145 F. Supp. 3d 1172
S.D. Fla.2015Background
- Plaintiffs John Lage and Maria Mantilla obtained a mortgage later serviced by Ocwen; foreclosure proceedings culminated in a sale on March 13, 2014 after a loss‑mitigation application process in January–March 2014.
- Plaintiffs faxed a loss‑mitigation package on January 8, 2014 (two days before Regulation X’s effective date of January 10, 2014); Ocwen repeatedly requested additional documents and denied a HAMP modification on March 9, 2014 because a sale date was imminent.
- Plaintiffs sent a Notice of Error/Qualified Written Request on September 4, 2014 alleging Ocwen improperly relied on its own delay to deny the modification and that Ocwen’s October 2014 response was boilerplate and substantively inadequate.
- Plaintiffs sued under RESPA/Regulation X for violation of loss‑mitigation procedures (§1024.41) and error‑resolution procedures (§1024.35), sought actual and statutory damages and punitive damages, and asserted a state‑law negligence claim based on the alleged statutory breaches.
- Ocwen moved for summary judgment, arguing (inter alia) Regulation X does not apply to applications received before its January 10, 2014 effective date, its response to the NOE was timely, and Plaintiffs lack proof of damages; Plaintiffs also moved to strike Ocwen’s late affidavit.
- The court denied the motion to strike, held Regulation X protections do not apply to applications initially received before January 10, 2014 (so Ocwen had no loss‑mitigation duties under §1024.41), found Ocwen’s NOE response substantively inadequate under §1024.35 but concluded Plaintiffs failed to prove actual or statutory damages causally tied to that violation, and granted summary judgment for Ocwen on all claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Regulation X (§1024.41) apply where an application was initially received before the rule’s effective date but later became complete after the effective date? | Regulation X duties are triggered when a servicer receives a complete or facially complete application; completeness occurring after Jan 10, 2014 should trigger protections. | Regulation X applies only to applications received on or after the Jan 10, 2014 effective date; pre‑effective submissions cannot be retroactively brought within the rule. | Held for Ocwen: effective date precludes application of §1024.41 because CFPB intended a bright‑line rule; servicer had no §1024.41 duties. |
| Motion to strike Ocwen’s late affidavit (Handville) submitted with reply — admissibility/timeliness | Affidavit is untimely, conclusory, and violates local‑rule limits on new evidence on reply. | Affidavit rebuts plaintiffs’ evidentiary objections and may be considered on summary judgment; hearsay can be cured at trial. | Denied: affidavit permitted as rebuttal evidence; hearsay concerns do not mandate striking at summary judgment. |
| Whether Ocwen’s October 2014 response to Plaintiffs’ NOE complied with RESPA/Regulation X (§1024.35) | The response did not substantively address the asserted error (reliance on its own delay) and thus violated §1024.35. | Ocwen contends it acknowledged receipt, extended time as permitted, and provided a response referencing the prior denial letter. | Held: Ocwen’s response was boilerplate and substantively insufficient under §1024.35 (a violation). |
| Whether Plaintiffs proved damages (actual or statutory) causally linked to the §1024.35 violation | Plaintiffs claim attorney fees, costs, expenses, and emotional distress from Ocwen’s conduct; allege pattern/practice to support statutory damages. | Ocwen asserts Plaintiffs offer no admissible evidence of actual damages causally tied to the NOE response and no evidence of a pattern or practice for statutory damages. | Held: Plaintiffs failed to prove statutory damages (no evidence of pattern/practice) and failed to show actual damages causally related to the NOE response (emotional harm tied to earlier loss‑mitigation process and foreclosure); therefore no recoverable damages and RESPA claim fails. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary‑judgment burden shifting principles)
- Anderson v. Liberty Lobby, 477 U.S. 242 (evidentiary standard for summary judgment; scintilla rule)
- Landgraf v. USI Film Prods., 511 U.S. 244 (presumption against retroactive application of statutes/rules)
- Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (retroactivity presumption and construction)
- Connecticut Nat. Bank v. Germain, 503 U.S. 249 (statutory interpretation; plain‑meaning rule)
- Macuba v. Deboer, 193 F.3d 1316 (11th Cir.) (consideration of hearsay at summary judgment when reducible to admissible evidence)
- McLean v. GMAC Mortgage Corp., [citation="398 F. App'x 467"] (11th Cir.) (RESPA damages scope and §2605 analysis)