Court Opinion

ID: 1035772
Source: CourtListenerOpinion
Date Created: 2013-07-31 00:01:31.698977+00
Date Added: 2024-06-11T15:26:04.590226
License: Public Domain

Case: 12-15755     Date Filed: 07/29/2013   Page: 1 of 5

                                                                         [PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                 No. 12-15755
                           ________________________

                      D.C. Docket No. 1:11-cv-00412-WS-C

MAX LEROY REED, JR.,
ELIZABETH REED,
individually and on behalf of all similarly
situated individuals,

                                                             Plaintiffs - Appellants,

                                       versus

CHASE HOME FINANCE, LLC,

                                                              Defendant - Appellee.

                           ________________________

                   Appeal from the United States District Court
                      for the Southern District of Alabama
                          ________________________

                                   (July 29, 2013)
                 Case: 12-15755        Date Filed: 07/29/2013        Page: 2 of 5

Before MARTIN and FAY, Circuit Judges, and GOLDBERG, * Judge.

PER CURIAM:

       Max Elroy Reed and Elizabeth Reed (the Reeds) sued Chase Home Finance

(Chase), claiming that Chase did not comply with the disclosure requirements in

the Truth in Lending Act (TILA), 15 U.S.C. § 1641(g),1 when Chase did not

inform them that it had been assigned an interest in their mortgage. The district

court granted summary judgment in favor of Chase. The district court ruled that as

servicer of the loan, Chase fell into the “safe harbor” exception of 15 U.S.C. §

1641(f), which provides that a servicer is exempt from the § 1641(g) disclosure

requirements when the assignment is “solely for the administrative convenience of

the servicer in servicing the obligation.” 15 U.S.C. § 1641(f)(2). The Reeds

appeal. Having had the benefit of oral argument, and after careful consideration,

we affirm.

                                               I.

       In November 2006, the Reeds refinanced their mortgage. They signed a

promissory note to Pensacola Guarantee Mortgage (Pensacola), and the mortgage

named Pensacola as the lender. The mortgage named Mortgage Electronic
*
 Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by
designation.

1
 Section 1641(g) provides in relevant part: “[N]ot later than 30 days after the date on which a
mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the
new owner or assignee of the debt shall notify the borrower in writing of such transfer.” 15
U.S.C. § 1641(g)(1).
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Registration Systems, Inc. (MERS) as the nominee for the lender, and the lender’s

successors and assigns. The mortgage also identified MERS as the mortgagee.

      Shortly after closing, Pensacola transferred ownership of the promissory

note to SunTrust Mortgage (SunTrust). SunTrust in turn transferred ownership of

the note to Fannie Mae in early 2007. Also shortly after closing, Pensacola

transferred servicing responsibilities for the loan to SunTrust. SunTrust then

transferred servicing of the loan to Chase in September 2007.

      As servicer of the loan, Chase gave the Reeds notice of intent to foreclose

after the Reeds missed several mortgage payments. On September 3, 2010, Chase

announced it would foreclose. Four days later, MERS executed an “assignment of

Mortgage” (the Assignment), transferring to Chase “all right, title and interest of

[MERS] in and to that certain Mortgage executed by [the Reeds].”

                                       II.

      The Reeds contend that the Assignment made Chase the new owner of the

debt, and triggered Chase’s obligation under § 1641(g) to inform them that it was

the new owner of the debt. In response, Chase argues that MERS assigned its

interest in the mortgage so that Chase could service the loan, because Chase could

not have foreclosed—“a core servicing duty”—without assignment of the

mortgage. Chase claims the assignment “was solely for the administrative

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convenience of the servicer” within the meaning of § 1641(f), so it was not

required to inform the Reeds of the assignment.

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

v. CNA Ins. Cos., 189 F.3d 1310, 1313 (11th Cir. 1999). With that in mind, and

even if we assume—without deciding—that Chase would otherwise be subject to

the § 1641(g) disclosure requirements as the new owner of the debt, we conclude

that Chase was exempt from § 1641(g)’s disclosure requirement because the

assignment was made “solely for the administrative convenience of the servicer in

servicing the obligation.” See § 1641(f)(2).

       In deciding whether the Assignment was an “administrative convenience”

under § 1641(f), we must first consider the meaning of the term. Because TILA

does not define “administrative convenience,” we look to the ordinary meaning of

the words. United States v. Silvestri, 409 F.3d 1311, 1333 (11th Cir. 2005)

(“Courts must assume that Congress intended the ordinary meaning of the words it

used.” (quotation marks omitted)). To determine the ordinary meaning of a term,

“courts often turn to dictionary definitions for guidance.” Id. (quotation marks

omitted). The word “convenience” is defined by Merriam-Webster as “fitness or

suitability for performing an action or fulfilling a requirement.” Merriam-Webster

Online Dictionary, http://www.merriam-webster.com/dictionary (last visited July

23, 2013). The word “administrative” connotes the act or process of managing or

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supervising. Id. Thus, the ordinary meaning of “administrative convenience” is

that which allows performance of a managerial action or requirement.

       It is not disputed in the record before us that the purpose of the Assignment

was to allow Chase to foreclose on the Reeds’ property. It is also undisputed that

Chase could not have foreclosed on the property without the Assignment. Thus,

we conclude that the Assignment was an “administrative convenience” within the

meaning of § 1641(f) because the Assignment allowed Chase to perform

foreclosure, a requirement of servicing the loan. For these reasons, Chase was not

subject to § 1641(g)’s disclosure requirements. 2

                                            III.

       The district court’s grant of summary judgment is AFFIRMED.

2
  The Reeds argue that if we consider anyone who provides, in some part, an administrative
convenience to fall within the § 1641(f) exception, then the disclosure requirement will be
toothless. However, the Reeds have conceded that the purpose of the Assignment was to allow
Chase to foreclose and Chase has explained that servicing of loans can require foreclosing. This
being the case, the Assignment constituted an “administrative convenience” within the meaning
of § 1641(f).
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