United States District Court, E.D. Wisconsin
DECISION AND ORDER
RUDOLPH T. RANDA, District Judge.
Plaintiff LJ LeFlore claims that Defendant Green Tree Servicing LLC's attempt to collect his alleged mortgage debt violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692; the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227; and constituted slander of title in violation of Wis.Stat. § 706.13(1). Jurisdiction is afforded over the federal claims pursuant to 28 U.S.C. § 1331, with supplemental jurisdiction over LeFlore's state claim pursuant to 28 U.S.C. §1367. Venue in this action lies properly in this District pursuant to 28 U.S.C. §1391(b)(2).
This matter is before the Court on the parties' cross-motions for summary judgment (ECF Nos. 24, 29.) These motions come in the wake of the Court's ruling based on the pleadings that "since at least August 28, 2014, [when the mortgage release was recorded, there was] no mortgage debt [owed by LeFlore] to Green Tree." (ECF No. 22, at 10.)
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment should be granted when a party that has had ample time for discovery fails to "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. If the moving party establishes the absence of a genuine issue of material fact, the nonmoving party must demonstrate that there is a genuine dispute over the material facts of the case. Id. at 323-24. The Court must accept as true the evidence of the nonmovant and draw all justifiable inferences in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is appropriate only "where the factual record taken as a whole could not lead a rational trier of fact to find for the non-moving party." See Bunn v. Khoury Enters., Inc., 753 F.3d 676, 681 (7th Cir. 2014) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). On cross-motions for summary judgment, the Court assesses whether each movant has satisfied the requirements of Rule 56. See Cont'l Cas. Co. v. Nw. Nat'l Ins. Co., 427 F.3d 1038, 1041 (7th Cir. 2005); see also Laskin v. Siegel, 728 F.3d 731, 734 (7th Cir. 2013).
LeFlore filed a statement of material facts (SMF). (ECF No. 24-2.) Green Tree filed a response and additional SMF. (ECF No. 31.)
Green Tree objects to LeFlore's SMF, asserting that it violates the procedural requirements for summary judgment motions as set forth by the Federal Rules of Civil Procedure and this District's Local Rules. (ECF No. 30, at 21-22.) Green Tree states that although LeFlore purports to rely on his verified complaint, his complaint is not verified. Green Tree also states that LeFlore fails to state he has personal knowledge for his allegations, citing as an example the Complaint's allegation that Bank of America conspired with Pitzka Wrecking, Inc. (the company that provided LeFlore an initial quote for demolition services) to increase the amount of the demolition, thereby "causing a theft" of the insurance proceeds in the amount of $11, 565.45. (Compl. ¶ 10, ECF No. 1.) LeFlore does not explain how he came to these conclusions or on what basis he would have firsthand knowledge of a conspiracy between Bank of America and Pitzka.
Indeed, LeFlore's SMF does not cite the particular part(s) of the record which support each factual proposition, instead the introductory portion perfunctorily states that "[p]aragraphs 1-16 were verified in the Complaint and by the court's prior Judgment on the pleadings; [p]aragraphs 17-35 are verified through" LeFlore's declaration. (SMF at 1.) Paragraph 1 of LeFlore's declaration, which is sworn under penalty, "affirm[s] and restate[s] all of the factual statements in [his] complaint and the related exhibits" (ECF No. 24-1); his declaration does not state that it is based on personal knowledge. Rule 56(c)(4) states that "[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated. Fed.R.Civ.P. 56(c)(4); see Luster v. Ill. Dep't. of Corr., 652 F.3d 726, 731 n.2 (7th Cir. 2011).
Because LeFlore's declaration does not state that it is based on personal knowledge, it does not provide a proper basis for summary judgment. Therefore, except for LeFlore's SMF to which Green Tree has responded that such statements are undisputed, his factual statements have been excluded as lacking proper evidentiary support.
LeFlore did not file a response to Green Tree's additional SMF. However, LeFlore maintains that the Declaration of Bradford Hardwick, Green Tree's Regional Manager, is without foundation in paragraphs six through twenty-five in that it attaches Bank of America's payment summary as exhibit D, which is not based on actual knowledge and "falsifies" LeFlore's actual payment history. (Pl. Summ. J. Reply Br., 3-4, ECF No. 36.)
Hardwick's declaration is based on his personal knowledge of Green Tree's records regarding the LeFlore loan, which includes records it obtained from Bank of America, the prior servicer of LeFlore's loan. (ECF No. 32, at ¶ 3.) Those prior records and Green Tree's records are maintained in the "ordinary course of business in Green Tree's loan file" ( Id. at ¶¶ 3, 7.) When an employee with appropriate experience uses records kept in the ordinary course of business to prepare an affidavit, that affidavit cannot be stricken on hearsay grounds because those business records properly fall within a hearsay exception provided by Fed.R.Evid. 803(6). Thanongsinh v. Bd. of Educ., 462 F.3d 762, 777-78 (7th Cir. 2006); BP Amoco Chem. Co. v. Flint Hills Res., LLC, 697 F.Supp.2d 1001, 1021 (N.D. Ill. 2010) (collecting cases and holding that a document prepared by a third party may qualify as another entity's business record under Rule 803(6) if that entity integrated the third-party record into its records and relied upon it in its day-to-day operations. The proponent also must satisfy the other requirements of Rule 803(6).) See also Alloc, Inc. v. Pergo, L.L.C., No. 00-C-0999, 2010 WL 3808977, at *8 (E.D. Wis. Sept. 23, 2010). The Hardwick declaration establishes the foundation for the admission of Green Tree's own business records, which incorporate those of the Bank of America- including the loan origination file and servicing records. Because LeFlore has not responded, Green Tree's SMF are deemed uncontroverted.
LeFlore resides at 4330 North 29th Street, in Milwaukee, Wisconsin. LeFlore is a meat cutter, and his wife works for the school board. He purchased a house and land located at 3024 N. 28th Street, Milwaukee, Wisconsin (the "Property") by means of a note and mortgage from Bank of America secured by that Property. The house on the Property burned down on February 17, 2011.
On April 4, 2011, LeFlore's insurer, Balboa Insurance Group which includes Meritplan Insurance Company, offered its entire policy limit of $75, 000 in insurance proceeds which included demolition of the house. LeFlore accepted the offer. LeFlore received a $10, 300 estimate from Pitzka to demolish the house.
Bank of America declined to apply the insurance proceeds from Balboa when the funds were tendered in 2011, claiming that it was owed more. There was nothing in the note or mortgage giving Bank of America the ability to refuse partial payments on the note; it had no prepayment penalty clause.
Bank of America subsequently sued LeFlore in foreclosure in Bank of America et. al v. LJ LeFlore, Milwaukee County Circuit Court Case No. 12-CV-4225. Bank of America voluntarily dismissed the foreclosure case without prejudice, giving Bank of America the right to reopen. LeFlore made no payments to Bank of America.
Bank of America subsequently sued LeFlore in foreclosure a second time in Bank of America et. al. v. LJ LeFlore, Milwaukee County Circuit Court Case No 12-CV-13785. Bank of America voluntarily dismissed the second foreclosure case.
Effective May 1, 2013, Bank of America transferred the servicing of LeFlore's note and mortgage to Green Tree. LeFlore never made any payments to Green Tree on this Property, loan or mortgage.
Green Tree notified LeFlore that his loan was past due and offered him loss mitigation alternatives. LeFlore filed this action on February 12, 2014, and Green Tree waived service. Every month from July 2013 through July 2014, LeFlore received statements and letters from Green Tree stating that his account was past due, severely delinquent, and that he owed a balance to Green Tree. By letter of October 28, 2014, Green Tree informed LeFlore that his loan had been paid in full. (Demet Decl. ¶ 1, Attach. 1.) (ECF Nos. 36-1, 36-2.)
Green Tree's SMF
On May 8, 2009, LeFlore executed a fixed-rate note in the principal amount of $52, 000 with Bank of America. The note was secured by a mortgage on the Property, a two-family rental property. At all relevant times, LeFlore's mortgage loan was owned by the Federal National Mortgage Association ("Fannie Mae").
By letter dated November 30, 2010, Bank of America advised LeFlore that it had reviewed the tax authority's official records and discovered that there were delinquent taxes owed on the Property. The Bank of America further advised that:
[I]f the delinquent property taxes owed are not paid within thirty (30) days from the date of this letter, BAC Home Loans Servicing, LP may (but is not required to) pay all delinquent taxes owed, including penalties, interest and/or fees, as well as any taxes due to protect your Lender's interest in the property. If BAC Home Loans Servicing, LP disburses funds to bring the account current with your Tax Authority, then it will establish an escrow/impound account at the time of the disbursement which will remain in effect thereafter to ensure the timely payment of future taxes. As a result, your monthly mortgage payment will significantly increase to reimburse any payments made by BAC Home Loans Servicing, LP as well as to collect for upcoming tax bills.
(Hardwick Decl. ¶ 8, Ex. E, ECF No. 32-5.) (Emphasis added.)
LeFlore failed to pay the tax delinquency. Bank of America paid $7, 643.69 to the City of Milwaukee on LeFlore's behalf. Bank of America informed LeFlore that it had advanced funds to pay the property tax delinquencies. Because LeFlore failed to pay the tax delinquency, his escrow account acquired a negative balance of $7, 566.01.
On the date of the fire, Meritplan sent LeFlore a letter acknowledging receipt of his fire damage claim and informing him that the policy had a $75, 000 limit. In April 2011, LeFlore stopped making his monthly mortgage payments.
Because LeFlore failed to take action to have the Property razed, the City of Milwaukee informed Meritplan, Bank of America, and LeFlore that it had commenced proceedings to obtain an order to raze the rental ...