Hulse v. Ocwen Federal Bank, Fsb

Decision Date27 February 2002
Docket NumberNo. CV-00-169-HU.,CV-00-169-HU.
CourtU.S. District Court — District of Oregon
PartiesGary A. HULSE and Judith A. Hulse, Plaintiffs, v. OCWEN FEDERAL BANK, FSB, a New Jersey corporation, Ocwen Financial Services, Inc., a New Jersey corporation, David E. Fennell, an individual, and Routh Crabtree & Fennell, a Washington state professional corporation, Defendants.

Terrance J. Slominksi, Lake Oswego, OR, for Plaintiffs.

Jonathan M. Radmacher, J. Kurt Kraemer, McEwen, Gisvold, Rankin, Carter & Streinz LLP, Portland, OR, for Defendants Ocwen Federal Bank, FSB, and Ocwen Financial Services, Inc.

Robert J. Penfield, Routh Crabtree & Fennell, Bellevue, WA, for Defendants David E. Fennell and Routh Crabtree & Fennell.

OPINION & ORDER

HUBEL, United States Magistrate Judge.

Plaintiffs Gary and Judy Hulse1 bring this action against defendants Ocwen Federal Bank, FSB (OFB), Ocwen Financial Services, Inc. (OFSI), David Fennell, and Routh, Crabtree, and Fennell (RCF). The action arises out of a loan from OFB to plaintiffs secured by a trust deed, and default and foreclosure proceedings conducted by Fennell and RCF.

Plaintiffs bring seven claims for relief as follows: (1) a breach of contract claim against OFB, including a claim for account stated; (2) a claim under Oregon's Unfair Debt Collection Practices Act against OFB, Fennell, and RCF; (3) a claim under the federal Fair Debt Collection Practices Act against OFB, Fennell, and RCF; (4) a claim for specific performance against OFB; (5) a claim for libel against OFB and "defendants"; (6) a claim for invasion of privacy against OFB, Fennell, and RCF; and (7) a claim for declaratory relief.

Defendants OFB and OFSI move for summary judgment. Defendants Fennell and RCF separately move for summary judgment. Plaintiffs cross-move for summary judgment. I grant in part and deny in part OFB's and OFSI's motion. I grant in part and deny in part Fennell's and RCF's motion. I deny plaintiffs' cross-motion.

BACKGROUND

In March 1997, plaintiffs borrowed $151,200 from OFB and promised to repay those funds, under the terms and conditions set forth in a note, purchase money deed of trust, and an adjustable rate rider. On November 13, 1997, OFB assigned the beneficial interest in the deed of trust to OFSI, a sister corporation and affiliate of OFB.

Plaintiffs failed to make any payments for January, February, March, and April 1999. In May 1999, OFB began to foreclose on plaintiffs' home. Hulse Affid. at ¶ 2. Hulse negotiated a forbearance agreement with OFB representative Ernest Santiago. Exh. 105. The agreement was dated May 14, 1999, and signed by Hulse on May 18, 1999. Id. at p. 2. The agreement called for the following payments: $6,965.67 due by May 20, 1999, and $1,640.91 due June 1, 1999, July 1, 1999, August 1, 1999, September 1, 1999, and October 1, 1999, Id. at p. 1. The agreement also informed plaintiffs that the "past due amount is $8184.50 which includes attorney fees and costs in the amount of $1176.00." Id. Additionally, it stated that late fees in the amount of $69.10 would accrue monthly until the delinquency was cured. Id.

Plaintiffs made all of the required payments under the forbearance agreement, but incurred another late fee of $71.89 for a late September 1999 payment. Plaintiffs dispute that the September 1999 payment was late. Because all of the payments pursuant to the agreement were made, OFB terminated the foreclosure proceedings.

Although the forbearance agreement states that the loan's past due amount is $8,184.50, including attorney's fees and costs of $1,176, the payment amounts included in the forbearance agreement may or may not have included that $1,176 in attorney's fees and costs. Exhibit 105 shows the first payment, due May 20, 1999, to be $6,965.67. This is $1,218.93 less than the $8,184.50 past due figure quoted in the agreement.

It is clear that the $6,965.67 figure is the total of the monthly payments owing and due from January 1, 1999, through May 1, 1999. This is seen by looking at Exhibits 107 and 113. Exhibit 113, a reconciliation statement prepared by Tamara Casamento, a research specialist for OFB, shows that the monthly payment that plaintiffs missed for each of the months of January 1999, February 1999, March 1999, and April 1999, was $1,381.96, or $5,527.84 total. The missed May 1999 payment was $1,437.83. See also Exh. 107 at p. 1 (February 23, 1999 notice to plaintiffs that because of the adjustable rate mortgage, the monthly principal and interest payment was to change from $1,381.96 to $1,437.83 as of May 1, 1999). The total of the missed monthly payments from January 1, 1999, through May 1, 1999, is $6,965.67, the amount plaintiffs had to pay by May 20, 1999, as part of the forbearance agreement.

Exhibit 105 then shows payments two through six, due on the first of each month beginning June 1, 1999, through October 1, 1999, to be $1,640.91. The reconciliation statement shows that plaintiffs' monthly payment beginning June 1, 1999, was $1,640.91. But, Exhibit 107 shows that beginning May 1, 1999, plaintiffs' principal and interest monthly payment was to be $1,437.83. Exh. 107 at p. 1. Thus, for June 1, 1999, July 1, 1999, August 1, 1999, September 1, 1999, and October 1, 1999, plaintiffs' monthly payments under the forbearance agreement were $203.08 per month more than their regular principal and interest payment. The reconciliation statement shows that this extra $203.08 was allocated to "Fees" in June 1999 and July 1999. Exh. 113. The description states the payment was "F/B Payment Including Fees." Id. The description for the extra $203 .08 for September 1999 and October 1999 is "F/B Payment Including L/C." Id. It is reasonable to assume that "L/C" may mean late charge. Id. For August 1999, the reconciliation statement shows $87.93 of the $203.08 being allocated to "Fees," and the remainder, or $115.15, being allocated to "L/C." The description there states that the payment was "F/B Payment Including Fees." Id.

The transaction summary, Exhibit 110, also shows the extra $203.08 as an "Expense Payment" for the months of June 1999 and July 1999, and that it was applied to "Other." Exh. 110 at p. 22. It shows an extra $203.08 for September 1999 and October 1999 as "Late Charge" payments, also applied to "Other." Id. Finally, it shows the extra $203.08 for August 1999 as divided between $87.93 for "Expense Payment," and $115.15 as "Late Charge" payment both of which were applied to "Other." Id.

Thus, the records show that from June 1, 1999, through October 1, 1999, plaintiffs paid $203.08 per month more than their principal and interest payment and that this $203.08 monthly sum was applied to various fees and charges which had apparently accrued on plaintiffs' account.

In her affidavit, Casamento explains that as of the date of the May 14, 1999 for-bearance agreement, plaintiffs owed $478.59 in fees and costs, independent of the $1,176 incurred by Regional Trustee Services in connection with the foreclosure proceedings begun in May 1999. Casamento Declr. at ¶ 12; Exh. 113. Those fees were incurred as follows: $225 for a June 1998 foreclosure fee, $250 for a "BPO Fee" in November 1998, $7.75 for a property inspection in April 1999, and $7.75 for another property inspection in May 1999. Because of a $4.16 payment toward fees remitted with plaintiffs' September 1, 1998 payment, the total fees owed as of the May 14, 1999 forbearance agreement was $486.34. Exh. 113. Casamento also states that as of that date, plaintiffs owed $827.58 in late charges. Id.; Exh. 113.

She further explains that the "extra" $203.08 in payments plaintiffs made as part of the forbearance agreement, plus additional payments made in November and December 1999, reduced the fees owed to zero as of December 10, 1999, and the late charges to $137.34 as of that date. Id.; Exh. 113. The reconciliation statement indicates that the $203.08 for the months of June and July 1999 were first applied to the fees owing on the account, making the balance of fees owed $80.18 as of July 14, 1999. Exh. 113. An additional $7.75 for a June property inspection was added on July 23, 1999, making the balance of fees owed $87.93. Id.

Then, $87.93 of the extra $203.08 tendered as part of the August 1, 1999 payment was allocated to the fees owed, rendering that balance zero. Id. The balance of that $203.08, or $115.15, was then applied toward the owing late charges, which, as of July 23, 1999, were $899.47. Id. The extra $203.08 for September and October were allocated to the owing late charges. Id. Thus, according to Casamento, at the time all of the payments called for in the forbearance agreement had been made, plaintiffs were current on principal and interest, owed nothing in fees, and owed $450.05 in late charges. Id.

Hulse, however, states that Santiago told him that all fees, payments, and anything else that OFB claimed plaintiffs owed, were included in the forbearance agreement. G. Hulse Affid. at ¶ 5. Thus, he asserts that the forbearance agreement took care of all outstanding balances on the account.

On December 6, 1999, Regional Trustee Services Corporation, the company OFB had used to initiate the foreclosure proceedings against plaintiffs' property in May 1999, issued a bill to OFB for $1,176 for its services. Exh. 108.

On December 14, 1999, in response to plaintiffs' request generated by their attempted refinance of the debt, OFB issued a written payoff statement to plaintiffs. In relevant part, the payoff statement provided that the amount due through December 22, 1999, was $150,139.53. This represented the total of $149,005.97 for principal, $1,058.56 for interest due, $45 for a satisfaction fee, $20 for a fax fee, and $10 for a quote fee. Exh. 111. It also provided that the interest per diem was $48.12. Id. It expressly stated as...

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