United States District Court, D. South Carolina, Spartanburg Division
OPINION AND ORDER
C. Coggins, Jr. United States District Judge
matter comes before the Court on Defendants’ Motion for
Summary Judgment. ECF No. 55. Plaintiffs filed a Response in
Opposition, ECF No. 62, and Defendants’ filed a Reply,
ECF No. 65. The Court heard arguments on the Motion on July
22, 2019. Accordingly, the Motion is ripe for
filed their initial Complaint in the Court of Common Pleas
for Spartanburg County, South Carolina on October 31, 2016,
asserting five state law causes of action. ECF No. 1-1 at
3–11. Defendants filed an Answer and Motion to Dismiss
on January 6, 2017. Id. at 12–64. On February
9, 2017, Plaintiffs filed a Motion to Amend Complaint, and
the state court entered a Consent Order to Amend Complaint on
April 4, 2017. Id. at 65–68. Thereafter, on
April 10, 2017, Plaintiffs filed an Amended Complaint, which
asserted two new causes of action-violation of the
“Mortgage Broker Fee Agreement” and violation of
the Real Estate Settlement Procedures Act
(“RESPA”). Id. at 69–78.
removed this action on April 25, 2017, based on federal
question jurisdiction in light of the newly added RESPA claim
and supplemental jurisdiction pursuant to 28 U.S.C. §
1367(a). ECF No. 1. That same day, Defendants filed an Answer
and a Motion to Dismiss. ECF Nos. 4, 5. Plaintiffs filed a
Response in Opposition on May 9, 2017, and Defendants filed a
Reply on May 16, 2017. ECF Nos. 10, 13.
20, 2017, the Court issued an Order granting in part, denying
in part, and denying without prejudice to refile in part. ECF
No. 20. Specifically, the Court: (1) denied Defendants’
Motion as to Plaintiffs’ claim under the South Carolina
Unfair Trade Practices Act (“SCUTPA”); (2)
granted Defendants’ Motion as to Plaintiffs’
claims for violations of Sections 37-10-105 and 37-22-110 of
the South Carolina Consumer Protection Code
(“CPC”); and (3) denied the remainder of
Defendants’ Motion, giving Plaintiffs leave to file a
Second Amended Complaint to cure “various pleading
deficiencies.” Id. at 5–9.
27, 2017, Plaintiffs filed a Second Amended Complaint. ECF
No. 21. Plaintiffs’ Second Amended Complaint alleged
that Defendant New Penn Financial (“New Penn”)
solicited Plaintiff Kevin Cantrell to refinance his
Veteran’s Administration Home Mortgage at a lower rate.
ECF No. 21 at 2. In February of 2016, Plaintiffs contacted
Defendant New Penn and chose to refinance their home.
Id. Defendant New Penn provided Plaintiffs with
numerous documents outlining the terms of the loan.
Id. at 3.
New Penn also required Plaintiffs to execute a variety of
documents including a South Carolina Attorney and Insurance
Preference Disclosure. Id. Plaintiffs chose attorney
Whit Bishop as their closing attorney. Id.
New Penn also provided Plaintiffs with documents that
indicated that an affiliated company, Defendant Avenue 365
Lender Services (“Avenue 365”), could be used as
the closing company, although Defendant Avenue 365’s
exact role was not explained. Id. Plaintiffs’
closing was delayed and some of the terms were changed by
Defendants. Id. During the process of obtaining the
loan, Plaintiffs worked with Defendant Jake Brown, a
mortgage consultant affiliated with the other Defendants.
Id. Defendant Jake Brown “repeatedly assured
[Plaintiffs] that everything was taken care of, the
[Plaintiffs] would be protected, and the loan and its terms
were good for them.” Id. However, Defendant
Jake Brown “never told [Plaintiffs] that they had their
choice of their own closing company or Title Company or
explained what that meant.” Id. No one working
for Defendants asked Plaintiffs about their choice of
attorney or Title Company even though Plaintiffs had chosen
attorney Whit Bishop. Id. at 4.
the process of obtaining the loan, Plaintiffs began receiving
correspondence and documents from Defendant Avenue 365.
Id. On the date of the closing, Plaintiffs were
visited at their home by attorney Ryan Breckenridge, who was
sent by and on behalf of Defendants, to handle the closing.
Id. at 4. Mr. Breckenridge did not identify himself
as an attorney,  instead introducing himself as a notary.
Id. Plaintiffs later learned that Defendant Avenue
365 hired Mr. Breckenridge through a third party attorney
placement firm. Id. at 5. Therefore, Plaintiffs
assumed the closing documents had been sent to Whit Bishop.
Id. Plaintiffs later learned that the documents were
never sent to Whit Bishop, and Defendants required
Plaintiffs, who were unrepresented, to sign a new mortgage
loan application, a new good faith estimate, a non-durable
power of attorney, a hold harmless provision, a privacy
policy, a legal description of the property, a borrower
compliance agreement, and an agreement to reimburse Defendant
Avenue 365 for any and all attorneys’ fees and costs.
Id. After the closing, Plaintiffs were directed to
make their mortgage payments to Defendant Shell Point, which
they have continued to do. Id. at 4.
on these allegations, Plaintiffs’ Second Amended
Complaint asserted the following causes of action: (1) fraud
in the inducement, fraud, and constructive fraud; (2)
violation of the SCUTPA; (3) negligence; (4) violation of the
South Carolina CPC; (5) breach of fiduciary duty; (6)
violation of RESPA; and (7) violation of the “Licensing
of Mortgage Broker Act.” On July 11, 2017, Defendants
filed an Answer. ECF No. 22. On August 2, 2017, Defendants
filed a Partial Motion for Judgment on the Pleadings, which
is the Motion currently before the Court. ECF No. 23.
Plaintiffs filed a Response in Opposition on September 7,
2017, and Defendants filed a Reply on September 14, 2017. ECF
Nos. 30, 31.
September 17, 2018, the Court issued an Order ruling on
Defendants' Partial Motion for Judgment on the Pleadings.
ECF No. 47. The Court: (1) denied Defendants' Motion as
to Plaintiffs' claims for fraud, constructive fraud, and
fraud in the inducement; (2) granted Defendants' Motion
as to Plaintiffs' claims under the Mortgage Brokers Act;
(3) granted Defendants' Motion as to Plaintiffs'
SCUTPA claim, but afforded Plaintiffs ten days to amend their
pleadings to plausibly plead a claim for damages; (4) granted
in part and denied in part Defendants' Motion as to
Plaintiffs' negligence claim, permitting the claim to
proceed as to whether Defendants were negligent in their
assumption of the duty to properly choose and supervise a
closing attorney; (5) granted in part and denied in part
Defendants' Motion as to Plaintiffs' claims under
Section 37-10-102 of the South Carolina Code, allowing the
claim to proceed as to all defendants except Defendant Jake
Brown; (6) denied Defendants' Motion as to
Plaintiffs' claims under Section 37-10-108 of the South
Carolina Code; and (7) denied Defendants' Motion as to
Plaintiffs' claim for breach of fiduciary duty. ECF No.
September 28, 2018, Plaintiffs filed a Third Amended
Complaint, and Defendants filed an Answer. ECF Nos. 48, 49.
On November 16, 2018, Plaintiffs filed a Motion for Partial
Summary Judgment, and Defendants filed a Motion for Summary
Judgment. ECF Nos. 54, 55. The Motions were fully briefed by
the parties, ECF Nos. 60, 62, 64, 65, and the Court heard
argument on the Motions on July 22, 2019. As indicated above,
the Court denied Plaintiffs' Motion for Partial Summary
Judgment during the hearing and took Defendants' Motion
for Summary Judgment under advisement. ECF No. 76.
Accordingly, Defendants' Motion for Summary Judgment is
ripe for review.
the principal purposes of summary judgment “is to
isolate and dispose of factually unsupported claims . . .
.” Celotex Corp. v. Catrett, 477 U.S. 317,
323–24 (1986). It is “not a disfavored procedural
shortcut, ” but is instead the “principal tool by
which factually insufficient claims or defenses [can] be
isolated and prevented from going to trial with the attendant
unwarranted consumption of public and private
resources.” Id. at 327. To that end,
“Rule 56 states “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). A
fact is “material” if proof of its existence or
non-existence would affect disposition of the case under
applicable law. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). An issue of material fact is
“genuine” if the evidence offered is such that a
reasonable jury might return a verdict for the non-movant.
Id. at 257. When determining whether a genuine issue
has been raised, the court must construe all inferences and
ambiguities against the movant and in favor of the non-moving
party. United States v. Diebold, Inc., 369 U.S. 654,
party seeking summary judgment shoulders the initial burden
of demonstrating to the court that there is no genuine issue
of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). Once the movant has made this threshold
demonstration, the non-moving party, to survive the motion
for summary judgment, may not rest on the allegations averred
in his pleadings. Id. at 324. Rather, the non-moving
party must demonstrate specific, material facts exist that
give rise to a genuine issue. Id. Under this
standard, the existence of a mere ...