United States District Court, S.D. Mississippi, Southern Division
MEMORANDUM OPINION AND ORDER GRANTING RESIDENTIAL CREDIT SOLUTIONS, INC.'S AMENDED MOTION FOR SUMMARY JUDGMENT
HALIL SULEYMAN OZERDEN, District Judge.
BEFORE THE COURT is Defendant Residential Credit Solutions, Inc.'s ("RCS") Amended Motion for Summary Judgment  filed on November 25, 2013. Plaintiffs Charles and Bonnie Neel filed a Response in Opposition  to the Motion on December 16, 2013, and RCS filed its Rebuttal  on December 30, 2013. Having considered the parties' submissions, the record, and relevant legal authorities, the Court is of the opinion that RCS' Amended Motion should be granted and Plaintiffs' claims against RCS for invalid transfer, breach of contract, negligence, fraud, violation of the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 to 2617, ("RESPA"), and violation of the Fair Debt Collection Practices Act, 15 U.S.C § 1692 ("FDCPA"), should be dismissed with prejudice.
A. Factual Background
This case arises from the servicing of a note executed by Plaintiffs on February 23, 2007 ("the Note") [162-1]. The record establishes beyond dispute the following facts. Payment of the Note was secured by a Deed of Trust covering Plaintiffs' home located at 7012 Red Bud Lane, Ocean Springs, Mississippi ("the Property"). Dep. of Charles and Bonnie Neel ("Neel Dep.") 7:3-9, 33:4-9 [162-5]; Deed of Trust [162-2]. Capital Lending, LLC ("Capital Lending") was listed as the lender on the Note, and AmTrust was the initial servicer. Note ¶ 1, Neel Dep. 42:4-11. Pursuant to the terms of the Deed of Trust, Mortgage Electronic Registration Systems, Inc. ("MERS") was listed as the beneficiary of record, as nominee for Capital Lending, its successors, and assigns, of the Deed of Trust that secured payment of the Note. Deed of Trust 3. The terms of both the Note and Deed of Trust permitted transfer of both instruments by the lender. Note ¶ 1, Deed of Trust ¶ 20.
In March 2010, the Note was transferred to Fannie Mae, and Saxon Mortgage Services, Inc. ("Saxon") replaced AmTrust as the servicer of the Loan. Neel Dep. 46:10-15, 49:22-25. In December 2010, Plaintiffs and Saxon attempted to agree upon the terms for a modification of the Loan, but these efforts were unfruitful, and Plaintiffs rejected the proposed modification by letter dated January 30, 2012. Id. at 112:17-22, 149:12-150:17; Ex. "I" to RCS' Am. Mot. for Summ. J [162-9]. Plaintiffs have not made a payment towards the Loan since June 2011. Neel Dep. 170:19-22. On November 9, 2011, the Deed of Trust was transferred from MERS to Saxon. Assignment and Transfer of Lien [162-3]. Thereafter, Saxon exchanged correspondence with Plaintiffs' attorney regarding a threatened foreclosure by Saxon. Neel Dep. 136:20-138:6.
On or about May 1, 2012, RCS replaced Saxon as the servicer of the Loan. Id. at 145:17-20, 146:12-147:1; Dep. of Marlon Frazier ("Frazier Dep.") 7:25-8:3 [162-10]. Plaintiffs were in default when RCS began servicing the Loan. Frazier Dep. 11:22-25. RCS wrote Plaintiffs on May 1, 2012, informing them that the balance on the Loan was $93, 110.03, that Plaintiffs were in default, and that Plaintiffs could contact RCS' attorney to obtain reinstatement information. Ex. 4 to Mem. in Supp. of Pls.' Resp. in Opp'n to Mot. for Summ. J. ("Resp. in Opp'n") [188-4]. RCS sent a "welcome letter" to Plaintiffs on May 3, 2012, providing Plaintiffs with the number that RCS assigned to the Loan and informing them that RCS was attempting to collect a debt. Frazier Dep. 12:1-13:20; Ex. 5 to Resp. in Opp'n [188-5]. On May 5, 2012, RCS sent correspondence containing a validation of Plaintiffs' debt and the disclosures required by 15 U.S.C. § 1692g(a), the FDCPA's disclosure provision. Ex. 7 to Resp. in Opp'n [188-7]. There is no evidence indicating that Plaintiffs responded to this correspondence.
On June 11, 2012, Plaintiffs forwarded correspondence to RCS which they contend constituted a "qualified written request" ("QWR") pursuant to RESPA. Ex. 9 to Resp. in Opp'n [188-9]. RCS responded on June 19, 2012, informing Plaintiffs that their letter was not determined to be a QWR as defined under RESPA because Plaintiffs did not reference a specific allegation of improper servicing. Ex. 10 to Resp. in Opp'n [188-10]. RCS also noted that if Plaintiffs questioned a specific servicing event, they should contact RCS in writing. Id. On July 2, 2012, Plaintiffs, through their attorney, wrote a second letter to RCS which Plaintiffs also allege constituted a QWR. Ex. 9 to Resp. in Opp'n [188-9]. RCS responded on July 10, 2012, and noted that RCS had again determined that the correspondence did not constitute a QWR because Plaintiffs did not identify a specific allegation of inaccurate servicing. Ex. 10 to Resp. in Opp'n [188-10]. RCS' response also enclosed a payment history for the time that the loan had been serviced by RCS. Id. This appears to have been the final communication between RCS and Plaintiffs before Plaintiffs sued RCS on September 12, 2012.
On June 26, 2013, RCS wrote Plaintiffs informing them that RCS was placing flood insurance on the Property. Ex. 12 to Resp. in Opp'n [188-12]. RCS informed Plaintiffs that it must be listed as mortgagee in order for Plaintiffs to be considered in compliance with the requirement that the Property remain insured. Id. While Plaintiffs purchased a one year policy of flood insurance covering the Property on June 26, 2012, the insurance policy identified Saxon and not RCS as the mortgagee despite the fact that Saxon was no longer servicing the Loan. Ex. 3 to RCS' Rebuttal Br. in Supp. of Am. Mot. for Summ. J. ("Rebuttal Br.") [208-3]. When Plaintiffs renewed their flood insurance coverage for the policy year beginning June 26, 2013, Saxon was again listed as the mortgagee rather than RCS. Id.
At their deposition on September 13, 2013, Plaintiffs repeatedly testified that they had never had a telephone conversation with anyone from RCS and never forwarded any payments to RCS. Neel Dep. 150:11-17, 196:10-13, 205:19-21. Plaintiffs further testified that RCS "disappeared" shortly after taking over servicing of the Loan. Id. at 203:19-23. Plaintiffs stated that they "had no complaint against" RCS because they had not dealt with RCS. Id. at 198:15-22. Plaintiffs acknowledged that their complaints in this case were primarily directed toward events that occurred prior to RCS taking over as servicer. Id. at 199:11-14.
B. Procedural Background
Plaintiffs sued RCS, Saxon, Fannie Mae, MERS, and Capital Lending on September 12, 2012, in the Circuit Court of Jackson County, Mississippi. Complaint [1-2]. On October 12, 2012, the case was removed to this Court on the basis of diversity jurisdiction. Notice of Removal 1 . Plaintiffs filed an Amended Complaint  on March 26, 2013, and a Second Amended Complaint  on May 16, 2013. Although it is not clear, the Second Amended Complaint appears to assert claims for breach of contract, negligence, breach of the duty of good faith and fair dealing, breach of fiduciary duties, modification of the Loan, a mortgage surrender, retraction of all negative credit reporting, conspiracy, fraud, a RESPA violation, and failure to provide Plaintiffs with "adequate disclosures" in violation of the FDCPA. Second Am. Compl. 1-11.
Construing the pleadings in Plaintiffs' favor, they appear to advance claims against RCS for negligence, conspiracy, fraud, breach of contract, a violation of RESPA, a violation of the FDCPA, and that RCS' receipt of the Note was pursuant to an invalid transfer. Id. at ¶¶ 14, 17, 18, 28, 29, 31, 32, 35, and 45. RCS now moves for summary judgment as to all claims asserted against it by Plaintiffs.
A. Standard of Review
Federal Rule of Civil Procedure 56(a) provides that 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). If the movant meets this burden, "the nonmovant must go beyond the pleadings and designate specific facts showing that there is a ...