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Veloz v. Green Tree Servicing LLC

United States District Court, D. Arizona

May 29, 2014

Maria Veloz, Plaintiff,
Green Tree Servicing LLC, Defendant.


DAVID G. CAMPBELL, District Judge.

Plaintiff Maria Veloz has filed a motion for summary judgment as to her claim that Defendant Green Tree Servicing LLC violated 12 U.S.C. § 2605(g). Doc. 47. Defendant has also filed a motion for summary judgment. Doc. 49. The motions are fully briefed. For the reasons that follow, the Court will deny Plaintiff's motion and will grant in part and deny in part Defendant's motion.[1]

I. Background.

Plaintiff owns real property located at 4142 N. 48th Avenue, Phoenix, Arizona. Doc. 49 at 1. In 2006, Plaintiff executed a Deed of Trust against the property to secure a loan. Doc. 1, ¶ 7. Defendant now holds a beneficial interest in the Deed of Trust, ( id., ¶ 10; Doc. 49 at 2), and is the servicer of Plaintiff's loan (Doc. 1, ¶ 11). As a condition of the Deed of Trust, Plaintiff is required to maintain a homeowner's insurance policy. Plaintiff makes payments to Defendant, and Defendant impounds funds in an escrow account and pays the homeowner's insurance from those funds. Doc. 49 at 2. Plaintiff obtained an insurance policy through Mercury Insurance Group (the "Mercury policy"), which was effective through January 20, 2013. Id. Upon the expiration of the Mercury policy, no payment was made to renew the policy. Plaintiff alleges that her insurance agent, Mickey Clayton, noticed the nonpayment on January 23, 2013, contacted Defendant the following day, and was notified that Defendant would "send the insurance premium immediately to Mercury." Doc. 1, ¶¶ 16-18. Plaintiff then alleges that she received a letter from Defendant on January 28, 2013, stating that it had not received a bill from her insurance company. Id., ¶ 19. According to Plaintiff, Mr. Clayton again contacted Defendant on February 5, 2013, faxed Defendant evidence of insurance, and was told that the insurance payment would be delivered via overnight mail. Id., ¶ 20. When Plaintiff called Defendant on February 15, 2013, she was informed that the insurance premium had not been paid. Id., ¶ 21. She then contacted Mr. Clayton, who she alleges then faxed the insurance information to Defendant "for the third time." Id., ¶ 23. Mr. Clayton was apparently told by Defendant on February 18, 2013, that the premium would be sent the following day. Id., ¶ 24.

Defendant contends that it did not receive notification of the lapse in Plaintiff's insurance until February 18, 2013, and that it sent Plaintiff letters on January 28 and February 11, 2013, requesting a copy of her insurance bill. Doc. 49 at 2. Defendant further contends that it issued a check to Mercury Insurance on February 26, 2013 and forwarded it to Mr. Clayton's office. Id. at 3.

On March 3, 2013, Plaintiff attempted to make a claim with Mercury Insurance for water damage in her kitchen. Doc. 1, ¶ 25. Her claim was denied the following day because her policy had been canceled on January 21, 2013. Id., ¶ 26. Mr. Clayton again contacted Defendant and was allegedly notified that payment had been sent to Mercury on February 29, 2013. Id., ¶ 27. Mr. Clayton's office received a check from Defendant on March 11, 2013, which he immediately sent to Mercury. Id., ¶¶ 28-29. Mercury refused to reinstate the policy. Id., ¶ 31. Then, on March 25, 2013, Defendant obtained a "force-placed" policy from Assurant (the "Assurant policy") on Plaintiff's property effective February 2, 2013. Doc. 49 at 3. The Assurant policy did cover Plaintiff's claim and Assurant issued a check to Plaintiff in the amount of $21, 930.12 on May 11, 2013. Id. Plaintiff, however, alleges that the damage to her home was "approximately $48, 000" (Doc. 1, ¶ 32) and included "issues with mold" that made her home uninhabitable and forced her and her family to relocate for five months (Doc. 54 at 10-11). The Assurant policy did not cover expenses related to mold, relocation costs, or storage costs. Id. at 11.

Plaintiff commenced this action alleging violations of portions of the Real Estate Settlement Procedures Act ("RESPA"), namely 12 U.S.C. § 2605(g), § 2605(e), § 2605 (k) and (l), and later added a claim for negligence. Doc. 49 at 4.

II. Legal Standard.

A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, 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). Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

III. Analysis.

A. Damages.

Defendant argues that, as a threshold matter, it is entitled to summary judgment on each of Plaintiff's claims because she has not offered any proof of damages. Doc. 49 at 5. In response, Plaintiff has provided an affidavit in which she states that (1) her home was temporarily unfit to live in (Doc. 54, ¶ 14); (2) "Assurant refused to take any action regarding the mold and refused to cover expenses incurred due to loss of use of the kitchen, " ( id., 18); (3) she and her family had to move out of their home and Assurant would cover neither their added living expenses nor the cost of storing their belongings ( id., ¶¶ 20-21); (4) she was charged $266 for the force-placed Assurant insurance policy ( id., ¶ 24); (5) she and her family "were physically sick and mentally distressed by [Defendant]'s failure to help [them], " ( id., ¶ 27); and (6) she had to purchase a new homeowner's insurance policy at an increase of $161.47 over the cost of the Mercury policy ( id., ¶ 28). In response, Defendant argues that Plaintiff has already been compensated by Assurant for the cost of replacing her kitchen and there is no evidence in the record that Plaintiff would be "entitled to mold remediation under any insurance policy." Id. at 6-7 (emphasis original).

Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. To recover mold-related expenses from Defendant due to the lapse of the Mercury policy, Plaintiff must show not only that she incurred the expenses, but also that the Mercury policy would have covered them. Plaintiff has identified no portion of the Mercury policy that provided coverage for mold remediation or additional living, storage, or repair expenses. The Court accordingly will grant summary judgment in favor of Defendant as to any costs associated with the mold in Plaintiff's home.

As noted above, Plaintiff's affidavit asserts that she was charged a fee of $266.00 for the force-placed Assurant policy, she was physically sick and mentally distressed as a result of Green Tree's actions, and she was forced to purchase a new insurance policy that cost $161.47 more than the Mercury policy. See Doc. 54 at 10-12. In support of these claims, Plaintiff provided a copy of her escrow account statement showing that a disbursement was made on March 27, 2013 for $1, 624.00 for hazard insurance and that only $1, 358.00 was credited back to her escrow account on April 8, 2013 - a difference of $266.00. Id. at 23. Defendant does not offer any explanation for the discrepancy. Had the Mercury policy been ...

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