United States District Court, E.D. North Carolina, Western Division
JOHN R. LAWS, II, Plaintiff,
U.S. BANK NATIONAL ASSOCIATION, TRUSTEE, and NATIONSTAR MORTGAGE, L.L.C.,
C. DEVER III Chief United States District Judge.
December 19, 2014, John R. Laws, II ("Laws" or
"plaintiff'), filed a suit against U.S. Bank
National Association ("U.S. Bank") and Nationstar
Mortgage, LLC, ("Nationstar") (collectively,
"defendants"), in Cumberland County Superior Court
[D.E. 1 -1 ]. On January 2, 2015, defendants removed the
action to this court [D.E. 1]. On January 30, 2015,
defendants moved to dismiss Laws's complaint [D.E. 13].
On June 3, 2015, the court granted defendants' motion to
dismiss Laws's complaint and granted Laws leave to file
an amended complaint [D.E. 24]. On June 19, 2015, Laws filed
an amended complaint [D.E. 25]. On July 20, 2015, defendants
answered Laws's amended complaint [D.E. 28, 29].
November 21, 2016, defendants moved for summary judgment
[D.E. 36] and filed a statement of material facts [D.E. 37],
a memorandum in support [D.E. 39], and an appendix to the
memorandum in support [D.E. 38]. On January 10, 2017, Laws
responded to defendants' motion [D.E. 45] and filed a
statement of material facts [D.E. 43] and an appendix with
additional documents [D.E. 44]. As explained below, the court
grants in part and denies in part defendants' motion for
6, 2005, Laws executed a $205, 200.00 promissory note
("the Note") in favor of Argent Mortgage Company,
LLC. [D.E. 44-1] 2-3. At all relevant times, MLMI Trust,
Certificate Series 2007-SD1, owned the loan, and U.S. Bank is
the current trustee. [D.E. 37] ¶ 8; [D.E. 43] ¶ 8.
The Note required Laws to make monthly payments of $ 1, 45
5.93, which the holder of the Note was to apply first to
interest on the Note, second to the Note's principal, and
third to escrow fees. [D.E. 44-1] 2, 7. The holder of the
Note also was allowed to assess "late charges" and
to return any payment that was "insufficient to bring
the Loan current." Id. at 7. The Note allowed
Laws to make advance payments, which after prepayment fees
would be applied to the Note's principal. Id. A
deed of trust on property located at 6911 Southstaff Road,
Fayetteville, NC, ("the Deed of Trust") secured the
Note. Id. at 5-16. The Deed of Trust provided that
the holder of the Note "or its agents may make
reasonable entries upon and inspection of the property."
Id. at 9.
made timely monthly payments as required by the Note. [D.E.
44-13] 26-27. In 2010, Bank of America, N.A.,
("BANA") or its predecessor began servicing
Laws's loan. [D.E. 37] ¶ 7; [D.E. 43] ¶ 7. U.S.
Bank is the trustee of Laws's loan for MLMI. [D.E. 44-3]
7; [D.E. 37] ¶ 8; [D.E. 43] ¶ 8.
November 18, 2011, Laws sued BANA, alleging servicing errors
and other misconduct arising from BANA's servicing of his
loan. [D.E. 37-5]. Essentially, Laws alleged that BANA had
erroneously changed the name on his loan, refused to accept
the payments Laws sent in his own name, and therefore had
injured Laws by treating his loan as though it were in
2013, BANA and Nationstar contracted to transfer the
servicing of Laws's loan to Nationstar on July 1, 2013.
[D.E. 37-6] 14; [D.E. 37] ¶ 10; [D.E. 43] ¶ 10.
BANA credited Laws for a $1, 856.11 payment made on June 12,
2013, which was the last of Laws's payments BANA
credited. [D.E. 37-1] 37; [D.E. 37] ¶¶ 11-12; [D.E.
43] ¶¶ 11-12. When the loan was transferred to
Nationstar for servicing, the account statement reflected a
$41, 187.98 delinquency, even though Laws had sent a full
payment each month. [D.E. 37-1] 38-40. In June 2013, during a
settlement conference with BANA, Laws learned for the first
time that BANA planned to transfer servicing of his loan to
Nationstar on July 1, 2013. [D.E. 44-13] 59.
letter dated June 10, 2013, BANA wrote to Laws providing
information regarding the pending transfer of service,
including a statement that any Qualified Written Request
("QWR") regarding BANA's loan servicing be sent
to a given address. [D.E.44-3] 1-4. In a letter dated June
25, 2013, Nationstar wrote to Laws regarding the impending
transfer of loan servicing to Nationstar. [D.E. 37-6] 14. In
a letter dated June 28, 2013, Nationstar again informed Laws
of the impending transfer of loan servicing. Id. at
letter dated July 12, 2013, Nationstar sent Laws a
"Notice of Servicing Transfer, " a welcome letter,
and "Important Account Information." [D.E.44-3]
5-8. The communication stated that $39, 385.98 was currently
due on the loan. Id. at 5. In a section titled
"CONTACT INFORMATION" the communication indicated
that any QWR should be sent to "350 Highland Drive,
Lewisville, TX 75067." id. at 6. An asterisk
directed the reader to a footnote which stated "PURSUANT
TO RESPA, A 'QUALIFIED WRITTEN REQUEST' REGARDING THE
SERVICING OF YOUR LOAN MUST BE SENT TO THIS ADDRESS:
Nationstar Mortgage, 350 Highland Drive, Lewisville, TX
75067, Attn: Customer Relations Officer, " and went on
to define what letters qualify as QWRs. Id. The July
12, 2013 communication also stated "[u]nless you dispute
the validity of this debt, or any portion thereof, within
thirty (30) days after receipt of this notice, the debt will
be assumed to be valid by Nationstar" and "[i]f you
notify Nationstar in writing within this thirty (30) day
period that the debt, or any portion thereof, is disputed,
Nationstar will obtain verification and such verification
will be mailed to you." Id. at 7. From July
2013 through March 2014, Laws paid Nationstar in monthly
amounts of $ 1, 856.11, which Nationstar accepted and applied
to Laws's account for the months of August 2011 through
May 2012. See [D.E. 37-1] 45-47; [D.E. 37] ¶17; [D.E.
letter to Laws dated July 22, 2013, Nationstar sent a payoff
quote stating that Laws owed $ 187, 675.29 in unpaid
principal, $27, 501.50 in unpaid interest, $795 in unpaid
fees and charges, and $4, 217.36 in unpaid escrow expenses
for a total of $220, 189.15 owed. [D.E. 37-6] 22-23. The
letter also stated that payoff funds sent by mail should be
Nationstar Mortgage LLC Attn: Payoff Processing 350 Highland
Drive Lewisville, TX 75O67[.]
Id. at 22.
August 16, 2013, Laws's attorney sent a letter to:
Nationstar Mortgage, LLC 350 Highland Drive Louisville, TX
75067 ATTN: Payoff Processing
that the $27, 501.50 of interest was incorrect because
"[w]hen [Nationstar] purchased this mortgage, this
mortgage had been in litigation for approximately 2 1/2
years, " and that the information regarding Laws's
missed payments was "completely false and
incorrect." [D.E. 44-4]. The letter described the basis
for Laws's complaint against BANA-that Laws had been
making timely payments but BANA had improperly refused to
accept them-and that the case against BANA had been settled,
demanded that Nationstar not report Laws's outstanding
debt to credit reporting agencies, and expressed Laws's
expectation that Nationstar would reply within five days.
Id. at 2-3.
August 21, 2013, Nationstar's internal records show that
it updated the mailing address on file from Laws's
address to his attorney's address. [D.E. 37-8] 4. On
August 22, 2013, Nationstar sent Laws's attorney a letter
that was essentially identical to the July 22, 2013 letter,
except that it stated that Laws owed $187, 415.79in unpaid
principal, $27, 463.57 in unpaid interest, and $3, 817.18 in
unpaid escrow expenses for a total of $219, 491.54 owed.
[D.E. 44-3] 9-10.
letter dated August 23, 2013, Nationstar sent to Laws's
attorney an acknowledgment of Laws's August 16, 2013
letter and stated that Nationstar would investigate the
matter and that "[i]n accordance with the Real Estate
Settlement Procedures Act (RESPA), a response will be
provided within 30 business days." [D.E. 44-4] 5.
September 19, 2013, Laws and BANA signed an agreement
settling the November 18, 2011 suit ("the Settlement
Agreement"). [D.E. 44-2]. The settlement provided that
BANA (identified in the Settlement Agreement as
"Defendant") would pay Laws $250, 000.00 plus
mediator's fees, reinstate Laws's credit-card limits?
and report Laws's loan payments to credit reporting
agencies as current through June 30, 2013. Id. at 3.
In exchange, Laws (identified in the Settlement Agreement as
"Plaintiff') would dismiss the November 18, 2011
suit against BANA and release BANA from liability for acts
relating to the November 18, 2011 suit. Id. at 4.
Specifically, the release stated:
For consideration of the Payment and other covenants
contained herein, the receipt and sufficiency of which are
hereby expressly acknowledged, Plaintiff(s), for themselves
and each of their present, former, arid future heirs,
executors, administrators, partners, co-obligors,
co-guarantors, guarantors, sureties, family members, spouses,
attorneys, insurers, agents, representatives, predecessors,
successors, assigns, and all those who claim through them or
could claim through them unconditionally and irrevocably
remise, waive, satisfy, release, acquit, and forever
discharge Defendants) and each of their present, former, and
future parents, predecessors, successors, assigns, assignees,
affiliates, divisions, departments, subdivisions, owners,
partners, principals, trustees, creditors, shareholders,
joint ventures, co-venturers, officers, and directors
(whether acting in such capacity or individually), attorneys,
vendors, accountants, nominees, agents (alleged, apparent, or
actual), representatives, employees, managers,
administrators, and each person or entity acting or
purporting to act for them or on their behalf, as well as any
past, present, or future person or any entity that held or
holds any interest in the Loan and the underlying Note or
Security Instrument, including, but not limited to, Bank of
America Corporation and all of its subsidiaries and
affiliates (collectively, "Releasees"), and each of
them, respectively, from and against any and all past,
present, and future claims, counterclaims, actions, suits,
rights, causes of action, lawsuits, set-offs, costs, losses,
controversies, agreements, promises and demands, or
liabilities, of whatever kind or character, direct or
indirect, whether known or unknown or capable of being known,
arising at law or in equity, by right of action or otherwise,
including, but not limited to, suits, debts, accounts, bills,
damages, judgments, executions, warranties, attorney's
fees, costs of litigation, expenses, claims, and demands
whatsoever that Plaintiffs(s) or their attorneys, agents,
representatives, predecessors, successors, and assigns have
or may have against the Releasees, for, upon, or by reason of
any matter, cause, or thing, whatsoever, in law or equity,
including without limitation, the claims made or which could
have been made by Plaintiff(s) arising from the origination
or servicing of the Loan as well as in any way related to the
Property, Note, or Security Instrument, any servicing act or
omission thereon as well as any claim or issue which was or
could have been brought in the Litigation (collectively, the
"Released Matters"). However, nothing in this
agreement shall be construed to include a release as to
Nationstar Mortgage, LLC or any of its agents, servants and
employees with regard to the handling, servicing, or
reporting of the Plaintiffs mortgage.
Id. at 4-5. Laws and BANA also
agreed that the Parties may provide a copy of this
agreement... in any litigation, or negotiations with
Nationstar Mortgage LLC or its successors or assigns as
relates to any negotiations regarding the mortgage upon
[Laws's] property, referenced herein, as relating to any
penalties, interest or fees that Nationstar Mortgage LLC may
seek to impose upon the plaintiff as a result of the transfer
of the servicing of [Laws's] mortgage by [BANA] and any
information submitted at the time or contemporaneously with
Id. at 5. The Settlement Agreement contained a
provision stating that "[t]o the extent that this
Agreement keeps the Loan and underlying Note or Security
Instrument in force ... this agreement shall not alter the
rights, duties, and obligations of said Loan."
Id. at 10. Finally, the Settlement Agreement
contained a "Neutral Interpretation" provision,
stating that "[t]he Parties shall be deemed to have
cooperated in the drafting and preparation of this Agreement.
Hence, any construction to be made of this Agreement shall
not be construed against any Party." Id. at 8.
Laws set aside "[a]ll of the $250, 000.00 for the
purposes of paying the uncredited loan payments. [D.E. 37-2]
letter dated October 1, 2013, Nationstar wrote to Laws's
attorney that Nationstar had received the letter dated August
16, 2013,  and that Nationstar was "still in the
process of reviewing all the concerns addressed in the
letter. A resolution will be sent as soon as it is
available." [D.E. 44-4] 6.
lived on the property secured by the Note, which was located
in a gated community. [D.E. 44-17] ¶¶ 2-5. If a
visitor requested entrance to the community, and that visitor
had not already been placed on a list of approved visitors,
the community's security staff would contact the
homeowner to ask if the visitor should be allowed to enter.
Id. ¶¶ 4-6. On October 22, 2013,
Nationstar completed a property inspection of Laws's
property. [D.E. 44-11] 6. On November 12, 2013, Nationstar
again inspected Laws's property. Id. Beginning
on May 6, 2016, Nationstar's agents made "numerous
attempts" to enter the community to inspect Laws's
property, including attempting twice in the same day. [D.E.
44-17] ¶¶ 8-12. "Laws [was] contacted each
time, " presumably by telephone, "to determine if
such persons [were] authorized to enter." Id.
¶ 12. In total, Nationstar charged Laws for 33 property
inspections over 36 months.
letter dated April 28, 2014, Nationstar wrote to Laws's
attorney asserting that Laws had "not made payments on
[his] loan since" June 1, 2012, demanding payment of
$39, 907.55, and threatening foreclosure. [D.E. 44*7] 2-3. In
a letter dated May 19, 2014, Laws responded to Nationstar,
stated that Nationstar had not responded to the August 16,
2013 letter, offered to provide additional information to
assist in Nationstar's investigation, cited RESPA, and
requested a resolution to the dispute. [D.E. 44-5] 2-3. In a
letter dated May 29, 2014, Nationstar responded, asserting
that Nationstar had reviewed Laws's dispute and found
that no error had occurred, that the payment history was
correct, that Nationstar would continue to report Laws's
loan to credit reporting agencies as delinquent, and that the
fees, advances, and interest would not be waived.
Id. at 7-8. From May 2014 through December 2014,
Nationstar declined to accept Laws's monthly payments and
returned each month's payment check to Laws's
attorney. [D.E. 37] ¶ 19; [D.E. 43] ¶ 19. In a
letter dated June 20, 2014, Nationstar again wrote to
Laws's attorney stating that Laws was delinquent on his
loan and threatening foreclosure. [D.E. 37-6] 52-54.
letter dated September 25, 2014, Laws's attorney wrote to
Nationstar requesting documents and information regarding
Laws's loan and Nationstar's delinquency claim.
Id. at 72. In a letter dated October 6, 2014,
Nationstar responded to Laws's attorney, stating that it
hoped to provide a response by October 10, 2014. Id.
at 74. In a letter dated October 8, 2014, Nationstar
responded to Laws's attorney but did not provide any
documents or information regarding Laws's loan or
Nationstar's delinquency claim. [D.E. 37-1 ] ...