Phillips v. Ocwen Loan Servicing, LLC
92 F. Supp. 3d 1255
N.D. Ga.2015Background
- In 1998 Phillips executed a promissory Note and Security Deed for a home loan; payments of $815.64 were due monthly on the 15th and Note defined default for missed monthly payments.
- Ocwen Loan Servicing (OLS) began servicing the loan in 2005; account statements warned that this was a simple-interest loan and late payments increase interest applied to interest before principal.
- OLS published foreclosure-related notices (NSUP) in March 2010 after Phillips missed payments due January 15 and February 15, 2010; OLS returned an $855 payment mailed December 21, 2009; Phillips next paid March 9, 2010.
- Upland assigned the Security Deed to a Trustee (assignment recorded March 2010); no foreclosure sale occurred and Phillips remains in possession and has made no payments since March 2010.
- Phillips sued OLS asserting wrongful attempted foreclosure, false light invasion of privacy, and breach of contract (plus remedy claims); Magistrate Judge Anand recommended summary judgment for OLS; District Judge Duffey adopted the R&R and granted OLS summary judgment, overruling Phillips’s objections.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful attempted foreclosure (publication of default) | Phillips: OLS published false, derogatory statements that he was in default; misapplication of payments meant he was not in default | OLS: Phillips missed required monthly payments under the Note; published statements about default were true | Court: Phillips was in default when NSUP published; summary judgment for OLS — no actionable wrongful attempted foreclosure |
| False light invasion of privacy | Phillips: Publication that he was in default placed him in false light | OLS: Statement that debt was in default was true because payments were missed | Court: Same reasoning as wrongful attempted foreclosure; summary judgment for OLS |
| Breach of contract — OLS liability | Phillips: OLS misapplied payments, charged improper fees, paid taxes/insurance improperly, and may have been a de facto principal/assignee | OLS: It was only servicer/disclosed agent (not a party or assignee of the Note); no evidence OLS breached specific contractual provisions | Court: OLS was a disclosed servicer/agent (not party to the Note); even if treated as party, Phillips failed to show breach of specific terms — summary judgment for OLS |
| Use of expert declaration (Diana Crawford) | Phillips: Sought to rely on expert calculations showing misapplication of payments; argued admission harmless | OLS: Expert disclosed after discovery cutoff in violation of Local Rule 26.2C; prejudice/harmful | Held: Magistrate (and adopted by district court) struck the expert declaration as untimely; exclusion upheld |
Key Cases Cited
- Bates v. JPMorgan Chase Bank, N.A., 768 F.3d 1126 (11th Cir.) (statements that debtor failed to pay as when due are truthful and defeat wrongful attempted foreclosure/false light claims)
- Aetna Fin. Co. v. Culpepper, 171 Ga. App. 315 (Ga. Ct. App.) (test for wrongful attempted foreclosure requires knowing publication of untrue, derogatory information about debtor's financial condition)
- Sale City Peanut & Milling Co. v. Planters & Citizens Bank, 107 Ga. App. 463 (Ga. Ct. App.) (foreclosure notice published before any indebtedness was due supported wrongful attempted foreclosure where notice was provably false)
- In re Ocwen Loan Servicing, LLC, 491 F.3d 638 (7th Cir.) (discussion of servicing rights/partial assignments and potential liability where servicer assumes contractual obligations)
- American Casual Dining, L.P. v. Moe’s Southwest Grill, L.L.C., 426 F. Supp. 2d 1356 (N.D. Ga.) (plaintiff must identify specific contractual provision breached to sustain breach-of-contract claim)