McLaughlin et al v. Ocwen Loan Servicing LLC et al
Filing
43
MEMORANDUM OPINION AND ORDER DENYING 41 42 MOTIONS to Strike, GRANTING IN PART AND DENYING in PART 32 MOTION for Summary Judgment with the exception of Count XI in particular, as it relates to the two QWRs the Defendants acknowledge rec eiving. The Plaintiffs' claims against the Defendants are DISMISSED WITH PREJUDICE. As for Count XI, to bring finality for the parties, the Court SETS this matter for a Pretrial Conference on July 20, 2018, at 12:15 p.m., and for Trial on August 20, 2018, at 9:00 a.m. in Courtroom 4A of the Hugo L. Black United States Courthouse. Signed by Judge Abdul K Kallon on 6/26/2018. (JLC)
FILED
2018 Jun-26 PM 12:21
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JAMES MARK MCLAUGHLIN,
SHERRY MCLAUGHLIN,
Plaintiffs,
v.
OCWEN LOAN SERVICING, LLC,
et al.,
Defendants.
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Civil Action Number
2:16-cv-02041-AKK
MEMORANDUM OPINION AND ORDER
After receiving notice of default and a foreclosure on their residence, James
McLaughlin and Sherry McLaughlin filed this lawsuit alleging claims under state
law and federal statutes against Ocwen Loan Servicing, LLC (“Ocwen”) and the
Bank of New York Mellon Trust Company National Association (“Mellon”). The
court has for consideration the Defendants’ Motion for Summary Judgment, doc.
32. The motion is fully briefed, docs. 32-1, 40, and ripe for review. For the reasons
explained more fully below, except for the claim in Count XI relating to two of the
qualified written requests (QWRs), the Defendants’ motion is due to be granted.
As for Count XI, to bring finality for the parties, the court SETS this matter for a
pretrial conference on July 20, 2018 at 12:15 p.m., and for trial on August 20,
1
2018 1 at 9:00 a.m. in Courtroom 4A of the Hugo L. Black United States
Courthouse. The parties are directed to the attached pretrial instructions.
I. STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 56(a), summary judgment is proper
“if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” “Rule 56(c) mandates the
entry of summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the existence of
an element essential to that party’s case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The
moving party bears the initial burden of proving the absence of a genuine dispute
of material fact. Id. at 323. The burden then shifts to the non-moving party, who is
required to go “beyond the pleadings” to establish that there is a “genuine issue for
trial.” Id. at 324 (internal citations and quotation marks omitted). A dispute about a
material fact is “genuine” if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
The court must construe the evidence and all reasonable inferences arising
from it in the light most favorable to the non-moving party. Adickes v. S.H. Kress
1
This case is currently the second on the court’s trial docket. Assuming the first, United States v.
Tyrell, 2:18-CR-43-AKK, tries, this case will begin on August 23, 2018.
2
& Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 244 (all
justifiable inferences must be drawn in the non-moving party’s favor). Any factual
dispute will be resolved in the non-moving party’s favor when sufficient competent
evidence supports that party’s version of the disputed facts. But see Pace v.
Capobianco, 283 F.3d 1275, 1276-78 (11th Cir. 2002) (a court is not required to
resolve disputes in the non-moving party’s favor when that party’s version of
events is supported by insufficient evidence). However, “mere conclusions and
unsupported factual allegations are legally insufficient to defeat a summary
judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (citing
Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)).
Moreover, “[a] mere ‘scintilla’ of evidence supporting the opposing party’s
position will not suffice; there must be enough of a showing that a jury could
reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.
1990) (citing Anderson, 477 U.S. at 252).
3
II. FACTUAL BACKGROUND 2
In March 2004, the Plaintiffs executed a mortgage on their residence with
Homecomings Financial Network, Inc. in support of a promissory note. Docs. 32-1
at 4-5; 40 at 3. The note passed from Homecomings through a succession of other
creditors, and eventually to Mellon. Doc. 32-1 at 5. The original servicer, GMAC
Mortgage, declared the Plaintiffs in default after they failed to make multiple
mortgage payments. Id. Subsequently, Ocwen began servicing the loan. Id. The
Plaintiffs brought the loan current in June 2014, but subsequently fell behind again
on their payments. Id. at 6. As a result, in September 2015, Ocwen sent the
Plaintiffs a notice of default and requested a $15,378.91 payment to cure the
default, which the Plaintiffs never fully paid off. Id at 7. Consequently, in January
2016, the Defendants accelerated the loan. Id. at 8. The Plaintiffs have never
attempted to repay the full amount, and have stopped making payments. Id. at 7-8.
Following the acceleration, the Plaintiffs submitted credit disputes
concerning Ocwen to the consumer reporting agencies (“CRAs”) Experian and
2
The Plaintiffs have moved to strike the affidavit of Kevin Flannigan, doc. 32-3, contending that
Flannigan lacks personal knowledge and the affidavit contains conclusions of law. Doc. 41.
Flannigan’s affidavit states he “has knowledge of the matters set forth herein” based on his
review of “records in connection with the loan obtained by [the Plaintiffs])” that “Ocwen retains
in the ordinary course of business.” Doc. 32-3 at 3. “As a matter of law, personal knowledge can
come from review of the contents of business files and records.” Mid-Continent Cas., Co. v. Don
Brady Const. Co., No. CIV.A. 11-0088-CG-C, 2012 WL 1598149, at *2 (S.D. Ala. May 7, 2012)
(quoting In re Trafford Distributing Center, Inc., 414 B.R. 858, 862 (Bkrtcy. S.D. Fla. 2009)
(internal quotation marks and alterations omitted). As to the second contention that the affidavit
contains conclusions of law, the Plaintiffs fail to identify any such purported conclusions. See
doc. 41. Therefore, the motion to strike fails.
4
Equifax. Id. Ocwen received notice of the disputes, conducted an investigation, and
subsequently deleted the disputed reporting. Id. The Plaintiffs’ counsel submitted
multiple QWRs to the Defendants. Id. at 9. The parties agree Ocwen responded to
two QWRs. Docs. 32-1 at 9; 40 at 6.
The Defendants scheduled a foreclosure sale for November 2016 and
published notices in local newspapers and online. Docs. 32-1 at 9; 40 at 6. This
lawsuit caused the Defendants to cancel the foreclosure sale. Doc. 32-1 at 9-10.
III. ANALYSIS 3
The Plaintiffs plead nine claims under Alabama law: negligence (Count I),
wantonness (Count II), unjust enrichment (Count III), wrongful foreclosure (Count
IV), slander of title (Count V), breach of contract (Count VI), fraud (Count VII),
false light (Count VIII), and defamation (Count IX). Doc. 14 at 8-16, 25. The
Plaintiffs also plead alleged violations of federal laws: the Truth in Lending Act
(“TILA”), 15 U.S.C. § 1601 et seq. (Count X); the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq. (Count XI); the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. (Count XII); the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. (Count XIII); the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq. (Count
3
The Defendants have moved to strike the Plaintiffs’ brief for failure to comply with the court’s
page limits. Doc. 42 (citing doc. 20 at 7-11). However, because the portions of the brief in excess
of the page limit do not change the outcome of the motion, the court will not strike them.
5
XIV); and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq.
(Count XV). Id. at 17-25. Finally, the Plaintiffs plead a claim for declaratory relief
(Count XVI). Id. at 25. The Defendants contend these claims fail for several
reasons, which the court addresses in turn.
A. Claims Abandoned by the Plaintiffs
The Plaintiffs have not responded to the Defendants’ arguments concerning
Counts V, VII, XIV, XV, and XVI, other than to note that they pleaded these
claims in their complaint. See doc. 40. But “[i]n opposing a motion for summary
judgment, a party may not rely on his pleadings to avoid judgment against him.”
Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995)
(citations and internal quotation marks omitted). Moreover, “[t]here is no burden
upon the district court to distill every potential argument that could be made based
upon the materials before it on summary judgment.” Id. Rather, “the onus is upon
the parties to formulate arguments; grounds alleged in the complaint but not relied
upon in summary judgment are deemed abandoned.” Id.; see Wilkerson v. Grinnell
Corp., 270 F.3d 1314, 1322 (11th Cir. 2001) (finding claim abandoned and
affirming grant of summary judgment on claim presented in complaint but not
raised in initial response to motion for summary judgment); Coalition for the
Abolition of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301, 1325 (11th
Cir. 2000) (finding claim abandoned where it was not briefed and argued in party’s
6
response to motion for summary judgment). Accordingly, the motion is due to be
granted as to Counts V, VII, XIV, XV, and XVI.
B. The Negligence and Wantonness Claims (Counts I and II)
Under Alabama law, “[t]he elements of a negligence claim are a duty, a
breach of that duty, causation, and damage.” Prill v. Marrone, 23 So. 3d 1, 6 (Ala.
2009) (quoting Armstrong Bus. Servs., Inc. v. AmSouth Bank, 817 So. 2d 665, 679
(Ala. 2001)). “To establish wantonness, the plaintiff must prove that the defendant,
with reckless indifference to the consequences, consciously and intentionally did
some wrongful act or omitted some known duty.” Martin v. Arnold, 643 So. 2d
564, 567 (Ala. 1994). Further, “[t]o be actionable, that act or omission must
proximately cause the injury of which the plaintiff complains.” Id. (citing Smith v.
Davis, 599 So. 2d 586 (Ala. 1992)).
Turning to the specifics here, the Plaintiffs plead the Defendants negligently
and wantonly foreclosed on their residence and made misrepresentations to the
Plaintiffs. Doc. 14 at 8-9. These claims fail because “Alabama law does not
recognize a cause of action for negligent or wanton mortgage servicing,” as there is
no independent duty of care upon which to base such a claim. Duke v. JPMorgan
Chase Bank Nat. Ass’n, No. 2:14-CV-422-RDP, 2014 WL 5770583, at *4 (N.D.
Ala. Nov. 5, 2014) (quoting McClung v. Mortg. Elec. Registration Sys., Inc., No.
2:11-CV-03621-RDP, 2012 WL 1642209, at *7 (N.D. Ala. May 7, 2012)) (internal
7
quotation marks omitted). The duty, if any, is contractual, as it arises from the
relevant mortgage agreement, promissory note, and any loan modifications. Id.
While the Plaintiffs contend the Defendants breached their duty “to provide
truthful and accurate information about the status of the loan account,” doc. 40 at
33-34, they do not plead, however, that this duty exists independently of the
contractual duties, or cite any cases stating they can plead negligence and
wantonness claims against a mortgage servicer. Accordingly, the motion is due to
be granted as to Counts I and II.
C. The Unjust Enrichment Claim (Count III)
The Plaintiffs allege the Defendants improperly charged them, resulting in
unjust enrichment. Doc. 14 at 9-10. To prevail on a theory of unjust enrichment,
the plaintiff must show “that defendant holds money which, in equity and good
conscience, belongs to plaintiff or holds money which was improperly paid to
defendant because of mistake or fraud.” Dickinson v. Cosmos Broad. Co., 782 So.
2d 260, 266 (Ala. 2000) (quoting Hancock-Hazlett Gen. Constr. Co. v. Trane Co.,
499 So. 2d 1385, 1387 (Ala. 1986)) (emphasis omitted). Alabama courts will imply
a contract in law “to prevent a manifest injustice or unjust enrichment[.]” Mantiply
v. Mantiply, 951 So. 2d 638, 656 (Ala. 2006) (quoting Green v. Hospital Bldg.
Auth. of Bessemer, 294 Ala. 467, 470 (1975)). However, “[t]he existence of an
express contract on a given subject generally excludes an implied agreement on the
8
same subject,” barring unjust enrichment claims. Id. (citing Brannan & Guy, P.C.
v. City of Montgomery, 828 So. 2d 914, 921 (Ala. 2002); Vardaman v. Florence
City Bd. of Educ., 544 So. 2d 962 (Ala. 1989)).
The Defendants contend that the mortgage and promissory note constitute an
express contract. Doc. 32-1 at 12. The Plaintiffs do not dispute this, and, indeed,
base their breach of contract claim upon that contract. See doc. 40. In the presence
of an express contract, the court will not imply a contract in law. See Mantiply, 951
So. 2d at 656. Accordingly, the motion is due to be granted as to Count III.
D. The Wrongful Foreclosure Claim (Count IV)
In Count IV, the Plaintiffs plead a claim for wrongful foreclosure. “Under
Alabama law, a mortgagor has a wrongful foreclosure action whenever a
mortgagee uses the power of sale given under a mortgage for a purpose other than
to secure the debt owed by the mortgagor.” Buckentin v. SunTrust Mortg. Corp.,
928 F. Supp. 2d 1273, 1282 (N.D. Ala. 2013) (quoting Reeves Cedarhurst Dev.
Corp. v. First Am. Fed. Sav. and Loan, 607 So. 2d 180, 182 (Ala. 1992)) (internal
citations omitted). Critically, “in order to state a claim for wrongful foreclosure, a
foreclosure sale must have actually taken place.” Id. (citing Hardy v. Jim Walter
Homes, Inc., 2007 WL 174391, at *6 (S.D. Ala. 2007)); see Zanaty v. Wells Fargo
Bank, N.A., No. 2:16-CV-0277-VEH, 2016 WL 6610443, at *5 (N.D. Ala. Nov. 9,
2016) (collecting cases). As the Defendants note, and the Plaintiffs do not dispute,
9
the foreclosure sale has yet to occur. See docs. 32-1 at 12-13; 40. Therefore, Count
IV fails.
E. The Breach of Contract Claim (Count VI)
In Count VI, the Plaintiffs plead the Defendants breached the mortgage
contract by failing to provide a notice of intent to accelerate and failing to properly
credit payments made towards the mortgage. Doc. 40 at 26-29.4 “In order to
recover on a breach-of-contract claim, a party must establish: (1) the existence of a
valid contract binding the parties; (2) the plaintiff’s performance under the
contract; (3) the defendant’s nonperformance; and (4) damages.” Capmark Bank v.
RGR, LLC, 81 So. 3d 1258, 1267 (Ala. 2011) (citing Reynolds Metals Co. v. Hill,
825 So. 2d 100, 105 (Ala. 2002)). Even if the Plaintiffs’ allegations are true, to
prevail, they must still show they performed under the contract. The Plaintiffs have
failed to make this showing. In fact, they do not address the Defendants’
contention that they fell behind on their loan, never brought it current, entered
default, and never cured their default. See doc. 40. The Plaintiffs assert only
generally that the original loan servicer’s declaration of default was improper,
allegedly because they were not in default. Id. at 3. However, they support this
4
The Plaintiffs also contend the Defendants breached a covenant of good faith and fair dealing
and that Ocwen breached a trial modification agreement it allegedly made with them. Doc. 40 at
27, 30. Neither of these allegations are pleaded in the complaint. See doc. 14. Because a plaintiff
may not amend her complaint through statements made in pleadings, Burgess v. Religious Tech.
Ctr., Inc., 600 F. App’x 657, 665 (11th Cir. 2015) (citing Rosenberg v. Gould, 554 F.3d 962, 967
(11th Cir. 2009)), the court does not consider these contentions.
10
contention only with their own affidavits, in which they state, among other things,
“we claimed that we were not in default,” “Ocwen improperly defaulted my
mortgage loan,” “[Ocwen] could not explain why I was allegedly in default,” and
“I was never sent nor did I receive a proper notice of default[.]” 5 Docs. 40-1 at 3,
6-7; 40-2 at 3, 6-7. None of these statements meet the necessary evidentiary
burden.
The first statement, “we claimed that we were not in default,” falls short of
the relevant standard of personal knowledge to establish that the Plaintiffs were, in
fact, not in default. See Pace, 283 F.3d at 1278 (noting that affidavits in opposition
to a motion for summary judgment must be based on personal knowledge) (citing
Fed. R. Civ. P. 56(e)). Rather, it is a “claim[ ],” which does not establish the
Plaintiffs’ performance under the contract. The second statement, “Ocwen
improperly defaulted my mortgage loan,” is a legal conclusion. It is also
conclusory, as the Plaintiffs do not explain why the default was improper or how
they knew it was improper. See Avirgan v. Hull, 932 F.2d 1572, 1577 (11th Cir.
1991) (holding that a party cannot satisfy its burden at summary judgment by
relying on legal conclusions or conclusory allegations) (citing First National Bank
of Arizona v. Cities Serv. Co., 391 U.S. 253, 289 (1968); Fontenot v. Upjohn Co.,
780 F.2d 1190, 1195 (5th Cir. 1986)). The third statement, that “[Ocwen] could not
5
While the Plaintiff filed separate affidavits, their contents are identical. See docs. 40-1, 40-2.
11
explain why I was allegedly in default,” also does not establish that the Plaintiffs
were not in default; it shows only that Ocwen did not provide an explanation of the
reasons for the default. As to the fourth statement, “I was never sent nor did I
receive a proper notice of default,” testimony that the Plaintiffs never received a
notice of default is not testimony they were not in default.
In short, the Plaintiffs’ contentions fall short of establishing their
performance under the contract. Therefore, because the Plaintiffs’ assertion that
they were not in default is not supported by evidence sufficient to satisfy Rule
56(c), and because the Defendants have submitted unrefuted evidence of the
default, see doc. 32-1 at 5-7, the Plaintiffs have failed to meet their burden of
establishing that they performed under the contract. See Hammet v. Paulding Cty.,
875 F.3d 1036, 1049 (11th Cir. 2017) (“Although all reasonable inferences are to
be drawn in favor of the nonmoving party, ‘an inference based on speculation and
conjecture is not reasonable’”) (quoting Ave. CLO Fund, Ltd. V. Bank of Am., N.A.,
723 F.3d 1287, 1294 (11th Cir. 2013)); Morton v. Kirkwood, 707 F.3d 1276, 1284
(11th Cir. 2013) (“When documentary evidence blatantly contradicts a plaintiff’s
account . . . a court should not credit the plaintiff’s version on summary
judgment”) (quoting Witt v. W. Va. State Police, 633 F.3d 272, 276-77 (4th Cir.
2011)) (internal citations omitted); Johnson v. Niehus, 491 F. App’x 945, 949 (11th
Cir. 2012) (explaining that a court need not credit self-serving evidence “which is
12
blatantly contradicted by the record, so that no fair-minded jury could believe it”)
(internal quotation omitted); Vicks v. Knight, 380 F. App’x 847, 852 (11th Cir.
2010) (affirming summary judgment because “a reasonable factfinder could not
believe” the non-movant’s assertions that were “contradicted by all of the relevant
evidence, with the exception of his own affidavit”). As such, because a party that
has not performed its own obligation cannot prevail on a breach of contract claim,
see S. Med. Health Sys., Inc. v. Vaughn, 669 So. 2d 98, 99 (Ala. 1995), Count VI
fails.
F. The False Light Claim (Count VIII)
In Count VIII, the Plaintiffs plead that the Defendants placed them in a false
light by publishing notices regarding the foreclosure sale. Doc. 14 at 13-14. Under
Alabama law,
One who gives publicity to a matter concerning another that places the other
before the public in a false light is subject to liability to the other for
invasion of his privacy, if
(a) the false light in which the other was placed would be highly offensive to
a reasonable person, and
(b) the actor had knowledge of or acted in reckless disregard as to the falsity
of the publicized matter and the false light in which the other would be
placed.
Regions Bank v. Plott, 897 So. 2d 239, 244 (Ala. 2004) (quoting Butler v. Town of
Argo, 871 So. 2d 1, 12 (Ala. 2003)) (internal quotation marks omitted). “A falselight claim does not require that the information made public be private, but it does
13
require that the information . . . be false.” Id. (citing Butler, 871 So. 2d at 12)
(internal quotation marks omitted) (emphasis and alterations in original).
The Plaintiffs contend they were not in default, and that the publication of
articles stating otherwise constitutes a false statement. Doc. 40 at 23-24. However,
as discussed supra at III.E, the Plaintiffs’ contention is not supported by evidence
sufficient to satisfy Rule 56(c). Summary judgment is a time to “put up or shut up.”
Siegel v. Shell Oil Co., 612 F.3d 932, 937 (7th Cir. 2010) (quoting Johnson v.
Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003)). To the extent that the
Plaintiffs were in fact current on their mortgage, they should have produced the
relevant evidence in opposition to the motion. Stating that they were not in default
is insufficient for the reasons offered previously. Thus, because there is nothing in
the record contradicting the truthfulness of the Defendants’ statements, the motion
is due to be granted as to Count VIII.
G. The Defamation Claim (Count IX)
In Count IX, the Plaintiffs plead a defamation claim based on the
Defendants’ same statements that the Plaintiffs were in default. Doc. 14 at 14-16.
A prima facie claim for defamation under Alabama law requires, among other
things, “a false/defamatory statement concerning the plaintiff[.]” Temploy, Inc. v.
Nat’l Council on Comp. Ins., 650 F. Supp. 2d 1145, 1155 (S.D. Ala. 2009) (citing
Delta Health Group Inc. v. Stafford, 887 So. 2d 887, 895-96 (Ala. 2004); Gary v.
14
Crouch, 867 So. 2d 310, 315 (Ala. 2003); Nelson v. Lapeyrouse Grain Corp., 534
So. 2d 1085, 1091 (Ala. 1988)). For the same reason discussed supra at III.F, i.e.
that the Plaintiffs have not produced sufficient evidence to establish that they were
not in default, they are unable to satisfy this element of their defamation claim.
Therefore, Count IX also fails.
H. The TILA Claim (Count X)
In Count X, the Plaintiffs plead the Defendants violated sections 1605,
1632(a), 1638(a)(3), 1638(a)(4), and 1638(b) of the TILA by making unauthorized
charges, improperly amortizing the loan, and failing to make the necessary
disclosures regarding these acts. Doc. 14 at 16-18. The TILA requires creditors to
provide consumers with “clear and accurate disclosures of terms dealing with
things like finance charges, annual percentage rates of interest, and the borrower’s
rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998). A TILA claim
under the provisions relevant here is time-barred if it is not filed “within one year
from the date of the occurrence of the violation.” Adams v. Bank of Am., N.A., 237
F. Supp. 3d 1189, 1204 (N.D. Ala. 2017), appeal dismissed sub nom. Adams v.
Bank of Am., NA, No. 17-12172-FF, 2018 WL 2229331 (11th Cir. Mar. 15, 2018)
(citing 15 U.S.C. § 1640(e)). “The violation ‘occurs’ when the transaction is
consummated. Nondisclosure is not a continuing violation for purposes of the
15
statute of limitations.” Velardo v. Fremont Inv. & Loan, 298 F. App’x 890, 892
(11th Cir. 2008) (citing In re Smith, 737 F.2d 1549, 1552 (11th Cir. 1984)).
The Defendants contend the statute of limitations began to run when the
Plaintiffs consummated the loan on March 25, 2004. Doc. 32-1 at 23-24. The
Plaintiffs counter that every monthly statement from Ocwen since 2012 has
violated the TILA by improperly adding new charges, bringing their claim within
the statute of limitations. Doc. 40 at 40-41. However, the TILA “provides remedies
for inadequate disclosures, not for the charging of unlawful fees.” Rice v. Seterus,
Inc., No. 7:17-CV-00732-RDP, 2018 WL 513345, at *10 (N.D. Ala. Jan. 23,
2018). Therefore, this alleged conduct, which is not a TILA violation, has no
bearing on the statute of limitations. Thus, as the Plaintiffs do not dispute that they
consummated the loan transaction on May 25, 2004, see doc. 40, their TILA claim,
Count X, is barred by the statute of limitations.
I. The RESPA Claim (Count XI)
In Count XI, the Plaintiffs allege the Defendants violated the RESPA by
failing to respond to two QWRs, and by making untimely responses. Doc. 14 at 1819. The RESPA requires loan servicers to provide a written response to a QWR
within thirty days, excluding Saturdays, Sundays, and public holidays. 12 U.S.C.
§ 2605(e). To state a RESPA claim for failure to respond to a QWR, a plaintiff
must allege that “(1) the defendant is a loan servicer under the statute; (2) the
16
plaintiff sent a qualified written request consistent with the requirements of the
statute; 6 (3) the defendant failed to respond adequately within the statutorily
required days; and (4) the plaintiff has suffered actual or statutory damages.”
Correa v. BAC Home Loans Servicing LP, No. 6:11-CV-1197-ORL-22, 2012 WL
1176701, at *6 (M.D. Fla. Apr. 9, 2012) (citing Frazile v. EMC Mortg. Corp., 382
F. App’x 833, 836 (11th Cir. 2010); Williams v. America’s Servicing Co., No.
2:09-CV-755-FTM-29DNF, 2011 WL 1060652, at *2 (M.D. Fla. Mar. 22, 2011)).
The parties disagree on whether the Plaintiffs sent two or four QWRs to the
Defendants, including the two the Plaintiffs contend the Defendants never
answered. See docs. 32-1 at 9; 40 at 5-6. There are two critical flaws with the
Plaintiffs’ assertion they sent four QWRs. First, they have failed to produce copies
of these QWRs, which they contend their lawyer sent to Ocwen. See doc. 40 at 5-6.
The Plaintiffs’ failure to provide these two purported QWRs as evidentiary support
of their contentions is fatal to their prima facie case, which requires in part that
they show they “sent a qualified written request consistent with the requirements of
the statute.” See Correa, 2012 WL 1176701, at *6. In the absence of these two
QWRs, there is no way for the court to discern whether the Plaintiffs, in fact, sent
6
The RESPA defines a QWR as “a written correspondence from the borrower to the servicer”
that (1) “includes, or otherwise enables the servicer to identify, the name and account of the
borrower;” and (2) “includes a statement of the reasons for the belief of the borrower, to the
extent applicable, that the account is in error or provides sufficient detail to the servicer
regarding other information sought by the borrower.” 12 U.S.C. § 2605(e)(1)(B).
17
documents that complied “with the requirements of the statute.” Id. In other words,
the Plaintiffs have failed to prove their claim.
Second, the only evidence the Plaintiffs cite in support of their position, their
affidavit testimony, is inconsistent with James McLaughlin’s previous deposition
testimony that he was only aware of two QWRs his counsel had sent to the
Defendants. 7 See doc. 32-4 at 37. “In limited circumstances, a district court can
disregard an affidavit as a matter of law when, without explanation, it flatly
contradicts the affiant’s own prior deposition testimony for the transparent purpose
of creating a genuine issue of fact where none existed previously.” Bell v. City of
Auburn, Alabama, 722 F. App’x 898, 899 (11th Cir. 2018) (citing Furcron v. Mail
Centers Plus, LLC, 843 F.3d 1295, 1306 (11th Cir. 2016)). “For an affidavit to be
disregarded as a sham, a party must have given clear answers to unambiguous
questions that negated the existence of any genuine issue of material fact.” Id.
(citing Van T. Junkins & Assocs. v. U.S. Indus., 736 F.2d 656, 657 (11th Cir.
1984)). “A definite distinction must be made between discrepancies which create
transparent shams and discrepancies which create an issue of credibility or go to
the weight of the evidence.” Tippens v. Celotex Corp., 805 F.2d 949, 953 (11th Cir.
1986).
7
Sherry McLaughlin testified that she was present for the entirety of James McLaughlin’s
deposition and did not disagree with any of the answers he gave, except as to the age of their son.
Doc. 32-5 at 11.
18
The question James McLaughlin answered—“[b]esides these two QWRs,
are you aware of any other QWRs that were sent to Ocwen?”—is unambiguous,
while his answer—“[n]o, sir”—is clear. See doc. 32-4 at 37. The Plaintiffs have not
presented any explanation for the discrepancy between the deposition and the
affidavits. See doc. 40. Accordingly, the court disregards, as a matter of law, those
portions of the Plaintiffs’ affidavits stating that they sent four QWRs to the
Defendants, and finds that as to the two disputed QWRs, the Plaintiffs have failed
to meet their burden.
This leaves the court with the parties’ dueling assertions as to whether the
Defendants timely responded to the two undisputed QWRs. See docs. 32-1 at 25;
40 at 5-6. This issue is a quintessential dispute of material fact for a jury to resolve.
Accordingly, the motion is due to be denied solely as to the two QWRs the
Defendants acknowledge receiving.
J. The FCRA Claim (Count XII)
In Count XII, the Plaintiffs allege the Defendants violated sections 1681s2(a) and 1681s-2(b) of the FCRA by reporting false information to CRAs and
failing to properly investigate and respond to credit disputes.8 Doc. 14 at 20-21.
“The FCRA imposes a duty on furnishers . . . to provide accurate information to
8
While the complaint pleads Count XII against all Defendants, the Plaintiffs do not dispute that
they fail to allege that any CRA notified Mellon of their credit disputes. See docs. 32-1 at 27; 40.
Accordingly, the motion is due to be granted as to the FCRA claim, if any, against Mellon.
19
consumer reporting agencies, and further prohibits a furnisher from reporting
information that the furnisher knows or has reasonable cause to believe is
inaccurate.” Adams, 237 F. Supp. 3d at 1206 (citing 15 U.S.C. § 1681s-2(a)(1)(A)).
“But, it is axiomatic that no private right of action exists for such violations of
section 1681s-2(a).” Id. (citing 15 U.S.C. § 1681s-2(c)(1); Peart v. Shippie, 345 F.
App’x 384, 386 (11th Cir. 2009)). Indeed, the Plaintiffs do not dispute this. See
doc. 40 at 20-23. Thus, summary judgment is due as to the § 1681s-2(a) claim.
As for the § 1681s-2(b) claim, the “FCRA does provide a private right of
action for a violation of section 1681s-2(b).” Adams, 237 F. Supp. 3d at 1206
(citing Green v. RBS Nat. Bank, 288 F. App’x 641, 642 (11th Cir. 2008); Peart,
345 F. App’x at 386). “Section 1681s-2(b) requires that, when a consumer
reporting agency notifies a furnisher of a dispute regarding its reporting, the
furnisher must conduct an investigation to verify the accuracy of that reporting and
report the results to the consumer reporting agency.” Id. (citing 15 U.S.C. § 1681s2(b)). Regardless of the results of its investigation, the furnisher must report back
to any CRA that notified it of the dispute. 15 U.S.C. § 1681s-2(b)(1)(C). If the
investigation results in a finding that the furnisher provided incomplete or
inaccurate information to the CRA, it must report the results of its investigation to
all other CRAs that received such incomplete or inaccurate information. 15 U.S.C.
§ 1681s-2(b)(1)(D). Finally, if the investigation is inconclusive or results in a
20
finding that the furnisher provided incomplete or inaccurate information to the
CRA, then the furnisher must “promptly modify that item of information; delete
that item of information; or permanently block the reporting of that item of
information.” 15 U.S.C. § 1681s-2(b)(1)(E).
The Plaintiffs’ only rebuttal to the Defendants’ contention that Ocwen
satisfied its duty under 15 U.S.C. § 1681s-2(b) is a somewhat muddled argument,
simultaneously contending “the false information nevertheless was not corrected,”
doc. 40 at 22-23, while stating also that “Ocwen deleted the inaccurate information
it had been reporting regarding the [Plaintiffs’] account,” id. at 5. In light of the
Plaintiffs’ admission that Ocwen deleted the disputed information, the record
supports the Defendants’ contention that Ocwen complied with the FCRA by
initiating an investigation after Experian and Equifax notified it of the Plaintiffs’
credit disputes, deleting the disputed reporting, and notifying Experian and Equifax
of this result. See Hinkle v. Midland Credit Mgmt., Inc., 827 F.3d 1295, 1304 (11th
Cir. 2016) (citing 15 U.S.C. § 1681s-2(b)(1)(E)). Therefore, Count XII fails.
K. The FDCPA Claim (Count XIII)
In Count XIII, the Plaintiffs assert the Defendants violated the FDCPA by
attempting to collect amounts not owed, seeking unjustified amounts, improperly
threatening legal action, and falsely stating amounts of debt owed. Doc. 14 at 2223. To assert a FDCPA claim, a plaintiff must show that “(1) the plaintiff has been
21
the object of collection activity arising from consumer debt, (2) the defendant is a
debt collector as defined by the FDCPA,9 and (3) the defendant has engaged in an
act or omission prohibited by the FDCPA.” Janke v. Wells Fargo & Co., 805 F.
Supp. 2d 1278, 1281 (M.D. Ala. 2011) (citing Kaplan v. Assetcare, Inc., 88 F.
Supp. 2d 1355, 1360-61 (S.D. Fla. 2000)). To support their contention that the
Defendants are debt collectors, the Plaintiffs point to a number of allegations,
including that the Defendants attempted a non-judicial foreclosure; attempted to
collect debts using illegal and unconscionable methods; sought to collect an
incorrect amount of debt in the default and acceleration notices; instituted an
improper foreclosure based on an improper acceleration; and made statements,
letters, and phone calls trying to collect past due amounts. Doc. 40 at 11-20.
However, none of these contentions address the actual standard—i.e., whether the
primary purpose of either Defendant’s business is to collect debts, or whether
either regularly collect debts owed to another. See 15 U.S.C. § 1692a(6). Discovery
is designed in part for a party to obtain the relevant evidence on an issue on which
that party has the burden of proof, or as the Seventh Circuit aply put it, “to put up
or shut up.” Siegel, 612 F.3d at 937. The Plaintiffs have failed to do so, and cannot
support their FDCPA claim by ignoring the actual standard required under the law.
9
The FDCPA defines a debt collector as “any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of which is the collection of any
debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another.” 15 U.S.C. § 1692a(6).
22
In the absence of the requisite evidence to support the Plaintiffs’ contentions, the
court cannot find, as a matter of law, that the Defendants are debt collectors.
Therefore, Count XIII also fails.
IV. CONCLUSION AND ORDER
For the reasons explained above, the parties’ respective motions to strike,
doc. 41 and doc. 42, are DENIED. The Defendants’ motion for summary
judgment, doc. 32, is GRANTED in part. With the exception of Count XI—in
particular, as it relates to the two QWRs the Defendants acknowledge receiving—
the Plaintiffs’ claims against the Defendants are DISMISSED WITH
PREJUDICE.
DONE the 26th day of June, 2018.
_________________________________
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
23
EXHIBIT A
24
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
PRE-TRIAL DOCKET
HON. ABDUL K. KALLON, PRESIDING
BIRMINGHAM, ALABAMA
This case is set for a pre-trial hearing pursuant to Rule 16 of the Federal
Rules of Civil Procedure. A conference-type hearing will be held in the 4th floor
jury assembly room in the Hugo Black Federal Courthouse in Birmingham,
Alabama at the time indicated.
The hearing will address all matters provided in Rule 16, including the
limitation of issues requiring trial, rulings on pleading motions, and settlement
possibilities.
Counsel attending the conference are expected to be well-informed about the
factual and legal issues of the case, and to have authority to enter appropriate
stipulations and participate in settlement discussions. Counsel appearing at the
conference will be required to proceed at trial notwithstanding the naming of
others as designated trial counsel.
Promptly upon receipt of this notice, plaintiff’s counsel is to initiate
discussions with other counsel aimed at ascertaining which basic facts are not in
dispute, at clarifying the parties’ contentions (for example, just what is denied
under a “general denial”) and at negotiating workable procedures and deadlines
for remaining discovery matters. At least four (4) business days in advance of the
conference, plaintiff’s counsel is to submit to chambers (via email at
kallon_chambers@alnd.uscourts.gov) a proposed Pre-trial Order in WordPerfect or
Microsoft Word format, furnishing other counsel with a copy. It is anticipated that
in most cases the proposed order, with only minor insertions and changes, could be
adopted by the court and signed at the close of the hearing.
A sample of a proposed Pre-trial Order is available on the Chamber web site
(www.alnd.uscourts.gov/Kallon/Kallonpage) to illustrate the format preferred by
the court and also to provide additional guidance and instructions. Each order
must, of course, be tailored to fit the circumstances of the individual case.
25
Counsel drafting this proposed order should consider the utility this
document will provide for the litigants, the jury, and the court alike. The court
anticipates using the pretrial order to (1) identify and narrow the legal and factual
issues remaining for trial, and (2) provide jurors with the legal and factual context
of the dispute. This order should not revisit at length arguments made in previous
filings with the court, nor should it serve as another venue for adversarial
posturing. Pretrial orders should be simple, short, and informative.
IN ANY CASE WHERE COUNSEL HAVE ANNOUNCED
SETTLEMENT TO THE COURT, A CONSENT JUDGMENT IN
SATISFACTORY FORM MUST BE PRESENTED TO THE COURT PRIOR
TO THE SCHEDULED TRIAL DATE; OTHERWISE, THE CASE WILL BE
DISMISSED WITH PREJUDICE.
26
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