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Heard v. Nationstar Mortgage LLC

United States District Court, N.D. Alabama, Southern Division

August 22, 2018




         This case arises from defendant Nationstar Mortgage, LLC's efforts to collect purportedly overdue mortgage payments from plaintiffs Tommy and Katrina Heard and Nationstar's inaccurate reporting of the plaintiffs' payment delinquencies to credit bureaus. The Heards contend that Nationstar improperly billed them for force-placed property insurance which caused Nationstar to escrow their mortgage account. When the Heards made their mortgage payments without the added escrow charge, Nationstar began reporting the unpaid difference as delinquent. The Heards argue that by reporting unverified delinquencies, Nationstar violated their rights under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. Mr. Heard also contends that to collect the escrow charges Nationstar subjected him to repeated, autodialed collection calls in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq.

         The Heards ask the Court to enter judgment in their favor on their FCRA and TCPA claims, leaving the issue of damages for trial. (Doc. 47, p. 6). Nationstar opposes the Heards' motion. (Doc. 51). For the reasons stated below, the Court grants the plaintiffs' motion and sets the issue of damages for trial.


         “The court shall grant summary judgment 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). To demonstrate that there is a genuine dispute as to a material fact that precludes summary judgment, a party opposing a motion for summary judgment must cite “to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). When considering the Heards' summary judgment motion, the Court must view the evidence in the record and draw reasonable inferences in the light most favorable to the non-moving party, Nationstar. White v. Beltram Edge Tool Supply, Inc., 789 F.3d 1188, 1191 (11th Cir. 2015). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).

         II. FACTS

         The parties' dispute arises from a mortgage that the Heards obtained in 2001 for an investment property in Jacksonville, Alabama. (Doc. 48-2, p. 2). The Heards refinanced the mortgage in 2005 through GMAC Mortgage, LLC. (Doc. 52, p. 30). Mr. Heard provided his cell phone number to GMAC as part of his loan refinance application. (Doc. 48-1, pp. 35-36). GMAC transferred the mortgage to Ocwen Loan Servicing, LLC, and Ocwen transferred the mortgage to Nationstar in April 2015. (Doc. 48-2, p. 2; Doc. 48-15, p. 20). The facts surrounding Ocwen's servicing of the mortgage are somewhat murky, but it appears that just before transferring the mortgage, Ocwen provided insurance for the Heards' property (force-placed insurance) under the mistaken belief that the Heards had not insured their property. (Doc. 48-15, pp. 31, 172-73). Ocwen would have charged the Heards for the cost of this insurance, and as a result, the Heards' mortgage account had a negative escrow balance, which was reflected in their account information when Ocwen transferred the mortgage to Nationstar. (Doc. 48-15, p. 12).

         Based on the loan information from Ocwen, Nationstar added charges to the Heards' monthly mortgage payments to account for the negative escrow balance. (Doc. 52, pp. 31-32). Mr. Heard was unaware of the escrow charges and set up monthly automatic payments in the amount he had historically paid on the loan. (Doc. 48-2, p. 3). Because this payment amount was less than the amount Nationstar billed to the Heards' account, Nationstar began to record the shortfall as late. (Doc. 48-7, pp. 13-14; Doc. 48-18, pp. 26-27).

         Nationstar made a collection call to Mr. Heard's cellular phone on June 4, 2015. (Doc. 48-7, p. 3). During this call, Mr. Heard learned that his monthly payments had increased to reflect the addition of force-placed insurance which resulted in an escrow balance on the account. (Doc. 48-2, p. 3). Mr. Heard disputed the need for force-placed insurance and informed the representative that he had maintained insurance on the property for several years. (Doc. 48-2, p. 3). Mr. Heard had his insurer fax proof of his property insurance to Nationstar on June 5, 2015. (Doc. 48-7, pp. 4-5; Doc. 48-15, pp. 26-27).

         Although Mr. Heard provided Nationstar with information indicating that the force-placed insurance was unnecessary, Nationstar continued to bill Mr. Heard for the escrow balance created by the force-placed insurance, and Nationstar's representatives continued to make collection calls to Mr. Heard's cell phone. (Doc. 48-7, pp. 13-14; Doc. 48-15, p. 14). During several of these calls, Mr. Heard contested the amount of his mortgage payment, and the Nationstar collections representative often would transfer his call to Nationstar's escrow department to correct the ongoing discrepancy. (Doc. 48-7, pp. 12-14). The record of a call on July 24, 2015 indicates that Nationstar removed the escrow from the Heards' account and planned to adjust the monthly payment to reflect the change. (Doc. 48-7, p. 9). Despite this, the Heards' monthly statements continued to reflect their mortgage payment plus an additional escrow charge.

         The ongoing discrepancy between the Heards' monthly payments and their monthly statement caused a steady stream of collection calls to Mr. Heard's cell phone. (Doc. 48-7, pp. 15-34). Nationstar often would call Mr. Heard many times a day. (Doc. 48-7, pp. 21-22; Doc. 48-14, pp. 9-10). Mr. Heard states that on August 22, 2015, he told Nationstar to stop calling him on his cellular phone. (Doc. 48-2, p. 5). Nationstar's call records indicate that on October 29, 2015, Mr. Heard first told Nationstar to stop calling him. (48-7, p. 19). Nationstar's call records also indicate that Mr. Heard told Nationstar collections representatives to stop calling him on ten subsequent occasions. (Doc. 48-7, pp. 20-23, 26-27, 29- 30, 32).

         Nationstar reported the Heards' mortgage account as thirty days delinquent for several months during 2015. (Doc. 48-18, pp. 27-28). In response to these negative entries, the Heards individually sent credit disputes to Transunion, Equifax, and Experian stating that the payment histories reported by Nationstar were inaccurate due to the incorrect forced placement of insurance on the property and the resulting escrow on the mortgage. (Doc. 48-23; Doc. 48-29). When Nationstar received notice of these disputes, Nationstar checked the information in the Heards' credit reports against Nationstar's records of the couple's payment history and reported that the Heards' account was delinquent. (Doc. 48-18, pp. 27- 28; Doc. 48-19, pp. 32-33, 35; Doc. 48-20, p. 23). In fact, it was not. The Heards claim that in addition to the time and effort they spent attempting to correct the inaccuracies, Nationstar's incorrect reporting of their mortgage account caused them to be denied credit from their normal lenders and to pay higher rates with other institutions. (Doc. 47, p. 5). Nationstar has since revised its reporting of the mortgage loan and acknowledges that the account is current with no delinquencies. (Doc. 28-15, pp. 14, 15).


         A. Mr. Heard's TCPA Claim

         “The TCPA was enacted to address certain invasive practices related to ‘unrestricted telemarketing,' and is designed to protect consumers from receiving unwanted and intrusive telephone calls.” Schweitzer v. Comenity Bank, 866 F.3d 1273, 1276 (11th Cir. 2017) (citing Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 372 (2012)). The TCPA makes it unlawful to use “any automatic telephone dialing system or an artificial or prerecorded voice” to call “any telephone number assigned to a . . . cellular telephone service, ” without the express consent of the party being called. 47 U.S.C. § 227(b)(1). Congress provided a private right of action for those who receive calls made in violation of the TCPA's prohibitions. 47 U.S.C. § 227(b)(3).

         “The TCPA is essentially a strict liability statute” that “does not require any intent for liability except when awarding treble damages.” Alea London Ltd. v. Am. Home Servs., Inc., 638 F.3d 768, 776 (11th Cir. 2011). Because Nationstar called a number assigned to a cellular phone service, (Doc. 48-1, pp. 47-48), the question is whether ...

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