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Montgomery v. CitiMortgage, Inc.

United States District Court, S.D. Mississippi.

July 8, 2013

TERRY MONTGOMERY and NAWASA MONTGOMERY, PLAINTIFFS
v.
CITIMORTGAGE, INC. and JOHN DOES 1-5, DEFENDANTS

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For Terry Montgomery, Nawasa Montgomery, Plaintiffs: Donald W. Medley, LEAD ATTORNEY, MEDLEY LAW OFFICE, Hattiesburg, MS.

For CitiMortgage, Inc., Defendant: Reid S. Manley, LEAD ATTORNEY, BURR & FORMAN, LLP, Birmingham, AL; Christopher Daniel Meyer, BURR & FORMAN, LLP - Jackson, Jackson, MS.

OPINION

Keith Starrett, UNITED STATES DISTRICT JUDGE.

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MEMORANDUM OPINION AND ORDER

This matter is before the Court on the Defendant CitiMortgage, Inc.'s Motion for Summary Judgment [45] and Motion to Strike Exhibits E, F, G, H and I to Plaintiffs' Response in Opposition to Defendant's Motion for Summary Judgment (" Motion to Strike" ) [58]. Having considered the submissions of the parties, the record and the applicable law, the Court finds that the Motion to Strike [58] should be granted and that the Motion for Summary Judgment [45] should be granted in part and denied in part.

BACKGROUND

Plaintiffs Terry Montgomery and Nawasa Montgomery, husband and wife, assert numerous state law claims against Defendant CitiMortgage, Inc. (" CitiMortgage" ) relating to their efforts to have their mortgage loan payments reduced. Terry and Nawasa Montgomery own certain real property and a residence located at 183 Friendship Church Road, Columbia, Mississippi, 39429 (the " Subject Property" ). On November 26, 2007, Plaintiffs pledged the Subject Property as collateral in order to secure a loan from Citicorp Trust Bank, fsb (" Citicorp" ) in the principal amount of

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$264,009.93. ( See Note and Deed of Trust [45-1 at ECF pp. 8-31].) Plaintiffs' Note requires monthly mortgage payments in the amount of $2,323.27. Plaintiffs initially paid this amount via semi-monthly, automatic drafts from their bank account.

Effective July 1, 2008, Citicorp assigned its right to service the Plaintiffs' loan (that is, to collect payments from the Plaintiffs) to CitiMortgage. In September of 2008, Nawasa Montgomery called CitiMortgage seeking information about having the interest rate on the loan reduced. Mrs. Montgomery was advised to contact CitiMortgage's modification department. In December of 2008, Terry Montgomery also called CitiMortgage with respect to having the interest rate lowered. He was transferred to CitiMortgage's refinance department. Neither of these telephone calls resulted in Plaintiffs' mortgage loan payments being reduced.

The preceding circumstances are largely undisputed by the parties. Many of the circumstances addressed below are in dispute.

CitiMortgage alleges the following pertinent facts based on its business records, which include a Payment History report and Account Notes pertaining to the Plaintiffs' loan. (See Doc. No. [45-1 at ECF pp. 35-66].) Plaintiffs [1] contacted CitiMortgage on April 9, 2009 and June 29, 2009, to inquire about hardship assistance. On July 14, 2009, Plaintiffs contacted CitiMortgage in order to stop mortgage payments being deducted from their bank account. On July 22, 2009, Plaintiffs inquired about a modification of their loan pursuant to the Home Affordable Modification Program (" HAMP" ). [2] On September 28, 2009, Plaintiffs executed a HAMP Hardship Affidavit in order to qualify for loan modification that indicated, inter alia, their expenses had increased and their monthly debt payments were excessive. ( See Doc. No. [45-1 at ECF pp. 67-69].) Plaintiffs further provided via their affidavit that " we have never been delinquent on our mortgage and we feel we deserve a break with CitiMortgage." Effective October 1, 2009, Plaintiffs entered into a trial period plan (" TPP" ) that required monthly payments of $2,190.47 for October, November and December of 2009. Plaintiffs were required to submit certain documentation in order to qualify for a permanent loan modification under HAMP. Plaintiffs failed to submit the necessary documentation despite CitiMortgage repeatedly contacting them about the deficiencies in their application. Plaintiffs' application was declined on May 25, 2010, for failure to submit the required documentation. Plaintiffs subsequently furnished CitiMortgage certain documents, but on February 8, 2011, their application was denied again because they had insufficient income to qualify for loan modification. Upon being advised of this denial, Plaintiffs indicated that their income had changed and CitiMortgage thus advised them to send in additional documents. The loan modification process was pet on hold when Plaintiffs filed this lawsuit.

CitiMortgage also makes the following claims regarding Plaintiffs' payment history

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under the loan. Plaintiffs did not make a payment for the month of August, 2009. Plaintiffs' payments of $2,190.47 under the TPP for September and October of 2009 were less than the $2,323.27 amount required under the Note. Plaintiffs' December, 2009 payment was late. Plaintiffs' inadequate payments led to a delinquency on their account that was never resolved through loan modification. Plaintiffs have not made any payments under the loan since August 30, 2010.

The Plaintiffs contend CitiMortgage steered them toward HAMP modification when they inquired about having their interest rate reduced. Allegedly, the Plaintiffs did not know anything about the loan modification process at that time. Plaintiffs assert that CitiMortgage should have lowered their interest rate and not led them into loan modification since they had never missed a mortgage payment or failed to pay on time.

Plaintiffs further assert or admit to the following matters relating to this dispute. Plaintiffs paid CitiMortgage less than $2,323.27 per month during the trial modification process. These reduced payments were made on time. Plaintiffs never asked CitiMortgage to stop making automatic withdrawals from their bank account. CitiMortgage advised the Plaintiffs that it could not debit their account during the modification process and that the Plaintiffs would have to send in the payments. Plaintiffs never missed a payment before or during the trial modification. From July of 2009 forward, CitiMortgage failed to apply any of Plaintiffs' payments (totaling approximately $28,000.00) to the loan. In 2010, Plaintiffs received letters from CitiMortgage that indicated their loan was delinquent and that foreclosure may result if the overdue amounts were not paid. Upon receiving the first of these letters, Terry Montgomery called CitiMortgage and was advised to disregard the letter as it was just part of the modification process. Plaintiffs timely submitted all of the information requested by CitiMortgage during the modification process. Further, Plaintiffs had to compile and resend information on several occasions because CitiMortgage could not keep track of it. No mortgage payments have been made since October of 2010, when CitiMortgage stopped making withdrawals from Plaintiffs' bank account.

It appears to be undisputed that CitiMortgage referred the Plaintiffs' loan to foreclosure in October of 2010. It also appears undisputed that foreclosure proceedings have not been finalized since Plaintiffs still reside at the Subject Property.

On December 13, 2011, Plaintiffs filed suit against CitiMortgage in the Circuit Court of Marion County, Mississippi. ( See Compl. [1-1].) Plaintiffs' Complaint contains the following seven counts: (I) Negligence and Gross Negligence; (II) Negligent or Intentional Infliction of Emotional Distress; (III) Breach of Fiduciary Duty; (IV) Unjust Enrichment; (V) Breach of the Covenant of Good Faith and Fair Dealing; (VI) Negligent, Grossly Negligent and Wanton Failure to Monitor and Train Agents; and (VII) Injunction. On January 17, 2012, CitiMortgage removed the proceeding to this Court on the basis of diversity of citizenship jurisdiction under Title 28 U.S.C. § 1332. ( See Notice of Removal [1].) On March 15, 2013, CitiMortgage filed its Motion for Summary Judgment [45]. This motion has been fully briefed. On May 6, 2013, CitiMortgage filed its Motion to Strike [58]. Plaintiffs have not responded to the Motion to Strike and the time for their response has expired.

I. CitiMortgage's Motion to Strike [58]

CitiMortgage contends that Exhibits " E" through " I" to Plaintiffs' Response

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in Opposition [54] to summary judgment should be stricken as improper summary judgment evidence. Exhibit E [54-5] is a spreadsheet that purportedly shows Plaintiffs' mortgage payment history, as reflected by their bank statements. CitiMortgage argues that Exhibit E is unauthenticated and that neither it nor the bank records it purports to summarize were produced during discovery. Exhibit F [54-6] is an article published by the Federal Deposit Insurance Corporation addressing unsafe or unsound practices by certain residential mortgage servicers in connection with foreclosure activities. Exhibits G, H and I [54-7 to -9] are media publications concerning the Troubled Asset Relief Program and government bailouts of lending institutions resulting from the 2007-2008 financial crisis. CitiMortgage posits that Exhibits F, G, H and I should be stricken as irrelevant, prejudicial and hearsay evidence.

Plaintiffs' response to the Motion to Strike [58] was due to be filed on or before May 23, 2013. Plaintiffs failed to file their response or request a filing extension by that date. The Court's Local Uniform Civil Rules provide that " [i]f a party fails to respond to any motion, other than a dispositive motion, within the time allotted, the court may grant the motion as unopposed." L.U.Civ.R. 7(b)(3)(E). The grant of the Motion to Strike would leave the Complaint pending. Further, the Court finds that the subject Exhibits are not dispositive of any issue on summary judgment. Therefore, the Motion to Strike [58] will be granted as unopposed.

II. CitiMortgage's Motion for Summary Judgment [45]

A. Standard of Review

Federal Rule of Civil Procedure 56 provides that " [t]he court shall grant summary judgment 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). " Where the burden of production at trial ultimately rests on the nonmovant, the movant must merely demonstrate an absence of evidentiary support in the record for the nonmovant's case." Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808, 812 (5th Cir. 2010) (citation and internal quotation marks omitted). The nonmovant must then " come forward with specific facts showing that there is a genuine issue for trial." Id. " 'An issue is material if its resolution could affect the outcome of the action.'" Sierra Club, Inc. v. Sandy Creek Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010) (quoting Daniels v. City of Arlington, Tex., 246 ...


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