Monette Saccameno v. U.S. Bank National Association
943 F.3d 1071
| 7th Cir. | 2019Background
- Saccameno completed a Chapter 13 plan (42 payments) and received a bankruptcy discharge, but her mortgage servicer, Ocwen, repeatedly misstated her account as delinquent, rejected payments, and sent threatening foreclosure letters.
- Saccameno and an attorney repeatedly faxed documentation to Ocwen; Ocwen provided incoherent or misaddressed responses and failed to investigate or explain errors.
- Ocwen had prior consent decrees addressing deficient servicing, recordkeeping, and reconciliation of Chapter 13 plan payments.
- Saccameno sued on breach of contract, FDCPA, RESPA, and ICFA claims. A jury awarded $500,000 compensatory damages (breach/FDCPA/RESPA) and, on the ICFA claim, $12,000 economic, $70,000 non‑economic, and $3,000,000 punitive damages (total judgment $3,582,000).
- The district court upheld the verdict; on appeal the Seventh Circuit affirmed liability and the availability of punitive damages but held the $3,000,000 punitive award excessive as a matter of due process and remanded to reduce it to $582,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency to support punitive damages | Ocwen exhibited deliberate indifference and corporate ratification of employees’ misconduct, justifying punitive damages under Illinois law | Errors were isolated or negligent (a miscoding by a single employee “Marla”), not conscious disregard | Evidence sufficed: systemic, repeated errors and Ocwen’s failure to investigate or correct could show corporate ratification and reckless indifference, permitting punitive damages under Illinois law |
| Corporate complicity / ratification | Corporate ratification may be inferred from Ocwen’s litigation posture, failure to investigate, and the consent decrees showing similar misconduct companywide | No proof of managerial authorization or knowledge; only line‑level mistakes | Ratification can be found where the corporation, with knowledge, retains benefits or defends the conduct and fails to alter procedures; jury reasonably inferred ratification here |
| Due process / punitive‑to‑compensatory ratio and aggregation | Aggregate compensatory award across related claims may be used to assess ratio; award was within single‑digit ratio to aggregate damages | Ratio should be computed against ICFA compensatory damages only ($82,000), making the 3,000,000 award constitutionally excessive | Court rejected reliance on all‑claims aggregation for insulation; applied Campbell guideposts and reduced punitive damages to $582,000 (approximately 1:1 to total compensatory, ~7:1 to ICFA compensatory) |
| Remedy / procedural posture after finding excess | Plaintiff urged affirmance or deference to jury; sought no new trial re amount | Ocwen sought a new trial or remittitur and argued Seventh Amendment requires jury determination of punitive maximum | Court held constitutionality and appropriate maximum punitive amount is a legal question for the court; it reduced the award without ordering a new trial and remanded to amend judgment |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (Sup. Ct. 2003) (establishes constitutional guideposts for punitive damages review)
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (Sup. Ct. 1996) (due‑process limits on punitive awards)
- Parks v. Wells Fargo Home Mortg., Inc., 398 F.3d 937 (7th Cir. 2005) (standard for sufficiency on punitive damages in mortgage‑servicing context)
- Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672 (7th Cir. 2003) (ratio discussion; upheld high ratio in particularly egregious facts)
- Robinson v. Wieboldt Stores, Inc., 433 N.E.2d 1005 (Ill. App. Ct. 1982) (corporate ratification through litigation conduct may support punitive damages)
- Dubey v. Public Storage, Inc., 918 N.E.2d 265 (Ill. App. Ct. 2009) (refusal to investigate supports punitive damages)
- Slovinski v. Elliot, 927 N.E.2d 1221 (Ill. 2010) (defines Illinois standard for punitive damages: fraud, actual malice, willful or grossly negligent misconduct)
- Kemner v. Monsanto Co., 576 N.E.2d 1146 (Ill. App. Ct. 1991) (corporate liability principles for punitive damages)
- McGinnis v. American Home Mortgage Servicing, Inc., 901 F.3d 1282 (11th Cir. 2018) (factually similar mortgage‑servicing case analyzing reprehensibility and punitive awards)