United States District Court, D. Nevada
GEORGINA FORD and THE ESTATE OF MURRAY D. FORD, Plaintiffs,
NATIONSTAR MORTGAGE, LLC, Defendant.
for Summary Judgment
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
the Court is Defendant's Motion for Summary Judgment. ECF
No. 50. For the reasons stated below, the Motion is granted
in part and denied in part.
filed the Complaint on February 19, 2016. ECF No. 1.
Defendant filed an Answer on April 18, 2016. ECF No. 13.
Defendant filed the instant Motion for Summary Judgment on
February 14, 2017. ECF No. 50. Defendant filed a Motion to
Supplement  Motion for Summary Judgment on April 7, 2017.
ECF No. 58. Plaintiffs filed their Response on April 28,
2017. ECF No. 59. Defendant filed its Reply on May 12, 2017.
ECF No. 61. The Court held a hearing to discuss the Motion
for Summary Judgment on September 18, 2017. ECF No. 64.
Motion for Summary Judgment
judgment is appropriate when the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show “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); accord Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). When considering the propriety of summary
judgment, the court views all facts and draws all inferences
in the light most favorable to the nonmoving party.
Gonzalez v. City of Anaheim, 747 F.3d 789, 793
(9th Cir. 2014). If the movant has carried its
burden, the non-moving party “must do more than simply
show that there is some metaphysical doubt as to the material
facts . . . . 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.” Scott
v. Harris, 550 U.S. 372, 380 (2007) (alteration in
original) (internal quotation marks omitted).
Court finds the following facts to be undisputed. In August
2004, Plaintiffs obtained a promissory note and deed of trust
(collectively, the “Loan”) on their home at 3204
Grey Dolphin Drive, Las Vegas, Nevada 89117. A Bank of
America affiliate originated and initially serviced the Loan.
Plaintiffs ultimately defaulted on the Loan and filed for
bankruptcy in November, 2009, in order to keep their home. As
a result, Plaintiffs entered into a Loan Modification
Agreement (the “Modification”) with Bank of
America in April, 2010. The Modification rolled $22, 892.22
of delinquent interest, fees, and costs into the Loan
principal and converted the Loan into a step rate loan, in
which the interest rate on Plaintiffs' Loan would
increase from 2.000% to 3.000% on specified dates between
June 1, 2010 and June 1, 2015; Plaintiffs' monthly
payment would increase from $644.87 to $967.30 on those same
dates; and those monthly payments would be interest-only
(i.e., they would not decrease the principal of the loan).
Plaintiffs were also responsible for making monthly escrow
payments to cover taxes and insurance on their home. The
amount necessary for Plaintiffs' escrow account was based
upon the applicable taxes, property value, and insurance
1, 2013, Nationstar began servicing Plaintiffs' Loan.
Nationstar is required as servicer to collect the escrow
amounts until such sums are paid out to the applicable third
parties (e.g., the state or local government and insurer).
Escrow amounts change regularly, and Nationstar does not keep
any unused funds in escrow accounts. Instead, such funds are
typically applied for the benefit of the borrower or, as may
be otherwise required, returned to the borrower.
February 2014, Plaintiffs filed an Adversary Complaint in
their bankruptcy against Bank of America and Nationstar,
complaining of errors made in the servicing of their account
while Bank of America was the servicer. On or about March 13,
2015, Plaintiffs, Bank of America, and Nationstar settled the
Adversary Complaint. To that end, the parties entered into a
confidential settlement agreement (the “Settlement
America and Nationstar made their respective payments to
provide the Settlement Payment to Plaintiffs. As also
required, the Holdback Payment was applied to Plaintiffs'
Loan. Plaintiffs kept the remaining Settlement Payment.
However, in applying the Holdback Payment, Nationstar used an
incorrect escrow calculation. This incorrect calculation
increased the amount of the escrow, and thus a larger share
of the Holdback Payment was applied to the escrow. This also
resulted in less of the Holdback Payment being applied to
outstanding principal and interest. As a result, despite the
Holdback Payment, Nationstar believed Plaintiffs owed
about July 13, 2015, Plaintiffs' attorney sent Nationstar
a letter, which he followed with a “Request for
Information Pursuant to 12 C.F.R. § 1024.36” (the
“RFI”) on August 31, 2015, expressing concerns
about the Loan and seeking information concerning it,
including a transaction history and payoff statement.
Nationstar responded to Plaintiffs' correspondence on
September 9, 2015, stating that, after conducting an
investigation, Nationstar had identified no errors on
Plaintiffs' Loan. Nationstar's September 9, 2015
letter also included the Detail Transaction History
Plaintiffs had requested, and invited Plaintiffs to provide
additional documentation if they still believed there was an
error on their Loan. Nationstar provided Plaintiffs with the
requested payoff statement on or about September 22, 2015.
about September 26, 2015, Plaintiffs, still believing there
were errors on their Loan, took Nationstar up on its
invitation to obtain additional documentation through a
“Notice of Error(s) pursuant to 12 C.F.R. §
1024.35(b); and Request for Information pursuant to 12 C.F.R.
§ 1024.36” (“NOE #1”), which
Plaintiffs sent to Nationstar via certified mail. On
September 30, 2015, Plaintiffs sent another “Notice of
Error(s) pursuant to 12 C.F.R. § 1024.35(b); and Request
for Information pursuant to 12 C.F.R. § 1024.36”
(“NOE #2”), again via Certified Mail. NOE #2