Gritters v. Ocwen Loan Servicing, LLC. et al

Filing 236

MEMORANDUM Opinion and Order. Defendant Pierce & Associates, P.C.'s Motion for Summary Judgment 185 denied, Plaintiff's Motion for Summary Judgment Against Defendant Pierce & Associates, P.C., 196 is granted, Defendant Ocwen Loan Servic ing, LLC's Motion for Summary Judgment 188 is granted in part and denied in part, and Plaintiff's Motion for Summary Judgment Against Defendant Ocwen Loan Servicing, LLC, 200 is granted in part and denied in part. A status is set for May 8, 2018 at 9:30 a.m. Notices mailed by judge's staff (ntf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DONNNA M. GRITTERS,
Plaintiff,
Case No. 14 C 916
v.
Judge Jorge L. Alonso
OCWEN LOAN SERVICING, LLC;
NATIONSTAR MORTGAGE, LLC; and
PIERCE & ASSOCIATES, P.C.,
Defendants.

MEMORANDUM OPINION AND ORDER
For the following reasons, Defendant Pierce & Associates, P.C.’s Motion for Summary
Judgment [185] is denied, Plaintiff’s Motion for Summary Judgment Against Defendant Pierce
& Associates, P.C., [196] is granted, Defendant Ocwen Loan Servicing, LLC’s Motion for
Summary Judgment [188] is granted in part and denied in part, and Plaintiff’s Motion for
Summary Judgment Against Defendant Ocwen Loan Servicing, LLC, [200] is granted in part
and denied in part.
Before turning to the discussion, the Court notes at the outset the difficulties it
encountered with the parties’ presentations. First, complaint allegations are not proper support
for asserted statements of fact, and to the extent any asserted fact was supported only in this way,
it was not considered. Second, disputes of asserted facts supported only with arguments instead
of citations to the record are also improper. Where a party failed to properly support its dispute,
the asserted facts were deemed undisputed. Third, the parties’ practice of citing lengthy exhibits
without page or line references, and the parties’ multiple mathematical errors and/or scrivener’s
errors unnecessarily complicated the Court’s review of a significant factual record.

1

BACKGROUND
Unless otherwise noted, the following facts are undisputed. In 2003, Donna Gritters took
out a mortgage loan with The Federal Home Loan Mortgage Corporation (“Freddie Mac”) for
her home. Ocwen Loan Servicing serviced the loan from August 2009 until May 2013.

The

loan was in default at the time Ocwen acquired the servicing rights, and in February 2010,
Ocwen’s counsel, Pierce & Associates, filed for foreclosure against Gritters. Pierce is a law firm
in the business of collecting debts. Shortly thereafter, Freddie Mac approved Ocwen’s request to
consider a loan modification, after consideration of a breakdown of payoff funds including such
items as loan principal and interest, and $500 in estimated foreclosure fees and $1,322 in
estimated foreclosure expenses.
A loan modification agreement was entered into by the parties a few weeks later with an
effective date of March 4, 2010. Following an initial payment by Gritters, and the entry of the
agreement, her new principal balance was $62,691.34, escrow balance was $927.85, and
suspense account balance was $994.04. [Pl Resp. Ocwen SOF ¶26.] When Gritters called
Ocwen on April 1, 2010, it confirmed receipt of the required initial payment. Ocwen also
entered notes into its loan servicing system directing Pierce to put the foreclosure action on hold.
The foreclosure action was not dismissed, however, until more than a year later, on May 6, 2011,
In order to effectuate the loan modification, Ocwen made a series of credits and debits to
Gritters’ loan between April 6 and April 27, 2010 and the loan was brought contractually current
on April 27, 2010.

Ocwen sent several account statements to Gritters during this time, some

with conflicting information. Among the various activities on the account that month, certain
expenses incurred in filing the foreclosure action were charged to Gritters on April 6, and then

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credited back on April 27 “because the foreclosure costs were included in the new principal
balance under the Loan Modification.” [Ocwen SOF ¶9; Pl Resp. Ocwen SOF ¶9.]
On May 21, 2010, Ocwen assessed $700 for attorneys’ fees related to the foreclosure,
based on an invoice it received from Pierce in April. On May 27, 2010, Ocwen received a $625
payment from Gritters. It applied $624.26 to her June 2010 payment, and $.74 towards the
foreclosure attorneys’ fees charge.

On June 14, 2010, Ocwen made an investor suspense

adjustment to the loan, applying $624.96 of the $994.04 suspense account to Gritters’ July 2010
payment obligation, and the remaining $369.78 to the foreclosure attorneys’ fees charge. Ocwen
similarly applied certain portions of Gritters’ August, September, and October 2010 payments to
the attorneys’ fees charge. In December 2010, Ocwen received a $48 bill for an assignment fee
in conjunction with the prior foreclosure action, which it assessed to Gritters in April 2011.
Pierce testified that it understood the assignment charge was not to be passed on to the borrower,
but also that it was Ocwen’s decision whether to do so.
Following the modification, Gritters was late in making several of her monthly payments
and she missed certain payments. Gritters testified she had no knowledge of anything Ocwen did
to cause her payments to be late. When she was late, Ocwen assessed late fees.
In March 2011, Ocwen projected an escrow shortage for the coming year and advised
Gritters that her escrow payments and correspondingly, her monthly installments would increase.
From April 2010 through March 2011, $4,250.07 was paid from Gritters’ escrow account to
taxes and insurance. Around April 2011, Gritters discovered that her house was still listed in
foreclosure. Gritters stated in a declaration that she called Ocwen about it, and was told that her
loan was current, and no foreclosure had been initiated.

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Gritters also had difficulty understanding Ocwen’s accounting. Between April 2010 and
April 2011, Ocwen sent Gritters statements she testified she did not understand, and at least
during that first month, statements that were contradictory.

Gritters testified that she was

confused about the loan’s status, and began to suffer from anxiety and panic attacks. According
to Gritters, she felt like she was in a perpetual state of default, and she feared that she would lose
her home. She communicated her confusion and sought information from Ocwen both through
phone calls and letters.
In the summer of 2011, Gritters reached out to the Office of the Illinois Attorney General
to dispute Ocwen’s handling of her account and to request assistance. Between 2011 and 2012,
Gritters sent four such letters to the Illinois Attorney General’s Office, which forwarded each to
Ocwen. In September 2013, Gritters sent a fifth request for information to Ocwen. Although the
parties dispute whether these five letters triggered response obligations under federal law and if
so whether Ocwen responded adequately, it is undisputed that Ocwen responded to each.
Meanwhile, in May 2013, servicing of Gritters’ account was transferred from Ocwen to
Nationstar. Gritters was notified of the transfer, and informed she had been assigned a single
point of contact at Nationstar. At the time of the transfer, both Ocwen and Nationstar considered
the loan to be in default. On August 1, 2013, Nationstar sent Gritters a letter attempting to
collect a defaulted amount of $3,345.59 by September 5, 2013. Plaintiff’s attempts at partial
payment were rejected by Nationstar.
In August 2013, Gritters complained to the Office of the Illinois Attorney General about
Nationstar and Ocwen. In September 2013, the Attorney General’s Office forwarded her letter to
Nationstar for response. When Nationstar responded, it reported that it had investigated the
complaint and determined that no changes to the account were warranted. On September 6,

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2013, Gritters against wrote to Nationstar requesting numerous categories of information.
Gritters dubbed her letter a Qualified Written Request under the Real Estate Settlement
Procedures Act.

Nationstar timely responded, providing a copy of the Note and Security

Instrument, the May 31, 2013 servicing transfer notice, a payoff statement good through
September 30, 2013, and payment history on the account from May 21, 2013 through the date of
the response.
Around the same time, Nationstar retained Pierce as its foreclosure counsel. Pierce
assigned the referral a new file number from the one associated with the 2010 Ocwen referral.
On September 16, 2013, Pierce sent Gritters a “loss mitigation solicitation letter” on behalf of
Nationstar, in which it invited her to provide Nationstar certain information to determine whether
she was eligible for alternatives to foreclosure. Pierce next communicated with Gritters on
October 25, 2013, when it informed her that it had been hired by Nationstar to commence
foreclosure proceedings. Pierce’s October 25 letter provided Gritters with the total amount of
debt due on the mortgage and note, and identified Nationstar as the creditor. It also included
debt validation language under § 1692 of the FDCPA. At the time, Nationstar was servicing the
loan and Freddie Mac was the investor.
On November 11, 2013, Gritters’ counsel sent a “Fair Debt Collection Practices Dispute
Letter” to Nationstar Mortgage c/o Pierce & Associates requesting that both Nationstar and
Pierce verify the debt pursuant to 15 U.S.C. § 1692g. Both Pierce and Nationstar acknowledged
receipt shortly thereafter, and promised a response.

On November 26, 2013, Nationstar

responded to Gritters’ letter, again providing a copy of the Note and Security Instrument, the
May 31, 2013 servicing transfer notice, a payoff statement good through September 30, 2013,
and payment history on the account from May 21, 2013 through the date of the response. Pierce

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did not provide a separate response to Gritters’ November 11, 2013 request, testifying instead
that it had relied upon Nationstar’s response.
In January 2014, Pierce filed a foreclosure complaint against Gritters in the Circuit Court
of Cook County.

In March 2014, Pierce sent Gritters a “Notice of Initial Case Management

Conference” in the foreclosure action. This action was filed in the interim, in February 2014.
ANALYSIS
Summary Judgment Standard
“The court shall grant summary judgment 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.” Fed.
R. Civ. P. 56(a). When deciding cross-motions for summary judgment, the Court must “construe
the evidence and all reasonable inferences in favor of the party against whom the motion under
consideration is made.” Premcor USA, Inc. v. Amer. Home Assurance Co., 400 F.3d 523, 526
(7th Cir. 2005). The court may not weigh evidence or determine the truth of the matters asserted.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
A “genuine” dispute is one that could change the outcome of the suit, and is supported by
evidence sufficient to allow a reasonable jury to return a favorable verdict for the non-moving
party. Spivey v. Adaptive Mktg. LLC, 622 F.3d 816, 822 (7th Cir. 2010). The court will enter
summary judgment against a party who does not “come forward with evidence that would
reasonably permit the finder of fact to find in [its] favor on a material question.” Modrowski v.
Pigatto, 712 F.3d 1166, 1167 (7th Cir. 2013).
Pierce’s Summary Judgment Motion/ Gritters’ Cross-Motion
Pierce argues at the outset that Gritters fails to demonstrate a concrete particularized
injury sufficient to establish Article III standing. Even if she could make such a showing, Pierce

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says, summary judgment would still be appropriate because: (1) Gritters knew of her right under
§ 1692g to request verification of her mortgage debt, and when she did request verification, it
was provided by the loan servicer as well as by Pierce; (2) any failure to disclose the identity of
the holder of her mortgage was immaterial since Gritters knew it; and (3) the foreclosure case
notice that Pierce forwarded to Gritters did not violate the FDCPA’s prohibition against
contacting a represented debtor directly since the court permitted it and it was not a
communication sent in connection with the collection of a debt.
Gritters cross-moves for summary judgment against Pierce, arguing Pierce’s FDCPA
violations gave rise to cognizable injuries-in-fact without the need for further evidence of injury
or actual damages in order to establish standing. According to Gritters, summary judgment in
her favor is appropriate since there is no question of material fact that Pierce: (1) failed to send
her a debt validation letter within the statutory time-frame following its initial communication
with her; (2) failed to disclose the identity of the current creditor of her mortgage loan when it
sent its untimely debt validation letter; (3) failed to verify her debt in response to her dispute; and
(4) communicated with her directly despite knowing she was represented by counsel.
Standing
In order to establish Article III standing, a plaintiff must establish that she “(1) suffered
an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3)
that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct.
at 1547 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). “To establish
injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected
interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or
hypothetical.’” Id. at 1548 (quoting with alteration Lujan, 504 U.S. at 560). “A ‘concrete’ injury

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must be ‘de facto’; that is, it must actually exist.” Id. at 1548. “‘Concrete’” is not, however,
necessarily synonymous with ‘tangible.’” Id. at 1549. “Although tangible injuries are perhaps
easier to recognize, . . . intangible injuries can nevertheless be concrete.” Id. In determining
whether an intangible harm constitutes a sufficiently concrete injury, “both history and the
judgment of Congress play important roles.” Id.
In several pre-Spokeo FDCPA cases, the Seventh Circuit recognized standing to
challenge unlawful debt collection demands even without proof of additional harm. See, e.g.,
Keele v. Wexler, 149 F.3d 589, 594 (7th Cir. 1998) (standing existed based “on the debt
collector's misconduct, not whether the debt is valid or . . . whether the consumer has paid an
invalid debt.”); Phillips v. Asset Acceptance Corp., 736 F.3d 1076, 1082–83 (7th Cir. 2013)
(standing existed where debt collectors had filed allegedly unlawful suits against consumers,
even though consumers had not been served). Spokeo does not disturb these holdings. See, e.g.,
Aguirre v. Absolute Resolutions Corp., No. 15 C 11111, 2017 WL 4280957, at *4 n. 3 (N.D. Ill.
Sept. 27, 2017) (collecting cases finding Article III standing to sue for statutory damages under
the FDCPA on clams of intangible injuries from allegedly predatory debt collection practices).
Since the Supreme Court’s decision in Spokeo, the Seventh Circuit has interpreted it to
mean that a statutory violation alone gives rise to a concrete harm where the “violation present[s]
an appreciable risk of harm to the underlying concrete interest that Congress sought to protect by
enacting the statute” at issue. Groshek v. Time Warner Cable, Inc., 865 F.3d 884, 887 (7th Cir.
2017) (internal quotation marks omitted) (citing Meyers v. Nicolet Rest. of De Pere, LLC, 843
F.3d 724, 727 (7th Cir. 2016); Spokeo, 136 S.Ct. at 1549-50). In those cases, the plaintiff “need
not allege any additional harm beyond the one Congress has identified.” Spokeo, 136 S.Ct. at
1549. Under these authorities, several district courts have found that a misrepresentation about a

8

debt is a sufficient injury for standing because a primary purpose of the FDCPA is to protect
consumers from receiving false and misleading information about one’s debts. See, e.g.,
Marquez v. Weinstein, Pinson & Riley, P.S., No. 14 C 739, 2017 WL 4164170, at *4 (N.D. Ill.
Sept. 20, 2017); Pierre v. Midland Credit Mgmt., Inc., No. 16 C 2895, 2017 WL 1427070, at *1,
*4 (N.D. Ill. Apr. 21, 2017). Accordingly, because Gritters had a right to receive information
under the FDCPA that she claims was not provided, she alleges a concrete harm sufficient to
give rise to Article III standing.
Section 1692g(a)
Gritters argues summary judgment should be granted in her favor because Pierce failed to
provide her with a debt validation letter within five days of its September 16, 2013 letter to her in
connection with its efforts to collect the debt. Pierce admits that it is a debt collector, and that it
did not send the debt validation letter until October 25, 2013, but says that judgment in its favor
should nevertheless be granted because its September letter was not an “initial communication”
triggering disclosure obligations under the FDCPA. Pierce bases this argument both on the
claim that its September letter was simply informational, and on the fact that it had previously
communicated with Gritters in 2010 when she had fallen behind on her mortgage. While Gritters
does not dispute the 2010 communications, she says they are irrelevant since they were years
earlier and on behalf of a different client.
Within five days of its initial communication with a consumer, a debt collector must
provide certain information to the consumer in what is known as a “debt validation letter.” 15
U.S.C. § 1692g(a). The notice must inform the debtor of the amount of the debt and the name of
the creditor to whom the debt is owed, and state that the debt will be assumed valid if the debtor
does not dispute its validity within 30 days of receipt of the notice. 15 U.S.C. § 1692g(a)(1)-(3).

9

It must also include a statement that if the debtor disputes the debt within 30 days of the notice,
the debt collector will obtain and send the debtor verification of the debt, and upon written
request, send the debtor the name and address of the current creditor, if different from the
original creditor. 15 U.S.C. § 1692g(a)(4)-(5). “For the FDCPA to apply, . . . two threshold
criteria must be met.” Gburek v Litton Loan Serv’g., LP, 614 F.3d 380, 384 (7th Cir. 2010).
First, the defendant must qualify as a “debt collector” under the statute, and second, “the
communication by the debt collector that forms the basis of the suit must have been made ‘in
connection with the collection of any debt.’” Id. at 384 (quoting 15 U.S.C. § 1692a(6), §§
1692c(a)-(b), § 1692e, § 1692g).
Pierce argues that because its September 16, 2013, letter did not include a demand for
payment, it was not sent in connection with the collection of a debt. In Gburek, however, the
Seventh Circuit rejected such a claim, finding instead that defendant servicing company’s letter
offering “foreclosure alternatives” and requesting certain financial information was sent in
connection with the collection of a debt, despite the fact that it had not demanded a payment.
Gburek, 614 F.3d at 385 (there is no “categorical rule that only an explicit demand for payment
will qualify as a communication made in connection with the collection of a debt.”). Whether
the letter contained a demand for payment, the Seventh Circuit explained, was only one factor
that courts might consider in assessing whether a communication was made in connection with
the collection of a debt. Id.; accord Matmanivong v. Nat’l Creditors Connection, Inc., 79 F.
Supp. 3d 864, 875 (N.D. Ill. 2015) (“The court [in Gburek] made clear that a debt collector need
not demand payment for the FDCPA to apply.”) Courts should also consider the nature of the
parties’ relationship, the objective purpose and context of the communication, and whether the
communication was made in order to induce the debtor to settle the debt. Id. at 385-86.

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Applying the Gburek factors here, Pierce’s September 16, 2013 letter is a communication
in connection with the collection of a debt. The only relationship Pierce had with Gritters arose
out of Gritters’ defaulted debt. At the time Pierce sent its letter, Gritters’ loan was in default,
and the letter was an invitation to settle her debt and avoid foreclosure. [Dkt 187-5 at 50.]
Among other things, Pierce “strongly recommend[ed] that [Gritters] consult an attorney to
preserve [her] legal rights,” and invited Gritters to contact Nationstar to be evaluated for a
repayment plan, loan modification, deed in lieu of foreclosure, reinstatement of her loan, or a
pre-foreclosure sale. [Id.] Pierce’s letter included the initial communication warning required
under 15

U.S.C.

§

1692e(11):

“YOU

ARE HEREBY

NOTIFIED THAT

COMMUNICATION IS AN ATTEMPT TO COLLECT A DEBT.

THIS

ALL INFORMATION

OBTAINED WILL BE USED FOR THAT PURPOSE.” [Id.] 1
Pierce tries to distinguish Gburek by emphasizing that, unlike the communication at issue
there, its letter did not request financial information. This is not entirely so. Pierce’s letter
requested that Gritters complete certain documents Nationstar “may have previously sent,” and
provide certain information in order to be considered for foreclosure alternatives, or, if she did
not have those documents, to contact Nationstar by phone in order to obtain them. [Id.] Just as
the servicer’s request for financial information in Gburek, Pierce’s request was to initiate the
process of discussing foreclosure alternatives.

Viewing the purpose and context of the

communication objectively, Pierce’s letter is a communication in connection with an attempt to
collect a debt.
Finally, Pierce argues without authority that its letter was not an “initial communication”
because it had previously communicated with Gritters several years earlier on behalf of a
1

The inclusion of this disclaimer “does not automatically trigger the protections of the
FDCPA,” but is only a factor in the Court’s determination. Gburek, 614 F.3d at 386 n. 3.

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different servicer, Ocwen, when she had previously fallen behind on her mortgage. Standing
alone, such a cursory argument could be rejected out of hand. See Long v. Teachers Retirement
Sys. of Ill., 585 F.3d 344, 349 (7th Cir. 2009) (party may waive an issue by perfunctory and
undeveloped argument). The argument, however, is rejected on its merits. Notably, Gritters’
loan was brought current in 2010 and Pierce’s retention on behalf of Ocwen was terminated.
Pierce was retained in 2013 by a new client, Nationstar, opened a new file, and filed a new
foreclosure lawsuit. The fact that Pierce undertook efforts to collect on Gritters’ mortgage years
earlier on behalf of Ocwen cannot insulate Pierce from liability for its actions on behalf of
Nationstar, especially where the first retention was successfully resolved. To hold otherwise
would suggest a major loophole in the FDCPA, inconsistent with its purpose.
It is undisputed that Pierce did not send its debt validation letter until October 25, 2013,
more than a month after its initial communication. [Pierce Resp. PSOF ¶ 15.] Relying largely
on nonbinding cases from other jurisdictions, Pierce argues that this “technical violation” should
be overlooked because Gritters nevertheless knew her validation rights. To determine whether §
1692g applies to each debt collector or only to the first debt collector to communicate with the
debtor, the Court begins with the statutory language. The language of the statute is ambiguous,
referring to “the initial communication with a consumer in connection with the collection of any
debt,” but followed closely thereafter with “a debt collector.” 15 U.S.C. § 1692g. Given the
FDCPA’s remedial purpose of curbing abusive debt collection practices, this Court agrees with
the trend of courts in this District that § 1692g applies to each successive debt collectors and not
only to the first in line. See, e.g., Sanchez v. Jackson, No. 16-CV-6144, 2016 WL 6833974 at
**4-6 (N.D. Ill., Nov. 11, 2016) (collecting cases); Janetos v. Fulton, Friedman & Gullace, LLP,

12

No. 12–CV-1473, 2013 WL 791325 at *5 (N.D. Ill. March 4, 2013) 2; Francis v. Snyder, 389 F.
Supp. 2d 1034, 1040 (N.D. Ill. 2005) (“The requirement of providing valid disclosures under §
1692g applies to each debt collector.”). Requiring successive collectors to comply with § 1692g
is likewise consistent with the Federal Trade Commission’s interpretation of the statute, and does
not create a heavy burden on successive debt collectors. See Sanchez, 2016 WL 6833974 at *5;
Janetos, 2013 WL 791325 at *5. Pierce was obliged to send a validation letter within the
statutory time frame, and it is undisputed it failed to do so. Summary judgment for Gritters on
this claim is granted.
Given Pierce’s violation of § 1692g(a), the analysis could end here. “Statutory damages
are subject to a cap of $1,000 per suit, 15 U.S.C. § 1692k(a)(2)(A), no matter how many
violations of the Act a given debt collector commits.” Smith v. Greystone Alliance, LLC, 772 F.
3d 448, 449 (7th Cir. 2014). Nevertheless, the Court will consider the other alleged FDCPA
violations, as the analysis might be relevant to determining statutory damages. See 15 U.S.C.
§1692k(b) (listing factors that should be considered in determining damages, including “the
frequency and persistence of noncompliance by the debt collector, the nature of such
noncompliance, and the extent to which such noncompliance was intentional.”); see also
Matmanivong, 79 F. Supp. 3d at 877.
According to Gritters, when Pierce finally sent its debt validation letter, its identification
of Nationstar and not Freddie Mac as the creditor further violated the Act. Specifically, she says,
Pierce violated § 1692g(a)(2) by falsely stating the creditor was Nationstar, and § 1692e by
2

The Seventh Circuit ultimately reversed a subsequent decision of the District Court granting
summary judgment to defendant on this claim, and ordered that judgment be entered for the
plaintiff. See Janetos v. Fulton, Friedman & Gullace, LLP, 825 F.3d 317 (7th Cir. 2016). As the
Court observed in Sanchez, however, “[I]t defies logic that the [Seventh Circuit] would grant
relief for violations of § 1692g if it doubted the applicability the provision to the communication
at issue.” 2016 WL 6833974, at *6.

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using a false, deceptive, or misleading representation in connection with its efforts to collect the
debt. Pierce disagrees, arguing that any technical violation arising from its failure to name the
creditor in addition to the servicer in its communication did not confuse Gritters, is not material,
and is defeated by the fact that Gritters knew all along the identity of the creditor, and how to
exercise her validation rights.
The Seventh Circuit’s recent decision in Janetos v. Fulton, Friedman & Gullace, LLP,
825 F.3d 317 (7th Cir. 2016) rejects arguments similar to those which Pierce makes here. In that
case, plaintiff complained that the defendant law firm’s communications did not identify the
current creditor Asset Acceptance, LLC, as such, but instead identified it as the “assignee” of the
original creditor, and stated that the account had been “transferred” to the law firm. Finding the
misrepresentation immaterial, and that the plaintiff had failed to support any claimed confusion
with extrinsic evidence, the district court granted summary judgment for the law firm. The
Seventh Circuit reversed with instructions to enter judgment for the plaintiff, agreeing that the
letters did not clearly state who owned the debt, and holding that neither evidence of materiality
nor consumer confusion were necessary to establish the § 1692g(a)(2) violation. See id. at 32224 (“We decline to offer debt collectors a free pass to violate that provision on the theory that the
disclosure Congress required is not important enough.”) As the Court explained, “Section
1692g(a) requires debt collectors to disclose specific information, including the name of the
current creditor, in certain written notices they send to consumers. If a letter fails to disclose the
required information clearly, it violates the Act, without further proof of confusion.” Id. at 319.
Under this reasoning, and in accordance with the objective unsophisticated consumer standard,
whether Gritters understood Nationstar’s role as servicer, previously knew that Freddie Mac
owned the debt, or could have figured it out despite what Pierce had written, is all beyond the

14

point. See id. at 322. “[A] lucky guess would have nothing to do with any disclosure the letters
provided. Compliance with the clear requirements of § 1692g(a)(2) demands more.” Id. at 324.
By failing to clearly disclose the name of “the creditor to whom the debt is owed,” Pierce’s
validation notice violated the Act, without any need for extrinsic evidence of confusion.
Summary judgment is likewise granted for Gritters on her § 1692(e) claim.

Section

1692e provides that “[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of a debt.” The Seventh Circuit
recognizes three categories of § 1692e cases: (1) where the allegedly offensive language is
plainly and clearly not misleading; (2) where the language is not misleading or confusing on its
face, but may potentially mislead the unsophisticated consumer; and (3) where the language is
plainly deceptive or misleading. Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012). Pierce’s
failure to identify Gritters’ creditor falls into the third category because it contained a plainly
deceptive statement that is likely to mislead the unsophisticated consumer. See Hahn v. Triumph
P’ships, LLC, 557 F.3d 755, 757-58 (7th Cir. 2009). Accordingly, there is no need for extrinsic
evidence. See Ruth v. Triumph P’ships, 577 F.3d 790, 801 (7th Cir. 2009).
Gritters must also establish that Pierce’s misstatement was material. As Pierce correctly
notes, a debt collector’s false statement only violates § 1692e if is material. See Hahn, 557 F.3d.
at 757 (“Materiality is an ordinary element of any federal claim based on a false or misleading
statement.”). If a debt collector’s false statement does not affect a consumer’s ability to “choose
intelligently” and the false statement would not “mislead the unsophisticated consumer,” then the
statement does not constitute a violation of § 1692e. See id. at 757-58. Here, too, the reasoning
of Janetos is instructive. Although the Seventh Circuit rejected a materiality requirement under
§ 1692g(a)(2), it cautioned in dicta that this did not “suggest the required information is not

15

important.” Janetos, 825 F.3d 317, 325. To the contrary, the court observed, Congress included
the creditor’s identity in the list of required disclosures because it had determined such
information helps consumers choose intelligently. As the court explained, knowing the identity
of the current creditor “potentially affects the debtor in the most basic ways.” Id. at 325 (internal
quotation and citation omitted).

Because the identity of the creditor was material, and Pierce

failed to provide it, its letter was plainly deceptive. Summary judgment for Gritters on this claim
is granted.
15 U.S.C. § 1692g(b)
Pierce’s October 25, 2013 validation letter advised Gritters that she had thirty days to
dispute its validity and that if she did, Pierce would mail her proof of the debt. [Dkt 187-5.] It
is undisputed that on November 11, 2013, Gritters’ counsel requested verification of the debt
from both Pierce and Nationstar in a letter sent to Pierce’s office.

[Pierce Resp. PSOF ¶ 20.]

Specifically, her counsel directed that “[b]oth Nationstar and Pierce must verify this debt within
30 days of receipt of this letter pursuant to 15 U.S.C. § 1692g by sending written verification of
the debt . . .” [Id.] In a letter dated November 21, 2013, Pierce acknowledged receipt of
Gritters’ letter, and advised, “You will receive a response in writing to the letter once we have
completed all of our research and review of the file.” [Id. ¶ 21.] Pierce did not follow up with
the promised substantive response. Instead, Pierce relied on Nationstar to respond, which it did
in a letter dated November 26, 2013. [Id. ¶ 22; Pl Resp. SOF ¶¶ 61-63, 68.] On January 22,
2014, Pierce filed a second foreclosure action against Gritters listing a default date of April 2013.
[Pierce Resp. PSOF ¶ 24.]
Under 15 USC § 1692g(b), a debt collector must cease collection of a debt or any
disputed portion thereof if the consumer notifies the collector in writing that she disputes the

16

debt within thirty days of receiving the disclosures required under § 1692g(a). According to
Gritters, because Pierce failed to validate or cease collection activities in response to her dispute,
it violated § 1692g(b). Pierce argues to the contrary, emphasizing that Gritters addressed her
correspondence to “Nationstar Mortgage c/o Pierce & Associates, P.C.,” and suggesting it was
an “attempt to elicit hyper-technical violations of the FDCPA.” [See dkt 186 at 23.] At the time
the letter was sent, however, both Nationstar and Pierce were attempting to collect the debt.
Gritters was entitled under the FDCPA to dispute her debt with both, and to require both to
respond. See 15 U.S.C. § 1692g(b). Regardless of how the address was written, the letter’s
primary purpose was clear, and its express statements compelled both Nationstar and Pierce to
respond. See Bowse v. Portfolio Recovery Assocs., LLC, 218 F. Supp. 3d 745, 751 (N.D. Ill.
2016) (decision to send letter to general counsel did not indicate attempt to obscure letter’s
contents). Pierce’s argument that it could rely on Nationstar’s response overlooks its own
obligations to validate the debt. “A consumer’s right to dispute a debt even without a valid
reason is clearly conferred by the FDCPA.” Bowse, 218 F. Supp. 3d at 752.
16 U.S.C. § 1692c
Finally, Gritters argues that Pierce violated § 1692c by sending her a notice of Initial
Case Management Conference in the foreclosure action it had filed, despite knowing she was
represented by counsel. 16 U.S.C. § 1692c(a)(2) prohibits a debt collector from communicating
directly with a consumer it knows is represented by an attorney unless the attorney fails to
respond within a reasonable time to a communication from the debt collector or the attorney
consents to direct communication with the consumer. According to Pierce, sending the notice
was not an effort to collect a debt, and meets the statutory exception for communications sent
with “the express permission of a court of competent jurisdiction,” 15 U.S.C. § 1692c(a).

17

Further, Pierce adds, any technical violation should be overlooked since the Notice asked for
nothing, and only advised Gritters of the date and time for court.
Pierce’s arguments notwithstanding, the notice was sent in connection with the collection
of a debt, under the same reasoning of Gburek, 614 F.3d at 384, as discussed above. See Gburek,
614 F.3d at 384; Melnarowicz v. Pierce & Assocs., P.C., No. 14-CV-7814, 2015 WL 4910748 at
**4-5 (N.D. Ill. Aug. 17, 2015) (notice of initial case management conference was sent in
connection with the collection of a debt). The context here was a foreclosure action, and the
purpose of the Notice, at least in part, was to prosecute the lawsuit, “and thus, to foreclose and
make good the debt.” Melnarowicz, 2015 WL 4910748 at *5. The Notice advised of a court
date in the case, and invited Gritters to look into the “Mortgage Foreclosure Mediation
Program.”

[Pl. Resp. Pierce SOF ¶ 73 and Pierce Dep. at Exh. 20 [dkt 187-5 at 67].]

Accordingly, it was an invitation to resolve a debt.
It is undisputed that at the time Pierce sent the Notice, it knew Gritters was represented
by counsel with regard to the debt. Accordingly, it was prohibited from communicating with her
directly. Nothing in the FDCPA limits this protection where a foreclosure action is initiated, see
Marquez, 836 F.3d at 810-812 (noting pleadings or filings can fall within the FDCPA), and
nothing required Gritters’ FDCPA counsel to also represent her in the foreclosure proceeding.
Further, the notice was not sent with the “express permission” of the foreclosure court as Pierce
suggests. Rather, it was sent pursuant to a general order applicable in all such cases. To the
extent Pierce’s obligations under the FDCPA conflicted with its obligations under the Cook
County order, the requirements of the FDCPA take precedence, and Pierce could have sought
relief from the state court judge. See Melnarowicz, 2015 WL 4910748 at *5.

18

The Court is not persuaded by Pierce’s suggestion that Gritters’ pro se status in the
foreclosure action was intended to “elicit yet another hyper-technical FCDPA violation.” [Dkt
186 at 29-30.] No facts in the record support this characterization. Summary judgment for
Gritters is granted on her § 1692c claim.
Ocwen’s Summary Judgment Motion/ Gritters’ Cross-Motion
Gritters seeks summary judgment on her claims that Ocwen breached the loan
modification agreement, and violated the FDCPA, the Illinois Consumer Fraud and Deceptive
Business Practices Act (“ICFA”), 815 ILCS 505/1, et seq., and the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. § 2605, et seq., by failing to properly implement the
agreement and improperly treating her loan as in default. [Dkt 200.] Ocwen cross-moves for
summary judgment on each of those counts as well as on Gritters’ breach of fiduciary duty
claim, arguing that the undisputed evidence shows it complied with applicable law and properly
handled her post-modification payments and account, by applying payments in accordance with
the order of priority set out in the mortgage agreement. [Dkt 188.] Their arguments are
considered in turn.
Breach
According to Gritters, Ocwen booked the loan at a later date than it should have, and
breached the loan modification agreement when it assessed $700 in foreclosure attorneys’ fees
since estimated fees were already a part of the loan modification’s recitation of a principal
balance. Specifically, she says, Ocwen breached the agreement “on at least” March 27, 2010,
June 14, 2010, August 19, 2010, September 15, 2010, October 25, 2010, and April 22, 2011, by
applying portions of her payments to these fees and by assessing improper late fees. [Dkt 201.]
Similarly, she says, Ocwen breached the contract by assessing a $48 assignment fee charge

19

forwarded months after the modification was complete. For its part, Ocwen says summary
judgment should be granted in its favor because Gritters shows no evidence it mishandled her
account, and cites no specific contract provision it allegedly breached. In any event, it adds,
Gritters cannot prevail on her claim because she breached the agreement first and failed to
provide the required notice and opportunity to cure before filing the instant action. 3 [Dkt 191.]
To establish a breach of contract under Illinois law, a plaintiff must show: (1) the
existence of a valid and enforceable contract; (2) performance by the plaintiff; (3) a breach by
the defendant; and (4) resultant damages. See McCleary v. Wells Fargo Secs., LLC, 29 N.E.3d
1087, 1093 (Ill. App. Ct. 2015); accord Spitz v. Proven Winners N. Am., LLC, 759 F.3d 724, 730
(7th Cir. 2014). The parties do not dispute the existence of a valid and enforceable agreement, or
the substance of its terms. Pursuant to the agreement, Gritters committed to pay a modified
principal amount of $62,691.34, as well as “fees and charges that were not included in this
principal balance.” [PSOF ¶14, Exh. B ¶ 1.] The agreement further provided that “Any expense
incurred in connection with the servicing of your loan but not yet charged to your account as of
the date of this Agreement may be charged to your account after the date of this agreement.” [Id.
¶ 6(c).]
Gritters supports her claim of breach with citation to Ocwen’s undisputed internal records
showing that the modification agreement’s new principal amount was prepared with calculations
including estimated foreclosure attorneys’ fees and expenses of $1,822, and the undisputed fact

3

Ocwen also seeks summary judgment on Gritters’ contract claim to the extent it is based on
breach of the covenant of good faith, or premised on allegations that Pierce failed to timely
dismiss the foreclosure action. Because Gritters has not responded to these arguments, she has
conceded them. See Greenlaw v. United States, 554 U.S. 237, 243-44 (2008) (noting general
rule that “adversary system is designed around the premise that the parties know what is best for
them, and are responsible for advancing the facts and arguments entitling them to relief”).
Accordingly, Ocwen’s motion is granted on these issues.

20

that the actual fees and expenses associated with the foreclosure were $1,582. [Ocwen Resp.
PSOF ¶¶ 4, 13-15.]

Because the estimated total fees and expenses were, as Ocwen

acknowledges, “ordered for purposes of calculating the modification terms,” and the estimate
was more than what Ocwen ultimately incurred, she says, Ocwen had no basis in the contract to
charge her any more. She further emphasizes the undisputed fact that bills for the foreclosure
attorneys’ fees and expenses got to Ocwen after the loan modification, and Ocwen’s admission
that it did not charge her for the expenses because they had already been included in the new
principal balance. [Pl Resp. Ocwen SOF ¶ 9.] As for the $48 assignment fee, she relies on
Pierce’s acknowledgment that it is the type of charge not typically passed on to the borrower.
Ocwen, on the other hand, urges there can be no breach because it was specifically
authorized under the above-quoted provisions of the loan modification agreement to assess the
attorneys’ and assignment fees since they were not included in the new principal balance.
Ocwen highlights the contract language authorizing the imposition of expenses incurred but not
yet charged, the fact that the invoice from its foreclosure counsel post-dates the loan
modification, and the testimony of Ocwen Senior Loan Analyst Howard Handville who testified
that the foreclosure attorneys’ fees had not been included in the modified principal amount
because they were not known to Ocwen at the time of the proposed modification. Ocwen further
points to Gritters’ testimony that she read the modification and agreed to it based on its terms,
and no other representations by Ocwen. [Pl Resp Ocwen SOF ¶16.] Ocwen adds on reply that,
in any event, Gritters can establish no damage from the assessment of the $748 because at the
time of loan modification Ocwen had credited her suspense balance with a $994.04 estimate for
them, and the amount it later applied from her funds was substantially less. [Dkt 218 at 2-3].
Even if this were true, Gritters says in cross-reply, Ocwen’s application of suspense account

21

funds would still be a breach since it would conflict with the priority of payments provision set
out in the original mortgage agreement. [Dkt 227 at 6.]
As the parties agree, Gritters’ breach of contract claim rests in large measure on the
application of the foreclosure-related charges. If the fees were included in the modification’s
principal balance, then Ocwen breached the contract when it charged them again and applied
certain of Gritters’ payments to those charges. If they were not included in the principal, on the
other hand, then the loan modification agreement authorized Ocwen to charge them. According
to Gritters, Ocwen’s records and treatment of foreclosure costs support her version of the case.
But as Ocwen points out, Handville’s testimony construing those same records support its
version. In the end, each side presents evidence creating a genuine issue of material fact for trial.
If the jury believes Gritters’ interpretation of Ocwen’s records and characterization of the
foreclosure fees and expenses, it could reasonably find Ocwen breached the agreement by
assessing duplicative fees.

If the jury believes Handville and Ocwen’s explanation of the

charges, and credits their interpretation of the contract, on the other hand, it could reasonably
conclude that Ocwen was authorized to charge the fees that it did. Accordingly, the issue is one
best left for the jury to decide.
Notably, Ocwen’s belated argument about the suspense account does not change this
outcome. First, Ocwen failed to timely raise this argument. See Citizens Against Ruining The
Env't v. E.P.A., 535 F.3d 670, 675 (7th Cir. 2008) (“[i]t is improper for a party to raise new
arguments in a reply because it does not give an adversary adequate opportunity to respond.”).
Moreover, even if it had been properly raised, Ocwen supports its assertion only with a
supplemental declaration of Ocwen Senior Loan Analyst Howard Handville in which he attests:
[W]hen Ocwen modifies a loan that is in default, Ocwen sometimes does not
received invoices from its vendors for servicing fees, such as foreclosure-related

22

fees, until after the modification is completed. To account for such fees once they
are invoiced, Ocwen credits the loan’s unapplied funds balance (also known as
the suspense balance) during the modification process with its estimate of the
amount of the fees and then later applies from the borrowers’ account toward the
actual invoiced fees. . . .
The Payment Reconciliation History reflects that Ocwen credited Plaintiff’s
suspense balance $994.04 on April 27, 2010 as part of the modification process.

[Dkt 216, Handville Suppl. Decl. ¶¶ 12, 13.]

Contrary to his supplemental declaration,

Handville previously testified that he did not know whether the suspense balance was for
foreclosure attorneys’ fees, and that he could not make the determination from Ocwen’s pay
history. [See dkt 215-1, Handville dep. at 53:11-21.] It is well settled that a party cannot use a
declaration to contradict a declarant’s prior deposition testimony to create a genuine dispute.
See, e.g., Pourghoraishi v. Flying J, Inc., 449 F.3d 751, 759 (7th Cir. 2006) (“A plaintiff cannot,
however, create an issue of material fact by submitting an affidavit that contradicts an earlier
deposition.”). Moreover, given the undisputed fact that Ocwen applied a portion of the suspense
account funds to Gritters’ July 2010 bill before it had come due, an issue of fact would
nevertheless remain as to whether it breached the contract.
Ocwen’s argument that Gritters breached the contract first also does not preclude the
need for trial. As Gritters notes, Ocwen’s earliest complaint of a late payment was August 2010,
by which point Ocwen had already charged Gritters the disputed fees. [Ocwen SOF ¶¶ 15-19.]
Further, contrary to Ocwen’s assertion, Hukic v. Aurora Loan Servs. & Ocwen Loan Serv’g., 588
F.3d 420 (7th Cir. 2009), does not stand for proposition that a lender is excused from its breach
where the borrower fails to make a payment. See id. (affirming summary judgment for lender
where borrower failed to provide required proof of payment of taxes and insurance such that
lender was contractually authorized to also pay taxes and insurance and to charge borrower for

23

the same); Catalan v. GMAC Mortgage Corp., 629 F.3d 676, 692 (7th Cir. 2011) (rejecting
overly broad interpretation of Hukic). To the contrary, in Hukic, the Seventh Circuit specifically
put to the side the parties’ dispute over whether the consumer had failed to fully pay on his
account, affirming summary judgment for the lender because the contract authorized it to charge
the fees it had charged, regardless of whether the borrower had also failed to pay. See Hukic,
588 F.3d at 433.

Unlike in Hukic, moreover, there is no alleged relationship between

nonpayment by Gritters and Ocwen’s authority to assess foreclosure fees.
Likewise, Ocwen’s brief argument that Gritters’ failed to provide the contractually
required notice and opportunity to cure also does not defeat her claim as a matter of law. First,
Ocwen has not established at the threshold that because it used the title “lender” in the
modification agreement, there was a corresponding expansion of the definition of “lender” in the
original mortgage agreement, where the notice and opportunity to cure provision is found.
Second, even assuming the notice and cure provision of the mortgage agreement could apply to
Ocwen, Gritters points to evidence of her multiple complaints to Ocwen about the propriety of
fees it assessed prior to her filing of the instant action. [PSOF ¶¶ 61-70, Exhs. H-5 and H-9.]
Whether the provision applies to Ocwen, and if so, whether Gritters complied with it, are issues
to be determined another day.
The same cannot be said as for Gritters’ claim that following the loan modification,
Ocwen charged her late fees eighteen times at the rate of $18.44 instead of $15.12. Gritters’
supports her claim with reference to the Handville’s declaration in which he recites that Gritters
had accrued 18 late charges of $18.44 that remained unpaid when servicing was transferred to
Nationstar, although the cited records shows that Ocwen had charged the contractually correct
late fee, $15.22. [Dkt 189 ¶ 74.] This misstatement was repeated in Ocwen’s statement of facts.

24

[Dkt 190.] Ocwen explains its mistakes in reply as immaterial “scrivener’s errors” in preparing
its materials.

[Dkt 218 at 7.]

While not excusing Ocwen’s carelessness in preparing its

statement of facts or Handville’s declaration, the underlying records show that the late fees were
imposed at the contractually authorized rate of $15.12 following the loan modification, and
Gritters submits no evidence to suggest otherwise. Because Gritters does not dispute that her
payments were late [see dkt Pl Resp. SOF ¶¶ 19-30], and the contract allowed for the imposition
of late fees, to the extent Gritters’ claim is based on this claimed overcharge, her motion is
denied and Ocwen’s motion is granted.
1692e and f

4

Gritters next contends that Ocwen violated the FDCPA by sending her three notices of
default, dated February 22, 2013, March 29, 2013, and April 27, 2013, and a February 18, 2013
mortgage statement that misrepresented the status of the debt, sought amounts not authorized by
contract or law, and threatened foreclosure if amounts were not paid by certain deadlines. Under
her theory, because Ocwen misstated the amount of debt and the notices threatened foreclosure,
the communications are plainly deceptive and violate the FDCPA without any extrinsic evidence
of confusion. Ocwen disagrees, arguing at the outset that the FDCPA does not apply to its
communications since they were not sent in connection with the collection of a debt, and in any
event, are not plainly deceptive. Without extrinsic evidence of how an unsophisticated consumer
would view them, Ocwen says, Gritters claim cannot withstand summary judgment.
Whether communications are made in connection with the collection of a debt under the
FDCPA is determined “through the eyes of the unsophisticated consumer.” Wahl v. Midland
Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009) (internal quotations omitted).

4

Gritters’ motion to voluntarily dismiss her §1692d claim [dkt 201 at 10 n.5] is granted.

25

As

discussed above, the Seventh Circuit has identified several factors to be considered in making
such a determination, including the nature of the parties’ relationship, and the objective purpose
and context of the communications. See Gburek, 614 F.3d at 384. The parties’ relationship here
was that of loan servicer and consumer debtor, and the purpose of the communications was to
advise Gritters of the amount she owed, and to elicit a payment from her.

As Ocwen

acknowledged, its notices of default, “provide[d] Gritters with an itemized list of her past due
amounts and explain[ed] what she must do to cure her payment default.” [Dkt 191 at 13.]
Further, the February 18, 2013 mortgage statement includes a payment coupon with instructions
to detach and return it “with payment in the enclosed envelope.” [Dkt 189-16.] Under the
rationale of Gburek, each of four documents were sent in connection with the collection of a
debt.
Ocwen bankruptcy disclaimers do not change this analysis. Applying the unsophisticated
consumer standard to similar communications, District Courts in this Circuit routinely find the
sort of disclaimer Ocwen supplied here insufficient to demonstrate that the communications were
not connected to the collection of a debt as a matter of law. See Harrer v. Bayview Loan Serv’g.,
LLC, No. 15-CV-4075, 2016 WL 6995559 at *2 (N.D. Ill. Nov. 30, 2016) (collecting cases).
This Court agrees with the reasoning of its colleagues, especially in light of the Seventh Circuit’s
analysis in Gburek of “the commonsense inquiry of whether a communication from a debt
collector is made in connection with the collection of any debt.” Gburek, 614 F.3d at 385. As
in Harrer, “commonsense” says that despite the disclaimer, the language in the notices of default
and the mortgage statement establish that the communications were in connection with the
collection of a debt.

26

The Court thus turns to whether the communications violated § 1692e and § 1692f by
misrepresenting the status of the debt, seeking amounts not authorized by contract or law, and
threatening foreclosure if amounts were not paid by certain deadlines. As discussed above, §
1692e prohibits debt collectors from using “any false, deceptive, or misleading representation or
means in connection with the collection of any debt.” Specifically prohibited conduct includes
falsely representing “the character, amount, or legal status of any debt.”

15 U.S.C. §

1692e(2)(A). Section 1692f prohibits a debt collector from using “unfair or unconscionable
means to collect or attempt to collect any debt.” Specifically prohibited conduct includes “the
collection of any amount (including any interest, fee, charge, or expense incidental to the
principal obligation) unless such amount is expressly authorized by the agreement creating the
debt or permitted by law.” 15 U.S.C. § 1692f(1).
Again, when determining whether a debt collector has violated Section 1692e or f, the
question is analyzed from the perspective of the “unsophisticated consumer.” Ruth, 577 F.3d at
800; McMillan v. Collection Professionals, Inc., 455 F.3d 754, 759 (7th Cir. 2006). The Seventh
Circuit recognizes three categories of § 1692e cases: (1) where the allegedly offensive language
is plainly and clearly not misleading; (2) where the language is not misleading or confusing on
its face, but may potentially mislead the unsophisticated consumer; and (3) where the language is
plainly deceptive or misleading. Lox, 689 F.3d at 822. When a case falls into the third category,
a plaintiff may prove her case without the need for extrinsic evidence. See Ruth, 577 F.3d at
801. Ocwen’s arguments notwithstanding, Gritters’ § 1692e and f claims fall into the third
category because they are premised on the claim that Ocwen misrepresented the debt. According
to Gritters, because Ocwen assessed foreclosure attorneys’ fees when they had already been
included in the modified loan’s new principal, it overstated the amount of the indebtedness.

27

Such a misrepresentation would be material because it could lead an unsophisticated consumer to
pay more than she owed, or to act in a way she would not have otherwise. See Lox, 689 F.3d at
827; Evory v. RJM Acquisitions Funding, LLC, 505 F.3d 769, 775 (7th Cir. 2007). But for all the
reasons discussed with regard to Gritters’ contract claim, the amount of Gritters’ debt is disputed.
Accordingly, to the extent the cross motions seek summary judgment on this portion of Gritters’
FDCPA claim, they are denied.
As to the reference to foreclosure litigation, however, no genuine issue of material fact
remains, and summary judgment for Ocwen is granted. While the default notices informed
Gritters that her failure to bring the account current could result in Ocwen’s pursuit of a
foreclosure, Gritters offers no evidence that Ocwen did not have a right seek foreclose at that
time. To the contrary, Gritters does not dispute that during the time in which the notices were
sent, she was over three months behind on her mortgage payments. [Pl Resp. Ocwen SOF ¶¶ 6659.] A threat of litigation in itself does not violate the FDCPA; to be actionable, it must be a
threat of litigation in the absence of a right to take such action. 15 U.S.C. § 1692(e); accord
Aker v. Bureaus Investment Group Portfolio, No. 15, LLC, No. 12-CV-3633, 2014 WL 4815366
at *5, n. 7 (N.D. Ill. Sept. 29, 2014).
§ 1692e11
Gritters’ § 1692e(11) claim based on Ocwen’s February 18, 2013 mortgage statement,
also fails as a matter of law. Section 1692e(11) requires a debt collector to disclose in its initial
communication that it is a debt collector, that it is attempting to collect a debt, and that any
information obtained will be used for that purpose, and to disclose in subsequent
communications that the communication is from a debt collector. It is undisputed that the
challenged mortgage statement included the mandatory disclosure on its back side. Relying on

28

Vaughn v. CSC Credit Servs., Inc., No. 93-CV-4151, 1995 WL 51402 (N.D. Ill. Feb. 3, 1995),
Gritters argues that the disclosure is nevertheless vague and confusing because it is “nearly
impossible to read” and buried on the back side of the document without any direction in front to
read the back.

Vaughn does not stand for the proposition that back-sided disclosures are

inherently confusing to an unsophisticated consumer, nor does this Court so conclude. The issue
in Vaughn arose from the nature of the debt collector’s disclosure, not simply its placement.
There, the debt collector disclosed in light gray ink that the debtor had thirty days in which to
dispute the debt on the back side of a document that in plain text demanded a payment or phone
call within seven days. It was the juxtaposition of two contradictory deadlines and instructions
that led to the conclusion that the letter was deceptive and misleading as a matter of law. To the
contrary, here, there is nothing inherently contradictory or confusing in Ocwen’s disclosure, nor
is it “nearly impossible to read” as Gritters says. [Dkt 201 at 14.] Rather, it tracks the statutory
disclosure language, appears in the same size and darkness as the rest of the document, and is set
off from surrounding text in its own text box.

Under these circumstances, no reasonable

factfinder could find the mortgage statement failed to include the statutory disclosure.
ICFA
Gritters’ IFCA claim also fails as a matter of law because the conduct of which she
complains is either not actionable, or simply duplicates her breach of contract claim. “A breach
of contractual promise, without more, is not actionable under the Consumer Fraud Act.” Avery
v. State Farm Mut. Auto Ins. Co., 835 N.E.2d 801, 844 (Ill. 2005). The ICFA is “not intended to
apply to every contract dispute or to supplement every breach of contract claim with a redundant
remedy.” Greenberger v. Geico Gen. Ins. Co., 631 F.3d 392, 399 (7th Cir. 2011) (affirming
dismissal of ICFA claim with prejudice where it duplicated contract claim). A consumer fraud

29

claim under ICFA requires “more than a garden-variety breach of contract.” Id. (citing Avery,
835 N.E.2d at 844.) To establish an ICFA claim, Gritters must present evidence of “unfair or
deceptive conduct [that is] distinct from the alleged breach of the contractual promise.”
Greenberger, 631 F.3d at 400. To the extent this count is premised on claims that Ocwen
provided conflicting information “in every statement or collection letter,” so that she “did not
understand what she owed,” and that it double-dipped and was “unfair” by charging her
foreclosure fees she did not owe, these allegations simply restate the alleged breach. See id. at
399.

To the extent Gritters’ claim is based on Ocwen’s advice that she consult with an

accountant, or the claim that Ocwen falsely told her the foreclosure case was over when it had
remained pending, these claims do not give rise to ICFA liability. “[I]t is not possible for a
plaintiff to establish proximate cause [under the ICFA] unless the plaintiff can show that he or
she was ‘in some manner, deceived’ by the misrepresentation.” DeBouse v. Bayer AG, 922
N.E.2d 309, 315 (Ill. 2009). Gritters cites no evidence from which she could make such a
showing.
Moreover, to the extent Gritters’ claim is based on alleged misrepresentations by Ocwen
about the status of the foreclosure case during an April 1, 2010 telephone call, it is beyond the
statute’s three-year statute of limitations. See 815 ILCS § 505/10a(e). 5 Further, any timely
representations regarding the pendency of the foreclosure action could not support an ICFA
claim. Contrary to her characterization, none of the cited communications say “the foreclosure
case was over in April 2010,” but rather they refer more generally to the status of foreclosure and
5

Additionally, Gritters’ declaration on this point conflicts with her previous deposition
testimony that she did not know about the foreclosure action until about a year after the loan
modification. [See dkt 215-3, Gritters Dep. at 51:04-13.] A declaration submitted at summary
judgment contradicting an earlier deposition will not create an issue of material fact. See
Pourghoraishi, 449 F.3d at 759.

30

activity on the account. It is undisputed that Ocwen considered the foreclosure status resolved
upon completion of the loan modification and directed its counsel accordingly. [Pl Resp. Ocwen
SOF ¶ 8.] Additionally, whether the foreclosure case remained pending was a matter of public
record, and not something about which Ocwen possessed exclusive knowledge. Instead, the
status of the case was “discoverable through the exercise of ordinary prudence by the plaintiff.”
Randels v. Best Real Estate, Inc., 612 N.E.2d 984, 988 (Ill. App. 2d Dist. 1993.)

Summary

judgment for Ocwen on this claim is granted.
RESPA
Ocwen argues summary judgment on Gritters’ RESPA claim is appropriate because there
is no evidence it collected excessive escrow amounts or failed to refund any escrow surplus, and
the record establishes it complied with RESPA’s acknowledgment and response requirements.
Gritters does not respond with any argument about the application of escrow funds, but argues
only that she establishes a RESPA claim for Ocwen’s failure to adequately respond to five
Qualified Written Requests (“QWRs”), one sent by her, and four sent by the Office of the Illinois
Attorney General. According to Ocwen, none of the letters constitute QWRs triggering response
obligations under the statute since Gritters cannot show she controlled the Illinois Attorney
General’s Office and none of the letters were sent to Ocwen’s designated QWR address. Even if
the letters had triggered its response obligations under RESPA, Ocwen adds, it adequately
responded to each.
The statute defines a QWR as “written correspondence, other than notices on a payment
coupon or other payment medium supplied by the servicer,” that includes certain identifying
information and “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

31

information sought by the borrower.” 12 U.S.C. § 2605(e). Within 60 days of receipt of a
QWR, the servicer must take one of three actions: either (1) make appropriate corrections to the
borrower’s account and notify the borrower in writing of the corrections; (2) investigate the
borrower's account and provide the borrower with a written clarification as to why the servicer
believes the borrower's account to be correct; or (3) investigate the borrower's account and either
provide the requested information or provide an explanation as to why the requested information
is unavailable. See 12 U.S.C. § 2605(e)(2)(A), (B), and (C). No matter which action the servicer
takes, the servicer must provide a name and telephone number of a representative of the servicer
who can assist the borrower. See id.
Ocwen’s arguments that Gritters’ letters categorically failed to trigger response
obligations under RESPA fail in short order. First, relying on a district court decision defining
agency under Illinois law, Ocwen argues there is no evidence that Gritters and the Illinois
Attorney General had a principal-agent relationship, or that Gritters could “control the Office of
the Illinois Attorney General as her agent.” [Dkt 218 at 13-14 .] Ocwen’s argument imposes
under RESPA obligations not set forth in the statute. RESPA does not define the meaning of
agent for purposes of QWRs, see § 2605(e)(1); see also § 2602 (definitions), so the Court
interprets “agent” in accordance with its ordinary meaning. See Sebelius v. Cloer, 569 U.S. 369,
376 (2013). As the Seventh Circuit observed in Catalan v. GMAC Mortg. Corp., 629 F.3d 676,
688 (7th Cir. 2011), “Any reasonably stated written request for account information can be a
qualified written request.” Indeed the Seventh Circuit had no difficulty in Catalan in finding
RESPA’s response requirements triggered by HUD’s forwarding of a borrower’s complaint letter
to the defendant there. See id. Just as HUD did for the borrower in Catalan, the Illinois
Attorney General’s Office acted on Gritters’ behalf by forwarding her requests to Ocwen and

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requesting responses.

Notably, the record reflects Ocwen treated each request as QWRs

triggering its acknowledgment and response obligations under the statute.
Second, Ocwen’s assertion that its “notices – which predate the letters from the Attorney
General – on the other hand are commands, rather than invitations or mere options, to use the
designated address” different from that which Gritters and the Attorney General’s Office
employed is plainly contradicted by the record.

[Dkt 218 at 15.]

None of its five cited

documents contain a command. Instead, each simply includes a listing of “correspondence
addresses,” and a request to “please address all correspondence to Ocwen Loan Servicing, LLC
to the attention of the appropriate department.” [E.g., dkt 189-15, 190-18.] Moreover, several of
the cited statements are dated after the Illinois Attorney General’s letters. [Id.] “[I]t is a mindboggling notion that the designation of an exclusive address could possibly be retroactive in
effect.” McClain v. CitiMortgage, Inc., No. 15-CV-6944, 2016 WL 269568, at * 6 (N.D. Ill. Jan.
21, 2016).
The Court thus turns to an assessment of the parties’ correspondence. Notably, Gritters
does not argue that Ocwen failed to respond; she argues only that “no investigation was
performed” in response to her QWRs, and that “any investigation [sic] reasonable investigation
would have at least led to a proper credit or refund from the $496.78 in fees applied to
foreclosure fees.” [Dkt 201 at 23.] While this sort of unsupported allegation might survive at an
earlier stage in the case, it is insufficient to survive Ocwen’s summary judgment motion.
The undisputed record reflects that Ocwen provided substantive responses to each of the
five QWRs. Gritters’ first letter did not ask a specific question; rather, it generally disputed
assessed fees, processing timing and alleged double-billing.

[Dkt 202-8 at 9-10.]

Ocwen

responded with a copy of Gritters’ payment history showing “when payments were received and

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applied to the loan,” and stated that “fees assessed to the loan are valid.” [Id. at 12.] Although
Gritters argues that this response did not address her inquires or explain fees, she fails to identify
a specific query to which Ocwen did not respond, and it cannot be said from the face of the
communications that a reasonable factfinder could find Ocwen’s response deficient. 6
Gritters’ second letter raised several issues regarding her home being listed in
foreclosure, duplicative fees and late fees. Ocwen responded in detail, explaining the imposition
of late fees and stating that “foreclosure proceedings were stopped on April 28, 2010 after the
loan was reinstated.” [Id. at 18.] Although Gritters complains that Ocwen did not adequately
respond to her request for an accounting or explanation of court fees and costs, her letter does not
specifically ask for those things. [Id. at 14-16.]
Gritters’ third letter questioned her monthly payment amount, and her suspense account.
[Id. at 21-24.] Ocwen responded with an explanation of the payment amount and how an escrow
deficiency affected it. [Id. at 26-27.]

It also enclosed a “detailed Payment Reconciliation

history.” [Id.] Here, too, she complains that Ocwen did not address her concerns, but she fails to
identify a specific issue to which it did not respond. Any such failure is not evident from the
correspondence.
Gritters’ only specific complaint about Ocwen’s response to her fourth letter is that it
“mocked Gritters by recommending the assistance of a ‘certified accountant’ if she still had
questions. [Dkt 201 at 20.] RESPA does not provide a remedy for this issue.
Gritters’ fifth letter requested information regarding application of payments, use of
suspense accounts and fees attached to the account. [Dkt 202-8 at 46-48.] Ocwen responded by
providing a payment reconciliation history and an explanation of its codes, as well Nationstar’s
6

Gritters also complains that Ocwen incorrectly stated that the foreclosure had closed, but
RESPA does not provide a recovery for any such statement.

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contact information since servicing of the loan by that point had been transferred there. [Id. at
51-53.] Once again, Gritters complains that Ocwen’s response was insufficient but specifies no
issue Ocwen failed to address.
Because Gritters has not demonstrated an issue of material fact supporting her claim that
Ocwen failed to conduct any investigation, summary judgment for Ocwen is granted.
Breach of Fiduciary Duty Claim
Finally, Ocwen argues Gritters puts forward no evidence from which fiduciary liability
could arise. [Dkt 191 at 21 -22.] Gritters has not opposed the motion. Once a party has made a
properly supported motion for summary judgment, the opposing party may not simply rest on her
pleadings, but must instead submit evidence showing there is a genuine issue for trial.
Accordingly, Ocwen’s motion on this count it is granted.

CONCLUSION
For the reasons set forth above, Defendant Pierce & Associates, P.C.’s Motion for
Summary Judgment [185] denied, Plaintiff’s Motion for Summary Judgment Against Defendant
Pierce & Associates, P.C., [196] is granted, Defendant Ocwen Loan Servicing, LLC’s Motion for
Summary Judgment [188] is granted in part and denied in part, and Plaintiff’s Motion for
Summary Judgment Against Defendant Ocwen Loan Servicing, LLC, [200] is granted in part
and denied in part. A status is set for May 8, 2018 at 9:30 a.m.

Date: 4/13/2018
Jorge L. Alonso
United States District Judge

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