McNamee v. Nationstar Mortg. LLC

CHARLES D. MCNAMEE, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant.

Case No. 2:14-CV-1948

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

January 20, 2021

Chief Judge Algenon L. Marbley

Magistrate Judge Vascura

OPINION & ORDER

This matter is before the Court on Cross-Motions for Summary Judgment - Plaintiff's Motion for Partial Summary Judgment (ECF No. 100) and Defendant's Motion for Summary Judgment (ECF No. 101). For the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Defendant's Motion and DENIES Plaintiff's Motion.

I. BACKGROUND

A. Factual Background

In June 2009, Plaintiff Charles D. McNamee executed a promissory note and mortgage to finance the purchase of a home, located at 8641 Ross Drive, Mechanicsburg, Ohio (the "Property"). (ECF No. 100-2 at 1; ECF No. 100-3 at 3). In January 2010, Plaintiff lost his job and his family experienced significant medical expenditures. (ECF No. 100-1 ¶ 8). Plaintiff became delinquent on his mortgage debt, which was owed to the mortgage servicer, Bank of America, N.A.¹ (ECF No. 100-1 ¶¶ 7-8). Despite signing an Open-Ended Restoring Stability Mortgage inMarch 2011, Plaintiff and his family were unable to overcome their financial difficulties. (ECF No. 100-1 ¶ 9).

On May 29, 2012, Mr. McNamee and his wife jointly filed a voluntary Chapter 7 petition. (ECF No. 100-1 ¶ 11; see also ECF No. 100-5). At the time of the bankruptcy filing, Plaintiff also filed a Statement of Intention pursuant to 11 U.S.C. § 521(a)(2)(A) to inform Bank of America, N.A., of his intention to surrender the Property. (ECF No. 100-1 ¶¶ 12-13; ECF No. 100-6). By the end of June 2012, Plaintiff and his family had physically vacated the Property. (ECF No. 100-1 ¶ 15). Bank of America, N.A. was duly scheduled as a secured creditor, received notice of Plaintiff's bankruptcy case, and appeared via counsel in the matter. (ECF No. 100-1 ¶¶ 13, 17; ECF No. 100-7 at 3; ECF No. 100-8). Bank of America, N.A. secured relief from the automatic order of stay in the bankruptcy proceeding in the form of an agreed order dated August 30, 2012. (ECF No. 100-9).

On September 25, 2012, Plaintiff received his Chapter 7 discharge. (ECF No. 100-1 ¶ 21; ECF No. 100-12). Upon request from Bank of America, N.A., the Chapter 7 Trustee formally abandoned the bankruptcy estate's interest in the Property on October 3, 2012. (ECF No. 100-13). On or around December 17, 2012, Bank of America, N.A. assigned the Mortgage on the Property to Defendant Nationstar Mortgage, LLC ("Nationstar"). (ECF No. 100-1 ¶ 22; ECF No. 100-14).

Following Plaintiff's Chapter 7 discharge and the assignment of the Mortgage to Nationstar, Nationstar began sending Mr. McNamee mortgage statements and other correspondence. (ECF No. 100-1 ¶¶ 23-37). On December 31, 2012, Nationstar sent Plaintiff a letter providing "formal notice" that Plaintiff was in default on his loan for the Property and that Nationstar was contacting him on behalf of Government National Mortgage Association. (ECF No. 100-14 at 1). The letter also explained that Nationstar "intend[ed] to enforce the provisions ofthe Note" and that Plaintiff "must pay the full amount of this default" within 35 days of the letter, or Nationstar would accelerate the entire sum of the principal and interest due. (Id.). The letter continued: "If you received a bankruptcy discharge which included this debt, this notice is not intended and does not constitute an attempt to collect a debt against you personally[.]" (Id.). In bold typeface, the letter then reads "the amount of debt that we are seeking to collect is $22,439.32." (Id.). The letter continued to explain how a letter recipient could cure the default and that, if requested in writing, Nationstar would not contact the recipient by phone, at place of employment or in any other manner, except to send "statutorily and/or contractually required legal notice." (Id. at 2). Near the end of the letter, Plaintiff was "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" by the Defendant. (Id.). Upon receiving the letter, Plaintiff contacted Nationstar to notify them of his Chapter 7 discharge and made a verbal request for Nationstar to cease contact with him. (ECF No. 100-1 ¶¶ 25-26; ECF No. 100-15 at 2-3).

As early as January 2013, Plaintiff also received monthly Mortgage Loan Statements ("Statement(s)") from Nationstar. (ECF No. 100-1 ¶¶ 27-28; see also ECF Nos. 100-17-20). Directly beneath the text "Mortgage Loan Statement," the Statement reads "Detach coupon below and return with your payment. Retain top portion for your records." (ECF No. 100-16). The top section on the first page then lists a statement date, a payment due date, a loan number, phone numbers for the recipient, and the address of the property at issue. (Id.). The second section of the Statement is labeled "Explanation of Amounts Payable," and shows the principal and interest balance, the escrow amount, the unpaid monthly payments, unpaid late charges, the lender paid expenses, the amount due, and the interest rate. (Id.). The third and final section of the first page is labeled "Important Messages." In this section, the following language appears:

This statement is sent for informational purposes only and is not intended as an attempt to collect, assess, or recover a discharged debt from you, or as a, or demand for payment from, any individual protected by the United States Bankruptcy Code. If this account is active or has been discharged in a bankruptcy proceeding, be advised this communication is for information purposes only and is not an attempt to collect a debt. Please note, however Nationstar reserves the right to exercise its legal rights, including but not limited to foreclosure of its lien interest, only against the property securing the original obligation.

If you do not wish to receive this monthly information Statement in the future, or if you have any questions regarding this account, please call 877-782-7612.

(Id.). The reverse side of the Statement contains sections labeled "Important Payment Information," "Payment Options," "Notice to Customers Making Payments by Check," "Contact Information," and a form for "Change of Address or Telephone Number." (Id.). In October 2013, Plaintiff provided the Statements to his bankruptcy counsel. (ECF No. 100-1 ¶ 29).

On March 20, 2013, Nationstar filed a Complaint for Foreclosure In Rem in the Court of Common Pleas in Champaign County, Ohio to foreclose on the Property. (ECF No. 100-21). On October 8, 2013, Defendant obtained a "Final Judgment Entry In Rem" decreeing the foreclosure of the Property. (Id.). Defendant sold the property on March 9, 2018. (ECF No. 100-1 ¶ 35).

During the ongoing bankruptcy adversary proceeding and this litigation, Mr. McNamee received at least two letters informing him of "Force-Placement of Insurance" in September 2016 and October 2016. (ECF No. 100-1 ¶¶ 36-37). On September 7, 2016, Plaintiff received a letter from Nationstar informing him that Nationstar had no evidence that Mr. McNamee had hazard insurance on the property listed above and that Nationstar "bought insurance on [his] property and added the cost to [his] mortgage loan account." (ECF No. 100-23 at 1). The letter continues that "hazard insurance is required" on the property and indicated that Nationstar "intend[s] to maintain insurance" on the property by renewing or replacing the insurance it had purchased. (Id.). The letter then provided an estimate of the annual cost of insurance. It then informed the recipient thatshe should immediately provide insurance information if the recipient decided to purchase such insurance herself. (Id.). The letter also included a "supplement" to the "Notice" on the first page of the document, with sections labeled "Purchasing Your Own Insurance," "Escrowing for Insurance," "The Insurance We Obtain," "Important Bankruptcy Information," and "Fair Debt Collection Practices Act Disclosure." (Id. at 2-3). In the "Important Bankruptcy Information" section, the letter reads: "If you or your account is subject to pending bankruptcy proceedings, or if you received a bankruptcy discharge, this letter is for informational purposes only and is not an attempt to collect a debt." (Id. at 3).

Mr. McNamee also received a letter from Nationstar dated October 31, 2016, labeled "Notice of Placement of Insurance." (ECF No. 100-24 at 1). This letter informed the recipient of the renewal policy/certificate for hazard insurance on the property, including the annual premium for the policy. The letter then sets forth a section entitled "Important Facts to consider about Lender Placed Insurance." (Id.). The letter later indicates "This is an attempt to collect a debt, and any information obtained will be used for that purpose." (Id. at 2). The letter continues with the following language:

IF THIS DEBT IS IN OR HAS BEEN DISCHARGED IN A BANKRTUPCY PROCEEDING, BE ADVISED THIS COMMUNICATIONN IS NOT AN ATTEMPT TO COLLECT THE DEBT AGAINST YOU. PLEASE NOTE, HOWEVER, WE RESERVE THE RIGHT TO EXERCISE THE LEGAL RIGHTS ONLY AGAINST THE PROPERTY SECURING THE ORIGINAL OBLIGATION.

(Id.). The letter than details the property insurance requirements before attaching a procured insurance policy for the Property, issued by Standard Guaranty Insurance Company. (Id. at 3-16).

B. Procedural Background

Plaintiff Charles M. McNamee brought a class action complaint against Defendant Nationstar on October 17, 2014, alleging violations of the Fair Debt Collection Practices Act("FDCPA"). (ECF No. 1). The complaint sought class certification, a finding that Nationstar's conduct violated the FDCPA, and a civil judgment for statutory damages, costs, and attorney's fees. (ECF No. 1 at 11-12). Nationstar filed a Motion to Dismiss Count II of the Complaint as duplicative; Nationstar also filed its Answer on January...