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Feehan v. Citimortgage, Inc.

Court of Appeals of Indiana

March 20, 2018

Thomas J. Feehan and Michelle Ceuterick-Feehan, Appellants-Defendants,
v.
CitiMortgage, Inc., Appellee-Plaintiff.

         Appeal from the St. Joseph Circuit Court The Honorable John E. Broden, Judge The Honorable Larry L. Ambler, Magistrate Trial Court Cause No. 71C01-1011-MF-617

          ATTORNEYS FOR APPELLANT Peter M. Yarbro Fred R. Hains Hains Law Firm, LLP South Bend, Indiana

          ATTORNEYS FOR APPELLEE Shannon O'Connell Egan Graydon Head & Ritchey LLP Ft. Mitchell, Kentucky Harry W. Cappel Graydon Head & Ritchey LLP Cincinnati, Ohio

          Brown, Judge.

         [¶1] Thomas J. Feehan and Michelle Ceuterick-Feehan (the "Feehans") appeal the trial court's entry of summary judgment in favor of CitiMortgage, Inc., ("CitiMortgage") and its denial of their motion to strike. We affirm.

         Facts and Procedural History

         [¶2] In December 2002, Thomas Feehan executed a promissory note evidencing a loan from ABN AMRO Mortgage Group, Inc., ("ABN AMRO") in the original principal amount of $170, 000 (the "Note"), and the Feehans executed a mortgage (the "Mortgage") in favor of ABN AMRO, granting a security interest in certain real property in St. Joseph County, Indiana, to secure repayment of the loan which was recorded with the St. Joseph County Recorder. CitiMortgage is the successor by merger to ABN AMRO. Thomas Feehan subsequently stopped making required payments under the Note. CitiMortgage sent a letter, dated September 28, 2009, to Thomas Feehan which stated that payments had not been received as required by the Note and Mortgage, that to cure the default he must pay the past due amount of $8, 990.70 by October 29, 2009, and that failure to cure the default may result in the acceleration of all sums due.

         [¶3] In November 2010, CitiMortgage filed a Complaint on Note and to Foreclose Mortgage alleging that it is the successor to ABN AMRO, that it is a person entitled to enforce the Note and is entitled to enforce the Mortgage, that default was made in the payment of the monthly installment due under the Note and Mortgage beginning on May 1, 2009, and on the first day of each month after that date, and that the outstanding principal balance of $155, 245.55 together with all accrued interest, late charges, expenses, and advances as provided in the Note had been declared to be and was immediately due and payable, and CitiMortgage requested judgment against Thomas Feehan and a decree of foreclosure with respect to the property. The court issued an Order for Settlement Conference, signed on December 20, 2010, which stated that the Feehans had requested a settlement conference, that a settlement conference was scheduled for February 3, 2011, that CitiMortgage shall advise the facilitator, not later than ten days prior to the conference, as to whether Thomas Feehan was eligible for a loan modification under the Home Affordable Modification Program ("HAMP"), and that CitiMortgage "shall have present at the settlement conference all persons with all authority needed to enter into a loan modification under HAMP and any other means by which a settlement of any type may be reached, " and that only the facilitator was authorized to file reports on the results of the settlement conference. Appellants' Appendix Volume 2 at 52.

         [¶4] In an order signed on May 17, 2013, the court stated that it had held a status hearing on that date at which the parties appeared by counsel and the facilitator appeared. The order set forth dates by which CitiMortgage was to provide the Feehans' counsel with a complete list of documents it required to complete an evaluation of the loan, by which the Feehans were required to submit the completed documentation, and by which CitiMortgage was required to advise the Feehans' counsel as to the status of its review of the loan for modification. On September 27, 2013, CitiMortgage filed a status report with the court stating that the parties held a status conference on May 17, 2013, to discuss mortgage modification options, that attempts at modification had been unsuccessful, and that it intended to proceed with the foreclosure.

         [¶5] The Feehans' counsel sent a letter dated February 7, 2014, to the settlement conference facilitator which stated in part that Thomas Feehan repeatedly provided the documentation and information requested by CitiMortgage; that in January 2011 CitiMortgage disclosed they were a servicer of the loan and took instructions from Federal Home Loan Bank of Chicago ("FHLBC"), an investor; that no one with decision-making authority from FHLBC attended a June 2011 settlement conference; that CitiMortgage repeatedly promised to provide proposed loan modification terms, but never came through with an offer and that CitiMortgage's attorney advised that FHLBC routinely took more than six months to make a decision on loan modifications and this appeared to be a calculated strategy. The letter also stated that a second settlement conference originally scheduled for August 1, 2011, was postponed at the suggestion of CitiMortgage's counsel as they believed there was no way FHLBC would have a response to the modification application; that Thomas Feehan resubmitted documentation and information following requests by CitiMortgage in August and September of 2011, February and July of 2012, and May 2013; that at no point has CitiMortgage attended a settlement conference with a person with authority to enter into a loan modification; and that CitiMortgage's filing of its status report with the court on September 27, 2013, was a violation of the court's December 20, 2010 order that status reports be filed with the facilitator. The letter stated that under no standard could the actions of CitiMortgage and FHLBC be interpreted as a good faith effort at working toward a solution.

         [¶6] In February or March 2014, CitiMortgage filed a motion for summary judgment on its complaint. On March 31, 2014, the Feehans filed a motion to strike and response to CitiMortgage's summary judgment motion together with a memorandum of law. In his affidavit, designated by the Feehans, Thomas Feehan stated in part that he and his wife had made a timely request for a settlement conference; "[m]y wife and I attended multiple attempted settlement conference with" CitiMortgage; "[h]owever, we were repeatedly told by Citimortgage's lawyers that no person with actual settlement authority was available, either in person, or by telephone or any other means, who could agree to, or offer, any settlement of any type"; CitiMortgage "made numerous and repeated demands on my wife and I to provide financial information which it claimed was necessary to make a decision on a potential modification of our mortgage"; and CitiMortgage "would repeatedly delay any decision on modification and then insist that our financial information was stale, and new financial information was required." Appellants' Appendix Volume 2 at 48-49. In their memorandum, the Feehans argued in part that, due to CitiMortgage's conduct during the settlement conference process, the court should deny it the equitable remedy of foreclosure, that CitiMortgage acted with unclean hands throughout the process, and that the court should deny CitiMortgage's motion for summary judgment.

         [¶7] CitiMortgage sent a letter dated March 11, 2015, to Thomas Feehan stating that he was conditionally approved for a short sale subject to further information obtained from an appraisal or title search but that it was unable to approve of his mortgage assistance request under HAMP because it serviced the loan on behalf of FHLBC, which had not given it the contractual authority to modify his loan under the program. The letter further provided that CitiMortgage could not approve a modification under the Private Supplemental Modification Program at that time because, in performing its underwriting of a potential modification, Thomas Feehan's combined housing expense-to-income ratio was outside of the acceptable range established for the program.

         [¶8] On July 24, 2015, the Feehans filed a supplemental response to CitiMortgage's summary judgment motion and a supporting memorandum of law. In the memorandum, the Feehans argued that CitiMortgage was required to participate in loan modification procedures under the U.S. Troubled Asset Relief Program ("TARP"), that CitiMortgage had entered into a servicer participation agreement with the Federal National Mortgage Association ("Fannie Mae") in which it consented to participate in HAMP, that the U.S. Treasury provided guidelines for servicers to determine borrowers' eligibility for loan modification, and that CitiMortgage was obligated to act in good faith to comply with the requirements of TARP and because it did not do so the court should deny its motion for summary judgment. On July 30, 2015, the court entered an order which provided that, upon request by CitiMortgage's counsel, a summary judgment hearing scheduled for August 4, 2015, was continued indefinitely, to be rescheduled upon the request of CitiMortgage.

         [¶9] CitiMortgage sent another letter to Thomas Feehan dated September 20, 2016, stating that he was not approved for a loan modification under HAMP because CitiMortgage serviced the loan on behalf of FHLBC which had not given CitiMortgage the contractual authority to modify his loan under the program and that he was not approved under the Private Supplemental Modification Program at that time because in performing its underwriting of a potential modification his combined housing expense-to-income ratio was outside of the acceptable range established for the program. The letter further indicated that the input values used to determine Thomas Feehan's eligibility included an unpaid principal balance of the loan, excluding any fees, of $155, 245.55 and a monthly gross income of $7, 967.56 and stated he had thirty days to request an appeal of the non-approval decision. CitiMortgage sent a letter to Thomas Feehan dated January 19, 2017, stating that the letter was in response to his appeal and ...


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