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Slusher v. Ditech Financial, LLC

United States District Court, D. Oregon

September 27, 2018

JEFFREY SLUSHER, an individual, KARIN SLUSHER, an individual, Plaintiffs,
DITECH FINANCIAL, LLC, a Foreign Corporation, Defendant.

          James R. Dowell THE DOWELL LAW FIRM Attorney for Plaintiff

          William G. Fig Elizabeth A. Semler SUSSMAN SHANK LLP Attorneys for Defendant

          OPINION & ORDER

          Marco A. Hernandez United States District Judge

         Plaintiffs Jeffrey and Karin Slusher bring this action against Defendant Ditech Financial, contending that a mortgage payoff statement issued by Defendant contained erroneous charges which "caused the termination of" an initial sale of the mortgaged property. Compl. ¶ 9, ECF 1-1 at 3-9. Plaintiffs contend that Defendant breached contractual obligations and the implied duty of good faith and fair dealing by issuing the allegedly incorrect payoff statement and by refusing to retract the allegedly erroneous charges. Id. ¶¶ 12-22. They further contend that the payoff statement errors amounted to fraudulent material misrepresentations supporting a claim of common law fraud. Id. ¶¶ 31-34. Finally, they allege that Defendant violated the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-2610 (RESPA), by making a negative credit agency report following Plaintiffs' dispute resolution request and thereby injuring Plaintiffs' credit. Id. ¶¶ 23-30.

         Defendant moves for summary judgment on all claims. I grant the motion.


         In the Complaint, Plaintiffs allege that they owned residential property in Creswell Oregon ("the Morse Property"). Id. ¶ 1. In late 2014, Defendant initiated foreclosure proceedings against the Morse Property. Semler Decl., Ex. 1 ("J. Slusher Dep.") 29:25-30:22[1]. However, in early October 2015, Plaintiffs entered into a Loan Modification Agreement with Defendant related to the Morse Property mortgage which terminated the foreclosure. Compl. ¶ 2; J. Slusher Dep. 32:21-23

         In the summer of 2017, Plaintiffs listed the Morse Property for sale for $240, 000, and shortly thereafter received an offer to purchase the property. Id. ¶ 4; J. Slusher Dep. 16:10-17; J. Slusher Dep.-Decl. 12:6-14:1. The buyers entered into an earnest money agreement. J. Slusher Dep. 14:21-15:3. In response to a request by the escrow agent, Defendant generated a payoff statement on September 7, 2017, showing a payoff amount of $174, 106.01. Compl. ¶ 4; Compl., Ex. 2, ECF 1-1 at 16-17. That amount included "Corporate Advances" of $1, 559.73 and $332.10 in late fees. Id.; Compl., Ex. 2. It also showed $2, 456.51 in escrow funds and a principal balance of $171, 830.89. Id.; Compl., Ex. 2. According to Jeffrey Slusher, Plaintiffs would have received $36, 015.06 in proceeds based on the $235, 000 sale price and amounts payable to Defendant. J. Slusher Dep. 16:10-17:11.

         According to Plaintiffs, since the October 2015 Loan Modification Agreement, all monthly payments had been made through September 2017 and no late fees had appeared on any monthly online statement. Id. ¶ 4[2]. Additionally, since the Loan Modification Agreement, the Morse Property had not been in judicial or non-judicial foreclosure proceedings. Id. ¶ 5.

         In "September and October of 2017," Plaintiffs contacted Defendant about the payoff statement and then made a formal dispute resolution request. Id. ¶ 7; see also J. Slusher Decl. ¶ 4 (stating that from September 2017 through November 2017, he contested and had communications with Defendant regarding the allegedly incorrect payoff amounts). In the factual background section of the Complaint, Plaintiffs do not assert the exact date of this formal dispute request. However, in support of their RESPA claim, they allege that they invoked formal dispute resolution procedures on October 6, 2017. Compl. ¶ 25.

         In a September 20, 2017 letter from Defendant to Plaintiff, presumably sent in response to one of Plaintiffs' communications, Defendant provided a breakdown of the corporate advances shown in the payoff statement. Compl., Ex. 3, ECF 1-1 at 18-19. For the period before October 4, 2015, when the Loan Modification Agreement was executed, the information shows three sets of charges and corresponding payments on those charges. Id. (charges and payments through Jan. 6, 2014). In September 2017, $3, 205.02 was added for charges related to an escrow deficiency, "escrow unbilled," and past due escrow. Id. These were paid on October 7, 2015, just three days after the Loan Modification Agreement was executed. Id. Thus, as of October 7, 2015, there were no "Corporate Advance" fees owing. Id.

         On October 20, 2015, the account was charged $2, 228.25 for "Court Costs," "Attorney Fees," "Trustee Sale," and "Trustee Fee." Id. However, the account was credited on three separate dates with payments toward those charges. Id. (showing $170.88 credit on Dec. 9, 2015; $341.76 credit on Jan. 8, 2016; and $170.88 credit on Mar. 11, 2016). The $2, 228.25 amount charged on October 20, 2015 less the total $683.52 credited, left a balance of $1, 544.73. On May 1, 2017, the account was charged $15 for an inspection, making the total "Corporate Advance" fees owing $1, 559.73, the amount shown on the September 7, 2017 payoff statement. Id.

         Plaintiffs allege that on November 11, 2017, they received Defendant's November 2, 2017 response to their dispute communication in which Defendant again demanded the same amounts as stated in the September 7, 2017 payoff request. Compl. ¶ 8. Plaintiffs allege that Defendant's "refusal to make adjustments to the payoff amount requested . . . caused the termination of the initial sale of the Morse Property." Id. ¶ 9. Plaintiffs re-listed the property for sale. Id.; J. Slusher Dep. 39:6-17. Plaintiffs sold the home in mid-November 2017 for $245, 000 and paid Defendant the disputed payoff amount. Id. ¶ 11; J. Slusher Dep. 40:13-22. Plaintiffs received $47, 464.73 from the proceeds of the sale.[3] J. Slusher Dep. 42:22-43:18. Plaintiffs filed this lawsuit approximately one month later.


         Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial responsibility of informing the court of the basis of 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) (quoting former Fed.R.Civ.P. 56(c)).

         Once the moving party meets its initial burden of demonstrating the absence of a genuine issue of material fact, the burden then shifts to the nonmoving party to present "specific facts" showing a "genuine issue for trial." Fed. Trade Comm'n v. Stefanchik, 559 F.3d 924, 927-28 (9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218 (9th Cir. 2007) (citing Celotex, 477 U.S. at 324).

         The substantive law governing a claim determines whether a fact is material. Suever v. Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the light most favorable to the nonmoving party. Earl v. Nielsen Media Research, Inc., 658 F.3d 1108, 1112 (9th Cir. 2011).

         If the factual context makes the nonmoving party's claim as to the existence of a material issue of fact implausible, that party must come forward with more persuasive evidence to support his claim than would otherwise be necessary. Mats ...

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