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Green v. Specialized Loan Services, LLC

United States District Court, W.D. Wisconsin

January 18, 2017

CURTIS W. GREEN and DEBORAH J. GREEN, Plaintiffs,
v.
SPECIALIZED LOAN SERVICING, LLC, Defendant.

          OPINION & ORDER

          JAMES D. PETERSON District Judge.

         Plaintiffs Curtis W. Green and Deborah J. Green bring this action under the Fair Debt Collection Practices Act (FDCPA). The Greens allege that defendant Specialized Loan Servicing, LLC (SLS) attempted to collect a debt that had in fact been discharged in bankruptcy. The Greens contend that SLS's communications about this loan violated the FDCPA and delayed Curtis Green's efforts to obtaining a new loan, which caused the Greens emotional distress.

         The case has been aggressively litigated on both sides, and multiple motions are now before the court. But only one matters. The court will grant SLS's motion for summary judgment on the ground that SLS made none of the challenged communications "in connection with the collection of any debt, " which is a required threshold showing under the FDCPA. The court's decision to grant summary judgment renders the other motions moot and disposes of the case.

         UNDISPUTED FACTS

         The following facts are undisputed unless otherwise noted.

         The Greens obtained a home loan in 2004. In 2009, they filed for bankruptcy and their debt was discharged. The lender foreclosed on the house and waived any right to a deficiency judgment against the Greens, leaving the Greens free of any obligation on their debt. The right to service their debt was eventually transferred in December 2014 to SLS, a loan servicing company that is a debt collector but also performs various administrative tasks, such as providing tax information and answering questions about the statuses of the transferred loans. SLS then sent four sets of communications that are the basis for the Greens' FDCPA claims.

         A. The Notice

         On December 22, 2014, SLS sent the Greens a letter titled “Notice of Servicing Transfer” (the Notice). Dkt. 74-1. The Notice identified SLS as the new servicer of the Greens' debt and stated that the Greens should send any payment “due on or after 12/16/2014” directly to SLS at its listed address. Id. The Notice also included this boilerplate language in bold capital letters:

If you are a customer in bankruptcy or a customer who has received a bankruptcy discharge of this debt: please be advised that this notice is to advise you of the status of your mortgage loan. This notice constitutes neither a demand for payment nor a notice of personal liability to any recipient hereof.

Id., at 2.

         B. The Credit Report

         In February 2015, Curtis Green applied for a loan to buy a new home. He submitted his loan application to WESTconsin Credit Union, which in turn ordered a credit report on Curtis Green from a credit reporting agency, CBCInnovis, Inc. The first credit report from CBCInnovis did not contain a tradeline from SLS.[1] On May 28, 2015, WESTconsin ordered another credit report (the Credit Report) for Curtis Green, and this time, the report did include a tradeline from SLS. The tradeline noted-in a format that one in the credit business could understand-a past-due amount and a recent late payment notation:

         Image Omitted.

         Dkt. 54-1, at 3, 5. The “6” that preceded the series of “Xs” in the far right column indicated that Curtis Green was at least 180 days past due on his debt. Dkt. 49, at 5. The parties agree that the SLS tradeline should have indicated that the loan had been discharged in bankruptcy.

         That same day, Curtis Green and CBCInnovis called SLS multiple times to ask questions about the SLS tradeline. Four days later, CBCInnovis sent SLS a fax titled, “request for information, ” Dkt. 74-2, at 2, which asked SLS to verify the status of Curtis Greens' loan that appeared on the tradeline.

         C. The Verification Fax

         On June 2, 2015, SLS sent a fax titled “verification of mortgage” (the Verification Fax). Dkt. 74-3. The parties dispute to whom SLS sent the fax and why. According to the Greens, SLS sent it to them as a collection attempt. Dkt. 63, at 13. SLS, on the other hand, states that it sent the Verification Fax to CBCInnovis in response to the request for information. Dkt. 41, at 32. The cover page of the fax indicates that it was addressed to Deborah Green, Dkt. 74-3, at 1, but the fax also lists CBCInnovis as the “requesting company, ” id. at 2.

         The header of the Verification Fax stated, “This communication is from a debt collector, this is an attempt to collect a debt and any information obtained will be used for that purpose.” Dkt. 74-3. It also included at the bottom a boilerplate language similar to that on the Notice:

If you are a customer in bankruptcy or a customer who has received a bankruptcy discharge of this debt: please be advised that this notice is to advise you of the status of your mortgage loan. This notice constitutes neither a demand for payment nor a notice of personal liability to any recipient hereof, who might have received a discharge of such debt in accordance with applicable bankruptcy laws or who might be subject to the automatic stay of Section 362 of the United States Bankruptcy code.

Id. The fax also stated that the next payment date was October 1, 2009, that principal balance was $0, and that the Greens were not delinquent over the previous two years. Id. But it also stated that the minimum payment was $608.23 and listed 2, 069 as “Days Delinquent excluding Grace days.” Id.

         D. The resolution of Curtis Green's loan application

         SLS's tradeline that appeared in the Credit Report caused a delay in Curtis Green's loan application. Dkt. 80, ¶ 19. His loan application was denied at first in May 2015, Dkt. 64, ¶ 11, and this denial caused him to miss the scheduled closing date for his new home in June 2015, Dkt. 80, ¶ 19. But the parties eventually sorted out the issues pertaining to SLS's tradeline, and Curtis Green closed on his house in July 2015. Dkt. 80, ¶ 19.

         Both of the Greens contend that they suffered emotional distress as a result of the delay in Curtis Green's loan application (even though they divorced in 2010). According to the Greens, Curtis Green became suicidal and locked himself in his home with firearms, with thoughts of killing himself. Deborah Green, too, suffered emotional distress that manifested in various ways, such as becoming so upset that she yelled and threw things at work. SLS disputes these allegations of extreme distress.

         E. ...


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