United States District Court, S.D. West Virginia, Charleston
WILLIAM W. BOSTER, JR., Plaintiff,
LIVE WELL FINANCIAL, INC. and COMPU-LINK COPRORATION, d/b/a CELINK, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Jr. Senior United States District Judge.
is a motion for summary judgment filed by the plaintiff,
William W. Boster ("Mr. Boster"), on May 21, 2018,
and a joint motion for summary judgment filed by the
defendants, Live Well Financial, Inc. ("Live Well")
and Compu-Link Corporation, d/b/a Celink
("Celink"), also on May 21, 2018.
case involves a dispute between Mr. Boster, who took out a
reverse mortgage on behalf of his mother as her
attorney-in-fact under a durable power of attorney, and Live
Well and Celink, the servicer and sub-servicer of the loan.
Mr. Boster now seeks to nullify the loan on the alleged
grounds that it was illegal.
26, 2001, Mr. Boster's Mother, Wanda Jean
Boster, conveyed to the plaintiff a remainder interest in her
home located in Nitro, West Virginia, in which she reserved a
life estate for herself. Defs.' Mot. Summ. J., Ex. A at
¶ 4; PL's Mot. Summ. J. 1. The mother died November
25, 2016. Defs.' Mot. Summ. J., Ex. A at ¶ 4. Mr.
Boster currently resides in the home. PI.'s Mot. Summ. J.
2007, Wanda Jean Boster provided Mr. Boster with a power of
attorney over "any mortgages, loans, deed of trust on
any of [her] real property or interests." Defs.'
Mot. Summ. J., Ex. A. at ¶ 4. In March 2014, several
years after the creation of the remainder interest, Mr.
Boster sought a reverse mortgage loan on behalf of his mother
to provide necessary funds for her care. Defs.' Mot.
Summ. J. 3; PI.'s Mot. Summ. J. 1. To obtain the loan
through the Home Equity Conversion Mortgage
("HECM") program, the plaintiff attended required
counseling wherein he signed the Certificate of HECM
Counseling, which provided that the HECM would be "due
and payable when no remaining borrower lives in the mortgaged
property, or when any other covenants of the mortgage have
been violated. (Borrowers are those parties who have signed
the Note and Mortgage or Deed of Trust.)" Defs.'
Mot. Summ. J. 3-4, Ex A ¶ 4; Ex. D. As will be seen, Mr.
Boster did not sign the Note in issue here and thus was not a
March 20, 2014, Mr. Boster, solely as attorney-in-fact for
his mother, executed two promissory notes for a
federally-insured loan under the HECM program, one with
Proficio Mortgage Ventures LLC ("Proficio"), and
the other with the Secretary of HUD (collectively, the
"Note"). Defs.' Mot. Summ. J. at Ex. E ¶
5; Ex. F. Mr. Boster signed the Note as "Wanda Jean
Boster by William Wayne Boster, as Attorney-in-Fact" and
signed a "Home Equity Conversion Mortgage Loan
Agreement" ("Loan Agreement") as his
mother's attorney-in-fact. Id. at Ex. A ¶
4; Ex. G. And so, he signed neither the Note nor the Loan
Agreement in his personal capacity. Id. at 4; Compl.
Mr. Boster held a remainder interest in the property, he
signed two deeds of trust ("Deed of Trust"), which
pledged the property as collateral for the Note. Id.
at Ex. E ¶ 4; Ex. H. The Deed of Trust required payment of
"all property charges consisting of taxes . . . and
hazard insurance premiums." Id. at Ex. H. It
stated that the lender could collect fees and charges
authorized by HUD as grounds for acceleration, and also
require payment in full if "[a] Borrower dies and the
Property is not the principal residence of at least one
surviving Borrower." Id. The Loan could also be
declared due and payable, with HUD's approval, if
"[a]n obligation of the Borrower under th[e] Security
Instrument is not performed." Id.
Boster also signed four documents as attorney-in-fact which
explained his role as a non-borrowing resident: (1)
Non-Borrowing Resident Disclosure; (2) Important Notice to
Non-Borrowing Spouse or Resident; (3) Ownership Interest
Certification; and (4) Notice to Non-Borrowing Spouse or
Resident. Defs.' Mot. Summ. J. at Ex. A ¶ 4; Ex. I.
Each document indicated that "[i]f the borrowing
homeowner predeceases you or otherwise no longer occupies the
property as their property residence, the reverse mortgage
will become due and payable." Id. at Ex. I.
Live Well took the Loan by assignment from Proficio on April
2, 2014. Compl. ¶ 16; Defs.' Mot. Summ. J. at Ex. E
¶ 3. The Loan was serviced by defendant Celink. Compl.
¶ 20; Defs.' Mot. Summ. J. at Ex. A ¶¶
4-6. Pursuant to the Reverse Mortgage, Mrs. Boster was
required to pay the taxes and insurance on the home to avoid
defaulting on the Loan. Defs.' Mot. Summ. J. at Ex. E
¶¶ 4, 6. Mrs. Boster immediately defaulted on these
obligations. Id. at Ex. E ¶ 7.
result of Mrs. Boster's failure to pay taxes and
insurance on the property, Live Well fulfilled these payment
obligations on her behalf in order to "protect its
collateral." Id. at Ex. E ¶ 8. Those
payments by Live Well began in October 2014 and ended in June
2017; however, the defendants claim that even after Live Well
transferred the Reverse Mortgage to TIAA FSB d/b/a EverBank
("Everbank") on March 15, 2017, Live Well retained
servicing rights and continued to advance funds for taxes and
insurance on the home into 2018. Defs.' Mot. Summ. J. at
Ex. E ¶ 16. After this transfer, defendant Live Well
became merely a servicer of the Loan and defendant Celink
became the sub-servicer. The defendants currently hold these
roles with respect to the reverse mortgage.
2, 2016, Celink sent Mrs. Boster a letter to inform her that
Live Well advanced funds on June 1, 2016 to pay for
delinquent taxes and/or insurance on the Loan. Defs.'
Mot. Summ. J. at Ex. A ¶ 4; Ex. E ¶ 11; Ex. J.
Celink further indicated that the Loan was "now
considered to be inxTax/Insurance Default'
status" and accordingly, she was required to pay $410.00
in order to cure the default. Id. at Ex. A.
Subsequently, Celink sent several more letters on Live
Well's behalf regarding her delinquent tax/insurance, but
she failed to make the $410.00 payment during that time.
Defs.'s Mot. Summ. J. 7, Ex. A ¶ 4; Ex. K.
light of Mrs. Boster's continued failure to meet her
insurance and tax payment obligations, which constituted
default under the loan agreement, Seneca Trustees, Inc.
("Seneca"), began initiating foreclosure on her
home and notified Mr. Boster and his mother of this by letter
dated October 19, 2016. Id. at Ex. A ¶ 4; Ex.
L. On or around November 10, 2016, Celink received a check in
the amount of $410.00 for the outstanding taxes/insurance
payment, but there was also $151.36 due for additional taxes
and insurance that Celink did not receive at that time.
Id. at Ex. A ¶ 8. On November 16, 2016, Samuel
I. White, P.C., attorney for Celink, sent a letter addressed
to Mrs. Boster that she had breached the terms of the Note by
failing "to pay the installments hereinafter
stated." Id. at Ex. A ¶ 4; Ex. M. The
installments totaled $66, 590.23 and included: an unpaid
principal balance of $54, 476.16; accrued interest in the
amount of $7, 752.94; mortgage insurance ("MIP") in
the amount of $4, 209.77; and taxes in the amount of $151.36.
Id. Pursuant to the letter, she was given 30 days to
cure the breach. Id.
after Mrs. Boster passed away on November 25, 2016, Celink
received on December 8, 2016 a check in the amount of $151.36
for the outstanding taxes and insurance. Defs.' Mot.
Summ. J. 7, Ex. A ¶ 9. Because Mrs. Boster died, the
$156.36 and $410.00 payments were both returned to the
sender. Defs.'sMot. Summ. J. 8, Ex. A ¶ 10. In light
of his mother's death, Celink called Mr. Boster that same
day and "advised him of five options with no recourse:
(1) sell the Property; (2) refinance the Property; (3) short
sale of the Property; (4) deed-in-lieu of foreclosure; or (5)
foreclosure." Defs.' Mot. Summ. J. 8, Ex. A ¶
December 27, 2016, Seneca sent notice to Mrs. Boster and her
son, informing them that the Loan would be accelerated, and
the property would be sold pursuant to the Deed of Trust.
Defs.' Mot. Summ. J. at Ex. A ¶ 4; Ex. N; PL's
Mot. Summ. J. 2-3. Mr. Boster sought counsel to avoid
eviction. PL's Mot. Summ. J. 3. On February 27, 2017, Mr.
Boster sent Proficio, Live Well, and Seneca Trustees, Inc., a
letter indicating that he was rescinding the Loan and
security interest pursuant to 15 U.S.C. § 1635. PL's
Mot. Summ. J. at Ex. 3. He claims that "[n]o action was
taken within the 20 days allowed after receipt of that notice
to release the lien on plaintiff s home or to seek a court
order to alter the statutory revision process."
PI.'s Mot. Summ. J. 3.
noted, on March 15, 2017, Live Well transferred the Reverse
Mortgage, including the Deed of Trust, to EverBank.
Defs.' Mot. Summ. J. 8, Ex. E ¶ 13; PL's Mot.
Summ. J. 3. By letter dated March 16, 2017, addressed to Mrs.
Boster, notice of the transfer was given by Live Well. Ex. E
¶¶ 14, 15; Ex. 0.
3, 2017, Mr. Boster brought this action in the Circuit Court
of Kanawha County, West Virginia. With the consent of Celink,
Live Well timely removed the case to this court, invoking
diversity jurisdiction pursuant to 28 U.S.C. § 1332.
Notice of Removal ¶¶ 6, 11. Plaintiff's
complaint asserts two counts against the defendants.
Mr. Boster asks in Count I that the court "declare
defendants' claimed lien void and unenforceable, and to
enter a preliminary and a permanent injunction barring
defendants from any action to enforce or assign it."
Compl. ¶ 59. Mr. Boster asserts that the lien is
unenforceable because the Loan violates the West Virginia
Residential Mortgage Lender, Broker, and Servicer Act
("RMLBSA"), W.Va. Code § 31-17-1, et seq., and
because the reverse mortgage has been rescinded under the
Truth in Lending Act, ("TILA"), see 15
U.S.C. § 1635.
noted that the court, by ordered entered on defendants'
motion to dismiss on March 30, 2018, dismissed two other
grounds raised by plaintiff for Count I relief, consisting of
the West Virginia Reverse Mortgage Enabling Act
("Reverse Mortgage Act"), W.Va. Code §
47-24-1, et seq., and the West Virginia Consumer Credit and
Protection Act ("WVCCPA"), W.Va. Code §
46A-2-104 (a) . See Id; at ¶¶ 47-49, 53-55.
he asserts in Count II that defendants engaged in illegal
debt collection acts in violation of provisions of the
WVCCPA, W.Va. Code ...