United States District Court, E.D. Wisconsin
DECISION AND ORDER GRANTING MOTION FOR SUMMARY
WILLIAM C. GRIESBACH, CHIEF JUDGE UNITED STATES DISTRICT
Joshua and Jessica Dellis sued Fay Servicing, LLC, for
damages allegedly arising out of Fay's servicing of
Plaintiffs' home loan and handling of their loan
modification applications. The loan was secured by a mortgage
on the Dellises' home, and when the Dellises failed to
make the payments as they became due, Juniper Reo, the
successor holder of the note, commenced a foreclosure action
in the Circuit Court for Kewaunee County on January 15, 2015.
Dkt. No. 35-1. In response to Juniper Reo's motion for
summary judgment in the foreclosure action, the Dellises did
not dispute that they were in default on the loan, but argued
that Fay, with whom Juniper Reo had contracted to service the
loan, had deceived and frustrated their efforts to obtain a
modification of the loan in violation of state and federal
law. The Circuit Court concluded that the Dellises had raised
factual disputes concerning Fay's servicing of the loan
that precluded summary judgment in Juniper Reo's favor.
The foreclosure action was later dismissed without prejudice
on September 6, 2016, shortly after the Dellises' loan
was modified. The Dellises then commenced this action on
February 7, 2018, alleging violations of the Real Estate
Settlement Procedures Act (RESPA), intentional interference
with contract, several violations of Wis.Stat. § 224.77,
and intentional interference with contract. Fay filed a
motion for partial dismissal in response to Plaintiffs'
first amended complaint, which the court granted, dismissing
Plaintiffs' intentional interference with contract claim
and their claim under § 224.77(1)(c), leaving their
RESPA claim and their other § 224.77 claims. Currently
before the court is Fay's motion for summary judgment on
the remaining claims. The court has jurisdiction over
Plaintiffs' RESPA claims under 28 U.S.C. § 1331, and
supplemental jurisdiction over their remaining state law
claims under 28 U.S.C. § 1367. For the reasons that
follow, Fay's motion will be granted with respect to
Plaintiffs' RESPA claims, the remaining state law claims
will be dismissed without prejudice, and the case will be
31, 2007, Joshua Dellis borrowed $72, 900 from First Funding
Group, LLC. He executed a promissory note to First Funding
Group, LLC, and he and his wife granted First Funding Group a
mortgage on their home to secure the debt. The loan was
initially serviced by Citi Mortgage, Inc. Mr. Dellis, who ran
his own construction business, had run into financial
difficulties and, along with his wife, had filed for
bankruptcy in 2011. They fell behind on their mortgage in
early 2013. Dkt. No. 32-1 at 29-33. At or around that time,
Mr. Dellis applied for a loan modification from Citi
began servicing the loan in May of 2013. In June, Mr. Dellis
contacted Fay to discuss the possibility of loan
modification, and Fay advised him to complete the loss
mitigation package that it had sent him. From July to
December of 2013, Fay and Mr. Dellis were in communication
about the loss mitigation application and the need for Mr.
Dellis to submit documents that were required in order for
his application to be complete, such as bank statements, his
wife's paycheck stubs, and profit and loss statements for
his construction business.
January 10, 2014, Mr. Dellis called Fay and claimed he had
sent the requested documents via Federal Express. When Fay
went on Federal Express' website and entered the tracking
number Mr. Dellis had provided, however, the website
indicated that no shipment had been sent or received using
that tracking number. On January 22, 2014, after Mr. Dellis
gave it the correct tracking number, Fay informed Mr. Dellis
that it had received his documents on December 16, 2013, but
that several items were missing, including current pay stubs
for Mrs. Dellis, current profit and loss statements for his
business, and bank statements for both his personal and
business accounts. On February 17, 2014, Mr. Dellis called
Fay and stated he had recently purchased a new computer and
would try to send all of the documents that day.
March 20, 2014, Fay called Mr. Dellis and informed him that
it had received all the documentation it required and that
his application was under review. Later that month, Mr.
Dellis was approved for a six-month forbearance plan under
which Fay agreed to forebear any action on the Dellises
previous default while they made regular payments to show
their willingness and ability to pay off the loan. The plan
was executed in April. The parties dispute what was to happen
at the end of the six-month period. Plaintiffs contend a Fay
employee told them that if they supplied all the necessary
paperwork by July of 2014, Fay would offer them a final
modification before the end of the six-month period. Fay
asserts it informed Plaintiffs that upon completion of the
forbearance plan, it would review their application for a
permanent modification, but that an offer was not guaranteed.
The recordings of the telephone conversations between Mr.
Dellis and Fay representatives largely support Fay's
version of events. Indeed, several of these conversations
which were played for Mr. Dellis at his deposition appear to
contradict many of the allegations of his amended complaint,
raising serious concerns over counsel's compliance with
Fed.R.Civ.P. 11(b). See Dkt. No. 32-1 at 57-141.
end of the six-month forbearance period, Fay called Mr.
Dellis to inform him that it required updated records and
documentation in order to grant a permanent modification in
September of 2014. In a telephone conversation on September
22, 2014, Mr. Dellis acknowledged to Fay account
representative Neal Hogberg, who had taken over the
Dellises' account in May, that he would send Hogberg his
wife's last two pay stubs, bank statements for the last
two months, and his quarterly profit and loss statements for
his business. Id. at 61-63. In the course of the
conversation, Hogberg patiently explained to Mr. Dellis that
before a loan modification agreement could be finalized, he
would need to update their financial information by providing
the requested documentation. Id. at 70-75. Mr.
Dellis complimented Hogberg on how helpful he was in
comparison with the previous account representative and
agreed to provide the requested documentation. Id.
October, Fay again contacted Mr. Dellis in an effort to
obtain the documentation it needed to offer him a loan
modification. Hogberg was on vacation at the time, but had
requested an associate to follow up with Mr. Dellis when the
requested documentation did not arrive. Id. at
77-78. Mr. Dellis acknowledged that the documentation had not
been sent. He stated that his wife tried to email it to
Hogberg “a couple times, ” but was having
problems. Id. at 79. He stated she would either send
it by email that Friday or they would send it by Federal
Express. Id. at 85-86. In the course of the
conversation, Mr. Dellis also commented on how helpful
Hogberg had been to him. Id. at 81-83. The
representative advised Mr. Dellis that the sooner he provided
the documentation the faster they could offer an agreement,
and told him to call if he sent it via Federal Express so
they could watch for it. Id. at 85-86. Hogberg
called Mr. Dellis when he returned from vacation on October
23, letting him know he still needed the last two months of
Mr. Dellis' bank statements and his last quarter profit
and loss statement. Id. at 87-90. Hogberg again
explained to Mr. Dellis that “the sooner we can get
that, then the sooner we can get everything set up so we can
do - get this modification just not temporary but
permanent.” Id. at 90. Mr. Dellis emailed
Hogberg his July, August, and September bank statements, his
profit and loss statement, and his wife's two most recent
paycheck stubs on October 30, 2014. Id. at 92. On
October 31, 2014, Hogberg telephoned Mr. Dellis to let him
know that he had not received the banking information in time
to be able to offer a permanent agreement. Hogberg had
earlier sent Dellis an agreement to extend the forbearance
agreement by three months so they would have the time needed
to complete the loan modification. He asked Mr. Dellis to
sign and fax a copy to him and then send the original in the
self addressed Federal Express envelope as soon as possible.
Id. at 95, 97-99. Hogberg explained that he needed
the agreement signed and returned immediately so that they
wouldn't have to restart the process, and Mr. Dellis
agreed that he would do so.
November 17, 2014, Mr. Dellis telephoned Hogberg “to
touch base” and stated he had sent the signed
three-month extension of the forbearance agreement and a
check for the monthly payment due under the agreement on
November 1, 2014. Dellis initially claimed he had sent it via
Federal Express but when Hogberg explained they had not
received it, he explained that he sent it out by mail because
there was no return envelope. Hogberg said he would look some
more. Id. at 110-11, 113-17. Mr. Dellis called back
the following week on November 2, 2014, and explained that
his wife had canceled the check he claimed to have sent on
November 1 because they had closed their accounts after $1,
300 had been withdrawn by an identity thief. When Hogberg
explained that he had still not received the signed
forbearance extension or the now canceled check in the mail,
Mr. Dellis stated he would sign the copy they had and send
that to him, along with a new check for the monthly payment.
Hogberg instructed Mr. Dellis that he should also send a copy
of the canceled check and a written explanation of what had
happened so he could document the fact that it was not his
fault that it was not returned within the time required. Mr.
Dellis agreed he would do so. Id. at 119-24.
Dellis did not send Hogberg the signed agreement, a new
check, the cancelled check, or the written explanation. On
December 3, 2014, Hogberg called Mr. Dellis and left a
message for him to call him back. Id. at 128-29. Mr.
Dellis returned the call on December 8, 2014, and asked if he
could make a lump sum payment for November and December.
Hogberg explained that because he had not received the signed
forbearance extension, the canceled check, and payments had
stopped, the foreclosure process had restarted. Mr. Dellis
acknowledged his own responsibility, stating several times,
“it's on my end. I drug my feet too long here with
this and that's why I'm calling today.” Mr.
Dellis asked if he could send “this stuff to
you”, but Hogberg told him he would have to find out if
they would have to start the process over again. Id.
that same day, Fay called Mr. Dellis back and told him they
would send him a new loan modification application and
stressed the importance of getting all of the required
documents together and returned to Fay in a timely manner.
Three weeks later, on December 29, 2014, Fay called Mr.
Dellis to inquire about the application. Mr. Dellis stated he
did not receive it, so Fay sent him another application.
January 2015, Fay sent the Dellises a new application for
loss mitigation. Id. at 146. On February 18, 2015,
Fay received the Dellises' new loan modification
application and began reviewing it. On February 20, 2015, Fay
informed Mr. Dellis the application was incomplete and
advised him that it needed the information called for by the
application by March 20, 2015. On March 17, 2015, Hogberg
called Mr. Dellis advising him of the documentation that was
still needed to complete his application, including October
and January bank statements, the signed profit and loss
statement for his business, a 2013 tax return for his
business, a written explanation of hardship, and a budget
analysis that Hogberg would conduct over the phone. Mr.
Dellis acknowledged that he was in the process of gathering
the requested documentation and agreed to call Hogberg back
the following day to complete the budget analysis.
Id. at 156-59. Mr. Dellis apparently did not call
Hogberg back the following day, but on March 24, 2015,
Hogberg called him. At that time, Mr. Dellis stated his wife
had sent out the requested documentation. Hogberg then
conducted the budget analysis. Id. at 163-78.
April 8, 2015, Fay called Mr. Dellis and informed him that it
still needed a signed and dated year-to-date profit and loss
statement for his business to evaluate his loan modification
application. On April 27, 2015, Fay called Mr. Dellis and
again told him it needed his signed and dated year-to-date
profit and loss statement. The following day, Fay received an
unsigned copy of the requested statement. Fay called Mr.
Dellis and informed him it needed a ...