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Nyhart v. PNC Bank, N. A.

United States District Court, D. Maryland

November 30, 2016

STEVEN NYHART and JENNIFER NYHART, Plaintiffs,
v.
PNC BANK, N.A. Defendant.

          MEMORANDUM OPINION

          Paula Xinis United States District Judge.

         Pending in this breach of contract case is Defendant's motion for summary judgment (ECF No. 31). The issues are fully briefed and the Court now rules pursuant to Local Rule 105.6 because no hearing is necessary. For the reasons stated below, Defendant's motion is granted in part and denied in part.

         I. BACKGROUND[1]

         On January 26, 2005, Plaintiff Steven Nyhart (“Mr. Nyhart”) executed a Promissory Note (“Note”) in the amount of $245, 000.00 to National City Mortgage, a division of National City Bank of Indiana. ECF No. 31-4. The Note was secured by a Deed of Trust executed on the same date by Jennifer and Steven Nyhart (collectively, “Plaintiffs”) and was recorded in the Land Records of Montgomery County. ECF No. 31-6. Defendant PNC Bank, N.A. (“PNC”) became the servicer of the Loan as a result of PNC's acquisition of National City Mortgage. ECF No. 31-1 at 3.

         By January 2014, Mr. Nyhart was approximately two payments behind on his mortgage. As a result, on January 15, 2014, PNC and Mr. Nyhart entered into a Repayment Plan (the “Repayment Plan”) which allowed Mr. Nyhart to repay the past due amount on his mortgage over a five-month period by paying a specified amount each month in addition to his regular monthly payment. ECF Nos. 31-9 & 31-4. Under the Repayment Plan, Mr. Nyhart was required to pay five installments of: (a) $2, 340 on or before January 16, 2014; (b) three payments of $2, 496.36 on or before February 15, 2014, March 15, 2014, and April 15, 2014; and (c) a final payment of $2, 496.38 on or before May 15, 2014. ECF No. 31-9. Mr. Nyhart made the first three Repayment Plan payments but failed to pay the $2, 496.36 payment due on April 15, 2014. ECF No. 31-1 at 5; ECF No. 31-7 at 9.

         On May 16, 2014, Mr. Nyhart submitted a payment of $1, 760. Because the Repayment Plan required Nyhart to pay $2, 496.38 in May 2014, PNC returned the $1, 760 payment as insufficient. On June 13, 2014, Mr. Nyhart made another payment of $1, 773. Again, the payment was returned to Mr. Nyhart for the same reason. At the time, however, Nyhart had additional funds in his “suspense account” with PNC which could be put toward the required payments. ECF No. 33-3 at 3. Plaintiffs continued to make their monthly payments for the remainder of 2014, and PNC continued to reject them. Plaintiffs then hired counsel, Gerald Solomon (“Solomon”), to assist them. ECF No. 2 at 4. On January 12, 2015, Solomon sent a letter to PNC seeking clarification of the loan transaction history and informing PNC that Plaintiffs had sufficient funds in their suspense account to cover all of the monthly payments in full and should not have returned the May and June payments. See ECF No. 33-3.

         On January 29, 2015, PNC instituted a foreclosure action against Plaintiffs in the Montgomery County Circuit Court. See Case No. 400118V (Montgomery Cnty. Cir. Ct. Jan. 29, 2015). PNC then reversed course, informing Plaintiffs that the May and June 2014 payments “were rejected in error, ” and thus the loan should not have been referred to foreclosure. ECF No. 33-3 at 3. PNC further stated that “[w]e have removed your client's loan from foreclosure on March 3, 2015, and waived all foreclosure fees and costs. We apologize for this error.” Id. PNC then dismissed the foreclosure action.

         On June 1, 2015, Plaintiffs filed a complaint in the Circuit Court for Montgomery County against PNC. The complaint alleges four causes of action: (1) declaratory judgment; (2) breach of contract; (3) deceptive trade practices in violation of the Maryland Consumer Protection Act; and (4) violations of the Maryland Consumer Debt Collection Act. ECF No. 2. At base, Plaintiffs allege that PNC wrongfully rejected Plaintiffs' May and June 2014 mortgage payments, wrongfully declared Plaintiffs' in default, and mistakenly reported the default and foreclosure to the credit bureaus. On July 30, 2015, PNC timely removed the case to this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. ECF No. 1.

         On June 3, 2016, PNC filed the instant motion for summary judgment. Reversing course once again, PNC now claims that its Customer Service Department was incorrect in abandoning foreclosure proceedings because Plaintiff's payments were insufficient all along. ECF No. 35 at 6. Thus, PNC asserts that it is Plaintiff, not PNC, who breached the loan agreement and so the original foreclosure action was proper. To date, however, PNC has not reinstituted any further foreclosure proceedings.

         II. STANDARD OF REVIEW

         PNC has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. A court may enter summary judgment only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). However, summary judgment is inappropriate if any material fact at issue “may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); JKC Holding Co. LLC v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).

         The moving party bears the burden of showing there is no genuine issue as to any material fact. See Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979). The moving party can meet this burden by demonstrating the absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In response, the nonmoving party must then demonstrate specific facts showing that a genuine issue remains for trial. Id. at 324. “A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of [his] pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (internal quotation marks and citation omitted) (alteration in original). This burden is particularly strong where the nonmoving party also bears the burden of proof at trial. Hughes v. Bedsole, 48 F.3d 1376, 1381 (4th Cir.1995) (quoting Pachaly v. City of Lynchburg, 897 F.2d 723, 725 (4th Cir.1990)).

         III. ANALYSIS

         A. Declaratory ...


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