Summ. Since the Rule 23(a) factors are satisfied, the Court will now consider whether the Rule 23(b)(3) predominance and superiority considerations are met. After two more extensions were granted, based on a finding by the Magistrate Judge that "Defendant has failed to comply" with its discovery obligations and delayed the process, discovery closed on March 22, 2018. After this missed payment, Nationstar assessed a late fee. Id. Md. Reg. Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . at 359-60. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Filed by Janie Robinson. 2017) (holding that "incidental costs related to the sending of correspondence" to the servicer, including "postage and travel," are not actual damages under RESPA because such a rule "would transform virtually all unsatisfactory borrower inquiries into RESPA lawsuits"). 1024.41(c)(1)(ii), 1024.41(b)(1), the Court concludes that common computerized analysis will substantially advance the resolution of such claims, even if not entirely eliminating the need for reviewing certain specific file documents. Write to the Court if you do not like the Settlement. Furthermore, according to Nationstar, to identify the content of a letter sent to a borrower, the letter itself must be viewed. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. For a class action brought for violations of Regulation X, a servicer is liable for "actual damages to each of the borrowers in the class" and, upon a finding of a "pattern or practice" of noncompliance, statutory damages amounting to a maximum of $2,000 per class member up to a total of the lesser of $1 million or one percent of the servicer's net worth. 1024.41(c)(1)(ii), which requires a servicer to respond to a loan modification application within 30 days of receipt of a complete loss mitigation application and provide notice of appeal rights; 12 C.F.R. ("Opp'n') 13, ECF No. LLCNo. He asserts that damages to borrowers can be calculated based on entries in LSAMS and other data showing that fees were assessed, and that it would be possible to identify which fees would not have been assessed but for a RESPA violation. P. 23(b)(3). . See id. 2014). 218. However, the burden is on the plaintiffs to show that other class members exist and that their joinder is impracticable; a court may not rely on mere speculation that numerosity has been satisfied. And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. EQT Prod. Filing fee paid $ 402, Receipt number AOHNDC-10680087. Id. 2d 873, 883 (D. Md. First, Nationstar correctly notes that Mr. Robinson, in his Motion, and Oliver, in his expert report, do not put forward any evidence establishing that the necessary prerequisites for a class action have been met with respect to the claim that Nationstar did not evaluate borrowers "for all loss mitigation options available to the borrower," in violation of 12 C.F.R. 2003). Nationstar's criticism that Oliver failed to use the correct data field to identify the date when a loss mitigation application was complete, and failed to consider the timing of application relative to the date of scheduled foreclosure sale, ring hollow because Nationstar provided to Oliver only limited data fields, which did not contain clear field names or definitions. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. Regulation X went into effect on January 10, 2014. Day to address discovery issues. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. Compl. Code Ann., Com. Id. While Mr. Robinson sought to reduce his monthly mortgage payment in applying for a loan modification, his deposition testimony reflects that he understands that the present lawsuit contends that Nationstar did not process the Robinsons' loan modification application correctly. In its Motion to Strike, Nationstar moves to strike the report of the Robinsons' expert witness, Geoffrey Oliver, on the grounds that (1) Oliver was hired pursuant to an ethically improper contingency fee agreement; and (2) his testimony does not meet the requirements of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). That notice must be provided within 30 days of receiving the complete loss mitigation application. Fed. R. Civ. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. R. Civ. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. Nelson, 2017 WL 1167230, at *3 (collecting cases). 2019) (noting that the purpose of certifying a class "is not to identify every class member at the time of certification, but to define a class in such a way as to ensure that there will be some administratively feasible [way] for the court to determine whether a particular individual is a member at some point" (internal citation omitted) (quoting EQT Production Co. v. Adair, 764 F.3d 347, 358 (4th Cir. 1976) (holding that while it may be unethical for a lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged professional misconduct" would require exclusion of the testimony because the rules of professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23, 26 (4th Cir. Id. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. Moreover, although the court stated that an arrangement for providing expert testimony for a contingent fee would violate public policy, the court did not address the question of the admissibility of evidence at issue here. Because of the manner in which class discovery was conducted, see supra part II.A, Oliver did not have access to all of Nationstar's data fields for the representative sample of loans. Rule 702 permits an expert to testify if the testimony "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the expert has "reliably applied the principles and methods to the facts of the case." the same interest in establishing the liability of defendants." While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. The Court agrees that costs, including administrative costs, "incurred whether or not the servicer complied with its obligations" are not actual damages "caused by, or 'a result of,'" the RESPA violation, whether or not they occurred before or after the violation. Ins. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". The settlement in the form of a consent judgment, filed in the U . Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. 2d at 1366. Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. Anderson, 477 U.S. at 248. Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). The Court will not revisit this determination. Mar. 2605(f)(2), "Rule 23 contains no suggestion that the necessity for individual damage determinations destroys commonality, typicality, or predominance, or otherwise forecloses class certification." Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. Thus, the Court concludes that common computerized analysis can largely answer the question of whether Nationstar violated these RESPA provisions with respect to individual borrowers. While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. 15-3960, 2017 WL 623465, at *8 (D. Md. 1024.41(h)(1), (4). 1024.41(b)(1). Jennings' office said that these new standards are more robust than existing law and will be in place for three years starting in January 2021. . Nationstar admits that in March 2014, two months after the implementation date of Regulation X, it had not yet updated its systems to comply with the regulation. 1024.41(b)(2)(B), (c)(1)(ii); Md. Although similar to Rule 23(a)'s commonality requirement, the test for predominance under Rule 23(b)(3) is "far more demanding" and "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. . Questions? If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. Id. When combined with the state settlements, Nationstar is on the hook to pay a total of $91 million overall: $85 million to harmed consumers and $6 million in civil penalties. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. Regulation X's effective date reflected "an intent not to apply it to conduct occurring prior to that date." Since Regulation X explicitly does not require a loan servicer to provide a loan modification, the Robinsons' claim that they suffered damages because they did not receive a loan modification is not cognizable under the statute. In Frank v. J.P. Morgan Chase Bank, N.A., No. Because of the need to protect the rights of absent plaintiffs to assert different claims and of defendants to assert facts and defenses specific to individual class members, courts must conduct a "rigorous analysis" of whether a proposed class action meets the requirements of Federal Rule of Civil Procedure 23 before certifying a class. R. Civ. 2018). News Ask a Lawyer But where the broad methodology is sound, the lack of consideration of unproduced data cannot provide a basis to strike the expert witness's testimony. (quoting East Tex. Marais v. Chase Home Fin., LLC, 24 F. Supp. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. Thus, the Court concludes that, while Nationstar may have defenses as to some borrowers, the common proof that establishes the asserted violations, as well as the common question of whether the Robinsons can prove a pattern-or-practice violation by Nationstar, will predominate over the individual issues as to these claims. The fact that each borrower must individually show damages under 12 U.S.C. Date: September 9, 2019, Civil Action No. Delaware Attorney General Kathleen Jennings said the settlements, Several states also fined Nationstar in 2018, Kwame Raoul, attorney general of Illinois, latest research from the Mortgage Bankers Association. 1024.41(a). See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. 1024.41(d). Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. For example, Nationstar's own internal procedures reveal that when a loss mitigation application is received, a processor reviews it to determine if all required information and documents have been received, and enters one code, specifically "code HMPC" in LSAMS signifying "Financial Application Complete," and a different code, specifically "code HMPA," signifying "Financial Application Incomplete." Fed. Amchem Prods. MSJ JR 0284. 2015) (holding that Regulation X did not apply to loss mitigation applications submitted before the effective date). See Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) ("When 'one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defense peculiar to some individual class members.'" 1972). The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. Others, however, have concluded that "all expenses, costs, fees, and injuries fairly attributable to" a servicer's RESPA violation are damages, "even if incurred before the" violation, because the "wrongful act . 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. 8:2014cv03667 - Document 18 (D. Md. The servicer "is liable for any economic damages caused by the violation." 1976). Law 13-316(e), for the reasons stated above, see supra part I.B.4, the Robinsons have provided sufficient evidence to create a genuine issue of material fact whether they have suffered economic damages, in the form of administrative costs, fees, and interest. TDC-14-3667 (D. Md. The language of the regulation states not that a loan servicer must comply with Regulation X's requirements only for a borrower's first loss mitigation application, but that a loan servicer must "comply with the requirements" only "for a single complete loss mitigation application." 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. While Mr. Robinson signed the promissory note ("the Note"), the deed of trust ("the Deed"), and the balloon payment rider for the 2007 loan, Tamara Robinson ("Mrs. Robinson") signed only the Deed and balloon payment rider and did not sign the Note. An expert's testimony is "critical" where it is "important to an issue decisive for the motion for class certification." To the extent that, as Nationstar claims, such a determination could not be fully accomplished through computerized analysis alone, the resources needed to resolve this question would be even greater, such that the importance of having it resolved in a common fashion for all claims would be heightened. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. J. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. Tenn. Aug. 28, 2018) (holding that a spouse who signed a deed of trust stating that a person who did not sign the promissory note was not obligated on the security instrument, but did not sign the promissory note, was not a borrower under RESPA). 1024.41(d). The comments to that rule state that the "common law rule in most jurisdictions is . v. Nationstar Mortgage LLC, Case No. 120. Plaintiff and Class Representative Demetrius Robinson, along with Class Counsel Tycko & Zavareei LLP and The Bestor Law Firm, respectfully move this Court for an award of $1,300,000 in reasonable attorneys' fees and expenses, as well as a $5,000 service award for Mr. Robinson. The Court will therefore deny the Motion for Summary Judgment as to this argument. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."). Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. 17-0982, 2018 WL 4111938, at *5-6 (M.D. 1024.41. Nationstar argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. Id. Similarly, though the precise nature of the fees imposed was not specified, it is reasonable to infer that some were attributable to delays linked to RESPA violations. Before relating the facts relevant to the Motion for Class Certification, the Court will highlight the relevant procedural history affecting the record before the Court. 15-05811, 2016 WL 3055901 (N.D. Cal. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! However, if the costs are shown to have been incurred in response to the RESPA violation, the Court finds that they would be actual damages within the meaning of 12 U.S.C. Id. That is not so here. 2006). 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. 2002), is misplaced. Proof of these claims requires a showing of the dates that an application was received, an acknowledgment letter was sent, an application became complete, Nationstar sent a decision letter to the borrower, and a foreclosure sale is scheduled. 1024.41(b)(2)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loan modification application; or 12 C.F.R. 2010). 1024.41(a). The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. 2d 452, 468 (D. Md. The Class Action Administrator would then begin distribution of the settlement funds. After attempts to modify the loan failed, the Robinsons filed a class action Complaint against Defendant Nationstar Mortgage, LLC ("Nationstar") for alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. 2601(a). Moreover, because borrowers often submit multiple loan modification applications, and because Nationstar's data is stored at the loan level, not at the application level, Nationstar claims that it is not possible to tell from the data alone, without reviewing the files, whether a status or code change is in response to a specific loan modification application. Here, Mrs. Robinson signed the Deed but did not sign the Note. You will receive no benefits from the Settlement, but will retain any rights you currently have to sue Nationstar about the same claims in this case. Signed by Judge Theodore D. Chuang on 8/18/2015. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. For purposes of ascertainability, the requirements of 12 C.F.R. Where the cost of litigation as compared to the potential recovery gives class members little incentive to bring suit, and there is little reason to individually control the litigation, a class action is a superior method to vindicate the rights of class members. Bouchat v. Balt. Furthermore, Oliver states that since Nationstar employees used templates to communicate with borrowers, he could determine whether there were violations of certain RESPA provisions based on entries showing that Nationstar employees used templates that did not comply with RESPA. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. Cal. Nationstar seeks summary judgment on the Robinsons' RESPA claims on the grounds that (1) Mrs. Robinson is not a proper plaintiff because she is not a "borrower" within the meaning of RESPA; (2) RESPA is inapplicable because Nationstar was required to comply with Regulation X only as to the Robinsons' first loss mitigation application; (3) there is no evidence to support a violation of 12 C.F.R.
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