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CitiMortgage, Inc. v. Equity Bank, N.A.

United States District Court, E.D. Missouri, Eastern Division

November 20, 2017

CITIMORTGAGE, INC., Plaintiff,
v.
EQUITY BANK, N.A., Defendant.

          MEMORANDUM AND ORDER

          SHIRLEY PADMORE MENS AH UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Plaintiff CitiMortgage, Inc.'s (“CMI's”) Motion for Reconsideration. (Doc. 226). The motion is fully briefed and ready for disposition. For the reasons stated below, the motion will be denied.

         I. Background

         This case involves CMI's claim that Equity Bank, N.A. (“Equity”) breached its contract with CMI (the “Agreement”) when Equity failed to repurchase from CMI twelve residential mortgage loans that CMI had purchased from Equity.[1] Both parties moved for summary judgment. In its Memorandum and Order addressing the parties' motions for summary judgment (the “Partial Order”), the Court granted summary judgment in favor of Equity with respect to six of the twelve loans-those six loans that had been foreclosed on prior to CMI's demand that Equity repurchase them (the “Liquidated Loans”).[2] After analyzing the language of the Agreement, the Court concluded that Equity did not have a contractual obligation to “repurchase” the Liquidated Loans. In the instant motion for reconsideration, CMI contends that conclusion was erroneous.

         II. Legal Standard

         Under Federal Rule of Civil Procedure 54(b), an order that adjudicates fewer than all the claims in an action “may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” In addition, the Eighth Circuit has held that a district court has “the inherent power to reconsider and modify an interlocutory order any time prior to the entry of judgment” K.C. 1986 Ltd. P'ship v. Reade Mfg., 472 F.3d 1009, 1017 (8th Cir. 2007) (internal quotation marks omitted). “Under Rule 54(b), a district court may, in its discretion, reconsider an interlocutory order to correct any clearly or manifestly erroneous findings of fact or conclusions of law.” Davenport v. Charter Commc'ns, LLC, No. 4:12-CV-00007-AGF, 2013 WL 992328, at *2 (E.D. Mo. Mar. 13, 2013) (internal quotation marks omitted); see also Bancorp Servs., LLC v. Sun Life Assurance Co. of Canada, No. 4:00-CV-1073-CEJ, 2011 WL 1599550, at *1 (E.D. Mo. Apr. 27, 2011). However, “[a] motion for reconsideration is not a vehicle to identify facts or legal arguments that could have been, but were not, raised at the time the relevant motion was pending.” Julianello v. K-V Pharm. Co., 791 F.3d 915, 923 (8th Cir. 2015).

         III. Discussion

         CMI argues that the Court's conclusion that Equity had no contractual obligation to repurchase the Liquidated Loans was erroneous for several reasons. Many of CMI's arguments in support of its motion for reconsideration are arguments that, albeit reframed, were raised and addressed in the Partial Order. However, CMI's motion also appears to assert new arguments regarding this Court's interpretation of key contract terms such as “Loan” and “repurchase.” CMI also appears to raise a new argument regarding the impact of this Court's interpretation on purpose and function of the contract as a whole and asserts that Judge Cohen's decision in CitiMortgage, Inc. v. Royal Pacific Funding Corp., No. 4:16-CV-00210-PLC, 2017 WL 3116135, at *8-*9 (E.D. Mo. July 21, 2017), warrants reconsideration and a reversal of this Court's decision as to the Liquidated Loans. While I find that these new arguments warrant consideration, for the reasons set out below, I find that the Partial Order was not erroneous.

         A. The Meaning of the Term “Loan”

         In moving for reconsideration, CMI contends the Court erred by limiting the definition of “Loan” to a residential mortgage loan that would cease to exist after foreclosure. More specifically, CMI argues that, as used in the Agreement, the term “Loan” encompasses both a residential mortgage loan before foreclosure, as well as any rights and obligations that might continue to exist after that loan has been foreclosed on. See Doc. 226, at 12. CMI argues that the Court's interpretation of the term “Loan” was narrower than intended by the parties and was based on a fundamental misunderstanding of the nature of the term “Loan, ” as used in the Agreement, and of mortgage principles generally.

         The Court does not take issue with CMI's position that, in general, even after a residential mortgage loan has been foreclosed on, there are rights and obligations that have value and continue to exist. However, in interpreting the Agreement, this Court must apply the cardinal rule of contract interpretation under Missouri law and seek to determine the parties' intent and give effect to it, first, by examining the words in the Agreement. See Chochorowski v. Home Depot U.S.A., 404 S.W.3d 220, 226 (Mo. 2013) (“[T]he primary rule of contract interpretation is that courts seek to determine the parties' intent and give effect to it.”). “The parties' intent is presumed to be expressed by the plain and ordinary meaning of the language of the contract. When the language of a contract is clear and unambiguous, the intent of the parties will be gathered from the contract alone, and a court will not resort to a construction where the intent of the parties is expressed in clear and unambiguous language.” Id. at 226-27. As such, so long as the language in the Agreement is clear and unambiguous, this Court may not resort to general mortgage industry principles or other extrinsic evidence to determine what the parties intended. See Renco Gp., Inc. v. Certain Underwriters at Lloyd's, London, 362 S.W.3d 472, 477 (Mo.Ct.App. 2012) (“Unless the contract is ambiguous, the intent of the parties is determined based on the contract alone, not on extrinsic or parol evidence.”).

         The Agreement in this case is not ambiguous. As relevant here, a “Loan” is defined in the Agreement as a “residential mortgage loan.” Although the Agreement does not further define the term “residential mortgage loan, ” the plain and ordinary meaning and use of the term “mortgage loan” is “[a] loan secured by a mortgage or deed of trust on real property.” Black's Law Dictionary (10th ed. 2014). See also MASTR Asset Backed Secs. Trust v. WMC Mortg. Corp., 2012 WL 4511065, at *4 (D. Minn. Oct. 1, 2012) (“As a general proposition, a ‘mortgage loan' is a ‘loan secured by a mortgage deed of trust on real property.'”) (quoting Black's Law Dictionary (9th ed. 2009)).

         CMI does not challenge the conclusion in the Partial Order that a residential mortgage loan, as that term is ordinarily applied, would cease to exist after foreclosure. Indeed, in describing the foreclosure process in its brief, CMI tacitly concedes that, after foreclosure, there is no longer a mortgage loan in existence, because there is no longer a “loan secured by a mortgage or deed of trust on real property.” Instead, the loan secured by a mortgage or deed of trust on real property has been replaced by something else-ownership of a piece of real property (or the proceeds from sale of that property) and a right to collect a deficiency judgment if there is a deficiency.

         The parties to the Agreement in this case could certainly have adopted a more expansive definition of the term “Loan” to encompass both a residential mortgage loan and any rights and obligations that continue to exist following a foreclosure. However, the parties did not do so. CMI has failed to point to any supportive language ...


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