GEORGE C. SMITH, District Judge.
This matter is before the Court on Defendant, Chase's, motion for summary judgment (Doc. 42), Plaintiff, Marais', motion for partial summary judgment (Doc. 43), and Chase' motion to strike (Doc. 51). For the reasons that follow, Chase's motion for summary judgment (Doc. 42) is
Plaintiff, Christine Marais, brought an action with claims for state common law conversion as well as violations of the Truth in Lending Act (TILA), 15 U.S.C. § 1641(f)(2), the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605(e), and the Ohio Consumer Sales Practices Act (OCSPA), Ohio Revised Code, section 1345.01 et seq. against her loan servicer, Defendant, Chase Home Finance, LLC. (Doc. 1, Compl. in passim ). This Court decided, upon motions for judgment on the pleadings, that Marais had failed to adequately state a claim for violations
In 2006, Marais obtained a refinancing on her home. (Doc. 42, Ex. A-1, Loan Documents at 3-40). The monthly payment according to the note was to be $1,064.80.
The undisputed evidence in the record reflects that in November 2007 Marais made a payment of $1,600. Chase allocated that payment as follows: $186.77 to principal; $878.03 to interest; $313.99 to escrow; and $221.21 to "miscellaneous or fees." (Doc. 43, Ex. A-3, Loan Stmnt. at 25). The statement from Chase also instructed, "Chase has funds in the amount of $221.21 that have not been applied to your account. Please contact the Customer Care number above and tell us how you would like these funds applied to your account." Id. In addition, the original loan note provided as follows, "I have the right to make payments of Principal at any time before they are due. A payment of Principal only is known as a `Prepayment.' When I make a Prepayment, I will tell the Note Holder in writing that I am doing so." (Doc. 42, Ex. A-1, Note at 77). There is no indication in the record whether or not Marais told Chase how she wanted the $221.21 allocated nor is there any evidence as to how, if ever, the $221.21 was allocated.
At some point (the record is not clear on exact timing), Marais fell behind on payments. She worked out a resolution with Chase by telephone and accordingly, on January 25, 2008, Chase sent her a repayment plan for a past-due amount of $2,968.64 to be repaid in conjunction with Marais' regular payments. (Doc. 43, Ex. A-4, Repay Plan at 26). In order to accept the plan and avoid foreclosure, Marais was instructed to sign and return the repayment plan agreement. Id. The record does not reflect whether Marais ever formally accepted Chase's offered repayment plan by signing but it is undisputed that Chase did not institute foreclosure action against Marais as it threatened to do had she refused to agree to the plan. Id. The following chart shows the due dates and amounts of repayment under the plan and the dates and amounts of repayment actually made by Marais:
Date Due Amount Due Date Paid Amount Paid
01/24/08 $1,544.56 No Records 2 No Records 02/23/08 $1,542.81 02/25/08 $1,542.81 03/23/08 $1,542.81 03/21/08 $1,542.84 04/23/08 $1,542.81 04/22/08 $1,543.00 05/23/08 $1,542.81 05/22/08 $1,542.90 06/23/08 $1,542.81 06/23/08 $1,543.00 07/23/08 $1,542.81 07/23/08 $1,543.00 08/23/08 $1,542.81 08/22/08 $1,543.00 09/23/08 $1,542.81 09/22/08 $1,543.00 10/23/08 $1,542.81 10/22/08 $1,545.00 11/23/08 $1,542.81 11/24/08 $1,543.00 12/23/08 $1,542.81 12/22/08 $1,543.00
(Compare Doc. 43, Ex. A-4, Repay Plan at 26 with Doc. 43, Ex. A-5, Payment Receipts at 28-38). As is evident from the chart, the record reflects (to the extent records are before this Court) that Marais paid the amounts due (or slightly in excess thereof) on time with two minor exceptions; in February and November she paid 2 and 1 days late respectively. During this same period, Chase sent Marais default letters approximately monthly, demanding payments of amounts that varied with each letter from $2,916.40 up to $3,520.96. (Doc. 43, Ex. A-6, Default Notices at 39-48). Each of these default letters listed the payment due dates as the 1st of the month, rather than the dates designated by Chase in the repayment plan. Id.
After the expiration of the repayment plan, Marais continued to make payments on her loan in excess of the amounts due. The record reflects that she paid as follows:
Date Paid Amount Paid 01/13/09 $1,543.00 02/06/09 $1.500.00 03/12/09 $1,500.00 04/09/09 $1,500.00 05/13/09 $1,402.65 06/11/09 $1,500.00 07/09/09 $1,402.66 08/11/09 $1,500.00 09/04/09 $1,425.00 10/13/09 $1,525.00 11/09/09 $1,524.42
(Doc. 43, Ex. A-7, Payment Receipts at 49-50). After continuing, for a time, to pay amounts which are not clearly evidenced in the record, Marais "suspend[ed] any performance" (i.e. stopped paying altogether) in November, 2010. (Doc. 42, Ex. B, Marais Disc. Resp. at 7).
On January 3, 2011, Marais drafted and sent a letter known as a qualified written request (QWR) by certified mail to Chase. (Doc. 43, Ex. A-10, QWR at 53-54). Chase acknowledged receipt of the QWR on January 6, 2011 in a letter dated January 7. (Doc. 43, Ex. A-11, QWR Receipt Ltr. at 56). The QWR made numerous demands upon Chase but, relevant to this Order, read as follows:
(Doc. 43, Ex. A-10, QWR at 54).
On February 28, 2011, Chase responded to the QWR's substantive inquiries by form letter. (Doc. 42, Ex. A-1, QWR Resp. Ltr. at 1-2). This letter in no way addressed any of Marais' concerns except insofar as it attached copies of her note, mortgage, loan transaction history, annual escrow statements, home appraisal, and payoff quote. Id. in passim. However, a review of the attached loan transaction history raises, rather than answers, questions. For example, as mentioned above, Chase set a repayment plan for Marais. (Doc. 43, Ex. A-4, Repay Plan at 26). Marais' receipts show that she paid the amounts required on time according to the plan except for three — one that was 1 day late, one that was 2 days late, and one for which no receipts are in the record as to whether or not it was paid. (Doc. 43, Ex. A-5, Payment Receipts at 28-38). In short, of the payments for which there is a reliable record, only February and November were late. But, notwithstanding, on the 16th or 17th of every month of 2008, Chase assessed Marais a late fee of $53.24. (Doc. 42, Ex. A-1, Loan Trans. Hist. at 69-74). During that same timeframe, Chase frequently assessed fees of $14.00-$15.00 with no apparent explanation. Id. Moreover, it noted payments as "UNAPPLIED" by Marais in the amounts of December — $140.34, November — $140.34, October — $118.92, September — $118.92, August — $118.92, July — $118.92, June — $118.92, May — $118.82, April — $118.92, March — $118.76, and February — $118.73. Id. Indeed, Chase itself (via a duly appointed Rule 30(b)(6) deponent) was unable to explain some of these charges and anomalies. (Doc. 43, Ex. C, Summerford Depo. Excerpt at 54:10-54:16, 62:9-62:20, 77:4-78:5).
On this somewhat muddled but nonetheless undisputed record, Marais now moves for partial summary judgment — arguing that Chase' response to her QWR was inadequate and violative of 12 U.S.C. § 2605(e). (Doc. 43, P. Mot. for Part. SMJ in passim). Chase moves for summary judgment on all issues and claims — arguing that its response was adequate and that Marais can prove no damages even if the response were judged inadequate.
"The standard of review for cross-motions of summary judgment does not differ from the standard applied when a motion is filed by only one party to the litigation." Ferro Corp. v. Cookson Group, PLC, 585 F.3d 946, 949 (6th Cir.2009) (citing Taft Broad. Co. v. U.S., 929 F.2d 240, 248 (6th Cir.1991)). Rule 56(a) of the Federal Rules of Civil Procedure, sets forth that standard: "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."
Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 258, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate, however, if the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. See Muncie Power Prods., Inc. v. United Techs. Auto., Inc., 328 F.3d 870, 873 (6th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
When reviewing a summary judgment motion, the Court must view all the facts, evidence, and any reasonable inferences that may permissibly be drawn from the facts, in favor of the nonmoving party. See, e.g., Crawford v. Metro. Gov't, 555 U.S. 271, 274 n. 1, 129 S.Ct. 846, 172 L.Ed.2d 650 (2009) (quoting Brosseau v. Haugen, 543 U.S. 194, 195, n. 2, 125 S.Ct. 596, 160 L.Ed.2d 583 (2004)); Muncie Power Prods., Inc., 328 F.3d at 873 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). The Court will ultimately determine whether "the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 251-52, 106 S.Ct. 2505.
In responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989) (quoting Liberty Lobby, 477 U.S. at 257, 106 S.Ct. 2505). The existence of a mere scintilla of evidence in support of the opposing party's position is insufficient; there must be evidence on which the jury could reasonably find for the opposing party. Liberty Lobby, 477 U.S. at 252, 106 S.Ct. 2505. The nonmoving party must present "significant probative evidence" to demonstrate that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Companies, Inc., 8 F.3d 335, 340 (6th Cir.1993). The Court may enter summary judgment if it concludes that a fair-minded jury could not return a verdict in favor of the nonmoving party based on the presented evidence. Liberty Lobby, 477 U.S. at 251-52, 106 S.Ct. 2505; see also Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir.1994).
Moreover, "[t]he trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Street, 886 F.2d at 1479-80. That is, the nonmoving party has an affirmative duty to direct the Court's attention to those specific portions of the record upon which it seeks to rely to create a genuine issue of material fact.
In enacting RESPA
Vega v. First Fed. Sav. & Loan Ass'n of Detroit, 622 F.2d 918, 923 (6th Cir.1980) (quoting 12 U.S.C. § 2601(a)). "Although the `settlement process' targeted by the statute was originally limited to the negotiation and execution of mortgage contracts, the scope of the statute's provisions was expanded in 1990 to encompass loan servicing." Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 665-66 (9th Cir.2012) (citations omitted). As a remedial statute, RESPA is construed broadly to effectuate its purposes. Carter v. Welles-Bowen Realty, Inc., 553 F.3d 979, 985-86, n. 5 (6th Cir.2009); see also Medrano, 704 F.3d at 665-66 (citations omitted) (internal quotation marks omitted) ("RESPA's provisions relating to loan servicing procedures should be construed liberally to serve the statute's remedial purpose.").
The relevant portions of RESPA
12 U.S.C. § 2605(e)(1)(B) (2006). Second, having received a QWR, the law places an obligation upon the servicer to respond:
12 U.S.C. § 2605(e)(2). Third, having received a QWR, a servicer is forbidden, during a limited response period, to report on the borrower's credit:
12 U.S.C. § 2605(e)(3). Finally, in the event a violation can be proven, RESPA provides for the recovery of certain limited categories of damages:
12 U.S.C. § 2605(f).
Each of these four parts shall be considered — drawing reasonable inferences in favor of each party when considering summary judgment against each.
For a communication from borrower to servicer to count as a QWR for purposes of § 2605, it must be written and not be a mere notice on a payment medium supplied by the servicer. 12 U.S.C. § 2605(e)(1)(B). In this case, the correspondence was a letter which denominated itself a QWR. (Doc. 43, Ex. A-10, QWR at 53-54). It must enable the servicer to identify the name and account of the borrower. 12 U.S.C. § 2605(e)(1)(B)(i). This did. (Doc. 43, Ex. A-10, QWR at 53 (stating the name, address, telephone, e-mail, and account number of Christine Marais)). It must also state reasons, to the extent applicable, that the borrower believes the account to be in error and sufficiently detail any other information sought. 12 U.S.C. § 2605(e)(1)(B)(ii). In this case, the QWR explained that the account was in error because, in addition to other reasons given, "payments made during the year 2008 and 2009 were misapplied to the account or declared late when, in fact, they were timely [and] [l]ate fees were charged despite a written repayment agreement from Chase to the contrary." (Doc. 43, Ex. A-10, QWR at 53-45). It also sought 22 specific pieces of information, many of which related to the alleged error. Id. There is no reasonable dispute that Marais sent Chase a valid QWR.
12 U.S.C. § 2605(e)(2) provides three ways in which a servicer can validly respond to a QWR. A servicer can make corrections to the account. 12 U.S.C. § 2605(e)(2)(A). A servicer, following an investigation, can explain or clarify why the account is already correct. 12 U.S.C. § 2605(e)(2)(B). Or a servicer can, after an investigation, provide the borrower with a written explanation or clarification that includes information requested and explain why information not provided cannot be obtained or provided by the servicer. 12 U.S.C. § 2605(e)(2)(C).
Because these three methods of compliance are presented in the disjunctive, a servicer need not use all three response methods — indeed, § 2605(e)(2)(A) and (B) are, in most factual scenarios, mutually exclusive. However, common sense suggests, and the statute implies (by using language like "if applicable," "to the extent applicable," and qualifiers like "appropriate,") that, depending on the circumstances, one response method may be preferable above others. See 12 U.S.C. § 2605(e)(2). Chase argues against this line of thought. (Doc. 42, D. Mot. for SMJ at 8-9). Chase asserts that it is "entirely within the discretion of the servicer as to which option for responding it chooses to exercise." Id. at 9. However, none of the cases it cites for this proposition go quite so far
The undisputed record in this case demonstrates that Marais challenged, in her QWR, the correctness of her account and it is an open question on this factual record, whether that challenge has merit. The loan transaction history created by Chase, though far from clear, shows a large number of "UNAPPLIED" payments and fees with no explanation:
Date Amount "UNAPPLIED" Fee Amount 11/26/2007 $221.21 - 12/03/2007 $221.21 - 01/29/2007 - $15.00 02/23/2008 $118.73 - 03/21/2008 $118.76 - 03/24/2008 - $15.00 04/22/2008 $118.92 - 04/25/2008 - $15.00 05/22/2008 $118.82 - 06/23/2008 $118.92 - 06/27/2008 - $15.00 07/23/2008 $118.92 - 07/25/2008 - $14.00 08/22/2008 $118.92 - 08/29/2008 - $14.00 09/22/2008 $118.92 - 09/26/2008 - $14.00
10/22/2008 $118.92 - 10/29/2008 - $14.00 11/22/2008 $140.34 - 11/26/2008 - $14.00 12/22/2008 $140.34 - 1/13/2009 $1,350.51 -
(Doc. 42, Ex. A-1, Loan Trans. Hist. at 69-75; see also Doc. 43, Ex. C, Summerford Depo. Excerpt at 54:10-54:16, 62:9-62:20, 77:4-78:5 (Chase's Rule 30(b)(6) deponent admitting he does not know what to make of the fees assessed)). In addition, the numerous default notices sent to Marais all indicate payment due dates on the first of each month. (Doc. 43, Ex. A-6, Default Notices at 39-48). The repayment plan worked-out between Chase and Marais, however, indicates due dates of the 23rd or 24th of each month. (Doc. 43, Ex. A-4, Repay Plan at 26). Yet, nearly every month, regardless of when Marais paid, Chase assessed a late fee of $53.24 on the 16th or 17th of the month. (Doc. 42, Ex. A-1, Loan Trans. Hist. at 69-74).
Thus, when presented with Marais' QWR alleging that her account had incorrectly been assessed fees and that her payments had not been allocated correctly, Chase, pursuant to § 2605(e)(2)(A or B), ought to have had something to say about the matter — either justifying and explaining these anomalies or correcting them.
It is undisputed that Chase did not correct the account. (Doc. 43, Ex. B, Chase Disc. Resp. at 5-6 (admitting that it did not correct the account in light of the absence of errors)). This, according to Chase, is because it did not need correcting. Id. Thus, there is no dispute that Chase did not comply, or even seek to comply, with 12 U.S.C. § 2605(e)(2)(A).
A servicer seeking to comply with RESPA may,
12 U.S.C. § 2605(e)(2)(B)(i). There are two stumbling blocks in this requirement for Chase. First, is that some explanation is in order. That is, the statute demands "a written explanation or clarification that includes ... a statement of the reasons for which the servicer believes the account of the borrower is correct...." 12 U.S.C. § 2605(e)(2)(B)(i). Second, is that Chase was obliged to respond "after conducting an investigation...." Id. Or, to put it another way, Chase was obliged to investigate Marais' claims.
An investigation is, "[t]he action of investigating; the making of a search or inquiry; systematic examination; careful and minute research." Oxford English Dictionary (2d. ed.1989). The undisputed testimony from Chase' duly selected deponent, is that Chase investigated nothing. Rather, when Marais' QWR arrived, Chase stamped it received. (Doc. 43, Ex. C. Summerfield Depo. at 22:2-22:10). Then Chase verified the loan number, pulled
Chase also made no effort, beyond what has already been discussed, to explain or clarify why it felt that Marais' account was correct or the fees assessed against her appropriate. The letter Chase sent to Marais was, according to Chase's own testimony, a form letter with no individualized features apart from the list of enclosures. (Doc. 43, Ex. C. Summerfield Depo. at 27:12-28:10). Needless to say, it therefore explained nothing whatsoever about Marais' individual circumstances or her account. (Doc. 42, Ex. A-1, QWR Resp. Ltr. at 1-2). The letter not only does not offer "a written explanation or clarification ... of [] reasons for which the servicer believes the account of the borrower is correct," it does not even assert that Chase indeed believes Marais' account is correct. Id.; 12 U.S.C. § 2605(e)(2)(B)(i).
Chase argues that the enclosures to the letter, were self-explanatory and fulfilled Chase's responsibilities under RESPA. (Doc. 42, D. Mot. for SMJ at 11-13). In some circumstances, this might be a reasonable view. But where, as here, a borrower alleges that payments have been misapplied and her account has been incorrectly charged fees, it clarifies and explains nothing for the servicer to simply send the borrower new copies of documents she probably already has showing that the fees were indeed charged and the payments unallocated. For example, imagine that you are dining in a restaurant and notice an apparent error on the bill. You question the waiter about the error and he, without comment or dialogue, simply returns with a new copy of the exact same bill. Would you feel you had received a "a written explanation or clarification" or that the waiter had "conduct[ed] an investigation" into the alleged error? 12 U.S.C. § 2605(e)(2)(B). What Chase has done here is no different. Indeed, some of the best evidence in the record supporting Marais' claim that there were mistakes made on her account comes from the very documents Chase included in its supposedly explanatory response. See supra p. 722-23. Under the circumstances, and even drawing all reasonable inferences in Chase' favor, Chase did not comply with 12 U.S.C. § 2605(e)(2)(B).
A servicer, seeking to fulfill its obligation to respond to a QWR, may,
12 U.S.C. § 2605(e)(2)(C)(i).
Here again, as in its attempt to satisfy § 2605(e)(2)(B), Chase is foiled by its failure to investigate, explain, and clarify. That is, both § 2605(e)(2)(B) and § 2605(e)(2)(C) require a servicer to "conduct[] an investigation" before providing the borrower with a response and that the response must offer an "explanation or
Marais alleged:
Id. at 54. Then, in an attempt to obtain information to substantiate these beliefs, Marais asked for, among other things:
Id. at 53.
In response, Chase provided Marais a copy of her note, security instrument (mortgage), loan transaction history, escrow disclosure statements, appraisal, and payoff quote. (Doc. 42, Ex. A-1, QWR Resp. Ltr. at 1). While this response met many of the 22 numbered information requests from Marais, it did not clearly provide the information requested in paragraphs 9, 12, 15, and 16 nor, more importantly, did it "expla[i]n[] or clarif[y]" the issue at the heart of Marais' QWR — that Marais believed her account was in error because payments had been misapplied, fees unjustly assessed, and payments counted late though they had not been. 12 U.S.C. § 2605(e)(2)(C)(i).
Chase would have this Court decide that because it provided documents satisfying some of the individual items of information requested by Marais, that it fully met its responsibilities under RESPA. But RESPA is to be read liberally, not niggardly. See Carter, 553 F.3d at 985-86, n. 5; Medrano, 704 F.3d at 665-66. While this Court does not suggest that a servicer must, in order to avoid liability under RESPA, respond in detail to every aspect of every QWR tendered by a borrower, the servicer must, whatever response it chooses to make, fairly meet the substance of the QWR. In this case, Marais' information requests were generated because of her belief that her payments had been misapplied, fees wrongfully assessed, and payments counted late when they had been timely. (Doc. 43, Ex. A-10, QWR at 53-54). Under the circumstances, RESPA required a response that dealt with this
Chase was forbidden, under 12 U.S.C. § 2605(e)(3), to report Marais' alleged default for 60 days, beginning on the date Chase received Marais' QWR. Marais alleges that Chase ignored this obligation and reported her anyway. As purported proof, she submits a copy of her Equifax Credit Report. (Doc. 43, Ex. A-13, Credit Report at 59-61). The report indeed shows that Chase reported late payments for the period of 2008-09. Id. However, Marais apparently fails to note that the Equifax report lists the date the account information was reported to Equifax: 04/2011. Id. at 61. Since she sent the QWR to Chase on January 3, 2011 and Chase received it on January 6, 2011, any date in April of 2011, except April 1-4, would have been outside the 60-day window.
The damages available in a RESPA claim like that confronted here are "actual damages to the borrower as a result of the failure" to comply with RESPA and up to $1,000
Dunkle v. Bank of N.Y. Mellon, 3:11-cv-1242, 2013 WL 1910310, at *6, 2013 U.S. Dist. LEXIS 66359, *16-17 (M.D.Tenn. April 16, 2013) (citations edited for uniformity). In other words, courts in this circuit and district have previously found that the costs of preparing and sending a QWR, as well as costs of filing suit to enforce RESPA, do not satisfy the actual damages requirement. Tsakanikas, 2012 WL 6042836, *3-4, 2012 U.S. Dist. LEXIS 172058, *10-11. Tracing such decisions to their roots, the rationale was that finding otherwise would mean that every RESPA suit would have damages built-in "because every mortgagor who sent a QWR would suffer actual damages simply by sending the request and regardless of whether the loan servicer's response was deficient." Id.; see also Kevelighan v. Trott & Trott, P.C., 09-cv12543, 2011 WL 2076336, *4, 2011 U.S. Dist. LEXIS 56354, *10-11 (E.D.Mich. May 26, 2011) (citing Lal v. Am. Home Servicing, Inc., 680 F.Supp.2d 1218, 1223 (E.D.Cal.2010)).
However, the Sixth Circuit Opinion, issued regarding an earlier decision in this case, implies a new course for the courts in this circuit. Marais, 736 F.3d at 720-22. In reversing this Court, the Sixth Circuit, commented:
Marais, 736 F.3d at 721. The Circuit, in ruling for Marais, would not likely have suggested consideration of this argument if it thought our prior precedent clearly settled the issue against Marais. Since our prior precedent, reviewed above, would, if followed, settle the issue against Marais, the Court takes the Circuit's statement as a directive to reconsider the analysis employed in previous district decisions before the Circuit does it for us. See also Mellentine v. Ameriquest Mortg. Co., 515 Fed.Appx. 419, 424-25 (6th Cir.2013) (showing the softening stance on qualifying damages by holding that a plaintiff who alleged amorphous "damages in an amount not yet ascertained, to be proven at trial" could satisfy the actual damages element); Houston v. U.S. Bank Home Mortg. Wis. Servicing, 505 Fed.Appx. 543, 548 n. 6 (6th Cir.2012) (holding that even emotional damages could constitute "actual damages" for purposes of § 2605(f)(1)(A)).
This Court still recognizes that there is some appeal in the argument that any RESPA violation will have damages built-in if actual damages are construed broadly enough to encompass costs associated with the QWR and suit to enforce RESPA. But, upon reflection, such arguments prove too much. Every civil case, after all, has some damages built-in. Recklessly discharging a gun in the air would satisfy most elements of a tort. But the claim is not complete until the bullet turns Earthward
The Court also recognizes that there is great merit in the general proposition that damages are consequences that flow from the wrongful action and must, therefore, succeed the wrongful act in time. A headache that began hours before a car crash cannot be the result of the crash or considered as damages from it. However, in some cases, a wrongful act can cause damages retroactively. If a fellow pays a painter to paint his house, the payment is a cost. If the painter in fact, paints the house, the cost remains a cost. If the painter does not paint the house and instead, absconds with the money, the cost (though already incurred and paid) transmogrifies into damages.
The term "actual damages" is not defined within RESPA. 12 U.S.C. § 2602 (2006) (definitions do not list "actual damages" or even "damages"). Thus, the Court turns to the common meaning, "[a]n amount awarded to a complainant to compensate for a proven injury or loss; damages that repay actual losses." Black's Law Dictionary (9th ed.2009). In addition, the Court notes that, "[a]s a remedial statute, RESPA is construed broadly to effectuate its purposes." Marais, 736 F.3d at 719 (citing Carter, 553 F.3d at 985-86, n. 5; Medrano, 704 F.3d at 665-66). Hence, with these considerations in mind, and looking at the generous treatment given to damages in Mellentine, and Houston, as well as by the Sixth Circuit in this case, the Court construes actual damages as encompassing all provable injuries that are the result of Chase' response to receiving the QWR. Or, to put a finer point on it, all expenses, costs, fees, and injuries fairly attributable to Chase's failure to respond appropriately to the QWR, even if incurred before the failure to respond, are included.
Marais submits receipts showing postage for certified mailing of the QWR. (Doc. 43, Ex. A-10, QWR at 55 (certified mail receipts)). Though she incurred these expenses and paid them prior to Chase's deficient response, these are damages. That is, when they were incurred they were merely the transaction costs incident to correcting Marais' account or obtaining information about her loan. However, when Chase failed to do that which it was obligated to do, these costs metamorphosed into damages. Thus, it was Chase's failure that caused the metamorphosis; thus, it was Chase that caused the damages; hence, these damages, née costs, are "actual damages to the borrower as a result of [Chase's] failure...." 12 U.S.C. § 2605(f)(1)(A).
The finding above, that Marais can establish damages for QWR expenses, already
Yet, there is at least a question of fact as to whether there are other types of actual damages attributable to Chase's failure to properly respond to the QWR. The loan transaction history, though far from clear, shows a large number of "UNAPPLIED" payments and fees with no explanation. See supra p. 722 (summarizing, in table format, Doc. 42, Ex. A-1, Loan Trans. Hist. at 69-74); (see also Doc. 43, Ex. C, Summerford Depo. Excerpt at 54:10-54:16, 62:9-62:20, 77:4-78:5 (Chase's Rule 30(b)(6) deponent admitting he does not know what to make of the fees assessed)). In addition, the numerous default notices sent to Marais all indicate payment due dates of the first of the month. (Doc. 43, Ex. A-6, Default Notices at 39-48). The repayment plan worked-out between Chase and Marais indicates due dates on the 23rd or 24th of each month. (Doc. 43, Ex. A-4, Repay Plan at 26). But, nearly every month, regardless of when Marais paid, Chase assessed a late fee of $53.24 on the 16th or 17th of the month. (Doc. 42, Ex. A-1, Loan Trans. Hist. at 69-74).
In other words, on this record, there is a question of fact as to whether the principal amount to be repaid, as stated by Chase, was accurate. It may well have been. But, assuming, arguendo, that the amount was inaccurate, some interest damages would likely be proper. That is, interest is paid based upon principal balance outstanding. If that goes up, the proportion of interest in each payment goes up (though the total payment amount remains the same). If that goes down, the reverse is true. If Chase had responded to the QWR by correcting Marais' account (still assuming that it needed correction), the payments Marais made prior to ceasing performance in 2010 would have been corrected, allocated to their rightful place, and thus would have remained payments. However, because Chase did not correct Marais' account and this lawsuit had to be filed, those misapportioned payments, in this hypothetical, are no longer payments — they are, to the extent they were misapportioned, damages.
Federal Rule of Civil Procedure 26(a)(1)(A)(iii) requires a party to make initial disclosure of "a computation of each category of damages claimed by the disclosing party...." Chase's motion argues
Fed.R.Civ.P. 37(c)(1)(A-B). In other words, notwithstanding the tough language in parts of Rule 37(c)(1), the remainder of the Rule allows a Court to exercise its discretion to impose a large range of discovery sanctions upon a violator including, if the Court deems the violation "substantially justified" or "harmless," no sanction at all.
In this case, Marais' damages disclosure with respect to her RESPA claim read, "Count Two: $1,000 plus attorneys' fees and costs." (Doc. 42, Ex. C, Marais Int. Disc. at 2). As RESPA, § 2605(f), limits damages categories to "actual damages" and statutory damages based on a pattern and practice of non-compliance, this may be fairly read as a statement that Marais believed her damages in the categories of actual and statutory damages were $1,000. See Fed.R.Civ.P. 26(a)(1)(A)(iii) (requiring disclosure of "each category" of damages).
What is missing from Marais' disclosure, even under this generous reading, is the
Chase's motion for summary judgment (Doc. 42) is
Even drawing all reasonable inferences in favor of Chase, Chase violated RESPA in that it failed to appropriately respond to Marais' QWR. Drawing all reasonable inferences in favor either party, there is a question of fact as to whether Chase violated RESPA's requirement that it delay credit reporting about Marais during the 60-day period after receiving Marais' QWR. Finally, drawing all reasonable inferences in favor of Marais, Marais introduced evidence of actual damages sufficient to create a genuine issue of material fact as to whether she sustained such damages. And thus, the question of whether statutory damages can preserve a claim with no actual damages is moot.
The Clerk is directed to
The parties are directed to take whatever discovery is appropriate to clarify how payments were allocated, why fees were assessed, what interest, if any, was overpaid, when Chase reported Marais' account to consumer reporting agencies, what actual damages Marais suffered as a result of Chase' deficient response to the QWR and (if applicable) consumer reporting violations, and whether Chase had a pattern and practice of noncompliance with RESPA. This limited discovery period shall begin on the date this order is issued and shall extend for 90 days. 30 days after the conclusion of discovery (which is 120 days
In light of the Sixth Circuit's reversal and this Court's exercise of jurisdiction over Marais' RESPA claim, the Court retains jurisdiction over Marais' state law claims because they are part of the same controversy. See 28 U.S.C. § 1367 (2012). Though successive motions for summary judgment are not typical, the Court will consider, should the parties wish to file them, summary judgment motions on the state law claims also. If the parties file such motions, they shall be briefed on the same schedule as the damages briefing.
Should the parties wish to engage in settlement discussions or mediation, the Court will, upon joint motion of the parties, stay the foregoing schedule. The parties may contact my chambers or Judge Abel's chambers should they desire assistance in arranging mediation or other aids to settlement.
