Fuller v. Mercury Insurance Company of Georgia

REPLY BRIEF re MOTION for Summary Judgment on Sonya Fuller's Crossclaim

N.D. Ga.July 22, 2016

1 10490.4 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SONYA FULLER; NATIONSTAR MORTGAGE LLC Plaintiffs, v. MERCURY INSURANCE COMPANY OF GEORGIA, Defendant. ) ) ) ) ) ) ) ) ) Civil Action No. 1:13-CV-1914-TWT NATIONSTAR MORTGAGE LLC’S REPLY IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF SONYA FULLER’S CROSSCLAIM Plaintiff Nationstar Mortgage LLC (“Nationstar”), submits this reply in support of its Motion for Summary Judgment on Plaintiff Sonya Fuller’s (“Fuller”) Crossclaim (Doc. 121) and in support thereof shows as follows: I. INTRODUCTION Fuller entered into a reverse mortgage in 2010. Fuller’s home was damaged by fire in 2011. Nationstar is the holder of a reverse mortgage secured by that home. The reverse mortgage provides that any insurance proceeds will be used to repair the property, or if repair is not feasible, the proceeds will be applied to the indebtedness. Fuller seeks a judicial declaration that if she receives a monetary settlement from her insurer (or a judgment against the insurer) she is entitled to Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 1 of 8 keep the proceeds of that settlement rather than applying them to the indebtedness pursuant to her loan agreement. Neither of these things has happened and neither are guaranteed to happen. Fuller’s Response (Doc. 125) does not change that fact. Therefore, Fuller’s claim fails because it is not ripe. Additionally, even if her claim were ripe, Fuller’s argument ignores the plain language of the reverse mortgage. II. ARGUMENT AND CITATION TO AUTHORITY A. Fuller’s Claim is Not Justiciable. Fuller seeks a judicial determination that if Nationstar loses its claim against Mercury, and if Fuller obtains a judgment against Mercury or reaches a settlement with Mercury, that Nationstar will not be entitled to any of the hypothetical settlement proceeds. (Doc. 125). This is improper. Declaratory judgment is appropriate only where a "definite and concrete" controversy exists. Miccosukee Tribe of Indians of Fla. v. Kraus-Anderson Constr. Co., 607 F.3d 1268, 1275 n.14 (11th Cir. 2010). The "controversy" must be "real and substantial . . . admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 464, 81 L. Ed. 617 (1937). This standard is not met here. Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 2 of 8 Federal court jurisdiction is limited “to cases and controversies of sufficient concreteness to evidence a ripeness for review.” Digital Properties, Inc. v. City of Plantation, 121 F.3d 586, 589 (11th Cir.1997). The function of the ripeness doctrine is to “protect[ ] federal courts from engaging in speculation or wasting their resources through the review of potential or abstract disputes.” Mulhall v. UNITE HERE Local 355, 618 F.3d 1279, 1291 (11th Cir. 2010) “A claim is not ripe when it is based on speculative possibilities.” In re Jacks, 642 F.3d 1323, 1332 (11th Cir. 2011). Fuller’s Response admits that her declaratory judgment action is not ripe for consideration. (Doc. 125). She argues that her claim could become ripe in the near future if the Court holds that Nationstar is barred from recovering against Mercury and if Mercury thereafter settles Fuller’s claim. (Doc. 125, p. 2). Her analysis, apart from being contingent on two future events, ignores other possibilities, like the possibility that Mercury and Nationstar could settle this matter. The speculative nature Fuller’s claim militates in favor of dismissing her claim until it is no longer based on speculative possibilities. B. The plain language of the reverse mortgage precludes Fuller’s claim. Even to the extent a settlement is reached or to the extent Fuller obtains relief in her claims against Mercury, those proceeds must be applied to the Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 3 of 8 indebtedness pursuant to the Reverse Mortgage at issue. Fuller appears to argue that she should not be required to comply with the terms of the reverse mortgage because Nationstar or Generation refused to settle with her or Mercury. This argument is lacks merit. The plain language of the reverse mortgage requires the proceeds of any insurance policy be used to rebuild the property or to pay down the loan. Fuller identifies no Georgia precedent or statute allowing a mortgagor to avoid the Reverse Mortgage’s provision governing use of insurance proceeds. Georgia law is clear that mortgage provisions requiring insurance proceeds be used to repair damaged property or pay down the loan are enforceable. See e.g. Altegra Credit Co. v. Ford Motor Credit Co. (in Re Brantley), 286 B.R. 918, 923 (Bankr. S.D. Ga. 2002) (analyzing similar provision and noting even if “[lender] had not included the specific grant language in the security deed, it still holds a valid security interest in the proceeds of it's collateral.”). There is no material dispute that the Reverse Mortgage governs application of insurance proceeds. Fuller’s claim accordingly fails. Finally, Fuller’s request that this Court order Nationstar to hold any insurance funds for the restoration of Fuller’s home is without merit. As Fuller Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 4 of 8 acknowledges, the Reverse Mortgage is clear on the application of insurance proceeds, providing: Insurance proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender’s security would not be lessened. If the restoration or repair is not economically feasible or Lender’s security would be lessened, the insurance proceeds shall be applied first to the reduction of any indebtedness under a Second Note and Second Security Instrument held by the Secretary on the Property and then to a reduction of the indebtedness under the Note and this Security Instrument. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto. (Doc 121-2, p. 3, ¶ 9). Fuller admits, however, that the home is not repairable (Doc. 199, p. 9, ¶ 19), so there is no basis to award the relief Fuller seeks in her Response. III. CONCLUSION Pursuant to the foregoing, this Court should grant summary judgment against Fuller and dismiss Fuller’s Crossclaim. Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 5 of 8 Respectfully submitted, this 22nd day of July, 2016. s/Christopher S. Anulewicz Christopher S. Anulewicz Georgia Bar No. 020914 Email: canulewicz@balch.com Geremy Gregory Georgia Bar No. 885342 Email: ggregory@balch.com Alan F. Pryor Georgia Bar No. 101888 Email: apryor@balch.com BALCH & BINGHAM LLP 30 Ivan Allen Jr. Blvd Suite 700 Atlanta, GA 30308 Telephone: (404) 261-6020 Facsimile: (404) 261-3656 Attorneys for Nationstar Mortgage LLC Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 6 of 8 CERTIFICATE OF COUNSEL REGARDING FONT SIZE Counsel certifies that the foregoing has been prepared using Times New Roman font size 14 in accordance with Local Rule 7.1(D). This 22nd day of July, 2016. /s/ Christopher S. Anulewicz Christopher S. Anulewicz Georgia Bar Number 020914 Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 7 of 8 CERTIFICATE OF SERVICE I hereby certify that on this the 22nd day of July, 2016, a copy of the foregoing has been electronically filed with the Clerk of Court using the CM/ECF system, which will automatically send e-mail notification of such filing to the following attorneys: Wayne D. Taylor William D. Harrison Michelle A. Sherman Mozley, Finlayson & Loggins, L.L.P. One Premier Plaza, Suite 900 6506 Glenridge Drive Atlanta, Georgia 30342 Glenn Loewenthal Glenn Loewenthal, P.C. 3300 Windy Ridge Parkway, Suite 710 Atlanta Georgia 30339 /s/ Christopher S. Anulewicz Christopher S. Anulewicz Georgia Bar No. 020914 Case 1:13-cv-01914-TWT Document 133 Filed 07/22/16 Page 8 of 8