Ortiz v. Wilmington Savings Fund Society, FSB

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF WEST VIRGINIA

AT CHARLESTON

BARBARA ORTIZ,

Plaintiff,

v. Civil Action No. 2:18-cv-1129

WILMINGTON SAVINGS FUND SOCIETY,

FSB d/b/a CHRISTINA TRUST AS

OWNER TRUSTEE OF THE

RESIDENTIAL CREDIT

OPPORTUNITIES TRUST III,

FCI Lender Services Inc., and

Dana Capital Group, Inc.,

Defendants.

ORDER

Pending are a motion for summary judgment, filed May

8, 2019 by defendants Wilmington Savings Fund Society, FSB

(“Wilmington”), and FCI Lender Services, Inc. (“FCI”), and the

Motion for Leave to File Amended Answer to Amended Complaint,

filed May 30, 2019 by Wilmington and FCI. Wilmington acquired

the mortgage loan in issue in 2017. FCI services the loan.

I. Background

In 2003, the husband of the plaintiff, Barbara Ortiz

(“Ortiz”), owed approximately $88,000 in real estate debt and

about $15,000 on a judgment lien that constituted a second lien

on the same real estate. Amended Compl. ¶ 8. Late that year,

Ortiz decided to refinance both debts, along with an unspecified

amount of unsecured debt, in an “overarching, refinancing debt”

(the “Loan”) with Fremont Investment & Loan Company (“Fremont”).

Plaintiff sought the Loan “primarily to enable negotiation of a

settlement of the second judgment lien” of approximately

$15,000. Id. ¶ 9. ECF No. 14 at 2 (citing Amended Compl. ¶

14).

Plaintiff entered into the Loan on January 26, 2004,

which amounted to $115,545, pursuant to an adjustable rate note

(“Note”) secured by a deed of trust in the same real estate

(“Deed of Trust”). See Note, ECF No. 5-1; Deed of Trust, ECF

No. 5-2; Ex. 1, Ortiz Dep. 50:1–4, 59:15–23. Under the terms of

the Note and Deed of Trust, plaintiff owed regular monthly

payments. See, e.g., Note § 3, ECF No. 5-1; Deed of Trust § 1,

ECF No. 5-2.

Plaintiff claims she was subjected to the practice of

“predatory lending” and was exploited by Fremont and Dana

Capital Group Inc. (“Dana Capital”), the Loan broker, and

wrongly persuaded into entering into an “unaffordable

refinancing secured by [her] home.” Amended Compl. 1.

Plaintiff claims to have requested a “fixed rate” loan, which,

according to her, “was accurately depicted on the loan

application.” Id. ¶ 22. However, the Loan she entered into was

an adjustable rate loan which provided that plaintiff’s interest

rate would not decrease below 8.99 percent, but could increase

to as much as 15.99 percent. Id. ¶ 36. Plaintiff paid monthly

installments on her Loan for fourteen years that varied in

amounts from month to month. ECF No. 33, Ex. 1, Ortiz Dep.

62:18–63:18; 103:5–12, attached as ex. 1.

Plaintiff further alleges that the settlement

statement allocated $8,000 to pay off the judgment lien of

$15,000, and Fremont and Dana Capital prepared a closing

document titled “Creditors to be paid off,” listing $8,000 as an

amount required to be paid off. Id. ¶ 42. Dana Capital

negotiated a settlement with the judgment creditor to pay $8,000

in exchange for a release of the judgment lien. Id. ¶ 43. She

asserts that the judgment lien was not paid with the Loan

proceeds until January 2006, but instead held in a trust account

for those two years. Id. ¶¶ 44-45. Plaintiff also alleges that

the failure to furnish the $8,000 to the judgment creditor

caused the judgment lien to take primary lien status over the

Fremont home loan. Id. ¶ 45.

As a result of the aforementioned events, the judgment

creditor began collecting on the debt in May 2004. Id. ¶ 47.

In April 2005, the judgment creditor sought to utilize what had

become its primary lien status to foreclose on plaintiff’s

property. Id. ¶ 48. Plaintiff quickly retained an attorney, at

a cost of $2,000.00, to negotiate the payoff of the judgment

lien for the original amount of the judgment. Id. ¶ 48.

Plaintiff paid $7,262.02 of the settlement in August 2005 to the

judgment creditor; however, “defendant continued to refuse to

release the remaining $8,000.00 to pay off the judgment lien.”

Id. ¶ 49. The judgment creditor brought suit against plaintiff

and lender in January 2006, and lender “finally relented and

released the $8,000.00 to the judgment creditor.” Id. ¶ 50.

Approximately thirteen years later on May 31, 2017,

Wilmington became the owner of the Note, Deed of Trust, and

Ortiz’s debt through a series of assignments. Id. ¶ 5;

Countercl. ¶ 5-7; Assignments of Deed of Trust, ECF Nos. 5-4 to

5-5. Although Ortiz owed regular monthly payments under the

Note and Deed of Trust, she failed to furnish some of them

timely. ECF No. 32 at Aff. of Ron McMahan; Countercl., Ex. A,

B. According to the defendants, “it has been approximately

sixteen months since Plaintiff last made a full, timely payment”

- since May 18, 2017. ECF No. 13 at Aff. of Ron McMahan ¶ 9.

She has been in default on the Loan since at least December 11,

2017. Id. at Aff. of Ron McMahan ¶ 10. As a result, she

breached the terms of the Note and Deed of Trust, triggering the

Loan’s acceleration and the lender’s option to exercise its

power of sale. Countercl., Ex. 2 at 15; Deed of Trust § 22, ECF

No. 5-2.

On December 14, 2017, Wilmington served notice to

execute a foreclosure sale of the property. See, e.g., Aff. of

Ron McMahan ¶ 11, ECF No. 13-1; Demand, ECF No. 13-8.

Thereafter on April 9, 2018, Ortiz instituted a lawsuit in

Fayette County Circuit Court, alleging various contractual

defenses of unconscionability and fraud and affirmative claims

of fraud and excessive late fees. See Amended Compl. The

claims “were variously pleaded against Wilmington [holder] as

well as Defendants FCI (servicer) and Dana Capital Group, Inc.

(broker).” ECF No. 33 (citing Amended Compl.).

The complaint consists of six counts:

Count I, Contract Defense - Unconscionable Broker

Agreement (as to Broker Dana Capital only);

Count II, Fraud as a Contract Defense – Loan Agreement

(Loan Servicer/Holder);

Count III, Unconscionability as a Contract Defense to

the Loan Agreement (Loan Servicer/Holder);

Count IV, Fraud as a Contract Defense and for Damages

(as to all defendants); and

Count VI, Excessive Late Fees (Loan Servicer/Lender).

The court notes that Count V has been voluntarily dismissed by

the plaintiff.

Defendants Wilmington and FCI removed the action to

this court on July 9, 2018, and Wilmington brought counterclaims

of breach of contract and declaratory judgment, seeking to

exercise its power of sale. See Countercl. Wilmington moved

for summary judgment on the counterclaim which sought

foreclosure. The motion is denied by order entered

contemporaneously herewith.

Wilmington and FCI now seek summary judgment on the

claims made against them, asserting that Counts II, III, and IV

are time barred, and that plaintiff has failed to create a

genuine issue of material fact under Count VI that FCI and

Wilmington charged excessive late fees.

II. Legal Standard

A party is entitled to summary judgment “if the

pleadings, the discovery and disclosure materials on file, and

any affidavits show that there is no genuine issue as to any

material fact and that the movant is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(c). Material facts are

those necessary to establish the elements of a party’s cause of

action. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986).

A genuine issue of material fact exists if, in viewing

the record and all reasonable inferences drawn therefrom in a

light most favorable to the non-moving party, a reasonable fact-

finder could return a verdict for the non-movant. Id. The

moving party has the burden of showing - “that is, pointing out

to the district court - that there is an absence of evidence to

support the nonmoving party’s case.” Celotex Corp. v. Catrett,

477 U.S. 317, 325 (1986). If the movant satisfies this burden,

then the non-movant must set forth specific facts as would be

admissible in evidence that demonstrate the existence of a

genuine issue of fact for trial. Fed. R. Civ. P. 56(c); id. at

322-23. A party is entitled to summary judgment if the record

as a whole could not lead a rational trier of fact to find in

favor of the non-movant. Williams v. Griffin, 952 F.2d 820, 823

(4th Cir. 1991).

III. Discussion

A. Motion to Amend

The defendants filed on May 30, 2019 a contested

motion to amend their answer to include the affirmative defense

of laches. A defendant’s failure to assert the affirmative

defense of laches in its answer can, in some instances, result

in waiver. See Fed. R. Civ. P. 8(c). However, “there is ample

authority in this Circuit for the proposition that absent unfair

surprise or prejudice to the plaintiff, a defendant's

affirmative defense is not waived when it is first raised in a

pre-trial dispositive motion.” Brinkley v. Harbour Recreation

Club, 180 F.3d 598, 612 (4th Cir. 1999) (citing Peterson v.

Airline Pilots Ass'n, 759 F.2d 1161, 1164 (4th Cir. 1985)

(holding that waiver is not automatic, but requires a showing of

prejudice or unfair surprise); American Recovery Corp. v.

Computerized Thermal Imaging, Inc., 96 F.3d 88, 96 (4th Cir.

1996) (evaluating prejudice to plaintiff when considering

timeliness of affirmative defense of arbitration); Polsby v.

Chase, 970 F.2d 1360, 1364 (4th Cir. 1992) (noting that

affirmative defenses may be pled in pre-trial motions and that

the district court did not abuse its discretion by permitting

defendant to raise an affirmative defense after the answer);

vacated and remanded on other grounds, 507 U.S. 1048 (1993)).

Wilmington took one deposition on January 7, 2019,

being that of the plaintiff. The central focus of that entire

line of questioning was the passage of time between the date of

the closing and the filing of this lawsuit in April 2018, and

more particularly, why plaintiff waited fourteen years to bring

legal action. See Barbara Ortiz Dep. 61:10–12, 62:15–63:21,

64:24–65:20, 67, 98:11–99:22, 115:20-119:9, ECF No. 37, attached

as Ex. 1. Since then the plaintiff was given an opportunity to

respond to the merits of laches and statute of limitations

arguments in briefing her responses to Wilmington’s motion for

summary judgment and motion to amend, and she did in fact

respond to those arguments.

The plaintiff has been on notice, from an early stage

of this case, of the defendants’ intent to raise timeliness as a

defense strategy pursuant to the affirmative defenses of the

statute of limitations and repose listed in their answer to the

amended complaint. Answer & Countercl. ¶ 3, p. 12, ECF No. 5

(“Plaintiff’s claims are barred in whole or in part by any and

all applicable statutes of limitations or repose.”). Under the

circumstances, the plaintiff is unable to show either surprise

or undue prejudice by the defendants’ failure to include the

laches defense in their answer. As hereinafter more fully

developed, the parties addressed the question of timeliness

throughout the course of this litigation, and the plaintiff has

not been unfairly prejudiced by the defendants’ inadvertent

omittance. Consequently, the defense of laches was not waived,

the motion to amend the answer to include it is granted, the

answer is deemed amended accordingly, and the court will

consider the defense of laches on the merits.

B. Counts II, III, and IV

The defendants claim that Counts II (Fraud as a

Contract Defense), III (Unconscionability as a Contract

Defense), and IV (Fraud as a Contract Defense and for Damages)

are untimely. Counts II and III seek equitable relief that is

subject to a laches defense. Count IV seeks both equitable

relief and damages at law and is subject, respectively, to a

laches defense and a statute of limitations defense.

Federal courts sitting in diversity apply state

statutes of limitations to state law claims. See Walker v.

Armco Steel Corp., 446 U.S. 740, 753 (1980). To determine

whether an action is time-barred, the Supreme Court of Appeals

of West Virginia has outlined a five-step analysis that courts

should follow:

First, the court should identify the applicable

statute of limitation for [the] cause of action.

Second, the court . . . should identify when the

requisite elements of the cause of action occurred.

Third, the discovery rule should be applied to

determine when the statute of limitation began to run

by determining when the plaintiff knew, or by the

exercise of reasonable diligence should have known, of

the elements of a possible cause of action . . . .

Fourth, if the plaintiff is not entitled to the

benefit of the discovery rule, then determine whether

the defendant fraudulently concealed facts that

prevented the plaintiff from discovering or pursuing

the cause of action. Whenever a plaintiff is able to

show that the defendant fraudulently concealed facts

which prevented the plaintiff from discovering or

pursuing the potential cause of action, the statute of

limitation is tolled. And fifth, the court or the jury

should determine if the statute of limitation period

was arrested by some other tolling doctrine.

Syl. Pt. 5, Dunn v. Rockwell, 689 S.E.2d 255, 258 (W. Va. 2009).

“Where a suit . . . is not for damages but seeks to

rescind a writing or impose a trust or other equitable relief,

it is not a common law action for fraud but is equitable in

nature. Consequently, the doctrine of laches is applicable

rather than any specific statute of limitations period." Syl.

Pt. 7, Dunn, 689 S.E.2d at 258. “This is not to say that there

is no time limit for filing an equitable cause of action." Id.

at 267 n.11. "Laches applies to equitable demands where the

statute of limitation does not." Syl. Pt. 2, Condry v. Pope,

166 S.E.2d 167, 167 (W. Va. 1969).

"Laches is a delay in the assertion of a known right

which works to the disadvantage of another." Syl. Pt. 2, Bank

of Marlinton v. McLaughlin, 17 S.E.2d 213, 214 (W. Va. 1941).

But "[m]ere delay will not bar relief in equity on the ground of

laches." Syl. Pt. 1, State ex rel. Smith v. Abbot, 418 S.E.2d

575, 576 (W. Va. 1992). Instead, the West Virginia Supreme

Court "has consistently emphasized the necessity of a showing

that there has been a detrimental change of position in order to

prove laches." Dunn, 689 S.E.2d at 267 (citing Maynard v. Board

of Educ. of Wayne Cnty., 357 S.E.2d 246, 253 (W. Va. 1987); Syl.

Pt. 3, Carter v. Price, 102 S.E. 685 (W. Va. 1920)). For laches

to bar a claim, the defendant must establish a detrimental

change of position as a result of a plaintiff's delay in

bringing the action. See White v. Daniel, 909 F.2d 99, 102 (4th

Cir. 1990) ("Laches imposes on the defendant the ultimate burden

of proving '(1) the lack of diligence by the party against whom

the defense is asserted, and (2) prejudice to the party

asserting the defense.") (citing Costello v. United States, 365

U.S. 265, 282 (1961)).

The defendants claim that a “presumption of laches”

based on the analogous statute of limitations for the claims in

issue should be applied. Id. "Under equitable principles the

statute of limitations applicable to analogous actions at law is

used to create a 'presumption of laches.' This principle

'presumes' that an action is barred if not brought within the

period of the statute of limitations and is alive if brought

within the period." Tandy Corp. v. Malone & Hyde, Inc., 769

F.2d 362, 365 (6th Cir. 1985).

“When federal courts, in the exercise of their

equitable power, consider laches, they are guided by the

limitations period that they would borrow for actions at law and

presume that if an equitable claim is brought within the

limitations period, it will not be barred by laches.” Lyons

P’ship, L.P. v. Morris Costumes, Inc., 243 F.3d 789, 799 (4th

Cir. 2001), abrogated in part by Petrella v. Metro-Goldwyn-

Mayer, Inc., 134 S. Ct. 1962 (2014), (citing, among others,

Tandy 769 F.2d at 365-66).

In addition, several short per curiam opinions from

the Fourth Circuit Court of Appeals indicate its willingness to

presume prejudice as a result of dilatoriness in bringing an

equitable action. See Riddick v. Baltimore Steam Packet Co.,

374 F.2d 870, 871 (4th Cir. 1967) (per curiam) (recognizing a

"presumption of prejudice"); Davis v. Nelson, 285 F.2d 214, 215

(4th Cir. 1960) (per curiam) ("As this delay of nearly seven

years exceeds any possibly applicable limitations period, it

became the duty of the libellant to plead and prove facts

negativing a presumption of prejudice from inexcusable delay.

The presumption would be against prejudice if suit had been

brought during the legal period of limitations.").

In applying the presumption of prejudice where the

equitable action is not brought within the statute of

limitations period, defendants note that Counts II and IV are

for fraud, and assert that the analogous statute of limitations

should be two years pursuant to W. Va. Code § 55-2-12, which

provides that:

[e]very personal action for which no limitation is

otherwise prescribed shall be brought: (a) Within two

years next after the right to bring the same shall

have accrued, if it be for damage to property; (b)

within two years next after the right to bring the

same shall have accrued if it be for damages for

personal injuries; and (c) within one year next after

the right to bring the same shall have accrued if it

be for any other matter of such nature that, in case a

party die, it could not have been brought at common

law by or against his personal representative.

Id. They further claim that the analogous statute of

limitations for plaintiff’s Count III unconscionability claim

should be four years pursuant to W. Va. Code § 46A-5-101(1),

which provides:

If a creditor or debt collector has violated the

provisions of this chapter applying to collection of

excess charges . . . illegal, fraudulent or

unconscionable conduct . . . the consumer has a cause

of action to recover: (a) Actual damages; and (b) a

right in an action to recover from the person

violating this chapter a penalty of $1,000 per

violation: Provided, That the aggregate amount of the

penalty awarded shall not exceed the greater of

$175,000 or the total alleged outstanding

indebtedness. With respect to violations arising from

consumer credit sales, consumer leases or consumer

loans, or from sales as defined in article six of this

chapter, no action pursuant to this subsection may be

brought more than four years after the violations

occurred: Provided further, That no action pursuant to

this subsection to set aside a foreclosure sale of any

real estate securing a consumer loan may be brought

more than one year after the foreclosure sale is

final.

Id. (emphasis in original).

Defendants contend that, even if this court chooses

not to apply the presumption of prejudice in this case, they

have at this juncture successfully shown (1) lack of diligence

by the plaintiff and (2) prejudice to them. See Costello, 365

U.S. at 282. Defendants claim to have detrimentally changed

positions as a result of plaintiff’s delay in bringing this

action inasmuch as they were unable to obtain the payment

history of the Loan prior to when Kirkland Financial acquired it

on June 25, 2015, and were thereby prevented from developing a

holder in due course defense. Further, they assert that, even

if relevant witnesses from 2003 to 2004 could be found, the

“recollection of events” of witnesses from that long ago “are

bound to be faded and of little use.” See ECF No. 33 (citing

Powell v. Bank of Am., N.A., 2012 U.S. Dist. LEXIS 48753, at *18

(S.D. W. Va. 2012)); ECF No. 33 at Ortiz Dep. 61:10–12; 67:11–

23, attached as Ex. 1 (plaintiff herself could not remember

which attorney handled the Loan closing “during which she was

purportedly duped and defrauded”).

Plaintiff appears to have intentionally pled Counts II

and III for equitable relief only, even though both W. Va. Code

§ 55-2-12 and W. Va. Code § 46A-5-101(1) permit a party to seek

damages, should one so choose. See Amended Compl. ¶¶ 70, 77.

Count IV, on the other hand, was pled for equitable relief as

well as for actual and punitive damages. Id. ¶ 85.

As noted, the analogous statute of limitations for

claims under W. Va. Code § 55-2-12 is two years. The alleged

fraud here occurred during the Loan origination process, which

plaintiff generally alleges took place between the months of

December 2003 and February 2004. Amended Compl. 3. Thus, the

statute of limitations as to the fraud claims of Counts II and

IV would have accrued on a date no later than February 29, 2004.

As also noted, the analogous statute of limitations as

to the Count III unconscionability claim brought under the West

Virginia Consumer Credit and Protection Act (“WVCCPA”) is four

years. The statute provides that in the context of a consumer

loan, no action may be brought more than four years after the

violation occurred. In the present case, the alleged violation

– unconscionability as a contract defense to the loan agreement

– took place at the time the Loan was entered into by the

parties. See Amended Compl. ¶¶ 71-77. Thus, the statute of

limitations as to Count III would have begun to toll on the date

of the closing, which took place on January 26, 2004.

Consequently, the statute of limitations as to Counts

II, III, and IV would have expired long before the filing of

this lawsuit in 2018.

Application here of the presumption of prejudice would

render the plaintiff’s Count II fraud as a contract defense

claim, and Count III unconscionability claim as well as the

equitable portion of Count IV, time barred. That is, the

limitations period began to toll on January 26, 2004, while

plaintiff did not bring this action until April 9, 2018.

The court, however, need not apply the presumption

inasmuch as the court reaches the same conclusion in applying

the traditional laches analysis of delay and detrimental change

of position as a result of the delay. The plaintiff waited

fourteen years to file this lawsuit, despite having obtained the

appraisal report shortly after closing, despite having made

inconsistent monthly payments for years as a result of the

variable interest rate, and despite having hired an attorney to

review and help correct part of the Loan transaction in 2005.

Amended Compl. ¶ 29; ECF No. 33, Facsimile from Ortiz to

Fremont, attached as Ex. 2 (May 13, 2004); Ex. 3, Letter from

Fremont (May 13, 2004). The passage of time between the date of

the Loan origination and the filing of this lawsuit has made it

impossible for Wilmington to obtain the full payment histories

of the Loan from prior lenders. ECF No. 32, Aff. of Ron McMahan

¶ 7.

Wilmington aptly claims to have been unable to develop

a holder in due course (“HDC”) defense as a result of the

plaintiff’s failure to bring suit in a timely fashion. If a

transferee qualifies as an HDC, it is immune to “virtually all

defenses.” See One Valley Bank v. Bolen, 425 S.E.2d 829, 831

(W. Va. 1992). Where a transferee does not qualify as an HDC in

its own right, the “shelter” rule applies, which means that the

transferee can take “shelter” under the transferor’s HDC status

pursuant to W. Va. Code § 46-3-203(b). Under this subsection,

where a negotiable instrument is transferred, any rights of the

transferor, including HDC rights, transfer to the transferee.

This means that both the HDC rights and transferee’s shelter

rights can be transferred under this rule. Id.

The court notes that the plaintiff raises the

discovery rule in her responsive brief to the defendants’ motion

to amend. “The statute of limitation[s] beg[ins] to run . . .

when the plaintiff knew, or by the exercise of reasonable

diligence should have known, of the elements of a possible cause

of action.” Dunn, 689 S.E.2d at Syl. pt. 5. Plaintiff claims

she learned of the elements of a possible cause of action when a

retrospective appraisal was obtained in 2018, at which time she

became aware of what the actual market value of her home was at

the time of the Loan origination. ECF No. 40 at 5. Thus, she

asserts that the statute of limitations accrued in August 2018,

rather than at the time of the closing. This argument is

without merit.

Ortiz testified that she suspected her home was worth

no more than $60,000 at the time she entered into the Loan

agreement. Ortiz Dep. 49:14-24, ECF No. 44, ECF No. 37,

attached as Exhibit 1. Within one year of the Loan’s

origination, plaintiff hired an attorney to evaluate the Loan

and its origination process. ECF No. 40 at 5. She made

multiple monthly payments on the loan that varied in amount due

the adjustable interest rate, and made those payments for years

without question or complaint, despite asserting that she

understood the interest rate as fixed. The Note that plaintiff

signed is titled “Adjustable Rate Note.” Accordingly, even if

the plaintiff claims to have been unaware of the violative

conduct until April 2018, she, by reasonable diligence, should

have been on notice of it more than a decade ago. Thus, the

discovery rule does not aid the plaintiff.

Accordingly, the court finds that laches bars the

assertion of Counts II, III, and the equitable relief sought in

Count IV against Wilmington and FCI. Plaintiff also seeks

damages for fraud in Count IV, triggering the two-year statute

of limitations period pursuant to W. Va. Code § 55-2-12, which

began to toll on a date no later than February 29, 2004. Thus,

Counts II, III, and the equitable portion of IV are barred by

laches and the damages at law portion of Count IV is barred by

the two-year statute of limitations. Consequently, Counts II,

III, and IV are dismissed.

C. Count VI

In Count VI, plaintiff seeks relief from Wilmington

and FCI as the current holder and servicer of the Loan for

charging excessive late fees. She claims the defendants

“repeatedly charged late fees” in violation of West Virginia

law. Amended Compl. ¶ 97. The applicable West Virginia

statute, W. Va. Code § 46A-3-113(1), mandates as to non-

precomputed consumer loans that late fees may not exceed the

greater of “[f]ive percent of the unpaid amount of the

installment, not to exceed $30.”

In looking to the record, there is no evidence that

either Wilmington or FCI charged the plaintiff excessive late

fees. The “Demand Loan Payoff” record of FCI which details the

history of charges made by FCI to the plaintiff, including late

fees, shows that plaintiff was charged late fees amounting to no

more than the equivalent of thirty dollars each month. ECF No.

32, Aff. of Ron McMahan, attached as Ex. 4 at FCI Demand Loan

Payoff, attached as Ex. 1. The “Demand Loan Payoff” form is

authorized by Ron McMahan, CEO of American Mortgage Investment

Partners Management, LLC, a company that maintains business

records of Wilmington and FCI. He attests to the fact that,

after Wilmington acquired plaintiff’s Loan, she was not charged

more than a monthly thirty dollar fee for late payments, as

evidenced by the payment history, i.e., the “Demand Loan Payoff”

form, of FCI. See Aff. of Ron McMahan ¶¶ 4, 10.

On five of the six dates that plaintiff claims the

“defendants” assessed excessive late fees, the sum of $56.15 is

said to have been charged on August 21, 2015, September 26,

2016, December 5, 2016, March 20, 2017, and May 18, 2017. ECF

No. 32, Aff. of Ron McMahan, attached as Ex. 4 at FCI Demand

Loan Payoff, attached as Ex. 1. The plaintiff was actually

charged those late fees by Kirkland Financial, as shown by the

Loan history detailed in the FCI Demand Loan Payoff form. See

id. Notably, Wilmington did not acquire the Loan from Kirkland

until May 31, 2017, at which time FCI apparently became the

servicer.

Plaintiff has provided no authority to support her

position that FCI and Wilmington should be held liable for the

violation of W. Va. Code § 46A-3-113(1) by Kirkland Financial in

charging excessive late fees to the plaintiff. Instead, she

urges that a document showing that FCI charged, on one occasion,

a late fee on November 17, 2017 of $56.07 for the transactional

period from November 11, 2017 to January 11, 2018 evidences that

FCI charged the plaintiff an excessive late fee. Under the

terms of the Loan, plaintiff owed monthly installments. A

single charge of $56.07 over a transactional period of two

months, from November 11, 2017 to January 11, 2018, at a time

when overdue payments aggregated at least $10,150.65 and the

plaintiff had not, during Wilmington’s ownership of the Loan,

made a single full timely payment was not a violation of the

statute. Accordingly, plaintiff has failed to demonstrate a

question of material fact as to whether FCI and Wilmington

charged excessive late fees to the plaintiff. The defendants

are entitled to judgment as a matter of law on Count VI.

Iv. Conclusion

For the foregoing reasons, it is ORDERED that the

defendants’ Motion for Leave to File Amended Answer to Amended

Complaint be, and hereby is, granted.

It is further ORDERED that the defendants’ motion for

summary judgment be, and hereby is, granted, and that Counts II,

III, IV, and VI be, and hereby are, dismissed.

The Clerk is requested to transmit copies of this

order to all counsel of record and any unrepresented parties.

ENTER: August 1, 2019

- Bb,

Jo . Copenhaver, Jr.

Senior United States District Judge

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