Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dellis v. Fay Servicing, LLC

United States District Court, E.D. Wisconsin

June 21, 2019

JOSHUA DELLIS and JESSICA DELLIS, Plaintiffs,
v.
FAY SERVICING, LLC, Defendant.

          DECISION AND ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          WILLIAM C. GRIESBACH, CHIEF JUDGE UNITED STATES DISTRICT COURT

         Plaintiffs 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 dismissed.

         BACKGROUND

         On May 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 Mortgage.

         Fay 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.

         On 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.

         On 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.

         At the 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. at 74-76.

         In 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.

         On 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.

         Mr. 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. at 130-34.

         Later 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.

         In 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.

         On 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.