REHKOPF et al v. OCWEN LOAN SERVICING, LLC et al

Filing 75

MEMORANDUM OPINION AND ORDER. Signed by MAG/JUDGE JOE L. WEBSTER on 11/2/2016, that Defendant Field Connections' Motion for Partial Summary Judgment (Docket Entry 55 ) is GRANTED IN PART AND DENIED IN PART. Defendants Altisource, Ocwen and Well Fargo's Motion for Partial Summary Judgment (Docket Entry 53 ) is GRANTED IN PART AND DENIED IN PART. (Daniel, J)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
LISÂ, REHKOPF, et al.,

Plaintiffs,

v
OC\)øEN LO,A,N SE,RVICING, LLC.,
et aI.,
Defendants.

)
)
)
)
)
)
)
)
)
)

1:15CV615

MEMORANDUM OPINION AND ORDER OF
UNITED STATES MAGISTRATE TUDGE
This matter is before the Cout upon Defendants Ocwen Loan Servicing, LLC
(Ocwen),.A,ltisource Solutions, Inc. ("Altisource"), and Wells Fargo Bank N.A. as Trustee for

Option One MortgageLoan Trust 2007-4, Asset-Backed Certifrcates, Series 2007-4's ('lWells
Fargo") motion for patttal surnmalT judgment. pocket E.ttry 53.) Also befote the Court is

Defendant Field Connections, LLC's ("Field Connections") motion

for parttal summarT

judgment. (Docket Entry 55.) The motions ate tipe fot disposition. Fot the reasons stated
herein, the Court will grant in part and deny in part Defendants Ocwen, Altisource, and

llells

Fatgo's motion for parttal summary judgment, and grant in patt and deny in patt Defendant

Field Connections' motion for parnal summary judgment.l

t

By consent of the parties, this matter has been teferted to the undersþed pursuant to 28 U.S.C. $
636(c), to conduct all proceedings including^ jury or nonjury trial, to order the enry of judgment, and
to conduct all post-judgment proceedings thetein. (Jer Docket F,n1iry 24.)
1,

I.

BACKGROUND
This action arises from the removal of petsonal property from a foteclosed home in

Otto, North Carohna.

(See generalþ

Sec.

Am. Compl., Docket F,n:ry 67.2) Plaintiff Lisa

Rehkopf ("Mr. Rehkopf) wâs the owner of a house located at

North Carolina.

(Id.nÍ.)

351, Sarah

She purchased the home in2005, and

Cove Road, Otto,

in 2007, Ms. Rehkopf

obtained a note that was secured by a Deed of Ttust against the home. Qd.111,4.) Thereafter,

the note was assigned to Option One Mottgage Corporation, and Ocwen subsequendy
became the servicer of the loan. (Id. '|llI 14-15.) Plaintiffs Eric Slater ("Mt. Slater") and Lance

Rehkopf ("Lance") also both resided at the home during the time Ms. Rehkopf owned the
home. Qd.lnß,24.) Lanceis Ms. Rehkopfs son. Qd. n%.) Lance, aUnited States Marine,
moved from the home

in

201.1, leaving

collection and some personal equipment)

behind some personal belongings (a baseball card

.

(d.Ífl25-29.)

After living in the home fot some years, mortgage payments fell behind after Ms.
Rehkopf lost her job and Mr. Slater experienced employment cutbacks. Qd. n 30.) In July
2014, Ms. Rehkopf and Mr. Slater moved to Florida, but left most of their personal property

in the home in Otto,

Noth

Carohnz until finding permanent housing in Florida. (1d.fln32-

33.) Ms. Rehkopf notified Ocwen of het move to Florida, and Ocwen thereafter

began

sending mortgage correspondence to Ms. Rehkopf in Florida. (Id.1t 34.) Because of failed

2 Defendants' motions for parttal suûrmary judgment were filed based upon Plaintiffs' ftst amended
complaint. (See Am. Compl., Docket Entry 30.) Ât the hearing held on September 20,201,6, the
undersigned granted Plaintiffs request to file a second amended complaint to add an additional
plaintiff in this action. (I4inute Ertry dated 9/20/201,6.) Plaintiffs theteafter filed the second
amended complaint. (Docket Errtty 67.) The Court will reference the second amended complaint in
this memorandum opinion.
2

payments, the home eventually went into default and Ocwen initiated foteclosute ptoceedings

on or aboutJuly 28,2014. Qd. n 36.) The foreclosure sale took place on or about December

3, 201.4.

Qd

T 39.) Defendant Wells Fargo purchased the home at the foreclosure

sale.

(Report of Foreclosure Sale/Resale, Defs.' Mem., F,x. 4, Docket Et tty 56-4.)

Following the sale, Ocwen hired ,{ltisource, a property preservation company, to
inspect the property and conduct furthet proceedings. (Sec. Am. Compl fl a6.) Âltisource
thereafter issued

a

work order to Field Connections to inspect the property, and the home was

identified asva,cantwith petsonal propetty present. (À4ark
A1 & ,\2, Docket Entry

54-1, at

S. \X/ierman

Aff., Defs.'Mem., Exs.

4-8.) A separate work order was sent to Field Connections to

clean out the property, which took place on December 22,201,4, flWierman Aff., Defs.' Mem.,

Ex. ,\3, Docket Entry

54-1.

at 9-10.) Âltisource attempted to cancel the order, but Field

Connections completed the work order through its vendor, West End Ptoperty Inspections,
before receiving the cancellation.
1. at'1.1.-1.2; SØork

(Jøe

\X/ierman Aff., Defs.'Mem., Ex. ,\4, Docket Entry 54-

Order, F..x.2, Docket E.rtty 67-2.3) Some items were removed from the

home, and other items remained in the home. (Sec. Am. Compl. fl 60, Docket Entry 67;
also Inspection Report, Wierman

Aff., Defs.' Mem., Ex. A.6, Docket Etttty

54-1.

at

see

1,5-1,7;

Altisource Dep. at 14, Docket Entry 54-3.) Altisource subsequently sent out anothet work
order, and the remaining items were removed from the property. (Sec. Am. Compl.

11

61,

Docket Entry 67.) Defendants never obtained a writ of possession prior to removing the
personal property from the home. Qd.\172; Ocwen A.m. .A.nswer

I72,

Docket Entry 68;

3 Defendant F'ield Connections submitted supplemental affidavits to clarify the correct wotk ordet
processed during the clean-out of Plaintiffs' home. (See Donna Eaker Suppl. Aff., DocketF;ntry 72;
Joel \X/yatt Suppl. -{ff., DocketF,ntry 73.)
J

-Altisource Am. AnswerflT2, Docket Entry 69; ì7ells Fargo Am. Answer j[72, Docket

E.tty

70; Field Connections Am. Answer fl 72, Docket Entry 71.)

Plaintiffs contend that several of the defendants had actual knowledge of Mr. Slater
attempting to retrieve Plaintiffs' personal belongings before and after the foreclosure

sale.

Plaintiffs allege that Mr. Slater contacted Ocwen prior to the foreclosure sale. (Sec. Am.
Compl.

II

40-46., Docket Entty 67.) Mr. Slater also made contact with Alitsource sevetal

times to determine the location of the property and how to tetrieve it. (Etic Slater Dep. at21-

22,Defs.'Mem., Ex. D, Docket Entry 54-4 at 4-5.) InJanuary

20'1,5,

Mr. Slater spoke with an

individual named "Car.tet" whom Mr, Slater believed to be a representative of Altisource.

(Sec.

Âm. Compl.l[47,Docket Ent"y 67.) Thatindividual told Mr. Slater that the personal property
was still in the home and that a wdt of possession had not been obtained with regards to the

property. (d.) The individual was employed by Hubzu and not,{ltisource. @radford ìØilkins

Aff.

Iï

5-7, Defs.' Mem., Ex. B, Docket E.ttry 54-2 at2;Peter I(uclo Dep. at 130, Defs.'Mem.

Ex. C, Docket Entry 54-3 at 16.) Aftet becoming concerned about the petsonal property, Mr.
Slater eventually dtove to North Carolina in March 201,5 only to discover that none of the
personal property remained in the home. (Sec. Am. Compl.

fl

52, Docket Entry 67; Slatet

Dep. at 22-23, Defs.'Mem., Ex. D, Docket Entry 54-4 at 6-7.)

As a tesult of Defendants' actions, Plaintiffs seek claims against all Defendants for
conversion, negligence, and unfar and deceptive trade practices. Plainuffs also seek claims
against Ocwen and Altisoutce

for

negligent misteptesentation. Punitive damages are

specifically sought against Ocwen and Altisource. Wells Fargo, Altisoutce, and Ocwen have

4

filed a motion fot parttal summary judgment as to Plaintiffs' demand for punitive damages.a
(Docket Entty 54.) Additionally, Field Connections has moved for pariral suffrnaly iudgment
as

to Plaintiffs' claim undet Nonh Carolina's Unfair and Deceptive Trade Practices Âct

("UDTPrt"¡.s lDocket Entry 55.) ,\ hearing was held in this matter on September 20,201,6.
(rVIinute

Ent y dated 9/20/201,6.) All parties were present.

II. DISCUSSION
Summary judgment is appropriate whete "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). The party seeking

demonstrating the absence

summalT judgment bears the initial butden

of any genuine issue of

of

mate{tal fact. Celotex Corp. u. Cøtreît, 477

U.S. 317, 323 (1.986). Once the moving party has met its burden, the nonmoving patty then

affirmattvely must demonstrate with specific evidence that there exists a genuine issue

of

material fact requiring trial. Mat¡u¡hita Elec. Indøl Ca Ltd. u. Zenith Radio Corp.,

4,

47

5 U.S.

57

586-87 (1986). Only disputes between the parties over facts that might affectthe outcome
the case propedy preclude the entry of summary judgment. Anderson

u.s. 242,

u.

of

Liberfl I-nbþ¡Inc.,477

247 -48 (1 986).

a Defendants also sought judgment as a matter of law ¿s to certain items owned by Lance Rehkopf.
(Docket E.ttty 53 atl.) During ahearingon the motion, the parties agreed to Plaintiffs amending the
complaint to add Lance as a plaintiff in this action. Thus, this argument is moot.
5 Field Connections also moved for summary judgment as to Plaintiffs' convetsion and negligence
claims to the extent damages are sought fot specific items: the baseball catd collection, and the stove,
refrigerator, dishwasher, and oven. (Docket Entty 55 at 2.) A.s to the baseball card collection, the
amended complaint adding Lance Rehkopf as a plaintiff in this action moots this argument. As to the
specific kitchen appliances, Plaintiffs (at the hearing) stipulated that Defendant Field Connections is
not responsible for those appliances.
5

"[Â]t the summaq/ judgment

stage, the [court's] function is

not [itselfl to weigh the

evidence and determine the ttuth of the matter but to determine whether there is a genuine
issue

those

for trial." Id. at249. Similarly, "[c]redibility determinations

...

ate

jury functions, not

of a judge." Id. at 255. In determining whether there is a genuine issue for trial,

"evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn

in [non-movant's] favor." Id.; see Unind
summary judgment the inferences

Stute¡ a. Diebold, lnc.,369 U.S. 654, 655 (1,962)

("On

to be drawn from the underþing facts contained in

[affìdavits, attached exhibits, and depositions] must be viewed in the light most favorable to
the party opposing the motion.").

Nevettheless, "pemissible inferences must still be within the tange

of

reasonable

probabiliry . . . and it is the duty of the court to withdraw the case ftom the jury when the
necessary inference
I-.ouelace a.

is so tenuous that it rests metely upon speculation and conjecture."

Shenyin-Williams Co., 681 tr.2d 230,241, (4th Cu. 1,982) (quotations

judgment as a matter

omitted). Thus,

of law is waranted "where a reasonable jury could teach only

one

conclusion based on the evidence," or when "the verdict in favor of the non-moving parfy
would necessarily be based on speculation and conjecture." M1rick
395 F.3d 485, 489 (4th Cir. 2005). However, when "the evidence

u.

a"

^s

Prine Ins. Slndicaîq Inc.,

whole is susceptible

more than one reasonable inference, a jury issue is created," and judgment as

^

of

mattet of law

should be denied. Id. at 489-90.

A. Defendant Field Connections'Motion for Partial SummaryJudgment
Field Connections âsserts that Plaintiffs have not presented sufficient evidence to
support their claim under the UDTPA. Mote specifically, Field Connections argues that its

6

conduct, viewed in the light most favorable to Plaintiffs, fails to amount to egregious and
aggravattng circumstances.

pef.'s Mem., Docket Entry 56 at 1,2-1,6.) Plaintiffs

asserting that Field Connections' acts are egregious

oppose,

in nature wartanting a UDTPA

claim.

(Pls.' Resp., Docket Errt"y 60 at 2-3.) Viewed in the light most favoral¡le to Plaintiffs, Field

Connections'motion fot summary judgment

as

to Plaintiffs'UDTP,{. claim should be granted.

N.C. Gen. Stat. $ 75-1.1(a) states in part "Unfaír methods of competition in or
affecting commerce, and unfair or deceptive acts or practices in ot affecting commerce, are

"[4r

action for unfair or deceptive acts or

practices is a distinct action apart frcm fraud, breach

of conttact, or breach of warcanty."

declared unlawful." N.C. Gen. Stat. $ 75-1.1,(u).

Bemard u. Cent. Carolina Truck Sales, 68 N.C.

N.C. 751, 321 S.E.2d

1,26 (1,984).

,tpp.

228, 232,314 S.F,.2d 582, 585, reu. denied, 31,1

To state a pnrna facie UDTPA claim in Notth Carolina,

Plaintiff must allege that "1) defendant committed an unfzt or deceptive act or practtce, Q)
the action in question was in ot affecting commerce, and (3) the act ptoximately caused injury

to the plaintiff." Dalton u. Carnþ,353 N.C. 647,656,548 S.E.2d 704,71,1 (2001) (citation
omitted);
Whether

see

aî

also Soatlt

At/. Ltd. PJhip of Tenn., L.P.

act is deemed

u.

Nese,284 F.3d 518, 535 (4th C11.2002)

unfair or deceptive is "a question of law fot the court." Dalton,353

N.C. at 656,548 S.E.2d at71,1, (citation omitted). An act or practice is unfair "if it is immoral,
unethical, oppressive, unscrupulous, or substantially injurious to consumers," afld is deceptive

"if it

has the capacity or tendency to deceive." Ace Chen. Corþ u. DSI Transþ., Inc., 115 N.C

fupp.237,247,446S.E.2d100, 106 (1994) (internalcitationsandquotationsomitted). Aparty
must allege and prove egregious or

^ggravating

7

circumstances to fall within N.C. Gen. Stat.

$

75-1,.1,(a). Pheþt Stffing

LLC

u. C.T. Pheþt Lnc.,740 S.E.2d

923,928 G{.C.

Cl App. 2013);

Allied Distributors,Inc. u. I-,cttrobe BrewingCo.,847 F. Supp. 376,379 (E.D.N.C, 1993)

Field Connections contend that there is no evidence of any deceptive ot unfair act
because

it never communicated with Plaintiffs regarding the removal of the personal property

from the home, and thatit was simply following "Altisource's ptocess for removal of personal
property inavacant foreclosed home." (Def.'s Mem., DocketEntty 56 at1.3.) As avendot

of Altisource, Field Connections was expected to rely upon the Real Estate

Owned

Operational Vendor Guide ('Vendor Guide") provided by ,{.ltisource, which set forth
procedures and insftuctions fot personal property left in vac nt homes. (Peter I(uclo Dep. at
40-41,,

Def.'s Mem., 8x.7, Docket Entry 56-7 at 3; Ronald Priest Dep. at 22-23, Def.'s Mem.,

Ex. 9, Docket Entry 56-9 at3;

see

also

Vendor Guide, Def.'s Mem., Ex. 8, Docket EntÐ'56-8.)

Pursuant to the Vendot Guide, a vendor must perfotm certain procedures when petsonal
property is present, including giving an estimate of the total value of the personal property,
and informing Altisource whether the estimation is

in excess of the amount requiring

a

Personal Property Notice ("PPN"). ffendor Guide, Def.'s Mem., Ex. 8, Docket Entry 56-8

^t12-1,3.)

Once a PPN is issued (fot ptoperties in North Carohna), A.ltiscource wouldwait

ten (10) days for the petsonal property owners to remove the property. (Id. at 1,4.)

If

the

petsonal property remained, Altisoutce would issue an otdet to the vendot to clean out the

property ("REO Otder"). @atdcia McTaggart Dep. at 48-49, Def.'s Mem., Ex. 5, Docket

Entry 56-5 at9.) When a REO Order was received, vendors were expected to remove the
personal property from the home and place it in the dump. Qd. at 44,51,.) The active Vendot
Guide in place in December 201,4 indicated that legal proceedings were not reqLìired prior to

8

removal of property from a foreclosed home. (Vendot Guide, Def.'s Mem., Ex. 8, Docket

Entty 56-8 at 1,4.) Thus, at the time, Altisource did not obtain writs of possession priot to
issuing REO Orders. (I(uclo Dep. at 58-59, Def.'s Mem., F.x.7, Docket Ettt"y 56-7 at7.)

In the instant

case, Field Connections acted pursuant to the

Vendor Guide in removing

personal property from Plaintiffs' home. After completing the inspection, Field Connections

orchesttated the clean out pfocess upon receiving the REO Ordet ftom Altisource. floel
Wyatt Aff.

E.ttty

67

1[

3, Def.'s Mem., Ex. 1.2, Docket Entty 56-1,2 at 1; Wotk Order,

8x.2, Docket

-2.) Plaintiffs never communicated with Field Connections (or its contractor vendor),

nor was Field Connections
this time. (.Wyatt Aff.

I7,

^w^re

that Plaintiffs sought recovery of their personal property at

Def.'s Mem., F.x.1.2, Docket Entty 56-1.2 at 3; Donna Eaket Aff.

1[

8, Def.'s Mem., Ex. 10, Docket Entty 56-10 at 3; Slater Dep. at 23-24, Def.'s Mem., Ex.3,

Docket Enúy 56-3 at3;Lisa Rehkopf Dep. at 31,-32, Def.'s Mem., Ex. 1, Docket Entry 56-1

^t

4.) Both Field Connections and ì7est End Property Inspections assumed ,{.ltisoutce had

the legal authority to issue the REO Order, and neither u/ere

North Carolina law. flX/yatt Aff. TT 5-6, Def.'s Mem., Ex.

^wate

"1,2,

of

any violation under

Docket Etttty 56-12 at 2-3;

Donna Eaker Aff.'!H 7-8, Def.'s Mem., Ex. 10, Docket Er,try 56-1,0 at3.)

Field Connections' conduct and actions dudng the removal of Plaintiffs' petsonal
property fail to rise to a level of egregious and aggravating circumstances to support

claim. Without any reference to evidence in this

a

UDTPA

case, Plaintiffs simply argue that Field

Connections' admission to entering and removing personal property from Plaintiffls home

without

a

writ of possession, and Field Connections' implementation of Altisource's policy in

violation of North Caroltna law is sufficient to allow the UDTPA claim to proceed. Even

9

assuming argaendz, Field Connections'illegal removal of the personal property is sufficient to

assert aprtma facie case for conversion, such conduct does

claim. Hantvck.

u.

notler¡e sufftce fot a UDTP,\

Renrhaw,421,8.R.738,743 (14.D.N.C. 2009) ("[C]onversion in and of itself

does not necessarily constitute an unfait or deceptive act or practice. Rather, there must be

sufficient aggravaing or egregious circumstances.");
Groue Aucrion

¡ee also

Baxlett Miilìng Co., L.P. u. ll/alnut

dz Realry Co. 192 N.C. App. 74, 83,6ó5 S.E.2d 478, 487 (2008) ("[Â]cts of

conversion ma1 constttute unfair and deceptive trade practices[.]") (citing

l-.aue a.

Presley 34

N.C. App. 503,239 S.E.2d 574 (1977)(emphasis added)); Allied Distributors, 847 tr. Supp. at

380 (noting that "[t]he North Carohna legislature must have intended that substanial
aggravattng circumstances be present before any ptactice is deemed unfair under [this section],

since

it provided that any damages suffered

by the victim are to be trebled.") (citations

omitted).

Plaintiffs argue that the instant case is most akin to Prexlel; however, the Court
disagrees. In Prexley the defendant landlord rented a housing unit to the plaintiffs. 34 N.C.

App. at 505, 239 S.E.2d at 576. Several days aftet moving in, the plaintiffs informed the
defendant's agent that the plaintiffs were moving out of the

tnit.

Id. at 505, 239 S.E.2d at 57 6.

The plaintiffs returned to the property two days later to discover that their personal property
was missin

g. Id. at 505, 239 S.F^2d at 57 6. The plaintiffs attempted to contact the defendant

landlord, but he failed to respond. Id. at 505,239 S.E.2d at 576. The jury concluded that the
defendant landlord trespassed upon the property rented to the plaintiffs and converted the
personal property in the

unit. Id. at5"1.6,239 S.E.zd at 583. The parties stipulated

as

to the

defendant landlord's failure to initiate eviction of the plaintiffs through fudicial proceedings.

10

Id. at 51,6-17,239 S.E.2d at 583. The jury also implicitly found that the defendant landlord
"refused to return the property upon demand." Id. at 51,6,239 S.F,.2d

^t

583. The court found

that such acts by the defendant landlord constituted unfâir and deceptive trade ptactices,
thereby warranting an au,ard of treble damages to the plaintiffs. Id. at 51,6,239 S.F,.2d

In the instant case, Field Connections actions were not

^t

583.

nearly as egregious as the

defendant landlord in Presslry. Field Connections was acting pursuant to Altisource's policy in
ananging the removal of Plaintiffs' personal property from the home, and Field Connections
was unaware of North Carolina law requiring a writ of possession prior to entering the home.

Unlike the defendant landlordin

Prersle1,

Field Connections wâs unaware that Plaintiffs sought

their personal properry, and never engaged

in any communication with Plaintiffs about the

property. Thus, there was never any refusal to cooperate with Plaintiffs. Because Field
Connections' conduct

"do not

establish the additional egtegious, immoral, oppressive,

unscrupulous, or substantially injurious acts needed to impose the heightened penalty of unfait
and deceptive trade practices[,]" its motion for parttal summary as to Plaintiffs' UDTPA claim

will be granted. Bartlett,192 N.C. App. at 83, 665 S.E.2d at 487 ¡ee also Cardinal Health 4/4,
Inc. a. SchwarqProperties,lar:, No. 1:06CV570, 2008

WL

52161.89, at x14 (NI.D.N.C. Dec. 11,

2008) (although defendants administered a public auction sale of plaintiffls property without

providing a statutory notice, the Court held that such conduct was not sufficient to support

UDTPA claim

as

â

it "st[ood] in stark contrast to the facts in L.oud' ar.d that defendants, among

other things, believed their actions were legal).6

6 Ât the headng, Plaintiffs relied upon the holding rn Belk, Inc. u. Meler Corþ., U.S. to support their
argument that Field Connections'good faith and lack of intent to deceive Plaintiffs were not relevant.
1,1,

B. Defendants Ocwen, Altisource, and Wells Fargots Motion for Pattial
Summary Judgment
Defendants Ocwen, r{.ltisource and Wells Fargo move for partial summatT judgment
as

to Plaintiffs' claim for punitive damages.T (Docket Entry 53.) Defendants assert that

Plaintiffs'claim for punitive damages arising from the alleged negligent misrepresentation fails
as

^

matter of

law. (Defs.' Mem., Docket Entty 54 at 9-10.) Defendants

also atgue that

Plaintiffs'claim for punitive damages based upon the alleged willful and wonton conduct of
Defendants fail as

^m^ttet

of law.

Qd. at 10-1S.) Plaintiffs assert that Defendants'conduct

did rise to a level of willful and wonton conduct such that their claim for punitive damages
should proceed. @ls.'Resp., Docket Entry 59.)

1,. Punitive Damages for the A.lleged Conversion oF Property Without Writ of
Possession

Defendants Altisource, Ocwen and Wells Fatgo contend that Plaintiffs' punitive
damages claim for

willfully violating North Carolina law by not obtaining a writ of possession

before removing Plaintiffs' property does not survive Defendants' motion for summary
judgment. @efs.'Mem., Docket Entry 54 at1,0-1,8.) Plaintiffs contend that Defendants'acts
were willful and wanton because they purposefully violated the law, and "they manifested

a

679 tr.3d 146 (4th Cu. 2012), as amended (NIry 9, 201,2). Indeed, the Fourth Citcuit noted that "the
intent of the actor and good faith are irrelevant." Id. at1,64 (citations omitted). In that action involving
patent infringement, the Coutt recognized a change in the law whereby "a violation of state-tegistered
trademark law [is] a per se violation fN.C. Gen. Stat. $ 75-1,.1), and thus subject to treble damages."
Id. at 1,67 . The Court further held that "the inference of an intent to deceive" was evident based upon
the deceptively similar cookware designs of the patent owner and fotmer customer. Id. at 1'68. In the
instant case, Plaintiffs fail to present sufficient evidence of deceptive conduct on behalf of Field
Connections, rlor is there a logical bridge between Belk and the facts of this case.
z In its motion, Defendants also moved fot summary iudgment as to Plaintiffs' convetsion claim with
regard to certain personal property owned by Lance Rehkopf. (Docket Ettry 54 at 8-9.) Based upon
the filing of the second amended complaint, Lance Rehkopf has been added as a plaintiff in this action.
Thus, this argument is moot.
1,2

reckless indiffetence

to the right of the homeowners whose property was being wrongfully

destroyed." Glr.' Resp., Docket Entry 59 at 5.) Punitive damages arc awarded "to punish
defendant

for

egtegiously wrongful acts and

to detet the defendant

a

and others from

committing similar wrongful acts." N.C. Gen. Stat. $ 1D-1. Putsuant to North Carolina law,

"þ]unitive damages may be awarded only if the claimant proves that the defendant is liable
for compensatory damages and that . . .

þ"]

aggravaing factorfl was ptesent and was telated

to the injury for which compensatory damages were awarded."
170 N.C. App. 555, 559,613 S.E.2d 503,507 (2005). The

Schenk u. HNA Holdings, Inc.,

followingate considered aggravatsng

factots: (1) fraud, (2) malice ot, (3) willful or wanton conduct. N.C. Gen. Stat. $ 1D-15(a).

"{Willful or wanton conduct' means the conscious and intentional disregatd

of

and

indifference to the rþhts and safety of others, which the defendant knows or should know is
reasonably likely to result in injury, damage, or other harm. lWillful or wanton conduct' meâns

more than gtoss negligence."' N.C. Gen. Stat. $ 1D-5(7). The aggravating factor must be
established by clear and convincing evidence. N.C. Gen. Stat. S 1D-15(b).

Here, Plaintiffs' argumerit as to willful or wanton conduct primarily surrounds the issue

of Defendant's knowledge with the law requiring a writ of

possession before removing

petsonal propetty from a vãcant foreclosed home. (Pls.' Resp., Docket Entry 59 at 5-7.)
Putsuant to North Carohna General Statute 45-2'1.29,
,{.n otder for possession issued pursuant to G.S. 45-2129ß) shall be directed to
the sheriff and shall authorize the sheriff to temove all occupants and their
personal property from the premises and to put the purchaser in possession,
and shall be executed in accordance with the procedure fot executing a writ ot
ordet for possession in a summaÐ/ ejectment ptoceeding under G.5.42-36.2.

1,3

N.C. Gen. Stat. $ 45-21,.29Q). Plaintiffs contend that, based upon the evidence, aiury could

infer that Defendants "established its policy of violating the law by illegally entering
unoccupied houses because

it

saved the company

money." Plt.'Resp., Docket Entty 59 at

7.)

The Court concludes that Plaintiffs have ptesented sufficient evidence

to

cteate a

genuine issue of m atertal f^ct as to whethet Defendants' conduct dses to a level of willful or

wanton conduct necessary to succeed on a claim for punitive damages. Duting a deposition,

Mr. I(uclo stated that the understanding was that Âltisource was required to obtain to wtit of
possession to remove the personal property. (I(uclo Dep. at 59, Defs.' Mem. Ex. C, Docket

Entry 54-3 at7.) Mr. I{uclo further stated that Altisource's polices were "a collaborative effort
between multiple business units, including compliance and legal.
was made to proceed

At that time, [the] decision

in the way . . . fAltisoutce] did. [Altisource has] since reviewed the

processes and have made modifications to align with the requitements of

Nonh Carol7¡a."

(Id. at 78-79.) Mt. I{uclo also stated that he suspected that Altisoutce has more than ten
attorneys in its legal depattment. (Id.
managet, stated that documents
basis by the compl-iance
54-7

team."

^t78.)

Futthetmote, Ronald Priest, an Altisoutce üaining

in the Vendot Guide "ãte generally reviewed on an annual
(R-onald Pdest Dep. at 30,

Defs.'Mem., Ex. G, Docket Ettry

at4.) Lastly, Mr. I(uclo made the following statements dudng his deposition:
Q. But isn't it more expensive to obtain a writ of possession fot a property that's
.vacant and contains personal property than not to obtain that writ of
possession?

MR. GRIFFIN: Object to the form.
THE ìTITNESS: Yes. If there's no wtit of possession or eviction action
incutted, thete's no expense.
Q. (By Mr. ìØhite) And isn't it ttue that this policy was put in place fot the
purpose of teducing costs in dealing with properties that wete vacant?
1,4

MR. GRIFFIN: Object to the form.
THE \X/ITNESS: No.
\X/hite) Why was the policy put in place?
Q. @y Mr.
,{,. Which policy?
Q. The policy of not obtaining writs of possession for vacant personal -- vac nt
property with personal property in Notth Carolina.
MR. GRIFFIN: Object to the form.
THE IøITNESS: Duting the exetcise of developing the personal property
matrix, we've discussed [and] it was determined that we did not need a writ of
possession in that particular state.
Q. (By Mr. White) And that was because it cost less money?
MR. GRIFFIN: Object to the form.
THE WITNESS: I don't know. I was not -- I was not part of the decisionmaking process at that time.

Q. How much does it cost Altisource to obtain an order of possession from
Clerk of Superior Court in North Carolna?
MR. GRIF'FIN: Oblect to the form.
THE !øITNESS: I don't know the exact number. A few hundted dollars.
(I(uclo Dep. at 83-84, Pls.'s Resp., Docket Enty

I

59-1,

at 5-0.¡a

Defendants object to a portion of Mr. I(uclo's deposition regarding his response to a question about
whether Altisource decided not to obtain writs of possession to save cost. (Docket Etttty 63 at 2.)
Mr. I(uclo stated "I don't know. I was not -- I was not part of the decision-making process at that
time." (I(uclo Dep. at 84, Pls.'s Resp., Docket Etttty 59-1, at 6.) Defendants contend that Plaintiffs
abeady asked Mr. I(uclo the same question before hand and Mt. I(uclo answered "No." Qd. at83; see
al¡o Docket Enty 63 at 2.) The Court concludes that Plaintiffs' line of questioning was not
inappropriate. Plaintiffs inquired a second time if saving money was Âltisoute's teasoning behind its
policy after Mr. I(uclo stated that it was detetmined that a writ of possession was not needed in Noth
Carolina during the development of a personal property matrix. (I(uclo Dep. at 84, Pls.'s Resp.,
Docket E.ttty 59-1. at 6.) This question did not subject Defendants to unfair prejudice, confuse the
issues, cause undue delay, waste time, ot needlessly present cumulative evidence. Fed. R. Evid. 403.
Nor does the Court find that the question was asked in bad faith or to unreasonably annoy, embartass
or oppress the witness. Fed. R. Civ. P. 30(dX3X,{,). Defendants also contend that Plaintiffs'question
assumes facts not in evidence. (Docket Etrtty 63 at3). "This trial objection has no place in discovery
practice and is overruled." Baker a. CrJ. of Missaakee, No. 1:09-CV-1059, 201,3 WL 5786899, at*7
[X/.D. Mich. Oct. 28, 2013); see also Garcia u. C/ar'þ,No. 1:1O-CV-00447-UO,201,2WL1232315,at*2
(E,.D. Cal. Apr. 1.2,2012) ("Assuming facts not in evidence may be the basis for an objection dudng
tdal or some other evidentiary headng. This however, is discovery.') Lastly, Defendants contend
that Plaintiffs' opposition brief omitted a portion of Mr. I(uclo's answer to the questions tegarding
Altisource's cost-saving methods. (Docket E.ttty 63 zt3.) However, Plaintiffs' attached the pertinent
portion of Mr. I(uclo's deposition to their response. (I(uclo Dep. at 83-84, Pls.'s Resp., Docket Etttty
59-1. at 5-6.) Thus, Defendants' objection is overtuled. The Coutt has considered the content of
Defendants' remaining objections (Docket Ertry 63 at 1-2). The Court's ruling on Defendants'
15

Based upon the evidence, there is a genuine issue

of material fact as to whether

Defendants conduct was willful or wanton. The facts here ate akin to Nchardson u. Ban/< of

Am.,182 N.C. App. 531.,643 S.E.2d

41,0

Q007). In

Wchardson, a class

action suit was filed

against "Bank of ,\merica, N.A. (Bank of America) and its wholly-owned subsidiary, Nations

Credit Financial Services Corporation QJations Credit)." Id. at 534-35, 643 S.E.2d
^t

41,3.

Defendants sold single-ptemium credit insurance ("SPCI") to some plaintiffs which had loans
greater than fifteen years or mote. Id. at 536,643 S.F,.2d

^t

41,4.

"fllh. SPCI sold to Plaintiffs

having loans gteatet than fifteen yeârs was not apptoved by the Department of Insurance."

Id. at 536, 643 S.E.2d at 41.4. The plaintiffs "alleged claims for unfair and deceptive trade
practices (UDTP) under N.C. Gen. Stat. $ 75-1.'1,, unjust enrichment, breach of the duty

good faith and fair dealing, and punitive damages." Id. at 535,643 S.E.2d

^t

of

413.

The trial court found that the "Plaintiffs with loans greater than fifteen years were
entitled to a

itry trial regarding punitive damages on their

good faith and fa:r dealing." Id. at 558, 643 S.E.2d

^t

claims for breach of the duty

of

427. The trial court considered the

following facts to determine whether the plaintiffs' punitive damage claimed survived
summary judgment:
[1.] NationsCredit was a wholly owned subsidiary of a sophisticated nationwide
bank;
[2.] NationsCredit had a legal department available to give advice;

suÍìmary judgment is not based upon either of these objections. The Court
construes the content at issue as mere arguments.

motion for

parldral

'16

[3.] There is no affidavit or deposition testimony ftom anyone working fot or
with NationsCredit that fNationsCredit] ever consideted whether the sale of
this SPCI was legal or conducted an investigation into the legality of its
insurance sales ptactices on these kinds of loans;

[4.] [NationsCredit] has offeted no direct evidence that it believed or had a
rational basis for believing it was acting legally when it illegally sold these
insurance policies over a two year period from May 1998 throughJune 2000;
[5.] The lawfulness vs. unlawfulness issue is not a complicated factual question;
it is a matter of reading the applicable statutes. Anyone reading the statute,
patticulady someone in the insurance field, would at the least recognize the
problem with selling this insurance, and thete is no evidence before the Court
that the arguments now made by defense counsel in court in defense of selling
this insurance were considered and evaluated before making the decision to sell
the insurance;
[6.] The sale and fìnancing of SPCI on mortgage loans has been controversial
for a number of yeats and is highly regulated by the states;
[7.] SPCI is expensive insurance that meets the needs of very few if any
customefs;
[8.] NationsCredit never investigated offering other kinds of insurance because
profits would have been lower; and

[9.] The primary motivation behind the sale

of SPCI was the large profits

avallable.

Id. at 559-60,643 S.E.2d

^t

428. The trial court further determined that Nations Credit

failed to investig^te or take any steps to determine whether the sale of this
controversial and highly tegulated insurance was legal and decided to sell the
insurance solely based on the high proûts available and without regard to the
ftnancial needs or legal tþhts of its customers, and to the detiment of their
property rights in the homes securing these mortgages.
Id. at 560,643 S.E.2d

^t

428. The Court of Appeals agreed. Id. at 560;643 S.E.2d at 429

Similar to Nchard¡oz, Altisource has a compliance department and alegal department

with at least 10 attorneys. (I{uclo Dep. at 78, Defs.'Mem., Ex. C, Docket Entty 54-3 at9.)
Based on the evidence presented,

it

can be

inferred that no one from Altisource considered

t7

whether a writ of possession was necessary prior to temoving personal property from the

home. It was industry knowledge that sheriffs were aggressive with respect to thteatening the
arrest of those that entered properties without a writ of possession. (I(uclo Dep. àt 61, Def.s'

Mem., Ex. 7, Docket Entty 56-7 at 7.) Thus, there may have be

^î

awaLreness

that Altisouce's

behavior was coritroversial. In addition, it is uncleat whether the pdmary motivation behind

Altisource's failure to obtain writs of possession was to save money. (I(uclo Dep. at 83-84,
Pls.'s Resp., Docket Entry 59-1, at 5-6.) The Court recognizes that there is a difference
between implementing a policy to make money, as found in Nchardson, and implementing one

to cut cost, which may be present in this case. These facts highlight several similarities between
the case at hand and Nchardson.

Furthermore, Defendants assert that their policies are teviewed annually. @riest Dep.

at 30, Defs.' Mem., Ex. G, Docket Entry 54-7 at 4.) The Court finds this troubling because

North Carolina law has required

a

writ of possession to remove property since at least

1993.

N.C. Gen. Stat. $ 45-21,.29 (1993). The record does not reveal how long Altisource has been

doing business but the evidence suggests that their policies were reviewed

yearly.

Nevetheless, Defendants still maintain that no one from Altisource reseatched N.C. Gen.
Stat. $ 45-21.29.

Defendants cite sevetal cases to support their position that their conduct does not rise

to the level of willful or wanton behaviot. These

cases are distinguishable because the

aggregating factor needed to taise the defendants'negligent conductto à willful orwanton
level is missing in each case.

See Strawbridge u. Sugar

436 (\X/.D.N.C.), on retvn¡ideration

in

Mountain Renrt, Lnc.,320 F. Supp. 2d 425,

þart,328 tr. Srpp. 2d 61,0 CX/.D.N.C . 2004) (reasoning that

18

the record did not support the plaintiffs claim that the defendants "deliberately misstated the

law in order to prevent patrons from bringing law suits fagainst the ski resort]. Furthermore,

the Court finds that. . . failingto markbare spots afterheaÅnsreports

thatthey...

caus[ed]

injuries and exaggeratefd] the amount of snow on the mountain, does not rise to the level of
willfulness and wantonness"); Collins u. St.

George PþtsicalTheraþ1,141

N.C. ,{'pp. 82, 88, 539

S.E.2d 356, 361 (2000) (concluding that while the defendant falled to propedy install an
exercise machine, "the evidence . . . indicate[d] that [the] defendant may have been negligent

in deviating from customary standards in caring for the Univetsal machine" but this behavior
did "not rise to the level of willful or wanton conduct"); Bøtt

u. Goþrth Propertie¡ 1z¿:, 95

N.C.

,\pp. 615, 6'1,6,383 S.E,.2d 387 ,387-88 (1989) (finding that the defendant's failure to adequately
secure the trailer before unhitching

it ftom the truck causing it to roll downhill and crash into

the plaintiffs bedroom was not willful or wanton conduct). Here however, Plaintiffs have
"producefd] a forecast of evidence demonstrating that fthey] will be able to make out at least
aprimafaùe case at ttial." Smith

u.

Am. Honda Motor Co., No. 1:1,4-CY-943,201.6WL 1312541,

at x3 (N{.D.N.C. Apr. 4, 201,6) (internal quotations and citations omitted). Thus, summary
judge is denied against r{,ltisource.e

Defendants assert that there is no evidence of participation by Ocwen and \X/ells Fargo giving rise to
the claim for punitive damages. (Defs.' Mem., Docket Ettry 54 at 15.) Plaintiffs only address
Defendants' punitive damages arguments regarding ,{,ltisource in their response. (See generalþ Pls.'
Resp., Docket Entty 59.) The Court finds that Plaintiffs have failed to produced evidence to cre te
^
genuine issue of matertal fact as to whether Ocwen or Wells Fargo are liable for punitive damages.
Thus, Plaintiffs' punitive damages claim only survives against r\ltisource.
e

1,9

2.

Punitive DamaEes for NeElisent Misreoresentation

Defendants Altisource, Ocwen and Wells Fargo contend that Plaintiffs fail to present
sufficient evidence to establish that its' officers condoned or panicipated in any conduct giving

rise to punitive damages. (Defs.' Mem., Docket entry 54

^t

9-10.) Plaintiffs contend that

Defendants are liable fot punitive damages fot incorrectly stating "that Defendants would not
attempt to remove Plaintiffs'Personal Property until after they had obtained and served

a

writ

of possession, and that Plaintiffs would be able to att^nge a time with Defendants to move
the Personal Ptopetty." (Sec. Am. Compl.

1[

88, Docket Entry

67.) In their opposition brief,

Plaintiffs rely upon Altisource's alleged willful and wanton conduct, and contends that the
determination as to whether CarlLopez is an employee of Âltisource is "merely

a

contention,

not an undisputed fact." (Pls.'Mem., Docket Entty 59 at 8.)
According to North Catohna law,

"in order to

award punitive damages against a

corporation based on vicarious liability, 'the officets, directors, or managers of the corporation
[must have] participated in or condoned the conduct constituting the aggravattngfactot giving
rise to punitive damages."' Euerharta. O'Charlel's[nc.,200 N.C. r\pp. 142,1,52,6835.8.2d728,

731 Q009) (citing N.C. Gen. Stat. $ 1D-15(c)). Here, the evidence indicates that the petson

who assuted Mr. Slatet that his property was safe did not work for Altisource or any othet
Defendant. ,{.ccording to Btadford Wilkins, Altisoutce's Vice Ptesident of Human Resources,

Mr. Slater spoke to "Carl Lopez, tegarding the location of the property at issue in this
litigation." flX/ilkins,\ff.

I 5, Defs.'Mem.,

Ex. B, Docket Entry 54-2 at 2.) Mr. tX/ilkins also

stated that CarlLopez is a representative of Hubzu which is not a patty to this case. (Id.n 6.)

Additionally, in an email chain between Altisource employees,Lana Delos Reyes,

20

^

m^î

get,

indicates thatCarlLopez is "not from the PPI CC team but he is from Hubzu." (Âltisource

Email Chain, Defs.' Mem., Ex.

"4.,.

Docket Entry 54-1 at 14.) Lastly, Peter l{uclo, another

,\ltisource representative, stated that he is not

^w^re

of the person that Mr. Slater spoke to

that assured Mr. Slater that he would be able to move his property, or whether the person was
a call center associate

for Hubzu. ((uclo Dep. at L30, Defs.'Mem. Ex. C, Docket F,ntry 54-

3 at1,6.) Plaintiffs have not provided any evidence to refute these statements.lO Thus, punitive
damages cannot be assessed against Altisource

none

of its officers,

directots,

or

for the alleged misrepresentations

managers participated

because

in or condoned the alleged

misreptesentations made by Hubzu's representatives.ll Estrada u. Conso/. Util. Serat.,lzr:, No.

5:10-CV-161-RLV,

2011,

WL

2174467 , at x3 CX/.D.N.C. June

2,2011) (denying the plaintiffs

claim for punitive damages because "[t]he complaint d[id] not point to any specifìc officets,
directors, or managers taking part in or condoning any willful or wanton conduct"); Phillips u.
Rest. Mgmt. of Carolina,

L.P.,1,46 N.C. App. 203,21,6,552 S.F,.2d 686,694-95 (2001) (fìnding

that the plaintiff "failed to forecast any credible evidence that any offìcer, ditector, or mânager

of defendant RestaurantManagement pancipated in or condoned any fraudulent, malicious,
or willful or wanton act that might provide the basis for punitive damages").

th¿t Altisource and Hubzu have something analogous to
^n ^gency
relationship, the email chain does not show that Reyes condoned âny statements made by Cad Lopez
to Mr. Slater, nor does it indicate participation in any willful or wanton conduct.
It The Court notes that Plaintiffs' only addtessed whether their claim for punitive damages fot
misrepresentation suryives as to Altisource. (Pls.' Resp., Docket Etrtty 59 at 8.) However, in the their
second amended complaint, Plaintiffs state that the Court should "[a]ward Plaintiffs punitive damages
for Defendants Ocwen and Altisource's Negligent Misrepresentations and their willful and wanton
conduct." (Sec. ,{.m. Compl. n 102, Docket Entry 67 .) The Court finds that Plaintiffs have failed to
produce evidence to create a genuine issue of material fact as to whether Ocwen is liable for punitive
damages fot misrepresentation.
10

Even assuming

argaendo,

21,

III.

CONCLUSION
For the teasons stated hetein,

IT

IS HEREBY ORDERED that:

Defendant Field Connections' Motion fot Partial Summary Judgment (Docket Etttry
55) is

GRANTED IN PART AND DENIED IN PART. Itis GRANTED

claims of relief

for conversion and negligence to the extent those claims

damages against Field Connections

as

to Plaintiffs'

seek recovery

fot cetain kitchen appliances allegedly lost ot destroyed.

IT IS FURTHER ORDERED that the motion is GRANTED

as

to Plaintiffs' claim for

unfair and deceptive tade practices against Field Connections. The motion is

DENIED

to Plaintiffs' claims of relief fot convetsion and negligence to the extent those claims
recovery

of

of

damages against Field Connections

as

seek

for the baseball collection allegedly lost ot

desttoyed.

IT IS FURTHER ORDERED that Defendants Altisoutce, Ocwen
Motion forPartal SummaryJudgment (Docket E.rtry 53) is GRANTED

and Well Fargo's

IN PART AND

DENIED IN PART. It is GRANTED as to Plaintiffs'claim for punitive damages

arising

ftom the alleged negligent misteptesentation claim. It is GRANTED as to Defendants
Ocwen and Wells Fatgo for Plaintiffs' claim fot punitive damages arising from theit alleged

willful and wanton conduct. The motion is DENIED as to Defendant ,{.ltisoutce for
Plaintiffs' claim for punitive damages arising ftom its alleged willful and wanton conduct.
Futhermore, the motion is DENIED as to Plaintiffs' claim of relief for conversion against
Altisource, Ocwen and Wells Fatgo fot the locket, camping equipment and baseball card
collection.

22

oe L. Webster
United States Magistrate Judge

November 2,201.6
Durham, North Caroltna

23