Carson et al v. Ocwen Loan Servicing Llc et al

MOTION for Summary Judgment

D. Me.September 16, 2016

DM1\7073226.3 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE __________________________________________ ) BERNARD and NANCY CARSON, ) Plaintiffs, ) ) v. ) ) OCWEN LOAN SERVICING, LLC, ) ) THE BANK OF NEW YORK MELLON F/K/A ) THE BANK OF NEW YORK AS SUCCESSOR ) TO TRUSTEE FOR THE BENEFIT OF THE ) Case No.: 2:15-cv-00514-DBH CERTIFICATEHOLDERS OF POPULAR ABS, ) INC. MORTGAGE PASS-THROUGH ) CERTIFICATES SERIES 2005-C, ) ) and ) ) LITTON LOAN SERVICING, ) Defendants. ) DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT WITH INCORPORATED MEMORANDUM OF LAW Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 1 of 44 PageID #: 2258 i DM1\7073226.3 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii I. STANDARD ........................................................................................................................1 II. ARGUMENT .......................................................................................................................2 A. Counts I and II: Violations of the Automatic Stay and the Discharge Injunction ................................................................................................................ 2 1. The Modification Agreement was never binding upon BONY because it was not executed by it or its agents. ............................................3 2. If the Modification Agreement became effective, then Plaintiffs’ recently discovered material misrepresentations on their RMA concerning the monthly net income vitiate the contract, rendering it unenforceable by Plaintiffs. .........................................................................6 B. Counts III and IV: Federal and Maine FDCPA ................................................... 11 C. Count V: Maine Consumer Credit Code .............................................................. 15 D. Count VI: UTPA .................................................................................................. 20 E. Count VII: RESPA ............................................................................................... 21 F. Count VIII: IIED .................................................................................................. 27 G. Counts IX and X: Fraud and fraudulent misrepresentation ................................. 31 H. Count XI: Breach of Contract .............................................................................. 32 I. Count XII: Promissory Estoppel .......................................................................... 34 III. CONCLUSION ..................................................................................................................35 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 2 of 44 PageID #: 2259 ii DM1\7073226.3 TABLE OF AUTHORITIES Cases Am. Aerial Servs. v. Terex USA, LLC, 39 F. Supp. 3d 95 (D. Me. 2014) ....................................................................................... 31-32 Anderson v. Hannaford Bros. Co., 659 F.3d 151 (1st Cir. 2011) ....................................................................................................34 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ...................................................................................................................1 Bartner v. Carter, 405 A.2d 194 (Me. 1979) .........................................................................................................19 Beaulieu v. Bank of Am., N.A., 2014 U.S. Dist. LEXIS 136876 (D. Me. Sept. 29, 2014) ........................................................28 Brown v. Morris, 243 F. App’x 31 (5th Cir. 2007) ..............................................................................................13 Butner v. United States, 440 U.S. 48 (1979) .................................................................................................................3, 5 Campbell v. Machias Sav. Bank, 865 F. Supp. 26 (D. Me. 1994) ................................................................................................28 Catanzaro v. Experian Info. Solutions, Inc., 671 F. Supp. 2d 256 (D. Mass. 2009) ......................................................................................17 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ...................................................................................................................1 Chiang v. Verizon New England Inc., 595 F.3d 26 (1st Cir. 2010) ......................................................................................................16 Clifford v. Barnhart, 449 F.3d 276 (1st Cir. 2006) ......................................................................................................1 Cota v. U.S. Bank Nat’l Ass’n, No. 2:15-cv-486-GZS, 2016 U.S. Dist. LEXIS 31171 (D. Me. Mar. 10, 2016)..........14, 16, 28 Culebra II, LLC v. River Cruises & Anticipation Yachts, LLC, 564 F. Supp. 2d 70 (D. Me. 2008) ...........................................................................................33 Cunha v. LVNV Funding, LLC, C.A. No. 13-11418-MLW, 2015 U.S. Dist. LEXIS 132911 (D. Mass. Sept. 30, 2015) ........................................................................................................17 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 3 of 44 PageID #: 2260 iii DM1\7073226.3 Davis v. Bank of Am., N.A., No. 13-4396, 2014 U.S. Dist. LEXIS 124731 (E.D. Pa. Aug. 11, 2014) ................................13 Fenello v. Bank of Am., N.A., 926 F. Supp. 2d 1342 (N.D. Ga. 2013) ....................................................................................14 Fitzgerald v. Hutchins, 983 A.2d 382 (Me. 2009) .........................................................................................................34 Fogg v. Ocwen Loan Servicing, LLC, No. 2:14-cv-454-GZS, 2015 U.S. Dist. LEXIS 45642 (D. Me. April 8, 2015) .................27, 29 Fournier v. Bank of Am. Corp., 5:13-CV-00702, 2014 U.S. Dist. LEXIS 13447 (N.D.N.Y. Feb. 4, 2014) ..............................25 Hamilton v. Fed. Home Loan Mortg. Corp., 2:13-cv-00414-JAW, 2014 U.S. Dist. LEXIS 128441 (D. Me. Sept. 15, 2014) ...............16, 21 Harvey v. Dow, 11 A.3d 303 (Me. 2011) ...........................................................................................................35 Hawk v. Carrington Mortg. Servs., LLC, 3:14-CV-1044, 2016 U.S. Dist. LEXIS 87532 (M.D. Pa. June 29, 2016) ...............................21 Hutchinson v. Del. Sav. Bank FSB, 410 F. Supp. 2d 374 (D.N.J. 2006) ..........................................................................................21 James v. GMAC Mortg. LLC, 772 F. Supp. 2d 307 (D. Me. 2010) .........................................................................................19 Jester v. CitiMortgage, No. 1:13 CV 1926, 2014 U.S. Dist. LEXIS 144168 (N.D. Ohio Oct. 9, 2014) .......................23 K & S Servs., Inc. v. Schulz Elec. Group of Cos., 670 F. Supp. 2d 91 (D. Me. 2009) ...........................................................................................34 Kelley v. Maine Eye Care Assocs., P.A., 37 F. Supp. 2d 47 (D. Me. 1999) ...............................................................................................3 Kloss v. RBS Citizens, N.A., 996 F. Supp. 2d 574 (E.D. Mich. 2013) ...................................................................................13 LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507 (1st Cir. 1998) ....................................................................................................27 Leet v. Cellco P’ship, 480 F. Supp. 2d 422 (D. Mass. 2007) ......................................................................................17 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 4 of 44 PageID #: 2261 iv DM1\7073226.3 Letellier v. Small, 400 A.2d 371 (Me. 1979) .........................................................................................................10 Lougee Conservancy v. CitiMortgage, Inc., 48 A.3d 774 (Me. 2012) ..................................................................................................... 28-30 Lyman Morse Boatbuilding, Inc. v. N. Assur. Co. of Am., Inc., No. 2:12-cv-313-DBH, 2013 U.S. Dist. LEXIS 139226 (D. Me. Sept. 27, 2013)...................................................................................................... 19-20 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986) ...................................................................................................................1 Maxwell v. Fairbanks Capital Corp. (In re Maxwell), 281 B.R. 101 (Bankr. D. Mass. 2002) .....................................................................................25 McCarthy v. U.S.I. Corp., 678 A.2d 48 (Me. 1996) ...........................................................................................................33 Miss. & Dominion S.S. Co. v. Swift, 29 A. 1063 (Me. 1894) ........................................................................................................... 3-5 Moore v. Mortgage Elec. Registration Sys., Inc., 848 F. Supp. 2d 107 (D.N.H. 2012) ...................................................................................22, 25 Napolitano v. Green Tree Servicing, LLC, 2:15-cv-00160-JAW, 2016 U.S. Dist. LEXIS 14122 (D. Me. Feb. 4, 2016) ..........................12 Orcutt v. Feis, 298 A.2d 758 (Me. 1973) ...........................................................................................................4 Paris Utility Dist. v. A.C. Lawrence Leather Co., 665 F. Supp. 944 (D. Me. 1987) ................................................................................................3 Pascal v. JP Morgan Chase Bank, N.A., No. 09-CV-10082 (ER), 2013 U.S. Dist. LEXIS 33350 (S.D.N.Y. March 11, 2013)......................................................................................................13 Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir. 1985) .................................................................................................13 Pineo v. Turner (In re Turner), 274 B.R. 675 (Bankr. W.D. Pa. 2002) .......................................................................................5 Pollice v. National Tax Funding, LP, 225 F.3d 379 (3d Cir. 2000)............................................................................................... 12-14 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 5 of 44 PageID #: 2262 v DM1\7073226.3 Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241 (11th Cir. 2016) ...............................................................................................24 Schelling v. Lindell, 942 A.2d 1226 (Me. 2008) .......................................................................................................30 Selby v. Bank of Am., Inc., No. 09cv2079 BTM(JMA), 2011 U.S. Dist. LEXIS 25427 (S.D. Cal. March 14, 2011) ......................................................................................................26 Tobin v. Barter, 89 A.3d 1088 (Me. 2014) .........................................................................................................32 United States v. Premier Contractors, Inc., 283 F. Supp. 343 (D. Me. 1968) ..............................................................................................32 Webb v. Chase Manhattan Mortg. Corp., No. 2:05-cv-0548, 2008 U.S. Dist. LEXIS 42559 (S.D. Ohio May 28, 2008) ........................24 Estate of Whitlock, 615 A.2d 1173 (Me. 1992) .........................................................................................................9 Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013) ................................................................................................3, 18 Statutes 11 U.S.C. § 362(a) ...........................................................................................................................2 11 U.S.C. § 363(b)(1) ......................................................................................................................5 11 U.S.C. § 524(a) ...........................................................................................................................2 12 U.S.C. § 2601 ..............................................................................................................................2 12 U.S.C. § 2605 ............................................................................................................................21 12 U.S.C. § 2605(e) ........................................................................................................... 21, 23-24 12 U.S.C. § 2605(e)(2) ...................................................................................................................21 12 U.S.C. § 2605(f) ........................................................................................................................24 12 U.S.C. § 2605(f)(1)(A)..............................................................................................................21 12 U.S.C. § 2605(f)(1)(A)-(B) .......................................................................................................24 12 U.S.C. § 2605(f)(1)(B) ..............................................................................................................23 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 6 of 44 PageID #: 2263 vi DM1\7073226.3 15 U.S.C. § 1681n(a)(1)(A) ...........................................................................................................24 15 U.S.C. § 1681s-2 ................................................................................................................. 16-17 15 U.S.C. § 1681s-2(b) ..................................................................................................................17 15 U.S.C. § 1681t(b)(1)(F) ............................................................................................................16 15 U.S.C. § 1692 ..............................................................................................................................2 15 U.S.C. § 1692a(4) .....................................................................................................................12 15 U.S.C. § 1692a(5) .....................................................................................................................12 15 U.S.C. § 1692a(6)(F) ................................................................................................................12 15 U.S.C. § 1692a(6)(F)(iii) ..........................................................................................................13 15 U.S.C. § 1692c(2) ...............................................................................................................12, 15 15 U.S.C. § 1692c(a)(2) .................................................................................................................15 15 U.S.C. § 1692d ..........................................................................................................................11 15 U.S.C. § 1692e(2) .....................................................................................................................11 15 U.S.C. § 1692e(10) ...................................................................................................................11 15 U.S.C. § 1692f ..........................................................................................................................12 11 USC § 362 .................................................................................................................................26 11 USC § 524 .................................................................................................................................26 32 M.R.S. § 11001 ...........................................................................................................................2 32 M.R.S. § 11002(4) ....................................................................................................................12 32 M.R.S. § 11002(6) ....................................................................................................................12 32 M.R.S. § 11003(7)(C) ...............................................................................................................13 32 M.R.S. § 11012(1)(B) ...............................................................................................................12 32 M.R.S. § 11013(1) ....................................................................................................................11 32 M.R.S. § 11013(2) ....................................................................................................................11 32 M.R.S. § 11013(2)(B) ...............................................................................................................11 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 7 of 44 PageID #: 2264 vii DM1\7073226.3 32 M.R.S. § 11013(3) ....................................................................................................................12 5 M.R.S. § 205-A .............................................................................................................................2 5 M.R.S. § 213(1) ..........................................................................................................................19 9-A M.R.S. § 1-101..........................................................................................................................2 9-A M.R.S. § 9-403(F) ............................................................................................................. 15-17 9-A M.R.S. § 9-403(G) ............................................................................................................ 16-17 9-A M.R.S. § 9-408........................................................................................................................19 Other Authorities 12 C.F.R. § 1024.36(f)(1)(i) ...........................................................................................................25 12 C.F.R. § 1024.36(f)(2) ..............................................................................................................26 Fed. R. Civ. P. 56(c) ........................................................................................................................1 Maine Rule of Professional Conduct 4.2 .......................................................................................26 Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 8 of 44 PageID #: 2265 DM1\7073226.3 Defendants Ocwen Loan Servicing, LLC (“Ocwen”), the Bank of New York Mellon F/K/A the Bank of New York as Successor to Trustee for the Benefit of the Certificateholders of Popular ABS, Inc. Mortgage Pass-Through Certificates Series 2005-C (“BONY”) and Litton Loan Servicing, LP (“Litton” and, collectively with Ocwen and BONY, “Defendants”), hereby move for summary judgment on all claims asserted by Bernard and Nancy Carson (“Plaintiffs”). I. STANDARD Summary judgment is appropriate when the record shows that there is “no genuine issue as to any material fact.” Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To overcome a motion for summary judgment, the non-movant “may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986). The “mere existence of some alleged factual dispute between the parties,” however, cannot defeat a motion for summary judgment. Anderson, 477 U.S. at 247-48. The non-movant must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586. If a plaintiff is unable to satisfy the legal requirements necessary to establish his or her case, summary judgment is not only appropriate, but mandated. See Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248. To that end, a plaintiff’s failure to prove any essential element “necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323; Clifford v. Barnhart, 449 F.3d 276, 280 (1st Cir. 2006). Under this standard, as discussed in detail below, Defendants are entitled to summary judgment on all counts of Plaintiffs’ Amended Complaint. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 9 of 44 PageID #: 2266 2 DM1\7073226.3 II. ARGUMENT Plaintiffs bring 12 causes of action: Count I: violations of the automatic stay, 11 U.S.C. § 362(a); Count II: violations of the bankruptcy discharge injunction, 11 U.S.C. § 524(a); Counts III and IV: violations of the federal and Maine Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., and 32 M.R.S. § 11001, et seq.; Count V: violations of the Maine Consumer Credit Code, 9-A M.R.S. § 1-101, et seq.; Count VI: violations of the Maine Unfair Trade Practices Act (“UPTA”), 5 M.R.S. § 205-A, et seq.; Count VII: violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq.; Count VIII: intentional infliction of emotional distress; Counts IX and X: fraud and fraudulent misrepresentation; Count XI: breach of contract; and Count XII: promissory estoppel. For the reasons discussed in detail below (and based upon the separately filed Statement of Undisputed Material Facts (“Statement”), which is incorporated and cited to herein), Defendants are entitled to summary judgment in their favor on each of these claims. A. Counts I and II: Violations of the Automatic Stay and the Discharge Injunction In Counts I and II, Plaintiffs allege Ocwen and BONY violated the automatic stay and the discharge injunction, by: (1) attempting to collect pre-petition, pre-modification loan debt after the Court approved the loan modification; (2) misapplying post-petition payments to the pre- modified terms of the loan; and (3) misreporting their default to credit reporting agencies. Amended Complaint, ¶¶ 106, 118, attached as Exhibit A to the Declaration of Brett L. Messinger (“Messinger Decl.”). To establish Ocwen’s potential liability under these theories, Plaintiffs must prove that the Modification Agreement is an enforceable, binding contract to modify their loan. Plaintiffs cannot do so, for two reasons. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 10 of 44 PageID #: 2267 3 DM1\7073226.3 1. The Modification Agreement was never binding upon BONY because it was not executed by it or its agents. It is undisputed that BONY did not execute the Modification Agreement after it was returned by Plaintiffs, either directly or through its attorneys-in-fact, Litton and then Ocwen. Statement, ¶¶ 50, 70-71. This is dispositive. The parties did not intend that the Modification Agreement be an effective, binding contract unless and until it was executed by BONY, as demonstrated by the terms of the agreement itself. State law governs the interpretation of property interests unless there is an actual conflict with the Bankruptcy Code. See Butner v. United States, 440 U.S. 48, 54 & n.9 (1979). This includes the interpretation of HAMP agreements. Young v. Wells Fargo Bank, N.A., 717 F.3d 224, 231-32 (1st Cir. 2013). (HAMP agreements are ordinary contracts and, thus, interpreted according to state law.) Given this fact, there is no material dispute that the Modification Agreement is not enforceable as a matter of Maine law. “‘Parties do not become contractually bound until they mutually assent to bind themselves to an agreement.’ In determining whether or not there was mutual assent, the intent of the parties is dispositive. However, intent is assessed ‘not on the basis of what goes on inside the parties’ heads, but rather on the basis of what they say and do.’” Kelley v. Maine Eye Care Assocs., P.A., 37 F. Supp. 2d 47, 52 (D. Me. 1999) (citations omitted); Paris Utility Dist. v. A.C. Lawrence Leather Co., 665 F. Supp. 944, 955 (D. Me. 1987) (“only the party’s objectively manifested intent is relevant”). This rule applies equally to the question of whether the parties intended to be bound in the absence of a fully executed contract. Miss. & Dominion S.S. Co. v. Swift, 29 A. 1063, 1066-67 (Me. 1894) (“If the party sought to be charged intended to close a contract prior to the formal signing of a written draft, or if he signified such an intention to the other party, he will be bound by the contract actually made, though the signing of the written Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 11 of 44 PageID #: 2268 4 DM1\7073226.3 draft be omitted. If on the other hand, such party neither had nor signified such an intention to close the contract until it was fully expressed in a written instrument and attested by signatures, then he will not be bound until the signatures are affixed.”). The burden of establishing that a contract exists in such a circumstance falls upon the party asserting it. Id. at 1065. Section 2 of the Modification Agreement—entitled “Acknowledgments and Preconditions to Modification”—provides, as an express precondition to the modification, that “the Lender accept[] this Agreement by signing and returning a copy of it to me[.]” Statement, ¶ 39 (“the Loan Documents will not be modified unless and until (i) the Lender accepts this Agreement by signing and returning a copy of it to me, and (ii) the Modification Effective Date (as defined in Section 3) has occurred”). Making plain that the parties did not intend that the Modification Agreement become effective until it was executed by both Plaintiffs and Litton, Section 3 of the Modification Agreement states that, if “all preconditions to the modification set forth in Section 2 have been met,” including the precondition of Litton’s execution of the contract, “the Loan Documents will automatically become modified on 02/01/2011 (the ‘Modification Effective Date’) and all unpaid late charges that remain unpaid will be waived.” Id.,¶ 40. Thus, the “automatic[]” modification provided under the Modification Agreement was expressly and unambiguously preconditioned upon Litton signing the document and returning a copy to Plaintiffs. That never occurred and, as such, the Modification Agreement never became effective by its own terms.1 See Orcutt v. Feis, 298 A.2d 758, 759 (Me. 1973) (affirming trial 1 Litton, then Ocwen, never signed the Modification Agreement because of Plaintiffs’ failures to take action required under both the Commitment Letter and the RMA. The Commitment Letter obligated Plaintiffs to seek authorization from the Bankruptcy Court to enter into the Modification Agreement. Rather than do so immediately, Plaintiffs ignored Litton’s multiple warnings that the modification could not be finalized without Bankruptcy Court approval. Statement, ¶¶ 45-49. Instead, Plaintiffs waited until more than five months after Litton had ceased servicing their loan, to file their motion with the Bankruptcy Court. Id., ¶ 52. That this Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 12 of 44 PageID #: 2269 5 DM1\7073226.3 court’s holding that no contract was formed where “[t]he record demonstrates the defendants’ intention not to be contractually bound until a written instrument had been executed by all the parties, which was never done”); Swift, 29 A. at 1067 (where a party had no “intention to close the contract until it was fully expressed in a written instrument and attested by signatures, then he will not be bound until the signatures are affixed”). Plaintiffs will likely argue that, notwithstanding the parties’ written expression of intent that the Modification Agreement not become effective until executed by both parties, the Bankruptcy Court’s October 31, 2011 Order approving that contract nonetheless created a binding obligation. Statement, ¶ 56. However, the Bankruptcy Court’s Order is necessarily ineffective to order a modification to which both parties had not yet agreed. Whether or not a binding agreement exists is answered by looking to Maine law, subject to any conflicts with the Bankruptcy Code (such as the need for bankruptcy court approval for the use, lease or sale of estate property, see 11 U.S.C. § 363(b)(1)). The Modification Agreement did not exist under state law at the time it was approved by the Bankruptcy Court. The Bankruptcy Code does not provide the Bankruptcy Court with the authority to order it into existence. Cf., Pineo v. Turner (In re Turner), 274 B.R. 675, 681 (Bankr. W.D. Pa. 2002) (treating bankruptcy court approval of otherwise binding agreement as a condition subsequent to its effectiveness). To so hold would be to stand the principle of Butner, and Young on their heads, and grant bankruptcy courts power authorization was not requested or received precluded Litton from executing and finalizing the Modification Agreement. Id., ¶ 43. Ocwen then requested additional updated financial documents three times from Plaintiffs, between September 29, 2011, and November 18, 2011; Plaintiffs ignored each of these letters. Id., ¶¶ 54-62. This failure to respond was directly contrary Plaintiffs’ agreement in the RMA to “provide all requested documents and to respond to all Servicer questions in a timely manner.” Declaration of Nicole Gostebski (“Gostebski Decl.”), Ex. E at 4. As a result, Ocwen denied Plaintiffs’ request for HAMP assistance, on December 13, 2011. Statement, ¶ 63. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 13 of 44 PageID #: 2270 6 DM1\7073226.3 to create property interests under state law where none would have otherwise existed but for the “approval.”2 Maine law is clear that, where the parties’ express written intent is that no binding agreement exists unless and until it is signed by both parties, courts must honor that intent. The Modification Agreement includes such written intent. Because it is undisputed that BONY did not sign the Modification Agreement, it is likewise undisputed that the Modification Agreement was never effective. Plaintiffs’ claims in Counts I and II therefore fail. 2. If the Modification Agreement became effective, then Plaintiffs’ recently discovered material misrepresentations on their RMA concerning the monthly net income vitiate the contract, rendering it unenforceable by Plaintiffs. On August 9, 2010, Plaintiffs submitted a HAMP Request for Modification and Affidavit (“RMA”) to Litton. Statement, ¶ 12. The purpose of this submission was to induce Litton to obtain a modification of the terms of Plaintiffs’ Mortgage. Id., ¶ 13. In that RMA, Plaintiffs reported monthly gross wages in the amount of $3,671 and a total net income of approximately $1,615. Id., ¶ 16. In signing this RMA, Plaintiffs certified, under penalty of perjury, “[t]hat all of the information in this document is truthful[.]” Id., ¶ 14. Plaintiffs also acknowledged that, if they “misrepresented any fact(s) in connection with this document, the Servicer may cancel any Agreement under Making Home Affordable and may pursue foreclosure on my home.” Id., ¶ 15. The actual modification terms again emphasized the necessity that Plaintiffs’ representations, including their income, be truthful and accurate. The Commitment Letter required Plaintiffs to attest: 2 The same can be said of the August 20, 2012 Order from the Bankruptcy Court deeming the Plaintiffs current. Amended Complaint, Ex. 12. If the request to approve the Modification Agreement did not grant the Bankruptcy Court the power to create a contract where the parties had no intent to be bound, then this subsequent order addressing only how much was owed on the Mortgage cannot have either. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 14 of 44 PageID #: 2271 7 DM1\7073226.3 [a]ll representations made by me/us pursuant to my/our request for the Modified Mortgage are true and have been and will be relied upon by Litton, and any breach of the representations will give Litton the right to terminate this commitment and could result in the pursuit of other rights and remedies by Litton. Statement, ¶ 36. These representations included that Plaintiffs, “have provided documentation for all income that I receive” and that “all documents and information I have provided to Lender in connection with this Agreement, including the documents and information regarding my eligibility for the [Home Affordable Modification program], are true and correct.” Id., ¶ 38. However, the record demonstrates that Plaintiffs’ representations materially understated their income and that, but for these misstatements, they would not have received the Modification Agreement. Mr. Carson testified that, at the time he executed the RMA and all relevant times thereafter, he received a weekly check from his employer in the amount of $300.3 Messinger Decl., Ex. B (B. Carson Dep., 33:23-34:1) (“A. I got like an extra check every month for – every week for $300 from Deering Pavilion because they didn’t have to pay for my medical. I was on Medicare. They reimbursed me for my Medicare.”); id., 35:10-11 (“A. When I was working for Deering, I was making 40,000 a year, plus 300 a week that I just told you about.”). Emphasizing the weekly nature of these payments, Mr. Carson agreed that he received 52 checks annually from the time he began working at Deering Pavilion (his place of employment throughout the relevant period): A. I told you on a weekly basis. Q. You got a $300 check weekly? A. That’s 1200 a month, any way you look at it. 12 times 1500 a month – 300 times five weeks or 300 times four weeks. Q. You got 52 checks? A. Right. 52 by 300 …. Q. You started to get that $300 check in what year? A. When I went to work for 3 Mr. Carson characterized these payments as reimbursements for certain Medicare payments. Messinger Decl., Ex. B (B. Carson Dep., 33:23-34:1). But Plaintiffs’ RMA includes no payments at all for health insurance. Gostebski Decl., Ex. E. Even if Mr. Carson were paying for Medicare and those expenses were disclosed, the weekly check he received from his employer should have eliminated those costs as household expenses. In other words, this weekly check either increased Plaintiffs’ income by $300 per week, or decreased their expenses by the same amount. Either way, Plaintiffs’ RMA substantially understated their net income. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 15 of 44 PageID #: 2272 8 DM1\7073226.3 Deering Pavilion.”); id., 117:5-8 (“Q. So, we are talking about during the time period that you applied for your loan modification agreement, you were employed by Deering Pavilion? A. That makes sense.. Id., 115:23-116:8. Thus, these payments totaled approximately $1,200 monthly and $15,600 annually. Mr. Carson confirmed that he did not disclose these payments to Litton at any time. Mr. Carson testified that the monthly gross wages listed on Plaintiffs’ RMA reflected only the wages paid to them in 2010. Q. If you were to take your income from 2009, which is 42,131, which is your gross income and you divide that by 12, you would come to 3,510.92. The number that he put on his income tax returns is 42,131 for 2009. Of course, you might have gotten a little bit of a raise, but do you see anywhere else -- do you see anywhere on here where you disclose the $300 a week? A. No, I didn’t see anything. Messinger Decl., Ex. B (B. Carson Dep., 118:6-13). The lack of disclosure is confirmed by the paystubs Mr. Carson provided to Litton to substantiate his income, which likewise do not reflect any weekly $300 payments to Mr. Carson. Statement, ¶ 20. When confronted with these materials during his deposition, Mr. Carson agreed that Litton was not notified of this $300 weekly payment. Messinger Decl., Ex. B (B. Carson Dep., 118:23-119:1) (“Q. Do you have any information that leads you to believe that you notified Litton of the $300 per week that you were receiving from Deering? A. No, I don’t have notification.”). The correctness and accuracy of Plaintiffs’ representations concerning their income was repeatedly affirmed as material to Litton’s consideration of their request for a loan modification. Statement, ¶¶ 14-15 (RMA); id., ¶ 36 (Commitment Letter); id., ¶ 38 (Modification Agreement). While this is true in the case of any application of HAMP assistance, it is particularly true here given the small difference between Plaintiffs’ original monthly principal and interest payment ($1,588.40, id., ¶ 3) and the payment under the modification offer provided ($1,435.75, id., Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 16 of 44 PageID #: 2273 9 DM1\7073226.3 ¶ 33). This $153.35 monthly difference is approximately half a week of Plaintiffs’ undisclosed income; on an annual basis, the total savings for Plaintiffs ($1,840.20) were less than 12% of the income they concealed from Litton. The difference between Plaintiffs’ original loan payment and the modification offer is so small given Plaintiffs’ undisclosed weekly income that they would not have received a modification offer had they disclosed it. Id., ¶ 34. Under Maine law, a contract is vitiated upon clear and convincing evidence (1) that the other party to the contract made a fraudulent or material misrepresentation; (2) that the misrepresentation induced them to enter into the agreement; and (3) that they were justified in relying on the misrepresentation.4 Estate of Whitlock, 615 A.2d 1173, 1176 (Me. 1992). Thus, Defendants need not prove that Plaintiffs intentionally failed to disclose their additional income to Litton to void the Modification Agreement, only that the misrepresentation was material to Litton such that “the contract would not have been made if not for the misrepresentation.” Id. The undisputed facts demonstrate each of the three elements necessary to void a contract for material misrepresentation. First, Mr. Carson’s testimony established that (1) he was receiving $15,600 per year in income from his employer that he did not disclose to Litton in connection with this RMA; and (2) he did not disclose this income to Litton at any time during the HAMP review process. This misrepresentation was material because Plaintiffs’ income levels were critical to Litton’s determination both of their HAMP eligibility and the terms of the modification provided. Statement, ¶¶ 17, 34; see Whitlock, 615 A.2d at 1176 (a misrepresentation is material, inter alia, where “the maker knows that it would be likely to induce the recipient” to manifest his assent (citation and quotations omitted)). This is not mere supposition: Litton expressly told Plaintiffs 4 “Proof of damage from fraud is not necessary” in order to void a contract under these circumstances. Whitlock, 615 A.2d at 1176. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 17 of 44 PageID #: 2274 10 DM1\7073226.3 their representations were material in the Commitment Letter. Statement, ¶ 36 (Plaintiffs’ acknowledgment that “[a]ll representations made by me/us pursuant to my/our request for the Modified Mortgage . . . have been and will be relied upon by Litton”). Second, the misrepresentations contained in Plaintiffs’ RMA induced Litton to offer Plaintiffs the modification agreement. But for Plaintiffs’ misrepresentation of their income, Litton would not have approved Plaintiffs’ HAMP modification. Statement, ¶¶ 17, 34, 36. Third, Litton was justified in relying on Plaintiffs’ misrepresentation. A party is entitled to rely in good faith on the truthfulness of its counterparty; “[r]eliance is unjustified only if the plaintiff knows the representation is false or its falsity is obvious to him.” Letellier v. Small, 400 A.2d 371, 376 (Me. 1979). Accordingly, Litton’s usage of Plaintiffs’ sworn RMA responses establishes its justifiable reliance on Plaintiffs’ material misrepresentations therein. Litton did not know about Plaintiffs’ understatement of their income, or the understatement’s extent. Statement, ¶¶ 18-21. As a result, Litton’s reliance was justified, and the HAMP agreement that Plaintiffs signed and returned in 2011 was the product of material misrepresentation. Treating Plaintiffs’ material misrepresentation of their income as voiding the HAMP agreement is consistent not only with Maine law, but Plaintiffs’ expectations in entering into the HAMP approval process in the first place. Plaintiffs were repeatedly warned that their representations must be truthful and correct to obtain a HAMP modification. Moreover, Plaintiffs acknowledged that, if they “misrepresented any fact(s) in connection with this document, the Servicer may cancel any Agreement under Making Home Affordable and may pursue foreclosure on my home.” Statement, ¶ 15 (RMA). Thus, before they even obtained the HAMP modification offer, they knew that, should Litton discover they had misrepresented facts to get that offer, their modification would be null and void. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 18 of 44 PageID #: 2275 11 DM1\7073226.3 Hence, Plaintiffs’ claims for violation of the automatic stay and the discharge injunction, which depend on the legal viability of a contract procured by their material misrepresentations, cannot stand. The undisputed facts demonstrate a direct line from Plaintiffs’ material misrepresentations to their claims that Ocwen violated the automatic stay and the discharge injunction by (i) failing to properly implement their ill-gotten modification; and (ii) reporting to credit agencies that Plaintiffs were not making the full payment required under the original, unmodified Note and Mortgage. At the end of the day, Plaintiffs ask the Court to give them the benefit of a contractual offer that they would never have been granted, but for their misrepresentations to Litton to obtain assistance from a government program. There is no dispute as to the misrepresentation, as Mr. Carson admitted it at the deposition. Thus, the Court should determine that Plaintiffs are not entitled to enforce the Modification Agreement and grant Ocwen and BONY summary judgment on Counts I and II of the Amended Complaint. B. Counts III and IV: Federal and Maine FDCPA Counts III and IV allege that Ocwen violated the federal and Maine FDCPA by  Falsely representing the character, amount and legal status of the mortgage debt from October 4, 2011, to the present and through reports to credit reporting agencies. 15 U.S.C. § 1692e(2); 32 M.R.S. § 11013(2)(B).  Use of false and deceptive means to collect on the debt through letters, statements and inaccurate credit reporting. 15 U.S.C. § 1692e(10); 32 M.R.S. § 11013(2).  Delivering notices seeking payment of monies not owed, misapplying payments, and reporting inaccurate amounts owed to the credit reporting agencies. 15 U.S.C. § 1692d; 32 M.R.S. § 11013(1). Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 19 of 44 PageID #: 2276 12 DM1\7073226.3  Communicating with the Carsons in connection with the collection of the debt when Ocwen knew that the consumers were represented by an attorney with respect to that debt and had knowledge of that attorney’s name and address. 15 U.S.C. § 1692c(2); 32 M.R.S. § 11012(1)(B).  Using unfair or unconscionable means to collect or attempt to collect on the mortgage debt through letters, statements, misapplication of payments, and inaccurate credit reporting. 15 U.S.C. § 1692f; 32 M.R.S. § 11013(3). Amended Complaint, ¶ 129. These claims fail for multiple reasons. First, with respect to its interactions with Plaintiffs, Ocwen was not a “debt collector” under the either the federal or Maine FDCPA and, therefore, not subject to either statute. See Napolitano v. Green Tree Servicing, LLC, 2:15-cv-00160-JAW, 2016 U.S. Dist. LEXIS 14122, *24-25 (D. Me. Feb. 4, 2016) (“the FDCPA ‘treats assignees as debt collectors if the debt sought to be collected was in default when acquired by the assignee, and as creditors if it was not’” (citation omitted and emphasis added). “The FDCPA’s provisions generally apply only to ‘debt collectors.’ Creditors . . . are not subject to the FDCPA.”5 Pollice v. National Tax Funding, LP, 225 F.3d 379, 403 (3d Cir. 2000) (citation omitted). The definition of “debt collector” expressly excludes any person “collecting or attempting to collect any debt owed or due or asserted to be owed or due another” where it “concerns a debt which was not in default at the time it was obtained by such person[.]” 15 5 A “creditor” is defined as “any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.” 15 U.S.C. § 1692a(4); see 32 M.R.S. § 11002(4) (same). A “debt collector” is, with certain exceptions, defined as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(5); see 32 M.R.S. § 11002(6) (similar). Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 20 of 44 PageID #: 2277 13 DM1\7073226.3 U.S.C. § 1692a(6)(F); 32 M.R.S. § 11003(7)(C) (same). Where a successor takes over an obligation in default, the manner by which it takes the obligation determines whether it is a creditor or a debt collector. It is well-settled, for instance, that mortgage loan servicers like Ocwen are not “debt collectors” when they begin servicing a mortgage before the borrower defaults. Pollice, 225 F.3d at 403 (“an assignee of an obligation is not a ‘debt collector’ if the obligation is not in default at the time of the assignment”); Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (same). Moreover, the FDCPA excludes from the definition of debt collector “any person collecting … any debt owed … to the extent such activity … concerns a debt which was not in default at the time it was obtained by such person[.]” 15 U.S.C. § 1692a(6)(F)(iii) (emphasis added). Courts have interpreted the word “obtained” as coextensive with the word “assigned.” Brown v. Morris, 243 F. App’x 31, 34 (5th Cir. 2007). Where a successor obtained its right to collect on an obligation by merger with, or acquisition of, the prior collector, it has not “obtained” the obligation in such a way as to bring it within the definition of “debt collector.” Id. at 34-35 (“ABN AMRO, a mortgage company, was not specifically assigned Brown’s mortgage for debt-collection purposes. Rather, ABN AMRO acquired it through its merger with Brown’s previous mortgage company. Accordingly, ABN AMRO did not ‘obtain’ her mortgage while it was in default.”); Davis v. Bank of Am., N.A., No. 13-4396, 2014 U.S. Dist. LEXIS 124731, *11 n.1 (E.D. Pa. Aug. 11, 2014); Kloss v. RBS Citizens, N.A., 996 F. Supp. 2d 574, 598 (E.D. Mich. 2013); Pascal v. JP Morgan Chase Bank, N.A., No. 09-CV-10082 (ER), 2013 U.S. Dist. LEXIS 33350, *11 (S.D.N.Y. March 11, 2013) (“[A]t least one other circuit court, as well as a number of district courts, have found that where a defendant company acquires a debt through its merger with a previous creditor or servicer of the plaintiff, rather than via a specific Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 21 of 44 PageID #: 2278 14 DM1\7073226.3 assignment, the debt was not ‘obtained’ while it was in default. These courts have concluded that such defendant companies are not ‘debt collectors’ under the FDCPA because, as a result of the merger or acquisition, they ‘stand[] in the place of [the original servicing company] as Plaintiffs’ loan servicer.’” (citations omitted)); Fenello v. Bank of Am., N.A., 926 F. Supp. 2d 1342, 1350-51 (N.D. Ga. 2013) (holding that surviving entity which merged with a creditor was likewise considered to be a creditor under the FDCPA, and collecting cases supporting this proposition), aff’d, 577 F. App’x 899 (11th Cir. 2014). In this case, Litton began servicing the Mortgage in November 2008. Statement, ¶ 8. Mr. Carson testified that Plaintiffs’ account was not in default in 2008. Messinger Decl., Ex. B (B. Carson Dep., 79:6-7). As such, at the time it began servicing Plaintiffs’ Mortgage, Litton was considered a creditor, rather than a debt collector, for purposes of the FDCPA. Pollice, 225 F.3d at 403. On June 5, 2011, Ocwen acquired Litton. Id., ¶ 44. Ocwen’s acquisition of Litton meant that, “by operation of law, [Ocwen] now stands in the place of [Litton] as Plaintiffs’ loan servicer” before their default and, as such, “[Ocwen] is not a ‘debt collector’” under the FDCPA. Fenello, 926 F. Supp. 2d at 1351. As a creditor, Ocwen is “not subject to the FDCPA.” Pollice, 225 F.3d at 403; see Cota v. U.S. Bank Nat’l Ass’n, No. 2:15-cv-486-GZS, 2016 U.S. Dist. LEXIS 31171, *11-12 (D. Me. Mar. 10, 2016) (applying federal and Maine FDCPAs co- extensively with respect to who is a “debt collector”). Plaintiffs’ FDCPA claims therefore fail. Even if Ocwen were to be considered a “debt collector,” each of Plaintiffs’ theories of relief under those statutes (save their claims that Ocwen improperly contacted them directly while they were represented by counsel) incorporates and relies upon the validity of the Modification Agreement. See Amended Complaint, ¶ 129. Thus, for the reasons described Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 22 of 44 PageID #: 2279 15 DM1\7073226.3 above, with respect to Counts I and II, Counts III and IV are attempts to recover on an agreement which never came into existence or, alternatively, was procured by material misrepresentations, and thus fails as a matter of law. Finally, Plaintiff’s counsel consented to Litton’s direct communication with Plaintiffs. On July 13, 2010, Plaintiffs’ counsel authorized Litton’s agents “to communicate directly with” Plaintiffs regarding “the subject matter of a workout or loss mitigation alternative with respect to” their loan. Statement, ¶ 11; Gostebski Decl., Ex. D. This consent was never withdrawn and, as such, the communications from Ocwen were not without attorney consent. Even if Plaintiffs’ attorney never consented, Section 805(a)(2) of the FDCPA, 15 U.S.C. § 1692c(2), permits a debt collector to communicate directly with a consumer, even if they are represented and their attorney has not consented, where the consumer him or herself has directly consented to such communications. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt . . . if the debt collector knows the consumer is represented by an attorney with respect to such debt . . ..” (emphasis added)). 15 U.S.C. § 1692c(a)(2). Bernard Carson’s February 8, 2014 letter to Ocwen, Gostebski Decl., Ex. N, expressly consents and directs Ocwen to contact him regarding his account both by phone and in writing. Id. (“You may talk to me by phone home 207-282-3654 evening or my cell 207- 468-9753” and “I would expect something in writing from you in the near further [sic].”). In light of this express prior consent, Ocwen did not violate Section 805(a)(2). Accordingly, summary judgment on Counts III and IV should be granted. C. Count V: Maine Consumer Credit Code Plaintiffs argue that Ocwen violated the Maine Consumer Credit Code in two ways. First, Plaintiffs claim that, in violation of 9-A M.R.S. § 9-403(F), Ocwen reported their loan as Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 23 of 44 PageID #: 2280 16 DM1\7073226.3 delinquent to credit reporting agencies, but did not inform those agencies that the Carsons disputed the debt and “failed to take any action to correct the inaccurate information after receiving notice of the improper disclosure.” Amended Complaint, ¶ 134. Second, Plaintiffs allege that, in violation of 9-A M.R.S. § 9-403(G), Ocwen failed to comply with a Consent Judgment with the Consumer Financial Protection Bureau (“CFPB”) in its attempts to collect on the loan. Both arguments fail. Plaintiffs’ credit reporting claim is preempted by the Fair Credit Reporting Act (“FCRA”). Section 625 of the FCRA provides that “[n]o requirement or prohibition may be imposed under the laws of any State . . . with respect to any subject matter . . . relating to the responsibilities of persons who furnish information to consumer reporting agencies[.]” 15 U.S.C. § 1681t(b)(1)(F). Section 625(b)(1)(F) “supersedes any state law that would cover the subject matter of 15 U.S.C. § 1681s-2, which governs the responsibilities of persons who furnish information to consumer credit reporting agencies.” Hamilton v. Fed. Home Loan Mortg. Corp., 2:13-cv-00414-JAW, 2014 U.S. Dist. LEXIS 128441, *72 (D. Me. Sept. 15, 2014); see Cota, 2016 U.S. Dist. LEXIS 31171 at *13-15 (applying FCRA’s preemption provision to bar furnisher claims). The Maine Consumer Credit Code prohibits one from “[d]isclos[ing] or threaten[ing] to disclose information concerning the existence of a debt known to be disputed by the debtor without disclosing that fact[.]” 9-A M.R.S. § 9-403(F). This is precisely the subject matter covered by Section 623 of the FCRA, 15 U.S.C. § 1681s-2, which describes the scope of the FCRA’s preemption. “Under § 1681s-2, furnishers may not provide inaccurate information to consumer reporting agencies, and also have specific duties in the event of a dispute over furnished information.” Chiang v. Verizon New England Inc., 595 F.3d 26, 35 (1st Cir. 2010). Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 24 of 44 PageID #: 2281 17 DM1\7073226.3 “Section 1681s-2(b),” in particular, “outlines a furnisher’s duties when a consumer disputes the completeness or accuracy of information in their credit report.” Id. Given that Section 623 of the FCRA covers the same subject matter as Plaintiffs’ cause of action for violation of 9-A M.R.S. § 9-403(F), Plaintiffs’ claim is preempted.6 See Cunha v. LVNV Funding, LLC, C.A. No. 13-11418-MLW, 2015 U.S. Dist. LEXIS 132911, *14 (D. Mass. Sept. 30, 2015) (holding that state law claim “premised on unfair credit reporting, failure to correct credit information, or failure to investigate a disputed debt . . . is pre-empted by the FCRA”); Catanzaro v. Experian Info. Solutions, Inc., 671 F. Supp. 2d 256, 262 (D. Mass. 2009) (“including reporting inaccurate credit information, failing to investigate or report credit information as disputed . . . constitutes precisely the kind of conduct that Congress intended to regulate under § 1681s-2” and, therefore, any state law statutory claim based upon such conduct is preempted); Leet v. Cellco P’ship, 480 F. Supp. 2d 422, 434 (D. Mass. 2007) (“to the extent the claim is based on . . . reporting of plaintiff’s consumer credit information, it directly relates to the subject matter of § 1681s-2”). Plaintiffs’ second theory of liability under the Maine Consumer Credit Code fares no better. Plaintiffs contend that, pursuant to the Consent Judgment, “Ocwen was obligated to ‘cease all collection efforts while the borrower (i) is making timely payments under a trial loan modification.’” Amended Complaint, ¶ 137. In violation of this obligation, Plaintiffs contend, Ocwen attempted to collect the pre-modified amounts due. Id., ¶ 138. According to Plaintiffs, these collection attempts sought “to enforce a right that has been barred by law or a final order of the Supreme Judicial Court or a court of the United States[.]” 9-A M.R.S. § 9-403(G). There are three fatal infirmities in this theory. 6 Plaintiffs’ claim that Ocwen violated the UTPA by “misreporting inaccurate amounts due to the credit reporting agencies” is preempted for the same reason. Amended Complaint, ¶144. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 25 of 44 PageID #: 2282 18 DM1\7073226.3 First, the portion of the Consent Judgment on which Plaintiffs rely plainly does not even apply to them. Plaintiffs assert a right to be free from collection attempts where they are “making timely payments under a trial loan modification.” Amended Complaint, ¶ 137 (quotations omitted). Plaintiffs, however, never had a trial loan modification. Rather, as the record demonstrates, they skipped the trial loan modification process because they were in active Chapter 13 bankruptcy at the time of their initial HAMP approval. Statement, ¶ 26. Plaintiffs then moved directly to the permanent modification stage. Id., ¶ 31; see Young, 717 F.3d at 229 (generally describing process from application to trial modification to permanent modification under HAMP). As a consequence, Ocwen did not violate the provisions of the Consent Judgment upon which Plaintiffs base their cause of action. Second, nothing in the Consent Judgment bars Ocwen’s collection of the amounts due and owing on Plaintiffs’ loan. The Consent Judgment merely addresses how collection can be undertaken. Thus, the “right” being enforced, i.e., the right to payment of amounts due under the parties’ contracts still exists, and is not “barred” by the Consent Judgment. See 9-A M.R.S. § 9- 403(G). Third, Plaintiffs’ cause of action depends upon proving that the Modification Agreement was enforceable. Amended Complaint, ¶ 138 (“Ocwen continued to send monthly statements and delinquency notices to the debtors seeking the pre-modification amounts due during the modification period”). For the reasons already described, the Modification Agreement was either never effective or, alternatively, was vitiated by Plaintiffs’ material misrepresentations. Finally, Plaintiffs’ relief under their Maine Consumer Credit Code theories is significantly circumscribed from what is sought in the Amended Complaint. Amended Complaint, ¶ 141 (asking the Court to award “actual damages, including emotional damages, Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 26 of 44 PageID #: 2283 19 DM1\7073226.3 statutory damages, [and] punitive damages”). The Maine Consumer Credit Code does not provide its own remedy; rather, the statute is enforced through the UTPA. See 9-A M.R.S. § 9- 408 (“Any violation of this article constitutes a violation of the Maine Unfair Trade Practices Act.”). Under the UTPA, a person “may bring an action . . . for actual damages, restitution and for such other equitable relief, including an injunction, as the court determines to be necessary and proper.” 5 M.R.S. § 213(1). Because the statute only permits a cause of action for those having suffered a loss of money or property, “[e]motional distress damages are not included.” Lyman Morse Boatbuilding, Inc. v. N. Assur. Co. of Am., Inc., No. 2:12-cv-313-DBH, 2013 U.S. Dist. LEXIS 139226, *10 n.7 (D. Me. Sept. 27, 2013), aff’d in part and rev’d in part, 772 F.3d 960 (1st Cir. 2014); see Bartner v. Carter, 405 A.2d 194, 202-03 (Me. 1979) (finding that “loss of money or property” language “[o]n its face, without the benefit of a strained interpretation, . . . appears to rule out recovery, under the statute, of several kinds of . . . damages [such as] for personal injury, mental distress or loss of time”). Furthermore, the UTPA permits recovery of actual damages or restitution only, and not punitive damages. See 5 M.R.S. § 213(1). Thus, Plaintiffs’ recovery, if any, is limited to whatever economic damages they can show at trial, and their request for an award of either non-economic or punitive damages should be stricken. In addition, regardless of whether Ocwen can be liable under the UTPA, BONY cannot because there is no joint and several liability under the statute. See James v. GMAC Mortg. LLC, 772 F. Supp. 2d 307, 321 (D. Me. 2010) (“Liability under the Maine UTPA attaches only to the party that performed the unfair or deceptive act.”). Thus, BONY is not liable under the statute for Ocwen’s acts, even if an agency relationship existed, as a matter of law. Id. (granting summary judgment to owner of mortgage for acts allegedly committed by servicer). Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 27 of 44 PageID #: 2284 20 DM1\7073226.3 Summary judgment is therefore proper as to both of Plaintiffs’ theories under the Maine Consumer Credit Code or, in the alternative, their relief must be substantially limited from what is pleaded in the Amended Complaint. D. Count VI: UTPA In Count VI, Plaintiffs allege that Ocwen and BONY violated the UTPA by: (a) failing to implement the loan modification; (b) attempting to collect on the pre-modification terms of the debt after the Carsons accepted the modification offer and made payments on the offer; (c) failure to correct the issue after complaints by the Carsons and their counsel; (d) soliciting the Carsons for a new modification and inducing them to engage in the lengthy, time consuming process of applying for a new modification when they were current on the Litton modification; (e) misrepresenting the status of the loan as in default, current, and then in default when it was current; (f) failing to reduce the deferred principal balance per the terms of the loan modification; and (g) misreporting inaccurate amounts due to the credit reporting agencies. Amended Complaint, ¶ 145. Again, Plaintiffs’ claim under the UTPA depends upon the validity and enforceability of the Modification Agreement. For the reasons already stated, there was never an enforceable Modification Agreement and, if there was, that modification cannot be enforced due to Plaintiffs’ material misrepresentations in the course of the HAMP application process. Count VI should have the same fate as Counts I through V. Even if the Court declines to grant summary judgment to Defendants in whole, they are entitled to partial summary judgment on Plaintiffs’ demand for their alleged “emotional damages.” Amended Complaint, ¶ 148. As described above, “[e]motional distress damages are not” recoverable under the UTPA. Lyman Morse Boatbuilding, Inc., 2013 U.S. Dist. LEXIS 139226 at *10 n.7. Thus, Plaintiffs’ recovery must be limited to economic damages, if any, they can show at trial, to Ocwen only. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 28 of 44 PageID #: 2285 21 DM1\7073226.3 E. Count VII: RESPA In Count VII, Plaintiffs allege that Ocwen violated RESPA by failing to respond to qualified written requests (“QWR”) on February 8, 2014, March 4, 2015 and September 24, 2015 and “continu[ing] to provide information regarding alleged overdue payments by the Carsons to the credit reporting agencies during the 60-day period after receipt of the QWRs.” Amended Complaint, ¶¶ 151-53. Plaintiffs seek actual and statutory damages for these alleged violations of RESPA. Id., ¶ 156. The record demonstrates that summary judgment is appropriate. Plaintiffs’ RESPA cause of action is predicated upon Section 6 of RESPA, 12 U.S.C. § 2605(e). This provision of “RESPA requires the ‘servicer of a federally related mortgage loan’ to respond to certain correspondence from a debtor by ‘acknowledging receipt of the correspondence within 5 days (excluding legal public holidays, Saturdays and Sundays).’” Hamilton, 2014 U.S. Dist. LEXIS 128441 at *62 (quoting 12 U.S.C. § 2605(e)). “This correspondence, called a ‘qualified written request,’ is defined in detail in the statute.” Id. In addition to acknowledging receipt of the QWR, the servicer must investigate and provide a response to the borrower within 30 days of receipt of the request. 12 U.S.C. § 2605(e)(2). “[T]he essential elements of a RESPA claim under §2605 are: (1) the submission of a qualified written request by a borrower to a loan servicer; (2) a failure by the loan servicer to timely respond; and (3) damages. In this regard, it is clear that proof of damages caused by the failure to respond to the qualified written request is a crucial component of a RESPA claim.” Hawk v. Carrington Mortg. Servs., LLC, 3:14-CV-1044, 2016 U.S. Dist. LEXIS 87532, *12-13 (M.D. Pa. June 29, 2016), adopted in relevant part, 2016 U.S. Dist. LEXIS 109307 (M.D. Pa. Aug. 17, 2016). Thus, “a breach of RESPA duties alone does not state a claim under RESPA. Plaintiffs must, at a minimum, also allege that the breach resulted in actual damages.” Hutchinson v. Del. Sav. Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J. 2006); 12 U.S.C. § Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 29 of 44 PageID #: 2286 22 DM1\7073226.3 2605(f)(1)(A) (damages awarded to borrower must be “as a result of” the lender’s failure to comply with RESPA). A plaintiff must prove “a causal relationship between” their damages and the alleged RESPA violation. Moore v. Mortgage Elec. Registration Sys., Inc., 848 F. Supp. 2d 107, 123 (D.N.H. 2012). Each of the three written communications on which Plaintiffs’ RESPA claim is based are directed entirely to their efforts to have the Modification Agreement implemented. Amended Complaint, Exs. 16, 21, 27. For the reasons already described, Plaintiffs cannot enforce that agreement, assuming it was ever effective due the fact that it was never countersigned, because their material misrepresentations induced Litton to offer it in the first place. The same holds true here. Had Plaintiffs not misrepresented their income to Litton, they would not have obtained the Modification Agreement. It was Plaintiffs’ own misconduct, then, which set their claims in motion, and which caused their damages, if any. Similarly, Plaintiffs cannot establish any actual damages from any failure by Ocwen to respond to their written communications because the record establishes that, immediately before the first communication on which their RESPA claim is based, Ocwen responded to a nearly identical inquiry from Plaintiffs about the status of the modification setup. On January 17, 2014, Bernard Carson called Ocwen to inquire why he was being billed for the un-modified monthly payment of $2,033.73, rather than the post-modified monthly payment. Statement, ¶ 64 After reviewing the matter, Ocwen responded to Plaintiffs in writing on February 7, 2014, informing them that the un-modified monthly payment was valid. Id., ¶ 65. Plaintiffs were therefore aware of Ocwen’s position regarding the proper monthly payment amount on their mortgage before Ocwen is claimed to have failed to respond to their February 8, 2014 letter. The failure to respond to subsequent requests seeking the exact same information cannot have caused Plaintiffs Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 30 of 44 PageID #: 2287 23 DM1\7073226.3 any damages. Because these alleged failures to comply with RESPA did not cause Plaintiffs any actual damages, they cannot prevail on their RESPA claim. Likewise, Plaintiffs have offered no proof of any damage resulting from Ocwen allegedly “continu[ing] to provide information regarding alleged overdue payments by the Carsons to the credit reporting agencies during the 60-day period after receipt of the QWRs.” Amended Complaint, ¶ 153. Plaintiffs contend that Ocwen improperly reported them as delinquent for years, both long before and after the submission of their QWRs. Id., ¶¶ 55, 58-59, 76, 89. In the face of this longstanding reporting of delinquency, Plaintiffs cannot—and have not attempted to—show that it was the reporting in the 60 days QWRs which caused them the damage, rather than the delinquencies reported both before and after those periods. In addition to their actual damages (if any are found to exist), Plaintiffs also seek statutory damages under RESPA. A RESPA plaintiff may recover, in addition to his or her actual damages, “additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2,000.” 12 U.S.C. § 2605(f)(1)(B). Plaintiffs claim that Ocwen’s failure to respond to their three written communications “constitutes a pattern and practice of violation of RESPA.” Amended Complaint, ¶ 154. Statutory damages are not available in this case, for two reasons. First, “additional damages” pursuant to Section 2605(f)(1)(B) are only available where the plaintiff has first established that he or she suffered actual damages. As stated above, the existence of actual damages is an element of a claim for violation of the QWR response requirements contained in 12 U.S.C. § 2605(e). See Jester v. CitiMortgage, No. 1:13 CV 1926, 2014 U.S. Dist. LEXIS 144168, *9 (N.D. Ohio Oct. 9, 2014) (“Damages are a necessary element of a RESPA claim.”). This is true not only for claims of actual damages, but statutory additional Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 31 of 44 PageID #: 2288 24 DM1\7073226.3 damages as well. See Webb v. Chase Manhattan Mortg. Corp., No. 2:05-cv-0548, 2008 U.S. Dist. LEXIS 42559, *37 (S.D. Ohio May 28, 2008) (“Even if Plaintiff Carter could establish that Defendant Chase failed to timely respond to a qualified written request, her RESPA claim would still fail because she cannot establish any actual damages. If a loan servicer violates §2605(e), §2605(f) provides for remedies to the borrower. However, remedies for violations of §2605(e) are conditioned upon actual damages to the borrower.”). This conclusion flows from the language of RESPA itself, which makes violators liable for (1) “actual damages” and (2) “any additional damages,” as the court may allow, “in the case of a pattern or practice of noncompliance with the requirements of this section[.]” 12 U.S.C. § 2605(f)(1)(A)-(B). As the Eleventh Circuit recently noted, “the use of ‘additional’ seems to indicate that a plaintiff cannot recover pattern-or-practice damages in the absence of actual damages.” Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 (11th Cir. 2016). The statute provides for the recovery of actual damages and additional damages in the event there is a pattern or practice of noncompliance. This conjunctive indicates that a plaintiff must first be awarded actual damages and then, in certain circumstances, additional damages on top of those actual damages. Cf. 15 U.S.C. § 1681n(a)(1)(A) (permitting, in the case of a willful noncompliance with the FCRA, a consumer to recover “any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000” (emphasis added)). Because Plaintiffs cannot show any actual damages caused by these alleged RESPA violations, they cannot recover additional damages either. Second, there is insufficient evidence that Ocwen engaged in “a pattern or practice of noncompliance with” 12 U.S.C. § 2605(e). “The term ‘pattern or practice’ in a federal statute is not a term of art but rather is defined according to the usual meaning of the words. The term Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 32 of 44 PageID #: 2289 25 DM1\7073226.3 suggests a standard or routine way of operating.” Maxwell v. Fairbanks Capital Corp. (In re Maxwell), 281 B.R. 101, 123 (Bankr. D. Mass. 2002) (citations omitted). The sole basis for Plaintiffs’ “pattern or practice” claim is that Ocwen failed to respond to their three QWRs. Amended Complaint, ¶ 154. As of December 31, 2015, Ocwen was the seventh-largest mortgage servicer in the country, with a $251 billion loan portfolio. Statement, ¶ 72. In the context of Ocwen’s operations, the failure to respond to three QWRs does not establish a pattern or practice under RESPA. See Fournier v. Bank of Am. Corp., 5:13-CV-00702, 2014 U.S. Dist. LEXIS 13447, *13 (N.D.N.Y. Feb. 4, 2014) (“In light of Plaintiff’s allegation that ‘Defendants are regularly engaged in the servicing of residential mortgages,’ the Court agrees with Defendants that three instances of noncompliance with RESPA is insufficient to establish a pattern or practice of noncompliance[.]”); see also, Moore, 848 F. Supp. 2d at 122 (“failure to respond to the Moores’ two letters does not make out a pattern or practice of noncompliance with RESPA”); Maxwell, 281 B.R. at 123 (“In view of the testimony that Fairbanks services a large number of loans in most, if not all, of the 50 states, the Court is unpersuaded that the Debtor has established a ‘pattern or practice’ for purposes of RESPA’s statutory damage provision by showing just two violations.”). The absence of a “pattern or practice” is especially apparent when one considers the context of the three letters at issue here. The first, Plaintiffs’ February 8, 2014 letter to Ocwen, was received by Ocwen on February 19, 2014, less than two weeks after Ocwen had mailed a response to Plaintiffs’ complaints regarding the payment on their mortgage. Statement, ¶¶ 65- 66. Two days later, Ocwen determined that, inasmuch as its February 7, 2014 letter addressed the same issue as Plaintiffs’ February 8, 2014 letter, no further investigation was required. Id. , ¶¶ 67-68. This is a permissible response to a QWR under RESPA. See 12 C.F.R. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 33 of 44 PageID #: 2290 26 DM1\7073226.3 § 1024.36(f)(1)(i). Notice of this determination must be provided to the borrower within five business days of when it was made. 12 C.F.R. § 1024.36(f)(2). Thus, the alleged violation with respect to the February 8, 2014 letter was a failure to notify Plaintiffs that their letter was duplicative of a query to which Ocwen had already responded, not a more general failure to answer to a QWR. Further, Plaintiffs’ counsel’s September 24, 2015 letter to Ocwen was far from an ordinary QWR. On September 16, 2015, counsel sent a demand letter to Ocwen informing it that Litton and Ocwen’s “gross pattern and practice of ongoing misconduct was in violation of at least the FDCPA, RESPA, UTPA, Maine Consumer Credit Code, 11 USC §362 and 11 USC §524 for which the Carsons are entitled to actual, compensatory, punitive, and statutory damages.” Statement, ¶ 69. A second demand letter was sent on September 21, 2015. Amended Complaint, ¶ 88. Following these demands, Plaintiffs’ counsel submitted, less than two weeks later, the third written communication at issue.7 The timing suggests that Plaintiffs’ counsel was seeking to manufacture another potential violation of RESPA to bolster their “pattern or practice” claim, a sequence of events militating against the existence of a “pattern or practice.” Cf. Selby v. Bank of Am., Inc., No. 09cv2079 BTM(JMA), 2011 U.S. Dist. LEXIS 25427, *15 (S.D. Cal. March 14, 2011) (“Two instances of not responding to requests for information sent 7 Notably, counsel’s initial settlement demand to Ocwen (and counsel’s subsequent, September 24, 2015 letter) copied William Fogel and Andrew Feldman, attorneys representing Ocwen in other matters also involving Plaintiffs’ counsel. Gostebski Decl., Ex. O. Maine Rule of Professional Conduct 4.2 prohibits a lawyer from “communicat[ing] about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.” The commentary to the Rule makes clear that “such actual knowledge may be inferred from the circumstances.” Maine R.P.C. 4.2, cmt. 9. It is entirely possible, in other words, that one of the letters on which Plaintiffs’ RESPA claim relies violated Maine’s Rules of Professional Conduct. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 34 of 44 PageID #: 2291 27 DM1\7073226.3 after the filing of a lawsuit do not rise to the level of a ‘pattern or practice.’”). Summary judgment on Plaintiffs’ RESPA claim is therefore proper. F. Count VIII: IIED In Count VIII, Plaintiffs bring a claim against Ocwen and BONY for intentional infliction of emotional distress. The basis of this claim is Ocwen’s “reckless, extreme, and outrageous conduct” in “continuing to attempt to collect on a debt that has been satisfied in full and misrepresenting outrageous amounts due by the Carsons, after at least two demand notices from counsel about the misconduct.” Amended Complaint, ¶ 158. Plaintiffs’ IIED cause of action depends upon their contention that the Modification Agreement was valid and enforceable and, consequently, Ocwen’s attempts to collect on the prior, unmodified mortgage was wrongful. For the reasons set forth above, their material misrepresentations to Litton to obtain that modification void the contract and preclude them from filing any action based upon it. In addition, Plaintiffs have failed to adduce sufficient evidence establishing IIED as a matter of law. To state a claim for intentional infliction of emotional distress, a plaintiff must prove that: (1) the defendant intentionally or recklessly inflicted severe emotional distress or was certain or substantially certain that such distress would result from his conduct; (2) the conduct was so extreme and outrageous as to exceed all possible bounds of decency and must be regarded as atrocious, and utterly intolerable in a civilized community; (3) the conduct of the defendant caused the plaintiff’s emotional distress; and (4) the emotional distress suffered by the plaintiff was so severe that no reasonable man could be expected to endure it. Fogg v. Ocwen Loan Servicing, LLC, No. 2:14-cv-454-GZS, 2015 U.S. Dist. LEXIS 45642, *20- 21 (D. Me. April 8, 2015) (citation omitted). The Court “properly may determine, as a matter of law, whether undisputed (or assumed) facts suffice to state a claim for intentional infliction of emotional distress.” LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 511 (1st Cir. 1998) Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 35 of 44 PageID #: 2292 28 DM1\7073226.3 (applying Maine law); see Lougee Conservancy v. CitiMortgage, Inc., 48 A.3d 774, 784 (Me. 2012) (“in the context of summary judgment on a claim for intentional infliction of emotional distress, ‘it is for the court to determine in the first instance whether the defendant’s conduct may reasonably be regarded as so extreme and outrageous to permit recovery’” (citation omitted)). This Court has characterized the second element—that the defendant’s conduct was so extreme and outrageous as to exceed all possible bounds of decency—as setting a “high bar.” Cota, 2016 U.S. Dist. LEXIS 31171 at *26. Applying this “high bar,” the Court has rejected several attempts by homeowners to bootstrap disputes with their mortgage holders or servicers into IIED claims. For instance, earlier this year in Cota, Judge Singal reviewed a complaint alleging that the defendants wrongfully “threaten[ed] a foreclosure action, us[ed] the threat of such action to induce Plaintiffs to enter into the Loan Modification in order to obtain additional cash payments from Plaintiffs, and [] ultimately fil[ed] the foreclosure action[.]” Cota, 2016 U.S. Dist. LEXIS 31171 at *25. While agreeing that “Plaintiffs have alleged unsavory and perhaps legally actionable conduct, they have not satisfied the high bar of alleging conduct that could be ‘reasonably characterized as atrocious and utterly intolerable.’” Id. at *25-26 (citation omitted). The Court cited Beaulieu v. Bank of Am., N.A., 2014 U.S. Dist. LEXIS 136876, *19 (D. Me. Sept. 29, 2014) (finding that a “wrongful and illegal” filing of a foreclosure action against a military veteran without giving required notice to the Veterans Administration that caused “understandable emotional distress” did not state an IIED claim), and Campbell v. Machias Sav. Bank, 865 F. Supp. 26, 36 (D. Me. 1994) (finding that “threats of foreclosure,” “the filing of a criminal complaint,” and “rude behavior” did not state an IIED claim), each of which alleged conduct similar to, or more egregious, than that alleged by Plaintiffs. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 36 of 44 PageID #: 2293 29 DM1\7073226.3 Given this caselaw, Plaintiffs have not provided sufficient evidence to create a triable issue regarding the second element of IIED. The evidence in this case demonstrates, at most, that Ocwen made a single error in not setting up the Modification Agreement, then repeated that error over the course of several years. This is precisely the type of conduct Magistrate Judge Rich last year held could not state a cause of action for IIED: a mortgage servicer’s allegedly outrageous conduct consisting largely of a single, repeated course of conduct. See Fogg, 2015 U.S. Dist. LEXIS 45642 at *29 (“the predicate of their IIED claim is that Ocwen wrongfully and illegally continued to send dunning notices, as well as filing a false report with credit agencies. The fact that they received a dozen dunning notices does not, in my view, render Ocwen’s conduct extreme, outrageous, atrocious, and utterly intolerable in a civilized society”). The Court should reject Plaintiffs’ IIED claim on the same basis. With respect to the fourth element—that the distress suffered by Plaintiffs be “so severe that no reasonable person could be expected to endure it,” Lougee Conservancy, 48 A.3d at 784—Plaintiffs’ evidence likewise falls short. To establish this element, Plaintiffs “must show that the distress caused would be unbearably severe to an ordinarily-sensitive plaintiff.” Id. This distress must indeed be “severe,” as “general feelings of upset and defeat that, as a matter of law, are not substantial enough to qualify as emotional distress ‘so severe that no reasonable person could be expected to endure it.’” Id. (citation omitted). In Lougee Conservancy, for instance, the plaintiffs argued that their mortgage company’s allegedly wrongful entry into the property and damage to the contents constituted severe emotional distress because [a]s a direct result of this incident, Jim was left upset and anxious and obtained counseling for ten months. The Lougees allege that his existing anxiety-related mental health conditions have been exacerbated. Eleanor feels anxious, defeated, resistant to going to the Homestead, discouraged, offended, disgusted, and as though the Homestead has been “dirtied.” David feels outraged, violated, and Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 37 of 44 PageID #: 2294 30 DM1\7073226.3 “greatly upset.” His “sense of security and isolation at the Homestead” has been “destroyed.” Id. at 779. The Maine Supreme Judicial Court nonetheless concluded that this evidence was insufficient as a matter of law to support an IIED cause of action. Id. at 784. Plaintiffs’ evidence is deficient for the same reasons as in Lougee Conservancy. Nancy Carson testified that her frustration with Ocwen led her to “just want the whole thing to go out the window.” Messinger Decl., Ex. C (N. Carson Dep., 39:13). The process of preparing and responding to Ocwen’s requests for documentation and information “stirred up my emotions a lot and also got me into a lot of crying sessions and a lot of arguments with my husband about all this paperwork we were doing.” Id. (N. Carson Dep. 39:17-19). As a result, she “wasn’t eating right,” lost sleep and missed several days of work over the last five years. Id. (N. Carson Dep. 40:3-16). Bernard Carson similarly testified to feelings of frustration with Ocwen, stating that “[i]t has been emotionally draining to the point that I gave up and paid [Ocwen] the hell off up to date and that’s why I paid you.” Id., Ex. B (B. Carson Dep., 124:24-125:3). These are the “general feelings of upset and defeat that, as a matter of law, are not substantial enough to qualify as emotional distress ‘so severe that no reasonable person could be expected to endure it.’” Lougee Conservancy, 48 A.3d at 784 (citation omitted). This is because “[s]tress, humiliation, loss of sleep, and anxiety occasioned by the events of every day life are endurable.”8 Schelling v. Lindell, 942 A.2d 1226, 1233 (Me. 2008). Plaintiffs have failed to IIED. 8 Bernard Carson testified to a physical manifestation of his emotional frustration with Ocwen in the form of one or more fainting spells. Messinger Decl., Ex. B (B. Carson Dep., 127:1-128:1). Mr. Carson’s personal reaction to Ocwen’s conduct cannot establish the fourth element of IIED, as the Maine Supreme Judicial Court has made clear that this element is an objective one, to be evaluated without regard to a particular plaintiff’s sensitivities. Schelling, 942 A.2d at 1233 (“there is no recognition of damage to an ‘eggshell psyche’ in Maine”). Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 38 of 44 PageID #: 2295 31 DM1\7073226.3 G. Counts IX and X: Fraud and fraudulent misrepresentation In Counts IX and X, Plaintiffs bring claims against Ocwen for fraud and fraudulent misrepresentation. Plaintiffs allege that Ocwen committed fraud by misrepresenting to them the status of their loan following the Modification Agreement and Ocwen’s willingness to correct their account. Amended Complaint, ¶ 170. According to Plaintiffs, they relied upon these misrepresentations by making their reduced monthly payments, incurring time and expense in submitting a further loan modification application and incurring additional costs to bring the loan current after Ocwen wrongfully declared them in default. Id., ¶ 175. As this recitation makes clear, Plaintiffs’ theories of relief are only viable if they are entitled to enjoy the benefits of the Modification Agreement. Plaintiffs are not so entitled because there was no Modification Agreement and, even if there was, Plaintiffs obtained it based upon material misrepresentations they made to Litton during the HAMP application process. Summary judgment is therefore proper. If the Modification Agreement exists and is enforceable, Plaintiffs’ fraud theories fail because Maine’s economic loss doctrine prohibits recovery in tort under the facts here. The economic loss doctrine polices the line between contract and tort by requiring parties to a contract to seek redress for wrongful acts arising out of that agreement under the terms and limitations imposed in the law for the enforcement of contracts. See Am. Aerial Servs. v. Terex USA, LLC, 39 F. Supp. 3d 95, 111-12 (D. Me. 2014) (“the purpose of the economic loss doctrine . . . is to limit duplicative tort remedies where the alleged harm suffered by the plaintiff can be addressed by claims for breach of contract or breach of express and implied warranties”). In Terex, this Court applied the economic loss doctrine to bar fraud claims, like the instant one, which were not independent of the parties’ contract. Id. at 111. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 39 of 44 PageID #: 2296 32 DM1\7073226.3 The same result should obtain in this case. The Amended Complaint, at base, claims nothing more than that the parties had a long-running dispute about the proper amount actually due and owing under their contract and that, as a result of that dispute, they paid more than they believe they should have for the services received. Amended Complaint, ¶ 175. No matter how much Plaintiffs attempt to add by way of their further allegations, they cannot escape the fact that at issue is whether the Modification Agreement is void, and not to what extent Ocwen complied with its alleged responsibilities thereunder. That being so, their fraud claims are “barred by the economic loss doctrine.” Terex, 39 F. Supp. 3d at 112. H. Count XI: Breach of Contract In Count XI, Plaintiffs allege that Litton, Ocwen and BONY all breached the Modification Agreement by failing to properly implement it. Amended Complaint, ¶¶ 182-207. The existence of a valid, binding contract is, of course, a predicate for a breach of contract claim. See Tobin v. Barter, 89 A.3d 1088, 1091-92 (Me. 2014). For the reasons set forth above, BONY did not sign the Modification Agreement and, as such, the parties never had a binding agreement to modify Plaintiffs’ loan. Further, Plaintiffs’ material misrepresentations vitiates the Modification Agreement in any case and, thus, Plaintiffs are precluded from bringing any action which depends upon the validity of that agreement as an essential factual predicate. Defendants are entitled to summary judgment on Count XI for these reasons alone. But even if the Modification Agreement were both effective and enforceable, summary judgment is still appropriate because Plaintiffs cannot enforce a contract of which they were already in material breach. “It is axiomatic in the law of contracts that a party cannot recover on his contract unless he can show substantial performance of his own obligations under the contract or that performance was made impossible by the breach of the other party.” United States v. Premier Contractors, Inc., 283 F. Supp. 343, 348 (D. Me. 1968). Maine law provides Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 40 of 44 PageID #: 2297 33 DM1\7073226.3 that Plaintiffs “cannot claim the benefits of the agreement the court found they themselves had breached.” McCarthy v. U.S.I. Corp., 678 A.2d 48, 53 (Me. 1996); see Culebra II, LLC v. River Cruises & Anticipation Yachts, LLC, 564 F. Supp. 2d 70, 76 (D. Me. 2008) (“a ‘material breach’ justifies the non-breaching party’s subsequent failure to perform”). The truthfulness and accuracy of Plaintiffs’ verified income was one of, if not the most, material considerations to Litton in determining whether Plaintiffs were eligible for HAMP and, if so, the terms of the ensuing modification offer. Statement, ¶ 17. In the Commitment Letter, Plaintiffs attested that “[a]ll representations made by me/us pursuant to my/our request for the Modified Mortgage are true and have been and will be relied upon by Litton, and any breach of the representations will give Litton the right to terminate this commitment and could result in the pursuit of other rights and remedies by Litton.” Id., ¶ 36. In the Modification Agreement itself, Plaintiffs represented that they “have provided documentation for all income that I receive” and that “all documents and information I have provided to Lender in connection with this Agreement, including the documents and information regarding my eligibility for the [Home Affordable Modification program], are true and correct.” Id., ¶ 38. Mr. Carson’s testimony conclusively shows that these representations were untrue; this breach goes to the heart of the bargain between the parties and is thus material. Plaintiffs’ preexisting material breach of the Modification Agreement, precludes them from bringing an action to enforce that agreement. Further, assuming that Plaintiffs’ breach of contract claim could survive at all, it must be substantially narrowed and cabined.  At the time it extended the offer for the Modification Agreement to Plaintiffs, Litton was acting as an agent for a disclosed principal, namely BONY.9 9 Ocwen’s relationship to the Modification Agreement is even more attenuated, as it merely came to an offer provided to Plaintiffs by the prior servicer of their Mortgage. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 41 of 44 PageID #: 2298 34 DM1\7073226.3 Gostebski Decl., Ex. H (identifying BONY as the signatory on the Modification Agreement, by Litton as its attorney-in-fact). “Generally, an agent is not personally liable for contracts entered into on behalf of a disclosed principal.” K & S Servs., Inc. v. Schulz Elec. Group of Cos., 670 F. Supp. 2d 91, 94 (D. Me. 2009). “When an agent acting with actual or apparent authority makes a contract on behalf of a disclosed principal, (1) the principal and the third party are parties to the contract; and (2) the agent is not a party to the contract unless the agent and third party agree otherwise.” Fitzgerald v. Hutchins, 983 A.2d 382, 386-87 (Me. 2009). Because Litton’s and Ocwen’s were agents of a disclosed principal, they are not liable for breach of contract as a matter of law.  Plaintiffs assert that they are “entitled to actual, compensatory and equitable damages” for Defendants’ alleged breach of contract. Amended Complaint, ¶ 209. Plaintiffs’ damages are limited to economic damages. Anderson v. Hannaford Bros. Co., 659 F.3d 151, 167 (1st Cir. 2011) (breach of contract damages are “restricted in that they disallow ‘recovery of damages for mental or emotional distress suffered solely as the result of a breach of contract,’ even if foreseeable” (citation omitted)). Should Plaintiffs’ breach of contract claim survive summary judgment, their potential damages must be so limited. I. Count XII: Promissory Estoppel Count XII asserts a promissory estoppel claim against Defendants as a companion to Plaintiffs’ breach of contract claim. Amended Complaint, ¶ 211. Plaintiffs allege that, if the Modification Agreement is unenforceable, then the doctrine of promissory estoppel requires the implementation of the modification because Plaintiffs detrimentally relied upon Litton’s promise to modify the loan should they meet certain conditions. Id., ¶¶ 211-236. Plaintiffs’ theory of promissory estoppel should be rejected for the same reason as their contract theory viz., they are seeking to enforce a promise expressly preconditioned on events which never occurred and, moreover, induced by their own admitted material misrepresentations. Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 42 of 44 PageID #: 2299 35 DM1\7073226.3 Just as such a claim cannot be a basis for contractual relief, it also cannot provide the basis for quasi-contractual relief to enforce the same ill-gotten promise. In the event that Plaintiffs’ promissory estoppel claim survives summary judgment, the scope and quantum of relief available should be limited in the same manner as their breach of contract claim (i.e., BONY as the only proper defendant, and potentially liable only for economic damages). This is because Maine treats a promise binding under promissory estoppel as the equivalent of a contract. Harvey v. Dow, 11 A.3d 303, 308 (Me. 2011). In light of the direct relationship between contract and quasi-contract, “damages should not put the promisee in a better position than performance of the promise would have put him.” Id. (citation omitted). Thus, should Count XII survive, Plaintiffs’ relief must be limited in the same manner as their potential breach of contract damages. III. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court grant them summary judgment on all counts. Dated: September 16, 2016 Portland, Maine Respectfully submitted, /s/ Brett L. Messinger By: Brett L. Messinger DUANE MORRIS LLP 2 Monument Square, Ste. 505 Portland, ME 04101-3406 blmessinger@duanemorris.com 215.979.1508 Attorneys for Defendants Ocwen Loan Servicing, LLC, the Bank of New York Mellon F/K/A the Bank of New York as Successor to Trustee for the Benefit of the Certificateholders of Popular ABS, Inc. Mortgage Pass-Through Certificates Series 2005-C and Litton Loan Servicing, LP Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 43 of 44 PageID #: 2300 DM1\7073226.3 CERTIFICATE OF SERVICE I, Brett L. Messinger, hereby certify that on 16th day of September, 2016, I caused the foregoing Motion for Summary Judgment to be placed on the Court’s ECF filing system. /s/ Brett L. Messinger Case 2:15-cv-00514-DBH Document 45 Filed 09/16/16 Page 44 of 44 PageID #: 2301