Henok v. Chase Home Finance, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_______________________________
)
ARAYA HENOK, )
)
Plaintiff, )
)
v. ) Civil Action No. 12-336 (RWR)
)
CHASE HOME FINANCE, LLC, )
et al., )
)
Defendants. )
_______________________________)

MEMORANDUM OPINION AND ORDER

Pro se plaintiff Araya Henok brings this action against

Chase Home Finance, LLC (“Chase”), Shapiro & Burson, LLP

(“Shapiro”), and Fannie Mae, challenging the legality of the

foreclosure on a property he owned on 16th Street N.E. in

Washington, D.C. (“the property”). Henok moves for partial

summary judgment against Chase arguing that Chase and Shapiro

failed to send to Henok valid notice of default and notice of

foreclosure. Henok also moves for sanctions against Chase and

Shapiro and their counsel. Because Henok has failed to show that

he is entitled to judgment as a matter of law, his motion for

partial summary judgment will be denied and judgment as to the

notice of default will be entered for Chase since the undisputed

material facts entitle it to such a judgment as a matter of law.

Because Henok has not met the requirements of Rule 11 or shown

that the defendants committed sanctionable conduct, Henok’s

motions for sanctions will be denied.
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BACKGROUND

Henok purchased the property in 2006 with financing from JP

Morgan Chase Bank. Pl.’s Mot. for Partial Summ. J. (“Pl.’s Summ.

J. Mot.”), Exs. 2-3; Defs. Chase & FNMA’s Mem. of Law in Opp’n to

Pl.’s Second Mot. for Partial Summ. J. (“Chase’s Opp’n to Pl.’s

Summ. J. Mot.”) ¶ 2. In August of 2009, Chase returned his

monthly payment and “stated that [his] property [was] going into

foreclosure.” Am. Compl. ¶ 8; Chase’s Opp’n to Pl.’s Summ. J.

Mot. ¶ 8. Fannie Mae bought the property in a foreclosure sale

on November 18, 2009. Pl.’s Summ. J. Mot. ¶ 16, Ex. 1; Chase’s

Opp’n to Pl.’s Summ. J. Mot. ¶ 16, Ex. 2.

Henok filed a complaint in D.C. Superior Court challenging

the foreclosure in February 2012 and the defendants removed the

case to federal court and answered the complaint. Henok v. Chase

Home Finance, LLC, Civil Action No. 12-336 (RWR), 2013 WL 167941,

at *1 (D.D.C. Jan. 16, 2013). Henok moved for partial summary

judgment arguing that Chase and Shapiro breached the contract by

failing to provide notice of default and failing to mail to the

correct address the notice of foreclosure. Pl.’s Summ. J. Mot.

at 6-9. Further, Henok moved for sanctions against Chase’s

attorneys, Shapiro’s attorneys, Chase employee Kevin Johnson and

Shapiro employee Brett Callahan claiming that Chase and Shapiro

intentionally made false representations that they did not

receive letters Henok had sent them by certified mail. Mot. for
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Sanctions Against Shapiro at 1; Mot. for Sanctions Against Chase

at 1.

DISCUSSION

I. PARTIAL SUMMARY JUDGMENT

Summary judgment is warranted on an individual claim or part

of a claim if “there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). “A party asserting that a fact cannot be

or is genuinely disputed must support the assertion by . . .

citing to particular parts of materials in the record, including

. . . documents, . . . declarations, . . . or other materials;

or . . . showing that the materials cited do not establish the

absence or presence of a genuine dispute[.]” Fed. R. Civ. P.

56(c)(1). A party may not rely merely upon denials in pleadings

to show a genuine dispute, but must come forward with specific

evidence that reveals a genuine factual dispute. Rogers v.

District of Columbia, 880 F. Supp. 2d 163, 165-66 (D.D.C. 2012);

Ali v. District of Columbia Gov’t, 810 F. Supp. 2d 78, 82-83

(D.D.C. 2011). At the summary judgment stage, “‘[t]he evidence

of the non-movant is to be believed, and all justifiable

inferences are to be drawn in his favor.’” Feirson v. District

of Columbia, 506 F.3d 1063, 1066 (D.C. Cir. 2007) (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

Where there are no disputed facts to resolve regarding a claim,
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and it is the non-movant who is entitled to judgment as a matter

of law, judgment may be entered for the non-movant on that cause

of action. Henok v. Chase Home Finance, LLC, Civil Action No.

12-335 (RWR), 2013 WL 525696, at *4 (D.D.C. Feb. 13, 2013).

Henok’s motion for partial summary judgment argues in part

that Chase never gave him the required advance notice of default,

Pl.’s Summ. J. Mot. at 6-7, and that he never received such a

notice, id. at 7-9. The deed of trust securing Henok’s mortgage

required Chase before foreclosing to “give notice to Borrower

. . . [that] shall specify (a) the default; (b) the action

required to cure the default; (c) a date, not less than 30 days

from the date the notice is given to Borrower, by which the

default must be cured; and (d) that failure to cure the default

on or before the date specified in the notice may result in

acceleration of the sums secured by this Security Instrument and

sale of the Property.” Id., Ex. 3 ¶ 22. The deed also provided

that “[a]ll notices given by Borrower or Lender in connection

with this Security Instrument must be in writing. Any notice to

Borrower in connection with this Security instrument shall be

deemed to have been given to Borrower when mailed by first class

mail or when actually delivered to Borrower's notice address if

sent by other means.” Id., Ex. 3 ¶ 15.

These provisions impose a duty upon Chase to “give notice”

of default to Henok. Here, Chase supplied with its opposition to

Henok’s motion a declaration under the penalty of perjury from
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its Assistant Secretary and Operations Unit Manager that Chase

indeed gave Henok advance notice of default that fully complied

with the requirements of the deed of trust. The declaration

attaches a copy of a letter Chase sent Henok on April 4, 2009 to

his address at 1800 New Jersey Avenue, N.W., Washington, D.C.,

20001, advising Henok “[y]ou are in default because you have

failed to pay the required monthly installments [as of April 4,

2009]”; “[y]ou must pay [$4,167.00] within thirty-two days . . .

in order to cure this default”; and “[i]f you fail to cure the

default . . ., Chase Home Finance LLC will accelerate the

maturity of the Loan, . . . and commence foreclosure

proceedings[.]” Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1 ¶ 3,

Ex. B. This notice of default was sent to Henok after Henok

informed Chase in a 2008 letter that his address was 1800 New

Jersey Avenue, N.W., Washington, D.C., 20001, id., Ex. 1 ¶ 2,

Ex. A, and Henok confirmed that the 1800 New Jersey Avenue, N.W.,

Washington D.C., 20001 address was accurate in a May 21, 2009

letter, id. ¶ 4, Ex. C. These letters were sent before Henok

first allegedly informed Chase in an August 13, 2009 letter of

his new address on New Hampshire Avenue, N.W. Pl.’s Summ. J.

Mot. ¶ 12, Ex. 4. Therefore, the April 4, 2009 notice of default

was addressed to Henok’s “last known address” before Henok

allegedly sent Chase a notice changing his address to the New

Hampshire Avenue address.
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Henok has not rebutted this evidence that Chase gave the

notice of default required by the deed in the way the deed

allowed it to be given. Henok may not simply rely upon denials

to raise a genuine dispute of fact about whether Chase complied

with its duty to provide notice of default. Because there are no

disputed facts to resolve regarding that duty, and it is Chase

that is entitled to judgment as a matter of law, judgment will be

entered for Chase on that cause of action. See Henok, 2013 WL

525696, at *4.

Henok’s motion for partial summary judgment further argues

that neither Chase nor Shapiro ever sent the required advance

notice of foreclosure to him at his correct address, Pl.’s Summ.

J. Mot. at 6-7, 9; Ex. 1, and that he never received a copy of

the notice of foreclosure recorded on October 15, 2009, id. at 7-

9. The deed of trust securing Henok’s mortgage states that if

Chase sought to conduct a foreclosure sale, Chase was required to

“send written notice as prescribed by Applicable Law to

Borrower[.]” Id., Ex. 3 ¶ 22. Under D.C. law in effect at the

time of the foreclosure, the holder of a note had to give written

notice to the owner of the property at least 30 days in advance

of any foreclosure sale at the borrower’s “last known address[.]”

D.C. Code § 42-815(b) (2001). Further, the deed provides that

when the lender sends a notice to the borrower, “[t]he notice

address shall be the Property Address unless Borrower has
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designated a substitute notice address by notice to Lender.”

Pl.’s Summ. J. Mot., Ex. 3 ¶ 15.

The dispute centers on whether Chase sent Henok the notice

of foreclosure at his last known address. Henok provides a copy

of a letter that he says he sent to Chase by certified mail on

August 13, 2009 notifying Chase that his new mailing address was

“908 New Hampshire Ave, NW #400, Washington D.C. 20037.” Pl.’s

Summ. J. Mot. ¶ 12, Ex. 4. He provides with it copies of the

accompanying certified mail receipt and the signed return receipt

acknowledging delivery on August 17, 2009. Chase responds that

Henok’s 2008 letter and May 21, 2009 letter informing Chase that

his address was the one on New Jersey Avenue were the last

notices regarding Henok’s address received by Chase from the

plaintiff. Chase’s Opp’n to Pl.’s Summ. J. Mot. ¶¶ 3-5; Ex. 1

¶¶ 2, 4, 7, Exs. A, C. Shapiro also argues that the notice of

foreclosure was proper claiming that it was sent to Henok at his

last known address. Shapiro Opp’n to Pl.’s Summ. J. Mot. at 5-6.

Chase and Shapiro have submitted declarations under penalty of

perjury which state that the business records of each party

reflect that those parties did not receive Henok’s August 13,

2009 notice that his address had changed to 908 New Hampshire

Ave., N.W. Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1, ¶ 7;

Shapiro’s Opp’n to Pl.’s Summ. J. Mot., Ex. A, ¶ 4(g), (j).

Therefore, Chase and Shapiro argue that they sent proper notice

to Henok’s last known address by sending it to the New Jersey
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Avenue address. Chase’s Opp’n to Pl.’s Summ. J. Mot. at 7-9;

Shapiro’s Opp’n to Pl.’s Summ. J. Mot. at 5-7.1

Henok has not shown that summary judgment is appropriate

because there is a genuine issue of material fact: whether Chase

received the change of address notice which would have required

Chase to send the notice of foreclosure to the 908 New Hampshire

Avenue address. Because the evidence of the defendants is to be

believed at this stage, and all justifiable inferences are to be

drawn in their favor, summary judgment on this issue is not

appropriate. Therefore, Henok’s motion for partial summary

judgment will be denied as to this claim.

II. SANCTIONS

Henok moves under Rule 11(b) for sanctions against Chase’s

attorneys, Shapiro’s attorneys, Chase employee Kevin Johnson and

Shapiro employee Brett Callahan claiming that Chase and Shapiro

made intentionally false representations to the court. Rule 11

sanctions may be imposed where a party files a pleading, motion

or other paper with the court for an improper purpose, that is

unwarranted by existing law, or that is lacking in evidentiary

support. Fed. R. Civ. P. 11(b)(1)-(3). “‘[T]he district court

1
Curiously, the defendants have made no effort here to
rebut the evidence Henok produced that suggested the defendants
did know of his later change of address to New Hampshire Avenue.
Henok's motion attaches a copy of a notice of foreclosure on a
Chase note for a different property sent from Shapiro that was
addressed to Henok on New Hampshire Avenue bearing the same date
and signatures of the same noteholder's agent and notary as
appear on the foreclosure notice for the property in this case.
Pl.’s Summ. J. Mot., Ex. 1A.
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is accorded wide discretion’ in determining whether sanctions are

appropriate.” Gomez v. Aragon, 705 F. Supp. 2d 21, 23 n.2

(D.D.C. 2010) (quoting Westmoreland v. CBS, Inc., 770 F.2d 1168,

1174 (D.C. Cir. 1985)). “‘Rule 11 sanctions are an extreme

punishment for filing pleadings that frustrate judicial

proceedings.’” Brown v. FBI, 873 F. Supp. 2d 388, 408 (D.D.C.

2012) (quoting Wasserman v. Rodacker, Civil Action No. 06-1005

(RWR), 2007 WL 2071649, at *7 (D.D.C. July 18, 2007)). “‘The

test [for sanctions] under Rule 11 is an objective one: that is,

whether a reasonable inquiry would have revealed that there was

no basis in law or fact for the asserted claim.’” Sharp v. Rosa

Mexicano, D.C., LLC, 496 F. Supp. 2d 93, 100 (D.D.C. 2007)

(quoting Reynolds v. U.S. Capitol Police Bd., 357 F. Supp. 2d 19,

23 (D.D.C. 2004)). Further, Rule 11 includes a “safe harbor

provision” which requires that the motion must be first served on

the non-movant to allow an opportunity to withdraw the challenged

assertion. Fed. R. Civ. P. 11(c)(2). “This procedural rule must

be satisfied before the Court considers the substantive aspects

of plaintiff’s motion.” Brown, 873 F. Supp. 2d at 408.

The essence of Henok’s argument is that Chase and Shapiro

falsely represented that they never received Henok’s letters2

regarding the property, that these defendants’ attorneys “failed

2
Henok specifies that he is referring to correspondence to
Chase from August 2009 to December 2009 and correspondence to
Shapiro from August 2009 to May 2010. Mot. for Sanctions Against
Chase at 1; Mot. for Sanctions Against Shapiro at 1.
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to do any reasonable inquiry” as to whether Henok’s letters were

delivered, Mot. for Sanctions Against Chase at 1-2; Mot. for

Sanctions Against Shapiro at 1-2, and that Chase and Shapiro

falsely represented that Henok received notices, Mot. for

Sanctions Against Chase at 3; Mot. for Sanctions Against Shapiro

at 3.3

Henok has not complied with the safe harbor provision of

Rule 11. Henok’s motions include a certificate of service which

states that the motions were served by first class mail on August

2, 2012, which was the same day that the motions were filed on

the public docket.

Even if Henok had complied with the procedural rule,

sanctions are not appropriate in this case. With regard to both

defendants, Henok seems to be referring to his letters requesting

cure amounts attached to Henok’s partial summary judgment motion.

See Pl.’s Summ. J. Mot., Exs. 4-7. In particular, Henok alleges

that Chase and Shapiro stated in filings that they did not

receive Henok’s letters. Mot. for Sanctions Against Chase at 3;

Mot. for Sanctions Against Shapiro at 3. As to Chase, Johnson

signed a declaration that states that his review of Chase’s

records revealed a December 1, 2008 change of address

notification from Henok, but “no record in its file for this Loan

3
Henok also alleges that Chase and Shapiro provided two
notes and falsely stated that the notes were true and correct
copies. No sanctions can be imposed where Henok neither
identifies the subject notes nor provides any factual support for
the allegation of falsity.
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of receiving a letter from Plaintiff dated August 13, 2009” and

“Chase did not receive any cure payments from Plaintiff at any

time between August 13, 2009 and November 18, 2009, or at any

time thereafter.” Chase’s Opp’n to Pl.’s Summ. J. Mot., Ex. 1

¶¶ 2, 5, 7. Similarly, for Shapiro, Callahan signed a

declaration that states that his review of Shapiro’s business

records revealed that Shapiro received a November 4, 2009 phone

message requesting a return call and that Shapiro “did not

receive a change of address from the borrower in connection with

the Property” and that “no other communications, such as requests

for loan payoffs or reinstatement figures, were received by

[Shapiro] from [Henok] in connection with the Property prior to

the Sale.” Shapiro’s Opp’n to Pl.’s Summ. J. Mot., Ex. A ¶ 4(c),

(g), (j). Henok’s certified mail receipts for his letters

reflect that the first letter was signed for on August 17, 20094,

and the third and fourth letters were signed for on November 6,

2009 and December 28, 2009. See Pl.’s Summ. J. Mot., Exs. 4, 6,

7. However, Henok has not alleged or shown that Johnson’s and

Callahan’s declarations falsely state the contents of Chase’s and

Shapiro’s business records and what letters from Henok were

contained in them. Further, “[t]he Court must also take into

consideration that Rule 11 sanctions are a harsh punishment, and

what effect, if any, the alleged violations may have had on

4
The second letter was not sent by certified mail and the
receipt does not reflect any signature. See Pl.’s Summ. J. Mot.,
Ex. 5.
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judicial proceedings.” Sharp, 496 F. Supp. 2d at 100 (internal

quotation marks omitted). The discrepancy between Chase and

Shapiro’s business records and Henok’s certified mail receipts do

not justify the “harsh punishment” of Rule 11 sanctions.

CONCLUSION AND ORDER

A genuine dispute exists about whether Henok was given the

notice of foreclosure to which he was contractually entitled, but

it is undisputed that Henok was given the required notice of

default. Thus, Henok’s motion for partial summary judgment will

be denied, but judgment will be entered for Chase on Henok’s

contract claim regarding the notice of default. Because Henok

has not met the procedural requirements of Rule 11 or shown that

the defendants have committed sanctionable conduct, the

plaintiff’s motions for sanctions will be denied. Accordingly,

it is hereby

ORDERED that plaintiff’s motion [18] for partial summary

judgment be, and hereby is, DENIED, and that judgment be, and

hereby is, ENTERED for Chase concerning the notice of default

claim. It is further

ORDERED that plaintiff’s motions [24, 25] for sanctions

against Chase and Shapiro and their counsel be, and hereby are,

DENIED.
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SIGNED this 26th day of February, 2013.

/s/
RICHARD W. ROBERTS
United States District Judge