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Joel S. Reynolds v. Suntrust Mortgage

November 22, 2011

JOEL S. REYNOLDS,
PLAINTIFF,
v.
SUNTRUST MORTGAGE, INC., AND DOES 1-50, DEFENDANTS.



MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT

Plaintiff Joel S. Reynolds brought this action against defendant SunTrust Mortgage, Inc. ("SunTrust"), alleging wrongful foreclosure on plaintiff's home. Defendant now moves for summary judgment pursuant to Federal Rule of Civil Procedure 56.

I. Relevant Facts

In May of 2003, SunTrust issued plaintiff a mortgage loan of $189,500 ("the mortgage") that was secured by the deed of trust for plaintiff's residence, which is located at 860 Potsgrove Place, in Tracy, California ("Potsgrove residence").

(Reynolds Decl. ¶ 2 (Docket No. 17-2); Switzer Decl. ¶ 1, Ex. A (Docket Nos. 14-14, 14-15).)

According to bank records, plaintiff fell behind on his mortgage payments in 2005, but made up the deficiency by the end of the year and was current on his payments entering 2006. (Switzer Decl. ¶ 4.) During 2007 and 2008, plaintiff failed to pay several mortgage payments. (Id. ¶¶ 6-8.) Plaintiff paid defendant funds sufficient to satisfy the outstanding payments in April of 2008, (id. ¶ 9), and made his May 2008 payment in July of 2008, (id. ¶ 10). The May payment was the last payment SunTrust received. (Id.)

Plaintiff's mortgage loan went into default in August of 2008 and defendant mailed plaintiff a letter alerting him of this fact on August 5, 2008. (Id. ¶ 10, Ex. B (Docket No. 14-16.) The letter was sent to the Potsgrove residence. (Id.) A second letter was mailed to plaintiff on September 8, 2008, informing him that, due to his continued default, defendant had referred his account to an attorney to begin foreclosure. (Id. ¶ 11, Ex. C (Docket No. 14-17).)

ReconTrust, the organization defendant engaged to handle the non-judicial foreclosure of the Potsgrove residence, caused a Notice of Default to be recorded on May 8, 2009. (Quitana Decl. ¶ 2, Ex. A (Docket Nos. 14-1, 14-2.) ReconTrust mailed several copies of the Notice of Default to plaintiff's residence. (Id. ¶¶ 3-4, Exs. B, C, D (Docket Nos. 14-3, 14-4, 14-5).)

In December of 2009, a Notice of Trustee's Sale for January 7, 2010, was recorded at ReconTrust's direction. (Id. 6, Ex. F (Docket No. 14-7).) As no sale occurred on January 7, 2010, ReconTrust recorded a second Notice of Trustee's Sale, setting February 5, 2010, as the new date for the foreclosure sale of the Potsgrove residence. (Id. ¶ 6, Ex. G (Docket No. 14-8).) Several copies of the second Notice of Trustee's Sale were mailed to plaintiff at the Potsgrove residence. (Id. ¶7, Ex. H (Docket No. 14-8).) Additional copies were posted at the Potsgrove residence and published in a local newspaper. (Id. ¶¶ 9-11, Exs. J, K (Docket Nos. 14-11, 14-12).)

The Potsgrove residence was sold in a foreclosure sale on February 5, 2010, and the trustee's deed upon sale was recorded on February 17, 2010. (Id. ¶ 12, Ex. L (Docket No. 14-13).) The deed upon sale stated that "[a]ll requirements of law regarding the recording and mailing of copies of the Notice of Default and Election to Sell, and the recording, mailing, posting, and publication of the Notice of Trustee's Sale have been complied with." (Id. Ex. L.)

Plaintiff lived at the Potsgrove residence with Kimberly Pannell, his girlfriend of over twenty years. (Bradford Decl., Ex. A at 15:3-5 (Docket No. 17-3).) Plaintiff and Ms. Pannell were not married, although Ms. Pannell sometimes used the name "Kimberly Pannell-Reynolds." (Id. at 15:8-25.) Plaintiff and Ms. Pannell had an informal arrangement whereby they each contributed half of the monthly mortgage payments. (Id. at 29:24, 34:19, 36:5-9; Reynolds Decl. ¶ 3.)

Plaintiff did not make mortgage payments personally, rather he relied on Ms. Pannell to issue payments to SunTrust. (Reynolds Decl. ¶ 3; Bradford Decl., Ex. A at 29:6-13.) At some point during 2006 or 2007, Ms. Pannell, without informing plaintiff, stopped making mortgage payments in a timely manner. (Bradford Decl., Ex. A at 39-40.) She began instead to secretly divert funds that plaintiff believed were being paid to defendant to other destinations or to simply not cash the checks plaintiff paid to her with the intent that she use those funds to make mortgage payments. (Id. at 36-37, 44, 49.) She also intercepted letters sent to plaintiff by defendant regarding the mortgage account. (Id. at 55.)

Plaintiff claims that, as a result of Ms. Pannell's actions, he was unaware that he had missed any payments due on the mortgage. He claims he was also unaware that the Potsgrove residence was in default, was foreclosed upon, or was sold until a neighbor informed him that he had discovered that the Potsgrove residence had been sold. (Reynolds Decl. ¶¶ 5-8.) In his separate statement of undisputed facts, plaintiff does not claim that defendant failed to properly notice the default and trustee's sale, as required under California law (see, e.g., Docket No. 17-1 ¶¶ 4, 5, 6, 9, 11, 12); he only asserts that he never received any of the required notices and was never contacted prior to the entry of default (id.; Reynolds Decl. ¶¶ 5, 7).

II. Discussion

Summary judgment is proper "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).*fn1 A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in ...


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