Hickcox v. Rocket Mortgage, LLC

Filing 55

ORDER signed by Chief District Judge Troy L. Nunley on 01/24/25 DENYING 49 Motion for Reconsideration and ORDERING parties to file a Joint Status Report within 30 days indicating their readiness to proceed to trial on Plaintiff's remaining claims and proposing trial dates. (Deputy Clerk AJB)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NICOLE HICKCOX,

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No. 2:22-cv-00437-TLN-CSK

Plaintiff,

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v.

ORDER

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ROCKET MORTGAGE, LLC,

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Defendant.

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This matter is before the Court on Defendant Rocket Mortgage, LLC’s (“Defendant”)

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Motion for Reconsideration. (ECF No. 49.) Plaintiff Nicole Hickcox (“Plaintiff”) filed an

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opposition. (ECF No. 51.) Defendant filed a reply. (ECF No. 54.) For the reasons set forth

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below, the Court DENIES Defendant’s motion.

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I.

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This case arises out of a dispute regarding home insurance coverage. On October 15,

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2019, Plaintiff executed a promissory note in favor of Defendant, in the amount of $171,762 (the

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“Note”) to refinance real property located at 4371 Park Woods Dr., Pollock Pines, California,

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95726 (the “Property”). (ECF No. 41-1 at 2.) That same day, Plaintiff executed and granted a

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Deed of Trust in favor of Defendant on the Property to secure payment for the Note. (Id.) The

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Note and Deed of Trust will be collectively referred to as the “Refinance Loan.” (Id.) Defendant

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is the originator and servicer of the Refinance Loan. (Id.)

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FACTUAL AND PROCEDURAL BACKGROUND

The Deed of Trust requires Plaintiff to maintain hazard insurance on the Property. (Id.)

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In July 2019, prior to closing the Refinance Loan, Plaintiff obtained two different hazard

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insurance policies: one from California Fair Plan (“CFP”) and one from California State

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Automobile Association (“CSAA”). (Id. at 3.) AAA acted as Plaintiff’s broker. (Id. at 5.) The

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Deed of Trust also requires Defendant to hold Plaintiff’s funds in escrow for the purpose of

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paying insurance premiums as they come due. (Id. at 2–3.)

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When Defendant originated the Refinance Loan in its system, Defendant incorrectly

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inputted the CSAA policy as the top line policy. (ECF No 41-1. at 4–5.) If the policies had been

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put into Defendant’s system correctly, the CSAA payment would have been sent to AAA, while

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the CFP payment would have gone to CFP directly. (Id. at 5.) Because the policies were entered

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into Defendant’s system incorrectly, Defendant did not send CFP any money and instead sent

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AAA money for both the CFP policy and the CSAA policy. (Id.) When AAA received this

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overpayment, it issued Plaintiff a direct refund for the CFP policy amount but did not notify

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Defendant of the mistake. (Id. at 6.) Due to Defendant’s failure to pay the CFP premium, the

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policy lapsed in January 2020 (the “first lapse”). (ECF No. 39-6 at 7.)

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On March 16, 2020, Plaintiff suffered damage to the exterior deck of her home (the

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“Loss”). (ECF No. 41-1 at 6.) The parties dispute the specific cause of the loss. (See ECF No.

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39-6 at 7; ECF No. 41-1 at 6–7.) Plaintiff asserts the loss was caused by a windstorm (a covered

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peril under the CFP policy), while Defendant claims the loss was caused by heavy snow and/or

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record precipitation (a non-covered peril under the CFP policy). (ECF No. 39-6 at 7.)
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Around June 2020, Plaintiff told Defendant about the loss and that the CFP policy was not

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active at the time of the loss. (Id. at 8.) In response, Defendant contacted Assurant, Defendant’s

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exclusive provider of lender-placed policies, to purchase hazard insurance on Plaintiff’s behalf

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that would retroactively cover the loss. (Id. at 9, 15.) Defendant purchased a policy through

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Assurant to adjust Plaintiff’s otherwise uninsured loss and billed Plaintiff in the amount of $1,206

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from her impound account to pay for the policy. (Id. at 9.) The Assurant policy provided

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coverage for the repair of damage to Plaintiff’s home but did not provide coverage for contents or

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loss of use. (Id. at 10.) Assurant investigated Plaintiff’s claim and decided to retroactively cover

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the loss in the amount of $5,170.33. (ECF No. 41-1 at 12–13.)

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Following the close of Assurant’s retroactive policy, Plaintiff renewed her CFP policy in

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October 2020. (ECF No. 41-1 at 12.) Plaintiff’s AAA broker sent the renewed application on

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Plaintiff’s behalf. (Id. at 13.) However, Plaintiff’s broker did not update the application to reflect

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Defendant’s new address on the application’s mortgagee clause. (Id.) The new policy therefore

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lapsed again due to failure to pay (the “second lapse”). (Id.) Defendant subsequently notified

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Plaintiff it would purchase hazard insurance on her behalf because the CFP policy expired. (ECF

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No. 39-6 at 14.) Accordingly, on December 13, 2021, after two prior notices, Defendant sent

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Plaintiff a notice of force-placed insurance. (ECF No. 44-1 at 14.)

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On March 8, 2022, Plaintiff filed this action against Defendant alleging: (1) violations of

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12 U.S.C. § 2605(g), (k) (“§ 2605”) of the Real Estate Settlement Procedures Act (“RESPA”) and

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California Financial Code § 50505; (2) breach of fiduciary duty; (3) breach of contract; (4) breach

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of the covenant of good faith and fair dealing; and (5) negligence. (ECF No. 1.) Plaintiff moved

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for partial summary judgment on the RESPA and breach of fiduciary duty claims and voluntarily

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dismissed all remaining claims. (ECF Nos. 32, 33.) Defendant opposed Plaintiff’s motion and

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filed a countermotion for summary judgment. (ECF No. 39.)

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On February 29, 2024, the Court denied Plaintiff’s motion for summary judgment. (ECF

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No. 48 at 15.) In the same order, the Court granted Defendant’s countermotion for summary

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judgment as to Plaintiff’s § 2605(g) claim pertaining to the second lapse, and as to the § 2605(k)

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claims pertaining to both the first and second lapse. (Id.) The Court denied Defendant’s motion
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in all other respects. (Id.) Accordingly, the only remaining claims in this action are: (1) violation

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of § 2605(g) as it pertains to the first lapse; and (2) breach of fiduciary duty as it relates to the

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first lapse. On March 27, 2024, Defendant filed the instant motion for reconsideration. (ECF No.

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49 at 1.)

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II.

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The Court may grant reconsideration under either Federal Rule of Civil Procedure

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(“Rule”) 59(e) or 60(b). See Schroeder v. McDonald, 55 F.3d 454, 458–59 (9th Cir. 1995). A

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motion to alter or amend a judgment under Rule 59(e) must be filed no later than 28 days after the

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entry of judgment. Fed. R. Civ. P. 59(e). Therefore, a “motion for reconsideration” is treated as a

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motion to alter or amend judgment under Rule 59(e) if it is filed within 28 days of entry of

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judgment. Rishor v. Ferguson, 822 F.3d 482, 489–90 (9th Cir. 2016); see Am. Ironworks &

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Erectors, Inc. v. N. Am. Const. Corp., 248 F.3d 892, 898–99 (9th Cir. 2001). Otherwise, it is

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treated as a Rule 60(b) motion for relief from judgment or order. Id.

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STANDARD OF LAW

Under Rule 60(b), the Court may relieve a plaintiff from a final judgment, order, or

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proceeding “for any of the following reasons: (1) mistake, inadvertence, surprise, or excusable

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neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been

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discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called

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intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is

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void; (5) the judgment has been satisfied, released, or discharged; it is based on an earlier

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judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

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(6) any other reason that justifies relief.” Fed. R. Civ. P. 60(b).
“A motion for reconsideration should not be granted, absent highly unusual

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circumstances, unless the district court is presented with newly discovered evidence, committed

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clear error, or if there is an intervening change in the controlling law.” Marlyn Nutraceuticals,

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Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009). “A motion for

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reconsideration may not be used to raise arguments or present evidence for the first time when

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they could reasonably have been raised earlier in the litigation.” Id. (emphasis in original).

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Additionally, where the motion for reconsideration pertains to an order granting or

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denying a prior motion, Local Rule 230(j) requires the moving party to “[identify] what new or

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different facts or circumstances are claimed to exist which did not exist or were not shown upon

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such prior motion, or what other grounds exist for the motion; and [explain] why the facts or

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circumstances were not shown at the time of the prior motion.” E.D. Cal. L.R. 230(j)(3)–(4).

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Moreover, district courts retain inherent authority to revise interim or interlocutory orders

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any time before entry of judgment. See, e.g., Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir.

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1996) (“the interlocutory orders and rulings made pre-trial by a district judge are subject to

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modification by the district judge at any time prior to final judgment”) (citation omitted)); Balla

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v. Idaho State Bd. of Corr., 869 F.2d 461, 465 (9th Cir. 1989); Fed. R. Civ. P. 54(b). A district

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court may reconsider and reverse a previous interlocutory decision for any reason it deems

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sufficient, even in the absence of new evidence or an intervening change in or clarification of

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controlling law. Washington v. Garcia, 977 F. Supp. 1067, 1068–69 (S.D. Cal. 1997). But a

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court should generally leave a previous decision undisturbed absent a showing that it either

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represented clear error or would work a manifest injustice. Christianson v. Colt Indus. Operating

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Corp., 486 U.S. 800, 817 (1988).

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III.

ANALYSIS

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Defendant requests the Court reconsider its denial of summary judgment as to Plaintiff’s §

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2605(g) claim related to the first lapse. (ECF No. 49.) The RESPA imposes certain statutory

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responsibilities on loan servicers regarding borrowers’ accounts. See generally 12 U.S.C. § 2605.

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A plaintiff bringing a RESPA claim must show: (1) a statutory violation based on the defendant’s

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failure to comply with RESPA; and (2) that actual damages resulted from the violation. Read v.

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Cenlar FSB, No. EDCV 21-504 JGB, 2021 WL 6618659, at *6 (C.D. Cal. Sept. 30, 2021).

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In its prior order, the Court concluded Defendant violated § 2605(g) by failing to pay

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Plaintiff’s CFP premiums out of the designated escrow account. (ECF No. 48 at 7); see 12 U.S.C.

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§ 2605(g) (requiring that where the terms of a loan require the borrower to make payments into an

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escrow account for insurance premiums, “the servicer shall make payments from the escrow

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account for such . . . insurance premiums . . . in a timely manner as such payments become due”).
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However, the Court concluded there are triable issues as to actual damages and denied summary

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judgment on that basis.1 (ECF No. 48 at 7–10.) In its summary judgment briefing, Defendant

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argued there are no actual damages because the $5,170.33 Assurant paid for the repairs to

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Plaintiff’s deck made her whole. (ECF No. 39-1 at 12.) The Court disagreed. (ECF No. 48 at 8.)

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The Court found there is sufficient evidence to create at the very least a reasonable inference that

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Plaintiff would have recovered more under the CFP policy than she did under the Assurant

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policy. (Id.) As an example, the Court pointed out there is evidence the CFP policy afforded

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coverage for contents and loss of use, while the Assurant policy did not. (Id.) In addition, the

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Court found there are triable issues as to whether Plaintiff’s purported mental distress constituted

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actual damages. (Id. at 8–9.)

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In moving for reconsideration, Defendant argues the Court’s decision constituted clear

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error and/or would result in manifest injustice. (ECF No. 49 at 4.) Defendant’s motion lacks

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clarity, but the Court gleans three main arguments from the motion: (1) there is insufficient

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evidence Plaintiff would have recovered more under the CFP policy; (2) Plaintiff’s mental

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distress damages do not constitute actual damages under RESPA; and (3) Plaintiff cannot bring

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this action because she failed to comply with her obligations under the Deed of Trust. (Id. at 4–

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13.) The Court will address Defendant’s arguments in turn.

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A. Whether Plaintiff Would Have Recovered More Under the CFP Policy

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Defendant first takes issue with the Court’s conclusion that there are triable issues as to

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whether Plaintiff would have recovered more under the CFP policy than she did under the

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Assurant policy. (ECF No. 49 at 4–5.) In reaching this conclusion, the Court relied on various

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pieces of evidence: (1) Plaintiff’s declaration stating she suffered more than $10,000 to her

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contents and more than $75,000 in damage to the home; (2) Defendant’s admission that the

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Assurant policy did not afford coverage for contents or loss of use; and (3) the deposition of

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Defendant’s Person Most Knowledgeable (“PMK”) that the CFP policy afforded coverage for

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The Court addressed both parties’ motions for summary judgment together, as there were
overlapping arguments. Both parties failed to persuade the Court they are entitled to judgment as
a matter of law on the issue of actual damages.
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contents and loss of use while the Assurant policy did not. (ECF No. 48 at 8.) The Court found

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this evidence, taken together, creates at the very least a reasonable inference that Plaintiff would

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have recovered more under the CFP Policy than she did under the Assurant policy. (Id.)

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In the instant motion for reconsideration, Defendant argues there is no evidence the CFP

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Policy would have covered loss of use. (ECF No. 49 at 5–6 (citing ECF No. 39-3 at 242).) Next,

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Defendant argues even if the CFP policy could be interpreted to cover loss of use, Plaintiff failed

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to plead any facts about contents or loss of use in the Complaint. (Id. at 7.) Defendant also

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argues Plaintiff never made a claim to Defendant for contents or loss of use, and Plaintiff herself

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stated there was no interior damage or damage to any contents. (Id. at 8–9.)

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Defendant raised some of these arguments in its motion for summary judgment. (See,

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e.g., ECF No. 39-1 at 12 (arguing Plaintiff never advised Defendant there was any kind of loss

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other than her deck, Plaintiff does not provide evidence for additional damages, and Plaintiff

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advised the adjuster at her property there was no personal property loss or interior damage).)

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However, Defendant failed to cite evidence or legal authority to support those vague,

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undeveloped arguments. (Id.) Defendant also argued in its motion for summary judgment that

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the CFP policy would not have covered the loss, but Defendant’s argument was that Plaintiff

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failed to establish a covered peril caused the loss. (Id. at 13–14, 16.) Defendant did not argue, as

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it does now, that the CFP policy did not cover contents or loss of use, and Defendant fails to

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adequately explain why it failed to raise this argument sooner.2 As to Defendant’s argument that

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Plaintiff failed to plead facts about contents or loss of use in the Complaint, Defendant raised this

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argument for the first time in its reply brief despite having the opportunity to raise such an

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argument in its original motion. (ECF No. 42 at 6.) Lastly, while Defendant asserts the Court

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incorrectly relied on Plaintiff’s self-serving declaration, Defendant ignores that the Court

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considered other evidence as well — namely, Defendant’s PMK deposition testimony that the

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CFP policy covered both loss of use and contents. (ECF No. 32-4 at 102.)

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In her motion for summary judgment, Plaintiff argued she suffered actual damages based
on uncompensated losses for: repairs to her home; replacement of her personal property; costs
associated with alternative housing during repairs of her home; and emotional distress. (ECF No.
32-1 at 12–13, 18.) She also repeatedly mentioned contents and loss of use. (Id. at 5–6, 8–10.)
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As the Court stated in its prior order, the summary judgment briefing from both parties

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lacked clarity. (ECF No. 48 at 7–8.) Many of Defendant’s arguments lacked citations to

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evidence or authority and were devoid of meaningful analysis. In the instant motion for

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reconsideration, Defendant improperly attempts to bolster its earlier arguments and raises new

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arguments that could have been raised in its motion for summary judgment. See Marlyn

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Nutraceuticals, Inc., 571 F.3d at 880 (“A motion for reconsideration may not be used to raise

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arguments or present evidence for the first time when they could reasonably have been raised

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earlier in the litigation.”) (citation and internal quotation marks omitted) (emphasis in original);

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Garcia v. Biter, 195 F. Supp. 3d 1131, 1133 (E.D. Cal. 2016) (“A motion for reconsideration may

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not be used to get a second bite at the apple.”) (citation and quotation marks omitted).

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For these reasons, the Court DENIES Defendant’s motion to reconsider as to the Court’s

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finding that there are triable issues about whether Plaintiff would have recovered more under the

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CFP policy than she did under the Assurant policy.

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B. Whether Plaintiff’s Mental Distress Damages Constitute Actual Damages
Defendant next requests the Court reconsider its finding that Plaintiff’s potential mental

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distress damages also created a triable issue as to actual damages. (ECF No. 49 at 9.) In its prior

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order, the Court noted that Plaintiff alleges in her declaration that she suffered “substantial stress,

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upset, and financial worry” because of the CFP policy lapse. (ECF No. 48 at 8.) The Court then

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noted that while Defendant asserted in its reply brief that RESPA does not cover “that type of

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damage,” Defendant failed to provide authority to support its assertion. (Id. at 9.) The Court

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went on to cite two district court cases that found emotional distress damages may constitute

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actual damages for RESPA violations. (Id. (citing Veloz v. Green Tree Servicing LLC, No. CV-

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13-00915-PHX-DGC, 2014 WL 2215866, at *4 (D. Ariz. May 29, 2014); Craig v. Capital One,

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N.A., No. CV 17-3788-DMG (AJWx), 2018 WL 5857987, at *6 (C.D. Cal. Apr. 10, 2018)).)

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In moving for reconsideration, Defendant argues the Court’s statement that Defendant

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failed to provide authority was inaccurate because Defendant cited two cases holding that a

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borrower may not recover actual damages for nonpecuniary losses under RESPA. (ECF No. 49 at

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Spraggins v. Caliber Home Loans, Inc., No. 3:20-cv-01906-S-BT, 2020 WL 8366645, at *7

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(N.D. Tex. Dec. 31, 2020)).) Defendant also argues there is insufficient evidence, other than

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Plaintiff’s self-serving declaration, to establish that she suffered emotional distress. (ECF No. 49

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at 10 (citing Storms v. Flagstar Bank, FSB, No. 2:22-cv-00650-RAJ, 2023 WL 3723557, at *6

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(W.D. Wash. May 30, 2023)).)

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The Court notes that Defendant did not raise arguments about Plaintiff’s alleged

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emotional distress in its motion for summary judgment and only included such arguments in its

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reply brief. In its reply brief, Defendant cited Lal and Spraggins for general legal standards, but

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Defendant did not adequately analyze how those cases apply to Plaintiff’s specific allegations.

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(ECF No. 42 at 5–6.) Defendant fails to address the fact that neither Lal, Spraggins, nor

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Defendant’s newly cited case, Storms, involved violations of § 2605(g), and all those cases appear

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to be factually distinct from the instant case. Defendant also fails to address the Court’s citation

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to Veloz and Craig, two district court cases that found damages for emotional distress may

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constitute actual damages under RESPA. (ECF No. 48 at 9.) As to the sufficiency of the

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evidence of Plaintiff’s emotional distress, Defendant could have raised this argument in its

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original briefing and does not explain why it failed to do so.

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Accordingly, the Court DENIES Defendant’s motion to reconsider as to the Court’s

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finding that there are triable issues about whether Plaintiff’s potential mental distress damages

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constitute actual damages.

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C. Plaintiff’s Obligations Under the Deed of Trust
Lastly, Defendant argues Plaintiff is prohibited from suing Defendant because Plaintiff

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never notified Defendant of loss of contents, loss of use, or any other damages, as required by the

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Deed of Trust. (ECF No. 49 at 11–12.) Defendant touched on this argument in its motion for

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summary judgment. (ECF No. 39-1 at 12 (arguing Plaintiff never advised Defendant there was a

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loss to personal property, interior damage, or any other kind of loss other than her deck).) In its

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prior order, the Court stated Defendant failed to cite any authority explaining how Plaintiff’s

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purported obligations under the Deed of Trust impact Defendant’s liability under RESPA. (ECF

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No. 48 at 7.) Although Defendant appears to provide fuller argument on the issue in the instant
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motion, Defendant fails to adequately explain why it failed to make these arguments in its motion

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for summary judgment. Therefore, the Court DENIES Defendant’s motion to reconsider as to

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arguments about Plaintiff’s obligations under the Deed of Trust.

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In sum, Defendant fails to persuade the Court that its denial of summary judgment

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“represented clear error or would work a manifest injustice.” Christianson, 486 U.S. at 817.

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Defendant’s summary judgment briefing was disorganized, undeveloped, and unclear, and

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Defendant ultimately failed to persuade the Court that it was entitled to judgment as a matter of

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law on the issue of actual damages. See Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994)

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(quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)) (per curiam) (“[J]udges are

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not like pigs, hunting for truffles buried in briefs.”)). Defendant cannot remedy its deficient

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briefing by using a motion for reconsideration to raise new or improved arguments that could

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have been brought in its original motion. Marlyn Nutraceuticals, Inc., 571 F.3d at 880.

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Accordingly, the Court DENIES Defendant’s Motion for Reconsideration in full.

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IV.

CONCLUSION

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For the foregoing reasons, the Court DENIES Defendant’s Motion for Reconsideration.

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(ECF No. 49.) The parties are ORDERED to file a Joint Status Report within thirty (30) days of

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the electronic filing date of this Order indicating their readiness to proceed to trial on Plaintiff’s

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remaining claims and proposing trial dates.

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IT IS SO ORDERED.

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Date: January 24, 2025

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___________________________________
TROY L. NUNLEY
CHIEF UNITED STATES DISTRICT JUDGE

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