Opinion
NO. 2017-CA-000933-MR
11-01-2019
MICHAEL V. WHITE AND PAMELA J. WHITE APPELLANTS v. BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP, F/K/A COUNTRYWIDE HOME LOANS SERVICING, LP, AND LAKEVIEW LOAN SERVICING, LLC APPELLEES
BRIEF FOR APPELLANTS: Pete W. Whaley Williamstown, Kentucky BRIEF FOR APPELLEE LAKEVIEW LOAN SERVICING, LLC: Rick D. DeBlasis Cincinnati, Ohio NO BRIEF FILED FOR BANK OF AMERICA, N.A.
NOT TO BE PUBLISHED APPEAL FROM GRANT CIRCUIT COURT
HONORABLE R. LESLIE KNIGHT, JUDGE
ACTION NO. 12-CI-00436 OPINION
AFFIRMING
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BEFORE: CLAYTON, CHIEF JUDGE; NICKELL AND L. THOMPSON, JUDGES. THOMPSON, L., JUDGE: Michael and Pamela White appeal from an order of foreclosure and judicial sale and an order denying their Kentucky Rules of Civil Procedure (CR) 59.05 motion to alter, amend, or vacate. Appellants argue that Bank of America promised it would not foreclose on their property and should be estopped from foreclosing. They also argue that Bank of America should be sanctioned for not mediating in good faith and that summary judgment was improper because there were still material facts to be determined. We find no error and affirm.
FACTS AND PROCEDURAL BACKGROUND
On March 19, 2008, Appellants took out a loan for $205,529. The loan was secured by the execution of a note and a mortgage. Appellants granted the note to Progressive Mortgage Group Inc. and the mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Progressive. The note and mortgage changed hands multiple times. The note went from Progressive to The Huntington National Bank, to Countrywide Bank FSB, and then to Bank of America. The mortgage went from MERS to Bank of America.
In the summer of 2012, Appellants had fallen behind on their mortgage payments. On September 17, 2012, Appellants contacted Bank of America by phone in order to discuss the status of the loan and attempt to obtain a loan modification. Mr. White spoke with a representative. Appellants allege that the representative promised that their property would not be foreclosed upon if they took certain steps. Appellees allege that no promises were made, only that Appellants could attempt to become current on the loan.
On September 18, 2012, Bank of America filed the underlying foreclosure action. Bank of America alleged that Appellants owed $193,760.04 at an interest rate of 5.5% per year. Discovery and motion practice followed. During discovery, Appellants sought the audio recording of the September phone call multiple times; however, Bank of America claimed no such recording existed. Bank of America filed multiple motions for summary judgment. Appellants opposed the motions. Appellants argued Bank of America was acting in bad faith because it would not accept any payments to end the foreclosure and that the ownership of the note and mortgage was in doubt because they changed hands multiple times.
On January 22, 2014, Bank of America filed a motion to substitute Lakeview Loan Servicing as the party-plaintiff. Bank of America had assigned the note and mortgage to Lakeview. The trial court did not rule on this motion at the time; therefore, Bank of America and Lakeview proceeded in tandem. Mediation was ordered in March of 2014 but was unsuccessful. Appellants then filed a motion to dismiss and for attorney fees. Appellants alleged that the lawyer for Appellees who showed up at the mediation was unprepared and could not contact anyone who had the authority to settle the matter. Appellees dispute this accusation. No ruling occurred on this motion at the time.
In October of 2015, the trial court ordered another mediation. That mediation was also unsuccessful. On March 21, 2017, Appellees filed a motion for summary judgment. Appellants opposed the motion. On May 4, 2017, the trial court granted the motion and entered a judgment and order for judicial sale. This same order granted the motion to substitute Lakeview for Bank of America.
Appellants then filed a CR 59.05 motion to alter, amend, or vacate. Lakeview opposed the motion. Sometime after Lakeview filed its opposition to the CR 59.05 motion, it discovered the September 17, 2012 recording of the phone call between Mr. White and Bank of America. Appellants then filed a supplemental CR 59.05 motion related to this new evidence. Appellants argued that the phone call shows that an agent of Bank of America promised not to foreclose on the property; therefore, Appellees should be estopped from foreclosing.
On October 22, 2018, the trial court entered an order denying Appellants' motion. The court held that there were no genuine issues of material fact in the case that would have precluded summary judgment. The court found that Lakeview properly held the mortgage to the property. The court also indicated that it listened to the phone call recording. The court found that no promises were made, only that the Bank of America agent informed Mr. White what steps he could take to attempt to stop the foreclosure. The court also finally discussed Appellants' mediation issue. The court held that there was no evidence in the record to indicate Appellees participated in the mediation in bad faith. This appeal followed.
In actuality, Appellants filed the appeal at the same time they filed their original CR 59.05 motion. The appeal was put into abeyance until the trial court ruled on the CR 59.05 motion.
ANALYSIS
Appellants' first argument on appeal is that the recorded phone call shows that an agent of Bank of America promised to temporarily halt the foreclosure of the property and Appellees should be estopped from foreclosing. Appellees argue that this issue was not raised below and is not preserved. We find that this issue is preserved because it was raised in Appellants' supplemental CR 59.05 motion immediately after Appellees found the phone recording.
Unfortunately, the phone recording is missing from the record before us. It is the responsibility of the appellant to ensure that this Court receives the complete record. Gambrel v. Gambrel, 501 S.W.3d 900, 902 (Ky. App. 2016). We must presume that the missing parts of the record support the findings of the trial court. Harmon v. Harmon, 227 Ky. 341, 13 S.W.2d 242, 243 (1928). The trial court found that the Bank of America employee did not make any promises to Mr. White. The court found that the agent indicated that Mr. White would need to complete certain documents, that the documents would be examined and, if approved, might temporarily halt any foreclosure action. The employee did not promise to stop any foreclosure action. Without a promise or material representation, promissory estoppel and equitable estoppel are not available. Sawyer v. Mills, 295 S.W.3d 79, 89 (Ky. 2009); Sebastian-Voor Properties, LLC v. Lexington-Fayette Urban Cty. Gov't, 265 S.W.3d 190, 194 (Ky. 2008). Without the phone recording for us to review, we must affirm the trial court on this issue.
Appellants next argue that the trial court erred in not awarding them attorney fees for the mediation in which they allege Appellees' attorney was not prepared. Appellants also believe the trial court should have sanctioned Appellees for this same behavior. The trial court found there was no evidence in the record to support Appellants' allegations. We agree. There is no affidavit or other testimony regarding what transpired during the mediation; therefore, the trial court did not err in denying attorney fees and sanctions.
Moreover, Appellants would be unable to prove what transpired during the mediation because mediation is confidential. Contained in the record is an agreement signed by the parties' counsel and by one of the Whites in which they agree that mediation is a confidential process and that nothing said during it is admissible in court. In addition, the local rules for the 15th Judicial Circuit, in which Grant County is located, indicate that "[m]ediation shall be regarded as settlement negotiation for purposes of [Kentucky Rules of Evidence (KRE)] 408." Ky. 15th Jud. Cir. LR 7, section 708, K(2). KRE 408(2) states that conduct or statements made during settlement negotiations are "not admissible to prove liability[.]" The trial court did not err in denying Appellants' requested relief on this issue.
The signature is illegible. --------
Appellants' final argument on appeal is that there were sufficient issues of material fact not yet resolved; therefore, summary judgment was improper.
The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. . . . "The record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor." Summary "judgment is only proper where the movant shows that the adverse party could not prevail under any circumstances." Consequently, summary judgment must be granted "[o]nly when it appears impossible for the nonmoving party to produce evidence at trial warranting a judgment in his favor[.]"Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citations omitted).
Appellants argue that there is still confusion as to the identity of the real party in interest because the note and mortgage have changed hands so many times. In addition, they claim that some of the originating mortgage documents have different interest rates listed, one being 5.50% and another being 5.959%. They argue this discrepancy precludes summary judgment at this time.
We disagree with Appellants. The record contains a clear and complete set of documents showing that the mortgage started with MERS, as a nominee of Progressive, and ended with Lakeview. The record also contains a clear and complete set of documents showing that the note was first held by Progressive and was eventually transferred to Lakeview.
Appellants allege that Lakeview might not hold the note because they received a letter from M&T Bank indicating it owned the note. The letter is in the record and this Court has read it. The letter clearly indicates that it is from a debt collecting entity that is servicing the loan for Lakeview. Appellants also claim that they received correspondence from an entity called Rushmore Loan Management Services which indicated it owned the mortgage or was the new mortgage servicer. Appellants do not cite to the record where this letter is located, and we could not find it. This is a bare allegation with no supporting evidence. As previously discussed, the record contains a clear and complete chain of ownership for both the mortgage and the note. Rushmore is not mentioned in any of these documents.
As to the discrepancy involving the interest rate, Appellants are correct that one document does list the loan interest rate as 5.959%; however, the final executed note indicates an interest rate of 5.50% and the complaint filed in this case requests interest at 5.50%.
Summary judgment was not improper in this case. There are no genuine issues as to any material facts. It is clear that Lakeview holds the note and mortgage and Appellants are in default. The trial court did not err in granting summary judgment and ordering the sale of Appellants' property.
CONCLUSION
Based on the foregoing, we affirm the judgment of the trial court.
ALL CONCUR. BRIEF FOR APPELLANTS: Pete W. Whaley
Williamstown, Kentucky BRIEF FOR APPELLEE
LAKEVIEW LOAN SERVICING,
LLC: Rick D. DeBlasis
Cincinnati, Ohio NO BRIEF FILED FOR BANK OF
AMERICA, N.A.