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Caruso v. PNC Bank, N.A.

United States District Court, D. Utah, Central Division

September 4, 2018

KEVIN J. CARUSO and MERRIDEE HANSEN FARR, individuals, Plaintiffs,
v.
PNC BANK, N.A., a national banking association, successor-in-interest to NATIONAL CITY BANK, ROE CORPORATIONS I - X; JOHN DOES 1 - 10; Defendants.

          MEMORANDUM DECISION AND ORDER DENYING PLAINTIFFS' [23] MOTION FOR SUMMARY JUDGMENT

          David Nuffer United States District Judge

         Plaintiffs Kevin J. Caruso and Merridee Hansen Farr (“Plaintiffs”) moved for summary judgment (“Motion”)[1] on the two causes of action set forth in their Complaint[2] against Defendant PNC Bank, N.A. (“PNC”): quiet title and damages under Utah Code Ann. 57-1-38(3). PNC opposed[3] the Motion. Plaintiffs replied[4] in support. Because there is a disputed issue of material fact, the Motion is DENIED.

         BACKGROUND

         As set forth in the Motion, Plaintiffs bring this quiet title action seeking to establish that they own property (the “Property”) that they purchased at a June 2017 trustee's sale free of any encumbrance by PNC.[5]

         The Property at issue was originally purchased in 2004 by Kim Jensen.[6] In 2005, Mr. Jensen opened a $400, 000 revolving home equity line of credit with PNC's predecessor in interest, National City Bank.[7] That home equity line of credit was secured by a deed of trust against the Property.[8]

         In 2008, Mr. Jensen refinanced the Property with a new loan from another bank for $1, 956, 500.00.[9] The refinancing was intended to pay off, among other things, the home equity line of credit with National City Bank.[10] Payment was sent to National City Bank, and was purportedly accompanied by a letter of authorization from Mr. Jensen that directed National City Bank to close the home equity line of credit.[11]

         In 2012, Mr. Jensen borrowed $300, 000 from American United Family of Credit Unions. That loan was also secured by a trust deed against the Property.[12] Mr. Jensen defaulted on this loan and a notice of default was recorded on January 25, 2017.[13] The property then was sold at trustee's sale under the AUFCU trust deed on June 8, 2017. Plaintiffs purchased the Property for $355, 000.[14]

         As stated at the outset of this memorandum decision, Plaintiffs' Complaint contains two causes of action: quiet title and damages pursuant to Utah Code Ann. 57-1-38(3). In support of their Motion, Plaintiffs argue that undisputed facts show that PNC failed to comply with Utah law which required PNC to release its security interest in the Property following receipt of Mr. Jensen's payment and his signed authorization letter. Because of this failure, Plaintiffs say title to the Property should be quieted in their favor and Plaintiffs should be awarded damages.

         STANDARD OF REVIEW

         Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[15] A factual dispute is genuine when “there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.”[16] In determining whether there is a genuine dispute as to material fact, the court should “view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant.”[17] The moving party “bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.”[18]

         DISCUSSION

         Utah Code Ann. § 57-1-38 establishes that a secured lender, or one who is the beneficiary on a trust deed, [19] who enters into an agreement with a borrower to loan the borrower money on a continuing basis, otherwise known as a revolving credit line, [20] shall close the revolving credit line and release any security interest if two specific conditions are met.[21] The secured lender must receive “payment in full from a third party involved in a sale or loan transaction affecting the security interest[, ]” and the “written request to close the credit line.”[22] That same section provides that:

[a] secured lender . . . who fails to release a security interest on a secured loan within 90 days after receipt of the final payment of the loan is liable to the . . . owner or title holder of the real property for: (a) the greater of $1, 000 or treble actual damages incurred because of the failure to release the security interest, including all expenses incurred in completing a quiet title action; and (b) reasonable attorneys' fees and court costs.[23]

         Plaintiffs' two causes of action are based in this section, and Plaintiffs argue that the undisputed facts show that PNC failed to comply with the requirements of this section and is therefore subject to its civil penalties. Specifically, Plaintiffs argue that the undisputed facts show that PNC failed to release its interest in the Property despite having received Mr. Jensen's repayment of the amount owing under the home equity line of credit and his written, signed request to close the line of credit.[24] Because this is the exact sort of scenario outlined in Utah Code Ann. § 57-1-38(3), Plaintiffs assert that they are entitled to an award of damages.[25]However, the undisputed material facts do not show that Plaintiffs are entitled to summary judgment on either cause of action.

         Paragraph No. 8 and 9 of Plaintiffs' statement of purported undisputed material facts state:

8. At the time of the Refinance, First American Title sent payment to National City Bank of $388, 934.02, which was notated as payoff of loan, interest of $468.23, and an early termination fee of $350.00.
9. Along with the payoff of the Line of Credit, Kim Jensen's signed request to close the Line of Credit was also sent.[26]

         Plaintiffs support these facts with citations to copies of the check itself, the copy of the letter from Kim Jensen authoring the closure of the account, and the FedEx shipping label ...


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