Johnson v. Synovus Bank et al

Filing 104

ORDER GRANTING MOTION 72 FOR SUMMARY JUDGMENT OF DEFENDANT CARRINGTON MORTGAGE SERVICES, LLC. Signed by Judge S. Thomas Anderson on 4/27/2016. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

B. JOHNSON and M. JOHNSON,

)
)
Plaintiffs,
)
)
vs.
)
)
SYNOVUS BANK; CRIMSON
)
PORTFOLIO, LLC; CRIMSON
)
PORTFOLIO ALPHA, LLC;
)
CRIMSON PORTFOLIO BETA, LLC; )
MOUNTAINVIEW MORTGAGE
)
OPPORTUNITIES FUND III TRUST I: )
CARRINGTON MORTGAGE
)
SERVICES, LLC; STATEBRIDGE
)
COMPANY, LLC; SELENE
)
FINANCIAL, LLC,
)
)
Defendants.
)

Case No. 2:14-cv 02950-STA-dkv

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT OF DEFENDANT
CARRINGTON MORTGAGE SERVICES, LLC
______
Before the Court is the Motion for Summary Judgment filed by Defendant Carrington
Mortgage Services, LLC (“Carrington”). (ECF No. 72.) Plaintiff Monika Johnson1 has filed a
response to the motion (ECF No. 84) and a supplemental response to the motion (ECF No. 96),
and Defendant has filed a reply. (ECF No. 100.) For the reasons set forth below, the Motion for
Summary Judgment is GRANTED.
Summary judgment is proper “if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as

1

Plaintiff Brian Johnson was dismissed from the action on November 24, 2015. (ECF No. 80.)
1

to any material fact and that the moving party is entitled to a judgment as a matter of law.”2
When deciding a motion for summary judgment, the court must review all the evidence and draw
all reasonable inferences in favor of the non-movant.

3

In reviewing a motion for summary

judgment, the Court views the evidence in the light most favorable to the nonmoving party, and
it “may not make credibility determinations or weigh the evidence.”4 When the motion is
supported by documentary proof such as depositions and affidavits, the nonmoving party may
not rest on his pleadings but, rather, must present some “specific facts showing that there is a
genuine issue for trial.” 5 These facts must be more than a scintilla of evidence and must meet
the standard of whether a reasonable juror could find by a preponderance of the evidence that the
nonmoving party is entitled to a verdict.6 The Court should ask “whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.”7 The Court must enter summary judgment “against a party
who fails to make a showing sufficient to establish the existence of an element essential to that
party’s case and on which that party will bear the burden of proof at trial.”8
Plaintiff filed a Petition for Breach of Contract, Unfair and Deceptive Servicing Practices,
Loss of Credit, Fraud, Issuance of a Temporary Restraining Order, and Further Injunctive Relief
2

Fed. R. Civ. P. 56(c).

3

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

4

Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014).

5

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Eastham v. Chesapeake Appalachia,
L.L.C., 754 F.3d 356, 360 (6th Cir. 2014).
6

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

7

Id. at 251–52.

8

Celotex, 477 U.S. at 322.
2

against Synovus Bank, Trust One Bank, Crimson Portfolio, LLC, and Carrington Mortgage
Services, LLC, in the Shelby County Chancery Court on November 25, 2013. (ECF No. 1-1.)
On October 9, 2014, Plaintiffs filed a First Amended Verified Petition, adding the remaining
Defendants. (Id.) The case was subsequently removed to this Court based on diversity of
citizenship, 28 U.S.C. § 1332. (ECF No. 1.)
On July 1, 2015, the Court granted the Motions to Dismiss of Synovus Bank and
Statebridge Company, LLC. (ECF No 54.) On March 31, 2016, the Court granted the Motion for
Summary Judgment of Defendant Mountanview. (EFF No. 99.)9
The undisputed facts show that Plaintiff obtained a mortgage loan in 2003, which was
modified in 2012, and subsequently transferred between several different servicers and investors.
Ultimately, Crimson became the owner of the loan, with Synovus Bank servicing the loan on
behalf of Crimson. Synovus Bank transferred the servicing rights to Carrington effective April
1, 2013. Servicing rights were transferred from Carrington to Statebridge effective June 18,
2014. The last monthly payment made by Plaintiff under the note and deed of trust was the
March 1, 2013, payment. No payments were ever sent by Plaintiff to Carrington.
Plaintiff originally brought three claims against Carrington: breach of contract, breach of
the common law covenant of good faith and faith dealing, and violation of the Tennessee
Consumer Protection Act, Tenn. Code Ann. § 47-18-101, et seq. Plaintiff has now abandoned
her claim against Carrington under the Tennessee Consumer Protection Act.10

9

Crimson Portfolio, LLC; Crimson Portfolio Alpha, LLC; Crimson Portfolio Beta, LLC
(“Crimson”) has also filed a Motion for Summary Judgment which is pending before the Court.
(ECF No. 73.)
10

(Resp. p. 10, ECF No. 96.)
3

Breach of Contract Claim
To state a breach of contract claim under Tennessee law, a plaintiff must show the
existence of an enforceable contract, a breach of the contract, and damages resulting from the
breach.11 Here, Plaintiff contends that “Carrington breached the terms of the loan modification
agreement by failing to recognize that payments were to be applied exclusively to principal; by
attempting to collect on Note B when it was not yet due; and by reporting the debt evidenced by
Note B as ‘charged off’ when there had been no default on the mortgage and no payments were
due under note B.”12
This Court has already issued an order interpreting the loan modification agreement. In
the Order of Dismissal as to Synovus and Statebridge, the Court held that the loan modification
agreement “is not susceptible to more than one interpretation, and thus it is not ambiguous.”13
Accordingly, “the parties’ intent is determined from the four corners of the contract.”14 This
Court then determined that, contrary to Plaintiff’s contention, the loan modification agreement
unambiguously provided for a twelve-year amortization period with a two-year term.15 “Here,
the contract terms are clear from the written instrument, which the Johnsons admittedly signed
after communicating their concerns with Willingham; therefore, any parole evidence is

11

See ARC LifeMed, Inc. v. AMC Tennessee, Inc., 183 S.W. 3d 1, 26 (Tenn. Ct. App. 2005).

12

(Resp., p. 11, ECF No. 96.)

13

(Order of Dismissal, p. 10, ECF No. 54.)

14

(Id.)

15

(Id., pp. 10-12.)
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inadmissible.”16 The Court further held that the loan modification was valid and enforceable and
that Plaintiff was “bound by the agreement [she] signed.”17
Plaintiff points to discussions that she had with Thomas Willingham, a representative for
Trust One Bank/Synovus, concerning issues relating to the servicing and payment collection for
the loan. (“Although the proposed Loan Modification and Agreement did not expressly state it,
Mr. Willingham committed that all payments on the first and second mortgage would be applied
entirely to principal to reduce the loan balance more quickly by e-mail dated December 20,
2011.”)18 The discussions cited relate to matters that took place before Carrington became the
servicer for the loan. Those communications were outside the four corners of the loan
modification agreement executed by Plaintiff and Trust One Bank/Synovus, and Plaintiff has
presented no evidence that the loan modification agreement was further modified in writing. In
light of the Court’s previous ruling, Plaintiff cannot present parole evidence to show any further
modifications.
Moreover, Willingham testified at his deposition that he had no conversations with any
loan servicer once the loans left Synovus.19 Thus, subsequent servicers such as Carrington were
provided with no servicing directions contrary to that which was contained in the original loan
documents and in the loan modification agreement.
Additionally, during the time that Carrington serviced the loan, Plaintiff made no
payments on the loan. Accordingly, there were no payments to apply to the loan principal or to

16

(Id., pp. 11-12.)

17

(Id., p. 11.)

18

(Resp., pp. 13 -14, ECF No. 96.)

19

(Willingham Dep., pp. 137-38, ECF No. 97.)
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misapply. Carrington could not breach an agreement to properly apply payments when it did not
receive any payments to apply, and Plaintiff’s breach of contract claim as to Carrington fails.
Breach of Covenant of Good Faith and Fair Dealing Claim
Plaintiff further alleges that Carrington breached the implied covenant of good faith and
fair dealing by failing to properly service Plaintiff’s loan. Under Tennessee law, the duty of
good faith and fair dealing is imposed on parties to a contract “as it pertains to the performance
of [that] contract.”20 “As a result of this covenant, each contracting party promises to perform
its part of the contract in good faith and, in return, expects the other party to do the same.”21
“The obligation of good faith and fair dealing does not create additional contractual rights or
obligations, and it cannot be used to avoid or alter the terms of an agreement.”22
Carrington could not breach the loan agreement by failing to properly apply payments, as
no payments were received. While Carrington acknowledges that it had a duty to properly apply
payments that were received, that duty was not triggered until Plaintiff fulfilled her duties under
the contract by actually making a payment on her loan obligation. “Absent a valid claim for
breach of contract, there is no cause of action for breach of implied covenant or good faith and
fair dealing.”23 Because Plaintiff does not have a breach of contract claim against Carrington,
her claim for breach of the implied covenant of good faith and fair dealing must also fail.
20

Barnes & Robinson Co. v.Onesource Facility Servs., Inc., 195 S.W.3d 637, 642 (Tenn Ct.
App. 2006)(citing Wallace v. National Bank of Commerce, 938 S.W.2d 684, 686 (Tenn. 1996).

21

Goot v Metro Gov’t of Nashville & Davidson County, 2005 WL 3031638 at *7 (Tenn. Ct.
App. Nov. 9, 2005).
22

Cadence Bank v. Alpha Trust, 473 S.W.3d 756 (Tenn. Ct. App. 2015) (citing Lamar Adver.
Co. v. By-Pass Partners, 313 S.W.3d 779, 791 (Tenn. Ct. App. 2009)).
23

SecurAmerica Bus. Credit v. Schledwitz, 2014 WL 1266121 at *33 (Tenn. Ct. App. Mar. 28,
2014) (quoting Ike v. Quantum Servicing Corp., 2012 WL 3727132 at *5 (W.D. Tenn. Aug. 27,
2012)).
6

The undisputed evidence shows that Carrington has no liability for Plaintiff’s claims.
Accordingly, Carrington’s Motion for Summary Judgment is GRANTED, and Carrington is
dismissed from the action.
IT IS SO ORDERED.

s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: April 27, 2016.

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