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Zulkowski v. Guild Mortgage Co.

United States District Court, D. Montana, Billings Division

September 18, 2018




         Plaintiff Karen Zulkowski brings this action against defendant Guild Mortgage Company (“Guild”)[1], asserting various claims related to Guild's attempt to foreclose on a trust indenture. (See generally Doc. 10.) Before the Court is Guild's Motion for Summary Judgment (the “Motion”), brought pursuant to Fed.R.Civ.P. 56. (Doc. 4.) For the reasons set forth below, Guild's Motion is GRANTED.

         I. Factual Background

         Zulkowski owns a residence at 31 Snowy Lane in Red Lodge, Montana (the “Property”). (Doc. 32 at ¶ 1.) On August 23, 2010, Zulkowski executed a promissory note (the “Note”) in favor of Guild for the amount of $350, 000.00 in order to purchase the Property. (Doc. 32 at ¶ 2.) Zulkowski also executed a Deed of Trust (the “Deed”) in favor of Guild encumbering the Property. (Doc. 32 at ¶ 3.) The Deed contains the following pertinent provisions:

15. Notices. […] Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means….The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address.
22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument….The notice shall specify: (a) the default; (b) the action required to cure the default; (3) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property.

(Doc. 6-1 at 10, 12) (emphasis removed).)

         Zulkowski's monthly principal and interest payments under the Note were set at $1, 721.79. (Doc. 32 at ¶ 5.) Throughout the life of the loan, Zulkowski has defaulted on her payment obligation multiple times. (Doc. 32 at ¶ 6.)

         On December 16, 2013, an Assignment of Trust Indenture recorded in the records of the Clerk and Recorder of Carbon County as Document No. 356634, transferred beneficiary interest from MERS to Guild. (Doc. 21-3.)

         Zulkowski continued to miss payments on the Note. (Doc. 32 at ¶ 7.) Therefore, Guild sent Zulkowski a Notice of Intention to Foreclose, dated September 15, 2016 (the “9/16 Notice”). (Docs. 6-13, 21-2 at 2.) The 9/16 Notice lists Zulkowski's address as the Property address at 31 Snowy Lane in Red Lodge, Montana. It provides in pertinent part that Zulkowski's loan is in default; she may cure the default “by paying all monies owed within 30 days of the date of this letter”; and it explains the remedies available to Guild if the obligation remains unpaid, including acceleration and foreclosure. (Doc. 6-13.)

         Zulkowski claims that she never received the 9/16 Notice. (Doc. 17-1 at 3.) She explains that she was residing primarily in Hawaii at times pertinent to this case, and therefore that “it did not make sense to have our mail delivered to our address at 31 Snowy Lane in Red Lodge.” (Doc. 17-1 at ¶ 4.) She states that she and her husband, John, instructed the Red Lodge Post Office to forward their mail to Hawaii. (Id.) Nevertheless, Zulkowski does not contend that she informed Guild of the address change, or that she took any steps to designate an address other than the Property address where Guild should send any notices. Guild has also attached what it purports to be United States Postal Service tracking information that indicates the 9/16 Notice was forwarded to Hawaii. (Docs. 6-14, 21-2 at 2.)

         Regardless of whether she received the 9/16 Notice, Zulkowski failed to cure the default within the time specified, and a Notice of Trustee's Sale was recorded on January 18, 2017, in the records of the Clerk and Recorder of Carbon County as Document No. 368840. (Docs. 32 at ¶ 7; 6-15.) An Affidavit of Mailing was recorded on January 31, 2017, with the Carbon County Clerk as Document No. 368975. (Docs. 32 at ¶ 10; 6-16.) The Notice of Trustee's Sale is the first correspondence from Guild that Zulkowski acknowledges receiving. Nevertheless, Zulkowski claims she had already found out about the foreclosure on February 26, 2017, when a friend sent her a message that she had seen the notice in the Carbon County News. (Doc. 17-1 at ¶ 6.)

         The Property was to be sold at a trustee's sale on May 31, 2017. (Doc. 6-15.) An Affidavit of Posting was recorded on February 15, 2017 in the records of the Clerk of Carbon County as Document No. 369076 (Docs. 32 at ¶ 11; 6-17), and an Affidavit and Certification of Publication was recorded on March 8, 2017, as Document No. 369241. (Doc. 6-18.)

         Zulkowski filed her initial Complaint on May 24, 2017 in the Montana Twenty-Second Judicial District Court, Carbon County. (Docs. 32 at ¶ 12; 6-19.) On May 25, 2017, the state court issued a temporary restraining order preventing Guild from proceeding with the May 31, 2017 trustee's sale. (Docs. 32 at ¶ 12; 6-20.) The Carbon County Clerk recorded a Cancellation of Notice of Trustee's Sale as Document No. 371119 on August 29, 2017. (Docs. 32 at ¶ 14; 6-22.)

         On September 3, 2017, Guild sent Zulkowski another Notice of Intention to Foreclose (the “9/17 Notice”) (when referring to both the 9/16 Notice and 9/17 Notice, “Notices”), containing the same basic information as the 9/16 Notice with updated arrearage amounts. (Docs. 32 at ¶ 15; 6-23.) No. trustee's sale has been scheduled to date. (Doc. 18 at 13.) Zulkowski makes no contention that she is not actually in default or that she has ever attempted to cure the default.

         Zulkowski filed her Amended Complaint for Damages and Injunction (“Complaint”) in state court on September 26, 2017 (Doc. 10), alleging that Guild breached the terms of the Deed in initiating foreclosure proceedings against Zulkowski (Count I); that it was negligent in doing so (Count II); that it violated the Montana Unfair Trade Practices Act and Consumer Protection Act (Count III); that it negligently misrepresented information to Zulkowski (Count IV); and that it should be enjoined from exercising the power of sale or otherwise foreclosing on Zulkowski (Count V).

         Guild removed the case to this Court on November 1, 2017 (Doc. 1), and now moves for summary judgment on all Zulkowski's claims. (Doc. 4.)

         II. Parties' Arguments

         Guild first argues that the Court lacks jurisdiction over this matter because no trustee's sale has occurred or is scheduled to occur, and therefore this matter is moot and lacks the requisite “case and controversy” to support jurisdiction. (Doc. 5 at 8-9.) Guild next argues that, assuming the Court has jurisdiction, Zulkowski's claims fail because the undisputed facts demonstrate that the factual ...

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