Diedrich v. Ocwen Loan Servicing, LLC, Case No. 13-CV-693
| Decision Date | 24 April 2015 |
| Docket Number | Case No. 13-CV-693 |
| Court | U.S. District Court — Eastern District of Wisconsin |
| Parties | DANIEL AND NATALIE DIEDRICH, Plaintiffs, v. OCWEN LOAN SERVICING, LLC, Defendant. |
Daniel and Natalie Diedrich ("the Diedrichs"), filed a complaint against Ocwen Loan Servicing, LLC ("Ocwen"), alleging various claims arising from a loan modification agreement entered into between the Diedrichs and Ocwen. Specifically, in their amended complaint, the Diedrichs alleged violations of Wis. Stat. § 138.052(7), Wis. Stat. § 138.052(7s)(a), 12 U.S.C. § 2605(e)(1), (2), and Wis. Stat. § 224.77(1)(k), (L), and (m). In a decision issued December 3, 2013, Magistrate Judge Callahan granted in part Ocwen's motion to dismiss and dismissed the Diedrichs' claims pursuant to Wis. Stat. § 138.052(7s)(a) and 12 U.S.C. § 2605(e)(1). (Docket # 21.)
This case was subsequently reassigned to me and the parties again consented to magistrate judge jurisdiction. Both parties move for summary judgment in their favor on all remaining counts of the Diedrichs' amended complaint. For the reasons that I explain in this decision, the Diedrichs' motion for summary judgment is denied and Ocwen's motion for summary judgment is granted.
The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). "Material facts" are those under the applicable substantive law that "might affect the outcome of the suit." See Anderson, 477 U.S. at 248. The mere existence of some factual dispute does not defeat a summary judgment motion. A dispute over a "material fact" is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
In evaluating a motion for summary judgment, the court must draw all inferences in a light most favorable to the nonmovant. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, when the nonmovant is the party with the ultimate burden of proof at trial, that party retains its burden of producing evidence which would support a reasonable jury verdict. Celotex Corp., 477 U.S. at 324. Evidence relied upon must be of a type that would be admissible at trial. See Gunville v. Walker, 583 F.3d 979, 985 (7th Cir. 2009). To survive summary judgment, a party cannot rely on his pleadings and "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 248. "In short, 'summary judgment is appropriate if, on the record as a whole, a rational trier of fact could not find for the non-moving party.'" Durkin v. Equifax Check Services, Inc., 406 F.3d 410, 414 (7th Cir. 2005) (citing Turner v. J.V.D.B. & Assoc.,Inc., 330 F.3d 991, 994 (7th Cir. 2003)).
On February 20, 2007, Natalie Diedrich and Daniel Diedrich executed a Note to Decision One Mortgage Company in the amount of $184,800. To secure the Note, the Diedrichs executed a mortgage dated February 20, 2007, that was recorded on February 27, 2007 at the Calumet County Register of Deeds as Document Number 414527. (Id. ¶ 2.) Ocwen is now the servicer of the Diedrichs' loan. (Id. ¶ 3.) Although the Diedrichs dispute that they defaulted under the terms and conditions of the Note and mortgage, they agree that Ocwen began foreclosure proceedings in Calumet County on September 28, 2010. (Id. ¶ 4.) Ocwen and the Diedrichs entered into a loan modification agreement dated May 20, 2011, implemented beginning July 1, 2011. (Id. ¶ 5.) As a result, the Calumet County foreclosure case was dismissed. (Id. ¶ 6.)
The Diedrichs began to make payments pursuant to the loan modification agreement. In July 2013, the Diedrichs became concerned about whether their escrow account was being correctly administered. (Id. ¶ 9.) The Diedrichs also became concerned that they were being charged improper litigation fees. (Id. ¶ 10.) Ocwen paid litigation charges from the suspense account on the file and the litigation charges paid by Ocwen on the suspense account exactly matched the amounts that had been charged to the Diedrichs on their bills. (Id. ¶¶ 14-15.)
The original note signed by the Diedrichs set an interest at a rate of 9.64% when it was signed in February 2007. (Id. ¶ 17.) The loan modification agreement specified that the Diedrichs would pay an interest rate of 2.0% on Ocwen's loan beginning at the end of thetrial period until July 1, 2016, at which point the interest rate would increase to 4.5% for the remainder of the loan. (Id. ¶ 19.) The Diedrichs' billing statements from July 2011 through February 2012 reflect the 2.0% interest rate.
In February 2012, Ocwen received a letter from the Diedrichs' attorney requesting loan information. (Id. ¶ 9.) On February 22, 2012, Ocwen acknowledged receipt of the February 2012 letter from the Diedrichs' attorney and provided the information requested. (Id. ¶ 10.) On February 24, 2012, Ocwen also sent a Payment Reconciliation in response to the February 2012 letter from the Diedrichs' attorney. (Id. ¶ 11.) On March 6, 2013, Ocwen received a letter from the borrowers dated February 22, 2013 requesting information regarding the loan. (Id. ¶ 12.) The Diedrichs sent the February 22, 2013 letter at the direction of their attorney. (Id. ¶ 14.)
On or around February 25, 2013, the Diedrichs sent Ocwen a borrower information request. (Def.'s Resp. to PPFOF ¶ 25.) In the borrower information request, the Diedrichs requested eight types of standard information about their account, including the names of the employees working on their account, the history of payments made from their escrow account including the date, amount, and payee, and a statement of interest rates applied to their account, among other general inquiries about their account information. (Id. ¶ 26.)
On or around March 7, 2013, Ocwen wrote a form letter to the Diedrichs, which simply said what Ocwen's policies were with respect to their inquiries. (Id. ¶ 31.) On or around March 30, 2013, Ocwen wrote to the Diedrichs stating that it would take another 15 days to review the Diedrichs' inquiry. (Id. ¶ 32.) In a letter dated April 22, 2013, Ocwen wrote the Diedrichs a letter saying only that it could not identify a problem with their account, and indicated that the Diedrichs should send another letter identifying whichmonth and reporting was being disputed, the explanations for the dispute, and all evidence showing that the payment for that month was received on time or that the information they reported was incorrect. (Id. ¶ 33.) Ocwen sent the Diedrichs' letter to its Research Department. (Id. ¶ 38.)
Both parties move for summary judgment in their favor. The Diedrichs move for summary judgment as to liability on their 12 U.S.C. § 2605(e)(2) claim and on their Wis. Stat. § 224.77(1) claim. Ocwen moves for summary judgment on all of the surviving claims in the Diedrichs' amended complaint, pursuant to Wis. Stat. § 138.052(7), 12 U.S.C. § 2605(e)(2), and Wis. Stat. § 224.77(1). I will address each claim in turn.
Wis. Stat. § 138.052(7) states that "[i]nterest imposed on the amount due after acceleration or maturity of a loan may not exceed the contract rate." Ocwen argues that it is entitled to summary judgment on the Diedrichs' Wis. Stat. § 138.052(7) claim because it only charged the Diedrichs the contractual interest rate. There is no dispute that the loan modification agreement specified that the Diedrichs would pay an interest rate of 2.0% on Ocwen's loan beginning at the end of the trial period until July 1, 2016, at which point the interest rate would increase to 4.5% for the remainder of the loan. (Def.'s Resp. to PPFOF ¶ 19.) The parties do dispute, however, what dates the "trial period" encompasses. The Diedrichs argue that the trial period lasted from May 30, 2011 until July 1, 2011 (PPFOF ¶ 18), whereas Ocwen states that the one month trial period began on July 1, 2011 (Def.'s Resp. to PPFOF ¶ 18). The loan modification agreement states that "In order for the terms of this modification to become effective, you promise to make an initial payment of $952.71on or before 5/30/11 and one (1) equal monthly payment of principal and interest in the amount of $640.98 to Ocwen ("Trial Period") beginning on 7/1/11."
The original note signed by the Diedrichs set interest at a rate of 9.64% when it was signed in February 2007. (Def.'s Resp. to PPFOF ¶ 17.) Ocwen argues that the July 2011 payment was a "trial payment" and the loan modification provided that the loan would be modified to the terms specified after the trial payment was made. Thus, pursuant to the terms of the agreement, the interest rate would change after the trial payment was made, so there is no evidence that any interest rate was used to calculate the trial payment. ( Further, Ocwen argues that paragraph one of the loan modification indicates that the July 1, 2011 payment would be equal to one month of principal and interest in the amount of $640.98, which is equal to the 2.0% principal and interest loan modification payment. (Id.) The Diedrichs argue that either they were charged 9.64% from July 1, 2011 through August 1, 2011, or that it was unclear what interest rate was charged during this time period. (
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