Messex v. Quicken Loans Inc
Filing
149
ORDER AND OPINION denying 145 Motion to Alter or Amend Judgment pursuant to Rules 52(b) and 59(e) of the Federal Rules of Civil Procedure. Signed by Honorable J Michelle Childs on 7/10/2018.(asni, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Travis Messex,
)
)
Plaintiff,
)
v.
)
)
Quicken Loans, Inc.,
)
)
Defendant.
)
____________________________________)
Civil Action No. 2:15-cv-04773-JMC
ORDER AND OPINION
Plaintiff Travis Messex filed the above-captioned action against Defendant Quicken
Loans, Inc. alleging claims for violation of the South Carolina Attorney Preference Statute
(“SCAPS”), S.C. Code § 37-10-102 (2017), in the context of a mortgage loan closing. T. Messex
v. Quicken Loans, Inc., C/A No. 2:15-cv-04773-JMC, ECF No. 1-1 at 9 ¶¶ 8–13 (D.S.C. Nov.
30, 2015).
This matter is before the court on Plaintiff’s Motion to Alter or Amend Judgment
pursuant to Rules 52(b) and 59(e) of the Federal Rules of Civil Procedure. (ECF No. 145.)
Specifically, Plaintiff seeks to alter or amend the Order entered on February 22, 2018 (ECF No.
143) (the “February Order”), in which the court granted Quicken Loans’ Motion for Summary
Judgment and denied Plaintiff’s Motion for Summary Judgment. (ECF Nos. 79, 82.) Quicken
Loans opposes Plaintiff’s Motion to Alter or Amend asserting that it should be denied. (ECF No.
146 at 2.) For the reasons set forth below, the court DENIES Plaintiff’s Motion to Alter or
Amend.
I.
RELEVANT BACKGROUND TO PENDING MOTION
Quicken Loans “is a nationwide online mortgage lender that provides, among other
things, residential mortgage loan refinances.” Boone v. Quicken Loans, Inc., 803 S.E.2d 707,
709 (S.C. 2017). “Under the Quicken Loans refinance procedure, the borrowers have already
purchased the property and are simply seeking a new mortgage loan (presumably with more
favorable terms) to replace the existing loan.” Id.
In or around November 28, 2012, Teresa Messex, Plaintiff’s wife, provided information
to Quicken Loans for purposes of completing a loan application to refinance the mortgage on the
Messexes’ residence located at 136 Messex Lane, Saint George, South Carolina.1 (ECF Nos. 793 at 4, 79-1 at 23:10–27:25 & ECF No. 79-5 at 3 ¶ 5.) At all times relevant to this transaction,
Teresa Messex had Plaintiff’s permission to conduct his business, which authorization was
conveyed by Plaintiff to Quicken Loans. (ECF No. 79-2 at 6:15–24 & 7:11–16; ECF No. 79-1 at
25:17–26:8.) As a result of the information provided by Teresa Messex, Defendant generated
loan application documents that were made available to Plaintiff and his wife to review via
Quicken Loans’ internet web portal. (ECF No. 79-5 at 3 ¶ 5.) In addition to the loan application
package, Quicken Loans included an Attorney/Insurance Preference Checklist (the “AIPC”).
(Id.; see also ECF No. 1-1 at 9 ¶ 8.) Based on the information provided by Teresa Messex, the
AIPC was prepopulated with the following relevant information (in bold):
1.
I (We) have been informed by the lender that I (we) have a right to select legal counsel to
represent me(us) in all matters of this transaction relating to the closing of this loan.
(a) I select I/We will not use the services of legal counsel.
__________________________________ __________________________________
Borrower Travis Messex
Date Borrower
Date
__________________________________ __________________________________
Borrower
Date Borrower
Date
1
Plaintiff and his wife had prior experience with the loan application process having refinanced
the mortgage on their residence a total of nine times with six different lenders. (ECF No. 79 at
2.)
2
(b) Having been informed of this right, and having no preference, I asked for assistance
from the lender and was referred to a list of acceptable attorneys. From that list I
select
Not Applicable _____________________
Borrower
Date
Not Applicable _____________________
Borrower
Date
Not Applicable______________________
Borrower
Date
Not Applicable______________________
Borrower
Date
(ECF No. 1-1 at 13.)
On November 29, 2012, Teresa Messex, with Plaintiff’s permission/authorization,
electronically signed the loan application documents and the AIPC and transmitted them to
Quicken Loans via its internet web portal. (Id.; see also ECF Nos. 79-1 at 25:2–8 & 27:18–24;
ECF No. 79-2 at 6:15–7:16; ECF No. 79-5 at 3 ¶ 6.) On January 10, 2013, Teresa Messex had a
telephone conversation with a Quicken Loans’ representative to discuss the details of the loan
closing, including who would be in attendance. (ECF No. 79-5 at 3 ¶ 7.) On January 22, 2013,
Plaintiff and his wife signed a disclosure form agreeing to be represented by Scotty Sheriff of the
law firm McDonnell & Associates, P.A. at the loan closing and completed their loan closing.
(ECF No. 79-8 at 3 ¶ 4–4 ¶ 8 & 6–8.)
On October 19, 2015, Plaintiff filed a Complaint against Quicken Loans in the Court of
Common Pleas for Dorchester County, South Carolina alleging violation of the SCAPS.2 (ECF
No. 1-1 at 9 ¶ 12.) After Quicken Loans removed the case to this court (ECF No. 1), the parties
engaged in and completed discovery on March 1, 2017. (ECF No. 49.) Quicken Loans then
moved for summary judgment on March 31, 2017. (ECF No. 79.) On that same day, Plaintiff
filed his Cross-Motion for Summary Judgment. (ECF No. 82.) After the court entered the
February Order, Plaintiff moved to alter or amend judgment on March 22, 2018. (ECF No. 145.)
2
A plaintiff enforces a violation of the SCAPS through S.C. Code § 37-10-105(A). In addition
to his attorney preference claim, Plaintiff also alleged his entitlement to relief under S.C. Code
§§ 37-10-105, -108, based on unconscionability. The court dismissed this claim on June 30,
2016. (ECF No. 39.)
3
II.
JURISDICTION
The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) based on
Quicken Loans’ allegations that there is complete diversity of citizenship between Plaintiff and
Quicken Loans, and the amount in controversy herein exceeds the sum of Seventy-Five
Thousand ($75,000.00) Dollars, exclusive of interest and costs. (ECF No. 1 at 2.) Quicken
Loans is a corporation organized under the laws of Michigan with its principal place of business
in Detroit, Michigan. (ECF No. 1-2 at 3 ¶ 5.) Plaintiff is a citizen and resident of Dorchester
County, South Carolina. (ECF No. 1-1 at 8 ¶ 1.) Moreover, the court is satisfied that the amount
in controversy exceeds $75,000.00 in accordance with Defendant’s representation. (ECF No. 1
at 3–7.)
III.
LEGAL STANDARD AND ANALYSIS
In the February Order, the court made the following observations in granting Quicken
Loans’ Motion for Summary Judgment:
The SCAPS requires the lender to ascertain the preference of the borrower as to
legal counsel. “‘[A]scertain’ means ‘to render certain or definite . . . to clear of
doubt or obscurity . . . to find out by investigation.’” Parker v. Cty. of Oxford,
224 F. Supp. 2d 292, 295 (D. Me. 2002) (quoting Black's Law Dictionary 114
(6th ed. 1990)); see also Morgan v. Huntington Ingalls, Inc., 879 F.3d 602, 609
(5th Cir. 2018) (“‘Ascertain’ means ‘to make certain, exact, or precise’ or ‘to find
out or learn with certainty. . . ’ [t]hus, ‘ascertain’ requires ‘a greater level of
certainty . . . .’”) (citation omitted). In considering the requirements of the
SCAPS, the court observes that the parties have not presented any dispute of fact
regarding Quicken Loan’s attorney preference procedure in this matter.
Therefore, the matter is ripe for summary judgment.
Upon review, the court is persuaded that Quicken Loans did ascertain Plaintiff’s
attorney preference in compliance with the SCAPS. First, Teresa Messex had
permission from Plaintiff3 to convey to an agent of Quicken Loans that Plaintiff
3
Q.
A.
Q.
A.
Do you remember what you [Plaintiff] talked about [with Quicken Loans] during
that one phone call?
No. Pretty much just giving them my wife authorization over everything.
Okay.
Since my name was on it, they had to have authorization. (ECF No. 79-2 at 8:17–
4
would not use the services of preferred legal counsel to represent him in this
transaction. After receiving Teresa Messex’s response that Plaintiff did not have
counsel of preference, Quicken Loans (1) sent Plaintiff an AIPC that advised him
that he has “a right to select legal counsel to represent me(us) in all matters of this
transaction relating to the closing of the loan” and (2) prepopulated the AIPC with
the statement “I/We will not use the services of legal counsel.” (ECF No. 1-1 at
13.) Upon receipt of the AIPC, Teresa Messex reviewed it, discussed it with
Plaintiff,4 electronically signed it5 and electronically transmitted the document
back to Quicken Loans.6 There is no evidence before the court that Plaintiff had
any questions about the content of the AIPC. Cf. Floyd v. Nationwide Mut. Ins.
Co., 626 S.E.2d 6, 12 (S.C. 2005) (“[A] competent person usually is presumed to
have knowledge and understanding of a document he signs, absent evidence his
signature was obtained by misrepresentation, fraud, forgery, or duress.”) (citations
omitted). Thereafter, Plaintiff had approximately seven weeks, from November
29, 2012, to before the loan closing on January 22, 2013, to express an attorney
preference to Quicken Loans, which he did not do. Moreover, Plaintiff has not
voiced any displeasure with counsel chosen by Quicken Loans (Scotty Sheriff).7
Based on the foregoing, the court predicts that the South Carolina Supreme Court
would conclude that Quicken Loans did “ascertain . . . the preference of the
borrower as to [] legal counsel . . . relating to the [instant] closing . . .” in
compliance with the SCAPS. Accordingly, the court GRANTS Quicken Loans’
Motion for Summary Judgment and DENIES Plaintiff’s Motion for Summary
Judgment.
(ECF No. 143 at 8–10.) Plaintiff seeks to alter or amend the foregoing pursuant to Rules 52 and
59.
4
5
6
7
Q.
A.
Q.
A.
Q
A.
Q.
A.
Q.
A.
Q.
A.
23.)
Do you remember talking about any of the application process with your wife
[Teresa Messex] for the Quicken Loans loan?
Yes. We had talked about it.
What did you talk about?
It’s been so long. I know we talk about everything. She just does the final.
Okay.
Everything we do, we talk about. (ECF No. 79-2 at 6:21–7:4.)
So if she signed your name to any of these documents, do you have any reason to
think they are incorrect for any reason?
No. (Id. at 7:7–10.)
Was your wife [Teresa Messex] authorized by you to fill out this paperwork?
Yes. (ECF No. 79-2 at 6:15–17.)
Okay. Assuming he [Scott Sheriff] was, were you okay with him – –?
Yes. (Id. at 9:12–14.)
5
A.
Applicable Standard under Rule 59(e)8
Rule 59 allows a party to seek an alteration or amendment of a previous order of the
court. Fed. R. Civ. P. 59(e). Under Rule 59(e), a court may “alter or amend the judgment if the
movant shows either (1) an intervening change in the controlling law, (2) new evidence that was
not available at trial, or (3) that there has been a clear error of law or a manifest injustice.”
Robinson v. Wix Filtration Corp., 599 F.3d 403, 407 (4th Cir. 2010); see also Collison v. Int’l
Chem. Workers Union, 34 F.3d 233, 235 (4th Cir. 1994). It is the moving party’s burden to
establish one of these three grounds in order to obtain relief. Loren Data Corp. v. GXS, Inc., 501
F. App’x 275, 285 (4th Cir. 2012). The decision whether to reconsider an order under Rule 59(e)
is within the sound discretion of the district court. Hughes v. Bedsole, 48 F.3d 1376, 1382 (4th
Cir. 1995). A motion to reconsider should not be used as a “vehicle for rearguing the law,
raising new arguments, or petitioning a court to change its mind.” Lyles v. Reynolds, C/A No.
4:14-1063-TMC, 2016 WL 1427324, at *1 (D.S.C. Apr. 12, 2016) (citing Exxon Shipping Co. v.
Baker, 554 U.S. 471, 485 n.5 (2008)).
B.
The Parties’ Arguments
1. Plaintiff
In his Motion, Plaintiff first re-expresses his contention that the SCAPS requires that a
“lawyer must be counsel selected by the borrower,” which Quicken Loans’ attorney preference
procedure fails to provide for a borrower.
(ECF No. 145 at 2–3.)
He then states his
disagreement with the conclusions reached by the court based upon its review of testimony
8
The court observes that Rule 52(b) is inapplicable because this action did not go to trial. See
id.; see also State Farm Mut. Auto. Ins. Co. v. Medgyesy, C/A No. 6:12-CV-00044-MGL, 2014
WL 11511695, at *1 (D.S.C. May 12, 2014) (“‘Rule 52(b) is a trial rule that is not applicable in a
summary judgment proceeding’ or on a motion to dismiss in a habeas proceeding.”) (quoting
Orem v. Rephann, 523 F.3d 442, 451 n.2 (4th Cir. 2008)).
6
provided by Plaintiff and Quicken Loans’ Rule 30(b)(6) witness, Jeremy Potter. (ECF No. 145
at 4–6.)
Next, Plaintiff explains again why Quicken Loans’ attorney preference procedure fails to
ascertain the preference of the borrower. (See id. at 7–9.) Referencing Quicken Loans’ AIPC,
Plaintiff asserts that the form is deficient under the SCAPS because “1. The form in fact does not
indicate a choice of ‘no preference’ as the section reserved for this event, l(b), contains the
prepopulated language ‘Not Applicable,’ and 2. The form did not provide the borrowers a choice
of attorney, as their signatures appear under the prepopulated statement ‘I/We will not use the
services of legal counsel,’ an option, unbeknownst to the Plaintiff, that is not available pursuant
to South Carolina law.” (Id. at 7.) Further, Plaintiff wonders how the AIPC ascertains the
preference of the borrower since it (1) is not a writing completed “in the borrower’s own
handwriting,” (2) is “already completed when the borrower receives it” and (3) is unable to be
substantiated by evidence submitted in violation of the parole evidence rule. (Id. at 8–9.)
Finally, Plaintiff expresses his dismay that the court’s February Order’s language did not
mimic the substantive findings contained in the Order entered denying Quicken Loans’ Motion
to Dismiss.9 (Id. at 10–11 (quoting ECF No. 39 at 4–6).)
9
In its June 30, 2016 Order, the court observed as follows:
The legislative intent of the attorney preference statute is to protect borrowers by
giving them the option to select their own counsel to assist them during the
closing of the transaction. In protecting borrowers, the statute requires that
lenders like Defendant ascertain Plaintiff’s attorney preference. The facts as
alleged by Plaintiff indicate that Defendant provided Plaintiff with a form where
the attorney preference portion was already filled in, then required Plaintiff to
sign the form. (ECF No. 1-1 at 9 ¶ 8-9.) Plaintiff further alleges that he was not
allowed to choose an attorney to represent him in the transaction. (Id. at ¶ 13). If
the facts as alleged by Plaintiff are true, it is hard to imagine how Defendant could
have ascertained Plaintiff’s preference for an attorney if Defendant essentially
told Plaintiff what his preference was by providing him with an already completed
form. If the facts as alleged are true, they would seem to support Plaintiff’s
7
2. Quicken Loans
Quicken Loans opposes Plaintiff’s Motion arguing that “[t]he Court’s factual findings are
supported by the record” and “Plaintiff offered no evidence to dispute the facts at summary
judgment and still has not in []his motion.” (ECF No. 146 at 3.) Quicken Loans further argues
that Plaintiff has failed to cite to any legal support for his claim that “it is legally impossible for a
borrower to not have a preference” for an attorney. (Id. at 5–8.) Additionally, Quicken Loans
argues that Plaintiff has failed to cite to any legal support for his claims that (1) a written record
of the borrower’s choice is mandatory pursuant to both the SCAPS and the federal Truth-inLending Act, 15 U.S.C. §§ 1601–1667f, or that (2) the parole evidence rule only allows
consideration of written evidence. (Id. at 8–10.) Finally, as to the exhibit that was attached to
Plaintiff’s Motion (see ECF No. 145-1), Quicken Loans asserts that “[t]he Court should reject
Plaintiff’s filing of the Department’s amicus brief10 because it is in direct contravention of the
Court’s Order and is an improper attempt to refashion their argument and expand the record at
the 59(e) stage.” (ECF No. 146 at 10.)
C.
The Court’s Review
Plaintiff does not reference either an intervening change in controlling law or new
evidence previously unavailable. Based on a review of Plaintiff’s filings (ECF Nos. 145, 147),
the court can only conclude that Plaintiff is seeking to alter or amend the February Order on the
basis that the court’s decision was either a clear error of law or resulted in a manifest injustice to
Plaintiff.
Clear error occurs when the reviewing court “is left with the definite and firm
allegation that he was deprived of a meaningful choice in selecting his attorney
for this transaction.
(ECF No. 39 at 5–6.)
10
The South Carolina Department of Consumer Affairs (“DCA”) filed an Amicus Curiae Brief in
the matter of Quicken Loans, Inc. v. Wilson, App. Case No. 2016-001214 (S.C. Ct. App.). In the
brief, the DCA asked that the appellate court “uphold the Special Referee’s ruling that Quicken
violated the attorney preference statute.” (ECF No. 145-1 at 19.)
8
conviction that a mistake has been committed.” United States v. Harvey, 532 F.3d 326, 336 (4th
Cir. 2008) (internal quotation marks omitted); see also United States v. Martinez–Melgar, 591
F.3d 733, 738 (4th Cir. 2010) (“[C]lear error occurs when a district court’s factual findings are
against the clear weight of the evidence considered as a whole.”) (internal quotation marks
omitted); Miller v. Mercy Hosp., Inc., 720 F.2d 356, 361 n.5 (4th Cir. 1983) (explaining that a
district court’s factual finding is clearly erroneous if “the finding is against the great
preponderance of the evidence”) (internal quotation marks omitted). Manifest injustice occurs
where the court “has patently misunderstood a party, or has made a decision outside the
adversarial issues presented to the Court by the parties, or has made an error not of reasoning but
of apprehension . . . .” Campero USA Corp. v. ADS Foodservice, LLC, 916 F. Supp. 2d 1284,
1292–93 (S.D. Fla. 2012) (citations omitted).
Upon review of the instant Motion, the court observes that Plaintiff’s arguments add very
little new substantive argument to what he has already presented on the aforementioned issues.
(See, e.g., ECF Nos. 82, 95 & 96.) A Rule 59(e) motion should not be used as an opportunity to
rehash issues already ruled upon because a litigant is displeased with the result. See Hutchinson
v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993) (stating that “mere disagreement does not support
a Rule 59(e) motion”); see also Consulting Eng’rs, Inc. v. Geometric Software Solutions &
Structure Works LLC, 2007 WL 2021901, at *2 (D.S.C. July 6, 2007) (“A party’s mere
disagreement with the court’s ruling does not warrant a Rule 59(e) motion, and such motion
should not be used to rehash arguments previously presented or to submit evidence which should
have been previously submitted.”). In the February Order (ECF No. 143), the court cited to
appropriate substantive case law and provided specific reasoning to support its decision to find
that Quicken Loans did ascertain Plaintiff’s preference as to legal counsel in accordance with the
9
SCAPS. Moreover, in contrast to its Order on Quicken Loans’ Motion to Dismiss (ECF No. 39),
the court did not have to rely solely on Plaintiff’s allegations and was able to reference specific
communications between the parties leading to the conclusion that there was no genuine issue as
to any material fact and that Quicken Loans was entitled to judgment as a matter of law. The
reference to specific communications is pertinent here.
In
Boone,
the
South
Carolina
Supreme
Court
referenced
borrower-lender
communications when it observed that “the borrower speaks on the telephone with a licensed
mortgage banker employed by Quicken Loans [][and] [e]ach borrower is informed that he or she
has the right to select legal counsel to represent him or her in the transaction and asked whether
he or she has a preference as to a specific attorney.” Boone, 803 S.E. 2d at 709. In reaching its
decision in this matter, the court focused on Plaintiff’s aforementioned testimony in addition to
the declaration and testimony of Jeremy Potter, Quicken Loans’ Rule 30(b)(6) witness, who
stated that the Quicken Loans’ mortgage banker is required to get an answer from a prospective
borrower to the following question in order to proceed through the loan application program:
“Will the borrower select legal counsel to represent them in this transaction?” (ECF No. 141-5
at 9:3–10:9.) Both in the February Order and the Boone opinion, there is an emphasis placed on
evidence regarding the communications between Quicken Loans and the borrower.
In
considering the special referee’s order and the DCA’s amicus brief from the Wilson case, neither
document purports to consider evidence regarding the parties’ communications to be pertinent to
a determination of whether the lender ascertained the attorney preference of the borrower.11 In
this regard, the court does not perceive that the South Carolina Supreme Court would require
11
In its amicus brief, the DCA identified only the following evidence as worthy of consideration:
(1) forms like Quicken Loans’ AIPC; (2) “[a]n email from the borrower to the lender choosing
the attorney or insurance agent”; (3) “[a]n email from another party such as the borrower’s real
estate agent;” and (4) “[c]ompany system notes entered by the lender’s employee.” (ECF No.
145-1 at 9.)
10
trial court’s to determine whether a borrower’s attorney preference was ascertained in a vacuum
wherein relevant testimony by the borrow and lender’s representative were disregarded.12 Cf.
Roberts v. Sea-Land Servs., Inc., 566 U.S. 93, 101 (2012) (“Statutory language, however,
“cannot be construed in a vacuum.”). In this regard, the court is not persuaded that entry of the
February Order resulted in the commission of either clear error of law or manifest injustice.
Accordingly, the court must deny Plaintiff’s Motion to Alter or Amend Judgment.
IV.
CONCLUSION
For the reasons set forth above, the court hereby DENIES Plaintiff Travis Messex’s
Motion to Alter or Amend Judgment pursuant to Rules 52(b) and 59(e) of the Federal Rules of
Civil Procedure. (ECF No. 145.)
IT IS SO ORDERED.
United States District Judge
July 10, 2018
Columbia, South Carolina
12
The court observes that Plaintiff’s citation to the parole evidence rule to prohibit consideration
of the communicative evidence is also neither persuasive nor supported by cited caselaw.
11
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