Court Opinion

ID: 52725
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:18:43+00
Date Added: 2024-06-11T14:59:38.059265
License: Public Domain

United States Court of Appeals
                    UNITED STATES COURT OF APPEALS             Fifth Circuit

                         FOR THE FIFTH CIRCUIT              F I L E D
                                                           September 18, 2007

                                                         Charles R. Fulbruge III
                                                                 Clerk
                               07-30032
                           Summary Calendar

YOLANDA M. SANDERS,

                           Plaintiff,

ANDRIA C. ROBINSON; CHARLES ROBINSON

                           Intervenor Plaintiffs-Appellants,

                                    v.

WASHINGTON MUTUAL HOME LOANS, INC., by and through its successor
Washington Mutual Bank, formerly known as Fleet Mortgage
Corporation

                           Defendant-Intervenor Defendant-Appellee.

         Appeals from the United States District Court for the
                      Eastern District of Louisiana
                             No. 05-CV-2166

Before WIENER, GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     Andria      and    Charles     Robinson     (“the       Robinsons”),

intervenor–plaintiffs,     appeal   the   district   court’s     grant     of

Washington Mutual Home Loan’s Motion for Partial Summary Judgment.

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
For the following reasons, we affirm.

I.   BACKGROUND

     In    2003,    the   Robinsons      became      delinquent    on    their    home

mortgage     loan    payments,     and        Washington     Mutual     Home     Loans

(“Washington       Mutual”)    instituted       a    foreclosure   proceeding       on

November 5, 2003.         The Robinsons thereafter contacted Washington

Mutual about their options to avoid foreclosure and indicated their

interest in a possible loan modification, which would terminate the

foreclosure    action      and   suspend       the   collection    of    delinquent

amounts.    Washington Mutual developed a proposed modification plan

that would (1) reinstate the loan; (2) capitalize amounts for

delinquent    interest,       previously       incurred    foreclosure     fees    and

costs, and escrow advances; (3) decrease the interest rate; and (4)

extend the loan’s maturity date.

     Washington       Mutual     sent    the     Loan     Modification    Agreement

(“LMA”), along with a cover letter explaining the terms of the LMA,

to the Robinsons on December 23, 2003.               The cover letter explained

that in order for the LMA to become effective, the Robinsons would

be required to pay a $500 “Administrative Fee” at the time of

execution.1    Three days later, on December 26, 2003, the Robinsons

signed the LMA and returned it to Washington Mutual, along with a

payment that included the $500 Administrative Fee.

     1
     According to Washington Mutual, the purpose of this fee was
to compensate Washington Mutual for the numerous costs associated
with modifying the loan agreement.

                                          2
     On July 25, 2005, the Robinsons intervened as plaintiffs in a

lawsuit against Washington Mutual. In the “Amended and Superseding

Complaint,” the Robinsons asserted a separate claim that the $500

Administrative Fee was “illegal” because it was not provided in a

writing signed by them, in violation of LA. REV. STAT. ANN. § 6:1097.2

     On September 6, 2006, Washington Mutual moved for partial

summary judgment on this claim, asserting that (1) federal law

preempts the Robinsons’ state law claim; (2) even if the Louisiana

statute applies, Washington Mutual complied with its requirements;

(3) the Louisiana statute does not prohibit the fees at issue; (4)

the original Note and Mortgage authorized the fees at issue; and

(5) Louisiana’s voluntary payment doctrine independently bars the

Robinsons’ claim.   On November 29, 2006, the district court orally

granted Washington Mutual’s motion for partial summary judgment.3

The Robinsons now appeal.

     2
     LA. REV. STAT. ANN. § 6:1097(A) provides, in relevant part:
“Notwithstanding any other law to the contrary, . . . the parties
to a federally related mortgage loan may agree to the payment of
any fees, charges, costs, and expenses, and the amounts thereof .
. . if the fees, charges, costs, and expenses, and the amounts
thereof, or the methods for fixing such, are provided in a
writing signed by the consumer.”
     3
     It is difficult for this Court to determine the exact
grounds for the district court’s ruling. The court seems to
grant the motion based on basic contract principles, stating that
the LMA “was a new arrangement . . . and the $500 was disclosed”
and the Robinsons “agreed to pay the $500 fee.” Regardless, this
Court may “affirm summary judgment on any ground supported by the
record, even if it is different from that relied on by the
district court.” Holtzclaw v. DSC Commc’ns Corp., 255 F.3d 254,
258 (5th Cir. 2001).

                                  3
II.    STANDARD OF REVIEW

       We review the district court’s grant of summary judgment de

novo, applying the same standard as the district court.               Atkins v.

Hibernia Corp., 182 F.3d 320, 323 (5th Cir. 1999).                      Summary

judgment is appropriate when the record establishes “that there is

no genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c).

III.       DISCUSSION

       The Robinsons assert that the Administrative Fee violates LA.

REV. STAT. ANN. § 6:1097 because it was not provided in a writing

signed by them.         Washington Mutual, on the other hand, asserts the

same five arguments contained in its original Motion for Partial

Summary Judgment.         Because Louisiana’s voluntary payment doctrine

bars the Robinsons from recovering the $500 fee, this Court need

not consider the other issues before it.4

       Louisiana courts have long held that “[t]here is no principle

of    law    better     settled   than   that   money   voluntarily   paid   with

       4
      The voluntary payment doctrine prevents recovery even if
the Administrative Fee violated § 6:1097 because the doctrine
goes to the Robinsons’ ultimate ability to recover, regardless of
liability. See Sutton Steel & Supply, Inc. v. BellSouth
Mobility, Inc., 875 So. 2d 1062, 1070 (La. Ct. App. 2004). Thus,
even if the $500 fee was “illegal,” the voluntary payment
doctrine may nevertheless prevent the Robinsons from recovering
that money from Washington Mutual. See Carter v. Montgomery Ward
& Co., 413 So. 2d 309, 314 (La. Ct. App. 1982) (holding that
where an employee had no right to workers compensation benefits
once he was well and able, the voluntary payment doctrine
nonetheless precluded the employer from recovering such
overpayments).

                                          4
knowledge of the facts cannot be recovered back.”                     Ken Lawler

Builders, Inc. v. Delaney, 892 So. 2d 778, 780 (La. Ct. App. 2005)

(citation    omitted).       This       doctrine   exists     because    of    “the

stabilizing legal principle preventing payors from disturbing the

status quo by demanding reimbursement subsequently of payments made

by them voluntarily with full knowledge of [the] facts.” Whitehall

Oil Co. v. Bogani, 255 So. 2d 702, 705 (La. 1969);5 see also Hicks

v. Levett, 140 So. 276, 281 (La. Ct. App. 1932) (“If in every

instance in which a man is in doubt as to which is the safe course

to pursue, he can pay under protest and then sue to recover back,

it is difficult to see where litigation ends.”).

     It     is   clear    that    the    Robinsons      voluntarily     paid   the

Administrative      Fee    with    knowledge       of   the   relevant     facts.

Washington Mutual specifically disclosed that it was assessing a

$500 Administrative Fee in exchange for modifying the loan. To the

extent the Robinsons did not understand the nature of the fee or

objected to its imposition, the cover letter provided a toll-free

number to call if they had any “additional questions or concerns.”

The Robinsons could have objected or disputed the fee at that time;

however, the Robinsons signed the LMA and paid the Administrative

     5
     The Robinsons cite Bogani in support of their position that
the voluntary payment doctrine is no longer an impediment under
Louisiana law. The Bogani court, however, recognized the
validity of the doctrine, but merely concluded that it was not
applicable to the specific oil royalty overpayments at issue in
the case.

                                          5
Fee in full.

       Furthermore, the Robinsons cannot argue that the payment was

made under duress and, therefore, was not voluntary. Duress exists

where either (1) “a person physically compels conduct” or (2) “a

person makes an improper threat that induces a party who has no

reasonable alternative to manifest his assent.” Comeaux v. Entergy

Corp.,   734   So.   2d   105,   107    (La.   Ct.    App.   1999).   Although

homeowners faced with foreclosure may agree to any fee required to

stop    such   foreclosure,      the    threat   of    foreclosure    does   not

constitute duress.        See LA. CIV. CODE ANN. art. 1962 (“A threat of

doing a lawful act or a threat of exercising a right does not

constitute duress.”); Southmark Props. v. Charles House Corp., 742

F.2d 862, 876 (5th Cir. 1984) (“[I]t is the established rule that

it is not duress to institute or threaten to institute civil suits,

or take proceedings in court . . . at least where the threatened

action is made in good faith . . . .”).

       The Robinsons, however, argue that LA. CIV. CODE ANN. art. 2299

permits their recovery, eliminating the impediment posed by the

voluntary payment doctrine.            Art. 2299 states: “A person who has

received a payment or a thing not owed to him is bound to restore

it to the person from whom he received it.”            This statute, however,

is inapplicable to the case at hand.             The purpose of arts. 2298-

2305 is to prevent unjust enrichment by “establish[ing] a cause of

action against one who has been enriched without cause at the

                                         6
expense of another.”   Onstott v. Certified Capital Corp., 950 So.

2d 744, 749 (La. Ct. App. 2006); see also Evangeline Iron Works,

Ltd. v. Lyons, 96 So. 2d 578, 580 (La. 1957) (stating that art.

2301–the predecessor statute of art. 2299–establishes a cause of

action in quasi-contract).   Here, however, the Robinsons did not

assert any cause of action sounding in unjust enrichment as the

basis for their recovery of the $500;6 therefore, art. 2299 is

inapplicable and cannot prevent the application of the voluntary

payment doctrine.

     Thus, the voluntary payment doctrine bars the Robinsons’

recovery of the Administrative Fee.7

     6
      The Robinsons never contend that the Administrative Fee was
excessive, unwarranted, or unjustified based on the services
provided by Washington Mutual; instead, the Robinsons’ contention
is merely that they should not have been required to pay the fee
because the fee was provided in the cover letter, not the LMA.
Indeed, it is unsurprising that the Robinsons make no claim based
on unjust enrichment, as there is no unjust enrichment to
rectify–Washington Mutual provided an extra service to the
Robinsons, and the Robinsons paid a fee in exchange for that
service. In fact, if this Court were to nullify the
Administrative Fee, then it would be the Robinsons who are
enriched at the expense of Washington Mutual, as they would have
received a valuable service–the modification of their loan–for
free.
     7
     This result may seem initially harsh, as homeowners are in
a disparate bargaining position with mortgagees threatening to
foreclose on their homes and are likely to agree to any fee to
prevent such foreclosure. However, this harsh result is tempered
by the potential application of art. 2299, which will allow such
homeowners to contest and recover fees that are excessive,
unwarranted, or unjustified. Under this Court’s analysis,
homeowners will simply be unable to recover fees knowingly and
voluntarily paid where such fees are an accurate assessment of
services rendered.

                                 7
    For the foregoing reasons, the order of the district court is

AFFIRMED.

                               8