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Roundpoint Mortgage Servicing Corp. v. Five Brothers Mortgage Company Services and Securing, Inc.

United States District Court, W.D. North Carolina, Charlotte Division

June 23, 2017

ROUNDPOINT MORTGAGE SERVICING CORPORATION, Plaintiff,
v.
FIVE BROTHERS MORTGAGE COMPANY SERVICES AND SECURING, INC., Defendant.

          Robert J. Conrad, Jr. United States District Judge.

          ORDER

         THIS MATTER comes before the Court on Plaintiffs Motion for Summary Judgment, (Doc. No. 53) (the "Motion"); Defendant's Opposition to Plaintiff s Motion, (Doc. No. 56); Plaintiffs Reply in Support of its Motion, (Doc. No. 57); and all the associated exhibits. The Motion has been briefed fully and is ripe for adjudication.

         I. BACKGROUND

         RoundPoint Mortgage Servicing Corporation ("Plaintiff or "RoundPoint") and Five Brothers Mortgage Co. Services & Securing, Inc. ("Defendant" or "Five Brothers") dispute which party should pay for which legal fees pursuant to a contract between the two of them and the indemnification clause therein. RoundPoint provides mortgage loan services and had a contract, called the Tri-Party Field Services Agreement (the "Contract"), (Doc. No. 1-1), with Five Brothers to perform inspections and property preservation on properties for which it provided loan services. Litigation arose regarding one of those properties in 2013 when the property owner filed a lawsuit against several parties including RoundPoint and Five Brothers. Both RoundPoint and Five Brothers (collectively, the "Parties") bore their own legal fees and settlement costs. Now RoundPoint seeks indemnification from Five Brothers for RoundPoint's costs incurred defending that lawsuit.

         a. The Contract

         On December 2, 2011, RoundPoint entered into the Contract, which provided, among other things, that Five Brothers would perform inspection and property preservation services on properties securing mortgage loans that RoundPoint services. The Contract includes an indemnification provision that states the following:

Five Brothers shall indemnify and hold harmless 24 Asset and RoundPoint from any and all liabilities, expenses, demands, suits, judgments, losses, claims, injuries, damages, penalties, fines, forfeitures, attorney's fees and costs, of any kind whatsoever (each a "Loss" and collectively "Losses"), arising from or in any way connected with Five Brothers:
i) Violation of any law or regulation;
ii) Non-compliance with the terms of this Agreement or the breach of any warranty or representation set forth in this Agreement, including all exhibits and any other agreements incorporated in this Agreement by reference;
iii) Any claims or actions whatsoever brought by any subcontractor hired by Five Brothers;
iv) Negligent, wrongful acts or misconduct by Five Brothers, its employees, officers, directors, agents, contractors or subcontracts;
v) Any claims or actions brought by a third party alleging death or injury to any person or damage to or destruction of (whether fully or partially) property arising out of an act, error, or omission by Five Brothers; or
vi) Any mistakes by Five Brothers relating to the performance of the Services herein.

         (Doc. No. 1-1 at 4-5). Furthermore, the Contract includes the following language:

It is expressly understood that this indemnity shall extend to any and all alleged acts, errors, or omissions (whether willful, intentional, negligent, or grossly negligent) committed by Five Brothers, its agents, employees, subcontractors, or independent contractors, while performing any services for RoundPoint. Five Brothers shall assume full responsibility for payment of the cost, defense and settlement of such claim action or proceeding.

(Id. at 5).

         b. Facts Leading to the Underlying Lawsuit

         In January 2010, RoundPoint informed one of its clients, Annette Hayes ("Hayes")-who owned a condominium in Wilson, NC- that her loan was in default. (Doc. No. 54-1 at 82-83). According to Ms. Hayes' complaint, she negotiated a repayment plan with RoundPoint and honored the repayment plan, but nonetheless RoundPoint instituted a foreclosure action, obtained a foreclosure on July 15, 2010, and proceeded with plans to sell Ms. Hayes' condo. (Id. at 49-50). Ms. Hayes alleged that she continued to make mortgage payments as scheduled but endured "incomprehensible errors by Defendant RoundPoint in properly crediting her mortgage payments and in continuing to pursue foreclosure proceedings that [Ms. Hayes] had been assured were abated as a result of her compliance with the repayment plan . . . ." (Id. at 50). Ms. Hayes' condo was eventually sold at public auction to the sole bidder Self-Help Services Corporation d/b/a/ Self-Help Credit Union ("SHCU'), who also provided the loan to Ms. Hayes for her purchase of the ...


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