Diedrich v. Ocwen Loan Servicing, LLC
2016 U.S. App. LEXIS 18196
| 7th Cir. | 2016Background
- Daniel and Natalie Diedrich obtained a mortgage in 2007; Ocwen serviced the loan and initiated foreclosure in 2010. The parties entered a loan modification in 2011.
- In Feb 2013 the Diedrichs sent a qualified written request (QWR) under RESPA §2605(e)(1)(B) seeking account/escrow/payment information and related materials. Ocwen's responses were form letters and did not supply the requested details within the statutory timeline.
- The Diedrichs sued under RESPA §2605(e)(2) and Wisconsin statutory provisions alleging credit damage, overpayment, higher interest, emotional distress, and related losses caused by Ocwen’s inadequate RESPA responses.
- The district court found Ocwen violated RESPA procedural requirements but granted summary judgment to Ocwen because the Diedrichs failed to present evidence linking their alleged damages specifically to Ocwen’s RESPA violation.
- The Seventh Circuit affirmed: it held the Diedrichs had pleaded standing (alleging concrete injuries) but failed at summary judgment to produce evidence causally connecting those injuries to the §2605(e)(2) violation; the state-law claim failed for the same reason.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Article III and Spokeo | Diedrichs alleged concrete injuries: credit damage, denied loans, higher payments, emotional distress. These satisfy injury-in-fact. | Ocwen argued that alleged harms were procedural or otherwise unlinked to the QWR and therefore not a concrete injury for standing. | Court: Pleading met minimal requirements for standing; alleged concrete injuries were sufficient to survive a dismissal challenge. |
| Causation/Proof of actual damages under RESPA §2605(f) at summary judgment | Diedrichs argued their testimony and disclosures show damages caused by Ocwen’s failure to respond adequately to the QWR. | Ocwen argued evidence fails to connect alleged damages to the QWR response instead of foreclosure, modification, or litigation; reporting showed account current. | Court: Diedrichs failed to produce admissible evidence tying their claimed damages specifically to Ocwen’s §2605(e)(2) violation; summary judgment for Ocwen affirmed. |
| Scope of recoverable harms under §2605(f) | Diedrichs sought actual damages (including emotional distress) and statutory additional damages for pattern/practice. | Ocwen contended statute requires proof of actual damages causally linked to the servicer’s failure to comply. | Court: §2605(f) requires actual damages; bare procedural violations without proof of concrete harm do not suffice. |
| State-law claim under Wis. Stat. §224.77 | Diedrichs invoked §224.77 subsections (k),(l),(m) and §224.80(2) aggrieved-party remedy, relying on same factual harms. | Ocwen argued the state claim fails for lack of proof of an injury “injuriously affected” by the alleged conduct. | Court: State-law claim fails for same reason as federal claim—no evidentiary causal link to the alleged wrongful act; summary judgment affirmed. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury in fact, traceability, redressability)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (concrete injury required; procedural violations alone may be insufficient)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards for plausibility; legal conclusions insufficient)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (facial plausibility standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burdens and standards)
- Catalan v. GMAC Mortgage Corp., 629 F.3d 676 (7th Cir.) (discussion of emotional distress damages and §2605 claims)
- Yahnke v. Kane County, 823 F.3d 1066 (7th Cir.) (standard of review for summary judgment)