WILLIAM J. MARTINEZ, District Judge.
This matter is before the Court on (1) Defendants Ocwen Loan Servicing, LLC ("Ocwen") and Nomura Credit and Capital, Inc.'s ("NCCI's") Motion for Summary Judgment (ECF No. 247); (2) Ocwen and NCCI's Amended Motion to Strike Declarations (ECF No. 264); and (3) Defendant Castle Meinhold & Stawiarski, LLC's ("CMS's") Motion for Summary Judgment (ECF No. 182). The motions are fully briefed and ripe for disposition. (See also ECF Nos. 251, 252, 259, 260, 265.) For the following reasons, Ocwen and NCCI's Motion for Summary Judgment is GRANTED, Ocwen and NCCI's Amended Motion to Strike is GRANTED IN PART and DENIED IN PART, and CMS's Motion for Summary Judgment is GRANTED.
This is a case about an individual— Plaintiff Glen Llewellyn—who refinanced a mortgage loan, but the company servicing the original loan, Ocwen, did not receive the refinancing proceeds intended to pay off the loan. When Plaintiff understandably stopped making monthly payments on the original loan, Ocwen understandably began treating the original loan as in default. The entity allegedly responsible for taking receipt of the refinancing funds has been named as a defendant but has not appeared in the action. Plaintiff's claims against Ocwen and NCCI, Ocwen's parent, relate to Ocwen's negative reporting of Plaintiff to consumer reporting agencies ("CRAs"). Plaintiff's claims against CMS relate to its initiation of foreclosure proceedings on the underlying property on behalf of Ocwen.
Unless otherwise noted, the following facts are not in dispute. On March 7, 2006, Plaintiff purchased the property located at 7915 South Coolidge Way, Aurora, Colorado, executing two notes with Allstate Home Loans, Inc. d/b/a Allstate Funding ("Allstate") totaling $559,980.00. (ECF No. 247, at 5 ¶¶ 1-3; id. Exs. A-4, A-6; ECF No. 251, at 7 ¶ 9.) Plaintiff was required to make monthly payments on the loan to Equity Pacific Mortgage, Inc. ("EPMI"), the loan servicer, and Plaintiff made the first monthly payment for May 2006. (ECF No. 247, at 6 ¶¶ 4, 8-9; ECF No. 251, at 3
On May 15, 2006, the right to service the loan was transferred from EPMI to Ocwen. (ECF No. 247, at 7 ¶ 10; id. Ex. A-16; ECF No. 251, at 3.) Ocwen serviced the loan as the attorney-in-fact for NCCI, the investor that purchased the loan on the secondary market. (ECF No. 247, at 7 ¶ 12; id. Ex. A-12 ¶ 7; ECF No. 251, at 3 ¶ 12.) Plaintiff does not appear to dispute that he knew of this transfer. (ECF No. 247, at 7-8 ¶¶ 15-21, 23; ECF No. 251, at 3.) Plaintiff's next payment was due to Ocwen by June 1, 2006. (ECF No. 247, at 7 ¶ 16; ECF No. 251, at 3.)
On June 1, 2006, Plaintiff closed on a refinancing of the loan. (ECF No. 247, at 9 ¶ 29; ECF No. 251, at 8 ¶ 18.) Plaintiff did not inform the closing agent, Staci Krehbiel, that servicing of the loan had been transferred from EPMI to Ocwen. (ECF No. 247, at 9 ¶ 29; ECF No. 251, at
On June 14, 2006, the title company wired the refinancing funds to Washington Mutual Bank, identifying EPMI as the beneficiary. (ECF No. 247, at 11 ¶ 39; ECF No. 251, at 10 ¶ 29.) On July 11, 2006, Kevin Rider at EPMI wired the funds to Allstate. (ECF No. 247, at 11 ¶ 42; id. Ex. A-26; ECF No. 251, at 10 ¶ 31.) The record does not suggest that Ocwen or NCCI ever received the refinancing funds from Allstate.
On July 17, 2006, Ocwen issued Plaintiff a past-due notice on the loan. (ECF No. 251, at 10 ¶ 33; id. Ex. B at 19; ECF No. 260, at 11
On August 7, 2006, Plaintiff again spoke with an Ocwen representative over the telephone. (ECF No. 247, at 12 ¶ 46-48; ECF No. 251, at 11 ¶ 36; id. Ex. B at 18.) Plaintiff told the representative that Plaintiff had refinanced the loan with Kevin Rider (at EPMI) and that the loan was with Washington Mutual, but the representative told Plaintiff that no one had sent any payoff funds to Ocwen and advised Plaintiff to contact Washington Mutual to get details about the refinancing. (Id.)
After sending Plaintiff another past due notice on August 9, 2006 (ECF No. 251, at 11 ¶ 38; id. Ex. D-5; ECF No. 260, at 7 ¶ 38), Ocwen initiated foreclosure on the property on August 29, 2006 (ECF No. 251, at 11 ¶ 41; id. Ex. B at 18; ECF No. 260, at 7
On September 25, 2006, Plaintiff faxed to CMS a copy of the HUD Settlement Statement (showing that EPMI was to receive the refinancing funds) and a letter from Washington Mutual to Plaintiff stating, "If Ocwen was to be paid off during the refinance and was not, please contact your closing agent for research on the payoff wire." (ECF No. 251, at 12 ¶ 45; id. Ex. D-4; ECF No. 260, at 7.) During October 2006, Plaintiff began increasing the frequency of his complaints to Ocwen
On October 19, 2006, Ocwen initiated an investigation into Plaintiff's concerns, and CMS informed Plaintiff that it had been directed by Ocwen to place its foreclosure file on hold. (ECF No. 251, at 14-15 ¶¶ 69-70; id. Exs. D-9, D-10; ECF No. 260, at 11.) Despite transferring its servicing rights over the loan to NCC Servicing, LLC on October 20 (ECF No. 247, at 14 ¶ 65; ECF No. 251, at 3), Ocwen continued investigating the issue, requesting various documents from Plaintiff to prove that the refinancing funds had been sent to EPMI. (ECF No. 247, at 15 ¶¶ 69, 71; ECF No. 251, at 3, 17 ¶ 90; id. Exs. D-13, D-14, D-15; ECF No. 260, at 11.) During this investigation, Ocwen continued to report to CRAs that the account was past due as of September 30, 2006. (ECF No. 251, at 15-19 ¶ 77, 80, 95, 98, 101; id. Ex. B at 6-7
(ECF No. 251, at 18 ¶ 99; id. Ex. G-71.)
Plaintiff's attorney made attempts throughout January and early February 2007 to get Ocwen to reverse its previous negative reports to CRAs. (See, e.g., ECF No. 251, at 19-21 ¶¶ 105, 110, 115; ECF No. 260, at 10-11.) On February 15, 2007, Ocwen finally "requested that the [CRAs] delete all of Ocwen's credit reporting." (ECF No. 247, at 17 ¶ 78; ECF No. 251, at 21-22 ¶¶ 120-121; id. Ex. G-19.)
Plaintiff filed this action on January 29, 2008, and filed the operative Second Amended Complaint on June 23, 2009. (ECF No. 1, 149.) He brings two sets of claims. The first are claims for theft and conversion against Allstate, based on the alleged theft of the refinancing funds. (ECF No. 149, at 7.)
The second set of claims are brought against Ocwen, NCCI, and CMS, the movants here. Specifically, Plaintiff brings
On March 18, 2011, Ocwen and NCCI filed their pending motion for summary judgment. (ECF No. 247.) Plaintiff has filed his Response (ECF No. 251), and Ocwen and NCCI have filed a Reply (ECF No. 260). Ocwen and NCCI also filed an Amended Motion to Strike Declarations (declarations filed by Plaintiff in response to Ocwen and NCCI's motion for summary judgment) (ECF No. 264), to which Plaintiff has filed a Response (ECF No. 265).
CMS has also filed a motion for summary judgment (ECF No. 182), to which Plaintiff filed a Response (ECF No. 252), and CMS filed a Reply (ECF No. 259).
On February 9, 2011, this action was reassigned to the undersigned. (ECF No. 232.)
The Court will first address Ocwen and NCCI's Amended Motion to Strike Declarations, which will resolve what evidence will be considered by the Court on Ocwen and NCCI's motion for summary judgment. The Court will then proceed to analyze the pending motions for summary judgment.
In the Amended Motion to Strike, Ocwen and NCCI move the Court to strike four declarations filed by Plaintiff in response to their motion for summary judgment: the declarations of William Stollar (Plaintiff's accountant), John M. McNamara, Jr. (Plaintiff's counsel), Candace Saport (Plaintiff's former mortgage broker), and Plaintiff himself. (See ECF No. 264.)
"Motions to strike are disfavored, particularly in the context of motions for summary judgment." Lobato v. Ford, No. 05-cv-01437, 2007 WL 2593485, *11 (D.Colo. Sept. 5, 2007); see also Alexander v. Archuleta Cnty., No. 08-cv-00912, 2009 WL 3245915, at *4 (D.Colo. Oct. 2, 2009) ("[S]triking affidavits is disfavored in the context of a summary judgment motion. . . . [L]itigation should promote the finding of the truth, and, wherever possible, the resolution of cases on their merits.") (internal citations and quotation marks omitted). A decision whether to grant or deny a motion to strike lies "within the sound discretion of the district court." Fed. Deposit Ins. Corp. v. Isham, 782 F.Supp. 524, 530 (D.Colo.1992).
Ocwen and NCCI argue that the Declaration of William Stollar (ECF No. 251, Ex. E) should be stricken because Stollar was not previously formally disclosed as a fact witness in the action, nor was he disclosed in Plaintiff's discovery responses. (ECF No. 264, at 3-6.) Plaintiff appears to concede that he did not formally disclose Stollar as a fact witness, but argues
Federal Rule of Civil Procedure 37(c)(1) provides, "If a party fails to . . . identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that . . . witness . . . unless the failure was substantially justified or is harmless." "The determination of whether a Rule 26(a) violation is justified or harmless is entrusted to the broad discretion of the district court." Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir.1999) (discussing factors relevant to whether failure was justified or harmless).
Fed.R.Civ.P. 26(e) advisory committee's note to the 1993 amendments (emphasis added); see also Gutierrez v. AT & T Broadband, LLC, 382 F.3d 725, 733 (7th Cir.2004) (affirming denial of motion to strike affidavit where, although defendants did not identify the affiant in their Rule 26(a) or 26(e) disclosures, plaintiffs knew of the affiant and the fact that she possessed relevant information through depositions in the case).
The evidence indicates that Ocwen and NCCI knew during Plaintiff's deposition that Stollar had discoverable information related to Plaintiff's purported damages. Indeed, during the deposition, Ocwen and NCCI initiated questioning regarding Stollar, questioning Plaintiff regarding a produced document that had been created by Stollar for purposes of the litigation. (ECF No. 265, Ex. A at 58:15-60:24, 71:20-77:24, 81:2-16.) After not deposing Stollar, Ocwen and NCCI cannot now complain that they are somehow prejudiced by the filing of Stollar's declaration. See Ojeda-Sanchez v. Bland Farms, LLC, No. 608CV096, 2010 WL 2382452, at *2 (S.D.Ga. June 14, 2010) ("From this [deposition testimony], Plaintiffs should have been aware that [the individual] had discoverable information. . . . [T]he Court will not strike [the] affidavit simply because Plaintiffs neglected to depose [the individual]."). The Court denies the Amended Motion to Strike to the Stollar declaration.
Ocwen and NCCI argue that the Declaration of John N. McNamara, Jr. (ECF No. 251, Ex. G) should be stricken because McNamara was not disclosed as a fact witness in the case, and also because McNamara's attempt to both serve as counsel in the case and provide testimony regarding underlying facts constitutes professional misconduct. (Id. at 3-8.) In response, Plaintiff argues that Ocwen and NCCI have always known about McNamara's involvement in the underlying events, and argue that the declaration does not violate rules of professional conduct because McNamara is not a necessary witness, his statements pertain to uncontested facts, and he is allowed to provide such factual testimony prior to trial. (Id. at 6-10.)
As Plaintiff concedes, the information contained in paragraphs 2 through 9 of McNamara's declaration is reflected in other evidence in the case. (ECF No. 265, at 8 & n. 6.) Specifically, McNamara's statements in paragraphs 2 through 9 of
Ocwen and NCCI argue that the declarations of Plaintiff and Candace Saport (ECF No. 251, Exs. D & J, respectively) should be stricken because the declarations contradict their deposition testimony. (Id. at 8-11.) "[I]n determining whether a material issue of fact exists [at summary judgment], an affidavit may not be disregarded because it conflicts with the affiant's prior sworn statements. . . . [H]owever, courts [should] disregard a contrary affidavit when they conclude that it constitutes an attempt to create a sham fact issue." Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986).
The Court denies the Amended Motion to Strike as to the Declaration of Glen Llewellyn. (ECF No. 251, Ex. D.) The most substantial example provided by Ocwen and NCCI to show that Plaintiff's declaration is inconsistent with his deposition testimony is that Plaintiff's declaration provides details regarding the various properties he purchased in the past, but during deposition he testified that he could not recall details regarding the purchases and financing of the properties. (ECF No. 264, at 8 & n. 17.) However, importantly, the parties do not appear to actually dispute any facts regarding Plaintiff's purchasing of these properties, including the amount of the original loans, whether they were ever refinanced, and whether Plaintiff defaulted on the loans. Also, it appears that Ocwen and NCCI have had for quite some time, including during Plaintiff's deposition, the underlying documents evidencing these purchases and loans. Thus, it does not appear that Plaintiff's inclusion of this information in his declaration has in any way "sandbagged" Ocwen and NCCI, or created a "sham" factual dispute where no factual dispute actually exists. Cf. Mitchael v. Intracorp, Inc., 179 F.3d 847, 854 (10th Cir.1999) (holding that affidavit submitted by plaintiffs was properly struck because it represented "an attempt to create a sham issue of fact" and was submitted in an attempt to "sandbag[]" defendants); Juarez v. Utah, 263 Fed.Appx. 726, 735 (10th Cir.2008) (affirming striking of affidavit containing detailed information from the plaintiff's journal, where the plaintiff had not produced the journal and where during her previous deposition she could not recall the contents of the journal).
The Court also denies the Amended Motion to Strike as to the Saport declaration.
Accordingly, in analyzing Ocwen and NCCI's motion for summary judgment, the Court will consider the Stollar, Llewellyn, and Saport declarations, as well as paragraphs 1 and 10 of, and exhibits to, the McNamara declaration.
Summary judgment is warranted under Federal Rule of Civil Procedure 56 "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." Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When, as here, "the moving party does not bear the ultimate burden of persuasion at trial, it may satisfy its burden at the summary judgment stage by identifying a lack of evidence for the nonmovant on an essential element of the nonmovant's claim." Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th Cir.2001) (internal quotation marks omitted). The nonmoving party may not rest solely on the allegations in the pleadings, but instead must designate "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Fed.R.Civ.P. 56(e).
Only disputes over material facts can create a genuine issue for trial and preclude summary judgment. Faustin v. City & Cnty. of Denver, 423 F.3d 1192, 1198 (10th Cir.2005). A disputed fact is "material" if under the relevant substantive law it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir.2001). An issue is "genuine" if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.1997). When reviewing a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. See McBeth v. Himes, 598 F.3d 708, 715 (10th Cir.2010).
Plaintiff's FCRA claim against Ocwen and NCCI, brought under 15 U.S.C. § 1681s-2(b), alleges, inter alia, that Ocwen furnished inaccurate credit information to CRAs and failed to conduct a reasonable or timely investigation after receiving notice from CRAs that Plaintiff had disputed the credit information. (ECF No. 149, at 8-9.) 15 U.S.C. § 1681s-2(b)(1) provides, inter alia,
In their motion for summary judgment, Ocwen and NCCI argue that the FCRA claim should be dismissed because Ocwen accurately reported the loan as being in default (because Ocwen was never paid), and also argue that Ocwen's investigation complied with section 1681s-2(b)(1). (Id. at 25-28.) In response, Plaintiff argues that the loan was never in default because he refinanced it, and that Ocwen's investigation failed to comply with section 1681s-2(b)(1) because Plaintiff repeatedly provided Ocwen with evidence of the refinancing. (ECF No. 251, at 23-29.)
Ocwen's duty under section 1681s-2(b) to conduct an investigation was not triggered until it was notified by a CRA of a dispute regarding information previously furnished to the CRA; not when Plaintiff contacted Ocwen disputing the information. See Pinson v. Equifax Credit Info. Servs., Inc., 316 Fed.Appx. 744, 751 (10th Cir.2009) (affirming dismissal of FCRA claim where plaintiff consumers only alleged that they themselves, and not a CRA, had notified the defendant of the dispute); see also Judge Krieger's previous order in this action on motions to dismiss, ECF No. 112, at 15 ("[C]ourts have nearly uniformly concluded that the duty to investigate disputes under § 1681-2(b) to arise only when the person furnishing the information is notified of the dispute by a[CRA], not when the borrower directly contacts the person furnishing the information.").
Thus, Ocwen's duty under the FCRA was not triggered by Plaintiff's June 5, 2006 or August 7, 2006 telephone calls with Ocwen representatives, nor by Plaintiff's correspondence in late September 2006 and early October 2006 providing Ocwen with copies of the HUD Settlement Statement and Washington Mutual letter. Ocwen concedes that its duty under the statute was triggered on October 23, 2006 when a CRA, Transunion, notified it of the dispute. (ECF No. 260, at 13-14.)
The first evidence suggesting that Ocwen's investigation may have concluded is CMS's December 5, 2006 letter to Plaintiff's attorney stating, "[O]ur client has indicated that this loan should have been paid-in-full. As such, our client has advised us to close . . . our foreclosure file on this case. Our client has also indicated that Mr. Llewellyn's credit report will be reversed. . . ." (ECF No. 251, Ex. G-7.) In their motion, Ocwen and NCCI focus on a later date, January 24, 2007, the date on which Michael Barron of Allstate executed a satisfaction of the deed of trust on the
The Court agrees with Plaintiff that this evidence of conduct by Ocwen is also attributable to NCCI, as Ocwen's principal on a theory of vicarious liability, a point NCCI does not specifically dispute. See, e.g., Jones v. Federated Fin. Reserve Corp., 144 F.3d 961, 964-66 (6th Cir.1998) (holding that a principal can be vicariously liable under the FCRA its agent's acts, under common law agency principles); Cole v. Am. Family Mut. Ins. Co., 410 F.Supp.2d 1020, 1025-26 (D.Kan.2006) (concluding that whether employer should be held liable under FCRA for acts of its employee under an agency theory was issue for the trier of fact).
Plaintiff argues that Ocwen's investigation beginning in October "should have [been] completed . . . immediately [rather than on December 5] because [Ocwen] had already received from Llewellyn, among other things, the . . . HUD Settlement Statement and . . . letter from Washington Mutual." (ECF No. 251, at 26.) The Court disagrees. The HUD Settlement Statement merely indicates to whom the refinancing funds were supposed to be paid. Given that Ocwen had not been paid, it did not act unreasonably by seeking actual proof of payment to EPMI. This is reinforced by the Washington Mutual letter itself, which directed Plaintiff to "contact [his] closing agent for research on the payoff wire." (Id. Ex. D-4.) Krehbiel finally faxed Ocwen proof of the payoff wire on November 21 (while shortly beforehand providing the information to CMS), which was just 14 days prior to CMS's December 5 letter. The Court concludes that CMS's investigation was not unreasonably long under the FCRA.
Plaintiff has come forward with some evidence of conduct by Ocwen between December 5, 2006 and February 15, 2007 that is proscribed by the FCRA. However, as discussed infra, summary judgment is appropriate on Plaintiff's FCRA claim against Ocwen and NCCI because Plaintiff has failed to come forward with sufficient evidence showing damages caused by Ocwen and NCCI's conduct during that time period.
Ocwen and NCCI argue that Plaintiff has not created a triable issue as to whether he suffered any actual damages as a result of Ocwen's credit reporting. (ECF No. 247, at 28-32.) Specifically, they argue, inter alia, that any decline in Plaintiff's creditworthiness was not caused by Ocwen's reporting but instead on Plaintiff defaulting on sixteen mortgage loans, Plaintiff was still afforded significant credit during the relevant time period, and there is no evidence that Plaintiff was ever denied credit during the relevant time period. (See id.) In response, Plaintiff argues (notably, without any citations to the record) that after Ocwen's reporting
(ECF No. 251, at 29.) In so arguing, both parties focus only on actual economic harm.
A plaintiff may recover his actual damages caused by a defendant's negligent violations of the FCRA. See 15 U.S.C. § 1681o(a). Where a plaintiff fails to meet
The Court finds that Plaintiff's evidence of actual economic damages caused by Ocwen and NCCI is weak, and in particular concludes that Plaintiff has not created a triable issue as to whether he suffered actual economic damages caused by Ocwen and NCCI's conduct between December 5, 2006 and February 15, 2007.
First, the record indicates that Plaintiff did not produce during discovery, and has failed to point the Court to, a single formal credit application of his that was denied during the relevant time period. Second, even if he had, he would still face the additional hurdle of showing that the application was denied because of Ocwen's negative credit reporting. And third, even if he had made such a showing, he would face yet another hurdle of establishing that his eventual economic harm would not have occurred but for Ocwen's negative credit reporting.
The declarations of Plaintiff and Candace Saport do not create a triable issue as to whether Plaintiff's negative economic situation was caused by Ocwen's failure to correct his credit history from December 5, 2006 to February 15, 2007. Plaintiff's declaration states,
(Id. Ex. D ¶¶ 5, 9.) Saport's declaration states,
(ECF No. 251, Ex. J ¶ 10.) Given the evidence concerning loans Plaintiff was able to close during the relevant time period, and given that Plaintiff has not provided any specific evidence of a formal loan application being denied during the relevant time period, these vague and conclusory statements
Ocwen and NCCI also argue that Plaintiff has not created a triable issue as to whether he suffered emotional damages caused by Ocwen's credit reporting, focusing on the fact that the events in question took place in 2006, but Plaintiff did not seek any psychological counseling during the entire period 2002 through 2008. (ECF No. 247, at 32-33.) In response, Plaintiff argues that he was diagnosed with depression and sought psychological counseling in late 2009 as a result of Ocwen and NCCI's misconduct. (ECF No. 251, at 30.)
The only medical documentation advanced by Plaintiff in support of his claim for emotional damages are records from medical evaluations on August 25, 2009, October 13, 2009, and November 3, 2009. (See ECF No. 251, Ex. D-17.) Plaintiff argues that the records not only show the severity of his conditions, but also show that the conditions were caused by Ocwen's conduct. (See ECF No. 251, at 30.) The records do not so indicate. See, e.g., id. Ex. D-17, at L-Med 71 ("He is still avoiding the stressor of `looking into the paperwork' with his legal/past business issues. He is waiting for his attorney to get back with him on this matter."); id. at L-Med 81 (citing "financial loss" as an adverse life event he suffered); id. at L-Med 210 (stating that patient "owned own company and was previously wealthy but has had business trouble over last 2 years with associated stress"). These documents are entirely insufficient to create a triable issue as to whether Ocwen's negative credit
Plaintiff also advances his own declaration to support his claim for emotional damages caused by Ocwen's negative credit reporting. A plaintiff's own testimony can be sufficient in itself to establish emotional damages under the FCRA, but the testimony must contain more than conclusory allegations of harm and causation. See, e.g., Tilley v. Global Payments, Inc., 603 F.Supp.2d 1314, 1325 (D.Kan.2009) ("Actual damages under FCRA may include humiliation and embarrassment, even if the consumer suffered no out-of-pocket losses. A plaintiff must present evidence beyond conclusory allegations; however, a plaintiff's own testimony [can be] sufficient. . . ."); Riley v. Equifax Credit Info. Servs., Inc., 194 F.Supp.2d 1239, 1244-45 (S.D.Ala.2002) ("A claim for mental distress damages [under the FCRA] must be supported by something more than the plaintiff's own conclusory allegations.").
There is no doubt that Plaintiff's declaration details severe physical, emotional, and psychological conditions he was experiencing during this general time period. (See ECF No. 251, Ex. D ¶¶ 6-8, 11.) However, given that during this same time period Plaintiff defaulted on sixteen mortgage loans, destroying his business and livelihood, the Court concludes that his unsupported statements attributing these medical conditions to Ocwen's conduct are too conclusory to show that Ocwen caused Plaintiff's emotional harm.
Ocwen and NCCI also argue that Plaintiff has failed to raise a triable issue as to whether they "willfully" violated the FCRA, and that therefore Plaintiff cannot recover statutory or punitive damages. (ECF No. 247, at 34.) In response, Plaintiff argues that Ocwen and NCCI recklessly disregarded their obligations under the FCRA, which is sufficient to justify an award of statutory and/or punitive damages. (ECF No. 251, at 31-32.)
The Court concludes that Plaintiff has not raised a triable issue as to whether Ocwen and NCCI knowingly or recklessly violated the FCRA between December 5, 2006 and February 15, 2007. See 15 U.S.C. § 1681 n (allowing for statutory and/or punitive damages where person "willfully" fails to comply with the FCRA); Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 56-60, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007) (holding that "willful" violations of the FCRA include violations made knowingly or recklessly). Plaintiff has come forward with no evidence of why the delay occurred in correcting the negative credit reporting. The Court cannot assume knowing or reckless conduct simply based on the fact that this delay occurred. This (lack of) evidence at most suggests negligence by Ocwen, which is insufficient to show an entitlement to statutory or punitive damages. See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988) ("The word `willful' . . . is generally understood to refer to conduct that is not merely negligent."); Murray v. New Cingular Wireless Servs., Inc., 523 F.3d 719, 725-26 (7th Cir.2008) ("[S]tatutory damages are available only for willful violations of the Act, [which] means . . . something more than negligence . . . of the law's requirements.").
Accordingly, because Plaintiff has only come forward with some evidence of conduct by Ocwen between December 5, 2006 and February 15, 2007 that is proscribed by the FCRA, and because there is no triable issue as to whether Ocwen and NCCI's conduct during this period caused Plaintiff any damages, summary judgment is appropriate on Plaintiff's FCRA claim against Ocwen and NCCI.
Plaintiff's outrageous conduct claim against Ocwen and NCCI alleges that Defendants "engaged in extreme and outrageous conduct by knowingly providing false credit information to several credit bureaus." (ECF No. 149, at 8 ¶ 29.) Under Colorado law, the elements of the tort of outrageous conduct are: (1) the defendant engaged in extreme and outrageous conduct; (2) recklessly or with the intent of causing the plaintiff severe emotional distress; and (3) causing the plaintiff severe emotional distress. Culpepper v. Pearl St. Bldg., Inc., 877 P.2d 877, 882 (Colo.1994). Ocwen and NCCI argue that summary judgment is appropriate as to each of these elements. (ECF No. 247, at 34-37.) The Court agrees that there is no triable issue as to whether Ocwen and NCCI engaged in extreme and outrageous conduct, or whether Ocwen and NCCI acted recklessly or with the intent of causing Plaintiff severe emotional distress.
"[T]he level of outrageousness required [to create liability for this tort] is extremely high: . . . the conduct [must be] so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized
Culpepper, 877 P.2d at 882-83.
Ocwen's conduct over the entire time period is relevant to Plaintiff's outrageous conduct claim (unlike the FCRA claim, where Ocwen and NCCI's duty to act was not triggered until October 23, 2006 when Transunion contacted Ocwen). However, this does not change the equation very much for the following reasons.
Plaintiff emphasizes that he first informed Ocwen on June 5, 2006 that the loan had been refinanced, but on that call Plaintiff declined to give any details about the refinancing. Plaintiff next spoke with an Ocwen representative on August 7. During that call, Plaintiff advised the representative that he refinanced the loan with Kevin Rider and the loan was with Washington Mutual, but the Ocwen representative told Plaintiff that Ocwen had not received the refinancing funds and that Plaintiff should contact Washington Mutual. Plaintiff argues that Ocwen should have initiated an investigation following these two telephone calls. Certainly, given that Plaintiff did not provide any details regarding the refinancing to Ocwen on June 5, 2006 Ocwen's inactivity following that call did not amount to extreme and outrageous conduct, or show a sufficient intent to cause severe emotional distress. See Coors Brewing Co., 978 P.2d at 666; Culpepper, 877 P.2d at 882-83. The same is true of the August 7, 2006 telephone call. Although the Ocwen representative would have been providing good customer service by voluntarily initiating an investigation at that point, his/her failure to do so at most amounts to negligence. See Green v. Qwest Servs. Corp., 155 P.3d 383, 387 (Colo.App.2006) (affirming grant of summary judgment on outrageous conduct claim because, "[w]hile reasonable people could find defendants' alleged conduct was grossly negligent," "we conclude that it was not sufficiently egregious to establish a cause of action for outrageous conduct").
The undisputed evidence indicates that Plaintiff did not attempt to make further contact with Ocwen until September 25, 2006, when Plaintiff faxed to CMS a copy of the HUD Settlement Statement and Washington Mutual letter. Plaintiff then became much more active in October 2006 in complaining to Ocwen and CMS. However, the evidence also indicates that Ocwen proceeded to initiate an investigation on October 19, 2006. The Court concludes that this delay in initiating the investigation between September 25, 2006 and October 19, 2006 at most amounts to negligence, and therefore does not rise to the level of extreme and outrageous conduct. See Green, 155 P.3d at 387. The Court has also already held that Ocwen's continuation of its investigation through December 5, 2006 was not unreasonable, and so as a matter of law did not amount to extreme and outrageous conduct. Coors Brewing Co., 978 P.2d at 666. And finally, the Court has also already held that the (lack of) evidence of Ocwen and NCCI's intent or recklessness in failing to
For these reasons, summary judgment is appropriate on Plaintiff's outrageous conduct claim against Ocwen and NCCI.
Plaintiff's FDCPA claim against Ocwen and NCCI, brought under 15 U.S.C. § 1692e(8), alleges, inter alia, that Ocwen and NCCI, as debt collectors, communicated false information concerning Plaintiff's creditworthiness to credit reporting agencies. (ECF No. 149, at 10.) 15 U.S.C. § 1692e & 1692(e)(8) provide,
The FDCPA applies only to "debt collectors." See id.; id. § 1692(a)(6). However, the statute specifically excludes from the definition of "debt collector" "any person collecting or attempting to collect any debt. . . which was not in default at the time it was obtained by such person. . . ." Id. § 1692(a)(6)(F). Courts have consistently ruled that a creditor, mortgage servicing company, or assignee of the debt is not a "debt collector" under the FDCPA if the entity acquired the loan before it was in default.
In their motion, Ocwen and NCCI argue that they are not "debt collectors" under the FDCPA because "Ocwen started servicing the Mortgage Loan on behalf of NCCI on May 15, 2006, when the loan was not in default." (ECF No. 247, at 37.) In response, Plaintiff first focuses on NCCI and states, "although Ocwen began servicing the Loan effective May 15, 2006, at some unknown date the ownership of the Loan was transferred from Allstate to NCCI. If NCCI took ownership of the Loan after the Loan was allegedly in default, NCCI would be deemed a debt collector." (ECF No. 251, at 35-36.) Plaintiff then argues that if NCCI was a "debt collector," Ocwen should also be deemed a debt collector because it was servicing the
As Plaintiff appears to concede, the undisputed evidence shows that the loan was not in default on May 15, 2006 when Ocwen acquired the rights to service the loan. Thus, under the case law, Ocwen is not a "debt collector" under the FDCPA (unless Plaintiff's argument as to Ocwen, discussed infra, is persuasive).
As for NCCI, there are two pieces of evidence suggesting that NCCI purchased the loan on the same date—May 15, 2006—before the loan went into default. First, the Declaration of Gina Johnson, a Senior Loan Analyst with Ocwen, states, "Ocwen began servicing the Mortgage Loan on or about May 15, 2006. . . . Ocwen serviced the Mortgage Loan as the attorney-in-fact for [NCCI], the investor that purchased the loan on the secondary market." (ECF No. 247, Ex. A-12 ¶¶ 5, 7.) This evidence implies that NCCI purchased the loan on May 15, 2006. And lending at least slightly more support to this premise is Ocwen's letter informing Plaintiff that "effective 5/15/2006 the servicing of your mortgage loan . . . will be assigned, sold and transferred from Allstate [] to Ocwen." (ECF No. 251, Ex. F-2.) This letter, in conjunction with the Johnson Declaration, implies that, as of May 15, 2006, Allstate was giving up its ownership interest in the loan to NCCI. The Court concludes that Ocwen has satisfied its burden of showing a lack of a genuine dispute as to when NCCI purchased the loan from Allstate. See Fed. R.Civ.P. 56(a); Liberty Lobby, Inc., 477 U.S. at 248-50, 106 S.Ct. 2505.
Thus, the burden shifts to Plaintiff to designate "specific facts showing that there is a genuine issue for trial" on this issue. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. Plaintiff has come forward with no evidence showing that NCCI purchased the loan from Allstate on some date other than May 15, 2006.
Because neither Ocwen nor NCCI are properly treated as "debt collectors" under
CMS also moves for summary judgment, both as to Plaintiff's outrageous claim and FDCPA claim brought against it. (See ECF No. 149, at 8, 10-11.)
In its motion, CMS argues that it did not engage in extreme and outrageous conduct, and did not act recklessly or with the intent of causing Plaintiff severe emotional distress, because it did not even initiate a foreclosure action against Plaintiff, but instead merely followed Ocwen's instructions to initiate foreclosure, then place foreclosure on hold, and then finally close its foreclosure file. (ECF No. 182, at 8, 11.)
In response, Plaintiff first argues that CMS knew or should have known that the debt was not owing when it sent Plaintiff its initial letter on September 7, 2006. In so doing, Plaintiff focuses on CMS's statement in its summary judgment motion that "CMS received a foreclosure referral from Ocwen and after review by a CMS attorney concerning the existence of a debt, sent out [the debt validation letter]." (ECF No. 182, at 2 (emphasis added).) Plaintiff argues, without citing any factual support, that
(ECF No. 252, at 26.) The Court is not aware of any factual support for these statements. Notably, as of the September 7, 2006 letter, Plaintiff had had no direct contact with CMS, and Plaintiff's only contacts with Ocwen were the two telephone conversations on June 5, 2006 and August 7, 2006. Plaintiff had not even sent Ocwen relevant documentation as of September 7, 2006, not to mention CMS. There does not appear to be any factual support for Plaintiff's assertion that CMS knew or should have known that the debt was not owing when it sent the September 7, 2006 letter, and thus there is no triable issue as to whether sending this letter constituted extreme and outrageous conduct. See Coors Brewing Co., 978 P.2d at 666; Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548.
Plaintiff also appears to suggest that CMS engaged in extreme and outrageous conduct between September 7, 2006 and December 5, 2006. (ECF No. 251, at 26-29.) The Court is unpersuaded. First, although Plaintiff had began providing documentation to CMS as early as September 25, 2006, CMS's delay until October 19, 2006 to inform Plaintiff that foreclosure was being put on hold did not amount to extreme and outrageous conduct.
Finally, Plaintiff argues that CMS's failure to correct Plaintiff's credit reports between December 5, 2006 and February 15, 2007 constituted outrageous conduct. (See ECF No. 252, at 24, 29-31.) The Court concludes that it is not appropriate to construe Plaintiff's outrageous conduct claim so broadly as to include allegations concerning CMS's failure to correct the credit reports. In the operative complaint, Plaintiff's outrageous conduct claim alleges only the following as to CMS: "[CMS] engaged in extreme and outrageous conduct by . . . pursuing foreclosure against Plaintiff's property after being repeatedly informed that Plaintiff was not in default and that the Allstate loan had been paid through refinance." (ECF No. 149, at 8 ¶ 30.) This allegation involves pursuing foreclosure, not failing to correct the credit reports. Notably, the preceding paragraph of the complaint alleges outrageous conduct against Ocwen and NCCI, and not CMS, based on their "knowingly providing false credit information to several [CRAs]." (Id. at 8 ¶ 21.) The Court will not construe Plaintiff's outrageous conduct claim against CMS to include allegations concerning CMS's failure to correct Plaintiff's credit reports.
Accordingly, the Court grants CMS's motion for summary judgment as to the outrageous conduct claim.
As for the FDCPA claim against CMS, the Court concludes that the claim is barred by the applicable statute of limitations.
Plaintiff's argument is unavailing because, similarly, Plaintiff's FDCPA claim against CMS is based only on CMS's initiation of foreclosure, not on CMS's involvement in cleaning up Plaintiff's credit reports. The FDCPA claim against CMS in the operative complaint alleges (only) that,
(ECF No. 149, at 10-11.) Plaintiff has not brought a claim against CMS based on its failure to correct negative credit reporting, and thus CMS's involvement in correcting the credit reports in early 2007 is irrelevant to Plaintiff's claim. Plaintiff's FDCPA claim against CMS, based entirely on CMS's pursuit of foreclosure, accrued no later than December 5, 2006. Because Plaintiff filed this action on January 29, 2008, more than one year later, Plaintiff's FDCPA against CMS is time-barred.
In accordance with the foregoing, it is therefore ORDERED as follows:
Default has been entered against Allstate. (ECF No. 69.) Plaintiff subsequently filed a motion for default judgment. (ECF No. 94, 95.) U.S. District Judge Marcia S. Krieger, to whom this action was previously assigned, denied the motion without prejudice on the ground that it was premature. (ECF No. 110.)
Plaintiff also originally brought these claims against Ocwen Financial Corp. and Nomura Securities International, Inc. (ECF No. 1.) Plaintiff has voluntarily dismissed those two defendants from the action. (ECF No. 56, 57, 73, 74.)
Plaintiff also emphasizes an October 18, 2006 Ocwen call log entry as evidence that Ocwen knew as of that date that the loan "was paid out prior to the loan being boarded at Ocwen." (ECF No. 251, at 26.) Plaintiff has not quoted the entire call log entry—the entire entry casts doubt on Plaintiff's conclusion. (See id. Ex. B at 14.) And again, Ocwen's duty under the FCRA was not even triggered until October 23 when Transunion contacted it.
Plaintiff also emphasizes an October 27, 2006 email from an NCC Servicing, LLC employee recognizing that Plaintiff's credit should be corrected. Plaintiff's claims against NCC Servicing are not at issue in the pending motions for summary judgment, and Plaintiff has not established that Ocwen or NCCI should be held accountable for NCC Servicing's apparent knowledge.
Id.
Plaintiff now argues that Ocwen does have the document in its possession. (Id.) Plaintiff is asking the Court to re-hear this discovery dispute, which it declines to do. Further, there is no indication that Plaintiff ever propounded during discovery a simple interrogatory asking on what date NCCI purchased the loan from Allstate.
