United States District Court, E.D. Arkansas, Western Division
OPINION AND ORDER
KRISTINE G. BAKER UNITED STATES DISTRICT JUDGE.
the Court is a motion for summary judgment filed by defendant
Bank of New York Mellon, as Trustee for CIT Mortgage Loan
Trust 2007-1 (“Mellon”) (Dkt. No. 14). Plaintiff
Gary Reece responded in opposition to the motion (Dkt. No.
18), and Mellon replied (Dkt. No. 19). For the following
reasons, the Court grants Mellon's motion for summary
judgment and enters judgment in favor of Mellon.
following facts are taken from Mellon's statement of
uncontested facts in support of its motion for summary
judgment (Dkt. No. 16), unless otherwise noted. Mr. Reece
sets forth facts he maintains are in dispute in his statement
of contested facts and his response to the motion for summary
judgment (Dkt. Nos. 18-1, 18).
Reece executed a $144, 000.00 note on June 4, 2004, in favor
of Wilmington Finance, a division of AIG Savings Bank
(“Wilmington”). The note is secured by a mortgage
executed by Mr. Reece, which encumbers real property located
at 1015 N. Mississippi Road, Little Rock, Arkansas (the
“Property”) (Dkt. No. 16, ¶¶ 1-2).
to Mellon, the loan was assigned from Wilmington to CIT
Group/Consumer Finance, Inc. (“CIT”), and then
CIT assigned the loan to Mellon (Dkt. No. 16, ¶¶
3-4). Mellon maintains that Mr. Reece, but not the lender,
signed a “stipulation agreement” on January 22,
2010 (the “2010 Agreement”) (Dkt. No. 18-2), in
which Mr. Reece agreed to make a discounted reinstatement
payment in exchange for forbearance of foreclosure (Dkt. No.
Reece admits that the mortgage was assigned numerous times
and maintains that, at one time, it was held by Vericrest
Financial, Inc. (“Vericrest”) (Dkt. Nos. 18, at
1; 18-1, ¶ 1). Mr. Reece asserts that, at least as of
January 2010, Vericrest held itself out to Mr. Reece as the
owner of his mortgage (Dkt. No. 18, at 1-2). Mellon does not
appear to dispute that Vericrest was a prior mortgage
servicer for Mr. Reece's mortgage (Dkt. No. 14-1, ¶
13). Mr. Reece asserts that he and Vericrest entered into the
2010 Agreement, and Mr. Reece characterizes this as a binding
contract regarding the mortgage (Dkt. No. 18-2). According to
Mr. Reece, he and Vericrest negotiated the 2010 Agreement,
and when his mortgage was thereafter assigned to Mellon,
Mellon was an assignee of the 2010 Agreement (Dkt. No. 18, at
2; Dkt. No. 18-1, ¶ 4).
Reece claims that, per the 2010 Agreement, he was to make an
initial payment in the amount of $5, 223.61 to Vericrest on
or before February 26, 2010 (Dkt. No. 18, at 2). On February
24, 2010, Mr. Reece claims that he tendered payment of $5,
300.00 but that Vericrest refused to accept the payment (Dkt.
No. 18, at 2; Dkt. No. 18-1, ¶ 6). He asserts that
Vericrest breached the 2010 Agreement by failing to accept
his initial payment (Dkt. No. 18, at 1-2; Dkt. No. 18-1,
¶ 2). He maintains that, since that date, Vericrest and
Mellon have refused to accept payments from him (Dkt. No. 18,
at 1-2). As a result, Mr. Reece asserts that Vericrest and
Mellon breached the contract. He also maintains that this
breach by Vericrest and Mellon excused his further
performance under the 2010 Agreement (Id., at 2;
Dkt. No. 18-1, ¶ 7).
to Mellon, Mr. Reece as the borrower was involved in 2010
litigation against the prior trustee for the subject loan
involving the ability of a national banking association to
foreclose without registration with the state banking
authority (Dkt. No. 16, ¶ 6). Mellon maintains that the
2010 litigation, which was a class action, did not involve
Mr. Reece's defenses to the foreclosure that are now
pending before this Court (Id., ¶ 7).
Reece acknowledges that, on October 15, 2010, he filed his
initial lawsuit challenging the privity of contract with
Mellon and Mellon's ability to avail itself of
non-judicial foreclosure procedures (Dkt. No. 18, at 3).
Reece v. Bank of N.Y. Mellon, 760 F.3d 771, 773 (8th
Cir. 2014). According to Mr. Reece, that litigation lasted
from October 15, 2010, to July 23, 2014; had the effect of
preventing any foreclosure proceedings; and therefore tolled
the limitations period for any breach of contract claim (Dkt.
No. 18-1, ¶¶ 8-9, 11). In that case, a temporary
restraining order was entered in Mr. Reece's favor
initially, but the case eventually was dismissed by the
district court. The Eighth Circuit Court of Appeals affirmed
the dismissal on July 23, 2014. Mr. Reece asserts that the
2010 litigation sought a remedy superior to Mr. Reece's
current breach of contract claim (Dkt. No. 18-1, ¶ 10).
Mr. Reece contends that Mellon did not take any action to
initiate foreclosure proceedings until 2017, over three years
after the conclusion of the initial litigation (Dkt. No. 18,
maintains that Mr. Reece has not made a regular monthly
payment since October 2009 (Dkt. No. 16, ¶ 8). Mellon
has maintained taxes, insurance, and homeowners'
association dues on the Property since 2009 (Id.,
¶ 9). Mr. Reece has not attempted to reinstate the loan
(Id., ¶ 10). Mr. Reece has not attempted to pay
off the loan (Id., ¶ 11). Mr. Reece does not
appear to dispute these facts.
September 5, 2017, Mellon, through its counsel, sent to Mr.
Reece a Notice of Default and Intent to Sell (Id.,
¶ 12). On October 12, 2017, Mellon's counsel
recorded an affidavit outlining its compliance with the
Arkansas Statutory Foreclosure Act (Id., ¶ 13).
To date, the parties have been unable to reach a settlement
agreement (Id., ¶ 14).
judgment is proper if there is no genuine issue of material
fact for trial. UnitedHealth Group Incorporated v.
Executive Risk Specialty Ins. Co., 870 F.3d 856, 861
(8th Cir. 2017) (citing Fed.R.Civ.P. 56). Summary judgment is
proper if the evidence, when viewed in the light most
favorable to the nonmoving party, shows that there is no
genuine issue of material fact and that the defendant is
entitled to entry of judgment as a matter of law. Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). “Where
the record taken as a whole could not lead a rational trier
of fact to find for the non-moving party, there is no genuine
issue for trial.” Johnson Regional Medical
Ctr. v. Halterman, 867 F.3d 1013, 1016 (8th Cir. 2017)
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986)). A factual dispute is
genuine if the evidence could cause a reasonable jury to
return a verdict for either party. Miner v. Local
373, 513 F.3d 854, 860 (8th Cir. 2008). “The mere
existence of a factual dispute is insufficient alone to bar
summary judgment; rather, the dispute must be outcome
determinative under the prevailing law.” Holloway
v. Pigman, 884 F.2d 365, 366 (8th Cir. 1989).
parties opposing a summary judgment motion may not rest
merely upon the allegations in their pleadings. Buford v.
Tremayne, 747 F.2d 445, 447 (8th Cir. 1984). The initial
burden is on the moving party to demonstrate the absence of a
genuine issue of material fact. Celotex Corp., 477
U.S. at 323. The burden then shifts to the nonmoving party to
establish that there is a genuine issue to be determined at
trial. Prudential Ins. Co. v. Hinkel, 121 F.3d 364,
366 (8th Cir. 2008), cert. denied, 522 U.S. 1048
(1998). “The evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in
his favor.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986).
Breach Of Contract Claim
makes several arguments in support of its motion for summary
judgment on Mr. Reece's breach of contract claim. The