588 F.3d 420 (7th Cir. 2009), 07-3826, Hukic v. Aurora Loan Services

Docket Nº:07-3826.
Citation:588 F.3d 420
Opinion Judge:WILLIAMS, Circuit Judge.
Party Name:Avdo HUKIC, Plaintiff-Appellant, v. AURORA LOAN SERVICES and Ocwen Loan Servicing, Defendants-Appellees.
Attorney:Brian E. King, Stephen M. Komie (argued), Komie & Associates, Chicago, IL, for Plaintiff-Appellant. Robert J. Emanuel (argued), Burke, Warren, MacKay & Serritella, Chicago, IL, Brian P. Brooks (argued), O'Melveny & Meyers, Washington, DC, for Defendants-Appellees.
Judge Panel:Before BAUER, EVANS, and WILLIAMS, Circuit Judges.
Case Date:November 20, 2009
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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588 F.3d 420 (7th Cir. 2009)

Avdo HUKIC, Plaintiff-Appellant,

v.

AURORA LOAN SERVICES and Ocwen Loan Servicing, Defendants-Appellees.

No. 07-3826.

United States Court of Appeals, Seventh Circuit.

November 20, 2009

Argued Jan. 23, 2009.

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Brian E. King, Stephen M. Komie (argued), Komie & Associates, Chicago, IL, for Plaintiff-Appellant.

Robert J. Emanuel (argued), Burke, Warren, MacKay & Serritella, Chicago, IL, Brian P. Brooks (argued), O'Melveny & Meyers, Washington, DC, for Defendants-Appellees.

Before BAUER, EVANS, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge.

Avdo Hukic obtained a six-figure mortgage with an interest rate of 10.65%. It allowed him to pay his taxes and insurance premiums directly to the entities owed payment, but only if he promptly furnished proof to his mortgage servicer that he was making those payments. Because Hukic did not submit such proof, Aurora Loan Services, and later Ocwen Loan Servicing, also made tax and insurance payments on Hukic's behalf. They notified Hukic of a corresponding increase in his monthly amount due, but Hukic did not change the amount he paid to them each month. The amounts Hukic owed for taxes and insurance and a deficiency that resulted from the incorrect processing of one money order led Aurora and Ocwen to report Hukic as delinquent to consumer reporting agencies. Although it turns out that Hukic had been paying taxes directly to the county all along, we must affirm the judgment in the defendants' favor because Hukic did not comply with the terms of his agreement that required him to submit proof of payment. Aurora and Ocwen were therefore justified when they reported that Hukic had defaulted on his loan. We affirm the grant of summary judgment in favor of the defendants on Hukic's claims for breach of contract, tortious interference, and violation of the Fair Credit Reporting Act (FCRA). We also affirm the dismissal of Hukic's claims for defamation and intentional infliction of emotional distress.

I. BACKGROUND

Avdo Hukic obtained a mortgage from Life Savings Bank in 1997. The mortgage was for $119,700 and had an interest rate of 10.65%. The mortgage agreement required that he make monthly payments of $1,334.42 as well as pay taxes, insurance premiums, and other charges or fines. The agreement allowed Hukic as the borrower to pay the taxes and insurance premiums directly to the entities owed payment, provided that

Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall furnish to Lender receipts evidencing the payments.

Hukic got off to a good start, making monthly payments of $1,335 in a timely fashion. Then, in April 1998, Hukic submitted a money order made out in the amount of $1,335 to Life Savings Bank. All should have been fine, as the amount was fifty-eight cents more than what he was required to pay, and he submitted it to the bank on time. For some reason, however, the money order was only processed as a payment of $1,135, and the bank only received that amount.

Life Savings Bank assigned Hukic's loan to Aurora Loan Services the next month and forwarded $1,135 as Hukic's April payment. Aurora notified Hukic that his April payment was deficient and asked Hukic to remit $200 and request a refund from the money order's issuer. Hukic did not do so, later saying he did not have the time to do that. When Hukic made monthly payments to Aurora thereafter, Aurora always applied his payment first to

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the amount that was due from the previous month, so Aurora's records continued to show Hukic as one month delinquent.

When Life Savings Bank assigned Hukic's loan to Aurora, it also advised Aurora that Hukic's hazard insurance had expired. Aurora wrote to Hukic and told him that if evidence of current insurance was not received within sixty days, Aurora would set up an escrow account to pay the $1,716 annual premium for the upcoming policy year, pursuant to the terms of the mortgage. Aurora did not receive evidence of up-to-date hazard insurance from Hukic, so it advanced the funds. Aurora also paid Hukic's property taxes of $1,927 for the first half of 1999 because Hukic had not submitted evidence that he was paying the taxes on his own. Pursuant to the terms of the mortgage, Aurora set up an escrow account for the reimbursement of the property taxes. Aurora notified Hukic of the increases to the amount due each month as a result of these accounts, but he continued to make monthly payments of $1,335. Aurora reported Hukic's loan as delinquent to consumer credit reporting agencies in November of 1999.

About four months later, Aurora assigned Hukic's loan to another company, Ocwen Loan Servicing. Records Ocwen received indicated that Hukic had not made his January mortgage payment. On March 13, 2000, Ocwen mailed Hukic a notice of default. It stated that he needed to pay $7,261.16 by April 12, 2000 to cure the deficiency in his account, and that failure to cure the default could result in foreclosure proceedings. On September 8, 2000, Ocwen advanced $1,116 to pay Hukic's property taxes and made an adjustment to his escrow account. Ocwen also informed Hukic that month that if he had paid the property taxes directly to the county without informing Aurora or Ocwen, he should obtain a refund of the property taxes and then remit the refund to Ocwen to cure the deficiency in the escrow account. Hukic did neither. When Ocwen did not receive proof of payment, it advanced funds on two occasions in 2001 to pay Hukic's property taxes and adjusted his escrow account.

Ocwen sent Hukic over ten notices of default during 2000 and 2001. On December 6, 2000, Ocwen wrote Hukic and told him that his loan had been transferred to Ocwen's Early Intervention Department for review and possible foreclosure. On January 11, 2001, Hukic's counsel wrote to Aurora. Counsel stated that Hukic had made timely payments to Aurora and was paying his property taxes directly, and also that Hukic had been unable to refinance his home due to negative information from Aurora on his credit reports. Counsel wrote a similar letter to Aurora later in the year.

On November 7, 2001, foreclosure proceedings began against Hukic in Illinois state court. On May 16, 2003, the state court wrote in an order that Ocwen had agreed " to accept reinstatement of monthly payments and the parties will continue to negotiate the escrow issue." A month later, in an order dated June 16, 2003, the state court dismissed the foreclosure proceedings and stated that Hukic had tendered proof of payment of real estate taxes for 2002 and the first installment of 2003. Hukic later prepared an application for a property tax refund and directed that the county pay a refund of the duplicate property tax payments to Ocwen.

On April 1, 2004, Hukic notified TransUnion, a credit reporting agency, that he disputed the status of his Ocwen account and asked TransUnion to investigate. One month later, TransUnion informed Hukic that the negative credit information reported by Ocwen had been deleted from his credit report. Hukic's later credit reports

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reflected an adverse account associated with Aurora but not with Ocwen.

Hukic filed suit against Aurora and Ocwen in Illinois state court on July 1, 2005. He maintained that he had been denied refinancing, loans and credit as a result of false information conveyed by Aurora and Ocwen to consumer reporting agencies. Aurora timely removed the case to federal court, and Hukic did not seek to remand the case. The district court granted the defendants' motion to dismiss seven of the counts alleged in the complaint. It later granted summary judgment to the defendants on the remaining claims for violation of the Fair Credit Reporting Act, breach of contract, and tortious interference with prospective economic advantage. Hukic appeals.

II. ANALYSIS

A. Subject Matter Jurisdiction

Hukic's first challenge is to our jurisdiction. He maintains that the notice of removal failed to establish diversity jurisdiction on its face, and, therefore, the federal court never had subject matter jurisdiction. Although Hukic did not raise this argument in the district court, it is always a federal court's responsibility to ensure it has jurisdiction, so we turn to that question first. See Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). We analyze jurisdiction based on the events at the time the case is brought. Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004); Olympia Exp., Inc. v. Linee Aeree Italiane, S.P.A., 509 F.3d 347, 349 (7th Cir.2007). When a case is initially filed in state court and then removed to federal court, the time-of-filing rule means that we analyze our jurisdiction at the time of removal, as that is when the case first appears in federal court. Wisc. Dep't of Corrs. v. Schacht, 524 U.S. 381, 391, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998); Tropp v. Western-Southern Life Ins. Co., 381 F.3d 591, 595 (7th Cir.2004).

The federal removal statute authorizes a defendant to remove " any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a); see Wisc. Dep't of Corrs., 524 U.S. 381 at 386, 118 S.Ct. 2047, 141 L.Ed.2d 364. One circumstance in which federal courts have original jurisdiction is when the lawsuit is between " citizens of different States" and the amount in controversy is over $75,000. 28 U.S.C....

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