House v. Federal Home Loan Mortgage Corp.

261 F. Supp. 3d 623
CourtDistrict Court, E.D. North Carolina
DecidedSeptember 28, 2016
DocketNo. 4:14-CV-129-D
StatusPublished
Cited by2 cases

This text of 261 F. Supp. 3d 623 (House v. Federal Home Loan Mortgage Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
House v. Federal Home Loan Mortgage Corp., 261 F. Supp. 3d 623 (E.D.N.C. 2016).

Opinion

ORDER

JAMES C. DEVER III, Chief United • States District Judge

On June 23, 2014, Shontay House (“House”) and Mary Vega (“Vega”) (collectively, “plaintiffs”) filed suit against Federal Home Loan Mortgage Corporation (“Freddie Mac”) and Brock & Scott PLLC (“Brock & Scott”) (collectively, “defendants”) in Pitt County Superior Court. See [D.E. 1-2] 2-9. On July 23, 2014, defen[627]*627dants removed plaintiffs’ action to this court [D.E. 1]. On July 30, 2014, defendants moved to dismiss plaintiffs’ complaint [D.E. 5] and filed a memorandum in support [D.E. 6]. On January 9, 2015, the court granted in part and denied in part defendants’ motion to dismiss and allowed plaintiffs’ claims for breach of lease, trespass, trespass to chattels, and conversion to proceed. See [D.E. 13].

On January 21,2016, both parties moved for summary judgment and filed memoran-da in support [D.E. 26-29], As explained below, the court grants defendants’ motion for summary judgment and denies plaintiffs’ motion for summary judgment.

I.

On March 15, 2013, plaintiffs entered into a one-year agreement with Steven Mills (“Mills”) to lease Mills’s residential property at 2912 Satterfield Drive in Greenville, North Carolina (“the rental property”). Compl. [D.E. 1-2] ¶¶ 7-8; Ans. [D.E. 15] ¶7; see [D.E. 27-2] 2-3. In relevant part, plaintiffs agreed to pay Mills $1000 per month for twelve months, that the lease would begin on March 15, 2013, and that the lease would expire on March 31, 2014. See [D.E. 27-2] 3. On March 22, 2013, plaintiffs moved into the rental property. House Dep. [D.E. 27-8] 156-57; Vega Dep. [D.E. 27-9] 81. During the first few months of the lease, Vega paid rent directly to Mills using certified funds from the Local Government Federal Credit Union. See Vega Dep. [D.E. 27-9] 63-64; House Dep. [D.E. 27-8] 86-87. .

Sometime before November I, 2013, Mills stopped making mortgage payments on the rental property. See [D.E. 27-3] 6-9. During this period of non-payment, Mills communicated to plaintiffs that he had ceased making mortgage payments. See Vega Dep. [D.E. 27-9] 86; House Dep. [D.E. 27-8] 161. Accordingly, plaintiffs stopped paying rent to him “right before Christmas.” Vega Dep. [D.E. 27-9] 87;- see House Dep. [D.E. 27-8] 161 (“After you found out Mr. Mills wasn’t paying his mortgage ... did you make any more monthly [rent] payments, to him?” “Oh no, that’s when—uh-uh, no.”). Instead, plaintiffs kept their rent money and put it “[i]n savings.” House Dep. [D.E. 27-8] 161.1

In February 2014, the rental property was the subject of a foreclosure action and, on February 5, 2014, foreclosure took place. Compl. ¶ 11; Ans. ¶ 11; see [D.E. 27-3] 6 .(11/04/2013 foreclosure notice); [D.E. 27-4] (01/09/2014 Pitt County Superior Court foreclosure order); [D.E. 27-6] 2 (02/05/2014 Pitt County Superior Court report of foreclosure sale). On February 18, 2014, Freddie Mac obtained equitable title to the rental property. [D.E. 27-7] 2-3 (02/18/2014 Pitt County deed conveying title to Freddie Mac). At- some point after the foreclosure, Brock & Scott communicated with plaintiffs about their lease and asked whether they wished to “stay in the property” or receive “some money to move out,” but plaintiffs did not agree to either proposal. See House Dep. [D.E. 27-8] 82; Vega Dep. [D.E. 27-9] 64. On February 28, 2015, Brock & Scott, on behalf of Freddie [628]*628Mac, mailed “Steve E. Mills and Autumn N. Mills or the Current Occupants ... [of] 2912 Satterfield Drive, Greenville, NC,” a “Notice to Vacate.” [D.E. 27-11] 2. In the notice to vacate, Brock & Scott notified plaintiffs that the rental property was foreclosed upon and that eviction would take place within 90 days “in the event [plaintiffs were] ... bona fide tenant[s] of the mortgagor of the Deed of Trust.” Id. 2. Brock & Scott requested notification “within five (5) business days” of plaintiffs’ bona-fide-tenant status. Id.

On March 3, 2014, Freddie Mac recorded the title transfer. Compl. ¶ 11; Ans. ¶ 11. On March 31, 2014, plaintiffs’ pre-foreclosure lease expired. See [D.E. 27-2] 3. Plaintiffs never paid “Freddie Mac ... or Brock & Scott ... any money to stay” in the rental property after Freddie Mac obtained title. House Dep. [D.E. 27-8] 161, 184 (“Isn’t it true that you have never paid one dime of rent to Freddie Mac to live at 2912 Satterfield Drive?” “That is so not true.” “Who did, who did you pay at Freddie Mac and when did you pay at Freddie Mac?” “Not Freddie Mac, I paid to Steven Mills, and that was to live at 2912 Satter-field Drive.”).

On June 5, 2014, 94 days after mailing notice to the plaintiffs, defendants applied for an order for possession under N.C. Gen. Stat. § 45-21.29(k) with the clerk of Pitt County Superior Court. Compl. ¶ 14; Ans. ¶ 14; [D.E. 27-12] 2 (06/05/2014 application for order for possession in Pitt County Superior Court).2 Also on June 5, 2014, the clerk granted the application, finding that “all of the requisites of the General Statutes of North Carolina ha[d] been complied with as well as all other applicable legal requirements.” [D.E. 27-12] 4 (06/05/2014 Pitt County Superior Court order for possession).

On June 9, 2014, the Pitt County Office of the Sheriff served plaintiffs with an ejectment notice. See Compl. ¶ 14; Ans. ¶ 14; [D.E. 27-13] 4. The ejectment notice stated that the sheriff would forcibly eject plaintiffs if they failed to vacate the rental property by June 16, 2014. Compl. ¶ 14; Ans. ¶ 14; [D.E. 27-13] 4. On June 16, 2014, plaintiffs had failed to vacate the premises, and the sheriff evicted them by locking them out of the residence. House Dep. [D.E. 27-8] 137-39; see [D.E. 28] ¶ 27; Compl. ¶ 15; Ans. ¶ 15. A locksmith accompanied the sheriff and changed the locks on the doors to the rental property. House Dep. [D.E. 27-8] 137. Following the lockout, plaintiffs returned to the residence on a few occasions to obtain personal items, with the permission of a banker named Ray Harrington. Vega Dep. [D.E. 27-9] 98-99; House Dep. [D.E. 27-8] 137.

On June 23, 2014, plaintiffs filed suit in Pitt County Superior Court alleging numerous violations of North Carolina law. Compl. ¶¶ 21-72. On June 24, 2014, Judge Arnold Jones of the Pitt County Superior Court entered an order enjoining Freddie Mac from evicting plaintiffs from the rental property. [D.E. 1-2] 12-13. As a result, plaintiffs returned to the rental property. [D.E. 28] ¶30. The Pitt County Superior Court scheduled a preliminary injunction hearing for July 3, 2014. [D.E. 1-2] 13. However, on July 3, 2014, plaintiffs agreed to voluntarily vacate the rental property by July 7, 2014, thereby mooting plaintiffs’ request for injunctive relief. See id. 14-16. On July 23, 2014, Freddie Mac removed the action to this court pursuant to 28 U.S.C. §§ 1331 and 1442 and 12 U.S.C. § 1452(f). [D.E. 1],

[629]*629On July 30, 2014, defendants moved to dismiss plaintiffs’ complaint under Federal Rule of Civil Procedure 12(b)(6). [D.E. 5]. On January 9, 2015, this court granted in part and denied in part defendants’ motion. [D.E. 13].

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Bluebook (online)
261 F. Supp. 3d 623, Counsel Stack Legal Research, https://law.counselstack.com/opinion/house-v-federal-home-loan-mortgage-corp-nced-2016.