Brand v. Caliber Home Loans, Inc.

ANTONIO BRAND, et al., Plaintiffs, v. CALIBER HOME LOANS, INC., et al., Defendants.

No. 16-cv-03432

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

October 9, 2018

Judge Andrea R. Wood

MEMORANDUM OPINION AND ORDER

Defendant Caliber Home Loans, Inc. ("Caliber") became the servicer of Plaintiffs Antonio and Consuelo Brand's mortgage loan after the loan debt was discharged in bankruptcy proceedings. The bankruptcy discharge meant that Caliber could not pursue collection on the loan from Plaintiffs. Nonetheless, Caliber made several communications with Plaintiffs that they allege violated provisions of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Illinois Collection Agency Act ("ICAA"), 225 ILCS 425/1 et seq. Plaintiffs have brought several claims under those statutes, and Caliber now moves for partial summary judgment. (Dkt. No. 44.) For the following reasons, the Court grants Caliber's motion.

BACKGROUND

Plaintiffs were the mortgagors of a secured home mortgage serviced by Caliber. (Pls.' Resp. to Defs.' L.R. 56.1 Statement of Material Facts ("PRSMF") ¶ 1, Dkt. No. 55.) Their mortgage was formerly owned by Defendant LSF9 Master Participation Trust¹ ("LSF9"). (Id.¶ 3.) On February 3, 2015, Plaintiffs' mortgage was discharged in a Chapter 7 bankruptcy. (Id. ¶ 5.) Following the bankruptcy discharge, Caliber became the new servicer for Plaintiffs' mortgage. (Id. ¶ 6.)

Caliber first made contact with Plaintiffs in a December 16, 2015 Welcome Letter. (Id. ¶ 7.) The Welcome Letter advises Plaintiffs that Caliber was their new mortgage servicer. (Id.) In addition, on its first page and prior to the substantive portion on the second page, the letter contains following bankruptcy disclosure:

*** IMPORTANT MESSAGE ***

If you filed a Bankruptcy petition and there is either an "automatic stay" in effect, or you received a discharge from the Bankruptcy Court of your personal liability: (i) Caliber will not pursue collection on your mortgage loan from you personally; (ii) this notice is for informational purposes only and is not intended as a demand for payment from you personally; (iii) unless the Bankruptcy Court has ordered otherwise, Caliber continues to retain whatever rights it holds in the property that secures the loan, despite your bankruptcy filing; and (iv) this correspondence does not constitute a "reaffirmation" agreement as that term is defined in the U.S. Bankruptcy Code, 11 U.S.C. § 524(C). . . .

(Id.; Def.'s Statement of Uncontested Facts ("SUF"), Ex. D, Dkt. No. 46-4.) Five days later, Caliber sent Plaintiffs a Debt Validation Letter to inform them that LSF9 was the creditor of their loan and their total debt was $89,454.29. (PRSMF ¶ 8; SUF, Ex. F, Dkt. No. 46-6.) The Debt Validation Letter contains a bankruptcy disclosure identical to the one in the Welcome Letter. (PRSMF ¶ 8.)

Shortly thereafter, Caliber began making telephone calls to Plaintiffs. The first call occurred in mid-December. (Id. ¶ 9.) A Spanish-speaking Caliber representative spoke with Antonio Brand and discussed foreclosure alternatives. (Id. ¶ 10.) At no point during the call did the representative demand that Plaintiffs repay the discharged loan. (Id.) Between January 9, 2016 and March 9, 2016, Caliber called Plaintiffs twelve more times. (Id. ¶ 11.) Eight of those calls areat issue in this action (although not the subject of this motion for partial summary judgment). (Id.) No Caliber representative ever demanded payment from Plaintiffs on the discharged loan or otherwise suggested Plaintiffs owed money on the loan during these calls. (Id. ¶ 12.)²

In a letter dated February 17, 2016, Caliber formally notified Plaintiffs that they were in default on their mortgage ("Notice of Default"). (Id. ¶ 13; SUF, Ex. J, Dkt. No. 46-10.) The Notice of Default begins by stating that Plaintiffs are "in default under the terms of the documents creating and securing your Loan . . . for failure to pay amounts due." (SUF, Ex. J.) In the next paragraph, the notice states that:

You have a right to cure your default. To cure the default, you must pay the full amount of the default on this loan by 3/23/2016 . . . . Failure to cure the default on or before this date may result in acceleration of the sums secured by the Security Instrument, foreclosure by judicial proceeding where applicable, and sale of the property.

(PRSMF ¶ 13; SUF, Ex. J.) The letter next lists the amounts that Plaintiffs owed on the mortgage and instructs them on how to cure the default and how to dispute the default. (SUF, Ex. J.) In the next paragraph, the letter states that, "[i]f foreclosure proceedings are undertaken, we may pursue a deficiency judgment, if permitted by applicable law." (Id.) Near the bottom of the second page of the letter, in normal typeface, there is a paragraph advising Plaintiffs of their rights. (Id.) Two sentences into that paragraph, on the third line, the notice discloses the following:

To the extent your obligation has been discharged or is subject to the automatic stay in a bankruptcy case, this notice is for informational purposes only and does not constitute a demand for payment or an attempt to collect a debt as your personal obligation.

(PRSMF ¶ 13; SUF, Ex. J.) The next paragraph on the same page is in bold typeface and begins by stating that "Caliber Home Loans, Inc. is attempting to collect a debt, and anyinformation obtained will be used for that purpose." (SUF, Ex. J.) On the next page, in normal typeface, the letter goes on to state: "You are notified that this default and any other legal action that may occur as a result thereof may be reported to one or more local and national credit reporting agencies." (Id.)

Plaintiffs' attorney, Salvador Lopez, sent Caliber a letter around March 11, 2016 in which he informed Caliber that he represented Plaintiffs in connection with their mortgage and advised Caliber no longer to communicate directly with Plaintiffs regarding any debt. (PRSMF ¶ 14.) After receiving the summons and complaint for the present action, Caliber noted that Plaintiffs were represented by Community Lawyers Group, Ltd. rather than Lopez. (Id. ¶ 15.) Caliber updated its records to account for this change in representation. (Id.) As a result, Caliber sent four letters dated March 30, 2016. (Id.) Two letters were sent directly to Plaintiffs' home address. (Id.) One letter (the "Attorney Letter") begins by acknowledging Caliber's receipt of verbal or written communication notifying Caliber that Plaintiffs were no longer represented by an attorney. (Id.; SUF, Ex. K, Dkt. No. 46-11.) The following paragraph is included in the Attorney Letter with an underlined typeface: "In accordance with the Federal Fair Debt Collection Practices Act, please be advised that all collections and account correspondence regarding the above-referenced account will now resume." (SUF, Ex. K.) In the next paragraph, in normal typeface, the letter provides Plaintiffs with a number to contact in the event they believe the notice to have been sent in error. Id. Below the valediction, in all caps and bold typeface, the letter informs Plaintiffs that "THIS IS AN ATTEMPT BY A DEBT COLLECTOR TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE." (Id.) Then, in a separate paragraph and normal typeface, the letter concludes with this bankruptcy disclosure:

Notice to Consumers presently in Bankruptcy or who have a Bankruptcy Discharge: If you are a debtor presently subject to a proceeding in BankruptcyCourt, or if you have previously been discharged from this debt by a Federal Bankruptcy Court, this communication is not an attempt to collect a debt but is sent for informational purposes only or to satisfy certain Federal or State legal obligations.

(PRSMF ¶ 15; SUF, Ex. K.)

The second letter to Plaintiffs informs them that Caliber acknowledged receipt of their written request to cease further communications regarding the mortgage loan. (PRSMF ¶ 15; SUF, Ex. K.) Then, in underline typeface, it states:

In accordance with the Federal Fair Debt Collection Practices Act, please be advised that you will no longer receive any correspondence, except to the extent that such communications are permitted or required by applicable law. Caliber may, however, continue to pursue any and all remedies afforded it under the terms of your account.

(SUF, Ex. K.) Immediately preceding the valediction is the same bold and all-caps notice regarding the letter being an attempt by a debt collector to collect a debt that appeared in the Attorney Letter and the same normal-typeface bankruptcy disclosure. (PRSMF ¶ 15; SUF, Ex. K.) Plaintiffs claim that they never received this second letter. (PRSUMF ¶ 15.)

Plaintiffs claim to suffer from emotional distress because of Caliber's calls and letters. Together, they completed and executed a form affidavit listing sixteen indicators of emotional distress. Plaintiffs circled "YES" for fourteen of those indicators, including: fear of answering the telephone, fear of answering the door, feelings of hopelessness, negative impact on job, and negative impact on relationships. (PRSMF ¶ 16; SUF, Ex. L, Dkt. No. 46-12.) They also wrote that "[w]ith these [sic] stress, I have to stop working, I can't concentrate, headaches, feeling worthless," although neither of them was working at the time Caliber began contacting them. (PRSMF ¶ 16.) In deposition testimony, Plaintiffs also claimed that Caliber's actions caused them to suffer feelings of nervousness, sleeplessness, panic attacks, embarrassment, depression, weight loss, and fears of police coming to their door. (Def.'s Resp. to Pls.' Statement of Additional Facts¶¶ 18-22, Dkt. No. 60.) Consuelo Brand testified that her children "had knowledge of the stress that she suffered, the intimidation that she felt, her fear of opening the door, and her lack of sleep." (Id. ¶ 24.) Further, she stated that she told her doctor of her stress and...