Joan B. Gottschall, United States District Judge.
In February 2015, Monette Saccameno ("Saccameno") sued Ocwen Loan Servicing, LLC ("Ocwen") and U.S. Bank National Association, as trustee for C-Bass Mortgage Loan Asset-Backed Certificates, Series 2007 RP1 ("U.S. Bank"), alleging that they had engaged in wrongful loan servicing and debt collection practices.
In January 2002, Saccameno obtained a home mortgage loan in the amount of $ 135,000 for a house located in Franklin Park, Illinois. See Ex. P1. In November 2008, Saccameno began to fall behind on her monthly payments, and in February 2009, U.S. Bank declared her to be in default. U.S. Bank accelerated the entire balance of the loan and filed a foreclosure action against her in the Circuit Court of Cook County, Illinois. See Ex. P2.
In June 2013, the Trustee filed a Notice of Final Cure Payment with the bankruptcy court. See Ex. P10. It is undisputed that Ocwen received notice of the final cure payment but did not file a response. See Tr. 471:25-472:5. On June 27, 2013, the bankruptcy court entered an order of discharge in the bankruptcy proceedings. See Ex. P11. It is undisputed that Ocwen received notice of the discharge as well. See, e.g., Tr. 68:5-7.
The problems giving rise to this litigation began shortly after Saccameno's bankruptcy discharge. On or about July 2, 2013, an Ocwen employee identified as "Marla" mistakenly coded Saccameno's bankruptcy discharge as a dismissal in Ocwen's computer system. See, e.g., Tr. 140:5-18. As a result, Saccameno's loan was returned to Ocwen's foreclosure department. During roughly the same time, Ocwen's bankruptcy department improperly advanced the post-petition due date for Saccameno's loan payments. See Tr. 116:7-15. In addition, Ocwen's records incorrectly indicated that Saccameno had made only forty of the forty-two ongoing mortgage payments required under her Chapter 13 plan. See, e.g., Tr. 125:9-22; Tr. 181:11-21; Tr. 182:18-20; Tr. 775:17-21.
A few days later, Ocwen began sending letters to Saccameno stating that her account was delinquent. The first letter, dated July 6, 2013, stated:
Ex. P14 at 1. Ocwen sent Saccameno an identical letter dated July 9, 2013. Ex. D1 at 1.
On July 15, 2013, Saccameno phoned Ocwen to discuss the possibility of modifying or refinancing her mortgage. Tr. 763:12-16. (At the time of the call, it appears
By July 25, 2013, Ocwen had corrected the miscoding of the bankruptcy discharge in its computer system. See, e.g., Tr. 550:5-9; Tr. 1078:10-12. By this time, Ocwen's records also included all forty-two payments by Saccameno, See Tr. 293:17-20; Tr. 296:12-19, Ex. 21 at 000051 (showing Saccameno's forty-second post-petition payment on June 18, 2013). Nevertheless, Ocwen continued to treat her account as delinquent. (Indeed, it appears that it was only during the trial that Ocwen acknowledged that Saccameno had made all forty-two payments).
Saccameno continued to make monthly mortgage payments as per usual. However, in September 2013, Ocwen began returning her checks because, according to its records, the payments were insufficient to cure her default. See Tr. 311:20-312:1. For the next seventeen months, Saccameno continued to make mortgage payments and Ocwen continued to reject them. Id. During this time, Saccameno had numerous communications with Ocwen representatives in an attempt to show that she had never missed any mortgage payments. See, e.g., Tr. 861:8-863:22. None of these efforts was successful. Meanwhile, Ocwen continued to send Saccameno letters informing that her mortgage loan was "severely delinquent." See, e.g., Ex. D7 (Letter from Ocwen to Saccameno dated Jan. 1, 2014); Ex. D8 (Letter from Ocwen to Saccameno dated Jan. 7, 2014); Ex D15 (Letter from Ocwen to Saccameno dated Apr. 30, 2014).
In March 2014, Saccameno enlisted the help of attorney Susan Van Sky ("Van Sky"), a friend of a friend, to help resolve the problem. See, e.g., Tr. 781:24-782:22; Tr. 821:10-13. Despite several phone calls and written communications with Ocwen, Van Sky's efforts proved unavailing. See, e.g., Tr. 513:2-15; Ex. P33 (Letter from Van Sky to Ocwen, Mar. 20, 2014); Ex. P34 (Letter from Van Sky to Ocwen, April 28, 2014). In December 2014, Saccameno stopped making monthly payments to Ocwen, and in February 2015, she filed this suit, asserting claims for breach of contract (Count I); violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. (Count II); violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 810 ILCS 505/1 et seq. (Count III); and violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq. (Count IV).
The case went to trial on April 3, 2018. During her testimony, Saccameno stated that she suffered from depression and anxiety as a result of Ocwen's conduct and that she lived in fear that her home would be repossessed. See, e.g., Tr. 818:3-17; 780:6-1. She further testified that she was
On April 11, 2018, the jury returned a verdict for Saccameno on all counts. It awarded her $ 500,000 in compensatory damages on her breach of contract, RESPA, and FDCPA claims. The jury awarded Saccameno an additional $ 82,000 in compensatory damages and $ 3 million in punitive damages on her ICFA claim.
Following the trial, Ocwen renewed its motion for judgment as a matter of law. In addition, Ocwen has separately moved for a new trial based on purported evidentiary errors by the court. Ocwen has filed a third motion seeking to amend the judgment, arguing that the jury's punitive damage award is excessive. The court addresses these motions in turn.
The court turns first to Ocwen's renewed motion for judgment as a matter of law. Under Federal Rule of Civil Procedure 50, "a court may enter judgment as a matter of law when it `finds that a reasonable jury would not have a legally sufficient evidentiary basis' to support its verdict." Martinez v. City of Chicago, 900 F.3d 838, 844 (7th Cir. 2018) (quoting Fed. R. Civ. P. 50(a)(1)). Federal Rule 50(b) permits a party to renew a motion for judgment as a matter of law after a case has been submitted to a jury. Fed. R. Civ. P. 50(b). "The standard that must be met before judgment as a matter of law may be granted is formidable." Florez v. Delbovo, 939 F.Supp. 1341, 1342 (N.D. Ill. 1996). As the Seventh Circuit has explained:
Robinson v. Perales, 894 F.3d 818, 833 (7th Cir. 2018) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)). Here, Ocwen seeks judgment as a matter of law with respect to all of Saccameno's claims except her FDCPA claim.
In her response to Ocwen's motion, Saccameno argues that the challenges to her RESPA and breach of contract claims are moot. Because mootness is a threshold jurisdictional issue, the court must address it before considering the merits of Ocwen's motion. See, e.g., Worldwide St. Preachers' Fellowship v. Peterson, 388 F.3d 555, 558 (7th Cir. 2004).
Saccameno's reliance on Illinois' general verdict rule is misplaced.
Saccameno seems to suggest that the jury's apportionment of damages among the three claims does not matter because
Saccameno's claim that her injuries arise from a single set of "indivisible facts" is also implausible. As will become clear in what follows, her FDCPA, RESPA, and breach of contract claims are based on different conduct by Ocwen: Saccameno's breach of contract claim is based on Ocwen's rejection of her mortgage payments; her FDCPA claim is based on the collection letters that Ocwen sent to her; and her RESPA claim is based on Ocwen's responses to her inquiries requesting correction of her account. These facts, while obviously related, are not "indivisible." In addition, the claims provide redress for different kinds of injury. For example, the RESPA and FDCPA statutes allow compensation for emotional distress and other non-economic harm, while breach of contract claims generally do not.
In short, the fact that Ocwen does not challenge the jury's verdict with respect to Saccameno's FDCPA claim does not moot its challenges to her breach of contract and RESPA claims.
Proceeding to the merits, the court first considers Ocwen's contention that it is entitled to judgment as a matter of law with respect to Saccameno's breach of contract claim. "Under Illinois law, to sustain a breach of contract claim a plaintiff must prove: `(1) the existence of a valid and enforceable contract; (2) substantial performance by the plaintiff; (3) a breach by the defendant; and (4) resultant damages.'" Roberts v. Columbia Coll. Chicago, 821 F.3d 855, 863 (7th Cir. 2016) (quoting W.W. Vincent & Co. v. First Colony Life Ins. Co., 351 Ill.App.3d 752, 286 Ill.Dec. 734, 814 N.E.2d 960, 967 (Ill. App. Ct.
In response to the first argument, Saccameno asserts that Ocwen breached her mortgage contract by improperly rejecting her mortgage payments from October 2013 to February 2015. Courts have recognized that returning mortgage payments, or otherwise failing properly to apply them, may indeed constitute a breach of a mortgage agreement. See, e.g., Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 690 (7th Cir. 2011) (plaintiff stated claim against transferee mortgage servicer by alleging that it refused to accept mortgage payments and apply them to plaintiff's debt); Gray v. Brown, No. 3:17-CV-153 (CDL), 2018 WL 1914287, at *5 (M.D. Ga. Apr. 23, 2018) ("The Court notes that normally, a claim that the mortgage servicer did not properly apply a borrower's payments would be a breach of contract claim for failure to apply the loan payments in accordance with the security deed."); Holt v. Ocwen Loan Servicing, LLC, No. 3:13-CV-120, 2013 WL 7211759, at *1 (S.D. Tex. Dec. 12, 2013) ("Holt's allegation that Defendants breached the loan agreement by failing to credit her timely mortgage payments is sufficient to state a breach of contract claim."). In any event, Ocwen has not responded to Saccameno's argument on this score and has therefore conceded the point. See, e.g., Perry v. Coles Cty., Illinois, 906 F.3d 583, 590 n.5 (7th Cir. 2018) ("Plaintiffs did not respond to this argument in their reply brief, so waiver applies."); Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010) ("Failure to respond to an argument... results in waiver.").
Ocwen's second argument—that Saccameno presented no evidence of actual damages—i.e., economic harm or pecuniary loss—is contradicted by the record. Saccameno presented evidence of economic harm in the form of her loss of employment and her medication expenses. With respect to her loss of employment, Saccameno testified that she was so distracted by Ocwen's mishandling of her loan that she was unable to concentrate on her work. See, e.g., Tr. 777:24-779:19. In particular, she testified that she brought with her to work each day all of the correspondence and other documents that she had received from Ocwen, and that she spent much of her time at work reviewing these materials, checking to see whether she had in fact made all of her payments, talking to Ocwen on the phone, and trying to figure out what had gone wrong. See Tr. 779:15-19. According to Saccameno, she frequently sought help from her coworkers, asking them, for example, to double-check her calculation of the number of payments she had made. See Tr. 777:24-778:7; 779:3-10. She testified that her job was not particularly challenging, but that she was unable to perform the work because she just "wasn't focused." Id. She was terminated from the position after less than a year. Tr. 837:12-14. It was the only time Saccameno could recall having been fired from a job. Tr. 814:27.
Saccameno's testimony was corroborated by Jill Anderson ("Anderson"), a former coworker, who testified that during the period in question, Saccameno "kept trying to get [her mortgage] straightened out, and it wasn't straightening out. And the longer it went, the more agitated she was about that and just things at work just started to kind of unravel." Tr. 890:8-11. Anderson corroborated Saccameno's testimony that she spent a great deal of time during working hours counting her payments
As for Saccameno's medication expenses, her physician, Dr. Sarantos, testified that during a visit in September 2013, Saccameno reported that "she was very depressed regarding her mortgage, that she was going to lose her house." Tr. 205:13-16; Tr. 211:18-22. Sarantos explained that he subsequently diagnosed Saccameno with anxiety and depression, see Tr. 205:9-12, and that he prescribed medications to treat the conditions, see Tr. 205:9-206:9. Saccameno testified that she paid out of pocket for the medications. See Tr. 820:9-25. On this record, a jury could reasonably have concluded that Saccameno suffered from depression and anxiety as a result of Ocwen's improper loan servicing practices, and that she suffered pecuniary loss in purchasing anti-depressant and anti-anxiety medications.
Ocwen advances a litany of arguments against the foregoing evidence. For example, Ocwen claims that Jill Anderson lacked competence to testify regarding the reason for Saccameno's firing, and that Saccameno's depression predated her mortgage problems and thus could not have been caused by Ocwen. The court has considered and rejected these arguments (along with many others) in prior orders and opinions. See, e.g., Saccameno v. Ocwen Loan Servicing, LLC, No. 15 C 1164, 2017 WL 5171199, at *5 (N.D. Ill. Nov. 8, 2017) (ruling on Ocwen's motion for summary judgment); Saccameno v. Ocwen Loan Servicing, LLC, No. 15 C 1164, 2018 WL 1240347, at *4-*7 (N.D. Ill. Mar. 9, 2018) (ruling on Ocwen's motion for reconsideration); ECF No. 235 (order ruling on Defendants' Motion in Limine to Preclude Testimony Regarding Loss of Job); ECF No. 236 (order ruling on Defendants' Motion to Exclude Evidence or Testimony From Fact Witnesses on Medical Causation); ECF No. 240 (order ruling on Defendants' Motion in Limine to Preclude Evidence Regarding Actual Damages). The court will not rehearse its analysis of these issues here.
Because Saccameno presented sufficient evidence of a contractual breach by Ocwen, and of resulting pecuniary harm, the court denies Ocwen's motion for judgment as a matter of law as to Saccameno's breach of contract claim.
Ocwen next argues that it is entitled to judgment as a matter of law
The "Consumer Fraud Act defines deceptive acts or practices as: `including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact ... in the conduct of any trade or commerce.'" Phillips v. DePaul Univ., 385 Ill.Dec. 823, 19 N.E.3d 1019, 1028 (Ill. App. Ct. 2014) (quoting 815 Ill. Comp. Stat. 505/2). It is undisputed that Ocwen made numerous false statements to Saccameno regarding the delinquency of her mortgage loan. Nevertheless, Ocwen argues that, given other information it provided to Saccameno, its communications cannot be deemed "deceptive." Specifically, Ocwen points to the following language included in fine print at the bottom of its letters to Saccameno:
Ex. D1 at 1; see also Ex. D2 at 1; Ex. D7 at 1. In light of this "heads up" disclaimer, Ocwen insists, "every time she got a letter, Saccameno had express written notice that those letters were not an attempt to collect on her since she knew she had a bankruptcy discharge." JMOL Br. 6, ECF No. 314.
As an initial matter, the court notes that Saccameno claims to have received deceptive communications from Ocwen both orally and in writing. In addition to sending her multiple letters, Ocwen had numerous phone calls with Saccameno during which its representatives falsely told her that she owed past-due amounts on her mortgage. See, e.g., Tr. 764, Tr. 766, Tr. 771, Tr. 778, Tr. 860. Since the disclaimer applies only to Ocwen's written communications, Ocwen's argument fails insofar as Saccameno's ICFA claim is premised on deceptive statements made in Ocwen's oral communications.
Ocwen also contends that Saccameno's deceptiveness claim fails because there was no evidence of its intent to deceive Saccameno. It is well settled, however, that ICFA does not require a showing of the defendant's intent to deceive; it requires a showing only of the defendant's intent that the plaintiff rely on the deceptive act or statement. See, e.g., Wigod, 673 F.3d at 575 ("[A] claim for `deceptive' business practices under the Consumer Fraud Act does not require proof of intent to deceive. It is enough to allege that the defendant committed a deceptive or unfair act and intended that the plaintiff rely on that act.") (quoting Siegel v. Shell Oil Co., 480 F.Supp.2d 1034, 1044 n. 5 (N.D. Ill. 2007)). There is ample evidence in the record indicating that Ocwen intended for Saccameno to rely on its statements.
For these reasons, the court concludes that Saccameno presented sufficient evidence to support a deceptive practices claim under ICFA.
Saccameno also presented sufficient evidence to support an ICFA claim
First, the record supported a finding that Ocwen's conduct offended public policy. A practice offends public policy under ICFA where it "violates statutory or administrative rules establishing a certain standard of conduct." Saika v. Ocwen Loan Servicing, LLC, 357 F.Supp.3d 704, 716 (N.D. Ill. 2018). This can encompass standards of conduct imposed by consent decrees and settlement agreements. In Lowry v. Wells Fargo Bank, N.A., No. 15 C 4433, 2016 WL 4593815 (N.D. Ill. Sept. 2, 2016), for example, the plaintiffs alleged that Wells Fargo had violated ICFA based on its handling of their mortgage after they had defaulted. Among other things, they alleged that Wells Fargo had engaged in unfair practices under ICFA by failing to adhere to the terms of a consent decree and national settlement that it had reached with the Office of Comptroller the Currency and the Department of Justice. Id. at *9. Although the plaintiffs were not parties to either of the agreements and were not seeking to enforce them, the court agreed that if Wells Fargo's handling of the plaintiffs' mortgage had violated the terms of the agreements, its conduct offended public policy and was thus "unfair" under ICFA. Id. at *9.
Here, Saccameno presented evidence of similar consent orders that Ocwen had reached with state and federal regulatory agencies.
Second, Saccameno presented evidence that Ocwen's conduct was "immoral, unethical, oppressive, or unscrupulous." For purposes of ICFA, "a practice may be considered immoral, unethical, oppressive, or unscrupulous if it imposes a lack of meaningful choice or an unreasonable burden on the consumer." Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F.Supp.2d 610, 616 (N.D. Ill. 2009) (brackets and quotation marks omitted). Here, a jury could reasonably have concluded that Ocwen's conduct left Saccameno with a lack of meaningful choice. After all, Saccameno had no choice in selecting Ocwen as her loan servicer and she had no ability to get rid of Ocwen after it began mishandling her account. In characterizing her experience in dealing with Ocwen, Saccameno stated: "I was speaking to vapors.... [It was h]opeless. There's no control. I can't write a check. I can't fix it with money." See Tr. 780:18-781:1. Nor, in any case, can there can be any doubt that Ocwen's conduct placed an "unreasonable burden" on Saccameno: for eighteen months she experienced depression and anxiety because of Ocwen's failure to fix errors that, to all appearances, could have been fixed in a matter of hours, if not minutes.
Finally, there was sufficient evidence that Ocwen's conduct resulted in substantial injury to consumers. "A practice causes substantial injury to consumers if it causes significant harm to the plaintiff and has the potential to cause injury to a large number of consumers." Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F.Supp.2d 610, 617 (N.D. Ill. 2009) (quotation marks omitted). The record in this case makes abundantly clear that Ocwen's conduct caused Saccameno significant harm, particularly in the form of emotional distress. However, the record also contains evidence that Ocwen's conduct had the potential to injure a large number of other consumers. Although Ocwen maintains that the problems with Saccameno's account boil down to a one-off mistake by a lone employee, a jury could have concluded that the difficulties stemmed from systemic defects with Ocwen's loan servicing practices. For example, on direct examination, Gina Feezer testified that several of Ocwen's business units were involved in responding to Saccameno's requests that her account be corrected. In particular, she explained that the inquiries were received by the company's Research Department, which then sent out workflows to various other departments, see, e.g., Tr. 617:13-17; Tr. 174:25-175:2, Tr. 280:10-15, including the Bankruptcy Department, see, e.g., Tr. 170, Tr. 174, Tr. 178, Tr. 180; the Foreclosure Department, see, e.g., Tr. 189, Tr. 308; and the Cashiering Department, see, e.g., Tr. 174, Tr. 309, Tr. 470. There is no evidence that the procedures Ocwen used in handling Saccameno's inquiries and concerns deviated from its procedures for handling customer complaints and inquiries generally. The fact that Ocwen's procedures were
To be sure, Feezer testified that Saccameno's case was the only one in which she had seen a miscoding error of this sort. See Tr. 131:16-17. On cross-examination, however, Feezer admitted that she had conducted virtually no investigation to determine whether Marla, or any other employee, had miscoded bankruptcy discharge orders in other cases. See Tr. 130:13-17; Tr. 136:16-137:13. The record therefore sheds little light on how frequently similar problems might have occurred in Ocwen's servicing of other loans. But it does not matter how often similar problems actually occurred in other cases. The question is only whether Ocwen's conduct carries the potential to harm a large number of other consumers. On this record, a jury could reasonably have concluded that the loan servicing practices employed by Ocwen in this case hold the potential to harm other consumers. And given the sheer size of Ocwen's loan portfolio, it is likewise reasonable to conclude that the potential harm extends to a large number of consumers.
Thus, there is sufficient evidence under each of the criteria singled out above to support Saccameno's ICFA unfairness claim; and to the extent that the evidence is insufficient as to any of the criteria individually, the evidence is sufficient when viewed collectively. Hence, whether based on deceptive conduct or unfair conduct, Saccameno's ICFA claim is adequately supported by the record. Accordingly, the court denies Ocwen's motion for judgment as a matter of law as to Count III.
Ocwen next argues that it is entitled to judgment as a matter of law with respect to Saccameno's request for punitive damages. "Under Illinois law, punitive damages may be awarded for ... violations of the ICFA based on unfair conduct in cases where the defendant acts maliciously or with deliberate indifference." Wendorf v. Landers, 755 F.Supp.2d 972, 981 (N.D. Ill. 2010); see also Linhart v. Bridgeview Creek Dev., Inc., 391 Ill.App.3d 630, 330 Ill.Dec. 843, 909 N.E.2d 865, 875 (2009) ("The Consumer Fraud Act explicitly
Ocwen first maintains that its conduct was not sufficiently egregious to warrant punitive damages. This is because, according to Ocwen, the record shows that the miscoding of Saccameno's bankruptcy discharge was an honest case of human error, not the result of malice or deliberate indifference.
For several reasons, this argument is unconvincing. As an initial matter, the record does not conclusively show that the miscoding was the result of human error. In fact, the precise reason for the miscoding is unclear. There is no dispute that the employee identified as Marla miscoded the discharge; but to show who committed the error is not to show how or why it occurred. When questioned on the matter, Feezer expressed bafflement and conceded that the error would have been a difficult one for an employee in Marla's position to make. See, e.g., Tr. 139:6-10. More importantly, even assuming that the initial miscoding could be explained as an accident, the question remains as to why Ocwen failed to correct the problem in the months that followed. Ocwen's failure to correct the issue is especially puzzling in light of the fact that Ocwen continued to treat Saccameno's loan as severely delinquent even after the miscoding was corrected in its computer system in July 2013.
Further, in addition to miscoding Saccameno's bankruptcy, Ocwen improperly advanced the due date for her loan payments and failed to credit two of the payments that she made during her bankruptcy. While a single error might be explained as a mere accident, multiple errors might reasonably be viewed as a pattern indicating deliberate indifference, if not malice. Notably, all but one of Ocwen's errors in connection with Saccameno's account would have redounded to Ocwen's benefit, requiring Saccameno to make additional mortgage payments as well as to pay various fines and fees. See, e.g., Tr. 156:16-158:2 (discussing inspection fees); Tr. 344:19-25 (property valuation and title fees). The sole exception is the fact that, between April and June 2013, Ocwen's records (apparently incorrectly) reflected a credit balance in Saccameno's favor of between of $ 1,156.83 and $ 2,840.12. See Tr. 113:14-17; Tr. 122:15-24. Unlike the errors that would have benefitted Ocwen, however, the error in Saccameno's favor was corrected swiftly and on Ocwen's own initiative.
On this record, a jury could reasonably have concluded that Ocwen's conduct was egregious enough to warrant punitive damages. In his closing argument, Saccameno's counsel suggested to the jury that Ocwen had essentially waged a war of attrition against Saccameno, pursuing its collection efforts in the hope that she eventually would capitulate by agreeing to make extra payments or by entering into a loan modification on terms more favorable to Ocwen. See Tr. 1041:17-21; Tr. 1049:7-1050:6. Viewing the evidence in the light most favorable to Saccameno, the court cannot say that such an inference would have been unreasonable. But regardless of whether jurors might have accepted the specific theory advanced by Saccameno, a jury could reasonably have concluded—
Ocwen argues that such an inference is contradicted by the fact that it offered Saccameno various forms of assistance. For example, Ocwen points out that many of its letters to Saccameno included the phone numbers for housing counseling services approved by the Department of Housing and Urban Development (HUD) and the hotline for the Homeownership and Opportunity for People Everywhere ("HOPE") Program. See, e.g., Ex. DX1 at 3; Ex. DX6 at 3; Ex. DX7 at 3. But this information appears to have been included routinely in Ocwen's collection letters and shows no effort to address the specific problems with Saccameno's account. In fact, Ocwen's letters list these resources under the heading, "Financial Counseling Services." Having emerged from bankruptcy, however, Saccameno no longer needed financial assistance; she simply needed Ocwen to correct its records.
In July 2013, Ocwen also assigned a "Relationship Manager" to assist Saccameno. This individual, Anthony Gomes ("Gomes"), was to "be responsible for monitoring [Saccameno's] account, making sure that [Ocwen had] all of [her] critical information and carefully reviewing [her] situation." Ex. DX2 ("Relationship Manager Notice," July 16, 2013). There is no evidence, however, that Gomes actually performed these functions. The record indicates that Saccameno spoke with him once by phone in August 2013, at which time he instructed her to resubmit the information that she previously had faxed on July 17, 2013. See Tr. 472:6-15; Tr. 776:16-767:6; Tr. 860:15-861:20. Saccameno sent Gomes the materials, but nothing came of it.
Finally, Ocwen notes that it gave Saccameno several opportunities to modify the terms of her loan. However, the two proposals discussed at trial were offered to Saccameno only in 2015, after she had filed suit. See Ex. DX16; Tr. 493:17-19; Tr. 495:18-22 (discussing loan modification offered on Feb. 13, 2015); Ex. DX17; Tr. 497:5-8 (discussing loan modification offered in July 2015). Moreover, while the modifications would have lowered Saccameno's monthly payments, they also would have increased the loan's principal balance, see Tr. 622:17-623:4; Tr. 625:12-24, and lengthened the term of the mortgage from fifteen to thirty years, see, e.g., Tr. 626:15-20. In the long run, therefore, Ocwen's proposed loan modifications might well have been costlier to Saccameno—and more beneficial to Ocwen.
In short, based on the record evidence in this case, a jury could reasonably have concluded that Ocwen's conduct was reprehensible enough to warrant punitive damages.
Next, Ocwen argues that it cannot be held liable for punitive damages because Saccameno presented no evidence that its corporate management authorized or approved of its employees' actions. See JMOL Br. 10, ECF No. 314. Under Illinois' so-called "corporate complicity" doctrine, punitive damages may be awarded against a principal or corporation based on the acts of its employees where:
Here, a jury could reasonably have concluded that Ocwen "ratified or approved" of its employees' actions. Under Illinois law, "[r]atification is the equivalent of authorization, but it occurs after the fact, when a principal gains knowledge of an unauthorized transaction but then retains the benefits or otherwise takes a position inconsistent with nonaffirmation." Progress Printing Corp. v. Jane Byrne Political Comm., 235 Ill.App.3d 292, 176 Ill.Dec. 357, 601 N.E.2d 1055, 1067 (1992). "[R]atification need not be express; it may be inferred from surrounding circumstances, including long-term acquiescence, after notice, to the benefits of an unauthorized transaction." Id. The record in this case contains sufficient evidence both that Ocwen's management was aware of its employees' actions and that Ocwen took a "position inconsistent with nonaffirmation" of those actions.
First, there is sufficient evidence in the record that Ocwen's management was on notice of potential problems with its loan servicing practices throughout the company generally. For example, as mentioned above, see Part II.C.2, supra, Saccameno's exhibits included consent orders that Ocwen entered into with state and federal regulatory bodies. These exhibits showed that, based on investigations conducted in 2010 and 2011, state and federal regulatory agencies had raised a host of concerns regarding Ocwen's handling of distressed loans. See Exs. P42 & P44. Among other things, the regulators claimed to have found a "[l]ack of controls related to general borrower account management, including... [m]isapplication of borrower payments" and "[a]ssessment of unauthorized fees and charges," Ex. P42 at 6; and "[d]eficiencies in management control and supervision necessary to ensure compliance with applicable laws and regulations," id. at 7; as well as "deficiencies in Ocwen's servicing platform and loss mitigation infrastructure, including ... failure to properly maintain books and records," Ex. P44 at 3. A jury could reasonably have inferred that various regulators had informed Ocwen that its procedures were subject to the kind of deficiencies that gave rise to the problems in Saccameno's case, and that, in light of the regulatory investigations on which the consent orders were based, Ocwen was aware of its employees' improper conduct in handling loans.
Ocwen appears to concede the consent orders constitute evidence of corporate complicity. It argues, however, that these exhibits were inadmissible. As previously noted, Ocwen's arguments on this point will be discussed in depth in Part III. However, even without the consent orders' evidence indicating knowledge of companywide problems with Ocwen's loan servicing practices, Saccameno presented sufficient evidence from which a jury could have found that Ocwen's management was aware that her account in particular was being improperly serviced. For more than a year, Saccameno and her attorney had numerous communications with Ocwen employees. Some of these should have been cause for alarm. For example, Van Sky's letters to Ocwen expressly threatened litigation. See Ex. P33; Ex. P34. The record shows that Saccameno's complaints and inquiries were distributed to and handled by several of Ocwen's corporate departments. Tr. 617:13-17; Tr. 174:25-175:2, Tr. 280:10-15. All of these communications—along with electronic images of the bankruptcy discharge order, the notice of final cure, and other documents—were logged in Ocwen's computer system, see generally Ex. P18; Tr. 138:18-139:3, and could be viewed by any Ocwen employee who accessed Saccameno's account, see, e.g., Tr.
Second, on this record, a jury could reasonably have inferred that Ocwen retained the benefits, or otherwise took a "position inconsistent with nonaffirmation," of its employees' conduct. We have seen that Ocwen stood to benefit from its mishandling of Saccameno's account in several ways. Among other things, its mistakes would have required Saccameno to make additional mortgage payments and to pay additional fees and charges, see, e.g., Tr. 156:16-158:2; Tr. 344:19-25, and might also have led her to modify her loan on terms more profitable to Ocwen, see Part II.D.1, supra. To be sure, Ocwen ultimately did not retain these benefits: Saccameno did not make the extra payments Ocwen demanded; the fees and charges to her account were later reversed, see, e.g., Tr. 471:5-23; Tr. 966:22-67:22; and Saccameno never accepted Ocwen's loan modification proposals. Nevertheless, it can reasonably be inferred that Ocwen would have retained these benefits if Saccameno had not filed suit.
Further, regardless of whether Ocwen ultimately retained any benefit from the mishandling of Saccameno's loan, a jury could reasonably have concluded that Ocwen took a "position inconsistent with nonaffirmation" of its employees' conduct. For example, the record indicates that Ocwen took no steps to prevent the problems that arose in Saccameno's case from recurring in the case of other consumers. As noted above, Feezer admitted that she had conducted virtually no investigation into the circumstances surrounding the miscoding of Saccameno's bankruptcy discharge: she admitted that she never spoke with Marla regarding the issue and did not check to see whether she or other employees had miscoded bankruptcy discharges in other cases. See, e.g., Tr. 132:3-136:1. Tr. 130:13-17; Tr. 136:16-137:13. To fail to take such corrective action is to take a "position inconsistent with the nonaffirmation" of employees' actions. See, e.g., Langan v. Rasmussen, Nos. 15-1295 & 15-1207, 13-15 (C.D. Ill. Aug. 28, 2018) (jury could reasonably have concluded that defendant corporation ratified employee's unsafe driving because, based on corporation's auditing procedures, it
In short, on this record, a jury could reasonably have concluded that Ocwen's management was aware of the mishandling of Saccameno's account, and that by acquiescing in its employees' conduct, Ocwen ratified their actions. See Langan, 15-1295 & 15-1207, 13-15; LeClercq, 2002 WL 992671, at *3. For these reasons, the record supports holding Ocwen liable for punitive damages based on the actions of its employees. Having concluded that the record also supports a finding that Ocwen acted with the requisite culpability, the court denies Ocwen's motion for judgment as a matter of law as to Saccameno's claim for punitive damages.
Lastly, Ocwen seeks judgment as a matter of law with respect to Saccameno's RESPA claim. "RESPA is a consumer protection statute that regulates the real estate settlement process, including servicing of loans and assignment of those loans." Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 680 (7th Cir. 2011). As relevant here, "the statute requires loan servicers to promptly respond to a `qualified written request' ["QWR"] from a borrower seeking `information related to the servicing' of his loan or alleging that his account is in error." Perron on behalf of Jackson v. J.P. Morgan Chase Bank, N.A., 845 F.3d 852, 856-57 (7th Cir. 2017) (quoting 12 U.S.C. § 2605(e)(1)(A)-(B)). Specifically, RESPA requires loan servicers to take one of following actions within thirty days of receiving a QWR: (1) "make appropriate corrections in the account of the borrower... and transmit to the borrower a written notification of such correction," 12 U.S.C. § 2605(e)(2)(A); (2) "after conducting an investigation, provide the borrower with a written explanation or clarification that includes ... to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer," 12 U.S.C. § 2605(e)(2)(B); or (3) "after conducting an investigation, provide the borrower with a written explanation or clarification that includes ... information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the servicer," 12 U.S.C. § 2605(e)(2)(C).
Saccameno claims that Ocwen failed to comply with these requirements in responding to her inquiries regarding her account. To prevail on her RESPA claim, Saccameno must show that Ocwen failed to comply with one of § 2605(e)(2)'s requirements and that she suffered actual injury as a result. See, e.g., Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979, 982 (11th Cir. 2017) ("[T]o prevail on a RESPA claim, a plaintiff must show (1) a failure to comply with a RESPA obligation and (2) actual damages sustained as a result of the failure to comply."). The parties agree that Saccameno
Saccameno's first QWR was prompted by communications she received from Ocwen in July 2013 informing her that her account was delinquent. As noted above, on July 15, 2013, she called Ocwen to inquire about the possibility of refinancing her loan. Tr. 763:12-16. During the conversation, an Ocwen representative informed Saccameno that, according to its records, she was $ 8,000 in arrears. Tr. 764:12-19. On July 17, 2013, she sent a fax to Ocwen stating:
See Ex. P16. Saccameno's fax included several pages of documentation, including a copy of the bankruptcy discharge order entered in her case. Id. at 7; Tr. 166:2-10.
Id.
A jury could reasonably have concluded that this response failed to meet RESPA's requirements under § 2605(e)(2). There is no dispute that Ocwen did not comply with § 2605(e)(2)(A), which requires servicers to "make appropriate corrections in the account of the borrower." Although Ocwen waived fees assessed by Saccameno's previous servicer, Ocwen did not correct its records to reflect that Saccameno had made all of her payments. Ocwen's response also did not comply with § 2605(e)(2)(C) because Ocwen did not claim that it was unable to obtain the information Saccameno had requested. The question is thus whether Ocwen complied with § 2605(e)(2)(B)'s requirement that the servicer, "after conducting an investigation, provide the borrower with a written explanation or clarification" as to why it believes the account does not need correction.
Here, there is sufficient evidence that Ocwen failed both to conduct a sufficient investigation and to provide an adequate explanation as to why Saccameno's account needed no correction. With respect to the adequacy of Ocwen's investigation, we have already seen that, by the time it sent its August 2013 response letter, Ocwen had all the information necessary to determine that Saccameno had in fact made all forty-two of her post-petition payments. See, e.g., Tr. 328:21-23, Further, even if Saccameno had missed payments, Ocwen would have been unable to collect them because it failed to respond to the Chapter 13 Trustee's Notice of Final Cure Payment. See Tr. 471:25-472:5. Still further, we have seen that by the end of July 2013, Ocwen had in fact corrected the miscoding of Saccameno's bankruptcy discharge. This information, which was accessible to all of Ocwen's employees, unequivocally showed that Saccameno was not responsible for any missed payments. Yet Ocwen offers no explanation as to why it responded by telling Saccameno that her loan was delinquent. In the absence of an alternative explanation, a jury could reasonably have concluded that Ocwen's mistaken response resulted from its failure to investigate Saccameno's account.
A jury could also reasonably have concluded that the explanation provided in Ocwen's response letter failed to comply with § 2605(e)(2)(B). Indeed, at a basic level, the letter's explanation was not responsive to Saccameno's QWR at all. For example, although Ocwen's response acknowledges that Saccameno provided details regarding her bankruptcy discharge, the letter makes no attempt to address
On this record, therefore, a jury could reasonably have concluded that Ocwen's response to the July 2013 QWR failed to comply with RESPA's investigation and explanation requirements.
On March 21, 2014, Susan Van Sky sent Ocwen a second QWR. See Ex. P33; Tr. 327:13-25; Tr. 507:11-14. The letter attached over 100 pages of supporting documentation showing that Saccameno had in fact made all of her mortgage payments. Tr. 508:25-509:12; Tr. 783:7-13. Van Sky requested that Ocwen "review these documents and call me with an explanation as to how you plan to remedy this situation." Id. Ocwen's response letter, dated April 9, 2014, acknowledged that Van Sky "provided us with the proof of payment and requested us to review and provide you with assistance in this regard," Ex. DX14. However, the letter went on to say: "A review of our record [sic] indicates that all payment [sic] reference [sic] in your correspondence have been received and applied towards the loan." Id. Ocwen also separately sent Van Sky a "Payment Reconciliation History," a twelve-page spreadsheet purportedly reflecting "all credits and disbursements, made to the loan and the resulting loan status." See Ex. DX13.
As with Ocwen's August 2013 response letter, a jury could reasonably have concluded that Ocwen's April 2014 letter fell short of § 2605(e)(2)(B)'s investigation and explanation requirements. Although Ocwen was still in possession of all of the information it needed to determine that Saccameno had missed no payments, it continued to maintain that her loan was delinquent. A jury could reasonably have concluded that Ocwen's failure to recognize its error— especially after being given a second opportunity—was due to its failure adequately to investigate the matter.
Similarly, like the August 2013 letter, the April 2014 letter was not responsive to the QWR and failed to explain why Ocwen believed that its understanding of Saccameno's account was accurate. Ocwen acknowledges that Van Sky had provided proof of payment but makes no attempt to respond to her proof. The letter says that all of Saccameno's payments had been properly applied but provides no explanation for this conclusion. Indeed, virtually all of the information in the April 9, 2014 letter is generic, offering no information relevant to the particulars of Saccameno's case. See, e.g., Ex. DX14 ("Any
True, Ocwen also sent Van Sky a "Payment Reconciliation History." See Ex. DX13. At trial, however, Van Sky testified that she found the document incomprehensible. Tr. 511:12-14. The document lists all transactions involving Saccameno's account from July 2011 (when Ocwen began servicing Saccameno's loan) to April 2014. It thus includes not only Saccameno's mortgage payments but also fees and charges to her account, tax and insurance disbursements, escrow adjustments, and other transactions. Even after isolating the spreadsheet entries reflecting Saccameno's payments, Ocwen's accounting is very difficult to follow. Several different types of payments are included in the document (e.g., pre-petition payments, suspense payments, "Payment-REV"), and oftentimes there are consecutive entries showing a payment for a particular amount followed by a payment in the amount of "0." Ocwen provided no explanation as to how the document purportedly shows that Saccameno made only forty payments; nor did the document include information to assist the layperson in deciphering it. This is not enough to comply with RESPA. See, e.g., Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1244-45 (11th Cir. 2016) (plaintiff stated claim for RESPA violation where, in responding to QWR, servicer "just said there was no error and pointed to attachments"); Marais, 24 F.Supp.3d at 725.
Notably, on April 28, 2014, Van Sky sent Ocwen another letter explaining in some detail why Ocwen's April 9, 2014 response failed to address her questions and concerns. Ex. P34; Tr. 508:25-511:3. Van Sky testified that she received no response to this letter, Tr. 510:6-19, and Ocwen has presented no evidence to the contrary. Saccameno argues that the April 28, 2014 letter represents a third QWR, and that by failing to respond to the letter, Ocwen violated RESPA a third time. See JMOL Resp. Br. 15, ECF No. 335. Ocwen has not responded to this argument and has therefore conceded the point. See, e.g., Perry v. Coles Cty., Illinois, 906 F.3d 583, 590 n.5 (7th Cir. 2018). Hence, even if Saccameno's claim failed with respect to the two prior QWRs, Ocwen would not be entitled to judgment as a matter of law on the RESPA count.
In light of the foregoing, the record sufficiently shows that Ocwen failed to comply with RESPA in responding to Saccameno's March 2014 QWR.
As a final basis for seeking judgment as a matter of law with respect to the RESPA count, Ocwen argues that Saccameno failed to produce sufficient evidence on the issue of damages. More specifically, Ocwen claims that Saccameno failed to show that she suffered actual damages—which, according to Ocwen, requires a showing of pecuniary harm. This argument is a non-starter because, as already explained, there is sufficient evidence that Saccameno suffered pecuniary harm. See Part II.B. supra. Moreover, for purposes of RESPA, "actual damages" includes both pecuniary and non-pecuniary harm. See, e.g., Hammer v. Residential Credit Sols., Inc., No. 13 C 6397, 2015 WL 7776807, at *24 (N.D. Ill. Dec. 3, 2015) ("Courts have held that the term `actual damages' includes not only pecuniary losses but damages for emotional distress, humiliation or mental anguish as well. This general holding has been applied specifically to actual damages arising under RESPA.") (citation omitted); Jury Inst. No. 38 ("Under RESPA, the term `actual damages' includes economic and non-economic damages caused by the RESPA violation."); cf. Catalan, 629 F.3d at 696 (noting defendant's concession that emotional distress damages are recoverable as actual damages under RESPA). The record contains sufficient evidence that Saccameno suffered compensable RESPA damages.
Ocwen additionally argues that Saccameno presented no evidence that her claimed RESPA damages were caused directly by Ocwen's response letters. The court disagrees. A jury could reasonably have found that Saccameno's emotional distress (along with her attendant medication expenses and loss of employment) were the direct result of Ocwen's failure properly to respond to her requests that her account be corrected.
Accordingly, the court denies Ocwen's motion for judgment as a matter of law as to Saccameno's RESPA claims.
In sum, the record evidence in this case is sufficient to support of all of Saccameno's claims, as well as her request for punitive damages. Accordingly, the court denies Ocwen's renewed motion for judgment as a matter of law.
The court next addresses Ocwen's motion for a new trial. "A new trial may be granted if the verdict is against the clear weight of the evidence or the trial was unfair to the moving party." Clarett v. Roberts, 657 F.3d 664, 674 (7th Cir. 2011) (quotation marks omitted). Ocwen's motion rests entirely on the court's rulings regarding the admissibility of the two consent orders mentioned above, see Part II.C.2, supra. "A party seeking a new trial based on a district court's alleged erroneous evidentiary rulings bears a `heavy burden.'" Weaver v. Mitchell, No. 15 C 2950, 2019 WL 218745, at *5 (N.D. Ill. Jan. 16, 2019) (quoting Alverio v. Sam's Warehouse Club, 253 F.3d 933, 942 (7th Cir. 2001)). A new trial is warranted for purported evidentiary errors
As discussed below, Ocwen's motion fails at the threshold because it has not shown that the court's evidentiary rulings were erroneous. In addition, even assuming the court's rulings were incorrect, Ocwen has failed to show that the errors had a "substantial and injurious effect or influence on the determination of a jury" leading to a result that is "inconsistent with substantial justice."
Although the court briefly discussed the consent orders above, it is necessary for purposes of the present motion to describe the exhibits, and their use at trial, in greater detail. Both exhibits—designated Exhibits P42 and P44—are consent orders resulting from an examination conducted by state mortgage regulators into Ocwen's loan servicing practices (the "multistate examination").
Based on the multistate examination's findings, the Consumer Financial Protection Bureau ("CFPB"), together with forty-nine states and the District of Columbia, sued Ocwen for allegedly violating various state and federal consumer protection laws. See Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., No. CV 13-2025 (RMC) (D.D.C. filed Dec. 19, 2013). Exhibit P42 is the consent judgment that Ocwen entered into to resolve the CFPB litigation ("the CFPB consent judgment").
Exhibit P44 is a 2014 consent order that Ocwen separately entered into with the New York State Department of Financial Services ("NYSDFS") pursuant to New York Banking Law § 44 ("the 2014 NYSDFS consent order," "the 2014 Order"). See Consent Order Pursuant to New York Banking Law § 44, In the Matter of Ocwen Financial Corporation, Ocwen Loan Servicing, LLC (Dec. 22, 2014). Like the CFPB consent judgment, Exhibit P44 recounts various findings of the 2010-2011 multistate examination. In particular, the NYSDFS consent order states that regulators found "deficiencies in Ocwen's servicing platform and loss mitigation infrastructure, including ... failure to properly maintain books and records." Ex. P44 at 3. According to the NYSDFS, these practices resulted in "numerous and significant violations of New York State laws and regulations." Id. at 4. As a result, Ocwen entered into an initial agreement with the NYSDFS in 2011 "requir[ing] Ocwen to adhere to certain servicing practices in the best interest of borrowers and investors." Id. at 2. When a subsequent investigation showed Ocwen's "widespread noncompliance" with the agreement, Ocwen entered into a consent order with the NYSDFS in 2012. Id. However, monitoring once again "identified numerous and significant violations of the 2011 Agreement, as well as New York State laws and regulations." Id. at 5. In particular, the NYSDFS reported that Ocwen maintained "inadequate and ineffective information technology systems and personnel," and that as a result, "Ocwen regularly gives borrowers incorrect or outdated information, sends borrowers backdated letters, ... and maintains inaccurate records." Id. at 6. Thus, Ocwen entered into a second consent order with the NYSDFS in 2014. Pursuant to the 2014 Order's settlement provisions, Ocwen agreed to continued monitoring of its loan servicing practices and agreed to pay a $ 100 million civil penalty and $ 50 million in restitution to New York borrowers. Id. at 10.
In addition to Exhibits P42 and P44, Saccameno originally sought to introduce several consent orders that Ocwen had entered into with other states, as well as a host of court decisions, verdict forms, and news stories involving Ocwen. Prior to the trial, Ocwen filed motions to bar all of these exhibits, arguing that they were irrelevant, that they constituted evidence of prior bad acts under Federal Rule of Evidence 404(b), and were unfairly prejudicial under Rule 403. See Defendants' Motion in
On the first day of trial, Saccameno's counsel questioned Gina Feezer regarding Exhibit P44. See Tr. 359:1-374:1. Feezer stated that she had no knowledge of the document. See, e.g., Tr. 358:12-18; Tr. 365:4-8. As a result, the court ultimately held that Saccameno had failed to lay the foundation for the exhibit's admission into evidence. Later in the trial, on April 6, 2018, Saccameno requested that the court take judicial notice of Exhibits P42 and P44. See Tr. 609:6-12. The parties subsequently briefed the issue. See ECF Nos. 267 & 268. On April 9, 2018, after Ocwen had rested its case, the court stated that it would grant Saccameno's request for judicial notice, provided that Saccameno furnish the court with properly redacted versions of the exhibits. Tr. 980:11-14. On April 10, before the parties delivered their closing arguments, the court reiterated its ruling. Tr. 1022:14-16. Both parties referred to the exhibits in their closing arguments. In addition, the court included the following in the instructions read to the jury:
Jury Inst. 15.50; see also Tr. 1151:9-16.
Ocwen claims that the court committed multiple errors in admitting Exhibits P42
Ocwen begins by asserting that Exhibits P42 and P44 were inadmissible because they were irrelevant to the litigation. With respect to Exhibit P42, Ocwen first contends that the CFPB consent judgment is irrelevant because it is concerned only with defects stemming from the company's computer platform, which is called "REALServicing." According to Ocwen, defects relating to REALServicing have nothing to do with Saccameno's case because the miscoding of her bankruptcy was purely the result of human error.
As an initial matter, this argument mischaracterizes the CFPB consent judgment. While the document is centrally concerned with problems relating to REALServicing, it also refers more broadly to Ocwen's "[l]ack of controls related to general borrower account management," and to its [i]nadequate staffing and lack of internal controls related to customer service." Ex. P42 at 6. The lack of such controls in Ocwen's account management and customer service were directly at issue in Saccameno's case. In addition, Ocwen's argument also mischaracterizes the record: the evidence at trial did not establish that human error alone was responsible for the miscoding of Saccameno's discharge nor that Ocwen's computer system played no role in the error. As discussed previously, the record does not disclose precisely how or why the miscoding occurred. See Part II.D.1, supra. It is entirely possible that Ocwen's computer platform was in some way involved in the miscoding. Moreover, even assuming that REALServicing was not responsible in any way for the miscoding of Saccameno's bankruptcy discharge,
Ocwen also argues that the CFPB consent judgment is irrelevant because it contains a clause stating that it may not be considered an admission by Ocwen of the allegations in the complaint or as evidence of Ocwen's liability. See, e.g., Ex. P42 at 5 ("Ocwen enters into this Agreement solely for the purpose of resolving disputes with the State Mortgage Regulators concerning their findings as communicated in the Reports of Examination in their entirety and without admitting any allegations or implications of fact, and without admitting any violations of applicable laws, regulations, or rules governing the conduct and operation of its mortgage servicing business.").
As an initial matter, this argument is not sufficiently developed—Ocwen devotes a mere two sentences to it—and has therefore been forfeited. See, e.g., Mahaffey v. Ramos, 588 F.3d 1142, 1146 (7th Cir. 2009) ("Perfunctory, undeveloped arguments without discussion or citation to pertinent legal authority are waived."). Without further elaboration, the logic of the argument is elusive. The CFPB consent judgment's allegations are relevant to the issue of notice regardless of whether Ocwen disputes their truth. Put differently, even if Ocwen believed that the state regulators' findings were mistaken, the consent orders nonetheless show that the regulators had made Ocwen aware of their concerns. See, e.g., In re: E. I. Du Pont De Nemours & Co. C-8 Pers. Injury Litig., No. 2:13-CV-170, 2016 WL 659112, at *54 (S.D. Ohio Feb. 17, 2016) ("The Consent Decree was offered as evidence that DuPont had knowledge that the EPA believed DuPont's handling of C-8 was deficient—not that its handling of C-8 was actually deficient."); Jones v. City of Hartford, 285 F.Supp.2d 174, 185 (D. Conn. 2003) (complaints and consent decree were admissible when "considered for the fact that the City and the police department knew that citizens were accusing its officers of using excessive force in the course of their duties").
The court additionally notes that, irrespective of the consent order's relevance to the issue of notice, the disclaimer does not affect the exhibit's relevance as proof of
With respect to Exhibit P44, Ocwen claims that the NYSDFS consent order is irrelevant to Saccameno's case because it was concerned with Ocwen's servicing of loans in New York and its violation New York law regarding foreclosure proceedings. See Rule 59(a) Br. 7. Again, Ocwen's characterization of the document is incorrect: while the NYSDFS order is principally concerned with Ocwen's conduct in connection with foreclosures in New York, its scope is not entirely confined to those matters. Like the CFPB consent judgment, the NYSDFS consent order arose out of the broader multistate investigation into Ocwen's loan servicing practices. As a result, the NYSDFS consent order makes reference to many of the same general problems noted in the CFPB consent judgment. See Ex. P44 at 3 ("In 2010 and 2011, the Department participated in a multistate examination of Ocwen [that] ... identified, among other things, deficiencies in Ocwen's servicing platform and loss mitigation infrastructure, including ... failure to properly maintain books and records."). Notwithstanding its emphasis on New York, therefore, Exhibit P44 is relevant to showing Ocwen's notice of regulators' concerns with its loan servicing practices.
Ocwen goes on to argue that Exhibits P42 and P44 both lack relevance because both were executed after the miscoding of the bankruptcy discharge in Saccameno's case. Specifically, Ocwen observes that the miscoding took place in July 2013—six months before Ocwen entered into the CFPB consent judgment (December 2013) and eighteen months before Ocwen entered into the NYSDFS consent order (December 2014). As a result, Ocwen concludes, the "documents could not possibly be probative of whether Ocwen had complied with its going-forward obligations or was evidence of Ocwen's awareness of problems with its loan servicing practices at the time of the miscoding." Rule 59(a) Br. 7 (quotation marks omitted).
One problem with this argument is that, although the miscoding and other errors in Saccameno's case occurred prior to the CFPB consent judgment, Ocwen's failure to correct the errors spanned the ensuing eighteen months—and thus continued after Ocwen's entry into the consent judgment. If Ocwen had complied with its obligations under the CFPB consent judgment, it can reasonably be inferred that it would have discovered and corrected the problems with Saccameno's account sooner. Conversely, the fact that Ocwen failed to discover and correct the problems can be regarded as evidence of Ocwen's failure to comply with its obligations under the CFPB consent order. Exhibit P42 thus remains relevant to the
In any case, both exhibits are relevant to the issue of notice. Although Ocwen did not enter into either of the agreements until after the miscoding in Saccameno's case, both consent orders were based on the multistate examination, which dated back to December 1, 2010. After the examination concluded in October 2011, the state mortgage regulators issued reports of their findings, and Ocwen had the opportunity to respond. See CFPB consent judgment at 4-5. Ocwen thus had notice of the regulators' concerns well before it entered into the consent orders, and well before the problems arose in Saccameno's case.
Finally, in addition to the issue of relevance, Ocwen argues that the consent orders are inadmissible because they constitute evidence of prior bad acts under Federal Rule of Evidence 404(b) and because they are unfairly prejudicial under Federal Rule of Evidence 403. Although the court previously addressed these objections in ruling on Ocwen's motion in limine seeking to exclude the exhibits, Ocwen contends that the court "erred by failing to analyze or explain how any probative value the Court discerned from these exhibits outweighed the substantial unfair prejudice, as required under both Rules 404(b) and 403." Rule 59(a) Br. 8, ECF No 312. The court disagrees. In ruling on Ocwen's motion, the court examined each of Saccameno's proposed exhibits and explained the basis for its determinations with respect to each. The court acknowledged the documents' potentially prejudicial effect and, as noted above, the court agreed that in the case of most of the proposed exhibits, the potential prejudice outweighed the documents' probative value. With respect to Exhibits P42 and P44, however, the court concluded that, having examined the documents in light of the facts of the case, the documents' probative value outweighed the potential prejudice. See ECF No. 256 at 4 & 6.
In short, Exhibits P42 and P44 were neither irrelevant nor unfairly prejudicial, and the court committed no error in admitting them into evidence.
Next, Ocwen argues that it is entitled to a new trial because the court erred in taking judicial notice of the consent orders. Ocwen begins with the categorical assertion that consent orders are not properly subject to judicial notice. Rather, according to Ocwen, courts may take judicial notice only of decisions in other court or administrative proceedings. See Rule 59(a) Br. 10 ("[W]hile a court may take judicial notice of decisions in other court or administrative proceedings, neither the CFPB Consent Judgment or the NYSDFS Consent Order are judicial or administrative decisions.") (citation omitted). This contention is without merit. The case on which Ocwen relies, Opoka v. I.N.S., 94 F.3d 392 (7th Cir. 1996), is inapposite. Opoka merely acknowledged the "well-settled principle that the decision of another court or agency, including the decision of an administrative law judge, is a proper subject of judicial notice." Id. at 394. Nothing in the opinion suggests that judicial and administrative decisions are the only documents of which courts may take judicial notice, or that judicial notice of consent orders is verboten.
On the contrary, that courts may take judicial notice of consent orders and similar agreements is settled beyond peradventure. See, e.g., Vill. of DePue, Ill. v. Viacom Int'l, Inc., 713 F.Supp.2d 774, 776 n.3 (C.D. Ill. 2010) ("Judicial notice of the Consent Order is appropriate here, as its
Ocwen goes on to assert that insofar as judicial notice of the consent orders was permissible, the court was "[a]t most... authorized ... to take judicial notice of the existence of the consent judgments, not disputed facts within them." Rule 59(a) Br. 11.
This argument founders at the outset because Ocwen failed to make any contemporaneous objection on this point at trial. See, e.g., Venson v. Altamirano, 749 F.3d 641, 657 (7th Cir. 2014) (by failing to object at the time, defendant waived argument that counsel's remarks during closing argument violated district court's motion in limine); Merix Pharm. Corp. v. Clinical Supplies Mgmt., Inc., 106 F.Supp.3d 927, 933 (N.D. Ill. 2015) ("A party forfeits any post-trial challenge to opposing counsel's arguments by failing to object at trial."). Ocwen made two objections during Saccameno's closing, but neither of these pertained to Exhibits P42 or P44, much less asserted that Saccameno had used the exhibits improperly. See Tr. 1029:19-20 (objecting to Saccameno's counsel's references to his "life story"); Tr. 1138:2-9 (objecting to Saccameno's counsel's remark that "if you accept [Ocwen's] behavior and you say it's okay, then tomorrow they will file that foreclosure again, and they will be right back on top of her doing these same things again"). "Neither a general objection to the evidence nor a specific objection on other grounds will preserve the issue for review." Naeem v. McKesson Drug Co., 444 F.3d 593, 610 (7th Cir. 2006) (citations and quotation marks omitted). Rather, "a party must make a proper objection at trial that alerts the court and opposing party to the specific grounds for the objection." Id. (citations and quotation marks omitted). For this reason, Ocwen has forfeited any objection to statements by Saccameno's counsel during closing and rebuttal arguments.
That said, Ocwen's argument fails on the merits as well. Notwithstanding Ocwen's insistence to the contrary, Saccameno's counsel's use of Exhibits P42 or P44 was not improper. For example, Ocwen's claim that "counsel for Saccameno walked the jury paragraph by paragraph through the CFPB Consent Judgment `findings,'" Rule 59(a) Br. 11-12 (quoting Tr. 1054:3-12.), is untrue. Saccameno's counsel characterized the paragraphs not as "findings" but as what the regulators told Ocwen.
The court likewise finds nothing amiss in the remark by Saccameno's counsel during his rebuttal argument that he "`didn't hear any evidence' that Ocwen complied with the CFPB Consent Judgments [sic]." Rule 59(a) Br. 12 (citing Tr. 1187:9). According to Ocwen, this comment was improper because Ocwen's "compliance with the Judgment was irrelevant to the legal issues in Saccameno's case and not a `fact' that the jury should have heard about." Id. As already explained, however, the question of whether Ocwen complied with the CFPB consent judgment bears directly on its liability under ICFA, as well as Saccameno's request for punitive damages. See Part II.C.2, supra. As for Ocwen's claim that Saccameno presented Ocwen's failure to comply with the CFPB consent judgment as a "fact," the nature of Ocwen's objection is unclear. If the objection is that Saccameno assumed the truth of factual statements in the consent judgment to show Ocwen's failure to comply with its obligations, the argument fails as a matter of logic: since Ocwen's obligations became effective only after it entered into the consent judgment, nothing in the consent judgment itself could be used to show Ocwen's failure to comply with the obligations. If, on the other hand, the objection is that Saccameno's counsel argued that Ocwen's conduct in her case showed Ocwen's failure to comply with its obligations under the CFPB consent judgment, Ocwen asserts nothing improper, for such an argument would not entail any presumption about the truth of the exhibit's factual statements.
Ocwen's final objection is that the court erred in taking judicial notice of Exhibits P42 and P44 after the close of evidence. The court disagrees. As an initial matter, there is nothing improper about taking judicial notice of a document after the close of evidence. Federal Rule of Evidence 201 specifically provides that "[t]he court may take judicial notice at any stage of the proceeding." Fed. R. Evid. 201(d) (emphasis added). This includes taking judicial notice after the close of evidence. As one treatise explains:
Mueller & Kirkpatrick, 1 Federal Evidence § 2:8 (4th ed.); see also Grp. One, Ltd. v. Hallmark Cards, Inc., 407 F.3d 1297, 1306 (Fed. Cir. 2005) ("Hallmark argues that the district court could not take judicial notice of the '752 patent's reinstatement because it occurred after the close of evidence. This argument fails because Federal Rule of Evidence 201(f) clearly states that `[j]udicial notice may be taken at any stage of the proceeding.'"); Coleman v. Schwarzenegger, No. C01-1351 TEH, 2009 WL 2407404, at *2 (E.D. Cal. Aug. 4, 2009) (taking judicial notice of assembly bills and governor's vetoes after close of evidence).
Ocwen's objection is that by taking judicial notice after the close of evidence, it had no opportunity to explain or rebut the exhibits. For several reasons, this argument is unpersuasive. First, given the court's rulings on Ocwen's motions in limine, there was every reason to believe prior to the start of trial that Exhibits P42 and P44 would be admitted into evidence. The exhibits were later deemed inadmissible only because Saccameno's counsel failed to lay a proper foundation. Perhaps Ocwen anticipated this eventuality. Nevertheless, it would have been reckless for Ocwen to have assumed at the outset that it would be unnecessary to address the exhibits as part of its defense. Further, Saccameno's request for judicial notice was pending at the time Ocwen presented its case. Thus, while the final decision was not made until after the close of evidence, Ocwen was fully aware before putting on its case that the exhibits might come into evidence.
Second, despite its protestations to the contrary, Ocwen had the opportunity to address the exhibits. In his closing argument, Ocwen's counsel discussed Exhibit P42. He highlighted the consent order's disclaimer and emphasized that by agreeing to the order, Ocwen had not admitted liability or agreed to the truth of the state regulators' purported factual findings. See Tr. 1110:14-1111:6. Rather, he argued, Ocwen entered into the consent orders
Finally, Ocwen fails to specify any way in which it might have defended the case differently if it had been aware earlier in the proceedings that the court would take judicial notice of the exhibits. Notably, Gina Feezer was the only witness on Ocwen's witness list. See Pretrial Order at 7, ECF No. 174. Given her repeated testimony that she had no knowledge of the consent orders, nor any knowledge of concerns raised by state regulatory agencies regarding Ocwen's loan servicing practices, see, e.g., Tr. 359:21-360:3; Tr. 545:15-20; 552:24-553:21, it is difficult to imagine how Ocwen might have addressed the exhibits if the court had issued its ruling sooner.
In sum, Ocwen has failed to show that the court erred in taking judicial notice of the consent orders or that Saccameno used the exhibits for purposes inconsistent with those delineated in the court's pretrial rulings.
Before concluding, the court briefly addresses two miscellaneous issues raised in Ocwen's motion for a new trial.
The first of these pertains to the cases that the court cited in taking judicial notice of the consent orders: Gonzalez v. Ocwen Home Loan Servicing, No. 3:14-CV-53 CSH, 2015 WL 2124365 (D. Conn. May 6, 2015), and Lowry v. Wells Fargo Bank, N.A., No. 15 C 4433, 2016 WL 4593815 (N.D. Ill. Sept. 2, 2016). Ocwen argues that the cases are inapposite because neither decision considered the admissibility of consent orders at trial or the propriety of taking judicial notice of consent orders' contents. Rule 59(a) Br. 12-13. This argument mistakes the purposes for which the court cited the decisions. The court cited Gonzalez only to address Ocwen's sweeping claim that consent orders are not properly subject to judicial notice. Given that Gonzalez took judicial notice of the very CPFB consent judgment at issue in this case, the decision is directly on point. The court cited Lowry to address Ocwen's claim that the consent orders were not relevant to Saccameno's case. In Lowry, it will be recalled, the plaintiff alleged that Wells Fargo had violated ICFA by failing to comply with the provisions of a national settlement and consent decree that, like the CFPB and NYSDFS consent orders at issue here, pertained to improper mortgage servicing practices. The Lowry court held that if the complaint's allegations were true, Wells Fargo's conduct would offend public policy and would qualify as "unscrupulous" conduct for purposes of an ICFA unfairness claim. 2016 WL 4593815,
The second residual issue has to do with Ocwen's reference to a portion of the transcript where Ocwen's counsel stated that it was "outrageously prejudicial" to allow Saccameno to use Exhibits P42 and P44 in her closing argument, to which the court replied, "Yes, it is." Tr. 982:23-25. Ocwen appears to attach great significance to the court's acknowledgment that the consent orders were highly prejudicial. However, the potentially prejudicial nature of the exhibits was never in question. That is why the court exercised great care in limiting the portions of the documents that could come into evidence, and why the court instructed the jury that the exhibits could be considered only for limited purposes. Rule 403, however, does not require the exclusion of prejudicial evidence—even highly prejudicial evidence. It requires exclusion only where the evidence's probative "value is substantially outweighed by a danger of ... unfair prejudice." Fed. R. Evid. 403; see also United States v. Krenzelok, 874 F.2d 480, 482 (7th Cir. 1989) ("[The evidence's] probative value was therefore great. Its prejudicial effect may well have been great too. But when the trial judge is in doubt, Rule 403 requires admission (this is the force of `substantially outweighed' [in Rule 403]).") (Posner, J.). The consent orders here were highly probative with respect to key issues in this case. This is especially true with regard to Ocwen's prior awareness of concerns regarding its handling of distressed loans such as Saccameno's. As discussed above, Ocwen's prior awareness of such concerns was essential to showing that it acted with the culpability and corporate complicity necessary to justify punitive damages. The court's acknowledgment of the exhibits' potentially prejudicial nature, therefore, is fully consistent with its decision to admit the exhibits into evidence. The danger of unfair prejudice resulting from the consent orders' admission into evidence did not substantially outweigh the exhibits' probative value.
For the reasons explained above, the court concludes that it did not err in admitting Exhibits P42 and P44 into evidence. Accordingly, the court denies Ocwen's motion for a new trial.
The third and final motion before the court is Ocwen's Rule 59(e) motion to amend the judgment. "Amendment of the judgment is proper only when the movant presents newly discovered evidence that was not available at the time of trial or if the movant points to evidence in the record that clearly establishes a manifest error of law or fact." Stragapede v. City of Evanston, Illinois, 865 F.3d 861, 868 (7th Cir. 2017) (quotation marks omitted). Ocwen argues that the judgment entered in the case must be amended because the jury's $3 million punitive damage award is excessive. The motion asks that the court either reduce the punitive damage award unilaterally or that the court order a remittitur, requiring a new trial unless Saccameno agrees to a reduction of the punitive damage award. For the reasons discussed below, the court denies the motion.
To determine whether the jury's award of punitive damages is excessive, it is first necessary to determine whether the award should be reviewed under state law or federal law. Saccameno argues that the
As the Supreme Court has explained, the "Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor." State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). This is because "[e]lementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose." BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). In Gore, the Court identified three guideposts for determining whether an award of punitive damages comports with the requirement of due process and fair notice: "(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases." State Farm, 538 U.S. at 418, 123 S.Ct. 1513. Applying these factors here, the court concludes that the jury's punitive damage award is not unconstitutional.
The Supreme Court has stated that "the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." State Farm, 538 U.S. at 419, 123 S.Ct. 1513 (quotation marks omitted). The Court has further instructed that, in assessing the reprehensibility of a defendant's conduct, courts should consider whether:
Id. at 419, 123 S.Ct. 1513. "The existence of any one of these factors weighing in favor of a plaintiff may not be sufficient to sustain a punitive damages award; and the absence of all of them renders any award suspect. Id.
The first two factors do not support Saccameno: her injury was chiefly emotional, not physical; and while Ocwen may have displayed a reckless disregard for Saccameno's emotional and psychological health, it did not do so with regard to her physical health. However, the remaining three factors weigh in Saccameno's favor: given that she was emerging from bankruptcy, she was highly vulnerable financially; Ocwen's conduct involved repeated actions (e.g., repeatedly failing to correct Saccameno's account; repeatedly seeking payment of funds it was not entitled to; repeatedly returning Saccameno's payments); and, as discussed above, there is
The second Gore factor is the disparity between the punitive damage award and the actual or potential harm suffered by the plaintiff. This is typically expressed as a ratio of punitive damages to compensatory damages. The Supreme Court "has recognized that in practice, `few awards exceeding a single-digit ratio between punitive and compensatory damages ... will satisfy due process.'" E.E.O.C. v. AutoZone, Inc., 707 F.3d 824, 839 (7th Cir. 2013) (quoting State Farm, 538 U.S. at 424-25, 123 S.Ct. 1513). Nevertheless, the Court "has repeatedly declined to set a fixed ratio to limit punitive damages based on constitutional grounds." Id.
Of the claims at issue here, only Saccameno's ICFA claim allowed for the recovery of punitive damages. It might thus appear that the relevant comparison for purposes of the Gore inquiry is between the $3 million in punitive damages and $82,000 in compensatory damages awarded on Saccameno's ICFA claim— which would result in a ratio of roughly 37:1. However, Ocwen and Saccameno each propose alternative formulations of the ratio. Ocwen contends that the court should consider only the $12,000 in economic damages awarded on Saccameno's ICFA claim, which would yield a ratio of 250:1. Saccameno says the court should consider the compensatory damages awarded on all of her claims—both the entire compensatory award for her ICFA claim ($82,000), as well as the compensatory damages awarded for her FDCPA, RESPA, and breach of contract claims ($500,000). Saccameno's formulation results in a ratio of roughly 5:1. The first ratio—37:1—is probably (though, as discussed below, not necessarily) unconstitutional; Ocwen's proposed ratio of 250:1 is almost certainly unconstitutional; and Saccameno's proposed ratio of 5:1 is very likely constitutional. Although the matter is not free from doubt, the court concludes that the correct ratio is 5:1, though not for the reasons Saccameno urges.
Ocwen's 250:1 ratio can be rejected in fairly short order. The arguments it asserts in support of its position are difficult to follow and amount to non sequiturs. For example, Ocwen points out that under ICFA, punitive damages cannot be recovered without a showing of pecuniary loss. While that is true, it does not explain why other forms of compensatory damages awarded under ICFA should be disregarded in assessing the punitive/compensatory ratio. Ocwen also points out that ICFA defines "actual damages" to mean "actual pecuniary loss." Once again, this is true but fails to explain why only the economic damages awarded on Saccameno's ICFA claim should be considered for purposes of the Gore inquiry. The relevant ratio, after all, is not between punitive damages and actual damages but between punitive damages and compensatory damages—and under ICFA, compensatory damages encompass both economic and non-economic
Ocwen has cited no case, and the court has found none, in which a court reviewing the constitutionality of a punitive damage award limited its comparison to the economic component of a larger compensatory award. In fact, case authority is to the contrary. See, e.g., McGinnis v. Am. Home Mortg. Servicing, Inc., 901 F.3d 1282, 1290 (11th Cir. 2018) (rejecting defendant's request to consider only economic damages, and to discount amount awarded for emotional distress, in conducting ratio analysis); Nance v. Kentucky Nat. Ins. Co., 240 F. App'x 539, 549 (4th Cir. 2007) (rejecting defendant's argument that court could compare the ratio only between punitive damages and plaintiff's out-of-pocket damages, not the remaining compensatory damages); Hammer v. Residential Credit Sols., Inc., No. 13 C 6397, 2015 WL 7776807, at *46 (N.D. Ill. Dec. 3, 2015) (same). At the very least, then, the punitive damage amount should be compared against both the economic and non-economic compensatory damages awarded under Saccameno's ICFA claim.
Somewhat more difficult is the question of whether, as Saccameno maintains, the court should compare the punitive damage figure with the cumulative amount of compensatory damages awarded on all of her claims. The court has found no Seventh Circuit authority directly addressing this issue.
A small number of decisions from other circuits have addressed the issue more squarely. Of these, Fastenal Co. v. Crawford, 609 F.Supp.2d 650 (E.D. Ky. 2009), is the most instructive. There, the plaintiff asserted several causes of action, including claims for civil conspiracy and fraud. Id. at 656. On the civil conspiracy claim, the jury awarded the plaintiff $10,000 in punitive damages and $100,000 in compensatory damages. On the fraud claim, the jury awarded an additional $10,000 in punitive damages but awarded no compensatory damages. Id. at 657. Given that no compensatory damages were awarded on the fraud claim, the court observed that the punitive damages awarded on that count would be excessive if the claim were viewed individually. The court therefore considered whether the compensatory damages on the fraud claim could be combined with the compensatory damages awarded on the civil conspiracy claim. The court concluded that aggregation of the compensatory damage awards was appropriate. In arriving at this conclusion, the court noted that the Gore disparity inquiry requires comparing the punitive damage award with both actual harm and potential harm resulting from the defendant's conduct. Id. at 661 (citing State Farm, 538 U.S. at 424, 123 S.Ct. 1513; Gore, 517 U.S. at 582, 116 S.Ct. 1589; TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 460, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993)). The court reasoned that if the inquiry is "not limited to compensatory damages that actually occurred in calculating the ratio, it follows that a court is not confined only to the compensatory damages under particular claims and instead can look at damages found by a jury on related claims." Id. at 661.
Of course, in Fastenal, the claims whose compensatory damages were combined both allowed recovery for punitive damages. Here, the question is whether aggregation of compensatory damages is appropriate where one of the claims allows for punitive damages and the others do not. However, several courts have held that compensatory damages may be aggregated under such circumstances, provided that the underlying claims are sufficiently related. See, e.g., Burton v. Zwicker & Associates, PSC, 577 F. App'x 555, 564-65 (6th Cir. 2014) (aggregating backpay awarded on claims for racial discrimination, retaliation, and wrongful termination with emotional distress damages awarded on wrongful termination claim); Bains LLC v. Arco Prod. Co., Div. of Atl. Richfield Co., 405 F.3d 764, 775-76 (9th Cir. 2005) ("On the facts of this case, in determining the correct amount of punitive damages, the jury could properly consider not only the one dollar in nominal damages awarded for discrimination under § 1981, but also the $50,000 in compensatory damages awarded for breach of contract. The conduct was intertwined."); Pollard v. E.I. DuPont De Nemours, Inc., 412 F.3d 657, 668 (6th Cir. 2005) (upholding $2.5 million punitive damages award on claim for intentional infliction of emotional distress based on $950,000 in compensatory damages awarded on that claim as well as back pay and front pay under Title VII claims); but see JCB, Inc. v. Union Planters Bank, NA, 539 F.3d 862 (8th Cir. 2008) (separately considering compensatory/punitive ratios for conversion and trespass claims because, "[a]lthough related, the wrongful acts leading to the Bank's trespass and conversion were not identical").
For completeness, the court considers the third option singled out above— comparing the $3 million in punitive damages to the $82,000 in compensatory damages awarded on Saccameno's ICFA claim. As noted, this results in a ratio of 37:1, which is significantly outside the single-digit range suggested by the Supreme Court. Nevertheless, it is worth noting that such a ratio is not necessarily unconstitutional. As previously noted, the Supreme Court has refused to fix any particular ratio above which a punitive damage award must be deemed unconstitutional. See, e.g., E.E.O.C., 707 F.3d at 839; see also Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672, 676 (7th Cir. 2003) (quoting State Farm, 538 U.S. at 426, 123 S.Ct. 1513) ("The Supreme Court did not, however, lay down a 4-to-1 or single-digit-ratio rule—it said merely that `there is a presumption against an award that has a 145-to-1 ratio,'—and it would be unreasonable to do so.") (citation omitted). And courts have upheld ratios comparable to or greater than 37:1. In Mathias, for example, the plaintiffs alleged that they had been bitten by bed bugs in one of the defendant's hotels, and were each awarded punitive damages of $186,000 and compensatory damages of $5,000. The Seventh Circuit held that the 37:1 ratio of punitive to compensatory damages was constitutional. Id. at 677; see also Daugherty v. Ocwen Loan Servicing, LLC, 701 F. App'x 246, 248 (4th Cir. 2017) (upholding 98:1 ratio in suit under Fair Credit Reporting Act based on $600,000 in punitive damages and $6,128.39 in compensatory damages); Kemp v. Am. Tel. & Tel. Co., 393 F.3d 1354, 1365 (11th Cir. 2004) (upholding a 725:1 ratio in RICO suit based on $250,000 in punitive damages and $345 in compensatory damages); Jeffries v. Wal-Mart Stores, Inc., 15 F. App'x 252, 255 (6th Cir. 2001) (upholding ratio of 50:1 in suit alleging discrimination and retaliation based on $425,000 in punitive damages and $8,500 in compensatory damages).
These cases can no doubt be distinguished from Saccameno's in various ways. Chief among these is the fact that these cases involved relatively small compensatory damage awards. Courts have held that larger punitive/compensatory ratios are permissible where plaintiffs have recovered only modest compensatory damages, since adhering to a single-digit ratio in such cases would result in punitive damage awards too modest to have a significant deterrent effect. See, e.g., Cooper v. Casey, 97 F.3d 914, 919-20 (7th Cir. 1996) ("The smaller the compensatory damages, the higher the ratio of punitive to compensatory damages has to be in order to fulfill the objectives of awarding punitive damages.... An award of punitive damages proportioned to the low compensatory damages that were awarded would have a very meager deterrent effect."). Courts have similarly recognized that "[w]here only small compensatory damages are awarded, a larger punitive sum may be warranted to give plaintiffs an incentive to sue." Mathias, 347 F.3d at 677; see also
In Saccameno's case, it might be argued, there is no justification for a such large ratio because she has been awarded more than $500,000 in compensatory damages. But this argument depends, once again, on whether Saccameno's compensatory damages are viewed separately or in the aggregate. If one considers the compensatory damages awarded only on her ICFA claim, hewing to, say, a 5:1 ratio would cap her punitive damages at roughly $500,000. Such an amount is not insignificant; but it is unclear whether it is substantial enough to have a meaningful deterrent effect on a corporation of Ocwen's size. If, on the other hand, Saccameno's compensatory damages are combined, as we have seen, the punitive/compensatory ratio falls within an acceptable range.
In any event, as explained above, the court concludes under the facts of this case that it is most sensible to aggregate Saccameno's compensatory damages for purposes of the Gore ratio analysis. The resulting 5:1 ratio between her punitive and compensatory damages is not unconstitutionally excessive. To the extent that concerns about the ratio spring from concerns about whether the defendant had notice that it could face a substantial punitive award, Gore, 517 U.S. at 574, 116 S.Ct. 1589, the many investigations, reports, consent decrees and judgments against Ocwen for related misconduct could not have left it surprised that the jury found a substantial punitive award appropriate.
The third and final Gore guidepost requires the court "to compare the punitive damages in this case to the `civil or criminal penalties that could be imposed for comparable misconduct.'" AutoZone, Inc., 707 F.3d at 840 (quoting Gore, 517 U.S. at 583, 116 S.Ct. 1589). Ocwen cites an ICFA provision allowing the Attorney General or State's Attorney to request that a court "impose a civil penalty in a sum not to exceed $50,000 against any person found by the Court to have engaged in any method, act or practice declared unlawful under this Act." 815 Ill. Comp. Stat. Ann. 505/7(b). The $3 million punitive damage award may indeed appear excessive when compared with this figure. As Saccameno points out, however, section 505/7(b) further provides that where the court finds that the defendant acted with an intent to defraud, the $50,000 penalty applies to each violation of the statute. Id. True, it would still require a good many ICFA violations to reach a figure of $3 million. But there are other relevant sanctions (not mentioned by either of the parties) that might approach the amount of the punitive damage award in this case. For example, Illinois' Residential Mortgage License Act of 1987 (RMLA), 205 Ill. Comp. Stat. 635/1-1 et seq., requires servicers and others in the residential mortgage lending industry to comply with applicable federal and state statutes and regulations (e.g., RESPA). See Ill. Admin. Code tit. 38, § 1050.870. The statute provides for fines of up to $25,000. See 205 Ill. Comp. Stat. 635/1-3(c), (e). More importantly, RMLA also allows Illinois' Department of Financial and Professional Regulation to suspend or revoke a loan servicer's license for violating the statute. 205 Ill. Comp. Stat. 635/4-5. The financial cost to Ocwen of losing its license to service loans in Illinois might well approach or even surpass $3
In addition to statutory and other penalties, courts also look to punitive damage awards in other cases for purposes of the third Gore factor. See, e.g., Hendrickson v. Cooper, 589 F.3d 887, 894 (7th Cir. 2009) ("As with our review of a compensatory damages award, it is useful to compare the challenged punitive damages award with other awards upheld in the past."). A comparison with punitive damage awards in other cases likewise suggests that the award in this case is within an acceptable range. See, e.g., McGinnis v. American Home Mortgage Servicing, Inc., 817 F.3d 1241 (11th Cir. 2016) (upholding $3 million punitive damage award based on loan servicer's attempts to collect a debt it erroneously believed plaintiff owed based on its mistaken accounting); Hammer v. Residential Credit Solutions, Inc., No. 13 C 6397, 2015 WL 7776807 (N.D. Ill. Dec. 3, 2015) (upholding award of $1.5 million in punitive damages and $500,000 in compensatory damages based on an ICFA claim against loan servicer that refused to honor plaintiff's loan modification agreement with prior servicer). While neither of these cases is directly analogous to the present case, the Seventh Circuit has instructed that the judicial function here "is to police a range, not a point." Mathias, 347 F.3d at 678.
In short, consideration of the civil penalties available for comparable misconduct, and the amount of punitive damages awarded in other cases, further supports the conclusion that the jury's punitive damage award in this case is not unconstitutionally excessive.
As explained above, none of the Gore factors suggests that the punitive damage award in this case runs afoul of the constitutional guarantee of due process: given Saccameno's financial vulnerability, the fact that Ocwen engaged in repeated misconduct over a period of eighteen months, and the evidence supporting a finding of deceptiveness on Ocwen's part, Ocwen's conduct is sufficiently reprehensible to justify the award; the ratio of punitive to compensatory damages is comfortably within the single-digit range routinely approved by courts; and the award is commensurate with civil sanctions and punitive damages that might potentially be imposed for comparable misconduct.
For the foregoing reasons, the court denies Ocwen's renewed motion for judgment as a matter of law, ECF No. 314; Ocwen's motion for a new trial, ECF No. 312; and Ocwen's motion to amend, ECF No. 313.
Tr. 979:13-980:4.
