Consumer Financial Protection Bureau v. The Mortgage Law Group, LLP et al

Filing 191

ORDER granting in part and denying in part 83 Motion for Summary Judgment; granting in part and denying in part 96 Motion for Summary Judgment. The parties have until August 2, 2016 to meet, confer and submit a proposed trial plan in writing. A Telephonic Scheduling Conference is set for 8/10/2016 at 01:00 PM before Judge Barbara B. Crabb. Counsel for Plaintiff is responsible for setting up the call to chambers at [phone]. Signed by District Judge Barbara B. Crabb on 7/20/2016. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CONSUMER FINANCE
PROTECTION BUREAU,
OPINION and ORDER
Plaintiff,

14-cv-513-bbc

v.
THE MORTGAGE LAW GROUP, LLP,
CONSUMER FIRST LEGAL GROUP, LLC,
THOMAS G. MACEY, JEFFREY J. ALEMAN,
JASON E. SEARNS and HAROLD E. STAFFORD,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Plaintiff Consumer Finance Protection Bureau brought this action against two defunct
companies and four lawyers associated with those companies, alleging violations of the
Consumer Financial Protection Act of 2010 and 12 C.F.R. part 215, which is commonly
called Regulation O. Specifically, plaintiff alleges that while providing mortgage relief
services to more than 6,000 consumers in 39 states, defendants The Mortgage Legal Group,
LLP and Consumer First Legal Group, LLC made misrepresentations about their services,
in violation of Regulation O and the Consumer Financial Protection Act; failed to make
certain disclosures required by Regulation O; and collected advance fees in violation of
Regulation O. Plaintiff contends that defendants Thomas G. Macey, Jeffrey J. Aleman,
Jason E. Searns and Harold E. Stafford may be held liable because they either participated
directly in the illegal acts or had the authority to control the actions of the corporate

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defendants. Plaintiff and defendants Consumer First Legal Group, LLC, Thomas G. Macey,
Jeffrey J. Aleman, Jason E. Searns and Harold E. Stafford have filed cross motions for
summary judgment. Dkt. ##83 and 96. (Defendant The Mortgage Law Group, LLC has
not filed an answer to the complaint or taken any other action in its defense.)
Although the court has entered orders on many issues that the parties raised in their
motions, including the validity of Regulation O, dkt. #144, and defendants’ qualification
for the statutory and regulatory exemption for attorneys, dkt. #187, there are a few
remaining issues related to liability and available remedies that are now before the court.
Dkt. #190 (order reinstating parties’ motion for summary judgment with respect to these
remaining issues). Specifically, plaintiff has moved for summary judgment with respect to
defendants’ violations of Regulation O and the Consumer Protection Act, the liability of the
individual defendants and available remedies.

Defendants have moved for summary

judgment with respect to the individual liability of defendants Macey and Stafford.
Plaintiff’s motion for summary judgment will be granted with respect to certain
matters. I conclude that:
1) The initial and monthly retainer fees charged by The Mortgage Law Group and
Consumer First Legal Group qualify as advance fees under 12 C.F.R. § 1015.5(a).
2)

The companies failed to make the disclosure required under 12 C.F.R. §

1015.4(b)(1) in the manner required under § 1015.4(b)(4) in either their telephonic
communications with potential clients or the written retainer agreements sent to newly
enrolled clients.

2

3)

The companies implied in their welcome letter that consumers should not

communicate with their lenders.
4) The companies’ intake specialists implied that consumers who were current on
their mortgage should stop making payments on their mortgage loans.
5) The companies told consumers during intake calls and in retainer agreements and
welcome letters that they would receive services from an attorney and legal representation
in seeking a loan modification. Consumer First Legal Group also made this representation
on its website.
6) The companies’ intake specialists misrepresented the performance of nonprofit
housing counselor agencies or programs.
7) Aleman may be held individually liable for any violations of the Act or regulation
on the part of The Mortgage Law Group at any time during its operations and of Consumer
First Legal Group beginning in July 2012 related to the receipt of advance fees,
misrepresentations made by the companies in oral and written communications to
consumers (not in advertising) and any failures to disclose a consumer’s right to reject
services.
8) Searns may be held individually liable for any violations of the Act or regulation
on the part of The Mortgage Law Group at any time during its operations related to the
receipt of advance fees, misrepresentations made by the company in oral and written
communications to consumers (not in advertising) and any failure to disclose a consumer’s
right to reject services.

3

9) Macey may be held individually liable for any violations of the Act or regulation
on the part of The Mortgage Law Group at any time during its operations and of Consumer
First Legal Group beginning in July 2012 related to the receipt of advance fees,
misrepresentations made in the retainer agreement about consumers’ receipt of legal services
and any failures to disclose a consumer’s right to reject services in the retainer agreement.
10)

The appropriate measure for restitution or disgorgement in this case is

defendants’ net revenues, which includes the amount of advance fees collected from their
clients minus any refunds made to those clients. The Mortgage Law Group received total
net revenues in the amount of $18,331,737 and Consumer First Legal Group received total
net revenues in the amount of $2,992,296.
Plaintiff’s motion will be denied with respect to the following issues, which will be
resolved at trial:
1) Whether the companies’ welcome letter failed to make the disclosure required by
12 C.F.R. § 1015.4(b).
2) Whether the television and internet advertisements placed by third parties on
behalf of the companies contained misrepresentations that consumers would receive legal
services and obtain a loan modification in violation of 12 C.F.R. §§ 1015.3(b)(1) and (8).
3) Whether the companies’ intake specialists told consumers not to communicate
with their lenders in violation of 12 C.F.R. § 1015.3(a).

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4) Whether the companies’ direct communications with consumers misrepresented
their likelihood of obtaining a mortgage loan modification in violation of 12 C.F.R. §
1015.3(b)(1).
5) Whether the companies’ welcome letters misrepresented the amount of time it
would take to obtain a loan modification in violation of 12 C.F.R. § 1015.3(b)(2).
6)

The individual liability of defendants Aleman and Searns for any

misrepresentations made in television and internet advertisements placed by third parties
on behalf of the companies.
7) Defendant Macey’s individual liability for any of the companies’ violations
involving their telephonic communications with consumers, television or internet advertising
(including company websites) or welcome letters.
8) Defendant Stafford’s individual liability.
Defendants’ motion for summary judgment will be granted with respect to the
individual liability of defendant Stafford and plaintiff’s claims against him will be dismissed.
Also, defendants’ motion will be granted with respect to Macey’s individual liability for any
of the companies’ violations involving their telephonic communications with consumers,
television or internet advertising (including company websites) or welcome letters.
Defendants’ motion for summary judgment will be denied in all other respects as it relates
to the individual liability of defendant Macey.
In addition to the disputed liability issues that will be resolved at trial, the court must
address the parties’ disputes concerning whether defendants qualify for the statutory and

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regulatory exemption for attorneys engaged in the practice of law. In my April 21, 2016
order, dkt. #187, I determined that to qualify for the exemption, defendants must prove that
they were licensed to practice law (or were affiliated legally with licensed attorneys) and
provided mortgage relief services as part of the practice of law in every state in which their
clients resided.

This means that defendants must show that they met the licensing

requirements and the definition of the practice of law for each state in which they provided
services. The parties dispute the legal standard applicable in some states and the type of
services that they provided to consumers. Although the legal standard must be determined
on a state-by-state basis, the parties seem to rely on uniform evidence of defendants’ services,
such as their general practice of reviewing consumers’ financial information and documents.
In light of these disputes and the number of states involved, it will be important to
develop a full record in an efficient and organized manner at trial, which is likely to take
place in October or November of 2016. It seems that it would be most efficient to develop
the evidentiary record on all of the remaining issues related to the attorney exemption,
defendants’ liability and damages in one trial before the court. This would allow each
witness to exhaust his or testimony on all issues in one appearance versus requiring the
witnesses to take the stand in multiple trials. I also anticipate that there are some areas on
which the parties may be able to reach an agreement and stipulate to certain facts or
applicable legal standard. In addition, because the parties seem to rely on common evidence
of defendants’ practices, it may be possible to develop a factual record for all states or at least

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groups of states. In light of these considerations, I would like some input from the parties
before deciding how this case will proceed.
The parties shall have until August 2, 2016 to meet, confer and submit a proposed
trial plan in writing that shall address: (1) whether the parties’ disputes concerning the legal
definition of the practice of law in certain states should be resolved in motions in limine
before trial or in post trial briefing; (2) the pros and cons of holding one trial versus
bifurcating or trifurcating the trial to resolve the attorney exemption issue first and then
proceeding on the remaining disputed issues relating to liability and damages if necessary;
(3) the amount of time the parties anticipate for presenting evidence on each of the
remaining issues in dispute: exemption, liability and damages; (4) whether it is possible to
develop one factual record for all states or at least for a group of states with substantially
similar legal standards; (5) whether it would be beneficial to use five or six states as a
representative example of a particular group of states; (6) evidentiary issues on which the
parties can reach agreement; (7) how to proceed against defendant The Mortgage Law
Group, which has not appeared in this case; and (8) any other suggestions that the parties
may have for structuring the trial in an efficient and organized manner. The parties should
highlight areas on which they agree and if necessary submit individual responses to address
any issues on which they were unable to reach agreement. The parties should understand,
however, that the court will make any final decision on how this case will proceed. The
court will schedule a telephonic conference after August 2, 2016 to set deadlines for any

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additional briefing, Rule 26(a)(3) disclosures, motions in limine, the final pretrial conference
and the court trial.

UNDISPUTED FACTS
A. Background and Formation of Corporate Defendants
Defendants Thomas Macey, Jason Searns, Jeffrey Aleman and Harold Stafford are all
attorneys with a background in consumer law. At all times relevant to this lawsuit, Macey
was licensed to practice law in Illinois, Searns was licensed to practice law in Colorado,
Stafford was licensed to practice law in Wisconsin and Aleman was licensed to practice law
in Wisconsin and Illinois. In the 1990s, Macey and Aleman worked together at the law firm
Legal Helpers, P.C. in Chicago, Illinois, which practiced in the area of consumer bankruptcy.
They later operated Legal Helpers Debt Resolution, LLC, which provided debt relief services
to consumers. Searns joined Legal Helpers Debt Resolution in 2009. Stafford worked with
several national consumer law firms before meeting the other defendants in 2012.
In early 2011, Macey, Searns and Aleman formed defendant The Mortgage Law
Group, LLP, a Nevada limited liability partnership with its principal place of business in
Chicago, Illinois. (The parties dispute whether the mortgage assistance relief services arm
of Legal Helpers Debt Resolution became The Mortgage Law Group.) Macey held a 76
percent interest, Aleman held a 14 percent interest and Searns held a nine percent interest
in the company. Aleman served as the managing partner and Searns served as general
counsel and ethics counsel. The Mortgage Law Group offered and provided mortgage

8

assistance relief and financial advisory services, including assisting consumers with modifying
the terms of an extension of credit. It ceased operations by approximately November 2013,
and in March or April 2014, it filed a voluntary Chapter 7 bankruptcy petition. (The parties
allege conflicting dates for the filing of the bankruptcy petition.)
In January 2012, Stafford formed defendant Consumer First Legal Group, LLC, a
Wisconsin limited liability company that offered and provided mortgage assistance relief and
financial advisory services to consumers. Stafford’s intention was that Consumer First Legal
Group would become a nationwide law firm that provided mortgage-related legal services to
consumers. Later in 2012, Stafford met Aleman, who proposed that he and Macey buy a
majority interest in the company. In July 2012, Macey purchased a 78 percent interest in
the company, Aleman purchased a 17 percent interest and Stafford retained a five percent
interest. Aleman took over the day-to-day management of the company from a new office
in Chicago, Illinois. By July 2013, Consumer First Legal Group ceased operations and did
not have any clients.

B. Role of Individual Defendants
1. Macey
As the majority partner of The Mortgage Law Group, Macey had the legal authority
to exert control over the company’s policies, procedures and practices and weigh in on
decisions for the company. He had final decision-making authority with respect to a number
of issues (including financial matters and new ventures), reviewed and negotiated most of

9

the vendor contracts (including the company’s lease and payment processing service) and
reviewed and approved some corporate policies, processes and procedures.
Similarly, as the majority shareholder of Consumer First Legal Group, Macey had the
authority to make large decisions for the company. He involved himself in financial matters
for the company if there was a dispute between the other shareholders, received weekly
financial updates on matters such as the number of enrollments and employee compensation
issues and had the authority to get an employee fired (though he never exercised his firing
authority).

2. Aleman
Aleman managed the day-to-day business and operations for The Mortgage Law
Group during its existence and for Consumer First Legal Group after July 2012. Aleman was
intimately familiar with the operations of The Mortgage Law Group. All company personnel
and local attorneys answered to him on daily matters, issues and policies. He developed and
approved The Mortgage Law Group’s mortgage assistance relief services, directed client
processing managers and third-party vendors, approved expenditures (including marketing),
addressed client matters and created policies and protocols related to client support,
processing and document collection. After July 2012, Aleman reviewed and approved
Consumer First Legal Group’s processes, procedures, expenditures and resource purchases;
approved the contents of the company’s website; hired, fired and managed all company
personnel; reviewed and approved the company’s retainer agreements, Class B member

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agreements and contracts related to the management of the company (including third-party
vendors).

3. Searns
As the minority shareholder and general counsel of The Mortgage Law Group, Searns
oversaw the company’s compliance with regulatory requirements and offered opinions on
ethical issues. Among other things, he reviewed the company’s retainer agreement and call
scripts for compliance with applicable legal and ethical requirements. Searns also instructed
managers in charge of client support, processing, and document collection on company
procedures; supervised and audited paralegals and other support staff; and investigated and
responded to complaints from consumers and regulatory authorities.

4. Stafford
Between January and July 2012, Stafford oversaw the operation of Consumer First
Legal Group, managing its day-to-day activities and making all business decisions for the
company.

After selling most of his ownership interest in the company in July 2012,

Stafford’s involvement in the company became more limited.

He participated in the

recruitment of local attorneys and drafted some written responses to consumer complaints
from the Better Business Bureau and state regulators. Stafford received an annual salary of
$50,000. Under the company’s operating agreement, the salary stopped on the first of the

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following to occur: a period of two years or when the company stopped providing services
to consumers.
For a number of months, Stafford spoke with Aleman for five to 10 minutes once a
week about the enrollment process (numbers, forecasting and whether the company was
attracting new clients). Stafford also reviewed case notes related to clients who filed a
complaint. He visited the Chicago office three times after he sold his ownership interest in
the company.

C. Advertising and Enrollment Process
Consumer First Legal Group’s website described the company as “one of the most
sophisticated consumer protection law firms in the country” with more than 100 associate
attorneys “insuring the best possible outcome during uncertain times.” Dkt. #41 at 9-10.
The website also made representations about the quality of services that Consumer First
Legal Group would provide, such as “[w]hile foreclosure scams are rampant, our mortgage
relief specialists are some of the highest rated professionals in the field;” and “[our attorneys]
have years of experience keeping people in their homes and have a long list of testimonials
from people who were on the brink of disaster.” Id.
The Mortgage Law Group and Consumer First Legal Group did not place or run any
television advertisements in their own names or contract with anyone to do so. Instead, they
paid marketing companies to provide them with “qualified leads” on consumers. These
third-party “lead generators” ran generic advertisements for mortgage loan modification

12

services on television and online websites and for a fee, provided information about
consumers who responded to the advertisements to companies like The Mortgage Law
Group and Consumer First Legal Group. The Mortgage Law Group always used third-party
lead generators, and Consumer First Legal Group began this practice in July 2012.
The Mortgage Law Group and Consumer First Legal Group employed client intake
specialists to field calls from potential consumers, gather information about the consumer
and explain the services offered by the companies.

(Plaintiff calls these employees

“salespeople,” a characterization to which defendants object.) The companies provided their
intake specialists with “scripts” to help them answer questions and resolve any issues that
the consumers might have, including what to tell consumers if they wanted to talk with their
spouse before enrolling in the program, asked about negotiating with lenders themselves,
objected to the cost of the program or wanted to cancel their enrollment. The script
contained the following instructions and sample language to aid the intake specialists:
•

All clients must be advised that they have “the right to reject any offer
from their lender.” Dkt. #103, exh. #1 at TMLG.MO.LIT.000177-78.

•

Do not tell a client not to talk with their lender, to stop paying their
mortgage or otherwise to breach the contract with their lender. Id. at
TMLG.MO.LIT.000152.

•

Tell consumers that “[i]f you are able to stay current we would recommend
you contact your lender because most programs are hardship based so the
clients that retain us are behind on their payments or are in imminent
default of doing so.” Id.

•

If a consumer is unable to stay current, tell them that “The first thing that
I want you to understand is that if you do fall behind on your mortgage it
will damage your credit and could lead to foreclosure. That being said if
you can't pay you can’t pay. The one thing we ask of people that are

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current is that they put in the proper amount of effort in working with us
to find the proper resolution for you. We find the person who is a year
behind is much more helpful that some who is current. Does that make
sense? . . . Will you be helpful during this process if we decide to bring you
in as a client?” Id.
•

If the consumer asks about free mortgage loan modification services:
“That makes a lot of sense to me, why pay for something if you don't have
to right? How exactly are you planning on getting this service for free? (Let
them answer) If things only worked that way in the REAL world! The
service you are talking about are non-profits that will tell you what paper
work you'll need to gather to submit to your bank to attempt a
modification. Heck, I can do that in 30 seconds by sending you a
document checklist and I’ll even do it for free, but that isn't going to get
the result you're really after, which is mortgage relief. You see, we employ
a very definitive strategy in an attempt to achieve the BEST possible
outcome for you and that involves lawyers tying up the foreclosure process,
holding your lenders feet to the fire, A LOT of back and forth negotiating,
and if need be filing a formal complaint to the authorities if we find any
wrong doing on the part of your lender. Believe me ___________ what
you’re talking about getting “for free” and what we're offering are miles
apart and at the end of the day I think all you're REALLY after is getting
the relief you so desperately need, not necessarily getting someone to work
for free for you, am I right? Great! Here's what we need to get you
started!!” Id. at TMLG.MO.LIT.000160.

(Although the parties agree that intake specialists followed these scripts during telephone
calls with consumers, they dispute whether the intake specialists made additional
representations that went “off script.” For example, the parties dispute whether intake
specialists expressly told consumers that they would get a mortgage loan modification if they
enrolled in the company’s services or that they should stop paying their mortgage.)
If a consumer expressed interest in defendants’ services, the intake specialist
transferred the consumer to an attorney at company headquarters who reviewed defendants’
services with the consumer. The attorneys also worked from a script and read the consumer

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statements about the program and fees. If the consumer answered yes to these statements,
he or she was transferred back to an intake specialist who had the consumer sign a retainer
agreement.
The retainer agreements for both companies stated the following with respect to the
consumer’s obligations and right to engage in and terminate defendants’ services:
IV. Term: The term of this Agreement shall commence on the effective date
and continue until the negotiated resolution of a successful mortgage workout
disclosed by Client in Exhibit A of this Agreement [which defines what
qualifies as a mortgage workout] or until termination of this Agreement as
provided in Paragraph XII.
*

*

*

VI. Client Obligations: The Client will perform the following obligations:
*

*

*

f. If a servicer contacts Client, Client will not engage in
negotiation or workout discussions with servicer. Rather, Client
will inform servicer that Client is represented by CFLG as
Client's attorney, provide the servicer with CFLG's contact
information, and advise servicer that all future communications
shall be directed through CFLG. If the servicer engages in
harassing or abusive conduct, the Client will promptly notify
CFLG and provide complete and accurate information regarding
such contacts.
*

*

*

VII.
[The Company’s] Obligations: In consideration for Client’s
obligations as slated in Section VI, [the company] agrees to use its best efforts
to defend the foreclosure action and, where appropriate, obtain a successful
mortgage workout solution for Client by providing basic legal services on an
efficient and cost-effective basis.
CLIENT EXPRESSLY AGREES THAT [THE COMPANY] MAKES NO
SPECIFIC GUARANTEE REGARDING THE OUTCOME OF ANY

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FORECLOSURE ACTION, MORTGAGE RELIEF SERVICES, LOAN
MODIFICATION, SHORT SALE OR OTHER NEGOTIATION FOR A
MORTGAGE WORKOUT SOLUTION CONSISTENT WITH THE
OBJECTIVES OF THE CLIENT.
*

*

*

VIII. Fees and Costs: In consideration for all services to be rendered
hereunder, Client agrees upon execution of this Agreement to pay [the
company] the Initial Flat Fee Retainer and monthly Recurring Flat Fee
Retainer, as set forth in the Payment Schedule attached as Exhibit B to this
Agreement. Client acknowledges that this Agreement is based on a Flat Fee
earned, not billed by the hour. However, for accounting of earned and
unearned fees only, fees are calculated in six minute intervals, with six (6)
minutes being the minimum time billed for any one project as provided for in
the attached Payment Schedule.
Client also agrees that if the Client's initial or ongoing payments fail for any
reason, [the company] is under no obligation to provide any legal or
law-related services under this Agreement until such time the Client
successfully recompenses [the company] and brings all amounts owed
hereunder current.
*

*

*

X. Client Acknowledgment: Client hereby acknowledges, consents and
agrees that:
*

*

*

c. The outcome of any foreclosure action and CFLG's
negotiation of any mortgage workout solution is uncertain.
Each case is unique and results may vary
*

*

*

XII. Termination and Severability: Client agrees that both parties may sever
the relationship at any time. The party choosing to terminate the Agreement
will document the decision by sending written notice to the other party. The
termination will occur upon receipt of such notice.

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If such termination occurs and within 30 days of the date of said termination,
the Client will be provided with an accounting of fees earned. Client shall only
be responsible for fees incurred through the date of cancellation and in
accordance with the Payment Schedule listed in Exhibit B. [The company]
may cancel this Agreement if the Client fails to make payments as previously
agreed upon or for any violation of the Client Obligations listed in section VI.
If any legal action is brought regarding this Agreement, the prevailing party
shall be entitled to legal fees and court costs.
*

*

*

XV. Disclosures and Disclaimers: Client acknowledges and understands that:
*

*

*

d. [The company] cannot and does not make any guarantee of
any kind regarding the outcome of any foreclosure case or the
success of any negotiation for a mortgage workout;
e. Client may accept or decline any mortgage workout solution
achieved by [the company];
f. It is not necessary to pay a third party to arrange for a loan
modification or other form of forbearance from your mortgage
lender or servicer. You may call your lender directly to ask for
a change in your loan terms. Nonprofit housing counseling
agencies also offer these and other forms of borrower assistance
free of charge. A list of nonprofit housing counseling agencies
approved by the United States Department of Housing and
Urban Development (HUD) is available from your local HUD
office or by visiting www.hud.gov.
Dkt. #101, exh. ## 4 and 17.
After the client signed a retainer agreement, the companies sent the client a welcome
packet that included a cover letter that made the following statements:
•

Currently we are seeing many workouts take anywhere from 90-120 days;
however, every case is unique based upon each client’s servicer and
circumstances. Fortunately by using an attorney you have a significant

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advantage over homeowners who attempt workouts on their own because
we are familiar with the process and expedite it through our contacts.
•

While we will not tell you not to speak to your servicer, we must advise
you that to do so is risky. We have seen several clients hurt by deceptive
practices when their servicer calls.

Dkt. #103, exh. #2 at 2 and 4.
Consumers who enrolled in the services offered by The Mortgage Law Group and
Consumer First Legal Group believed that they would be represented by an attorney. Intake
specialists, headquarter attorneys, the retainer agreement and the welcome letter told
potential customers that they would receive legal representation and services from an
attorney specifically assigned to their file.

D. Consumer Payments and Receipt of Services
After a consumer agreed to enroll, an intake specialist gathered the consumer’s bank
account information to set up payments for an initial retainer fee and recurring monthly
payments. The Mortgage Law Group required $1,195 for its “Stage I” services and a
monthly flat fee retainer of approximately $500.

(The parties dispute whether The

Mortgage Law Group charged additional fees for other services as part of an initial flat fee
retainer.) The “Payment Schedule” (Exhibit B) of The Mortgage Law Group’s retainer
agreement defined the stages of services as follows:
• Stage I: Completion of financial statement questionnaire and consultation;
review and analysis of the financial questionnaire to evaluate a client’s
difficulty in paying current loan and the likelihood of repayment of a modified
loan; evaluation of the client’s hardship; analysis of preliminary financial data
and mortgage loan terms; analysis of the client’s existing loan terms as

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compared to market conditions; determining the client’s lender’s requirements
for a loan application; attorney analysis of preliminary underwriting;
communications with client regarding the preliminary assessment; document
preparation; documentation requests to client; development of financial
summary; assistance in drafting a hardship affidavit; and confirmation of
lender submission requirements;
• Stage II: Follow up with the client regarding documentation; completion
of lender and federal forms; compilation of client’s financial documents;
preparation of file and rview of financial documents by underwriter;
underwriting client file in light of federal and investor guided options;
underwriting analysis and creation of loan modification submission package;
final underwriting analysis and review of completed loan modification package
by TMLG attorneys.
• Stage III: Transmission of loan modification package to client’s lender;
verification of lender’s receipt of the package; continued monitoring of loan
modification process with the lender; assisting the client with compiling
additional documentation requested by the lender; and proposing alternative
loan solutions where necessary.
Dkt. #101, exh. #4 at CFPB-TMLG-0037271-73.
The Consumer First Legal Group charged an initial flat fee retainer of varying
amounts but it required $1,195 as an initial fee for “Stage I” services and a continuing
monthly flat fee retainer of $895 upon completion of the earlier of each subsequent stage
of services or 30 days of work. The Consumer First Legal Group’s retainer agreement
identified nine stages of services, culminating with the company’s review and discussion of
the loan modification document with the consumer. Its Stage I services were substantially
similar to the Stage I services provided by The Mortgage Law Group.
Intake specialists were encouraged to call consumers to ask them to make their initial
retainer payment earlier than the scheduled date and the script instructed the intake
specialists to say:

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We have been seeing very strong results from the lenders we have been
working with and I can only attribute that to the fact that foreclosures are
skyrocketing and maybe they’re finally starting to realize they have to start
working with homeowners. Everything is ready to go on our end, the next
step is to get your first payment in to complete the process and get this
underway.
Dkt. #103, exh. #1 at TMLG.MO.LIT.000157.
The Mortgage Law Group enrolled at least 5,265 consumers who made one or more
payments between May 2011 and January 2013, and Consumer First Legal Group enrolled
at least 1,116 consumers who made one or more payments between May 2012 and January
2013.

The Mortgage Law Group collected $18,454,222 from its clients and issued

$122,485 in refunds, resulting in a net revenue of $18,331,737. Consumer First Legal
Group collected $3,082,055 from its clients and issued $89,759 in refunds, resulting in a net
revenue of $2,992,296. The companies did not start working on a consumer’s behalf until
the consumer made the initial retainer payment, and they requested and received initial and
monthly payments from consumers before those consumers had executed written loan
modification agreements with their lenders or mortgage servicers.
The Mortgage Law Group obtained loan modifications for 26 percent (or about
1,369) of its 5,265 clients. Consumer First Legal Group enrolled at least 1,116 consumers
in its loan modification program but obtained loan modifications for only 17 percent (or
about 190) of those clients. (The parties dispute whether these percentages reflect the
companies’ success rate. Defendants offer the affidavit of Aleman, dkt. #125 at ¶ 18, to
show that the percentages are misleading because they do not account for consumers who
canceled their retainer agreements, stopped using the companies’ services or obtained a

20

refund. Aleman avers that The Mortgage Law Group submitted competed loan applications
for only 50 percent of its clients and Consumer First Law Group for only 47 percent of its
clients.) The Mortgage Law Group took an average of 211 days and Consumer First Legal
Group took an average of 165-170 days to obtain a mortgage loan modification for a client.

OPINION
I. STATUTORY AND REGULATORY VIOLATIONS
Plaintiff alleges that defendants have made misrepresentations about their services,
in violation of Regulation O and the Consumer Financial Protection Act; failed to make
certain disclosures required by Regulation O; and collected advance fees in violation of
Regulation O. As I have discussed in my previous orders, defendants contend that none of
these provisions apply to them because they were attorneys engaged in the practice of law
and therefore exempt. That issue remains in dispute and will be resolved at the court trial
on a state-by-state basis. In light of the possibility that not every individual or corporate
defendant will qualify for the attorney exemption in all of the jurisdictions relevant in this
case, I will address the parties’ arguments with respect to liability in an effort to streamline
the issues for trial.

A. Advance Fees
Regulation O prohibits a mortgage assistance relief service provider from “request[ing]
or receiv[ing] payment of any fee or other consideration until the consumer has executed a

21

written agreement between the consumer and the consumer’s dwelling loan holder or servicer
incorporating the offer of mortgage assistance relief that the provider obtained from the
consumer’s dwelling loan holder or servicer.” 12 C.F.R. § 1015.5(a). Plaintiff contends that
defendants The Mortgage Law Group and Consumer First Legal Group repeatedly violated
this provision with respect to thousands of consumers by requesting and receiving payment
of initial and monthly retainer fees before the consumers had executed mortgage loan
modification agreements with their lenders or servicers that incorporated modification offers
that the corporate defendants obtained. According to plaintiff, all of the fees charged and
collected by the corporate defendants violated the advance fee provision of Regulation O.
Defendants do not dispute plaintiff’s contentions that the initial and monthly flat fees
charged by the companies qualify as advance payments from consumers. Therefore, plaintiff
is entitled to summary judgment with respect to this issue. I note, however, that plaintiff
has not yet established whether any of the defendants are subject to the advance fee
provision because their entitlement to an exemption remains in dispute.

B. Failure to Make Disclosures
Regulation O requires mortgage service providers to disclose the following in all
commercial communications to consumers in a clear and prominent manner:
You may stop doing business with us at any time. You may accept or reject
the offer of mortgage assistance we obtain from your lender [or servicer]. If
you reject the offer, you do not have to pay us. If you accept the offer, you
will have to pay us (insert amount or method for calculating the amount) for
our services.

22

12 C.F.R. § 1015.4(b)(1) and (4). Section 1015.2 defines a “commercial communication”
as any statement, illustration or depiction in any medium that is designed to effect a sale or
create interest in purchasing any service, plan or program. A “consumer-specific commercial
communication” by definition “occurs prior to the consumer agreeing to permit the provider
to seek offers of mortgage assistance relief on behalf of the consumer, or otherwise agreeing
to use the mortgage assistance relief service, and that is directed at a specific consumer.” Id.
The regulation requires that to be “clear and prominent,” the disclosure in an oral
communication must be “delivered in a slow and deliberate manner and in a reasonably
understandable volume and pitch.” In a written communication, the disclosure must be
“easily readable; in a high degree of contrast from the immediate background on which it
appears; in the same languages that are substantially used in the commercial communication;
in a format so that the disclosure is distinct from other text, such as inside a border; in a
distinct type style, such as bold; parallel to the base of the commercial communication, and,
except as otherwise provided in this rule, each letter of the disclosure shall be, at a minimum,
the larger of 12–point type or one-half the size of the largest letter or numeral used in the
name of the advertised Web site or telephone number to which consumers are referred to
receive information relating to any mortgage assistance relief service.” § 1015.2. Further,
“[i]n textual communications the disclosures must appear together and be preceded by the
heading, ‘IMPORTANT NOTICE,’ which must be in bold face font that is two point-type
larger than the font size of the required disclosures.”

§ 1015.4(b)(i).

In oral

communications, “the audio component of the required disclosures must be preceded by the

23

statement ‘Before using this service, consider the following information’ and, in telephone
communications, must be made at the beginning of the call.” § 1015.4(b)(ii).
Plaintiff contends that the script, welcome letter and retainer agreements used by The
Mortgage Law Group and Consumer First Legal Group did not contain the required
disclosure, much less utilize a clear and prominent form. In addition, plaintiff has submitted
affidavits from nine of defendants’ former clients who state that they were never told that
they could stop doing business with the company at any time or that they would not have
to pay the company if they rejected a loan modification offer. Dkt. ##84-88, 90-93 and
117.
As an initial matter, defendants argue that the welcome letter, which was sent to
clients after they hired defendants, does not qualify as a commercial communication because
it did not occur “prior to the consumer agreeing to use the mortgage assistance relief service.”
§ 1015.2. Defendants make a good point, and plaintiff does not challenge their assertion
in its reply brief. Accordingly, I find that defendants’ welcome letter does not qualify as a
consumer-specific commercial communication and is not subject to the disclosure
requirement in § 1015.4(b). Because defendants do not make the same argument with
respect to the script or retainer agreement, I construe their silence as a concession that these
communications qualify as commercial communications subject to the disclosure
requirements set out above. C & N Corp. v. Gregory Kane & Illinois River Winery, Inc.,
756 F.3d 1024, 1026 (7th Cir. 2014) (failure to make argument in response to summary
judgment motion constitutes waiver of that argument); Dexia Credit Local v. Rogan, 629

24

F.3d 612, 626 (7th Cir. 2010) (holding that failure to argue specific statute of limitations,
even if others are argued, constitutes waiver).
In a brief response to plaintiff’s other contentions, defendants argue only that the
script followed by intake specialists and the retainer agreement sent to clients provided the
required disclosure. However, a review of those documents shows otherwise. Dkt. #103,
exh. #1 (script); dkt. #101, exh. ##4 and 17 (retainer agreements).
Defendants point out that the script “specifically addressed [the] required disclosures”
by prohibiting intake personnel from telling a client not to communicate with his lender.
Dkt. #126 at 23 (citing Dfts.’ Resp. to Plf.’s Prop. Find. of Fact No. 208). I also note that
the script instructed company personnel to advise clients that they could reject any offer
from their lender. However, a consumer’s communication with a lender and his or her
decision to accept a lender’s offer are not the same thing as the consumer’s having the right
to stop doing business with defendants.
Defendants point out that the companies’ retainer agreements state that “Client
agrees that both parties may sever the relationship at any time” and “Client may accept or
decline any mortgage workout solution achieved by [the law firm]” and that they contain
provisions related to an accounting of fees, a refund for unearned fees and a payment
structure. Dkt. #126 at 23. Although these statements may address the consumer’s right
to sever his or her relationship with defendants, the retainer agreements do not contain all
of the required text of the disclosure in the form required by the regulation. For example,
there is no heading entitled “IMPORTANT NOTICE” and the agreements do not make clear

25

that if the consumers reject the offer, they do not have to pay the company or that if they
accept the offer, they will have to pay a specifically identified amount for the company’s
services. Office of the Attorney General v. Berger Law Group, P.A., 2015 WL 5922933, at
*3 (M.D. Fla. Oct. 9, 2015) (entering default judgment in part on this ground). The retainer
agreements for both companies provide a fee structure for consumers based on “stages” of
services leading up to the arrangement of a loan modification or other mortgage relief service.
However, defendants fail to point to any provision that states that consumers do not have
to pay these fees if they decide to reject the mortgage workout solution. In fact, the
agreements appear to require consumers to pay for any services performed by defendants
regardless whether defendants arrange a mortgage workout solution on their behalf.
Accordingly, I find that plaintiff has adduced sufficient evidence from which I can
conclude as a matter of law that defendants failed to make the disclosure required under §
1015.4(b)(1) in the manner required under § 1015.4(b)(4) in either their telephonic
communications with potential clients or the written retainer agreements sent to newly
enrolled clients. Federal Trade Commission v. E.M.A. Nationwide, Inc., 767 F.3d 611, 635
(6th Cir. 2014) (affirming grant of summary judgment in favor of commission because
consumers’ declarations and defendants’ scripts showed that defendants failed to make
required disclosures). Plaintiff’s motion for summary judgment will be granted with respect
to this issue.

26

C. Misrepresentations
Regulation O prohibits mortgage assistance relief providers from “[r]epresenting,
expressly or by implication, in connection with the advertising, marketing, promotion,
offering for sale, sale, or performance of any mortgage assistance relief service, that a
consumer cannot or should not contact or communicate with his or her lender or servicer.”
12 C.F.R. § 1015.3(a). Further, § 1015.3(b) prohibits mortgage assistance relief providers
from “[m]isrepresenting expressly or by implication, any material aspect of any mortgage
assistance relief service, including”:
(1) The likelihood of negotiating, obtaining, or arranging any represented
service or result, such as those set forth in the definition of Mortgage
Assistance Relief Service in § 1015.2;
(2) The amount of time it will take the mortgage assistance relief service
provider to accomplish any represented service or result, such as those set
forth in the definition of Mortgage Assistance Relief Service in § 1015.2;
*

*

*

(4) The consumer's obligation to make scheduled periodic payments or any
other payments pursuant to the terms of the consumer's dwelling loan;
*

*

*

(8) That the consumer will receive legal representation; and
(9) The availability, performance, cost, or characteristics of any alternative to
for-profit mortgage assistance relief services through which the consumer can
obtain mortgage assistance relief, including negotiating directly with the
dwelling loan holder or servicer, or using any nonprofit housing counselor
agency or program. . .
With respect to these provisions, plaintiff alleges that (1) representatives of The Mortgage
Law Group and Consumer First Legal Group violated all of the regulatory provisions set out

27

above in their oral and written communications with consumers; and (2) defendants’
television and internet advertising misled consumers about the likelihood of obtaining a loan
modification, in violation of § 1015.3(1), and being represented by an attorney, in violation
of § 1015.3(8).
In addition, plaintiff contends that the alleged misrepresentations by defendants also
violate the more general prohibition in the Consumer Protection Act concerning “unfair,
deceptive, or abusive act[s] or practice[s] in connection with any transaction with a
consumer for a consumer financial product or service.” 12 U.S.C. §§ 5531 and 5536(1)(B).
Although the Act does not define a “deceptive” practice, the parties agree that the
requirements are the same as those for a deceptive practices claim under the Federal Trade
Commission Act: (1) a representation, omission or practice, (2) that likely would mislead
a consumer acting reasonably under the circumstances and (3) that the representation,
omission or practice is material. Federal Trade Commission v. Tashman, 318 F.3d 1273,
1277 (11th Cir. 2003) (setting forth elements of deceptive practice claim under Federal
Trade Commission Act); Federal Trade Commission v. World Travel Vacation Brokers, Inc.,
861 F.2d 1020, 1029 (7th Cir. 1988) (same). See also United States v. Patel, 778 F.3d 607,
613 (7th Cir. 2015) (citing Sanders v. Jackson, 209 F.3d 998, 1000 (7th Cir. 2000) (noting
that in absence of statutory definition, courts consider similar terms in other statutes, as well
as purpose of statute being interpreted)); Illinois v. Alta Colleges, Inc., 2014 WL 4377579,
at *4 (N.D. Ill. Sept. 4, 2014) (holding that prohibitions against deceptive practices in
Consumer Protection Act and Federal Trade Commission Act are “virtually identical”). A

28

statement or practice is material if it is “likely to affect a consumer's decision to buy a
product or service.” Federal Trade Commission v. American Tax Relief LLC, 751 F. Supp.
2d 972, 978 (N.D. Ill. 2010); see also Federal Trade Commission v. Bay Area Business
Council, Inc., 2004 WL 769388, at *10 (N.D. Ill. Apr. 9, 2004). There is no requirement
that the misrepresentations or practices be made with an intent to deceive to be actionable.
World Travel, 861 F.2d at 1029.
Defendants assume that the statutory and regulatory standards are the same, arguing
that plaintiff’s claims fail for the same reasons under both the Act and Regulation O.
Because the parties agree on this point, I will follow their lead and construe a violation of 12
C.F.R. § 1015.3 as a violation of the general statutory prohibition against deceptive practices
under 12 U.S.C. §§ 5531 and 5536(1)(B). This means that the parties have forfeited their
right to raise a contrary argument at trial. I will address the parties’ arguments concerning
the specific instances of defendants’ alleged illegal conduct separately.

1. Advertisements made in violation of § 1015.3(b)(1) and (8)
Plaintiff alleges generally that defendants’ television and internet advertising were
designed to convince consumers that they would receive a loan modification and the
representation of an attorney. In support of its claim, plaintiff has submitted the affidavits
of a few of defendants’ former clients who aver that the companies’ websites led them to
believe that the companies could help them obtain a mortgage loan modification and make
their mortgage payments more affordable. Some of those former clients also aver that they

29

viewed television commercials that led them to believe that the companies could help them
obtain loan modification, but it is unclear from their statements whether they formed this
belief about the companies from the commercial alone or only after speaking with a company
representative.
Apart from a statement made on Consumer First Legal Group’s website about
providing clients the services of an attorney, plaintiff has not identified the specific content
of any other advertising that allegedly misled consumers about their likelihood of obtaining
a mortgage loan modification. As a result, it is impossible to reach a conclusion about
whether the advertising would have misled a reasonable consumer. Further, it is undisputed
that The Mortgage Law Group and Consumer First Legal Group did not do any of their own
advertising and relied on third-party lead generators to solicit potential clients.

As

defendants point out, plaintiff must show that any misrepresentations made by third parties
in advertising defendants’ services can be attributed to defendants.
With respect to this last point, plaintiff argues that as the managing partner in charge
of the companies’ expenditures to third parties, Aleman determined what type of advertising
and leads to pay for and which lead generators to pay. However, plaintiff has not produced
any evidence showing that Aleman actually reviewed or controlled the messaging or content
of the advertising. Along with its reply brief, plaintiff submitted copies of an email that
Searns wrote to an employee of a lead generator, stating that “I need to review and approve
any marketing of any kind for TMLG before it is used. Please show me what you want to
use and how you plan to use it.” Dkt. #136. Although I can infer from this email that

30

Searns may have had control over the content of the advertising performed for The Mortgage
Law Group, defendants have not had the opportunity to refute this evidence.
In sum, because plaintiff has not adduced undisputed evidence establishing what
representations the television and internet advertisements made to consumers or whether
defendants even controlled the content of those statements, I must deny its motion for
summary judgment with respect to its claim that defendants’ television and internet
advertisements violated § 1015.3. (The alleged misrepresentation about attorney services
made on Consumer First Legal Group’s website is discussed below.)

2. No communication with lender, § 1015.3(a)
In support of its claim that defendants implied that consumers should not
communicate with their lenders, plaintiff points to the undisputed fact that defendants’
welcome letter told consumers that “[w]hile we will not tell you not to speak to your servicer,
we must advise you that to do so is risky. We have seen several clients hurt by deceptive
practices when their servicer calls.” (Although plaintiff also relies on the affidavits of a few
of defendants’ former customers who aver that defendants’ representatives told them over
the telephone not to speak with their lenders, defendants dispute this with evidence that
they instructed their intake specialists not to make such statements.)
I agree that a reasonable consumer would conclude from the statements in
defendants’ welcome letter that defendants were implying that they should not communicate
with their lender. Stating that it was risky for a consumer to talk with their lender and

31

describing how others have been hurt would discourage consumers facing mortgage default
from talking with their lenders directly. Accordingly, I am granting plaintiff’s motion for
summary judgment with respect to its claim that defendants represented by implication in
their welcome letter that consumers should not communicate with their lenders. The motion
is denied with respect to plaintiff’s claim that defendants’ intake specialists made similar
representations in telephone calls to consumers because the parties dispute whether this
occurred. (The parties dispute whether intake specialists ever went “off script” and told
consumers not to speak with their lenders as a few former clients claim.)

3. Likelihood of obtaining mortgage loan modification, § 1015.3(b)(1)
Plaintiff contends that statements that the intake specialists made over the telephone
and that defendants made in their welcome letter led consumers to believe that they were
eligible for and would obtain a mortgage loan modification with the company’s help, even
though many of defendants’ clients did not obtain one. (There is a dispute concerning the
exact percentage of clients who failed to obtain a mortgage loan modification.) As evidence
of this misrepresentation, plaintiff relies on (1) the affidavits of a few of defendants’ former
clients who state that company representatives told them that they could get a mortgage loan
modification if they hired the company; (2) the script’s instruction that intake specialists
encourage consumers to pay their initial retainer fee by telling consumers that “we have been
seeing very strong results from the lenders we’ve been working with”; and (3) the statement

32

in the companies’ welcome letter that “you have a significant advantage because we are
familiar with the process and expedite it through our contacts.”
Without more, I am not persuaded that plaintiff has met its burden of showing
misrepresentation as a matter of law. Plaintiff has not explained why the vague and isolated
references to “very strong results” and having “a significant advantage” would lead a
reasonable consumer to believe that he or she would qualify for and obtain a loan
modification, especially in light of the fact that the retainer agreement expressly stated that
the companies were not promising a particular result. Both of the cited statements were
made to consumers after they agreed to defendants’ services and signed the retainer
agreement with this disclaimer.
The affidavits of the former consumers are more troubling but not necessarily
conclusive. None of the affidavits contain any details about what type of statements were
made, who made them or at what point in the process they were made. Further, defendants
have adduced evidence that intake specialists were trained not to guarantee or promise any
particular result and that the companies employed a compliance officer to insure that
nothing was promised or guaranteed to a client. The parties also appear to dispute whether
intake specialists ever went “off script” and promised consumers a loan modification and
whether the compliance officer was effective at ensuring no misrepresentations were made.
In light of the sparse evidence offered by plaintiff and the disputed factual issues, I am
denying plaintiff’s motion for summary judgment with respect to whether any of defendants’
oral or written communications with consumers violated § 1015.3(1).

33

4. Amount of time, § 1015.3(b)(2)
Plaintiff contends that the companies misled consumers by telling them in the
welcome letter that mortgage workouts were taking “anywhere from 90-120 days,” when in
practice many clients did not receive a loan modification, and if they did, it took The
Mortgage Law Group an average of 211 days to achieve that result and Consumer First Legal
Group an average of 165 to 170 days. Defendants argue that plaintiff takes the cited
language out of context because the welcome letter explains that “we are seeing many
workouts take anywhere from 90-120 days; however, every case is unique based on each
client’s servicer and circumstances.” They contend that “the use of the word ‘however’ is a
qualifier that a reasonable person could not interpret as a guarantee” of the 90 to 120 day
estimate. Dkt. #126 at 22-23. I agree with defendants.
A reasonable reading of the cited language is that even though defendants anticipated
that the mortgage workout would take somewhere between 90 to 120 days, it could take
longer in some circumstances. Neither company guaranteed that they would obtain a loan
modification within 90 to 120 days.
In practice, the Mortgage Law Group took an average of 211 days and Consumer First
Legal Group took an average of 165-170 days to obtain a mortgage loan modification for a
client. Defendants’ statement that “every case is unique based on each client’s servicer and
circumstances” reasonably accounts for the fact that defendants took 50 to 90 days longer
than they estimated to obtain loan modifications. Because I cannot find as a matter of law
consumer would find the statement in the companies’ welcome letter to be misleading in

34

light of the actual amount of time that defendants were taking to arrange loan modifications
on behalf of clients, I am denying plaintiff’s motion for summary judgment with respect to
this issue.

5. Obligation to pay, § 1015.3(b)(4)
Plaintiff contends that, at the least, the companies’ representatives strongly implied
to consumers that they should stop making payments on their mortgage loans. In support
of this contention, plaintiff points to the following: (1) undisputed evidence that the script
instructed intake specialists to tell consumers who were able to stay current on their
payments that “we would recommend you contact your lender because most programs are
hardship based so the clients that retain us are behind on their payments or are in imminent
default of doing so”; (2) undisputed evidence that the script instructed intake specialists to
tell consumers who are not able to stay current on their mortgage payments that “[w]e find
the person who is a year behind is much more helpful than someone who is current. . . Will
you be helpful during this process if we decide to bring you in as a client?”; and (3) affidavits
of three of defendants’ former customers, dkt. ##84, 85 and 90, who aver that the company
either told them to stop paying their mortgage and that it would take care of the
consequences or implied that any late payments would be rolled into the modification.
Defendants dispute the affidavits and plaintiff’s interpretation of the script with evidence
that the companies expressly instructed their intake specialists not to tell clients to stop
paying their mortgages.

35

Although the undisputed statements in the script are confusing and seem carefully
worded to avoid saying explicitly that consumers should stop paying their mortgage, I find
that a reasonable consumer would interpret them as strong encouragement to stop making
mortgage payments. Telling a consumer that most mortgage relief programs like those
offered by defendants are “hardship based” and that their clients are usually “behind on their
payments” certainly implies that to get help and qualify for relief, the consumer should be
behind on his or her payments. The script goes as far as to tell intake specialists to ask
consumers whether they will be “helpful” like the clients who are a year behind on their
payments. Accordingly, I will grant plaintiff’s motion for summary judgment with respect
to this issue on the sole basis of the undisputed content of the script.

6. Legal representation, § 1015.3(b)(8)
It is undisputed that The Mortgage Law Group and Consumer First Legal Group told
consumers during intake calls and in the retainer agreement and welcome letter that they
would receive services from an attorney and legal representation in seeking a loan
modification.

It is also undisputed that Consumer First Legal Group made a similar

representation on its website. However, as discussed at length in the April 2016 order, dkt.
#187, the parties dispute whether defendants actually provided legal services or legal
representation to their clients. As a result, I cannot determine as a matter of law whether
defendants’ statements regarding legal representation qualify as misrepresentations and a
deceptive practice.

36

7. Success of nonprofit alternatives, § 1015.3(b)(9)
It is undisputed that the companies’ script told intake specialists to respond to
consumers’ questions about free mortgage loan modification services with the following
statements:
That makes a lot of sense to me, why pay for something if you don't have to
right? How exactly are you planning on getting this service for free? (Let them
answer) If things only worked that way in the REAL world! The service you
are talking about are non-profits that will tell you what paper work you’ll need
to gather to submit to your bank to attempt a modification. Heck, I can do
that in 30 seconds by sending you a document checklist and I’ll even do it for
free, but that isn't going to get the result you're really after, which is mortgage
relief. You see, we employ a very definitive strategy in an attempt to achieve
the BEST possible outcome for you and that involves lawyers tying up the
foreclosure process, holding your lenders feet to the fire, A LOT of back and
forth negotiating, and if need be filing a formal complaint to the authorities
if we find any wrong doing on the part of your lender. Believe me ___________
what you’re talking about getting “for free” and what we're offering are miles
apart and at the end of the day I think all you're REALLY after is getting the
relief you so desperately need, not necessarily getting someone to work for free
for you, am I right? Great! Here's what we need to get you started!!
A former intake specialist who worked with both companies confirmed that intake specialists
discouraged consumers from using free mortgage loan modification services. Dkt. #79 at
130-34. Relying on this evidence, plaintiff contends that intake specialists misrepresented
the performance of a nonprofit housing counselor agency or program through which
consumers could have obtained loan modification services free of charge.
I agree that a reasonable consumer would conclude from the above statements that
free services are less effective than those provided by defendants for a fee. In fact, the script
goes as far as to state that the free service will not get the result that the consumer is “really
after, which is mortgage relief.” In response, defendants argue only that consumers would

37

not be misled about the availability or effectiveness of free services because their retainer
agreements stated that “[n]on-profit counseling agencies also offer these and other forms of
borrower assistance free of charge.” However, a client would have received the retainer
agreement only after having an initial conversation with an intake specialist and being told
that the free services were not really what the consumer needed. Further, the retainer
agreement informs consumers of the availability of non-profit alternatives and does not say
anything to counter statements made about the effectiveness of such services. Therefore, in
the absence of any further objection or argument from defendants, I find that plaintiff is
entitled to summary judgment with respect to this issue.

II. INDIVIDUAL DEFENDANTS’ LIABILITY
Plaintiff argues that it is entitled to summary judgment with respect to whether
Aleman, Searns, Macey and Stafford may be held individually liable for any violations of the
act and regulation committed by The Mortgage Law Group and Consumer First Legal
Group. Defendants have filed a cross motion for summary judgment with respect to the
individual liability of Aleman and Searns.
The parties agree that to hold any of the individual defendants liable for the corporate
defendants’ violations of the Act or Regulation O, plaintiff must show that the individuals:
(1) participated directly in the illegal practices or acts or had the authority to control them;
and (2) knew or should have known about the illegal practices. Federal Trade Commission
v. Bay Area Business Council, Inc., 423 F.3d 627, 636 (7th Cir. 2005) (discussing individual

38

liability for corporate violations of Federal Trade Commission Act); Federal Trade
Commission v. Amy Travel Service, Inc., 875 F.2d 564, 573 (7th Cir. 1989) (same). The
knowledge requirement “may be fulfilled by showing that the individual had ‘actual
knowledge of material misrepresentations, reckless indifference to the truth or falsity of such
misrepresentations, or an awareness of a high probability of fraud along with an intentional
avoidance of the truth.’” Amy Travel, 875 F.2d at 574 (quoting Federal Trade Commission
v. Kitco of Nevada, Inc., 612 F. Supp. 1282, 1292 (D. Minn. 1985)). In addition, the
degree to which the individual participates in business affairs is probative of knowledge. Id.

A. Aleman and Searns
Plaintiff has adduced undisputed evidence that Aleman managed and had intimate
knowledge of all of the day-to-day operations related to The Mortgage Law Group at all
times and Consumer First Legal Group after he purchased an interest in the company in July
2012.

It is also undisputed that Searns served as general and ethics counsel for The

Mortgage Law Group.

Although Searns testified at his deposition that he was not

responsible for business management or day-to-day operations, he reviewed the company’s
retainer agreement and call scripts for compliance with regulatory and ethical requirements.
Dkt. #74 at 45 and 81-82.
Defendants do not refute plaintiff’s contentions that Aleman and Searns had the
authority to control the actions of the corporate defendants and knew or should have known
about the companies’ receipt of advance fees, misrepresentations by company representatives

39

about their services and the companies’ failure to disclose a consumer’s right to reject
services. However, defendants contend in a one-sentence argument that there is no evidence
that either Aleman or Searns had any involvement in the advertising for either firm. As
discussed above, I agree that plaintiff has failed to show that either Aleman or Searns had
the ability to control the content of the advertising performed by third-party lead generators
on behalf of the corporate defendants or that they even knew of it. (Although plaintiff
offered some evidence that Searns had knowledge and control over the advertising performed
for The Mortgage Law Group, that issue remains in dispute because defendant has not had
the opportunity to refute it.)
Accordingly, I am granting plaintiff’s motion for summary judgment with respect to
the following issues related to individual liability:
1. Aleman may be held individually liable for any violations of the Act or
regulation related to the receipt of advance fees, misrepresentations by
company representatives and the failure to disclose a consumer’s right to reject
services that were committed by The Mortgage Law Group at any time during
its operations and by Consumer First Legal Group beginning in July 2012.
2. Searns may be held individually liable for any violations of the Act or
regulation related to the receipt of advance fees, misrepresentations by
company representatives and the failure to disclose a consumer’s right to reject
services that were committed by The Mortgage Law Group at any time during
its operations.
Plaintiff’s motion for summary judgment will be denied with respect to Aleman’s and
Searns’s individual liability for any misrepresentations made in third-party advertising for
The Mortgage Law Group or Consumer First Legal Group.

40

B. Macey
It is undisputed that as the majority shareholder of The Mortgage Law Group and
Consumer First Legal Group, Macey had the legal authority to control the companies and
make final decisions on their behalf. However, defendants contend that because there is no
evidence that Macey ever exercised this authority with respect to the companies’ day-to-day
operations or played an active role in their management, Macey cannot be held individually
liable for the companies’ alleged violations of the advance fee, consumer misrepresentation
and disclosure requirements.
Plaintiff contends that Macey actively participated in the companies’ affairs by
approving their business plans and operational structure, reviewing and negotiating their
vendor contracts, reviewing and approving some corporate processes and procedures,
reviewing reports and suggesting changes to company operations when appropriate.
Without further explanation, it offers the following evidence in support of these contentions:
•

Macey made decisions about the setup and formation of The Mortgage
Law Group, including what the company was going to do, how the
company proposed to do it and what and how the company would charge
for its services. Macey dep., dkt. #78 at 24-25.

•

Macey reviewed and approved policies and procedures for The Mortgage
Law Group on the “macro level” when the company first started, which
included the business plan or “template” for how the company would run.
Id. at 10-11, 37-38.

•

Macey reviewed the retainer agreements for both companies before the
business started. Id. at 27-28. See also dkt. #122, exh. #11 at 2 (Jan. 24,
2012 email from Macey to Searns and Aleman asking Searns to insure
arbitration clause in retainer agreement was “as AIR TIGHT as possible.”).

41

•

Macey reviewed the companies’ financial reports on new enrollments and
attrition rates. Dkt. #68 at 28-29; dkt. #78 at 42-43.

•

Macey suggested changes to the direction of The Mortgage Law Group’s
overall operations, such as “pulling back” or “going slower” in certain areas.
Dkt. #78 at 43-44.

•

Macey participated in the companies’ decision to hire “strategic alliance
partners” to handle some of the loan modification services. Dkt. #68 at
36, 38-39; Aleman dep., dkt. #76 at 252-53.

•

Macey may have expressed an occasional opinion about creating or
changing a policy for The Mortgage Law Group. Dkt. #76 at 47-48.
(Although plaintiff states in its response to defendants’ proposed finding
of fact no. 28 that Macey helped Aleman instruct managers in charge of
client support, processing and document collection about corporate policy
and procedures, dkt. #132 at 21, Aleman’s testimony does not support
such a finding.)

•

In an April 27, 2012 email to Searns, Macey asked why Searns chose one
out of two scenarios to use in obtaining non-profit leads on potential
clients for The Mortgage Law Group. Dkt. #122, exh. #10.

•

Email communications showing Macey was aware of settlement
negotiations with a state attorney general who sued The Mortgage Law
Group. Dkt. #122, exh. ##3-7. (Neither plaintiff nor the emails make
clear what the lawsuit was about.)

•

Macey participated in the decision that The Mortgage Law Group file for
bankruptcy.

Because plaintiff has offered evidence that Macey reviewed the companies’ financial
documents and initial retainer agreements and was aware of the general operations of the
businesses, it is reasonable to conclude that he knew or should have known that the
companies were charging advance fees, that the retainer agreement failed to make the
disclosure required under § 1015.4(b)(1) and that the retainer agreement led consumers to
believe that they would receive legal representation. As discussed at length above, the

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retainer agreement set forth the companies’ fee structure and payment expectations,
discussed services that the client would receive from an attorney and failed to disclose the
client’s right to terminate services without a cost. Although Macey testified that he did not
review changes to the retainer agreement over time or see the retainer agreements sent to
individual clients, his review of the “form” retainer agreement would have put him on notice
of its deficiencies. Further, the parties have submitted only one copy of each company’s
retainer agreement on which they rely for their arguments in this case. Defendants have not
argued that the deficiencies did not appear in other versions of the retainer agreement or
that any significant changes were made in the retainer agreements sent to individual clients.
Apart from reviewing and approving the retainer agreement, there is no evidence that
Macey knew or should have known about the content of the companies’ marketing materials,
welcome letters or script used by employees or what information about the companies’
services intake specialists or other personnel were giving to consumers. Plaintiff also fails to
explain in its briefs how Macey would have acquired this knowledge. As defendants point
out, Macey made it clear in his deposition testimony that he did not review or negotiate
contracts related to advertising, review any materials provided to consumers except for the
retainer agreement, have direct contact with clients, review client files or supervise, train,
hire or fire employees. Dkt. #78 at 17-19, 27-28, 36-38, 42-48. Further, almost all of the
evidence offered by plaintiff relates to Macey’s role with The Mortgage Law Group rather
than with Consumer First Legal Group. In his declaration, Macey says that he had no
involvement with the management or operations of Consumer First Legal Group. Dkt. #97

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at ¶ 9. Plaintiff has not adduced sufficient evidence to refute this statement. In light of
these facts, I find that plaintiff has failed to meet its burden of showing that Macey can be
held individually liable for any of the companies’ violations involving their telephonic
communications with consumers, television or internet advertising (including company
websites) or welcome letters.
Accordingly, plaintiff’s motion for summary judgment will be granted and defendants’
motion for summary judgment will be denied with respect to Macey’s individual liability for
any violations of the Act or regulation related to the receipt of advance fees,
misrepresentations made in the retainer agreement about consumers’ receipt of legal services
and the failure of the retainer agreement to disclose a consumer’s right to reject services that
were committed by The Mortgage Law Group at any time during its operations and by
Consumer First Legal Group beginning in July 2012.

Plaintiff’s motion for summary

judgment will be denied and defendants’ motion for summary judgment will be granted in
all other respects to Macey’s individual liability.

C. Stafford
It is undisputed that Stafford oversaw all operations of Consumer First Legal Group
and made all the decisions for it between January and July 2012. However, after selling most
of his ownership interest in the company in July 2012, Stafford’s role in the company
decreased significantly.

Nonetheless, plaintiff argues that Stafford should be held

individually liable for the actions of Consumer First Legal Group after July 2012 because he

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acquired “intimate knowledge” of Consumer First Legal Group and “actively participated”
in its operations.
As evidence of Stafford’s involvement, plaintiff relies primarily on Stafford’s
deposition testimony, in which he stated that he (1) had five-minute telephone calls with
Aleman once a week for several months; (2) reviewed notes in the client management system
related to client complaints; (3) made three visits to corporate headquarters; (4) “screened”
attorneys for the company to bring on as Class B members; and (5) drafted responses to
consumer complaints. (Plaintiff has not identified the subject of these complaints.) Plaintiff
also offers evidence that Stafford identified himself as a “managing member” of Consumer
First Legal Group in a May 13, 2013 letter to the Bureau of Financial Institutions regarding
a consumer complaint and provided specific details about the company’s business practices.
Dkt. #115, exh. A. However, it is not reasonable to conclude from these limited activities
that Stafford had any authority to make decisions on behalf of Consumer First Legal Group
after July 2012, or even had reason to know that Consumer First Legal Group was charging
advance fees, making misrepresentations to consumers or failing to make required
disclosures.
As defendants point out, a more complete review of Stafford’s deposition testimony
shows that although he maintained contact with the company after he sold the majority of
his shares to Macey and Aleman, he was not involved in or informed of the company’s dayto-day activities. He testified that he did not review or approve the contents of the retainer
agreement, call script or attorney agreements, determine what information the company put

45

on its website or in any marketing materials, provide services to consumers, supervise
employees, or set the fees to be charged to consumers. Dkt. #65 at 156-57, 169-72. See
also dkt. #98 at ¶ 6 (Stafford’s declaration confirming no managerial control); dkt. #66 at
24 (Aleman testified Stafford did not manage anyone).
Plaintiff has shown only that Stafford received brief updates on the company’s
enrollment numbers, helped identify local attorneys for the company to hire and responded
to some unidentified consumer complaints. Without more, it is not reasonable to conclude
that Stafford had the type of authority or knowledge required to hold him individually liable
for the company’s actions after July 2012. Although plaintiff did not make the argument,
it also is not reasonable to infer from the limited evidence offered by plaintiff that Stafford
should have known about Consumer First Legal Group’s practices after July 2012 solely
because he created the company and ran it between January and July 2012. Plaintiff has not
offered any evidence showing that the company continued to operate in exactly the same
manner after July 2012 as it had under Stafford’s direction between January and July 2012.
In fact, Stafford testified that he was never asked to provide any documents that he used
when he was responsible for providing services to consumers between January and July 2012.
Dkt. #65 at 170-71. Accordingly, I am granting defendants’ motion for summary judgment
and denying plaintiff’s motion for summary judgment with respect to Stafford’s individual
liability.

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III. REMEDIES
The Consumer Protection Act authorizes courts to “grant any appropriate legal or
equitable relief with respect to a violation of Federal consumer financial law, including a
violation of a rule or order prescribed under a Federal consumer financial law.” 12 U.S.C.
§ 5565(a)(1).

Among other things, relief may include restitution, disgorgement or

compensation for unjust enrichment, civil money penalties and limits on the activities or
functions of a person. § 5565(a)(2). The statute establishes three tiers of civil penalties
ranging from $5,000 to $1,000,000 for each day the violation continues, depending on the
person’s state of mind. § 5565(c)(2) (establishing different penalties for violations, reckless
violations and knowing violations). In this case, plaintiff seeks restitution or disgorgement
of “unlawful advance fees” in the total amount of $18,331,737 from defendants The
Mortgage Law Group, Macey, Aleman and Searns and $2,992,296 from defendants
Consumer First Legal Group, Macey and Aleman; a permanent injunction against all
defendants; and civil penalties against defendants of up to $1,000,000 a day for knowingly
violating the statute and Regulation O. Although a ruling on damages is premature at this
point, there is one issue that merits attention before this case proceeds to trial.
The parties disagree about how restitution or disgorgement should be calculated.
Plaintiff argues that the companies’ net revenue, that is the total amount of fees collected
less any refunds made to clients, is the appropriate measure because all of the advance fees
charged by defendants violated Regulation O regardless whether the consumer ultimately
obtained a mortgage loan modification. Defendants contend that the “typical” measure of

47

restitution is net profits, or the gross revenue generated from the wrongdoing reduced by
business expenses incurred by the defendant.
In support of their contention, defendants cite an unpublished opinion in a breach
of contract case in which the district court noted that the appropriate measure for restitution
“typically is net profits, ‘determined by reducing the gross revenues generated from the
wrongfully-obtained business by those cost-of-sale items and other expenses which the court
concludes were not fixed,’ i.e., those costs that related directly to the wrongfully-obtained
business.” Greenbrier Leasing Co. LLC v. Carroll, 2008 WL 4866037, at *9 (N.D. Ill. June
17, 2008).

Defendants argue that the revenues plaintiff requests as restitution or

disgorgement do not reflect their actual profits because business expenses have not been
deducted. In addition, defendants are concerned that those clients who received mortgage
loan modifications or other benefits (such as extended tenancy or a court defense) will be
unjustly enriched if they are compensated for benefits that they already have received.
(Although defendants make the general statement that “any disgorgement or restitution from
the individual defendants should be based on their personal gains (or losses) from their
involvement with their firms,” dkt. #126 at 31, I am disregarding it because they fail to
explain their argument or support it with any authority. United States v. Holm, 326 F.3d
872, 877 (7th Cir. 2003) (“[P]erfunctory and undeveloped arguments, and arguments that
are unsupported by pertinent authority, are waived.”)).
However, as plaintiff points out, federal courts have held that the appropriate
measure for restitution in consumer cases is “the amount paid by the consumer victims of

48

an illegal scheme, less any amounts previously returned to the victims.” Federal Trade
Commission v. Think Achievement Corp., 144 F. Supp. 2d 1013, 1019 (N.D. Ind. 2000),
aff’d, 312 F.3d 259 (7th Cir. 2002). The Court of Appeals for the Seventh Circuit has
explained that “[a] major purpose of the Federal Trade Commission Act is to protect
consumers from economic injuries,” and “courts have regularly awarded, as equitable
ancillary relief, the full amount lost by consumers.” Federal Trade Commission v. Febre, 128
F.3d 530, 536 (7th Cir. 1997) (citing Federal Trade Commission v. Gem Merchandising
Corp., 87 F.3d 466 (11th Cir.1996) (affirming an award of damages as calculated by
consumers’ losses and an order of disgorgement to the Treasury); Amy Travel, 875 F.2d at
570 (affirming restitution award of $6,629,100, the amount consumers paid for travel
certificates)).
I agree that the appropriate measure for restitution or disgorgement in this case is
defendants’ net revenue from the advance fees that they collected, less any refunds that the
consumers have received. Unless defendants are found exempt under the Act and Regulation
O, their revenues all flow from their illegal practices of requesting and receiving advance fees,
making certain misrepresentations to consumers and failing to make certain disclosures.
Their liability should not be reduced to account for consumers who received some form of
benefit. Federal Trade Commission v. John Beck Amazing Profits LLC, 888 F. Supp. 2d
1006, 1018 (C.D. Cal. 2012), aff'd, Federal Trade Commission v. John Beck Amazing
Profits, LLC, 2016 WL 828339 (9th Cir. Mar. 3, 2016) (finding same in case involving
violations of Federal Trade Commission Act and Telemarketing Sales Rule by sellers of

49

wealth-creation products). Whether the consumer is lucky enough to obtain a mortgage loan
modification is irrelevant to the question whether defendants collected fees illegally and
made misleading or deceptive representations to consumers. Id. See also McGregor v.
Chierico, 206 F.3d 1378, 1388 (11th Cir. 2000) (“While it may be true that the defrauded
businesses received a useful product, and though less likely, they may have even received the
product at a competitive price, the central issue here is whether the seller’s
misrepresentations tainted the customer’s purchasing decisions.”); Federal Trade
Commission v. Figgie International, Inc., 994 F.2d 595, 606 (9th Cir. 1993) (“The fraud in
the selling, not the value of the thing sold, is what entitles consumers in this case to full
refunds or to refunds for each detector that is not useful to them.”).
Finally, defendants make a conclusory argument that the monthly payments they
collected from consumers are not advance fees, “particularly in instances in which the fees
were paid by clients who received a mortgage modification.” Dkt. #126 at 31. However,
as discussed above, defendants did not challenge plaintiff’s contentions with respect to
liability that both the initial and monthly flat fees charged by the companies qualify as
advance payments from consumers. Moreover, they have not offered evidence that they
requested and received any monthly payments after consumers had executed mortgage loan
modification agreements with their lenders or servicers that incorporated modification offers
obtained by the corporate defendants. In fact, the retainer agreement provides for the
payment of monthly retainer fees up until the point of a loan modification.

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Accordingly, if I find that either restitution or disgorgement is an appropriate remedy
in this case, the amount awarded will be based on the net revenues received by defendants,
which includes the total fees collected from their clients minus any sums refunded to their
clients. It is undisputed that The Mortgage Law Group received net revenues in the amount
of $18,331,737 and Consumer First Legal Group received net revenues in the amount of
$2,992,296.

ORDER
IT IS ORDERED that:
1. Plaintiff Consumer Financial Protection Bureau’s motion for summary judgment,
dkt. #83, is GRANTED with respect to the following issues:
a. The initial and monthly retainer fees charged by The Mortgage Law Group
and Consumer First Legal Group qualify as advance fees under 12 C.F.R. §
1015.5(a).
b. The companies failed to make the disclosure required under 12 C.F.R. §
1015.4(b)(1) in the manner required under § 1015.4(b)(4) in either their
telephonic communications with potential clients or the written retainer
agreements sent to newly enrolled clients.
c. The companies implied in their welcome letter that consumers should not
communicate with their lenders.
d. The companies’ intake specialists implied that consumers who were current
on their mortgage payments should stop making payments on their mortgage
loans.
e. The companies told consumers during intake calls and in retainer
agreements and welcome letters that they would receive services from an
attorney and legal representation in seeking a loan modification. Consumer
First Legal Group also made this representation on its website.

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f. The companies’ intake specialists misrepresented the performance of
nonprofit housing counselor agencies or programs.
g. Aleman may be held individually liable for any violations of the Act or
regulation on the part of The Mortgage Law Group at any time during its
operations and of Consumer First Legal Group beginning in July 2012 related
to the receipt of advance fees, misrepresentations made by the companies in
oral and written communications to consumers (not in advertising) and any
failures to disclose a consumer’s right to reject services.
h. Searns may be held individually liable for any violations of the Act or
regulation on the part of The Mortgage Law Group at any time during its
operations related to the receipt of advance fees, misrepresentations made by
the company in oral and written communications to consumers (not in
advertising) and any failure to disclose a consumer’s right to reject services.
i. Macey may be held individually liable for any violations of the Act or
regulation on the part of The Mortgage Law Group at any time during its
operations and of Consumer First Legal Group beginning in July 2012 related
to the receipt of advance fees, misrepresentations made in the retainer
agreement about consumers’ receipt of legal services and any failures to
disclose a consumer’s right to reject services in the retainer agreement.
j. The appropriate measure for restitution or disgorgement in this case is
defendants’ net revenues, which include the amount of advance fees collected
from their clients minus any refunds made to those clients. The Mortgage
Law Group received total net revenues in the amount of $18,331,737 and
Consumer First Legal Group received total net revenues in the amount of
$2,992,296.

2. Plaintiff’s motion is DENIED in all other respects as it relates to the liability of
defendants The Mortgage Law Group and Consumer First Legal Group, the individual
liability of Macey and Stafford and available remedies.
3. The motion for summary judgment filed by defendants Consumer First Legal
Group, LLC, Thomas G. Macey, Jeffrey J. Aleman, Jason E. Searns and Harold E. Stafford,
dkt. #96, is GRANTED with respect to the following issues:

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a. The individual liability of defendant Stafford.
DISMISSED as to plaintiff’s claims against Stafford.

The complaint is

b. Defendant Macey’s individual liability for any of the companies’ violations
involving their telephonic communications with consumers, television or
internet advertising (including company websites) or welcome letters.
4. Defendants’ motion for summary judgment is DENIED in all other respects as it
relates to the individual liability of defendants Macey and Stafford.
5. The parties shall have until August 2, 2016 to meet, confer and submit a proposed
trial plan in writing that shall address: (1) whether the parties’ disputes concerning the legal
definition of the practice of law in certain states should be resolved in motions in limine
before trial or in post trial briefing; (2) the pros and cons of holding one trial versus
bifurcating or trifurcating the trial to resolve the attorney exemption issue first and then
proceeding on the remaining disputed issues relating to liability and damages if necessary;
(3) the amount of time the parties anticipate for presenting evidence on each of the
remaining issues in dispute: exemption, liability and damages; (4) whether it is possible to
develop one factual record for all states or at least for a group of states with substantially
similar legal standards; (5) whether it would be beneficial to use five or six states as a
representative example of a particular group of states; (6) evidentiary issues on which the
parties can reach agreement; (7) how to proceed against defendant The Mortgage Law
Group, which has not appeared in this case; and (8) any other suggestions that the parties
may have for structuring the trial in an efficient and organized manner. The parties should
highlight areas on which they agree and if necessary, submit individual responses to address
any issues on which they were unable to reach agreement.

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6. The clerk of court is directed to schedule a telephonic conference to be held after
August 2, 2016 for the purpose of setting deadlines for any additional briefing, Rule 26(a)(3)
disclosures, motions in limine, the final pretrial conference and the court trial.

Entered this 20th day of July, 2016.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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