Stephen H. Perron and the United States Bankruptcy Trustee for the Southern District of Indiana on behalf of Christine M. Jackson, Plaintiffs-Appellants,
J.P. Morgan Chase Bank, N.A., Defendant-Appellee.
January 11, 2016
from the United States District Court for the Southern
District of Indiana, Indianapolis Division. No. l:12-cv-01853
- Tanya Walton Pratt, Judge.
Easterbrook, Williams, and Sykes, Circuit Judges.
Perron and Christine Jackson owned their home in Indianapolis
subject to a note and mortgage serviced by J.P. Morgan Chase
Bank. In 2012 the couple divorced, ending their 25-year
marriage. They blame Chase for contributing to the collapse
of their marriage by failing to comply with its obligations
under the Real Estate Settlement Procedures Act
("RESPA"), 12 U.S.C. §§ 2601-2617.
requires mortgage servicers to correct account errors and
disclose account information when a borrower sends a written
request for information. In 2011 Perron and Jackson sent two
such letters accusing Chase of erroneously paying the wrong
homeowner's insurer using $1, 422 from their escrow
account. The mistake was their own fault; they had switched
insurers without telling Chase. When the bank learned of the
change, it promptly paid the new insurer and informed the
couple that their old insurer would send a refund check. The
bank also told them to forward the refund check in order to
replenish the depleted escrow.
didn't. When the refund came, they pocketed the money
instead. So the bank adjusted their monthly mortgage payment
to make up the shortfall. When the couple refused to pay the
higher amount, the mortgage went into default. Instead of
curing, they sent Chase two letters requesting information
under RESPA and demanding that the bank reimburse
their escrow. In response Chase sent a complete account
history, including a detailed escrow statement.
couple then sued Chase claiming that its response was
inadequate under RESPA and caused more than $300, 000 in
damages-including the loss of their marriage. They tacked on
a claim for breach of the implied covenant of good faith and
fair dealing. The district judge entered summary judgment for
affirm. Chase's response almost perfectly complied with
its RESPA duties. To the extent that any requested
information was missing, Perron and Jackson suffered no
actual damages and thus have no viable claim. Nor did Chase
breach the duty of good faith and fair dealing, assuming that
Indiana would recognize the implied covenant in this context.
and Jackson, a married couple, owned their home in
Indianapolis subject to a 2003 note and mortgage. Chase
became their loan servicer in 2005. Perron is a retired
criminal investigator for the IRS; Jackson is an attorney who
represents consumers fighting loan servicers. The dispute
arises out of complications with the couple's mortgage.
The story begins in 2009 with their failure to give Chase
notice when they changed homeowner's insurers.
many mortgage servicers, Chase had the responsibility of
paying the couple's home-insurance premiums from their
escrow account. In March 2009 Perron and Jackson changed
their home-insurance provider from Allstate to Homesite
Insurance without telling Chase. By that time, however, the
bank had already paid Allstate's $1, 422 premium for that
year. When the bank independently learned of the change, it
promptly paid HomeSite's premium from the escrow account.
Chase then sent the couple a letter explaining the situation
and instructing them to remit the refund check from Allstate
to replenish their escrow.
and Jackson received a refund check from Allstate but ignored
Chase's instructions and deposited the money into a
non-Chase account. This created an estimated escrow shortfall
of $802.28 for the upcoming year. To make up the deficiency,
Chase notified the couple that their monthly mortgage payment
would rise from $1, 432.15 to $1, 499.01 - an increase of
$66.86 per month. The couple ignored this as well. From
February 2010 to November 2010, they paid Chase only $1,
469.20 each month. (The amount is puzzling. It's lower
than the 2010 required monthly payment yet higher than the
2009 monthly payments. Perron and Jackson haven't
explained why they paid this sum.)
November 2010 Perron and Jackson reviewed their account
information and decided that Chase had miscalculated their
2010 mortgage payments because of the "erroneous"
escrow payment to Allstate in 2009-apparently forgetting that
they had received and pocketed the refund check from Allstate
despite Chase's instructions. To correct this
"error, " they called Chase and said they would