Saccameno v. U.S. Bank National Association

Facts

Around 2009, P fell behind on her $135,000 home mortgage, and her bank, D, began foreclosure proceedings. P sought the protection of the bankruptcy court and, in December 2009, began a Chapter 13 plan under which she was required to cure her default over 42 months while maintaining her ongoing monthly mortgage payments. P began having problems with Ocwen (D) in October 2011 shortly after Ocwen (D) acquired her previous servicer. Ocwen (D) sent her a loan statement saying, inexplicably, that she owed $16,000 immediately. With her attorney's advice, P ignored the statement and continued making payments based on her bankruptcy plan. P's February 2013 statement said she owed about $7500, and her March statement, $9000. A month later, Ocwen (D) owed P about $1000 in credit, and Ocwen (D) told her she did not need to pay again until September. P continued making payments through June, the last month of her plan. The bankruptcy court issued a notice of final cure, informing Ocwen (D) that P had completed her payments. Ocwen (D) never responded and the court entered a discharge order on June 29, 2013. P's last statement pre-discharge showed that the credit in her favor had grown to $2800 and she was paying down her loan. Ocwen (D) mistakenly treated it as a dismissal and not a discharge in bankruptcy. Internally, Ocwen (D) was screwed up as each check P paid under the bankruptcy plan was being placed into a suspense account and not being applied to the loan. With the dismissal being recorded as far as Ocwen (D) was concerned, P was now fair game for foreclosure. P began experiencing the problems and tried to get Ocwen (D) to fix the records and was discharged in bankruptcy. P frequently called Ocwen's (D) customer service line and each time was directed to a new unhelpful person. P recruited an acquaintance, an attorney named Susan Van Sky, to help. Van Sky wrote to Ocwen (D), explained how P had made all her payments during her bankruptcy, as confirmed by the court, and asked for an explanation of how P could be in default. She followed up with a phone call and an Ocwen (D) representative insisted that the company never rejects payments and requested proof that it had done so. Van Sky followed directions and faxed 100 pages of P's paperwork. Somehow this paperwork was routed to the wrong department and the receiving department refused to do anything with it. Van Sky continued to call Ocwen (D) and eventually, someone asked her to fax the same papers again, so she sent them once more. After talking to the wall Van Sky dropped out and P hired counsel. P continued to make all her payments and Ocwen (D) had reset everything for foreclosure. Ocwen (D) produced affidavits to support a request for judgment of foreclosure, including one prepared as early as July 2013, and gave them to its local law firm. That firm filed an appearance in the foreclosure proceeding in 2014 and told Ocwen (D), in January 2015, that it needed only one more document before it could move for judgment. P filed this suit seeking damages. Ocwen made a very poor showing at trial as its multitude of errors were proven. Ocwen (D) voluntarily dismissed the state-court foreclosure case in March 2016. The jury heard testimony regarding the mental and emotional strain P went through because of Ocwen's (D) continuous errors. Ocwen (D) had even promised the jury, in its opening statement, that it would explain why it received only 40 payments during the bankruptcy. P's counsel diligently walked Ocwen's (D) representative through its own records payment by payment. Just before lunch on the second day of the trial, the representative counted to 42, confirming that P had made each payment. Ocwen (D) never produced the person who allegedly made the initial mistake with P’s file. The jury found in P's favor on all counts. It awarded $500,000 in compensatory damages under the breach of contract, FDCPA, and RESPA claims. The ICFA claim could include punitive damages, and it requires that one prove economic damages before receiving other damages. The jury awarded $12,000 in economic, $70,000 in non-economic, and $3,000,000 in punitive damages, resulting in a total award of $3,582,000. Despite all of Ocwen's (D) post-verdict motions the court the court let stand the damages awards. It held that the punitive damages ratio of roughly 5:1 was not unconstitutionally high given the reprehensibility of Ocwen's (D) conduct. D appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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