Post on 16-Nov-2014
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STATEMENT OF THE ISSUES
1. Did the trial Court err by failing to hold an evidentiary hearing before Ruling
on evidence? Assuming that the trial court did not err for failing to hold an
evidentiary hearing, did the trial Court err by weighing evidence after having
previously stated these were jury issues?
2. Did the trial Court err by granting Final Summary Judgment when there
were remaining issues of material fact, and the trial court had previously
refused to grant summary judgment because of the remaining issues of
material fact?
3. Did the trial Court err when claiming that state law is inapplicable to
Plaintiffs’ RESPA claims?
4. Did the trial Court err by rewording RESPA’s requirements to show
emotional distress, and Ruling contrary to past cases?
5. Did the trial Court err by striking Plaintiffs’ evidence and witnesses
claiming they failed to show evidence of damages and failed to timely
disclose the witnesses to Appellees the witnesses when: a) several
witnesses were from defendants’ own company; b) During the whole
litigation, Appellees had full knowledge of who the doctors were; c) There
had been doctor’s and hospital reports filed, although the Court claimed
otherwise; and d) the defendant’s own witnesses were disclosed only days
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before the Plaintiffs’ but their witnesses weren’t stricken?
6. Did the trial Court err in failing to strike the testimony of, or sanction Mr.
Zeitz when the Court itself pointed out that he had perjured himself?
7. Did the trial Court err by striking Plaintiffs’ exhibits because the court didn’t
like the format, and without giving them a chance to correct any deficiency,
although the trial court had actual knowledge that Plaintiffs in fact had
available what was needed to correct the deficiency?
8. Did the trial court err when after ordering Appellee to comply with
discovery requests, then clarify the ruling to state Appellee didn’t have to go
to the trouble and expense of providing the discovery requests, thereby
denying Appellant evidence that was needed to prove their damages?
STATEMENT OF THE CASE
November 14, 2006 Virginia and Lascelles McLean1 filed in the District
Court for the Southern District of Florida, a civil action against GMAC Mortgage
Corporation2 (Doc 1generally); Appellees were properly served with Summons and
Complaint November 29, 2006 (Doc5).
By Order of Judge Graham filed March 16, 2007 the case was transferred to
Magistrate Judge O’Sullivan for Motions for sanctions, and motions on discovery
(Doc8). March 16, 2007 the Court entered an Order referring the case to
1RReferred to hereinafter as “Appellants” or “Plaintiffs”2 Referred to hereinafter as “GMAC” or “Appellees” or “Defendants”
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Mediation (Doc17) and April 18, 2007 Order Scheduling Mediation (Doc20); July
23, 2007 the Mediator filed a final report of mediation disposition advising the
Court that an impasse had been declared at mediation (Doc23); September 14,
2007, Judge Donald L. Graham entered an Order directing that the matter be
referred to United States Magistrate Judge John O’Sullivan for all further
proceedings in the case, including trial, and entry of a final judgment (Doc31).
October 5, 2007 Magistrate Judge O’Sullivan, in Chambers, signed an Order
granting Withdrawal of Appellants’ counsel (Doc36). December 12, 2007 Virginia
McLean filed First Amended Complaint (Doc54), Lascelles McLean’s first
Amended Complaint (Doc 55).
January 23, 2008 (Doc69) the trial Court Ruled Denying: Plaintiffs’ Motion
to Strike Depositions (Doc65), Plaintiffs’ Motion to Strike Summary Judgment
(R66, 01/18/2008); and Granting Plaintiffs’ Motion for Extension to Respond to
Motion for Summary Judgment (Doc67). February 19, 2008 the trial Court Ruled
(Doc82) on Discovery issues and Motion for Continuance (Doc84). February 21,
2008 the Trial Court Granted GMAC’s Motion for Clarification (Doc91).
February 26, 2008 the trial Court Granted with stipulations (Doc 97) Joint Motion
for Extension to Respond to Summary judgment (Doc96), which the Court
Amended February 26, 2008 (Doc98).
February 28, 2008 the Court Granted (Doc103) Plaintiffs’ Motion for
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Clarification of 02/19/08 Discovery Order (Doc99), Plaintiffs’ request for
extension to comply with the Court’s order on discovery (Doc101), and
Reconsideration of the Court’s Order Compelling Response to Summary Judgment
(Doc102)
May 2, 2008 the trial Court Granted in part and Denied in part GMAC’s
Motion for Summary Judgment (Doc131).
January 2, 2009 the trial Court ruled on Plaintiffs’ Verified Motion for
Order to Show Cause (Doc 182), GMAC’s Renewed Motion in Limine (Doc183),
Plaintiffs’ Motion to Vacate Void Judgments (Doc187), Plaintiffs’ Joint Motion for
Continuance of Trial (Doc186), GMAC’ Motion to Strike Plaintiffs’ Witnesses and
Exhibits (Doc202), and Plaintiffs’ Joint Responses to GMAC’s Amended Reply
memorandum of Law in Support of Final Motion for Summary Judgment and
GMAC’s Motion to Strike Witnesses and Exhibits (Doc212).
January 28, 2009, the trial Court Denied as Moot McLean’s Emergency
Motion to Stay Action Pending Surgery and Recovery (Doc222) and GMAC’s
Notice of Filing Request for Oral Argument On 01/28/09 granted Final Summary
Judgment in favor of GMAC (Doc229), Final Judgment was entered in favor of
Appellees, Clerk was directed to deny all pending motions as moot (Doc230).
February 26, 2009 Appellants timely filed Notice of Appeal,3 (Doc232). 3 Plaintiffs/Appellants Appeal Orders Doc131 (Partial Summary Judgment in favor of defendants/appellees); Doc217 (Denying Motion to Show Cause (Doc182), Granting in part and Denying in part Motion in Limine (Doc183), Denying Motion to Amend/Correct
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STATEMENT OF RELEVANT FACTS
Appellants bought a home located at 216 Shadow Way, Miami Springs,
Florida, 331664 in 1992, Appellee is the loan servicer (Doc 54/55 generally).
After GMAC’s repeated attempts to illegally foreclose on Appellant’s property,
which resulted in Appellants filing Chapter 13 Bankruptcy three times to prevent
foreclosure Appellants filed the case at bar. (Doc. 54/55 pgs. 6,7,8).
Due to a wrongful Ruling in a State Court foreclosure action, Plaintiffs’
home was illegally sold to Appellee5 September 1999 (Doc. 54/55, pg 8 ¶37; pg 26
¶144) which was overturned by State Court December 1999 (Doc 54/55, pg8 ¶38;
pg 26 ¶144). At time of the foreclosure sale, which Appellees had been high
bidder, Appellees had the Title transferred into their own name, but failed to have
the title transferred back to Appellant’s name when the sale was overturned by
State Court. (Doc. 54/55 pg8 ¶38; pg.10 ¶61; pg10 ¶117; pg 26¶144). From
September 1999 to 2006 the title reflected GMAC as the owner of Appellant’s
property. Appellee had to be Ordered by State Court to return Appellants’ name to
the title as the true and lawful owners.
Due to Appellee’s failure to correct the Title, Appellants were charged more
(Doc186) ), and Doc230; Doc228 Granting Summary Judgment to Defendants/Appellees on Damages, and Doc230 Final Judgment.4 Referred to hereinafter as “the property”, “Appellants’ property”, or “Appellants’ home”.5 Appellee had bought the home as winning bidder, and had the County records changed to indicate they were the owner (Doc. 54/55 pg21 ¶117).
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property taxes, and Appellees were allowed to force place insurance with much
higher insurance premiums on the property. (Doc. 54/55 pg 9 ¶46; pg 10 ¶61;
pg.11 ¶63). (Doc. 54/55 pg 17 ¶96; pg18 ¶¶98-104; pg 26 ¶144) .6
After GMAC failed to properly and timely pay the forced placed insurance
premiums for over a year, there was extreme escrow deficit; Appellees tried to
blame Appellants for the deficit by claiming the escrow account had been
underpaid, and/or that they were delinquent in their mortgage payments. (Doc.
54/55 pg.9 ¶46; pg. 10)
Before, during and after the bankruptcy proceedings, GMAC repeatedly
disregarded Appellants’ requests for records pertaining to any underpayments of
the escrow accounts, and other records. December 15, 2004 and February 25, 2005
Appellants sent “qualified written requests” to GMAC (Doc 54/55 pg 9 ¶¶43,44;
pg 19 ¶160; pg 21 ¶¶114,115), which Appellees failed to timely and appropriately
respond to, when they did respond, the response was insufficient, containing four
sentences. (Doc.54/55 pg. 9 ¶45; pg.21 ¶116; Doc.228, pg3).
Throughout the litigation, Appellee claimed they had not received the
December letter, yet as the Court pointed out, it was attached to Mr. Zietz’ (GMAC
corporate representative) deposition (Doc. 131 pg18) showing that Appellee had
misrepresented the fact to the Court, and perjured or subornated perjury in
6 To which GMAC had judicially confessed to.
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deposition testimony.
On two occasions, Appellees refused to release insurance proceeds for
damage claims on Appellants’ property (Doc.54/55 pg 10) thereby preventing
timely repair on Appellant’s home and causing further damage.
Appellees improperly reported to credit reporting agencies that Plaintiffs
were in default on their mortgage while the bankruptcy was pending (Doc.54/55 pg
22¶119), the claim was never retracted. Such reports in a credit report affected
Appellant’s ability to acquire credit, find gainful employment, and caused other
financial hardships, in turn resulting in hardship and emotional distress. GMAC
refused to, and has never retracted the report.
Contrary to Appellees’ claims, they had been presented with signed medical
release forms, doctor’s reports, hospital reports, and one Doctor’s phone testimony
on May 23, 2008 (Doc239); all of which supported that Plaintiff/Appellant
Virginia McLean’s health issues were compounded, not caused by, compounded
by Appellees actions and the trial itself (Doc 239 pg5). The trial Judge even
agreed that her health was an issue due to the case (Doc. 239 pg 21@8).
The trial court addressed Appellants’ liability, stating at that time was
$230,000 if Appellees prevailed (Doc 239 pg 20@22), the Court then questioned if
continuing the case was in the best interest of Appellant Ms. McLean’s health
(Doc. 239 pg 21 @8-14).
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After the telephone hearing with Ms. McLean’s doctor which stated that
Appellant Ms. McLean’s health issues had been compounded by GMAC’s actions
and the case itself, the trial court gave the ultimatum that Appellants either obtain
legal counsel, or the case would probably be dismissed. (Doc 239 pg-27)
Appellant Ms. McLean stated that they could not afford legal counsel and
requested the appointment of counsel. The Court first stated “no, not far into a
case”, then stated “the court doesn’t appoint attorneys in civil cases” (Doc 239 pg-
27). The trial court went on to say “..or if you need another month, or whatever
your doctor says, I’m not going to continue the matter anymore because I’m giving
you three months to either obtain an attorney of get better… Good luck to you…I
hope you feel better.” (Doc 239 pgs-27-28)
The trial Court ordered that Plaintiff/Appellant Ms. McLean either be well
enough to proceed, or hire legal counsel (Doc. 239 pg 27 @1-21), with actual
knowledge that the Plaintiffs possessed no assets for counsel (Doc 239 pg 27@10),
and with actual knowledge that the drugs Ms. McLean was taking causes problems
with concentrating and carrying on daily activities. The trial Court could have
appointed counsel to assist the Plaintiffs, but failed to do so (Doc 239 pg 27 @13).
The trial court had ordered Appellees to comply with discovery requests,
then Clarified it’s Order stating that Appellees did not have to go to the trouble and
expense. By the trial court’s own order, Appellants were denied access to
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information that would have aided in proving their case.
When the trial was to begin within a few days, the trial court, did an about
face and Granted GMAC’s Motion for Summary Judgment stating that the case
had already taken up too much of the Court’s time.
Plaintiffs showed that GMAC had purposely withheld Insurance proceeds
that should have been payable to Appellants causing delays in home repairs (Doc.
131 pg 33). The first time, was from water damage when the hot water heater
flooded their home (Doc 131 pg 11), GMAC withheld a $9000.00 check from
Balboa for the claim from June 2003 until May 2005when the Bankruptcy Court
Ordered Appellees to release the funds so that the home could be repaired (Doc
131 pg11). November 2005 Appellants filed a claim with Balboa7 for damages
caused by Hurricane Wilma; Balboa provided Appellees with a check for $12,000,
which Appellees held until May 2006 (Doc. 131 pg12; Doc. 54/55 pgs 16,17; pg
28 ¶155 ).
According to RESPA Rules, it is acceptable for a party in a RESPA case to
testify on their own behalf concerning emotional distress. The trial Court not only
struck Plaintiffs/Appellants’ witnesses and exhibits, but also refused to allow
testify on their own behalf concerning emotional distress. The trial court stated “In
the instant case, this Court has already determined that non-economic damages
7 Appellee’s force-placed insurance carrier
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such as emotional distress are recoverable under RESPA and referred to Doc 131
pg22” (Doc 228 pg9). The trial court also went on to state that “Plaintiffs list
various medical and litigation expenses” Id. (Doc 228 pg10)
Although Plaintiffs presented evidence of medical conditions, including a
telephone hearing with one of Appellee Virginia McLean’s doctor (Doc 239),
receipts for monetary damages, and other matters the trial Court did not like the
spread sheet Appellees had prepared for the Court, then refused to allow the
evidence to be prepared in a format acceptable to the Court’s liking and claimed
the evidence was not competent.
At one point the Judge made statement that what GMAC’s witness was
testifying to did not correspond with evidence. The trial court failed to sanction or
strike the testimony of the witness. Throughout the whole case, GMAC had
insisted that they had not received the first letter, dated December 14, 2004 yet the
Judge clearly remarks that Mr. Zietz had a copy of the letter attached as an Exhibit
to his deposition. (Doc. 131, pg.19)
STATEMENT OF REVIEW
This Court reviews “the district court's grant of summary judgment de novo,
applying the same legal standards that bound the district court, and viewing all
facts and reasonable inferences in the light most favorable to the nonmoving
party." Cruz v. Publix Super Mkts., Inc., 428 F.3d 1379, 1382 (11th Cir.2005)
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(internal quotes and emphasis omitted). “A grant of summary judgment is
appropriate where "the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(c).
SUMMARY OF THE ARGUMENT
A Jury trial had been demanded in the case at bar, and had never been
waived. The trial Court had repeatedly stated that there were genuine issues of
material fact on damages and had previously Denied GMAC’s Final Summary
Judgment. (Doc 131-pgs 19,20,21,23,27, 217-pg.2).
The Court had Ordered that (Doc 84 pg-2,3) by Feb. 22, 2008, Appellee
provide responses to discovery which Appellants had repeatedly requested:
“copy of the payment change letter; No. 6 and No. 12 of request for production, or identify the location of the documents if previously provided; provide with information concerning similar claims against same service center; documents in response to Request for Production No. 23 from 12/28/2000 to present; shall identify location of documents responsive to Request No. 7 PMI forced placed insurance; shall identify location of escrow disclosures produced from 1992 to present, or affidavit for missing dates; the Court gave to 03/05/2008 to allow inspection of the original loan and note”.
The Court hindered Appellants’ ability to obtain needed information,
Amended the Discovery Order: that Appellees “did not have to expend the time or
financial resources on requests No. 6 and 12; limited the lawsuits information from
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Feb 19, 2008 to Feb 19, 2008; request No. 23 to produce only Fannie Mae forms
for Plaintiffs’ loan Dec 28, 2000 to present, but not to produce employee training
manuals” (Doc 91 pg-1-2).
Appellants brought to the Court’s attention, and the Court had Ordered
Appellees to fully comply with discovery Appellant’s were seeking (Doc239 pg-
20@2-11), and that during the entire case Appellees had refused to provide
sufficient discovery responses, even after the Court Ordered it (Doc 84 pg-2,3).
After the trial Court Ordered Appellees to comply, they then they filed motion for
clarification and the Judge changed his previous Order for them to comply (Doc
91), thereby hindering Appellant’s abilities to prove their claims.
Even as late as October 2008 Appellees still had not fulfilled the requests for
escrow analysis that Appellants had been attempting to get from before Appellees
prior to and within the “qualified written request” letters from 2004, and the
original note and mortgage. Appellants sought information to help them prove
their damages and a company’s pattern or practice of denying Appellants and
others information requested through qualified written responses. The trial court’s
Clarification Order prevented the information Appellants sought to prove damages,
then Granted Final Summary Judgment against them.
At the pre-trial conference hearing (Doc 219), the trial court dismissed
Appellant’s witnesses after the Appellee claimed that the information was given
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after Discovery had passed. Appellants showed to the Court that the statement was
not true, that a release had been signed many months prior, but that Appellee had
failed to pursue the records, and that one doctor had testified within the court (Doc
219 pg-40@17-25); and Medical Documents had been previously filed from Mt.
Sinai Medical Center (Doc.117) . Further Appellants showed that individuals on
the witness list had been provided by Appellee, for which Appellees surely had
knowledge of (Doc 219 pg-49).
The facts are clear, according to 2605(e) an individual can testify to their
own emotional distress (Doc 228 pg14), yet the Court insisted that Appellants
would have to present expert witnesses “to testify” that “as a result…the failure of
GMAC to respond to those two letters…you suffered some kind of distress or
damages” (Doc 219 pg-41@4-13).
The Court goes on stating that there needs to be shown a pattern or practice
(Doc 219 pg-49@3-6) for 2605(e), which is not required to be shown for RESPA
emotional distress damages, unless the party is also seeking more than the
minimum damages. Appellant had two witnesses obtained through what little
discovery that Appellee complied with, and that would show Appellee had done
the same to others (Doc 219 pg-49@19 thru25). The witnesses were stricken.
Appellees denied receiving the first qualified written request (Doc 131
pg.18; Doc 228 pg-3); although the court commented that the letter was attached as
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an exhibit to Scott Zeitz’ deposition and Mr. Zeitz had testified that GMAC did not
receive the letter; and that would be a matter for a jury (Doc 131 pg 18; Doc 205
pg-7). Appellees claimed to be holder of note and mortgage, but “The Court
found a document matching the plaintiffs’ description as Exhibit 16 to Scott
Zeitz’s deposition. See Notice of Filing (DE# 72, 2/1/08); Mr. Zeitz could not
explain what ‘loan service sale’ meant”. “Mr. Zeitz was also questioned about
Exhibit 11…appears to be an IRS form 1099-A entitled ‘Acquisition or
Abandonment of Secured Property.’ Fannie Mae is listed as the lender…” “Mr.
Zeitz testified that GMAC had always been the lender. See Deposition…at 84,
Notice of Filing (DE#72, 2/1/08)” “The Court finds that these documents create an
issue of fact as to whether GMAC at all times was the lender.”
If nothing else, the above paragraphs show the amount of dishonesty the
Appellants have dealt with, and that in and of itself causes humiliation,
embarrassment and emotional distress.
Appellees admit that they failed to fulfill the request of the written requests,
it was not rebutted (Doc 228 pg-3). That concludes guilt of violating RESPA
2605(e); the fact Appellees failed on both requests means that they violated
2605(e) no less than two times. Because there is disagreement whether or not the
first letter was received, that would be a Jury’s decision, just as would whether or
not evidence produced was “competent evidence” (Doc 228 pg-20, 23). The Court
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stated without evidence of damages, that the “damages is going to be limited to a
thousand dollars…” (Doc 229 pg-25@13-17)
The trial Court dismissed Appellant’s FDCPA claims because “FDCPA does
not apply to a creditor’s attempts to collect its own debts” (Doc 131 pg-25). As the
Court pointed out in Doc 219 pg.-8@22 that GMAC was not the creditor they are
the servicer (Doc 219 pg-8), as such to dismiss the FDCPA because it does not
apply to a creditor’s attempts to collect it’s own debts (Doc 131 pg—25); the Court
then went on to say that “for the purposes of this litigation, I am going to find that
there was not a transfer of legal ownership of beneficial interest” (Doc 219 pg-
10@22)
A short period of time before the trial date, the trial court Granted Final
Summary Judgment in favor of GMAC although issues of material fact remained.
The trial Court granted had Appellee partial Summary Judgment May 02,
2008 (Doc. 131); the trial court stated that the only surviving claim was §2605(e),
and that the remaining issues of material fact were reserved for a Jury. The trial
Court, rather than have an evidentiary hearing, ruled that Appellants’ evidence was
not competent, granted Appellee Final Summary Judgment January 28, 2009 (Docs
228, 229, 230, 231).
There was sufficient evidence to create a triable issue of fact whether
Appellants suffered the injury specifically alleged in the complaint. Plainly the
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forced placed insurance premiums directly caused higher insurance premiums,
suffering mental anguish of continually having to fight foreclosure by someone
previously diagnosed with severe depression, and the humiliation and
embarrassment of derogatory statements on a credit report causing denial of
extensions of credit, results in injury.
Because the trial Court itself had established that Mr. Zeitz had perjured
himself more than once, and stated that it would be up to a Jury to decide whether
or not Appellees had received the qualified written request thereby proximately
causing any damage suffered by Appellants, there was genuine issues of material
fact remaining to be resolved by the fact-finder. Accordingly, the district court's
grant of summary judgment in favor of Appellees, as to Appellants' claim for
emotional distress was in error.
Further, in Granting Final Summary Judgment, the trial court relied solely
upon its prior finding in Partial Summary Judgment, which finding was not the
result of resolving all disputes and drawing all inferences in the light most
favorable to Appellants. Accordingly, the grant of summary judgment must be
reversed on the issue of whether the Appellants suffered damages from Appellees’
refusal to comply with Appellants’ qualified written requests.
ARGUMENT AND CITATIONS OF AUTHORITY
I. MORTGAGE SERVICERS
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At one time, and even in 1977 when the Federal Debt Collection Practices Act
was passed, “most mortgages were made by lenders who held on to the loan and
serviced the loans themselves.” There was no “incentive to manipulate the
servicing; to the contrary, servicing abuses could affect the lender’s reputation”.8
Today, servicing is handled by a separate entity, the servicers are not
originators, and their abuses have no affect on their ability to bring in new loans to
service. “The explosion in litigation in state and federal courts against mortgage
servicers is testament to the fact that mortgage servicing is fueling much of the
increase in defaults and foreclosures across the country.”9
Well documented misbehavior includes but is not limited to the following:
Misapplying payments, including failure to apply payments as directed by the consumer;Force-placing insurance for borrowers who have already provided servicers evidence of insurance;Failing to properly pay property taxes when due, triggering governmentally imposed late fees, or sometimes forced sale of the home;Charging late fees when borrowers are current on their payments; Engaging in coercive collection practices and falsely claiming amounts due.10
8 See National Consumer Law Center, Foreclosures, 2006 Supplemental (forthcoming – 2006), Chapter 4A. 9 See fn8; Also see Kurt Eggert, Limiting Abuse and Opportunism by Mortgage Servicers, Housing Policy Debate 15(3); 753 (Fannie Mae Foundation 2004) (“The way a loan is serviced often has a greater effort on the borrower than the way it was originated.”); O. Max Gardner, III, Mortgage Securitization, Servicing, and Consumer Bankruptcy, American Bar Association, GP Solo Law Trends and News_Business Law. Vol. 2 no. 1 (Sept. 2005)
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A. Force-Placed Insurance
Just as in Appellants’ case, problems concerning force-placed insurance have
long been realized. The extra charges from the more expensive insurance causes
havoc to the homeowner’s payment schedule. It has been found that “improperly
placed force-placed insurance too often escalates into foreclosure, even when the
original placement was a mistake; and also that in order to reap benefits of
additional revenues, “servicers have often force-placed insurance in cases where
the borrowers already had it”. See Vatican v. Wells Fargo Home Mortg., 2006
WL. 694740 (N.D. Ind. Mar3 16, 2006); Dowling v. Select Portfolio Servicing,
Inc., 2006 WL.571895 (S.D. Ohio Mar. 7, 2006); Barbera v. WMC Mortgage
Corp., WL 167632 (N.D. Cal. Jan. 19, 2006).
One of the problems that Appellants had concerning the insurance was that
when a claim is made, the insurance company Balboa, remitted payment to GMAC
rather than to Appellants (Doc 131 pg33). GMAC would hold the checks until
forced to submit them to Appellants (Id). One such instance the check was to
repair water damage, GMAC held the check for two years compounding the
damages and forcing Appellants, who had already presented evidence of ill health,
to live in a house with mold resulting from water damage.
The trial Court’s response “Paragraph 5 does not expressly govern the 10 National Consumer Law Center on Behalf of its Low Income Clients and the National Association of Consumer Advocates Comments to the Federal Trade Commission Regarding the Fair Debt Collection Practices Act June 6, 2007.
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offending conduct in the instant case, GMAC’s delay in tendering the insurance
proceeds and withholding the interest.” Clearly, the issue was a material fact that
a Jury would have concluded differently, and the outcome of the case was affected
by the trial court’s Grant of Final Summary Judgment without allowing a Jury trial.
II. CONSUMER PROTECTION STATUTES
The “express terms of RESPA clearly indicate that it is, in fact, a consumer
protection statute” Johnstone v. Bank of America, N.A., 173 F. Supp. 2d 809, at
816 (N.D. Ill. 2001). The language of § 1692k and § 2605(f) of RESPA are
essentially identical.
§ 2605(f) of RESPA provides:
Whoever fails to comply with any provision of this section shall be liable to the borrower for each such failure in the following amounts:(1) Individuals . In the case of any action by an individual, an amount equal to the sum of --(A) any actual damages to the borrower as a result of the failure; and(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $1,000.” 12 U.S.C. § 2605(f).
“The first step in construing a statute is to interpret the statutory language in
accordance with its ‘plain meaning.’” Boulware v. Crossland Mortgage Corp., 291
F.3d 261, 266 (4th Cir. 2002). Section 2605 of RESPA provides for relief in the
form of “any actual damages to the borrower” arising from a violation of said
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section.
The courts that have examined § 2605(f) have consistently found that “actual
damages” includes emotional distress damages. See Wright v. Litton Loan
Servicing LP, No. 05-02611-JF, 2006 U.S. Dist. LEXIS 15691, at *9-10 (E.D. Pa.
Apr. 4, 2006) (concluding that “‘actual damages’ includes damages for non-
economic loss, such as pain, suffering, and emotional distress”); Ploog v.
HomeSide Lending, Inc., 209 F. Supp. 2d 863, 870 (N.D. Ill. 2002) (“RESPA’s
actual damages provision includes recovery for emotional distress.”); Johnstone v.
Bank of America, N.A., 173 F. Supp. 2d 809, 814-16 (N.D. Ill. 2001) (actual
damages may include emotional distress); Rawlings, 64 F. Supp. 2d 1156, 1165
(M.D. Ala. 1999) (the term “actual damages” includes damages for mental
anguish).
The courts which found RESPA’s actual damages provision to include
damages for emotional distress did so on the basis that RESPA is a consumer
protection statute that should be construed liberally. See, e.g., Johnstone, 173 F.
Supp. at 816 (finding that “the express terms of RESPA clearly indicate that it is,
in fact, a consumer protection statute”). See also In re Hart, 246 B.R. 709, 732
(Bankr. D. Mass. 2000)(awarding $3000 in actual damages based of plaintiff’s
testimony that he was angered, frustrated, and emotionally depressed by his
dealings with the defendant.)
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In re Payne, 387 B.R. 614, 629 (D. Kan. 2008), the plaintiff testified that the
loan servicer caused her emotional distress…testified that she incurred
approximately $500 in medical costs over three years…The court found that the
loan servicer’s conduct proximately caused the plaintiff emotional distress and
awarded the plaintiff $500 in damages. Id at 640.
It must also be noted that the U.S. Department of Housing and Urban
Development (HUD), the Cabinet-level department responsible for implementing
RESPA, also interprets RESPA as being a consumer protection statute. For
example, on its website, HUD advises that “RESPA is a HUD consumer protection
statute designed to help homebuyers be better shoppers in the home buying
process, and is enforced by HUD.”11
Further, Courts that have analyzed the FDCPA have held that § 1692k’s
provisions allow for recovery of emotional distress damages. See, e.g., Davis v.
Creditors Interchange Receivable Mgmt., LLC, 585 F. Supp. 2d 968, 971-73 (N.D.
Ohio 2008); McGrady v. Nissan Motor Acceptance Corp., 40 F. Supp. 2d 1323,
1338 (M.D. Ala. 1998) (finding that damages for mental anguish are recoverable
under the FDCPA); Smith v. Law Offices of Mitchell N. Kay, 124 B.R. 182, 185
(D. Del. 1991) (noting that both the Fair Credit Reporting Act (FCRA) and the
FDCPA provide for actual damages for emotional distress).
11 U.S. Dep’t of Housing and Urban Development, RESPA - Real Estate Settlement Procedures Act, available at http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm.
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Moreover, the Federal Trade Commission Commentary to the FDCPA has
established that “actual damages” for FDCPA violations include “damages for
personal humiliation, embarrassment, mental anguish, or emotional distress” as
well as “out-of-pocket expenses.” Staff Commentary on the Fair Debt Collection
Practices Act, 53 Fed. Reg. 50097, 50109 (Dec. 13, 1988).
Finding there to be “no statutory language limiting the type of actual
damages recoverable, nor persuasive adverse case precedent, while finding
compelling supportive precedent”, the Courts have concluded that the “FDCPA
also allows for the recovery of all provable damages, including those of an
emotional nature”.
Under the FCRA, a statutory scheme very similar to the FDCPA and similar
to RESPA, “a plaintiff who proves a violation of the act is entitled to actual
damages for emotional distress arising from the violation, without first having to
prove a right of action under state law.” Indeed, in the recent case of Boris v.
Choicepoint, the court indicated, “It is well settled that actual damages under the
FCRA are not limited to out-of-pocket expenses and may instead include
humiliation and mental distress.” Boris v. Choicepoint Services, Inc., 249 F. Supp
2d 851 (W.D. KY 2003). Also see, Stevenson v. TRW, 987 F.2d 288, 292 (1993),
citing the Ninth Circuit Court of Appeals, in Guimond v. Trans Union Credit
Information Co., 45 F.3d 1329, 1333 (9 Cir.1995). Appellants are not required to
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prove state law tort elements to be compensated for their emotional distress.
Appellants submitted declarations attesting to emotional distress, and
Appellant Ms. McLean, and her doctor’s testimony shows that she suffered
emotional distress, including: embarrassment, humiliation, nervousness, and
difficulty in sleeping, and lack of concentration and stress. See Panahiasl v. Gurney
2007 U.S. Dist. LEXIS 17269, at *3 (N.D.Cal.)
Courts have noted, that a showing concerning emotional distress is, by its
very nature, not necessarily susceptible to precise quantification and, they
therefore, decline to preclude, as a matter of law, the ultimate fact finder’s
consideration of such evidence at trial.
Plaintiffs have suffered a great deal of emotional distress, anxiety, fear of
losing their home, loss of sleep, and frustration as a result of the defendant’s
conduct, since at least 1999. Appellants were entitled to a finding in their favor.
A. Statutory and Regulatory Background
In 1989, “the United States General Accounting Office … conducted a
major study of mortgage loan servicing practices … and uncovered a substantial
number of consumer complaints on abusive lender practices. These complaints
involved such wide-ranging concerns as mistakes in calculating escrow account
payments, unresponsiveness to inquiries, failure to make timely property tax and
hazard insurance premium payments, and failure to provide adequate notice of a
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mortgage loan servicing transfer. The complaints also pointed out that these errors
can potentially result in the imposition of late payment charges and payments to
the wrong parties.” (Lee & Mancuso, Housing Finance: Major Developments in
1989 (1990) 45 Bus. Law. 1863, 1870-1871, fn. omitted.)
As a result, section 941 of the voluminous Cranston-Gonzalez National
Affordable Housing Act of 1990 (Pub.L. No. 101-625 (Nov. 28, 1990) 104 Stat.
4079, 4405) amended RESPA by adding a new section 2605 requiring the servicer
of certain real estate loans to (1) notify the borrower when the loan is transferred
to another servicer and (2) respond to written inquiries from the borrower.
(Maurer, Using RESPA to Remedy Erroneous ARM Adjustments (1995) 49
Consumer Fin. L.Q. Rep. 115.)
The notification provision in section 2605(b)(1) states “[e]ach servicer of
any federally related mortgage loan shall notify the borrower in writing of any
assignment, sale, or transfer of the servicing of the loan to any other person.”
(Italics added.) Regulation X provides that “each transferor servicer and transferee
servicer of any mortgage servicing loan shall deliver to the borrower a written
Notice of Transfer, containing” the required information about the servicer and the
transfer. (24 C.F.R. § 3500.21(d)(1)(i) (2002), italics added.)
The concept of consumer protection has many facets. Consumers may be
protected by receipt of information that allows them to make decisions that are
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better informed. (See § 2601(a)(b)(1).) Consumers also are protected by measures
that reduce the cost of credit. (See § 2601(a), (b)(2).)
Actual damages may include, but are not limited to, (1) out-of-pocket
expenses incurred dealing with the RESPA violation, (2) lost time and
inconvenience to the extent it resulted in actual pecuniary loss, and (3) late fees.
(See Johnstone v. Bank of America, N.A., supra, 173 F.Supp.2d at pp. 813-814,
816; Rawlings v. Dovenmuehle Mortg., Inc., supra, 64 F.Supp.2d at p. 1164 [$115
spent on photocopies, secretarial work, and travel to post office recoverable under
§ 2605(f)(1)].) Accordingly, a Jury may have determined that payments
Appellants’ made to Appellee after the effective date of the transfer are actual
damages.
The issue of whether or not a foreclosure is included in the actual damages
suffered by Appellant are dependant upon a showing that the attempts to
foreclosure occurred “as a result of the failure” (§ 2605(f)(1)(A)) to deliver the
notice of transfer. (See Johnstone v. Bank of America, N.A., supra, 173 F.Supp.2d
at pp. 813-814 [complaint alleged sufficient causal connection between RESPA
violation and foreclosure to withstand a motion to dismiss].)
Section 2605(f) provides that “[w]hoever fails to comply with any provision
of this section shall be liable to the borrower” for actual damages. The phrase “any
provision of this section” plainly includes the provisions contained in section
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2605(c) concerning notices by transferees of loan servicing.
The trial court should have reasoned that Appellee GMAC owed a duty to
Appellants and a triable issue of fact existed with respect to whether or not
Appellee had negligently performed that duty. (See Rawlings v. Dovenmuehle
Mortg., Inc., supra, 64 F.Supp.2d at p. 1167 [summary judgment on negligence
claim denied; loan servicer owed borrower a legal duty under § 2605].) Whether
GMAC violated that duty presents triable issues of fact that should have been
reserved for the Jury.
III. SUMMARY JUDGMENT
The trial Court granted partial summary judgment in favor of Appellees,
after stating that there were remaining issues of material fact that would have to go
before a Jury for determination. The trial Court, then without having an
evidentiary hearing, weighed the evidence as “incompetent” and granted Final
Summary Judgment in favor of Appellees.
It has long been held in summary judgment that the trial court cannot weigh
evidence or determine credibility, which in Appellants’ case was done.
“Of course, the Court cannot weigh the evidence or make credibility determinations in its summary judgment analysis”. Williams v. Staples, Inc., 372 F.3d 662, 667 (4th Cir. 2004). The trial court must not “weigh evidence or make credibility determinations”, Edell & Assoc., P.C. v. Law Offices of Peter G. Angelos, 264 F.3d 424, 435 (4th Cir. 2001).; JKC Holding Co. LLC v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001); Thompson v. Aluminum Co. of Am., 276 F.3d 651, 656
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(4th Cir.2002); Williams v. Staples, Inc., 372 F.3d 662, 667 (4th Cir. 2004).
Summary Judgment may only be Granted when the are no issues of material
fact. A “material fact” is “a fact that might affect the outcome of a party’s case”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, at 247-48 (1986); JKC Holding
Co. LLC v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
“More important …, 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”. In First National Bank of
Arizona v. Cities Service Co., 391 U.S. 253 (1968). In Appellants’ case, genuine
issues or material fact remained; the facts were of a nature that would affect the
outcome of the case, therefore Final Summary Judgment could not be Granted.
See generally 10A C. Wright, A. Miller, & M. Kane, Federal Practice and
Procedure 2725, pp. 93-95 (1983), (“Only disputes over facts that might affect the
outcome of the suit”).
After having pointed out that the Court itself saw visible evidence that Mr.
Zeitz had committed perjury in deposition testimony multiple times. The Court
made the following comment (Doc 131 pg27):
“A copy of a letter from the plaintiffs dated December 15, 2004 is attached as an exhibit to the deposition of Scott Zeitz, GMAC’s corporate representative. Mr. Zeitz testified that GMAC did not receive the December 15, 2004 letter. Construing the evidence in the light most favorable to the plaintiffs, there is
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a genuine issue of material”
“Mr. Zeitz testified that GMAC had always been the lender but acknowledged that Exhibit 11 indicated that Fannie Mae was the lender.” See Deposition of Scott Zeitz at 84, Notice of Filing (DE# 72, 2/1/08). Mr. Zeitz could not explain why Fannie Mae was listed on Exhibit 11 but testified that Exhibit 11 was inaccurate. Id. at 85. The Court finds that these documents create an issue of fact as to whether GMAC at all times was the lender on the subject property.”
If nothing else, Mr. Zeitz was guilty of perjury, a sanctionable offense. The
fact that Mr. Zeitz testified that GMAC never received the first qualified written
request is a genuine issue of material fact for which a Jury could have concluded
evidenced Appellees’ guilt, and found them negligent. Surely, it could easily have
affected the outcome of the case.
A. Doctrine of Stare Decisis
The trial Court’s Ruling violates the doctrine of stare decisis, and it’s own
past cases. After previously stating issues remained that would have to be
determined by a Jury; the Court suddenly and without an evidentiary hearing,
Ruled striking Appellants’ witnesses, and weighed Appellants’ evidence
“incompetent”, Granting Final Summary Judgment in favor of Appellees.
The Supreme Court in 14 Penn Plaza LLC v. Pyett, 129 S.Ct. 1456 (U.S.
04/01/2009)12 held that there is a demanded respect for precedent:
12 129 S.Ct. 1456, 2009 Daily Journal D.A.R. 4861, 77 USLW 4260, 105 Fair Empl.Prac.Cas. (BNA) 1441, 186 L.R.R.M. (BNA) 2065, 09 Cal. Daily Op. Serv. 4103, 556 U. S. ____ (2009), 2009.SCT.0000062< http://www.versuslaw.com>
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"Principles of stare decisis ... demand respect for precedent whether judicial methods of interpretation change or stay the same. Were that not so, those principles would fail to achieve the legal stability that they seek and upon which the rule of law depends." CBOCS West, Inc. v. Humphries, 553 U. S. ___, ___ (2008) (slip op., at 14). And "[c]onsiderations of stare decisis have special force" over an issue of statutory interpretation, which is unlike constitutional interpretation owing to the capacity of Congress to alter any reading we adopt simply by amending the statute. Patterson v. McLean Credit Union, 491 U. S. 164, 172-173 (1989). Once we have construed a statute, stability is the rule, and "we will not depart from [it] without some compelling justification." Hilton v. South Carolina Public Railways Comm'n, 502 U. S. 197, 202 (1991).”
CONCLUSION
All provable damages, including emotional, are permitted under RESPA and
the FDCPA. Emotional distress is, by its very nature an issue to be submitted to
the Jury, rather than be disregarded in Summary Judgment, when it has been
shown and not properly disputed. The facts clearly show that there have been in
fact violations of RESPA; according to the trial court at least two instances. The
Appellees neither denied, nor rebutted RESPA 2605(e) violations, except to try to
claim that the January and March letters were not qualified written requests. The
trial court quickly dismissed the denial, until it Granted Final Summary Judgment,
continually stated that there were genuine issues of material fact remaining.
Appellants MOVE this Honorable Court to Remand this case to the District
Court and instruct the Court to have the matter of emotional distress put before the
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Jury. The trial Court had continually stated that there were remaining issues of
material fact that had to go before a Jury, but then suddenly Granted Final
Summary Judgment to Appellees, without a hearing in front of the Jury on any
matters.
Respectfully submitted, this ____ day of October, 2009
By: _________________________VIRGINIA MCLEAN, Pro Se
216 Shadow WayMiami Springs, FL 33166
(305) 888-3749
By: _________________________LASCELLES MCLEAN, Pro Se
216 Shadow WayMiami Springs, FL 33166
(305) 888-3749
CERTIFICATE OF COMPLIANCE
I certify that this brief complies with the type-volume limitation set forth in
FRAP 32(a)(7)(B). This Brief contains 7,030 words.
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____________________________VIRGINIA MCLEAN
CERTIFICATE OF SERVICE
I have this ____ day of October, 2009 served a true and correct copy of the
foregoing Appellants’ Brief upon the Appellees through their attorney on file, by
causing to be deposited with USPS, proper postage affixed thereto and addressed
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as follows:
Scott Frick, Esq.Box 800Tampa, FL 33601
__________________________VIRGINIA MCLEAN, Pro Se
216 Shadow WayMiami Springs, FL 33166
(305) 888-3749
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