Countrywide Home Loans Servicing, LP VS Marcus J. Thirstrup

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NC7T DESIGN FOR PtiBLICATION TEI TATE S OF I TA ISIAI GL RT COL OF PPEAL F1RST C IRCUIT 112 2C 0698 COUNTRYWIDE HOME LOANS SERVICING L P VERSUS MARCUS J THIRST RUP Jj d dered Judgrnent Ren aPR 1 0 2013 On Appeal from the 22nd Judicial District Court In and for the P of St Tammany rish Triai C Num 11923 ourt t er009 The Honorable AlYisc I nH enzato Judge Presi ding Eric J Simonson Counsel for Plaintiff in t a en e L New Orleans uisiana Appellee veritiazi ecox ide lECountyy e oa Servicing 1 and Honr l ns Reconveiit nppellee dant A Defezcarli Ba of Amzri A aN Tom W Thornhill lfor Defen Couns in Plaintiff ant Mitcheil A Palmer anc Appel vention Recor Slidell Louisiana larcus Thirstrup BEFORE PARRO HUGHES A WELCH J vD Jo Justice Jefferson D Hughes III is serving as judge ad hoe by special appointment of Yhe Louisiana Supreme Court HUGHES J This is an appeal of a November 2011 triai court judgment dismissing daims asserted bg the defendant in a recQnvention in plaintiff foreclosure proceeding via execatory process which sought tu annul a sheriffs sale of immovable pr to asseti a claim for failare of the operky mortgagee to maintain flood irisurancs at an existing covera e1eve1 and to challenge the constitutionality of LSA 133852 133853 13 and S R 3886 1 133886 regarding notice Having found this case appropriate for disposition by memorandum opinion in ccordance with the Uniform Rules for Louisiana Gourts of Appeal Rule 2 we detail only the central B 1 16 facts and law herein Marcus Thirstrup was the owner of a home located on Jlympia Drive in Slidell Louisiana which he had insured for flood damage in the amounts of 125 for the building and 3Q for the contents when he entered 000 000 into a loan agreement on March 28 2002 wiih Cuuntrywide Home Loans Servicing L Countryw securing ihe loan with a mortgage on the P rde property As part of the agreement betwe the parties Countrywicie agreed n to pay the flood insurance prermiurns to the insurer along with other expenses out of an escrow account and Mr Thirstrup agreed to make sufficient payments into the escrow account for payznent of he insurance premiums ar to furnish to Countrywide all notices of amounts to be d paid Further the mortgage agreement abligated the borrower Mr Thirstrup to keep the improvements on t property insured against all e hazards including flood The mortgage agreement stated in pertinent part as follows 5 Property Insurance Borrower sha Ikeen the lmprovements now existrng or hereafter erected on the Property insured aQainst loss bv fire hazards included wit the tez in i 2 extended coverage and any other hazardsincluding but not limited to earthquakes and oods for which Lender requirEs insurance This insurance shall be m in the amounts ined aint including deductible levelsj and tor the periods that Lender requires What Lenaer requires pursuant to the preceding The change dnring the term f the Loan sentences can insuranc carrier pro the insurance shall be chosen by iding Borrower subject ta Lender right to disappro Borrowar s es choice which right shall not e exercised unreasonably Lender may require Borr to pay in connection with this wer a either Loan a time one clharge for flood zone determination certification and tracking services or b a one time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification Borrower shall also be responsible for the payment of any fees imposed by th F deral Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower If Borrower facls to maintain anv of the coveraQes described above Lender mav obtain insurance covera at e s Lender option and Borrower expense Lender is under no s ation obli to nurchase anv narticular tvpe or amount of coverage Therefore such coverage shall cover Lender but might or might not protect Borrower Borrower sequity in the Property or the contents of the Property against any risk hazard ar liability and mighit provide greater or lesser coverage than was previously in effect Borro acknowledges that the er cost of the insurance coverage so obt might significantly ined exceed the cost of insurance that Borrower could have obtained Any amounts disbursed by Lender under this Section S shall become additionaY debt of Borrowe secured by this Security Instrument These amounts shall bear interest at the Note rate from the date of disbursemeni at shall be ayable ivith such d interest upon notice from Lender to Borrower requesting payment All insurance policies required by Lender and renewals of such policies shall be subiect to Lender right to disapprove s such poiicies shall include a standard mortgage clause and shall name Lender as mortgagee andr as an additional loss or payee Lender shall nave the right to hold the policies and renewal certificates If Lender requires Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices If Borrower obtains any form of insurance coverage not otherwise required by Lender for dama eto or destructioh of the Property such policy shall include a standard mortgage clause and shall name Lender as morkgagee and as or an additional loss payee Emphasis added In Au of 2002 and August of 2003 the flood insurance policy ust issued by Bankers Insurance Group Comrnunity Insurance Compan First 3 in the coverage amounts ef 125 for th building and 30 for the 000 000 contents with a deductible ag to each coverage amount and at 500 plicable a premium of 236 was renewed at the existin covexage level with Countrywide aying the prezr out of Mr Thirstrup escrow account m iu s However zn N of 2 Fidelit National Irrsuranee Serrvices vember 03 Fidelity th successor io Bankers Iaasurance Giou Community First Insurance Company sent a notice to Mr Thirstrup stating that pto new eligibility requirements established by the National Flood Insurance Program for Preferred Risk Policies the Thirstrup property was no longer in a preferred risk policy zone The November 2003 notice further notified Mr Thirstrup that unless he submitted an additional premium of 366 his policy would L rewritten as a Flood Policy with lower limits of e Standard coverage Although Mr Thirstrup contends thaS he contacted a Countrywide representative by telephone about the flood insuxance change does not it appear that 1 Thirshup took any steps to maintain his insurance 1r coverage which was his duty puzsuant tc the mortgage contract by negoiiating with Fidelity for cYifferent coverag than that described in s ber Fidelity Novem 2003 notice Nor does the record reflect that Mr Thirstrup paid the additional 366 pxemium amount requested in Fidelity s November 2403 norice either by forwarding this sum dir to Fidelity or ctly by paying this sum into his Countrywide escrow account for payment by Countrywide to Fidelity Upon Mr Thirstrup failure to maintairi hia s flood insurance coverage at the existing coverage level Countrywide pursuant t the express provisions of the mortgage contract was under no obligation to purchase any particular type ar amount of coverage 4 A November 21 2fiU3 flood insurarcc le page for the laratiuns policy period ending Auigust R QC s n t Mr Thirstrup stating 4 d ail that the coverage limits were 30 tbr t bullding and 4 for the 906 e l 700 contents and the premium arnnunt as 4 The subsequent flood insuranee renewal notice for the p pariod of Augnst R 2Q04 through cy la August 8 2005 mailed to Mr Tk or June 13 2004 also stated that irstrup the coverage limits were 30 for the building and 4 for the 900 700 contents and the premium was 24 which was aid by Countrywide out of Mr s Thirstrup escrow fter There on August 3 2004 a account declarations page showin g these covera g e and P remium amounts was mailed to Mr Thirstrup The next flood inssarance renewal notace for the policy perioci of August 8 2005 through Au ust 2006 was mailed to Mr Thirstrup on June 13 2U05 and again atat that the couerage limits were d 900 30 far the building and 4 for the contents the premium was again 700 paid by Countrywide out of Nf Thirstrup r sescrow account On August 9 2005 a declarations page showing these c and premium amounts verage was again mailed t Mr Thirstru On August 29 2005 Iurricane Katrina made landfall in Louisiana and r ir flooding dlam t 1r ulted e e s Thirstrup Qlyznpia Drive hause 1r hirstnap subsequently receic flood ed ce eds insurar proc checks fro Fi in t amounts of 30 3 n lelitv ie 900 000 and 1 7U0 n Apri 3 2009 C fi thi sait for executury proc uritrywide ed ss based on a cor of judgment in the act of mortga fession esigned by vlr Thirstrup Co alleged that the monthly installment payt dne intrywide ient on January 1 2006 and 11 subsequent installment payments had not been paid After complying with the procedures set forth in the Louisiana Code of C Procedure for executory process including notice tio Mr Thirstnzp vil 5 a sheriffs sale of the properYy was sched for July 2 ZOOy The first iied scheduled sale wa canceled fhe sale was reschedaled for Febnary 3 2010 and the property was sold On August 3 2010 Mr Thirstcup filed a pieading entitled Petition in n Reeonventi against Nullify Fqrecleslu eSale for lmmediate injunctive Relief Eviction and for Damages naming as defendants both Countrywide and the aileged administrator of the loan Bank of America A N BNA and alleging in summary that Countrywide breached its obligation to maintain flood insurance at existing coeerage levels engaged in fraud and ill practices by agreeing to cancel the first scheduied foreclosur sale but rescheduling the sale without further notice to him and engaged in unfair trade practices The statements made in the attached affidavit of Mr Thirstrup included his admission 1 he had reaeived the November 2003 hat correspondence from his flood insurer detailing the change of status of his insured property and indicating Yhat to m his existing coverage level intain an additional premium of 366 uas rec NIr Thirstrup affidavit also uired s maintained tl during this fitigation he had received rzumerous verbal t assurances frorn both BNA p and from the foreclosurE attorney rsonnel s office that the foreclosure wc be cazi and after the properiy was ul elled sold he claimed to have b told that Steps were being taken to xescind the en foreclosure Further Mr Thirstrup attached a cepy of a July 2U QO email purportedly sent to him by one of the foreclasure attomey s stating Good afternoon and thank you far your correspondence I am out of the office this afternoon but have confirmed that the sale this week has been canceled More shortly z Altkough Ir Thirstnzp named BNA as Bank of America NatiQnal AssocaaYion pleadings filed by BNA showed its correct name to be Bank of Amer N ca A b Mr Thirstrup idavit anc attachments Yurti indicate that he had prior saf er knowledge of the first scheduled July 22 2009 sheriff s sale In response to Mr Thirstrup petition Cauntryw and BNA filed a s de peremptary exception raising ine r no cause of action cont bjection of nding that whan a cr has prap com witl the legal requirements for ditor rli lied executory process ther are only tavo ways to defend against thz sale of the e property i filing an injunction to arrest the sale ar by suspensively e by appealing from the writ of seizure and sale citing LSA art 2642 P C S R 3852 LSA 13 Citizens Bank Trust Company v Little Ford Inc 522 So 1124 La App 1 Cir 1988 Ford Motor Credit Company v 2d Herron 234 So 517 La App 3 Cir 1970 and Dryades Savings and 2d 3 Article 2642 providest Defenses and procedural objectiqns to an executory proceeding may be asserted either through an injunctaon proceeding to arrest the seizure and sale as provided in Articles 2751 through 2754 or a suspensive appeal from the oxdex ci the issuance of the writ of irecting seizure and sale or both A suspensi appeal from e an order directing the issuance of a writ of seizure and sale shall be taken within ffreen days of the signing of the order The appeal is governed by the provisions of Articies 2081 through 2086 2088 through 2122 and 2324 through 2167 except that the security therefor shall be for an amount exceeding by one the balance due on half the debt secured by the mortgage or privile sought to be enfoxced e including principal interest to date of order of appeal and attorney the c fee but exclusive of court costs Louisiana Revised Sta 13 requires notice to the debtor of only the first ute 3852 A scheduled sale of the property providing The shexiff to whom the writ is directed shall make three notices setting forth the title of the action or proceeding its docket number the court which issued the writ the amount of the judgxnent or claim specified in the writ an exact copy of the description of the immovable property furnished him in accordance with R 13 and the fact that the sheriff is S 3851 seizing the described property in accordance with Code of Civzl Procedure Article 2293 and if applicable the date of the Frst scheduled sale of the pronertv If the immovable property to be seized is owned ry more thaz one party the sheriff shall make an additional notice for each additional party Emphasis added We note that 2012 La Acts No 504 l added the following sentence to LSA S R A 3852 13 No other notice of seiznre shall be required 7 I Loan Association v Givens 602 So 325 L App 4 Cir 1992 an the 2d plaintiff did neither Following a November 3 2010 hearing on Mr Thirstrup request for s injunctive relief and on the exceptiom of nc cause of actiorz raised by the reconvention in defendants the trial court denied injunctivz relief and granted judgment in part in favor c the defendants f nvention rec in dismissing that portion oi Mr Thirstrup recanventional demand seeking s the nullity of the foreclosure sale The trial court also denied the no cause of action exception as to Mr Thirstrup reconventional demand for damages s for Countrywide sfailure to maintain his existing flood insurance coverage level In Thirstrup her reasons for judgment had alleged two separate the trial causes judge recognized of action that Mr 1 to annul the foreclosure sale and 2 for damages arising out of tort contract and the Louisiana Unfair Trade Practices Act With respect to the action to annul the farecloswre sale the trial court stated that Mr Thirstrup had alleged two bases lj lack of notice of the sale date and 2 fr and ill practices by ud vide Country in telling Mr Thirstrup h would be advised of subsequent developments Citing Reed v Meau 292 So 557 La 19 the trial 2d 73 court reasoned that LSA arts 2 otherwise governing nullity P C 2006 001 actions are not applicable to judicial sales by executory proaess since the authentic documents required for executory process under LSA art P C 2635 are the foundation of the proceeding and the failure to comply with Article 2635 are defects of form whieh are not substantive in character and cannot serve as grounds for nullity of the sale Ftuther citing Chase Manhattan Mortgage Corp v Lassiter 2004 La App S Cir 0484 30104 11 889 So 1155 the trial court held that Louisiana law does not 2d require the defendant in an executory proceeding to be provided with notice 8 I of a rescheduled judicial sal e Th trial court con that because Mr luded Thirstrup was aware c the first scheduled sheriffs sale date and the f cancellation of that sale he ad failed to state a cause of action to annul the foreclosure sale However trie court found IvTr Tbirstrup had stated a cause of actic for damages based on the allegations rriade regarding a possible n obligation of the mortgagee to maintain the existing flood insurance coverageleveL Thereafter on January 18 2011 Mr Thirstrup requested permission to file a first supplemental and amending petition which was granted In his amended petition Mr Thirstrup added an additional defendant in reconvention the Federal Iv Mortgage Association FNMA and ational further challenged the constitutionality of LSA 13 13 S R 3852 3853 133886 and 133886 insofar as these statutas did not require that nofice 1 of the rescheduled foreclosure sale be rovided to him A FN1v1 responded to 1r Thirsirup amended petition with a s peremptory exception pleading th objections of no cause of action and no right of actior Countrywide and BNA filed a peremptory exception pleading the objections of no cause of action and no right of action as to Mr s Thirstrup constitutional challenges and als filed a motion for partial summary judgment seeking dismissal of Mr Tl flood insurance related claims A hearing rvas held on the exceptions and on the motion for partial summary judgment on August 24 2011 Thereafter judgznents vere signed on September 6 2011 granting Countr and E3NA motic s wide s nfor partial summary judgment dismissing Mr Thirstrup claims related to the s level of flood insurance coverage on his property granting FNMA s 5 I Mx Thirstrup alleged that Counhywide purchased his property at the foreclosure sale and then assigned or sold the loan and property to FNMA or 9 peremptory exceptions anei dismissiaag ll laims MA against FI A judgment was signed on iv 8 2Gi ranting Countrywide and er ovem s s ry ans BNA perempt except as to Mr s Thirstrup constitutional challenges and dismissing all claims asserted in this litigation by Marcus J Thirstrup against efendants by virtue of tzi Judgment reconvenxiqn in and the prior 3udgments dated januar 3 2011 and Septemb 2011 r6 Mr Thirstrup has appealed the November 8 2011 audgment Having thoroughly revieived the record presented on appeal we find no merit in Mr Thirstzup assig of error The basis of his lawsuit is s nts his contention that because of the unreir expenses and costs he had rzbursed to pay out to repair his Hurr Katrina damaged house he was pocket of cane unable to pay his monthly mortgage payrnents an he did not owe further ar mortgage payments on account of ountrywide alleged breach of its s contractual obligation to maintain the existing tlood znsurance coverage level However the plain language of the mortgage contract quoted hereinabove clearly placed the burden on Mr Thirstrup to acquire an appropriat level of flood insurarice coverage Mr 7 flood s hirstrup insurance corrz notifie him Yhat it u lowering his li of wverzge any d s its in November of 2Q03 Xet a r esprte peated renewal notices and declaration of coverage being sent to vlr hirstrup ove th caurse of r several years unaquivocally siaowing thaY he had lower limits of co erage than he preferred he took no other action ta maintain the flo insurance d 6 In his affidavit Mr Thirstrup stated in pertinent part I ended up having to pay for the majority of the losses out of pocket to repair the house Of the net adjusted olaim tialue exceeding 155 3 OG 900 35 was received in payments from the flood insurance company leaving approximately 119 remainang unpaid 200 atel Approxirr 000 110 was dne on the mortgage te A offsetting this balance ountrywide Cstill owed me 6 in addition to a full lien release and 200 mortgage cancellation as the debt was not extincY 10 coverage ei le he ted war Because Gi N1r s Thirstrup erroneous interpretation of the obligations imposeci under his mortga eaontract that Countrywide had a contractual duty xo maintain flood insurance on his behalf when the mortgage coratract pr te tl contra he concluded vided e ryj that he was justified in failin to make his mortgage paym resultiTag iel ents s Countrywide use of executor5 prcaces to sezze and szll the rnoritgaged home Because Countrywide suit for xecutory process was authorized s under the contract between tihe parties and aznder the law Mr Thirstrup s action to annul the sheriffs sale of the property and for damages was or meritless Accord we find no error n the trial court rulings dismissing ngly Mr s Thirstrup claims and we affirm the November 2011 trial court judgment in accordance with Uniform Rules ofCourts of Appeal Louisiana Rule 2 All costs fi appeal are to be bome by the appellant B 1 16 his Marcus J ThirstruP VIED AFFIR 11

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