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Gruninger v. America's Servicing Co.

February 22, 2010


The opinion of the court was delivered by: McLaughlin, J.


The pro se plaintiff,*fn1 Denise Stewart (formerly Denise Gruninger), brought this action involving a mortgage loan serviced by the defendant Wells Fargo Bank, N.A., d/b/a America's Servicing Company ("ASC"). After the plaintiff failed to pay her 2006 property taxes, she requested that the defendant pay those taxes for her. The defendant then created an escrow account to cover the repayment of the delinquent taxes and to provide a balance for the plaintiff's future property taxes. The plaintiff's claims arise out of the imposition of this escrow account. The defendant moves for summary judgment on all of the plaintiff's claims. The Court grants the defendant's motion.

I. The Undisputed Facts

The defendant provides a statement of the undisputed material facts in its motion for summary judgment. See Def.' Mot. at 5-10. The facts are supported by the exhibits attached to the motion, an affidavit from Jennifer L. Robinson ("Robinson Aff."), a default litigation specialist for the defendant, and the exhibits attached that affidavit. The plaintiff's response does not provide a statement of the undisputed facts or directly refute the defendant's facts, unless otherwise noted.

A. The Loan Transaction

The plaintiff entered into the mortgage loan at issue on December 6, 2006. The original lender was Atlantic Pacific Mortgage Corporation, and the original servicer was GMAC. Under the terms of the loan, the plaintiff's monthly payments were $1,347.00. See Def.'s Mot., Ex. B, Mortgage Note, and Ex. C, Mortgage Agreement.

The plaintiff also signed an escrow waiver at the closing of the loan. Under the escrow waiver, the defendant waived the usual requirement that a borrower pay into an account providing for the escrow of, among other things, property taxes, and the plaintiff agreed to pay her property taxes on her own. See Def.'s Mot., Ex. D, Escrow Waiver. The escrow waiver, however, provided that the "[f]ailure to pay [items such as taxes] when due . . . shall give Lender the right to reinstate the requirement that these items be paid to Lender to be placed in escrow and paid monthly for the remaining term of the loan." See id. The plaintiff paid her 2005 school and county taxes at closing. See Def.'s Mot., Ex. E, HUD-1 Settlement Statement at lines 1205 and 1306, and Ex. F, Real Estate Tax Certification.

Wells Fargo Bank, N.A. ("Wells Fargo")*fn2 currently services the loan under its trade name, ASC. It took over servicing the plaintiff's loan from GMAC in October 2006. See Robinson Aff. at ¶ 7. See also Def.'s Mot., Ex. I, ASC's "Hello Letter," and Ex. J, GMAC's "Goodbye Letter."*fn3

B. The Escrow Account

The plaintiff failed to pay her 2006 township and school taxes. See Def.'s Mot., Ex. G, Deposition of Denise Stewart at 90:5-91:10 ("Stewart Dep."). The defendant became aware that the plaintiff's 2006 taxes were delinquent in June 2007. See Robinson Aff. at ¶ 13. The defendant sent the plaintiff a letter dated June 22, 2007, notifying the plaintiff of her property tax arrears. See Def.'s Mot., Ex. L. The letter stated that, if the plaintiff had not already paid the delinquent taxes, the defendant would assist in paying the full amount of past taxes due. The letter provided, however, that if the defendant did pay the plaintiff's delinquent taxes, "[a]n escrow account will be established on your behalf for the collection of the advance, as well as all future tax bills. Your monthly mortgage payment will increase to repay the advance and to collect for a monthly escrow deposit." Id.

After receiving the defendant's letter, the plaintiff contacted the defendant and asked it to pay her delinquent taxes. See Stewart Dep. at 90:5-9. The payment of future taxes was not discussed during the call. See id. at 90:17-19. The defendant paid the plaintiff's delinquent 2006 taxes and established an escrow account for the plaintiff. See Robinson Aff. at ¶ 17 and Ex. 6. The defendant also paid the plaintiff's 2007 taxes, which were unpaid and had been due on March 1 and August 1, 2007. See id. at ¶ 20-21 and Exs. 2-5.

The defendant provided the plaintiff with an escrow account statement on August 16, 2007. See Def.'s Mot., Ex. M. The statement reflected the payment of the plaintiff's delinquent 2006 taxes and the payment of the plaintiff's 2007 taxes in a total disbursement amount of $5,619.09, which could be repaid in monthly amounts of $222.57. See id. It also reflected the amounts needed to establish a proper escrow balance under RESPA and under the specific terms of the plaintiff's mortgage and projected an escrow shortage of $6,509.33. A table entitled "Escrow Account Projections" was provided to show the calculations for this shortage. See id. The defendant gave the plaintiff the option of paying the shortage in monthly payments of $542.44 or in full. It informed the plaintiff that, if she chose not to pay in full, her adjusted total monthly mortgage payment, which included the monthly escrow payment of $222.57 and the monthly escrow shortage payment of $542.44, would be $2,112.45. See id.

C. The Plaintiff's Dispute Over the Escrow Account

The plaintiff failed to include her escrow payment and escrow shortage payment in her September 2007 payment and paid only $1,347.44, her original monthly payment amount. See id. at ¶ 43 and Ex. 17. The defendant accepted the payment and applied it to the plaintiff's principal and interest. See id. at ¶ 44 and Ex. 17. The plaintiff again failed to include the amounts due under her escrow account in her October 2007 payment. See id. at ¶ 45 and Ex. 17. The defendant also accepted this payment and applied it to plaintiff's principal and interest. See id. at ¶ 46 and Ex. 17.

When the plaintiff failed to include the escrow funds in her payment for November 2007, the defendant applied that payment to the plaintiff's escrow delinquency. See id. at ¶ 48-50 and Ex. 17. After that payment, the defendant refused to accept any payments that were not sufficient to reinstate the loan and informed the plaintiff of that decision in a letter dated December 18, 2007. See Def.'s Mot., Ex. S. The defendant also began reporting the plaintiff as delinquent to credit reporting agencies. See Robinson Aff. at ¶ 53.; see also the plaintiff's Experian credit report, attached as an exhibit to the plaintiff's opposition.

The plaintiff sent letters to the defendant on November 9, November 28 and December 26. Those letters, among other things, disputed the creation of the escrow account and denied the plaintiff's responsibility to pay the increased monthly payment. The defendant responded to the plaintiff's letters on several occasions. Its last response to the plaintiff's letters was dated on February 4, 2008, one day before the plaintiff filed her complaint in this action. See Robinson Aff. ¶¶ 29-33 and Ex. 7-15.

The plaintiff did not make a full payment on her account from November 2007 until mid-2009, when she entered into a loan modification agreement with the defendant's loss-mitigation department. See id. at ¶ 54 and Ex. 16.

II. Analysis

The plaintiff claims that because she never agreed to the creation of the escrow account for the payment of future taxes, she was not obligated to pay the corresponding increased amount in her monthly payments.*fn4 She brings 9 counts against the ...

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