S.E.2d 311, 315-16 (N.C. App. 2013) (affirming Reid in the debt
collector context); Glenn v. FNF Servicing, Inc., 2013 WL 4095524, *3-4 (E.D.N.C. Aug. 13,
2013) (plaintiffs suing under NCDCA for conduct arising after the 2009 amendments were still
required to prove status as a consumer and prove Chapter 75 elements of proximate cause and
damages). Therefore, the law has not changed and plaintiffs still must show that they meet the
threshold requirements laid out in Reid, 531 S.E.2d at 233, and the UDTPA.
In denying defendant's motion for summary judgment, this Court held that NCDCA
"extends to claims by individuals against whom a debt collector has made purposeful, targeted,
and directed attempts to collect a debt alleged to be owed by the plaintiffs." [DE 18 at 6]. In that
order, the Court held that plaintiffs had sufficiently alleged that Green Tree attempted to collect a
debt from them for which they were not liable. [Id]. At summary judgment, however, in order to
prevail the parties must come forward with more than allegations, they are required to present
evidence supporting their allegations. Here, plaintiffs have failed to proffer evidence which
supports their allegations that they are "consumers" allegedly obligated to Green Tree for a
"debt" or that Green Tree alleged that plaintiffs owed it a debt.
The evidence produced by discovery in this case reveals that plaintiffs are not consumers
and never owed a debt to Green Tree. There was no "business dealing or other consensual
obligation" between plaintiffs and Green Tree. DirecTV, Inc. v. Callahan, No. 5:02-cv-741B0(3), slip op. at 4 (E.D.N.C. Apr. 2, 2003) (unpublished); DirecTV v. Breedlove, 2003 U.S.
Dist. LEXIS 24694, *7-8 (E.D.N.C. Mar. 18, 2003) (unpublished) (recognizing that the
NCDCA's "definition of debt, while broadly including 'any obligation' is nevertheless limited
by the qualification that the debt must be 'owed by or due from a consumer"'). Additionally,
there is no evidence that Green Tree alleged that plaintiffs were obligated to Green Tree for the
Dudley Debt. Rather the eveidence shows that Green Tree was communicating with plaintiffs to
determine (a) if plaintiffs were interested in remaining in the manufactured home, as they had
indicated, and if so, arranging payment terms, and (b) the physical status of the manufactured
home (i.e. whether or not it was occupied and when it would become vacant).
The evidence shows that it is undisputed that plaintiffs never entered into any contract
with Green Tree, applied for credit with Green Tree, or personally paid Green Tree any money.
Similarly it is undisputed that plaintiffs are not responsible for the Dudley Debt and that Green
Tree never asked plaintiffs to assume the Dudley Debt. In fact, Timothy testified that Green Tree
told him that it was not possible for him to assume the Dudley Debt on the home as Green Tree
was the lienholder, not the owner, and did not have a power of attorney from Ms. Dudley.
Therefore the issue is whether or not plaintiffs have proffered enough evidence from
which a reasonable jury could deduce that Green Tree was attempting to collect a debt from
plaintiffs for which they were not liable. Plaintiffs have not done so. The evidence shows that
Green Tree was willing to forego its right to immediately initiate foreclosure and repossession
proceedings against the manufactured home in light of plaintiffs' stated desire to remain in the
home. In exchange for allowing plaintiffs to remain in the home Green Tree needed the mortgage
on the home to be current and was willing to accept payments from any party, including
plaintiffs' sister, that kept the mortgage current. Green Tree's communications with plaintiffs
regarding the arrangements that needed to be made for plaintiffs to remain in the home are
distinct from an attempt to collect the outstanding Dudley Debt from plaintiffs.
Plaintiffs found themselves in a situation where they were renting a property on a month
to month basis from a landlord who had a mortgage on the property. When the landlord defaulted
on the mortgage the natural consequence is for the creditor to foreclose on the property and evict
the tenants or not allow them to renew the lease. Because plaintiffs were facing eviction through
no fault of their own, the creditor, Green Tree, was willing to come up with an alternative
solution. It could not sell the property to plaintiffs because it was not the owner and did not have
legal authorization to sell on behalf of the landlord. The only way Green Tree could have sold
plaintiffs the home is after going through the repossession process which would have resulted in
the eviction of plaintiffs. Therefore, Green Tree offered to forego repossessing the home if the
mortgage was kept current. Although plaintiffs would not have been making progress towards
owning the home themselves, and would have been subject to the landlord's desires, they would
have been able to remain in the home as far as the creditor was concerned.
Plaintiffs never agreed to this plan with Green Tree. As a result, Green Tree was not
receiving payments for the home, but knew plaintiffs wanted to remain in the home. Rather than
simply initiate repossession, Green Tree made multiple attempts to contact plaintiffs to
determine if they would keep the mortgage current and remain in the home or if they would
vacate the home. Instead of providing a direct answer, plaintiffs stopped returning Green Tree's
calls remained in the home without making any payments to Green Tree or the landlord.
Essentially, they were able to live rent free from January until May, 2012.
Plaintiffs have not offered any evidence which supports their version of events where
Green Tree attempted to make them believe they were liable for the Dudley Debt or demanded
that they pay the Dudley Debt. The phone messages plaintiffs provide show nothing other than
that Green Tree made multiple attempts to contact plaintiffs to learn plaintiffs plans and whether
or not Green Tree would have to initiate repossession proceedings. In short, there is no evidence
that Green Tree violated the NCDCA because plaintiffs have failed to show that Green Tree was
ever attempting to collect a debt from them. Therefore the NCDCA does not apply and
defendants are entitled to summary judgment.
For the foregoing reasons, the defendant's motion for summary judgment is GRANTED
and plaintiffs' motion for partial summary judgment is DENIED. Plaintiffs' motion to file is
GRANTED and defendant's motion to substitute is GRANTED. Plaintiffs are ORDERED to
substitute the redacted version of exhibit C of plaintiffs' motion for summary judgment
submitted by Green Tree in support of its motions to substitute within five days of the entry of
this order. The exhibit C provisionally filed by plaintiffs under seal shall remain sealed. The
Clerk is DIRECTED enter judgment accordingly and to close the file after the appropriate
substitution is made.
f~ day ofMarch, 2014.
NCE W. BOYLE
UNITED STATES DISTRICT JUDGE
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