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Breining v. Ocwen Loan Servicing, LLC

United States District Court, E.D. California

March 28, 2018

FRED BREINING, et al., Plaintiffs,
OCWEN LOAN SERVICING, LLC, et al., Defendants.


          Troy L. Nunleyi United States District Judge

         This matter is before the Court on Defendant Ocwen Loan Servicing, LLC's (“Defendant” or “Ocwen”) Motion for Summary Judgment. (ECF No. 36.) Plaintiffs Fred Breining and Cathy Breining (“Plaintiffs”) oppose the motion.[1] (ECF No. 40.) In their opposition, Plaintiffs request that the Court dismiss their First and Second Causes of Action without prejudice. Defendant has filed a reply that addresses, among other things, Plaintiffs' request. (ECF No. 41.) The Court has carefully considered the arguments raised by the parties. For the reasons set forth below, (i) the First and Second Causes of Action are DISMISSED without prejudice, and (ii) Defendant's Motion for Summary Judgment is DENIED as to the Third Cause of Action.

         I. Introduction

         Defendant is the current servicer of Plaintiffs' mortgage. The case arises out of Plaintiffs' attempts to obtain a loan modification with respect to that mortgage. The Second Amended Complaint (“the SAC, ” ECF No. 25) is the operative complaint. The SAC sets out the following three causes of action: (i) violation of California Homeowner Bill of Rights (“the HBOR”), Cal. Civ. Code § 2923.7; (ii) violation of the HBOR, Cal. Civ. Code § 2924.10(a); and (iii) negligence. As noted above, Plaintiffs have requested that the First and Second Causes of Action be dismissed without prejudice. Having carefully reviewed the parties' submissions, the Court concludes that Defendant has not met its burden to demonstrate that it is entitled to judgment as a matter of law on Plaintiffs' Third Cause of Action. Before proceeding, the Court will briefly set out the factual and procedural background.


         On June 30, 2006, Plaintiffs took out a $300, 000 mortgage loan from First Federal Bank of California and secured their promise to repay the loan with a deed of trust encumbering property located at 965 Piermont Court, Galt, California. (ECF No. 40-5 at ¶ 1.) GMAC Mortgage, LLC (“GMAC”) was their prior loan servicer. (ECF No. 40-5 at ¶ 2.) On February 6, 2013, the servicing rights to Plaintiffs' loan were transferred to Defendant. (ECF No. 40-5 at ¶ 3.) When this action was filed, Plaintiffs had not made a payment on their loan since early 2010, and were more than $80, 000 in arrears. (ECF No. 40-5 at ¶ 4.) As of the filing of the instant motion, no notice of default has been recorded against Plaintiffs' property. (ECF No. 40-5 at ¶ 5.)

         Plaintiffs were first offered a loan modification on July 27, 2011. (ECF No. 40-5 at ¶ 6.) There is a dispute regarding whether this offer was timely accepted. (ECF No. 40-5 at ¶ 7.) This leads to a dispute with respect to whether it is correct to say Plaintiffs were offered subsequent loan modifications. (See ECF No. 40-5 at ¶ 11.) These disputes are immaterial to the resolution of the instant motion.

         In any event, Plaintiffs submitted a loan modification application on December 7, 2012, to GMAC, which Plaintiffs admit did not include Fred's social security number and did not answer “the four HAMP questions” in Section 1 of the application.[3] (ECF No. 40-5 at ¶¶ 13-14.) On January 15, 2013, GMAC requested Plaintiffs provide the following additional information to complete their loan modification application: (i) Fred's social security number, (ii) the answer to “the four HAMP questions” in Section 1 of the application, (iii) information on whether Cathy had any income, and (iv) Fred's two most recent paystubs. (ECF No. 40-5 at ¶ 15.)

         Defendant's submissions as to what happened next are not clearly presented. According to Defendant, on January 21, 2013, Plaintiffs “resubmitted almost the identical defective application that they submitted in late December or early January 2013 - the same one missing the answer to the HAMP questions and missing [Mr.] Breining's social security number.” (ECF No. 40-5 at ¶ 17 (emphasis added).) Although not clearly stated, it seems Defendant acknowledges having received at least three applications between December 7, 2012, and January 21, 2013. In any event, Defendant acknowledges that Plaintiffs provided the requested paystubs for Fred and indicated that Cathy did not have an income. (ECF No. 40-5 at ¶ 16.)

         Plaintiffs' version of these events is also presented in an unclear way. Plaintiffs deny submitting a loan modification application on January 21, 2013. (ECF No. 40-5 at ¶ 17.) Instead, Plaintiffs asserted they submitted a loan modification application to GMAC either on December 27, 2012, December 31, 2012, or both.[4] (Compare ECF No. 40-5 at ¶ 17 with ECF No. 40-4 at ¶ 13.) Then, they learned of the missing items on January 15, 2013. (ECF No. 40-5 at ¶ 15.) After learning this, Plaintiffs contend they “timely provided the additional documents on January 21, 2013.” (ECF No. 40-4 at ¶ 15.) It seems Plantiffs are arguing the following point: they view their submission of “additional documents” as a supplement to an already submitted application, rather than a new application.

         Plaintiffs have submitted an email chain to support their version of events. (See ECF No. 40-1 at 49-64.)[5] This chain contains an email, dated January 21, 2013, which appears to be from a person named Heidi Payne (identified as a legal assistant in Plaintiffs' counsel's office) to Defense counsel. (ECF No. 40-1 at 50.) The email reads in relevant part as follows: “I have attached the documents that you have requested. Please note that Mrs. Breining does not have an income. Should you have any additional questions, please do not hesitate to contact our office.” (ECF No. 40-1 at 50.) This is followed by an email, dated January 21, 2013, which appears to be from Defense counsel to Ms. Payne, cc'ing Plaintiffs' counsel. (ECF No. 40-1 at 49.) The email states: “Thank you Ms. Payne. I have forwarded the documents.” (ECF No. 40-1 at 49.) Strangely, neither party has provided the Court with a copy of the attachment from Ms. Payne's email. In any event, Plaintiffs admit that their application did not include Mr. Breining's social security number and that they failed to answer “all the HAMP questions.” (ECF No. 40-5 at ¶ 18.)

         Plaintiffs indicate they received a notice from GMAC that explained that the servicing of their loan had been transferred from GMAC to Defendant. (ECF No. 40-4 at ¶ 16.) Ms. Breining indicates in her declaration that the notice included the following:

Ocwen is committed to helping homeowners. If you are currently on a trial modification plan or have modification review underway, this process will continue. You should continue making your payments as required in the modification plan. If you recently submitted financial documentation to be considered for payment options, it is not necessary to re-send the documents to Ocwen, as the information will automatically transfer.

(ECF No. 40-4 at ¶ 17.) Defendant does not dispute Plaintiffs received this notice or that it contained such a statement.

         Citing to the previously mentioned email chain, it is Plaintiffs' position that the following sequence of events occurred: On February 8, 2013, Plaintiffs' counsel contacted Defense counsel to inquire about the status of Plaintiffs' loan modification application. (ECF No. 40-4 at ¶ 18.) On February 11, 2013, Plaintiffs again contacted GMAC asking about the status of their loan modification. (ECF No. 40-4 at ¶ 19.) In an email seemingly sent on February 12, 2013, GMAC's counsel responded in relevant part that he “will provide an update on the loan modification application when I have one.” (ECF No. 40-1 at 55.) On February 26, 2013, Plaintiffs, through their attorney, sent an email which they contend constitutes a request for a “Single Point of Contact at Ocwen.” (ECF No. 40-4 at ¶ 21.) The Court will reproduce the relevant sentence: “Is there a point of contact over at Ocwen that the Breinings should be contacting directly as I assume you do not represent Ocwen.” (ECF No. 40-1 at 57.) Plaintiffs indicate they were not given a “Single Point of Contact at Ocwen.” (ECF No. 40-4 at ¶ 22.) Plaintiffs submit that they twice more (on May 30, 2013 and May 31, 2013) requested an update on their loan modification application, without receiving such an update. (ECF No. 40-4 at ¶¶ 23-25.) It is clear from Defendant's submission that it does not view Plaintiffs to have “made an unequivocal request to Ocwen on February 26, 2013 to appoint a [Single Point of Contact] or that Ocwen refused to appoint such a [Single Point of Contact].” (ECF No. 40-5 at ¶ 20 (emphasis added).) However, Defendant has not taken the position that it actually did appoint a single point of contact. Otherwise, Defendant has not called into question the sequence of events set out in this paragraph.

         Defendant submits a copy of a letter, dated June 4, 2013, that it sent to Plaintiffs. (ECF No. 38-1 at 56-57.) Plaintiffs do not dispute they received this letter. (ECF No. 40-4 at ¶ 26.) Neither side has challenged the authenticity or admissibility of this letter. In relevant part, that letter provides as follows:

We recently received your request for a Traditional loan modification. We are not able to fulfill your request at this time for the following reason(s):
We previously requested additional information from you which had not been received; therefore, we are unable to continue our review for workout solutions.
. . . .
If you believe the denial of your modification was based on inaccurate information, you have until 07/04/2013 to submit documentation to support your request for additional review.

(ECF No. 38-1 at 56.)

         As to what happened next, Plaintiffs again submit copies of email correspondences between Plaintiffs' counsel and Defense counsel or persons seeming to be members of their respective offices from later in 2013 and into 2014. (ECF No. 40-1 at 62-64, 66-69.) In short, Plaintiffs' counsel appears to have requested updates as to the status of Plaintiffs' loan modification from Defense counsel (or members of his office) on the following dates: September 19, 2013, September 23, 2013, February 13, 2014, February 25, 2014, March 28, 2014, and April 9, 2014. (ECF No. 40-1 at 62-64, 66-69.) Further, Plaintiffs characterize email correspondences sent on June 10, 2013, and September 23, 2013, as requesting a single point of contact from Defendant. (ECF No. 40-4 at ¶¶ 29, 31.) The Court observes that Defense counsel (or members of his office) seems to have sent emails to Plaintiffs' counsel during this period. (See, e.g., ECF No. 40-1 at 69.)

         Defendant has not argued the information summarized in the previous paragraph is irrelevant or immaterial. Nor does Defendant dispute the authenticity of these emails or otherwise challenge them. (See generally ECF No. 41.) Rather, Defendant is silent regarding events that followed the June 10, 2013, email Defense counsel sent to Plaintiffs' counsel, stating he was representing Ocwen. (ECF No. 36-4 at ¶¶ 24-25.)

         III. Standard of Law

         Summary judgment is appropriate when the moving party demonstrates no genuine issue as to any material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Under summary judgment practice, the moving party always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of “the pleadings, depositions, answers to interrogatories, and admissions on file together with affidavits, if any, ” which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “[W]here the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the pleadings, depositions, answers to interrogatories, and admissions on file.” Id. at 324 (internal ...

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