United States ex rel. Fisher v. Ocwen Loan Servicing, LLC
| Decision Date | 25 May 2016 |
| Docket Number | CIVIL ACTION NO 4:12-CV-461,CIVIL ACTION NO 4:12-CV-543 |
| Parties | UNITED STATES OF AMERICA Ex rel., Michael J. Fisher, and Michael Fisher Individually, and Brian Bullock, and Brian Bullock, Individually v. OCWEN LOAN SERVICING, LLC and OCWEN FINANCIAL CORPORATION UNITED STATES OF AMERICA Ex rel., Michael J. Fisher, and Michael Fisher Individually, and Brian Bullock, and Brian Bullock, Individually v. HOMEWARD RESIDENTIAL, INC. f/k/a AMERICAN HOME MORTGAGE SERVICING, INC. and OCWEN FINANCIAL CORPORATION |
| Court | U.S. District Court — Eastern District of Texas |
MEMORANDUM OPINION AND ORDER
Pending before the Court is Relators Michael J. Fisher and Brian Bullock's Motion for Summary Judgment on Affirmative Defenses (Dkt. #224 in 4:12-cv-461, Dkt. #291 in 4:12-cv-543). After reviewing the relevant pleadings, the Court finds that the motion should be granted in part and denied in part.
On July 25, 2012, Relator Michael J. Fisher ("Fisher" or "Relator") filed his original complaint under seal (Dkt. #1 in 4:12-cv-461). In his original complaint, Fisher alleged that Homeward Residential, Inc. ("Homeward") did not provide disclosures required by the Truth in Lending Act ("TILA") and Regulation Z with any of its Home Affordable Modification Program ("HAMP") or non-HAMP modifications (Dkt. #1 in 4:12-cv-461).
On June 4, 2014, the Court ordered that the complaint be unsealed and served upon Defendant, after the United States declined to intervene (Dkt. #27 in 4:12-cv-461). On October 16, 2014, Relators filed Qui Tam Relators' First Amended Complaint (Dkt. #39 in 4:12-cv-461). The First Amended Complaint incorporated new allegations including: (1) Federal Housing Administration ("FHA") violations, (2) Dodd-Frank Act violations, (3) Real Estate Settlement Procedures Act ("RESPA") violations, and (4) Texas, New York, and Massachusetts state law violations (Dkt. #39 in 4:12-cv-461). It also added a new relator, Brian Bullock ("Bullock" or "Relator") (Dkt. #39 in 4:12-cv-461).
On March 3, 2015, Relators filed their second amended complaint (Dkt. #101 in 4:12-cv-461). The second amended complaint added a new defendant, Ocwen Financial Corporation ("OFC") (Dkt. #101 in 4:12-cv-461). On August 3, 2015, Homeward filed its Answer to the Second Amended Complaint (Dkt. #158 in 4:12-cv-461). Homeward pleaded the following affirmative defenses: (1) failure to state a claim upon which relief may be granted; (2) failure to plead fraud with particularity; (3) lack of standing; (4) lack of subject matter jurisdiction under the FCA's public disclosure bar; (5) dismissal of all or some of Relator's claims under the FCA's public disclosure bar; (6) all of some of Relators' claims are barred by the statute of limitations; (7) all or some of the claims asserted by Relators' are barred by res judicata and/or collateral estoppel; (8) all or some of Relators' claims are barred by equitable estoppel; (9) all or some of Relators' claims are barred by prior settlements and/or releases; (10) Relators' claims are barred by the doctrine of unclean hands; (11) Relators' claims for damages are barred by the fact that the United States has suffered no actual injury; (12) the damages requested are unconstitutionalunder the Fifth, Sixth, Eight, and Fourteenth amendments; (13) Homeward reserves its right to seek attorneys' fees and expenses; (14) Relators' claims fail because the alleged facts were known to the government; (15) Relators' claims fail because they cannot show that the government detrimentally relied on the Certifications; (16) Relators' claims fail because the alleged false statements were not material to the government's decision to pay HAMP incentives; (17) Relators' claims are equitably estopped because the government continued to pay incentives; and (18) Relators' claims for damages against Homeward are inequitable unjust, or improper (Dkt. #158 at pp. 32-35 in 4:12-cv-461). On December 8, 2015, OFC filed its answer (Dkt. #215 in 4:12-cv-461). OFC included the majority of the same defenses as Homeward, but included the following additional affirmative defenses: (1) the Court lacks subject matter jurisdiction because the second amended complaint's "successor liability" claim against OFC fails to state an actual controversy; (2) the second amended complaint does not state a cause of action against OFC for "successor liability" because it fails to state a cause of action against Homeward; and (3) to the extent that Homeward has asserted any defense that results in the dismissal of any underlying claim, the same claim should be dismissed against OFC (Dkt. #215 at pp. 39-42 in 4:12-cv-461)1
On December 22, 2015, Relators filed their Motion for Summary Judgment on Defendants' Affirmative Defenses (Dkt. #224 in 4:12-cv-461). On January 25, 2016, Defendants filed their response (Dkt. #248 in 4:12-cv-461). On February 3, 2016, Relators filed their reply (Dkt. #275 in 4:12-cv-461). On February 12, 2016, Defendants filed their sur-reply (Dkt. #282 in 4:12-cv-461).
On August 20, 2012, Fisher filed his original complaint under seal (Dkt. #1 in 4:12-cv-543). In his original complaint, Fisher claimed that Ocwen Loan Servicing LLC's ("OLS") HAMP modifications violated TILA because OLS did not provide a TILA notice of rescission in connection with its loan modifications. (See Dkt. #1 in 4:12-cv-543).
On April 7, 2014, United States Magistrate Judge Don Bush ordered that the complaint be unsealed and served upon Defendant, after the United States declined to intervene (Dkt. #19 in 4:12-cv-543). On August 1, 2014, Relator filed his amended complaint (Dkt. #23 in 4:12-cv-543). On August 6, 2014, Relator filed his second amended complaint (Dkt. #29 in 4:12-cv-543).
On November 13, 2014, Relators filed their third amended complaint (Dkt. #59 in 4:12-cv-543). The third amended complaint incorporated allegations including: (1) Federal Housing Administration ("FHA") violations, (2) Dodd-Frank Act violations, (3) Real Estate Settlement Procedures Act ("RESPA") violations, and (4) Texas, New York, and Massachusetts state law violations (Dkt. #59 in 4:12-cv-543). It also added Bullock as a new relator (Dkt. #59 in 4:12-cv-543).
On April 17, 2015, Relators filed their fourth amended complaint (Dkt. #126 in 4:12-cv-543). This complaint added OFC as a defendant, and alleged that OFC made false representations to the government, which induced the government to enter the SPA (See Dkt. #126 in 4:12-cv-543). The fourth amended complaint also claimed that OFC is the parent company of OLS (Dkt. #126 in 4:12-cv-543). On August 3, 2015, OLS filed its Answer to the Fourth Amended Complaint (Dkt. #220 in 4:12-cv-543). OLS pleaded the following affirmative defenses: (1) failure to state a claim upon which relief may be granted; (2) failure to plead fraudwith particularity; (3) lack of standing; (4) lack of subject matter jurisdiction under the FCA's public disclosure bar; (5) dismissal of all or some of Relator's claims under the FCA's public disclosure bar; (6) all of some of Relators' claims are barred by the statute of limitations; (7) all or some of the claims asserted by Relators' are barred by res judicata, collateral estoppel, or equitable estoppel; (8) all or some of Relators' claims are barred by prior settlements and/or releases; (9) Relators' claims are barred by the doctrine of unclean hands; (10) Relators' claims for damages are barred by the fact that the United States has suffered no actual injury; (11) the damages requested are unconstitutional under the Fifth, Sixth, Eight, and Fourteenth amendments; (12) Relators' claims fail because the alleged facts were known to the government; (13) Relators' claims fail because they cannot show that the government detrimentally relied on the Certifications; (14) Relators' claims fail because the alleged false statements were not material to the government's decision to pay HAMP incentives; (15) Relators' claims are equitably estopped because the government continued to pay incentives; and (16) Relators' claims for damages against OLS are inequitable unjust, or improper (Dkt. #220 at pp. 45-47 in 4:12-cv-543). On December 11, 2015, OFC filed its answer (Dkt. #284 in 4:12-cv-543). OFC included the majority of the same defenses as OLS, but included the following additional affirmative defenses: (1) OFC reserves its right to seek its attorneys' fees and expenses; (2) the Court lacks subject matter jurisdiction because the fourth amended complaint's "successor liability" claim against OFC fails to state an actual controversy; (3) the second amended complaint does not state a cause of action against OFC for "successor liability" because it fails to state a cause of action against OLS; and (4) to the extent that OLS has asserted any defense that results in the dismissal of any underlying claim, the same claim should be dismissed against OFC (Dkt. #284 at pp. 49-52 in 4:12-cv-543)2 On December 22, 2015, Relators filed their Motion for Summary Judgment on Defendants' Affirmative Defenses (Dkt. #291 in 4:12-cv-543). On January 25, 2016, Defendants filed their response (Dkt. #330 in 4:12-cv-543). On February 3, 2016, Relators filed their reply (Dkt. #362 in 4:12-cv-543). On February 12, 2016, Defendants filed their sur-reply (Dkt. #374 in 4:12-cv-543).
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits "[show] that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving part...
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