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Sealy v. Fay Servicing, LLC

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

October 16, 2017

MICHAEL L. SEALY & SHELLY N. SEALY, Plaintiffs,
v.
FAY SERVICING, LLC; ET AL., Defendants.

          ORDER

          Max O. Cogburn Jr. United States District Judge

         THIS MATTER is before the court on defendants' Motions for Summary Judgment (#26 and #30). The deadline for plaintiffs to respond has passed with no response and the matter is ripe for review. Plaintiffs are represented by counsel. Having considered defendants' motion and reviewed the pleadings, the court enters the following Order.

         I. Background

         This case centers on a purported loan modification agreement. In April 2008, plaintiffs obtained a mortgage loan from Countrywide or its affiliate entity for their personal residence at 3901 Blythe Road, Waxhaw, North Carolina. Years later, plaintiffs contacted the loss mitigation department at defendant Ocwen Loan Servicing and made a written request for a loan modification. On July 2, 2012, Ocwen approved the loan modification, subject to certain terms and conditions. On November 2012, after making Trial Period Plan (“TPP”) payments in a timely fashion, Ocwen approved the loan modification for the plaintiffs. (#1-1) at 7-8.

         Plaintiffs then contend that, despite complying with all the requisite terms and conditions and making every necessary payment, defendant Ocwen (and later, defendants Fay Servicing and Christiana Trust) failed to make the loan modification permanent and attempted to void it, in order to proceed with a foreclosure. (#1-1) at 11-12. Plaintiffs allege that in doing so, defendants are liable under theories of breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and unfair and deceptive trade practices. Plaintiffs also claim a declaratory judgment should be made to enforce the modification. (#1-1) at 10-16.

         Defendants contend that they did not fail to make the loan modification permanent, but rather plaintiffs failed to do so by neglecting to accept the offer of permanent loan modification and failing to make the necessary payments at the proper time. (#27) at 1-2; (#31) at 1. In doing so, defendants contend there never was a contract to begin with, and plaintiffs' arguments are thus null and void.

         II. Standard of Review

         Summary judgment shall be granted “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). A factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material only if it might affect the outcome of the suit under governing law. Id. The movant has the “initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal citations omitted). Once this initial burden is met, the burden shifts to the nonmoving party. That party “must set forth specific facts showing that there is a genuine issue for trial.” Id. at 322 n.3. The nonmoving party may not rely upon mere allegations or denials of allegations in his pleadings to defeat a motion for summary judgment. Id. at 324. Instead, that party must present sufficient evidence from which “a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248; accord Sylvia Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 818 (4th Cir. 1995).

         When ruling on a summary judgment motion, a court must view the evidence and any inferences from the evidence in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255. “‘Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting Matsushita v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). In the end, the question posed by a summary judgment motion is whether the evidence “is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 252.

         III. Discussion

         Plaintiffs make arguments on five grounds: breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, declaratory judgment, and unfair and deceptive trade practices. The court shall address each ground seriatim.

         a. Breach of contract

         First, plaintiffs assert that defendants breached their contract with plaintiffs by failing to honor the terms of the purported permanent loan agreement. For a breach of contract claim to succeed, there must be both the existence of a valid contract and a breach of the terms of that contract. Branch v. High Rock Lake Realty, Inc., 151 N.C.App. 244, 250 (2002); Jackson v. California Hardwood Co., 120 N.C.App. 870, 871 (1995). Here, it is undisputed that plaintiffs requested a permanent loan modification and successfully met all requirements in the months that followed. Plaintiffs then allege that defendants repeatedly failed to provide the necessary final paperwork, which has ultimately led to plaintiffs' filing suit. However, defendants have offered evidence that plaintiffs failed to agree to the permanent loan modification offer after defendants sent the proper paperwork. Specifically, the record contains multiple phone calls where plaintiffs stated they received the final paperwork but had not yet accepted it. See Exhibit A, Lucas Affidavit, ¶ 18; Exhibit A-6, Transcript of Dec. 20, 2012 Call, pp. 2:13-21; Exhibit A-7, Transcript of Feb. 1, 2013 Call, pp. 2:11-14. Then, in one phone call, plaintiff Michael Sealy appeared to refuse the offered final modification agreement, saying that plaintiffs would be “unable to start the payments at the timeline that they set” and that “I can't afford the mod for another 60 days.” Id. Essentially, plaintiffs received a final offer from defendants but refused it, failing to return the agreement and failing to make payments in accordance with the agreement. Plaintiffs have offered nothing that contradicts this persuasive evidence, and the court must find that the final loan modification agreement was not binding between the plaintiffs and any defendant. Plaintiffs' breach of contract claim thus fails.

         b. Breach of implied covenant of good faith ...


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