Page et al v. Roundpoint Mortgage Servicing Corporation

Filing 20

OPINION AND ORDER: Granting in Part Motion for Summary Judgment 12 , with respect to plaintiffs' RESPA claims. Denying in Part Motion for Summary Judgment 12 with respect to plaintiffs' UTPA claims; Granting defendant's Req uest for Judicial Notice 13 ; Denying defendant's motion to strike 16 . At oral argument, the parties expressed interest in a settlement conference. The parties are directed to contact Paul Bruch, Courtroom Deputy to Judge Thomas Coffin, at [phone] or [e-mail] within 14 days of the date of this opinion and order to schedule a settlement conference. Signed on 6/29/2017 by Judge Ann L. Aiken. (ck)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION

TATYANA PAGE and ROBERT PINARD,

Case No. 6:16-cv-00888-AA
OPINION AND ORDER

Plaintiffs,
vs.
ROUNDPOINT MORTGAGE SERVICING
CORPORATION,
Defendant.

AIKEN, Judge:
In this action, plaintiffs Tatyana Page and Robert Pinard allege that defendant
RoundPoint Mortgage Servicing Corporation violated federal and state law when processing
their application for loss mitigation programs in connection with the foreclosure of their
residential home loan.

Specifically, plaintiffs asseit violations of federal regulations

promulgated under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et.
seq., and state regulations promulgated under Oregon's Unlawful Trade Practices Act ("UTPA"),

Or. Rev. Stat. §§ 646.605 et. seq. Defendant moved for summary judgment, and the Court heard
oral argument on the motion on June 12, 2017. For the reasons set forth below, defendant's
motion for summary judgment is granted in pait and denied in part.
PAGE 1-0PINION AND ORDER

BACKGROUND
In May 2013, plaintiffs obtained a mortgage loan in the amount of $158,112 from
Premier Home Mmigage, Inc. ("Premier"), to finance their purchase of a residential property in
Mill City, Oregon ("the property"). Def.'s Mot. Summ. J. Ex. A at 10-13 (doc. 12-1). The loan
was secured by a promissory note and deed of trust, which gave Premier a first-priority lien
against the propetiy. Id at 17-25. Premier later transfel1'ed its beneficial interest in the propetiy
to First Guarantee M011gage Corporation. Id at 4. Defendant became the loan servicer on July
15, 2013. Id.
In late 2014, a series of events caused plaintiffs' income to decline dramatically. After a
car accident, Page developed a serious bone infection and required surgery. Def.'s Mot. Summ.
J. Ex.Cat 18. She had to take several months off work to recover. Page Dep. 74:4-8. 1 Around

the same time, Page's ex-husband stopped paying child suppoti. Page Dep. 75:9-13. Finally,
Page's in-home caregiving client passed away, and several of her housekeeping clients moved
away. Def.'s Mot. Summ. J. Ex.Cat 18. In late 2014, plaintiffs defaulted on the loan. Comp!. il

4.
In February 2015, Page and a RoundPoint employee had a telephone conversation in
which they discussed defendant's loan modification options. Page Dep. 78:18-23. Based on
that conversation, Page believed she and Pinard qualified for loan modification but that they
would have to submit paperwork to fotmalize their application. Page Dep. 79: 10-12, 90:20-21.
On March 31, 2015, plaintiffs sent an email telling defendant they would be submitting an
application for loan modification.

Def.'s Mot. Summ. J. Ex. A at 44.

On April 4, 2015,

plaintiffs faxed their application package to defendant. Id. at 43; Page Deel. if 1(doc.15-1).
1

Page's deposition is part of Exhibit C in the Appendix of Evidence filed in suppmi of
defendant's motion for summary judgment.
PAGE 2- OPINION AND ORDER

On April 7, 2015, defendant sent a letter to plaintiffs that stated: "This letter is to confirm
receipt of your request for assistance. During our preliminary review of the information in your
application that you supplied RoundPoint, we have determined that the following items are
missing." Def.'s Mot. Summ. J. Ex. A at 47. The letter then asked plaintiffs to provide several
documents, including signed and dated 2013 federal tax returns, an IRS foim authorizing the
release of tax returns, a copy of the most recent two months of bank statements, and
documentation of Pinard's Social Security income. Id.

The letter provided additional detail

about some of the missing documents, explaining, for example, that Page had left lines 6, 6a and
9 on the IRS form blank, and that Pinard would need to fill out a separate IRS form. Id. The
letter then stated that
[u ]pon receipt of all documents and information, we will continue evaluating your
request for assistance. We ask that you send these documents to us no later than
30 calendar days from the date of this letter. If we do not receive the requested
info1mation within 30 calendar days of the date of this letter, your home
assistance application may be denied and your application file will be closed.
Id. at 48. Finally, the letter provided the name and contact info1mation of an assigned portfolio

specialist, and urged plaintiffs to contact that person "[i]f you are not able to gather all of the
information requested, or will not be able to provide all of this documentation and information to
us within 30 calendar days of this letter[.]" Id.
Page called RoundPoint to clarify the requests in the letter. Page Dep. 92:14-25. Based
on that conversation, she understood the application was incomplete and would need to be
supplemented.
Over the next four months, plaintiffs faxed many more sets of documents, resulting in
additional letters from defendant. The table below summarizes the parties' communications
between April and August 2015:

PAGE 3 - OPINION AND ORDER

Communication

Date

April 4, 2015

Plaintiffs faxed the first set of documents to defendant, as described in more
detail above.

April 7, 2015

Defendant sent the first missing documents letter to plaintiffs, as described in
more detail above.

May 7, 2015

Defendant sent a second missing documents letter to plaintiffs, requesting the
same documents listed in the April 7 letter. 2

June 18, 2015

Plaintiffs faxed a second set of documents to defendant. Page stated that she
submitted "all" the documents requested in the April 7 letter, but she did not
recall precisely when. Defendant's internal records document a fax on June
18, 2015, which matches a date from Page's declaration.3

June 19, 2015

Defendant sent a third missing documents letter to plaintiffs, requesting the
same information listed in the April 7 and May 7 letters and adding a new
request for a profit/loss statement from Page's business. Page understood the
June letter to request "the same information that I already sent to them plus
additional that has never been mentioned before." Some of the repeat
requests stemmed from the fact that previously submitted documents had
become outdated. 4

June 30, 2015

Plaintiffs faxed a third set of documents to defendant. Page inconsistently
testified that she sent new documents and that she simply refaxed the
documents she had already sent. 5

2

Def.'s Mot. Summ. J. Ex. A at 50-51.

3

Id. at 42; Page Deel. i! 1; Page Dep. 95:8-11, 97:1-4.

4

Def.'s Mot. Summ. J. Ex. A at 53-54; Page Dep. 101:12-14.

5

Compare Page. Dep. 105:1-5 (stating that she sent new documents and did not simply
resend the same documents) with Page Dep. 27:4-6 ("They were basically the same thing as I
already submitted. I just keep re-faxing the same thing.") and Page Dep. 108:10-12 ("They
already had all the information that they kept asking for so I would resubmit it over and over
what they were asking.")

PAGE 4 - OPINION AND ORDER

Date

Communication

July 2, 2015

Defendant sent a fourth missing documents letter to plaintiffs, requesting the
same documents requested in the June letter and adding a new request for an
updated hardship affidavit. 6

August 13, 2015

Plaintiffs faxed a fourth set of documents to defendant. 7

August 14, 2015

Defendant sent plaintiffs a fifth missing documents letter, requesting the
same documents as the June and July letters with the exception of the
profit/loss statement. This letter added new requests for a financial form and
documentation of plaintiffs' receipt of public assistance. The letter stated
that financial documents including the explanation of hardship "must be
dated within 90 days at the time of RoundPoint's receipt to be considered
most recent and valid[.]" In addition, this letter stated that if a "complete
Borrower Assistance Application is received within 37 days of a scheduled
foreclosure sale," defendant would make "every effort" to expedite review of
the application.
However, the letter noted that "foreclosure sale
postponement is not guaranteed. " 8

On September 16, 2015, having received no further documents from plaintiffs, defendant
recorded a Notice of Default and Election to Sell.9 Request J. Notice Ex. B at 1 (doc. 13). The
foreclosure sale was scheduled to take place January 14, 2016. Request J. Notice Ex. C at 6.
Plaintiffs received the trustee's Notice of Sale.

6

Id. at 39; Page Deel. ~ 1.

8

7.

Def. 's Mot. Summ. J. Ex. A at 58-59.

7

Comp!.~

Def.'s Mot. Summ. J. Ex. A at 63-64.

9

Defendant asks the Comt to take judicial notice of three facts: (1) that April 4, 2015,
was a Saturday; (2) that a Notice of Default and Election to sell the property was recorded in
Marion County on September 16, 2015; and (3) that a set of documents related to the foreclosure
was recorded in Marion County on December 11, 2015. Defendant's motion for judicial notice
(doc. 13), which is unopposed, is granted because those facts are appropriate subjects for judicial
notice because they "can be accurately and readily detetmined from sources whose accuracy
cannot reasonably be questioned." Fed. R. Evid. 20l(b)(2); see also Chancey v. Wash. }.Jut.
Assetbacked Certificates WJ\!IABS Series 2007-HE2 Trust Issuing Entity, 2010 WL 3001178, at
*1 (D. Or. Jul. 27, 2010) Gudicially noticing a similar set of foreclosure documents).
PAGE 5 - OPINION AND ORDER

On December 21, 2015, less than a month before the scheduled foreclosure sale, plaintiffs
faxed a fifth set of documents to defendant. Def.'s Mot. Summ. J. Ex. Cat 40. On December
23, 2015, Roundpoint employee Jody Picton contacted plaintiffs by email to inform them that
their application was still incomplete. Def.'s Mot. Summ. J. Ex. A at 36. On December 30,
2015, a second email to plaintiffs reiterated that the application was incomplete and listed the
missing documents.

Def.' s Mot. Summ. J. Ex. B at 17.

The email included step-by-step

instructions for completing the requested IRS form. Id at 18. Also on December 30, defendant
postponed the foreclosure sale one day, to Janumy 15, 2016. Def.'s Mot. Summ. J. Ex. A at 36.
On January 13, 2016, plaintiffs emailed Picton noting that the foreclosure sale was only
two days away and that they had not received notice about the results of their application. Def.' s
Mot. Summ. J. Ex. B at 17. Picton responded the same day, explaining that the application was
incomplete, relisting the same documents requested in the December 30 email, and asking
plaintiffs to call in to complete a financial review. kl at 16. Plainiffs replied by two separate
emails, attempting to submit additional documents. Id at 16, 21. Picton responded to those
emails to infotm plaintiffs that the documents had been incorrectly attached. Id at 21.
On either January 14, 2016 (the day before the foreclosure sale) or early the morning of
January 15, 2016 (the day of the foreclosure sale), plaintiffs faxed a sixth set of documents to
defendant. Def.'s Mot. Summ. J. Ex.Cat 47-53. On January 15, 2016, defendant sent plaintiffs
a letter stating that their loan modification application was complete and would be evaluated.
Def.'s Mot. Summ. J. Ex. A at 68-69. That letter contained the same boilerplate language as the
August letter, stating that defendant would attempt expedited processing for applications
received more than 37 days before a foreclosure sale and that a foreclosure postponement was

PAGE 6 - OPINION AND ORDER

not guaranteed.

Notwithstanding defendant's receipt of plaintiffs' complete application, the

foreclosure auction proceeded as scheduled and the property was sold for $142,100. Id. at 71.
On February 17, 2016, defendant sent plaintiffs a letter stating that they did not qualify
for any assistance programs other than pre-foreclosure sale and deed in-lieu of foreclosure, both
of which were moot as the property already had been sold. Id. at 76-82. On May 17, 2016,
defendant sent plaintiffs a final letter, stating that plaintiffs were not eligible for any assistance
programs. Id. at 84-85.
Page alleges that throughout the application process, defendant assured her that it would
stop the sale once their application was complete. Page Deel.

~

3. Plaintiffs assert that they

would have attempted to sell the propeiiy if she had known their application would be denied
and defendant would foreclose. Page Deel.~ 5; Pinard Deel.~ 5 (doc. 15-2). They futiher state
that they were harmed by their reliance on the loan modification program because the property
sold at auction for more than $100,000 less than its fair market value. Page Deel.
Deel.~

~

6; Pinard

6.

STANDARDS
Summary judgment is appropriate if "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 moving
party has the burden of establishing the absence of a genuine issue of material fact. Id.; Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving patty shows the absence ofa genuine

issue of material fact, the nomnoving patty must go beyond the pleadings and identify facts
which show a genuine issue for trial. Id. at 324.

"Summary judgment is inappropriate if

reasonable jurors, drawing all inferences in favor of the nomnoving patty, could return a verdict

PAGE 7 - OPINION AND ORDER

in the nonmoving patty's favor." Diaz v. Eagle Produce Ltd P'ship, 521 F.3d 1201, 1207 (9th
Cir. 2008).
DISCUSSION

I.

Timeliness ofPlaintiffs' Opposition
Defendant filed its motion for summary judgment on March 23, 2017. Pmsuant to this

Court's local rules, plaintiffs' response with due within twenty-one days, on April 13, 2017. See
L.R. 7(f)(l ). Plaintiffs filed their response and accompanying declarations one day late, on April
14, 2017. Defendant asked the Comt to treat its motion for summary judgment as unopposed,
strike plaintiffs' opposition brief and declarations in their entirety, and/or find that plaintiffs
waived their right to oral argument. I will not impose such harsh penalties based on a delay of a
single day. 10
II.

RESPA Claims
RESPA regulations impose procedural requirements on lenders regarding "loss

mitigation options" for bonowers facing foreclosure. 12 C.F.R. § 1024.41. Plaintiffs contend
that defendant violated those RESP A regulations by failing to timely (1) notify them it had
received their loss mitigation application and state in writing whether the application was
10

Defendant also moved to strike plaintiffs' declarations on other grounds. The motion
to strike (doc. 16) is denied in its entirety. Plaintiffs' affidavits are properly grounded in
personal knowledge and meet the broad relevance test set out in Federal Rule of Evidence 401.
It is true that some of plaintiffs' statements are vague or conclusory. As the cases cited by
defendant in its motion to strike establish, vague or conclusory statements in sworn affidavits are
insufficient to create triable issues of material fact at the summary judgment stage. Hansen v.
United States, 7 F.3d 137, 138 (9th Cir. 1993); United States v. 1 Parcel of Real Property, 904
F.2d 487, 492 n.3 (9th Cir. 1990). But neither of those cases involved a motion to strike. I
conclude that striking the affidavits is unnecessary because the Comt is well-equipped to
detennine when a statement in an affidavit is specific enough to create a question of material
fact. Finally, defendant's hearsay objection to Page's statements about representations made by
RoundPoint employees has no merit because admissions of an opposing party are not hearsay.
See Fed. R. Evid. 80l(d)(2)(D).
PAGE 8 ~OPINION AND ORDER

complete or incomplete; and (2) evaluate their complete loss mitigation application and provide a
specific notice of approval or denial.

A.

Application Receipt and Completeness Notification

Plaintiffs' first argument, regarding receipt of their application and evaluation of its
completeness, presents the easier question.

Under RESPA's regulations, when a servicer

receives a loss mitigation application 45 days or more before a foreclosure sale, the servicer must
Notify the borrower in writing within 5 days (excluding legal public holidays,
Saturdays, and Sundays) after receiving the loss mitigation application that the
servicer acknowledges receipt of the loss mitigation application and that the
servicer has determined that the loss mitigation application is either complete or
incomplete. If a loss mitigation application is incomplete, the notice shall state
the additional documents and infomiation the b01TOwer must submit to make the
loss mitigation application complete and the applicable date pursuant to
paragraph (b)(2)(ii) of this section.
12 C.F.R. § 1024.41(b)(2)(i).
Section 1024.4l(b)(2)(i) applies to defendant's receipt ofa loss mitigation application 45
days or more before a foreclosure sale; here, because the foreclosure sale was initially scheduled
for January 14, 2016, the regulation applies to communications received before November 30,
2015. Within that timeframe, the summary judgment record unequivocally shows that each time
plaintiffs' submitted application materials, defendant evaluated those documents and responded
within the five-day window.

Specifically, defendant issued an April 7 letter in response to

documentation received April 4; 11 a June 19 letter in response to documentation received June

11

Plaintiffs initially alleged that Page faxed the initial set of documents "on or about"
March 27, 2015. Comp!. iJ 5. If that date were correct, defendant would have violated 12 C.F.R.
§ 1024.41(b)(2)(i)(B) because its first written response to plaintiffs' application is dated April 7,
2015, more than five days after March 27. However, at her deposition Page was unsure exactly
when she submitted the initial application packet. Page Dep. 76:9-81 :22. Defendant's internal
logs document receipt of documents by fax April 4, 2015. Mot. Summ. J. Ex. A at 43 & 44. In
her declaration, Page omits any mention of March 27, 2015, and lists the April 4 date as the first
PAGE 9 - OPINION AND ORDER

18; a July 2 letter in response to documentation received June 30; and an August 14 letter in
response to documents received August 13. 12 Each of these letters clearly stated that plaintiffs'
application was incomplete and listed documentation necessary to complete the application. In
addition, plaintiffs appear to have abandoned this argument as their response to the motion for
summary judgment does not mention it at all.

Defendant is therefore entitled to summary

judgment with respect to the claims under 12 C.F.R. § 1024.4l(b)(2)(i)(B).
B.

Application Processing and Eligibility Notification

Plaintiffs' second RESPA argument, regarding timely processing of a complete loss
mitigation application, presents a closer question.

If a servicer receives a "complete loss

mitigation application" more than 37 days before a foreclosure sale, the servicer must evaluate
the borrower's eligibility for loss mitigation options and inform the bo11"0wer, in writing, of any
eligibility determination with respect to such options. Id. § 1024.4l(c)(l)(i)-(ii). The written
notice must be provided to the borrower within 30 days after the service receives the complete
application. Id. § 1024.4l(c)(l). Further, if the borrower is denied a loan modification, the
servicer must state in the notice "the specific reason or reasons" for that decision.

Id. §

1024.41 (d). The regulations define "complete loss mitigation application" as
an application in connection with which a servicer has received all the
information that the servicer requires from a bo1rnwer in evaluating applications
for the loss mitigation options available to the borrower. A servicer shall exercise
reasonable diligence in obtaining documents and information to complete a loss
mitigation application.
specific date on which she faxed documents to defendant. Page Deel. if 1. The summary
judgment record thus establishes that defendant complied with 12 C.F.R. § 1024.4l(b)(2)(i)(B)'s
timeliness requirement in connection with its initial response to plaintiffs' application.
12 The next communication after August 14 took place on December 21. 12 C.F.R. §
1024.4l(b)(2)(i) does not apply to that communication or to any subsequent communications
because they took place within 45 days of the foreclosure sale.
PAGE 10- OPINION AND ORDER

Id. § 1024.41 (b)(1 ).
It is undisputed that defendant did not process plaintiffs' loss mitigation application until

after the foreclosure auction. The issue is whether, on the evidence in the summary judgment
record, a jury could conclude that plaintiffs' application was "complete" before the 37-day preforeclosure sale period began, triggering the requirements of12 C.F.R. §§ 1024.41(c)(l) & (d).
In her deposition testimony, Page was unable to connect patiicular documents to dates of
submission. Page produced some fax confirmation pages, but those pages are only evidence that
some documentation was sent on a particular date; they do not show which documents were sent

on any given date. For example, defense counsel cited a June 17, 2015, document confirming a
thirteen-page fax and asked Page if she recalled which documents she sent on that date. Page
Dep. 28:8-15. Page responded that she sent "[w]hatever they requested for" but admitted she
could not recall exactly which documents were included in the fax. Page Dep. 28:16-18. In her
declaration, Page asserted that she faxed documents in connection with her loss mitigation
application on "multiple occasions including April 4, May 7, June 18, June 30, and August 13,
2015," but does not specify which documents she submitted on any particular date. Page Deel.
I.

'if

Pinard's declaration is similarly nonspecific, stating only that he knows Page "faxed

documents to Roundpoint on multiple occasions in 2015." Pinard Deel.

'if 2.

Page did, however, broadly state in her declaration that she submitted "all" the
documents defendant requested. Page Deel.

'if

1. She also denied failing to submit required

documents. Id. In her deposition, Page more narrowly asserted that she provided defendant with
"all" the documents requested in the April 7 letter. Page Dep. 95:8-11. Those assetiions are the
only evidence that plaintiffs' loan mitigation application was complete before the 37-day preforeclosure period began.

PAGE 11 - OPINION AND ORDER

In the Ninth Circuit, self-serving affidavits can establish a genuine issue of material fact
"so long as they state facts based on personal knowledge and are not too conclusory." Rodriguez
v. Airborne Express, 265 F.3d 890, 902 (9th Cir. 2001). However, "[c]onclusory allegations

unsupported by factual data will not create a triable issue of fact." }I/arks v. United States, 578
F.2d 261, 263 (9th Cir. 1978).
In Rodriguez, 265 F.3d at 893, the plaintiff sued his former employer for disability
discrimination.

The Ninth Circuit concluded that the plaintiff had failed to exhaust his

administrative remedies. Id. at 898. However, the court concluded that an equitable exception to
exhaustion would apply if, as the plaintiff alleged, the California Department of Fair
Employment and Housing had misled him into thinking that he could not pursue a disability
discrimination charge.

Id. at 900.

The defendant employer argued that because the only

evidence the plaintiff had been misled came from his own "self-serving affidavit," there was no
triable issue of fact sufficient to withstand a motion for summary judgment. kl at 902. The
comt rejected such a contention, holding that because the plaintiff "set forth the facts of his
[agency] interview with great specificity," there was sufficient evidence to permit a trier of fact
to conclude he had been misled. Id.
Hernandez v. Space/abs 1Vfedical Inc., 343 F.3d 1107, 1107 (9th Cir. 2003), was another

employment discrimination case. The question before the court was whether ce1tain promotion
decisions had happened within the relevant statute of limitations, which batTed any claims arising
out of decisions made before August 30, 1998. Id at 1116. The plaintiff submitted an affidavit
stating that several of the promotion decisions had "occurred in 'late 1998' or 1999," but the
affidavit contained "no suppo1t for these asse1ted dates other than [the plaintiffs] declaration"
and "offer[ed] no specific dates for any of the actions." Id The court found such nonspecific,

PAGE 12- OPINION AND ORDER

conclusory allegations could not create a triable issue of fact, and granted the defendant's motion
for summary judgment.
Here, Page's repeated, nonspecific assetiion that she submitted "all" the documentation
defendant requested is more like the statements in Hernandez than the statements in Rodriguez.
It is therefore insufficient to carry plaintiffs' RESP A claims about the processing of a complete

application beyond summary judgment.
It is clear from the summary judgment record that the loss mitigation application process
was confusing and fmstrating, pmiicularly for Page, for whom English is a second language.
Many of the letters state that some already submitted documents have become outdated and
require the submission of new versions of the same documents.

Bonowers receiving such

notices understandably could feel that the goalposts were continually being moved and that, in
retrospect, they had no real or meaningful chance at loss mitigation.
But it is not the job of the courts to decide if the defendant's conduct was the best
practice. Courts must decide the narrower question of whether the defendant violated the law.
Here, a jury could certainly infer from the summary judgment record that Page did her best to
follow defendant's instructions and believed she had submitted all the documentation requested.
But under Ninth Circuit precedent, there is simply insufficient evidence in the summary
judgment record to permit a factfinder to conclude that plaintiffs actually submitted all the
necessary documentation before the 37-day pre-foreclosure period began. Because a jury could
not find that plaintiffs have proved their application was complete before that period began,
plaintiffs' RESPA claims under 12 C.F.R. §§ 1024.4l(c)(l) & (d) cannot proceed beyond
summary judgment.

PAGE 13 - OPINION AND ORDER

III.

UTPA Claims
Oregon's UTPA establishes a private right of action for persons who have suffered "an

asce1iainable loss of money or property, real or personal, as a result of another person's willful
use or employment of a method, act or practice declared unlawful" by the UTPA. Or. Rev. Stat.

§ 646.638(1). The statute provides for "actual damages or statutory damages of$200, whichever
is greater," as well as for punitive damages and equitable relief. Id. The law enumerates dozens
of specific unlawful trade practices, ranging from representing that goods for sale are new when
they are, in fact, used; making misleading representations about prizes, contests or promotions in
connection with a business or service; and selling a thermostat that contains mercury without
clearly disclosing that fact to the purchaser. Id. § 646.608. The statute also includes a catchall
provision which provides that "any other unfair or deceptive conduct in trade or commerce" is an
unlawful trade practice. Id. § 646.608(1)(u). A plaintiff can sue under the catchall provision
only ifthe Oregon Attorney General has established a specific rule declaring the conduct at issue
in the lawsuit to be "unfair or deceptive in trade or commerce." Id. § 646.608(4).
Pursuant to her authority under Or. Rev. Stat. § 646.608, the Oregon Attorney General
promulgated regulations to address "unfair and deceptive acts in mortgage loan servicing." Or.
Admin. R. 137-020-0805 (capitalization normalized). As relevant to plaintiffs' claims, those
regulations provide that a mortgage loan servicer has engaged in "unfair or deceptive conduct in
trade or commerce" if the servicer "[m]isrepresents to a bo1mwer any material information
regarding a loan modification," id. 137-020-0805(3) or "[flails to deal with a borrower in good

PAGE 14 - OPINION AND ORDER

faith," id 137-020-0805(6). 13 The regulations define "good faith" as "honesty in fact and the
observance of reasonable standards of fair dealing." Id. 137-020-0800(2).
A.

Supplemental Jurisdiction over Pendent State Law Claims

Because defendant is entitled to summary judgment on all federal claims, I first consider
whether to exercise supplemental jurisdiction over plaintiffs' remaining state claims. Neither
party raised the issue of supplemental jurisdiction, so such an analysis is not required. Acri v.
Varian Assocs., Inc., 114 F.3d 999, 1000 (9th Cir. 1997) (en bane). But the Ninth Circuit has

stated that when it comes to supplemental jurisdiction over state claims, "the proper
administration of justice is far better served by a deliberate decision than by default." Id at
1001. I therefore address the question sua sponte.
28 U.S.C. § 1367(a) provides the basis for supplemental jurisdiction:
Except as provided in subsections (b) and (c) or as expressly provided otherwise
by Federal statute, in any civil action of which the district courts have original
jurisdiction, the district courts shall have supplemental jurisdiction over all other
claims that are so related to claims in the action within such original jurisdiction
that they form part of the same case or controversy under Article III of the United
States Constitution.
The court has discretion to "decline to exercise" supplemental jurisdiction in various
circumstances, including when "the district court has dismissed all claims over which it had
original jurisdiction." 28 U.S.C. § 1367(c)(3).
The Supreme Court has explained that in the "usual case in which all federal-law claims
are eliminated before trial, the balance of factors . . . will point toward declining to exercise
jurisdiction over the remaining state-law claims." Carnegie-1'.1ellon Univ. v. Cohill, 484 U.S.
13

Plaintiffs also allege that defendant violated Or. Admin. R. 13 7-020-0805( 5), which
makes it an unlawful trade practice to violate ce1iain provisions of RESP A. As explained in
Section II of this opinion and order, defendant is entitled to summary judgment on plaintiffs'
RESPA claims. Plaintiffs' claim under Or. Admin. R. 137-020-0805(5) therefore necessarily
fails.
PAGE 15 - OPINION AND ORDER

343, 350 n.7 (1988). But there is no "mandatory rule to be applied inflexibly in all cases." Id.
Ultimately, whether to retain jurisdiction when section 1367(c) is triggered remains a
discretionary decision, informed by considerations of "economy, convenience, fairness, and
comity." Acri, 114 F.3d at 1001 (quotation marks omitted).
Under the circumstances presented here, I find that the values enumerated above weigh in
favor of retaining jurisdiction over the state UTPA claims.

Discove1y is complete and the

summary judgment motions have been fully briefed and argued. It would be a waste of judicial
resources to require the parties to start over in state comi on the UTPA claims.

More

impo1iantly, the plaintiffs' UTPA claims present no novel or difficult questions of state law,
instead turning primarily on questions of fact such as the fair market value of plaintiffs' prope1iy,
what constitutes good faith, and whether defendant made any material representations. I will
continue to exercise supplemental jurisdiction over plaintiffs' UTP A claims.
B.

lvferits ofUTPA Claims

Defendant argues that plaintiffs' UTPA claims cannot proceed for three reasons. 14 First,
defendant argues that plaintiffs cannot prove they were damaged by defendant's behavior. That
asse1iion is belied by the record. Plaintiffs state in their affidavits that ( 1) they would have
explored the possibility of a sh01i sale had they known that defendant was going to sell the house
14

As defendant correctly notes, plaintiffs' UTPA claims are subject to a one year statute
of limitations. Or. Rev. Stat. § 646.638(6). Plaintiffs filed this lawsuit on May 20, 2016, which
means that the pmiies' early communications about loss mitigation, including the February
phone call, plaintiffs' April application, and defendant's April and May missing documents
letters, fall outside the limitations period. Even though those events are not actionable by
themselves, however, they may be considered in interpreting the events that took place within the
limitations period. Cf N.L.R.B. v. United Bhd. ofCarpenters & Joiners ofAm., Local 745, AFLCIO, 450 F.2d 1255, 1256 (9th Cir. 1971) (noting that the statute of limitations in the National
Labor Relations Act is "not a rule of evidence" and approving consideration of events outside the
statute of limitations to the extent they "might ... throw[] light on the specific conduct within
the period at issue").
PAGE 16 - OPINION AND ORDER

at auction and (2) the sale price at auction was more than $100,000 below the prope1iy's fair
market value. Page Deel.

~~

5-6; Pinard Deel.

~~

5-6. Such a loss of equity, if proven, plainly

qualifies as an ascertainable loss of money or property within the meaning of the UTP A.
Second, defendant avers that plaintiffs cannot show that the purported loss of equity was
caused by defendant's allegedly unlawful trade practices. Defendant contends that plaintiffs'
default caused the foreclosure sale. That argument, too, misses the mark. Plaintiffs argue that
defendant strung them along, leading them to believe that they qualified for payment
restructuring and that the foreclosure sale would be stopped as soon as their application was
complete.

They further contend that had they not believed the foreclosure sale would be

stopped, they would have pursued a short sale, which would have protected some of their equity.
In other words, but for defendant's representations about the loss mitigation options, plaintiffs
would have taken other steps to limit their losses. Viewing the evidence in the light most
favorable to plaintiffs, there is sufficient proof of causation.
Finally, defendant asserts that nothing in the summary judgment record creates a question
of material fact regarding a willful violation of the UTPA regulations. Defendant insists that the
record shows that it always provided correct information to plaintiffs, who simply did not
manage to submit a complete application package within a reasonable timeframe. I agree that a
jury could reach that conclusion based on the summary judgment record. Plaintiffs, however,
advance a different reading of the evidence. They contend that they were led to believe that they
would definitely qualify for loss mitigation; that defendant sent hypertechnical, confusing notices
about what paperwork was missing; that defendant continued to send the same confusing notices
even though plaintiffs were clearly struggling to comply with the requests in those notices; that
communications were made more difficult by language ban-iers; and that defendant moved

PAGE 17 - OPINION AND ORDER

forward with a foreclosure sale even after plaintiffs' loss mitigation application was complete.
Viewing the evidence in the light most favorable to plaintiffs, a jury could conclude that
defendant willfully misrepresented material information to plaintiffs or willfully failed to deal
with plaintiffs in good faith. Because the record is open to multiple interpretations, summary
judgment is inappropriate on the UTP A claims.
CONCLUSION

Defendant's Motion for Summary Judgment (doc. 12) is GRANTED in patt, with respect
to plaintiffs' RESPA claims. Defendant's Motion for Summary Judgment is DENIED with
respect to plaintiffs' UTPA claims.

Defendant's request for judicial notice (doc. 13) is

GRANTED. Defendant's motion to strike (doc. 16) is DENIED.
At oral argument, the patties expressed interest in a settlement conference. The parties
are directed to contact Paul Bruch, Comtroom Deputy to Judge Thomas Coffin, at (541) 4314111 or Paul [e-mail] within foutteen days of the date of this opinion and order
to schedule a settlement conference.
Dated this~ay of June 2017.

,

~

Ann Aiken
United States District Judge

PAGE 18 - OPINION AND ORDER