CARSON et al v. OCWEN LOAN SERVICING LLC et al

Filing 65

DECISION AND ORDER ON MOTIONS re: 38 Motion for Summary Judgment; 45 Motion for Summary Judgment; 59 Motion for Leave to File By JUDGE D. BROCK HORNBY. (mjlt)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
BERNARD AND NANCY CARSON,
PLAINTIFFS
V.

OCWEN LOAN SERVICING LLC, THE
BANK OF NEW YORK MELLON
F/K/A THE BANK OF NEW YORK
AS SUCCESSOR TO TRUSTEE FOR
THE BENEFIT OF THE
CERTIFICATEHOLDERS OF
POPULAR ABS, INC. MORTGAGE
PASS-THROUGH CERTIFICATES
SERIES 2005-C, LITTON LOAN
SERVICING LP,
DEFENDANTS

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CIVIL NO. 2:15-CV-514-DBH

DECISION AND ORDER ON MOTIONS
This case involves Maine homeowners’ attempts to reduce their monthly
mortgage

payments

under

the

federal

government’s

Home

Affordable

Modification Program (HAMP). The crux of the dispute is whether Bernard and
Nancy Carson and their lender, through its agents, ever entered into a binding
Modification Agreement with respect to the Carsons’ loan. The defendants Litton
Loan Servicing and Ocwen Loan Servicing LLC consecutively serviced the loan;
the current holder of the note and mortgage is The Bank of New York Mellon
f/k/a The Bank of New York as successor trustee for JPMorgan Chase Bank,
N.A., as Trustee for the benefit of the Certificateholders of Popular ABS, Inc.

Mortgage Pass-Through Certificates Series 2005-C.

I will refer to them

respectively as Litton, Ocwen, and Bank of New York.
After oral argument on March 16, 2017, I GRANT the plaintiffs’ motion to
file a surreply (ECF No. 59).

At the argument, the defendants were able to

address any issues in the surreply (ECF No 59-1) that they desired. I DENY the
plaintiffs’ motion for summary judgment (ECF No. 38), and I GRANT

IN PART

the

defendants’ motion for summary judgment (ECF No. 45). Genuine issues of
material fact remain for most of the claims at trial.
FACTS
Where the facts are disputed, I will say so, and I will take the version
favorable to the nonmoving party. I also address more facts and factual disputes
later in this opinion when they are material to particular issues.
In 2005, the Carsons signed a Note for $250,000 secured by a Mortgage
on their Saco home.1

The Note called for monthly principal and interest

payments of $1,588.40 plus an escrow for taxes and insurance.2 In 2006, the
Carsons filed for Chapter 13 Bankruptcy in this District.3
On November 1, 2008, Litton began servicing the loan.4 In 2009, Bank of
New York (or its predecessor) took an assignment of the Note and Mortgage.5 In

1 Pls.’ Statement of Material Facts ¶ 1 (ECF No. 47) (Pls.’ SMF); Defs.’ Response to Pls.’ Statement
of Material Facts ¶ 1 (ECF No. 52) (Defs.’ RSMF).
2 Defs.’ Statement of Additional Material Facts ¶¶ 1, 3 (ECF No. 52) (Defs.’ SAMF); Pls.’ Response
to Defs.’ Statement of Additional Material Facts ¶¶ 1, 3 (ECF No. 55) (Pls.’ RSAMF).
3 Defs.’ SAMF ¶ 7; Pls.’ RSAMF ¶ 7.
4 The parties agree that the original lender, Popular, serviced the loan from its inception until
October 31, 2008. Defs.’ SAMF ¶¶ 6, 8; Pls.’ RSAMF ¶¶ 6, 8.
5 Pls.’ SMF ¶ 3; Defs.’ RSMF ¶ 3.

2

September 2011, Ocwen acquired Litton and assumed Litton’s obligations.6
Ocwen has serviced the loan since 2011.7
On account of ongoing financial difficulties, the Carsons asked Litton in
2010 to request a solicitation package for the federal government’s Home
Affordable Modification Program (HAMP).8 They submitted a HAMP Request for
Modification and Affidavit that same year to Litton.9 Litton approved the Carsons
for a Modification Agreement on January 6, 2011,10 and in April delivered a
Commitment Letter dated April 19 together with a document entitled Home
Affordable Modification Agreement.11 The Commitment Letter offered to reduce
the amount of the interest-bearing principal and to reduce the monthly payment
on the Note to $1,435.75, not counting the monthly escrow payment12 and to
modify the terms of the Note and Mortgage accordingly.13

Although these

documents were dated in April of 2011, the Modification Agreement said it would
be effective starting February 1, 2011, with the first modified payment due on
March 1, 2011.14

Pls.’ SMF ¶ 6; Defs.’ RSMF ¶ 6.
Pls.’ SMF ¶ 5; Defs.’ RSMF ¶ 5.
8 Defs.’ SAMF ¶ 10; Pls.’ RSAMF ¶ 10.
9 Defs.’ SAMF ¶ 12; Pls.’ RSAMF ¶ 12.
10 Pls.’ SMF ¶ 13; Defs.’ RSMF ¶ 13
11 Pls.’ SMF ¶ 15; Defs.’ RSMF ¶ 15. The defendants claim that the interval was due to the
Carsons’ delay in providing a signed Dodd-Frank Certification. Defs.’ Statement of Material Facts
¶¶ 29–30 (ECF No. 46) (Defs.’ SMF); Declaration of Nicole M. Gostebski ¶¶ 35–36 (ECF No. 461). The plaintiffs deny these statements of fact and object based on lack of foundation,
contending that Ms. Gostebski, a senior loan analyst at Ocwen Financial Corporation, cannot
testify regarding Litton’s records or Litton’s state of mind when the Carsons submitted their
application. Pls.’ Response to Defs.’ Statement of Material Facts ¶¶ 35–36 (ECF No. 50) (Pls.’
RSMF). The reason for the interval is not material to my decision.
12 The parties disagree over the original amount of the escrow payment—$445.33, Defs.’ RSMF
¶ 17, or $412.05, Pls.’ SMF ¶ 17—but the dispute is not material to this decision.
13 Pls.’ SMF ¶ 16; Defs.’ RSMF ¶ 16; Defs.’ SAMF ¶ 32; Pls.’ RSAMF ¶ 32.
14 Pls.’ SMF ¶ 18; Defs.’ RSMF ¶ 18.
6
7

3

Litton’s Commitment Letter said that it was Litton’s “offer to modify the
referenced loan, subject to” stated “terms and conditions.”15

In bold type it

stated: “If you choose to accept this offer, you must sign this letter and return
by May 3, 2011. Failure to do so will result in the automatic withdrawal of the
modification letter without further notice.”16 The Commitment Letter also said
that Litton “offer[ed] to modify the Note and Mortgage . . . (as modified it will be
called

the

‘Modified

Mortgage’),

listed

“Terms

of

Modification”

and

“Contingencies,”17 and said:
If you choose to accept the offer for a Modified Mortgage upon
the terms and conditions above, you must agree by signing
the acceptance that follows this offer. The acceptance must
be signed by each mortgagor and returned by May 3, 2011,
or the offer will expire.18

Attached was a document entitled “Home Affordable Modification Agreement
(Step Two of Two-Step Documentation Process),”19 which elaborated on all the
ways in which the Note and Mortgage would be amended. It also stated: “I
understand that after I sign and return two copies of this Agreement to the
Lender, the Lender will send me a signed copy of this Agreement.”20 The Lender

April 19, 2011 Commitment Letter, Deposition of Crystal M. Kearse, Ex. 2, at 1 (ECF No. 477) (Commitment Letter).
16 Id.
17 Section C, “Contingencies,” provided:
“If any other issues arise between the date of this
commitment and the date on which the documents for the Modified Mortgage are signed,
including, but not limited to, deterioration in the condition of the property, lawsuits, liens,
additional expenses, and defaulted amounts, we may refuse to permit the Mortgage to be
modified and will pursue all collection action.” Id. at 3. The defendants have not argued that
any of the listed contingencies occurred.
18 Id. at 1.
19 Defs.’ SMF ¶ 37; Pls.’ RSMF ¶ 37; Home Affordable Modification Agreement, Dep. of Crystal M.
Kearse, Ex. 2 (ECF No. 47-7) (HAMP Agreement). Step One would have been a trial payment
plan, but due to the Carsons’ active Chapter 13 bankruptcy, Litton determined that the Carsons
could skip the trial payment plan and proceed straight to a final modification. See Defs.’ SMF
¶¶ 26–27; Pls.’ RSMF ¶¶ 26–27.
20 HAMP Agreement at 1.
15

4

was defined as “Servicer” or Litton.21 No conditions were listed for that obligation
on the part of the Servicer.

The Carsons timely signed and returned the

Commitment Letter, thereby accepting the offer to modify the loan, Note and
Mortgage, along with the attached Modification Agreement, returning both
documents to Litton on April 27, 2011.22 Litton received them on the deadline,
May 3, 2011.23 However, Litton did not return to the Carsons a signed copy of
the Agreement as promised.24
The Carsons then began making payments according to the modification.25
But Litton never implemented the terms of the Modification Agreement.26 Before
the Carsons obtained bankruptcy court approval, Litton transferred servicing of
the loan and the Carsons’ signed Modification Agreement to Ocwen on
September 1, 2011.27 Litton incorrectly reported the loan to Ocwen as “HAMP
APPLICATION RECEIVED BY PRIOR SERVICER AND IS NOT DECISIONED
YET,” and Ocwen retained this same code upon the transfer.28

On

September 23, 2011, the Carsons filed a motion in the bankruptcy court to
approve the loan modification.29 They sent notice of the motion to Litton,30 but

Id.
Defs.’ SAMF ¶ 43; Pls.’ RSAMF ¶ 43; Commitment Letter at 1, 3.
23 Defs.’ SAMF ¶ 44; Pls.’ RSAMF ¶ 44.
24 Defs.’ SMF ¶ 43; Pls.’ RSMF ¶ 43; HAMP Agreement at 2.
25 Pls.’ SMF ¶ 21; Defs.’ RSMF ¶ 21.
26 Pls.’ SMF ¶ 25; Defs.’ RSMF ¶ 25. The defendants say that Litton was awaiting bankruptcy
court approval, Declaration of Nicole M. Gostebski ¶ 48 (ECF No. 46-1), but the Carsons
challenge the foundation for that assertion since it is made by Ms. Gostebski, an employee at
Ocwen Financial Corporation but not a Litton employee, see Defs.’ SMF ¶ 43; Pls.’ RSMF ¶ 43.
The reason for the delay in signing and returning the documents before Litton transferred
servicing of the Loan is not material to my decision.
27 Pls.’ SMF ¶¶ 24, 26–27; Defs.’ RSMF ¶¶ 24, 26–27.
28 Pls.’ SMF ¶¶ 28, 30; Defs.’ RSMF ¶¶ 28, 30.
29 Defs.’ SAMF ¶ 54; Pls.’ RSAMF ¶ 54.
30 Pls.’ SMF ¶ 33; Defs.’ RSMF ¶ 33.
21
22

5

not directly to Ocwen.31 Ocwen made its appearance in the bankruptcy court on
October 11, 2011, when it filed a Transfer of Claim for Security in the Carson’s
bankruptcy.32

The bankruptcy court granted the Carsons’ motion on

October 31, 2011.33 Ocwen received a copy of the bankruptcy court’s order on
November 15, 2011.34
In the meantime, treating the Carsons’ original modification request as not
yet approved, Ocwen sent the Carsons a letter requesting additional
documentation by October 29, 2011, including an updated HAMP Request for
Modification and Affidavit and paystubs, so that, from its perspective, the
application could be finalized.35 Ocwen sent the Carsons additional letters on
November 1 and 18, 2011, requesting these same documents for purposes of the
HAMP application.36 On December 13, 2011, Ocwen sent the Carsons a letter
informing them that, based on a review of the documents they had provided,
they were not eligible for a HAMP modification.37
On July 18, 2012, the Carsons filed in the bankruptcy court a Motion to
Determine Status of Mortgage as Current.38 They sent notice of the motion’s
filing to Ocwen.39 The bankruptcy court granted their motion, determining the
mortgage current on August 20, 2012.40 Around that same date, Ocwen received

31
32
33
34
35
36
37
38
39
40

Defs.’ SAMF ¶ 55; Pls.’ RSAMF ¶ 55.
Pls.’ SMF ¶ 40; Defs.’ RSMF ¶ 40.
Defs.’ SAMF ¶ 58; Pls.’ RSAMF ¶ 58.
Defs.’ SAMF ¶ 62; Pls.’ RSAMF ¶ 62.
Defs.’ SAMF ¶ 56; Pls.’ RSAMF ¶ 56.
Defs.’ SAMF ¶¶ 60, 63; Pls.’ RSAMF ¶¶ 60, 63.
Defs.’ SAMF ¶ 65; Pls.’ RSAMF ¶ 65.
Pls.’ SMF ¶ 62; Defs.’ RSMF ¶ 62.
Pls.’ SMF ¶ 70; Defs.’ RSMF ¶ 70.
Pls.’ SMF ¶ 69; Defs.’ RSMF ¶ 69.
6

notice of the bankruptcy court’s order determining that the mortgage was
current.41 But Ocwen did not change its treatment of the loan status.42 On
August 28, 2013, the bankruptcy court entered the Carsons’ Chapter 13 Order
of Discharge, with notice to Ocwen.43
From November 2011 to March 2015, Mr. Carson and his housing
counselor contacted Ocwen at least nineteen times attempting to straighten
things out, to clarify that the Carsons had already accepted the proposed loan
modification and to request that the terms of the modification be implemented.44
Ocwen never raised the failure to promptly obtain bankruptcy court approval or
the lack of the Servicer’s signature as the reason for failure to honor the
modification.

During this time period, the Carsons generally made monthly

payments according to the Modification Agreement,45 but Ocwen treated the
payments according to the original terms of the Note and Mortgage, as if there
had been no Modification Agreement.46 Because the payments did not satisfy
the unmodified terms, Ocwen’s system placed the payments in a suspense
account and showed that the Carsons were late on their payments.47
Accordingly, Ocwen sent the Carsons a letter indicating that it had not
received payments for December 1, 2014 and January 1, 2015, followed by a

Pls.’ SMF ¶ 71; Defs.’ RSMF ¶ 71.
Pls.’ SMF ¶¶ 74, 77; Defs.’ RSMF ¶¶ 74, 77.
43 Pls.’ SMF ¶ 81; Defs.’ RSMF ¶ 81.
44 Pls.’ SMF ¶ 57; Defs.’ RSMF ¶ 57.
45 Pls.’ SMF ¶ 92; Defs.’ RSMF ¶ 92. It appears that the Carsons failed to make any monthly
payments in November 2012 and March 2013, Defs.’ RSMF ¶ 59; Pls.’ SMF ¶ 59, although the
Carsons say they made all payments, and the defendants deny that assertion as to November
2012 and March 2013, Pls.’ SMF ¶ 61; Defs.’ RSMF ¶ 61. The dispute is not material to my
decision.
46 Pls.’ SMF ¶ 60; Defs.’ RSMF ¶ 60.
47 Pls.’ SMF ¶¶ 92–93; Defs.’ RSMF ¶¶ 92–93.
41
42

7

delinquency notice and a notice of default in February of 2015.48

Ocwen

subsequently sent letters in March and April, informing the Carsons that it had
not received payments and that it might refer the loan to foreclosure.49 In April,
Ocwen sent the Carsons another notice of default, again advising of potential
foreclosure if they did not provide payment.50 Afraid of losing their home, the
Carsons paid Ocwen $5,546.61 on May 6, 2015 and subsequently made
increased payments of approximately $2,080 per month.51
On September 16, 2015, the Carsons’ lawyer sent Ocwen a letter claiming
that Ocwen and Litton’s “gross pattern and practice of ongoing misconduct was
in violation of at least the FDCPA, RESPA, UTPA, Maine Consumer Credit Code,
11 U.S.C. § 362 and 11 U.S.C. § 524 for which the Carsons are entitled to actual,
compensatory, punitive, and statutory damages.”52 On June 14, 2016, Ocwen
implemented most of the terms of the Modification Agreement.53

Following

application of all the payments, Ocwen applied any remaining money on the
Carsons’ account to the principal.54
PROCEDURAL HISTORY
The Carsons filed this lawsuit on December 17, 2015.55 According to the
Amended Complaint,56 they make twelve claims against the defendants: Count
One, violation of the bankruptcy court automatic stay, 11 U.S.C. § 362 (Ocwen

48
49
50
51
52
53
54
55
56

Pls.’ SMF ¶¶ 94–96; Defs.’ RSMF ¶¶ 94–96.
Pls.’ SMF ¶¶ 99, 104; Defs.’ RSMF ¶¶ 99, 104.
Pls.’ SMF ¶ 105; Defs.’ RSMF ¶ 105.
Pls.’ SMF ¶ 106; Defs.’ RSMF ¶ 106.
Defs.’ SAMF ¶ 71; Pls.’ RSAMF ¶ 71.
Pls.’ SMF ¶ 120; Defs.’ RSMF ¶ 120.
Pls.’ SMF ¶ 120; Defs.’ RSMF ¶ 120.
Compl. (ECF No. 1).
Am. Compl. (ECF No. 13).
8

and Bank of New York); Count Two, violation of the bankruptcy court discharge
injunction, 11 U.S.C. § 524 (Ocwen and Bank of New York); Count Three,
violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692
(Ocwen); Count Four, violation of the Maine Fair Debt Collection Practices Act
(MFDCPA), 32 M.R.S. § 11001 (Ocwen); Count Five, illegal, fraudulent or
unconscionable conduct in attempted collection of debts in violation of the Maine
Consumer Credit Code (MCCC), 9-A M.R.S. §§ 9-403(1)(F)&(G) (Ocwen and Bank
of New York); Count Six, violation of the Maine Unfair Trade Practices Act (UTPA),
5 M.R.S. § 205-A (all defendants); Count Seven, violation of the Real Estate
Settlement Procedures Act (RESPA), 12 U.S.C. § 2605 (Ocwen);57 Count Eight,
intentional infliction of emotional distress (IIED) (Ocwen and Bank of New York);
Count Nine, fraud (Ocwen and Bank of New York); Count Ten, fraudulent
misrepresentation (Ocwen and Bank of New York); Count Eleven, breach of
contract

(all

defendants);

and

Count

Twelve,

promissory

estoppel

(all

defendants).
The Carsons moved for summary judgment as to liability on all but the
emotional distress count, requesting a trial on damages (ECF No. 38).

The

defendants moved for summary judgment on all counts (ECF No. 45).
ANALYSIS
The parties agree that the enforceability of the original 2011 HAMP
documents affects a number of counts. I therefore deal with that issue first.

The Amended Complaint says that the plaintiffs are bringing Count Seven against only Ocwen.
Am. Compl. ¶¶ 149–56 (ECF No. 13). In their motion for summary judgment, however, the
plaintiffs suggest that Count Seven also includes Bank of New York under an agency theory.
Pls.’ Mot. Summ. J. 33–34 (ECF No. 38). In the absence of a motion to amend further, I follow
the Amended Complaint.

57

9

Enforceability of the 2011 HAMP Documents

The Carsons argue that they accepted Litton’s Commitment Letter offer by
signing both it and the attached Modification Agreement as Litton requested, and
thereby entered into an enforceable loan modification in 2011. The defendants
argue that the Carsons failed to satisfy two preconditions to the contract—first,
promptly obtaining bankruptcy court approval; and, second, obtaining the
Lender/Servicer’s signature on the Modification Agreement.

They also argue

that Mr. Carson made a material misrepresentation that made the modification
unenforceable in any event.
The Commitment Letter does call for bankruptcy court approval.58 But
the Carsons obtained bankruptcy court approval later in 2011. There was no
time limit in the documents for that approval, and none of the defendants ever
attempted to rescind the Modification Agreement for lack of bankruptcy court
approval (or for any other reason). On the undisputed facts, that condition was
satisfied.59
As I stated earlier, the Modification Agreement provides that after the
Carsons sign and return two copies to Litton, the Lender (defined as the Servicer

It actually states that the “Mortgage will be modified to reflect the following terms” (emphasis
added) and lists as one of eight bullet-point terms that “[t]he mortgagor must . . . obtain approval
of this loan modification by the bankruptcy court.” Commitment Letter at 2. Given the language
that bankruptcy court approval is a revised term of the modified mortgage, it is hard to see how
bankruptcy court approval is a “pre-condition” to the modification, but I will overlook the sloppy
drafting.
59 As I noted earlier, Section C of the Commitment Letter also stipulates: “If any other issues
arise between the date of this commitment and the date on which the documents for the Modified
Mortgage are signed, including, but not limited to, deterioration in the condition of the property,
lawsuits, liens, additional expenses, and defaulted amounts, we may refuse to permit the
Mortgage to be modified and will pursue all collection action.” Commitment Letter at 3. The
record, however, does not contain any indication that the Carsons failed to satisfy the identified
contingencies in Section C, nor have the defendants made any argument that the Carsons did
not comply with Section C.
58

10

or Litton) “will send me a signed copy of this Agreement.”60 There is no listed
condition for that obligation on the Servicer to sign and return the document.
But Litton and its successor Ocwen never signed and returned the document as
this provision required. The defendants argue that there were two reasons the
Servicer did not sign.61

First, that the Carsons were slow in obtaining

bankruptcy court approval, and second, that they did not respond to Ocwen’s
requests for more financial information.

Neither of these is a listed reason

justifying failure to sign.62 Moreover, there was no deadline for bankruptcy court
approval, and the new information that Ocwen requested was “to complete the
application process,”63 whereas Litton had already approved the Carsons’
application. Neither was a proper justification for failing to sign and return the
Modification Agreement.
However, the document goes on to say: “This Agreement will not take effect
unless the preconditions set forth in Section 2 have been satisfied.”64 There are
two “Acknowledgments and Preconditions” in Section 2. The first is that the
Servicer not find before the Modification Effective Date, February 2, 2011, that
certain representations and covenants are not true and correct or not
performed.65

The defendants do not contend that this precondition was

unsatisfied. The second precondition of Section 2 is that “the Loan Documents
[defined as the Note and Mortgage] will not be modified unless and until (i) the
HAMP Agreement at 1.
Defs.’ Mot. Summ. J. 4–5 n.1 (ECF No. 45).
62 Nor did the defendants tell the Carsons that these reasons were grounds for rescinding the
original Modification Agreement.
63 Declaration of Nicole M. Gostebski, Ex. I, at 1 (ECF No. 46-1).
64 HAMP Agreement at 1.
65 Id. at 2.
60
61

11

Lender accepts this Agreement by signing and returning a copy of it to me.”66
Because none of the defendants ever signed and returned the Modification
Agreement to the Carsons (as they were obligated to do),67 they contend that an
express precondition of the Modification Agreement was never satisfied, and
therefore that the Modification Agreement never took effect.68
The plain language of the executed Commitment Letter and the
Modification Agreement that accompanied it show that Litton made an offer and
that the Carsons accepted it.69

There was a meeting of the minds, and no

material terms and conditions are missing in the documents such as would
prevent enforcement of that agreement.70 The defendants argue from Maine
cases that there was no obligation until they actually signed and returned the
Modification Agreement, an event that never occurred. But those Maine cases
dealt with situations where the parties were negotiating in preparation for a
contract or where they were waiting for the written instrument to be drafted.71

Id.; see also Defs.’ SMF ¶ 39; Pls.’ RSMF ¶ 39.
The defendants did finally sign the Modification Agreement on July 8, 2016. Pls.’ RSAMF ¶ 52;
Pls.’ SMF ¶ 121; Defs.’ RSMF ¶ 121. The defendants argue that this evidence should be stricken
under Federal Rules of Evidence 407 and 408. I do not use the July 2016 signature in
determining whether the original Modification Agreement was enforceable, see infra note 90.
68 Defs.’ Mot. Summ. J. 3–5 (ECF No. 45).
69 See Restatement (Second) of Contracts § 212(2) (Am. Law. Inst. 1981) (if neither credibility of
extrinsic evidence nor competing reasonable inferences are involved, “a question of interpretation
of an integrated agreement is to be determined as a question of law”); see also id. cmt. e (“[A]
question of interpretation is not left to the trier of fact where the evidence is so clear that no
reasonable person would determine the issue in any way but one.”).
70 “A contract exists when the parties mutually assent to be bound by all its material terms, the
assent is either expressly or impliedly manifested in the contract, and the contract is sufficiently
definite.” McClare v. Rocha, 2014 ME 4, ¶ 16, 86 A.3d 22 (internal quotation marks omitted).
“[A]legations of a meeting of the minds, consideration, and mutuality of obligations state a legally
enforceable contract.” Dom J. Moreau & Son, Inc. v. Fed. Pac. Elec. Co., 378 A.2d 151, 153 (Me.
1977). In this case, consideration and mutuality of obligations are not in dispute.
71 The defendants contend that the HAMP Agreement, rather than the Commitment Letter,
constitutes the parties’ contemplated agreement. Defs.’ Obj. to Pls.’ Mot. Summ. J. 6–7 n.2 (ECF
No. 51). The Commitment Letter expressly states that it “contains our offer to modify the
referenced loan” and “[w]hen signed by you, this letter will constitute your agreement to these
66
67

12

See, e.g., Masselli v. Fenton, 157 Me. 330, 335–36, 172 A.2d 728, 730–31 (1961);
Mississippi & Dominion S.S. Co. v. Swift, 86 Me. 248, 29 A. 1063, 1067 (1894).
Here, Litton made a fully detailed written offer, the Carsons accepted it in writing,
and the Carsons did not attempt to change any of the terms that Litton offered.
Once bankruptcy court approval was obtained, all the terms and conditions
within the Carsons’ control were satisfied. Since the offer was never withdrawn,
the Servicer at that point was contractually obligated to sign the Modification
Agreement.72 Indeed, Ocwen’s 30(b)(6) designee Crystal M. Kearse testified at
her deposition that the signature requirement is “normally . . . ministerial” and
accomplished within 30 days after bankruptcy court approval is obtained.73
If there were any doubt about the Modification Agreement being effective
after the bankruptcy court approval, the subsequent conduct of the parties in
the bankruptcy court removes all doubt. Never did any of the defendants object
to the Carsons’ assertion that there was a new loan arrangement or object that
Litton’s accepted offer was no longer valid or had been withdrawn.

The

defendants complain that the Carsons’ September 23, 2011, notice of their
motion for bankruptcy court approval went to Litton rather than Ocwen (Ocwen
terms and conditions.” Commitment Letter at 1. The Commitment Letter also directs the
borrower to “send a signed original copy of this commitment letter by mail along with the signed
modification agreement.” Id. at 4. I therefore construe the Commitment Letter and the HAMP
Agreement in tandem.
72 This case is unlike Orcutt v. Feis, 298 A.2d 758, 759 (Me. 1973), where “[t]he record
demonstrates the defendants’ intention not to be contractually bound until a written instrument
had been executed by all the parties, which was never done.” Litton demonstrated its intention
to be bound, but included a provision concerning when the Loan Documents would actually be
modified.
73 Crystal M. Kearse Dep. Tr. 87:15–88:6 (ECF No. 47-5). Although the Modification Agreement
states that the Note and Mortgage will not be modified until the Servicer signs and returns a
copy of the Modification Agreement to the Carsons and the Modification Effective Date
[February 2, 2011] occurs, I conclude that the Servicer could be enjoined to fulfil its contractual
obligation to sign. See Restatement (Second) of Contracts § 357 (Am. Law. Inst. 1981).
13

took over servicing the loan on September 1). But notice of the bankruptcy
court’s approval of the Modification Agreement went to the lawyers for the Bank
of New York, Litton’s and Ocwen’s principal, and no objection was forthcoming.74
Nor would any objection be expected, since Litton had directed the Carsons to
obtain bankruptcy court approval. If that were not enough to show that there
was an enforceable Modification Agreement,75 in mid-2012 the Carsons moved
for a bankruptcy court declaration that their mortgage was then current.76
Notice of that motion did go to Ocwen, Ocwen did not object to the motion,77 and
the bankruptcy judge on August 20, 2012, determined that as of that date the
Carsons were not in default or that all defaults had been cured.78 That could
only be the case if the Modification Agreement was in effect.
The defendants’ argument if accepted would make Litton’s original offer
wholly illusory.79 Simply by choosing not to sign the document—for no valid
reason—the Servicer could revoke its detailed written offer that had been
accepted. That is not the law on offer and acceptance.80 Even Ocwen’s corporate
designee under Rule 30(b)(6) agreed that in the normal case signature is only a

See Order on Motion to Approve Loan Modification With Request to Limit Notice, Pls.’ SMF,
Ex. 11 (ECF No. 47-11).
75 The defendants argue that there was no enforceable Modification Agreement at the time the
bankruptcy court approved it because they had not yet signed it. Defs.’ Mot. Summ. J. 4–5 (ECF
No. 45).
76 Pls.’ SMF ¶ 62; Defs.’ SMF ¶ 62.
77 The Carsons had consented to Ocwen’s Motion to Extend Time to Respond to the Motion to
Determine Status of the Mortgage as Current in the bankruptcy court. Pls.’ SMF ¶ 67; Defs.’
RSMF ¶ 67.
78 Pls.’ SMF ¶ 69; Defs.’ SMF ¶ 69.
79 Accord Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 562–63 (7th Cir. 2012) (Illinois law)
(the defendant’s “proposed reading of Section 2 would nullify other express provisions” and
“turns an otherwise straightforward offer into an illusion”); Barroso v. Ocwen Loan Servicing,
LLC, 146 Cal. Rptr. 3d 90, 99–100 (Cal. Ct. App. 2012) (California law) (failure to send signed
copy “is not a condition precedent barring formation of the binding modification agreement”).
80 See Restatement (Second) of Contracts §§ 22, 27 cmt. a.
74

14

ministerial event that occurs within 30 days of the bankruptcy court approval,
and there is no conflicting evidence.

The defendants have shown nothing

abnormal about this case except Litton’s and Ocwen’s mistakes in coding the
Carson loan after the offer was accepted.

Subject to the fraud and

misrepresentation dispute below, therefore, I conclude that the Modification
Agreement was enforceable and that the Servicer could be compelled to sign it.81
The defendants argue that even if the Servicer’s failure to sign the
Modification Agreement does not make it unenforceable, the Carsons made
material misrepresentations that produce the same result. Specifically, they
point out that Mr. Carson testified at his June 8, 2016, deposition that at the
time the Carsons requested the modification he was receiving a weekly $300
check from his employer as reimbursement for certain Medicare expenses he
paid independently.82

Mr. Carson did not disclose this $15,600 as annual

income in his original Request for Modification and Affidavit or during the HAMP
review process.

The defendants contend that he therefore materially

misrepresented his income to induce Litton to offer the Modification
Agreement.83 But there are genuine disputes of material fact on (1) whether the
amount Mr. Carson received was per week or per month, i.e., $3,600 or $15,600
annually; and (2) whether the amount was material to the HAMP decision.
On the first, the amount of the payment, the defendants can certainly use
at trial Mr. Carson’s June 8, 2016, deposition testimony and his failure to

There is also a genuine dispute of material fact concerning whether the Carsons can show
detrimental and justified reliance that would support a promissory estoppel claim against the
defendants. See, e.g., Harvey v. Dow, 2011 ME 4, ¶ 12, 11 A.3d 303.
82 Pls.’ SMF ¶ 125; Defs.’ RSMF ¶ 125.
83 Defs.’ Mot. Summ. J. 8–11 (ECF No. 45).
81

15

provide an errata sheet to correct it. But there is conflicting evidence that the
Carsons can rely on for the $300 payment frequency being monthly rather than
weekly. Over a year before the deposition, Mr. Carson had written Ocwen a letter
on February 23, 2015, referring to this as a $300 per month reimbursement.84
On June 17, 2016, the Carsons’ lawyer notified the defendants’ lawyer that Mr.
Carson had misspoken at his deposition.85

On July 1, the Carsons’ lawyer

produced in discovery to the defendants’ lawyer a letter from Mr. Carson’s
financial advisor that Mr. Carson received a monthly $300 payment as
reimbursement for medical insurance and an email from Mr. Carson’s employer
to the same effect.86 Mr. Carson should have filed an errata sheet to correct his
deposition testimony, Fed. R. Civ. P. 30(e), and that failure can be used to
challenge his credibility on the subject at trial. See Glenwood Farms, Inc. v. Ivey,
229 F.R.D. 34, 35 (D. Me. 2005). But it does not make his deposition statement
a binding admission that he cannot contradict. See 7-30 James Wm. Moore et
al., Moore’s Federal Practice ¶ 30.60 (3d ed. 2015); Elwell v. Conair, Inc., 145 F.
Supp. 2d 79, 87 (D. Me. 2001). Along with the documents I have listed, he has
now filed a declaration that he was confused at his deposition and misstated the
frequency of his reimbursement.87 It is true that the First Circuit has held that
a party cannot use a later affidavit to contradict clear testimony at a deposition
that would otherwise entitle the opposing party to summary judgment.

Declaration of Bernard Carson ¶ 4 (ECF No. 50-6); Declaration of Bernard Carson, Ex. 1 (ECF
No. 50-7).
85 Declaration of Andrea Bopp Stark ¶ 5 (ECF 50-2).
86 Declaration of Andrea Bopp Stark ¶ 7 (ECF No. 50-2); Declaration of Andrea Bopp Stark, Ex.
2 (ECF No. 50-4).
87 Pls.’ SMF ¶ 125; Declaration of Bernard Carson ¶¶ 5–11 (ECF No. 50-6).
84

16

Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4–5 (1st Cir. 1994). But
that prohibition is in the absence of a “satisfactory explanation.” Id. Mr. Carson
has provided a satisfactory explanation here, and the amount of the undisclosed
payment will be a matter for the jury to determine.
On materiality, the Carsons can argue to the jury that a $3,600 annual
payment was not material to Litton’s decision to offer them the Modification
Agreement,88 and that the omission of the $3,600 received was offset by
simultaneous omission of his expenditures on health insurance premiums in
approximately the same amount.89 The amount and materiality of the omission
remain a jury issue.90

Pls.’ Obj. to Defs.’ Mot. Summ. J. 12–15 (ECF No. 49).
Mr. Carson’s Declaration states that according to bank statements he submitted to Litton in
2010 he was paying AARP $307.70 per month for health insurance. Declaration of Bernard
Carson ¶ 7 (ECF No. 50-6). The defendants agree that he did not indicate any monthly health
insurance expenses on his HAMP Request for Modification and Affidavit. Declaration of Nicole
M. Gostebski, Ex. E (ECF No. 46-1).
90 After learning of this payment issue, Ocwen nevertheless implemented most of the terms of
the Modification Agreement in June 2016. Pls.’ SMF ¶ 120; Defs.’ RSMF ¶ 120. The defendants
argue that I should not consider this later conduct because of Federal Rules of Evidence 407 and
408. Defs.’ Obj. to Pls.’ Mot. Summ. J. 4 n.1 (ECF No. 51). As to Rule 407, although there is
disagreement among the Circuits, see 23 Charles Alan Wright & Arthur R. Miller, Federal Practice
& Procedure § 5285 (4th ed. 2008); compare Reynolds v. Univ. of Pennsylvania, 483 F. App’x
726, 731–33 (3d Cir. 2012) and Pastor v. State Farm Mut. Auto. Ins. Co., 487 F.3d 1042, 1045
(7th Cir. 2007), with R.W. Murray, Co. v. Shatterproof Glass Corp., 758 F.2d 266, 274 (8th Cir.
1985), and Brazos River Auth. v. GE Ionics, Inc., 469 F.3d 416, 428–29 (5th Cir. 2006), and the
First Circuit has not spoken, the plain language of Rule 407 does not apply to this contract
dispute. In any event, under Rule 407 a subsequent measure can be used to show feasibility. I
conclude that Ocwen’s eventual decision to enter the Modification Agreement is not evidence that
there was an earlier contract, but would be proper under Rule 407 to show that any
misrepresentation by the Carsons was not material to the Servicer’s decision whether to allow a
modification. The Rule 408 issue is more problematic. But at this stage, the record does not tell
me whether Ocwen’s 2016 decision was part of a compromise or attempt at compromise. The
exact terms, and any relevant consideration involved, in the 2016 implementation of the
Modification Agreement remain unclear. See Pls.’ SMF ¶¶ 120–21; Defs.’ RSMF ¶¶ 120–21. I
decline to decide at this stage, therefore, whether the parties’ 2016 modification would be
inadmissible as evidence of “furnishing, promising, or offering—or accepting, promising to
accept, or offering to accept—a valuable consideration in compromising or attempting to
compromise the claim” under Federal Rule of Evidence 408. See McInnis v. A.M.F., Inc., 765
F.2d 240, 246–51 (1st Cir. 1985).
88
89

17

Because the enforceability of the contract cannot be determined until the
material misrepresentation issue is resolved, summary judgment is unavailable
to both sides on the following claims: violation of the bankruptcy stay; violation
of the bankruptcy discharge; violation of the Maine UTPA; violation of RESPA;
fraud; fraudulent misrepresentation; breach of contract; and promissory
estoppel. There is one exception, however. Because it is undisputed that Bank
of New York was a disclosed principal, while Litton and Ocwen were only its
agents, the breach of contract and promissory estoppel claims can lie only
against Bank of New York.91
I therefore DENY the plaintiffs’ motion for summary judgment on Counts
One, Two, Six, Seven, Nine, Ten, Eleven, and Twelve.

I GRANT summary

judgment to the defendants Litton and Ocwen on Counts Eleven and Twelve, but
otherwise DENY the defendants’ motion for summary judgment on Counts One,
Two, Six, Seven, Nine, Ten, Eleven, and Twelve.
Ocwen’s Asserted Violations of the Fair Debt Collection Practices Act
and the Maine Fair Debt Collection Practices Act

Ocwen argues that it cannot be held liable under either the FDCPA or the
MFDCPA because Ocwen was not a “debt collector” for the Carsons’ loan.92 Both
statutes exclude from their coverage anyone collecting or trying to collect a debt
where the debt was not in default when that person or entity obtained it. 15
U.S.C. § 1692a(6)(F); 32 M.R.S. § 11003(7)(C).93

See Fitzgerald v. Hutchins, 2009 ME 115, ¶¶ 10-11, 983 A.2d 382; K & S Servs., Inc. v. The
Schulz Elec. Grp. of Companies, 670 F. Supp. 2d 91, 94–95 (D. Me. 2009). The plaintiffs’ lawyer
agreed at oral argument.
92 Defs.’ Mot. Summ. J. 12–14 (ECF No. 45).
93 The FDCPA and MFDCPA provide similar definitions of “debt collector” for purposes of liability.
Bank of Am., N.A. v. Camire, 2017 ME 20, ¶¶ 13, 19.
91

18

Relying on Brown v. Morris, 243 F. App’x 31, 34–35 (5th Cir. 2007), Ocwen
contends that because its right to collect came from its acquisition of Litton in
2011, Ocwen did not “obtain” the debt while it was in default.

15 U.S.C.

§ 1692a(6)(F). Rather, Ocwen says that as a consequence of its acquiring Litton,
it should stand in Litton’s place as the loan servicer.94 Thus, if the Carsons were
not in default when Litton began servicing the mortgage in November 2008,
Ocwen says that it should not be considered a “debt collector.”
On this point, Ocwen points to Mr. Carson’s deposition testimony that he
did not default on his house payments in 2008.95 But the Carsons assert that
Litton’s records show that their account was in default in November 2008,96
when Litton began servicing the account. Mr. Carson has provided an affidavit
in response to the defendants’ motion for summary judgment stating that at the
time of his deposition, he believed his statement was correct, but that upon
reviewing Litton’s records he understands that he was two months past due on
November 4, 2008.97

Ocwen argues that I should not consider the late

declaration on account of the Colantuoni decision I discussed earlier. But there
is already a genuine dispute over default because Litton’s records conflict with
Mr. Carson’s testimony even if I ignore the late declaration.
Given the factual discrepancies in the record regarding the timing of the
Carsons’ default, I cannot determine whether Ocwen is a “debt collector” under

Defs.’ Mot. Summ. J. 12–14 (ECF No. 45); see also Fenello v. Bank of Am., N.A., 926 F. Supp.
2d 1342, 1350–51 (N.D. Ga. 2013), aff’d, 577 F. App’x 899 (11th Cir. 2014).
95 Defs.’ RSAMF ¶ 2.
96 Pls.’ SAMF ¶ 2; Payment Reconciliation History, Pls.’ SMF, Ex. 9 at 8 (ECF No. 47-9).
97 Pls.’ SAMF ¶ 14; Defs.’ RSAMF ¶ 14; Declaration of Bernard Carson ¶ 11 (ECF No. 50-6).
94

19

the FDCPA or the MFDCPA.

Therefore, I DENY both the plaintiffs’ and the

defendant Ocwen’s motion for summary judgment on Counts Three and Four.
Violations of the Maine Consumer Credit Code

The MCCC provides that, in “attempting to collect an alleged debt arising
from a consumer credit transaction, a person shall not . . . [d]isclose or threaten
to disclose information concerning the existence of a debt known to be disputed
by the debtor without disclosing that fact,” 9-A M.R.S. § 9-403(1)(F), or “[c]laim,
attempt or threaten to enforce a right that has been barred by law or a final order
of the Supreme Judicial Court or a court of the United States,” 9-A M.R.S. § 9403(1)(G). The Carsons argue that Ocwen violated 9-A M.R.S. § 9-403(1)(F) by
reporting their loan as delinquent to credit reporting agencies without disclosing
that the Carsons disputed the debt, and violated 9-A M.R.S. § 9-403(1)(G)
by failing to comply with a Consent Judgment to which it was a party in the U.S.
District Court for the District of Columbia.98

Ocwen argues that section 9-

403(1)(F) is preempted and that section 9-403(1)(G) is inapplicable.
As to preemption, the federal Fair Credit Reporting Act (FCRA) provides
that “[n]o requirement or prohibition may be imposed under the laws of any State
with respect to any subject matter regulated under . . . section 1681s-2 of this
title, relating to the responsibilities of persons who furnish information to
consumer reporting agencies.” 15 U.S.C. § 1681t(b)(1)(F). Section 1681s-2 in
The Consumer Financial Protection Bureau (CFPB), along with numerous state attorneys
general and banking regulators, obtained a Consent Judgment against Ocwen and Ocwen
Financial Corporation in Consumer Financial Protection Bureau v. Ocwen Financial Corp., No.
13-2025 (RMC) (D.D.C. Feb. 26, 2014), ECF No. 12. Pls.’ SMF ¶ 129; Defs.’ RSMF ¶ 129. The
Amended Complaint enumerates only that Order as supporting the 9-403(1)(G) violation. Am.
Compl. ¶¶ 136–42 (ECF No. 13). The Carsons’ motion for summary judgment attempts to add
two of the bankruptcy court orders, Pls.’ Mot. Summ. J. 30–31 (ECF No. 38), but without an
amended complaint to that effect, I do not consider them at this late stage.
98

20

turn provides that, “[i]f the completeness or accuracy of any information
furnished by any person to any consumer reporting agency is disputed to such
person by a consumer, the person may not furnish the information to any
consumer reporting agency without notice that such information is disputed by the
consumer.”

15 U.S.C. § 1681s-2(a)(3) (emphasis added).

In short, section

1681s-2 “sets forth the duties of those who furnish consumer information to
credit reporting agencies.” Barrepski v. Capital One Bank, 439 F. App’x 11, 12
(1st Cir. 2011).
This District has concluded that by virtue of the federal statute, MCCC
provision 9-A M.R.S. § 9-403(1)(F) is preempted. Hamilton v. Fed. Home Loan
Mortg. Corp., No. 2:13-cv-00414-JAW, 2014 WL 4594733, at *27 (D. Me.
Sept. 15, 2014). “15 U.S.C. § 1681t(b)(1)(F) supersedes any state law that would
cover the subject matter of 15 U.S.C. § 1681s–2, which governs the
responsibilities of persons who furnish information to consumer credit reporting
agencies,” Hamilton, 2014 WL 4594733, at *27, and 9-A M.R.S. § 9-403(1)(F) is
a state law that “governs the responsibilities of persons who furnish information
to consumer credit reporting agencies.” See also Poulin v. The Thomas Agency,
708 F. Supp. 2d 87, 90–91 (D. Me. 2010).

The Carsons have advanced no

argument that 9-A M.R.S. § 9-403(1)(F) does not concern furnishers of
information to credit reporting agencies or that it otherwise does not fall within
the ambit of 15 U.S.C. § 1681s-2.99

Accordingly, I conclude that the FCRA

preempts the Carsons’ claim under 9-A M.R.S. § 9-403(1)(F).
The Carsons attempt to circumvent the preemption argument by insisting that their MCCC
“claim is premised on unconscionable practices in an attempt to collect a debt—Ocwen’s coercive

99

21

For their claim under section 9-403(1)(G), the Carsons contend that Ocwen
failed to comply with a provision of the D.C. District Court’s Consent Judgment—
specifically and only100 the provision that Ocwen “cease all collection efforts while
the borrower (i) is making timely payments under a trial loan modification.”101
But the Modification Agreement in this case, if it was enforceable, was never a
trial loan modification.
I therefore DENY the plaintiffs’ motion for summary judgment on Count V,
and GRANT the defendants’ motion on that count.
Intentional Infliction of Emotional Distress (IIED)

To survive the defendants’ motion for summary judgment on their IIED
claim, the Carsons must show, among other things, that Ocwen and Bank of
New York engaged in conducted that was “so extreme and outrageous as to
exceed all possible bounds of decency and must be regarded as atrocious, utterly
intolerable in a civilized community.” Lyman v. Huber, 2010 ME 139, ¶ 16, 10
A.3d 707 (quoting Curtis v. Porter, 2001 ME 158, ¶ 10, 784 A.2d 18).

conduct in trying to collect on the debt—and not specifically inaccurate credit reporting as
governed by the FCRA.” Pls.’ Obj. to Defs.’ Mot. Summ. J. 22 (ECF No. 49). 9-A M.R.S. § 9403(1)(F) provides no cause of action for “coercive conduct,” and even if the Carsons had properly
alleged such conduct, their MCCC claim would still be preempted by the FCRA. The Carsons
further argue that if their MCCC claim is preempted, they “still have a claim under the FDCPA,
15 U.S.C. § 1692e(8).” Pls.’ Obj. to Defs.’ Mot. Summ. J. 22 (ECF No. 49). Yet nowhere in their
Amended Complaint, or otherwise in the record, have the Carsons alleged such a claim, and they
cannot suddenly introduce a new cause of action for the first time in their objection to the
defendants’ motion for summary judgment. Logiodice v. Trs. of Me. Cent. Inst., 170 F. Supp. 2d
16, 30 n.12 (D. Me. 2001), aff'd, 296 F.3d 22 (1st Cir. 2002).
100 The Carsons have not argued that Ocwen violated the Consent Judgment’s requirement that
Ocwen “cease all collection efforts while the borrower . . . has submitted a complete loan
modification application, and a modification decision is pending.” Settlement Term Sheet at A25, Consumer Financial Protection Bureau v. Ocwen Financial Corp., No. 13-2025 (RMC) (D.D.C.
Feb. 26, 2014), ECF No. 12-1. They do argue that I should treat a permanent loan modification
the same as a trial loan modification, Pls.’ Mot. Summ. J. 30–31 (ECF No. 38), but the Consent
Decree does not support that treatment.
101 Am. Compl. ¶ 137 (quoting Consent Judgment, Consumer Financial Protection Bureau v.
Ocwen Financial Corp., No. 13-2025 (RMC) (D.D.C. Feb. 26, 2014), ECF No. 12).
22

A court must “determine in the first instance whether the defendant's
conduct may reasonably be regarded as so extreme and outrageous to permit
recovery, or whether it is necessarily so.” Champagne v. Mid-Maine Med. Ctr.,
1998 ME 87, ¶ 16, 711 A.2d 842 (quoting Colford v. Chubb Life Ins. Co. of
America, 687 A.2d 609, 616 (Me. 1996)). Liability for IIED “clearly does not
extend to mere insults, indignities, threats, annoyances, petty oppressions, or
other trivialities.” Restatement (Second) of Torts § 46 cmt. d. (Am. Law. Inst.
1965). Rather, an actionable case “is one in which the recitation of the facts to
an average member of the community would arouse his resentment against the
actor, and lead him to exclaim, ‘Outrageous!’” Id.
The Carsons contend that Ocwen engaged in extreme and outrageous
behavior by: (1) miscoding the loan as a pending application when it began
servicing the loan; (2) failing to implement the terms of the Modification
Agreement after the bankruptcy court approved the loan modification; (3) failing
to provide straightforward responses to Mr. Carson in his numerous calls
regarding the implementation of the Modification Agreement; (4) failing to apply
payments received from the Carsons in accordance with the terms of the
Modification Agreement and the Chapter 13 Plan; (5) advising the Carsons that
their loan was in default and could be referred for foreclosure despite the
bankruptcy court’s order determining the mortgage to be current in 2012;
(6) failing to respond to letters the Carsons and their counsel sent regarding
concerns with the implementation of the Modification Agreement; (7) sending
misleading letters to the Carsons regarding the status of their payments;
(8) misreporting the Carsons as late and past due to credit agencies; and
23

(9) encouraging the Carsons to apply for a new loan modification while
simultaneously sending them notices of default.102
Ocwen’s behavior toward the Carsons cannot be condoned. The record
shows that it failed to respond properly to the Carsons’ multiple attempts to
clarify the terms and implementation of the loan modification.103 Ocwen should
have corrected the coding error on the loan, properly organized its files regarding
the Carsons’ HAMP application, and answered the Carsons’ questions regarding
the terms of the loan payment schedule in a more straightforward manner.
Yet Ocwen’s behavior, “while troubling and unfortunate, cannot be
characterized as ‘so extreme and outrageous as to exceed all possible bounds of
decency in a civilized community.’” Champagne v. Mid-Maine Med. Ctr., 1998
ME 87, ¶ 16, 711 A.2d 842. The Carsons argue that Ocwen’s conduct is similar
to the “long litany of allegations” against the defendant bank in Hamilton v.
Federal Home Loan Mortgage Corp., No. 2:13-cv-00414-JAW, 2015 WL 144562,
at *3, *16 (D. Me. Jan. 12, 2015).104 In Hamilton, however, the bank’s conduct
was far more egregious.

It went to the extreme steps of posting foreclosure

notices on the plaintiff’s property, entering his home without consent, changing
the locks on his home, and barring him from entering his home until new
payment arrangements were made. Hamilton, 2015 WL 144562, at *3. It is true
that Ocwen created several administrative hurdles in its discussions with the
Carsons, but it did not physically intrude on their property or deny them entry
into their home.
102
103
104

Pls.’ Obj. to Defs.’ Mot. Summ. J. 32–33 (ECF No. 49).
See Pls.’ SMF ¶ 57; Defs.’ RSMF ¶ 57.
Pls.’ Obj. to Defs.’ Mot. Summ. J. 32–33 (ECF No. 49).
24

Rather, Ocwen’s conduct is more like the defendant’s actions in Beaulieu
v. Bank of America, N.A., No. 1:14-cv-00023-GZS, 2014 WL 4843809, at *8 (D.
Me. Sept. 29, 2014). In that case, the defendant filed a foreclosure action without
providing the required notice to the Veterans Administration. This District ruled
that the defendant’s failed attempt at foreclosure, even if “wrongful and
illegal . . . cannot be reasonably characterized as atrocious and utterly
intolerable conduct sufficient to state an IIED claim.”

Beaulieu, 2014 WL

4843809, at *8 (internal quotation marks omitted). Similarly, in Fogg v. Ocwen
Loan Servicing, LLC, No. 2:14-cv-454-GZS, 2015 WL 1565229, at *9 (D. Me.
Apr. 8, 2015), the defendant sent the plaintiffs twelve debt collection demands
during the time period from November 1, 2013 to January 4, 2015, inaccurately
reported the plaintiffs’ debt to credit agencies, and continued to send dunning
notices even after the entry of a consent judgment, the recording of the discharge
of the plaintiffs’ mortgage, and the receipt of cease and desist letters from the
plaintiffs’ counsel.

Even then, this District distinguished Hamilton and

dismissed the IIED claim, noting the lack of allegations that the defendant “set
foot on the Foggs’ property, posted any notices thereon, or even telephoned the
Foggs.” Fogg, 2015 WL 1565229, at *10; see also Campbell v. Machias Sav.
Bank, 865 F. Supp. 26, 36 (D. Me. 1994) (defendant’s threats of foreclosure, filing
a criminal complaint, and rude behavior were insufficient to state a claim for
IIED). More recently, in Cota v. U.S. Bank National Ass’n, No. 2:15-cv-486-GZS,
2016 WL 922784, at *9 (D. Me. Mar. 10, 2016), the plaintiffs alleged that the
defendants threatened a foreclosure action, used threats of foreclosure to obtain
additional cash payments from the plaintiffs, and completed the steps of filing a
25

foreclosure action.

Relying on Beaulieu, however, this District decided that

although the plaintiffs “have alleged unsavory and perhaps legally actionable
conduct, they have not satisfied the high bar of alleging conduct that could be
‘reasonably characterized as atrocious and utterly intolerable,’” and dismissed
the plaintiffs’ IIED claim. Cota, 2016 WL 922784, at *9.
I conclude that the Carsons “have alleged unsavory and perhaps legally
actionable conduct” on the part of Ocwen, but they have not shown facts that
satisfy the very demanding threshold for IIED’s extreme and outrageous
behavior. Id. Ocwen’s conduct bears considerably more resemblance to threats
of foreclosure, debt collection demands, inaccurate reporting to credit agencies,
and the refusal to properly take notice of a consent judgment and cease and
desist letters, than to Hamilton’s physically and emotionally demeaning steps of
setting foot unannounced on the plaintiffs’ property to post foreclosure notices
and block them from their home. Therefore, the defendants’ motion for summary
judgment on Count Eight is GRANTED.
Damages

The defendants argue that the plaintiffs are not entitled to noneconomic,105 punitive,106 emotional distress,107 or statutory damages108 on
particular counts. I note, but do not decide, that the Carsons may indeed be

105
106
107
108

Defs.’
Defs.’
Defs.’
Defs.’

Mot.
Mot.
Mot.
Mot.

Summ
Summ
Summ
Summ

J.
J.
J.
J.

19 (ECF No. 45).
19 (ECF No. 45).
20 (ECF No. 45).
23–27 (ECF No. 45).
26

eligible for non-economic,109 punitive,110 emotional distress,111 and statutory
damages112 for at least some of their claims. I therefore decline to strike any of
the requests for damages awards at this stage.
CONCLUSION
The plaintiffs’ motion for summary judgment is DENIED, the defendants’
motion for summary judgment is GRANTED on Counts V and VIII and on Counts
XI and XII as to the defendants Litton and Ocwen, and is otherwise DENIED.
SO ORDERED.
DATED THIS 29TH DAY OF MARCH, 2016
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

See, e.g., Fleet Mortg. Grp., Inc. v. Kaneb, 196 F.3d 265, 269–70 (1st Cir. 1999) (concluding
that non-economic damages may be recoverable under 11 U.S.C. § 362).
110 See, e.g., Laux v. Harrington, 2012 ME 18, ¶ 35, 38 A.3d 318 (allowing punitive damages
based on tortious conduct in cases where the defendant acted with malice).
111 See, e.g., Sweetland v. Stevens & James, Inc., 563 F. Supp. 2d 300, 304 (D. Me. 2008)
(indicating that emotional distress damages may be recoverable under the FDCPA and MFDCPA).
112 See, e.g., French v. Corp. Receivables, Inc., 489 F.3d 402, 403 (1st Cir. 2007) (recognizing
that the FDCPA provides that successful plaintiffs are entitled to statutory damages).
109

27