United States District Court, E.D. New York
DEBORAH HARTE, on behalf of herself and all others similarly situated, Plaintiff,
OCWEN FINANCIAL CORP. and OCWEN LOAN SERVICING, LLC, Defendants.
MEMORANDUM & ORDER
K. BRODIE, United States District Judge.
Deborah Harte commenced this action in New York state court
on behalf of herself and a nationwide class of similarly
situated homeowners, alleging that Defendants Ocwen Financial
Corporation (“OFC”) and Ocwen Loan Servicing, LLC
(“OLS”) made misrepresentations to borrowers in
violation of New York statutory and common law. (Compl. 1,
annexed to Notice of Removal as Ex. A, Docket Entry No.
Currently before the Court is Plaintiff's motion for
class certification and Defendants' motion for summary
judgment, both of which were referred to Magistrate Judge
Ramon E. Reyes, Jr. for a report and recommendation. (Order
dated June 22, 2017.)
report and recommendation dated February 8, 2018, Judge Reyes
recommended that the Court deny Defendants' motion for
summary judgment as to Plaintiff's claim pursuant to
section 349 of New York's General Business Law
(“GBL”) for “dual tracking,
” and grant Plaintiff's motion to
certify a dual tracking class (the “R&R”).
(R&R 20-23, Docket Entry No. 143.) Judge Reyes also
recommended that the Court grant Defendants' motion as to
Plaintiff's GBL section 349 claim for failure to provide
pre-foreclosure notice,  and as to Plaintiff's promissory
estoppel claim under New York state common law. (Id.
at 14-20.) For the reasons set forth below, the Court adopts
the R&R as to Plaintiff's promissory estoppel claim,
and as to Plaintiff's section 349 claim for failure to
provide pre-foreclosure notice. The Court reserves decision
on Defendants' motion for summary judgment as to
Plaintiff's section 349 dual tracking claim, and
Plaintiff's motion for class certification of this claim.
Court assumes familiarity with the facts and procedural
posture as discussed in its prior decisions in the
and the R&R, and provides only a summary of the pertinent
facts and procedural background.
following facts are undisputed unless otherwise noted. On
September 15, 2005, Plaintiff obtained a mortgage loan from
the federal Mortgage & Investment Corporation in the
amount of $420, 000, and executed a mortgage on her Brooklyn,
New York home as security for the loan. (Defs. Statement of
Material Facts Pursuant to Local R. 56.1 (“Defs.
56.1”) ¶¶ 32-33, Docket Entry No. 136-4; Pl.
Resp. to Defs. 56.1 and Counterstatement of Material Facts
(“Pl. 56.1”) ¶¶ 32-33, Docket Entry No.
2006 to early 2007, Plaintiff began experiencing difficulties
making her mortgage payments. (Defs. 56.1 ¶ 35; Pl. 56.1
¶ 35.) After taking initial steps to manage the debt,
Plaintiff received a letter from OLS in October of 2011, offering
to “work with [her] to identify a solution that will
resolve [her] delinquent mortgage loan” and
“presenting [her] with some of the ways [OLS] may be
able to help.” (Pl. 56.1 ¶ 72; Defs. Resp. to Pl.
56.1 (“Defs. 56.1 Resp.”) ¶ 72, annexed to
Defs. Mot. to Seal as Ex. F, Docket Entry No. 136-6; Letter
dated Oct. 21, 2011, annexed to Decl. of Robert I. Harwood in
Opp'n to Defs. Mot. (“Harwood Opp'n
Decl.”) as Ex. 6, Docket Entry No. 137-4.)
letter dated December 5, 2011, Plaintiff was notified by a
law firm engaged by OLS that her mortgage loan had been
referred for foreclosure. (Defs. 56.1 ¶ 44; Pl. 56.1
¶ 44.) The letter states, among other things, that
“[w]hile the foreclosure process has begun, you may
still have foreclosure prevention alternatives available to
you, ” and lists “forbearance, repayment, [and]
modification” as options that may enable distressed
borrowers to stay in their homes. (Letter dated Dec. 5, 2011,
annexed to First Decl. of Brian M. Forbes (“First
Forbes Decl.”) as Ex. 11, Docket Entry No. 136-2.)
December 28, 2011, Plaintiff submitted an initial application
for a loan modification, including certain supporting
documentation. (Defs. 56.1 ¶ 45; Pl. 56.1 ¶ 45.)
The first page of the application states that Plaintiff
“must submit all the [requested] documentation, ”
that failure to do so would result in her application not
being reviewed, and that:
[t]he review process may take up to [thirty] days after the
receipt of the completed package. During this time, Ocwen
will not delay or stop any collections or legal activity on
your loan. Therefore, it is important to complete the package
and fax/email it back to Ocwen as quickly as possible.
(Defs. 56.1 ¶ 46; Pl. 56.1 ¶ 46; see also Loan
Modification App. at 3,  annexed to Forbes Decl. in Supp. of
Defs. Opp'n to Pl. Mot. (“Forbes Opp'n
Decl.”), Docket Entry No. 121-10.) The parties dispute
whether Plaintiff's application as initially submitted
was complete. (Compare Defs. 56.1 ¶ 47 with Pl. 56.1
¶ 47, 73-81.) Beginning with a letter dated January 2,
2012 and continuing through April 24, 2012, OLS sent
Plaintiff multiple letters claiming that her application was
incomplete and requesting additional supporting documents.
(Defs. 56.1 ¶ 48.) Plaintiff does not dispute receiving
such letters, but maintains that (1) she submitted all
required documentation with her initial application, (Pl.
56.1 ¶ 48), (2) she nevertheless submitted the
additional documents requested in OLS' subsequent
letters, and (3) OLS' own records reflect that, in one
instance, it “found” the documents it claims that
Plaintiff failed to submit, (id. ¶¶ 76- 81).
this period, Plaintiff also received “at least
[ten]” letters providing information about the loan
modification process. (Defs. 56.1 ¶¶ 49-50, 54; Pl.
56.1 ¶¶ 49-50, 54.) In a section entitled
“Frequently Asked Questions, ” the letters state:
“[w]hile we consider your request [for a loan
modification], we will not initiate a new foreclosure action
and we will not move ahead with the foreclosure sale on an
active foreclosure so long as we have received all required
documents and you have met the eligibility
requirements.” (Defs. 56.1 ¶ 50; Pl. 56.1 ¶
50.) The letters further explain that “[i]f your loan
has been previously referred to foreclosure, we will continue
the foreclosure process while we evaluate your loan for
HAMP. However, no foreclosure sale will be
conducted and you will not lose your home during the HAMP
evaluation.” (Defs. 56.1 ¶ 51; Pl. 56.1 ¶
51.) The letters also state the following:
Important - Do not ignore foreclosure notices. The HAMP
evaluation and the process of foreclosure may proceed at the
same time. You may receive foreclosure/eviction notices . . .
or you may see steps being taken to proceed with a
foreclosure sale on your home. While you will not lose your
home during the HAMP evaluation, to protect you [sic] rights
. . . you may need to respond to these foreclosure notices or
take other actions.
(Defs. 56.1 ¶ 52; Pl. 56.1 ¶ 52.) Finally, the
If you do not qualify for HAMP, or if you fail to comply with
the terms of the Trial Period Plan, you will be sent a
Non-Approval Notice. In most cases, you will have [thirty]
days to review the reason for non-approval and contact us to
discuss any concerns you may have. During this [thirty]-day
review period, we may continue with the pending foreclosure
action, but no foreclosure sale will be conducted and you
will not lose your home.
(Defs. 56.1 ¶ 53; Pl. 56.1 ¶ 53; see also Loan
Modification Letters, annexed to Forbes Opp'n Decl. as
Exs. 12-21, Docket Entry Nos. 121-12-21.) The parties dispute
the extent to which Plaintiff reviewed these letters. (Defs.
56.1 ¶¶ 55-58; Pl. 56.1 ¶¶ 55-58, 82;
Defs. 56.1 Resp. ¶ 82.)
received two additional letters from OLS, both dated April
24, 2012. (Pl. 56.1 ¶ 84; Defs. 56.1 Resp. ¶ 84.)
The first letter states that Plaintiff was “not
eligible for a modification under [HAMP]” and states:
You have [thirty] calendar days from the date of this notice
to contact Ocwen to discuss the reason for non-approval for a
HAMP modification or to discuss alternative loss mitigation
options that may be available to you. Your loan may be
referred to foreclosure during this time, or any pending
foreclosure action may continue. However, no foreclosure sale
will be conducted and you will not lose your home during this
[thirty]-day period . . . .
(Defs. 56.1 ¶¶ 61-62; Pl. 56.1 ¶¶ 61-62;
Letter dated Apr. 24, 2012 annexed to Forbes Opp'n Decl.
as Ex. 22, Docket Entry No. 121-22.) The second letter
contained similar language. (Letter dated Apr. 24, 2012,
annexed to Forbes Opp'n Decl. as Ex. 23, Docket Entry No.
121-23.) The second letter also repeated that Plaintiff was
“not eligible” for a HAMP loan and noted that
“[t]here were missing or incomplete documents in your
application. Notification was sent over [thirty] days ago
regarding this issue but there was no response or we did not
receive all of the missing or incomplete documents.”
(Id.) Defendants contend that these letters reflect
a denial of Plaintiff's loan modification application due
to missing documents. (Defs. 56.1 ¶¶ 61- 63.)
Plaintiff disputes both the characterization of these letters
as a “denial” of her pending application and the
assertion the she failed to submit required documents. (Pl.
56.1 ¶¶ 61-63.) Plaintiff asserts that OLS sent her
a letter dated April 30, 2012 requesting the documents it had
purportedly not received, and that an OLS representative
followed up with a telephone call on May 1, 2012. (Pl. 56.1
¶¶ 85-86.) Defendant acknowledges that OLS'
records reflect correspondence on those dates, but disputes
“Plaintiff's characterization of the
substance” of these communications. (Defs. 56.1 Resp.
16, 2012, OLS filed a foreclosure action against Plaintiff.
(Pl. 56.1 ¶ 87; Defs. 56.1 Resp. ¶ 87.) Plaintiff
asserts that OLS did not notify her of the foreclosure
action. (Pl. 56.1 ¶ 87.) Defendants acknowledge that a
foreclosure action was filed against Plaintiff on this date,
but disputes “that Plaintiff's awareness of the
foreclosure is material to the issues raised in
Defendants' [m]otion for [s]ummary [j]udgment.”
(Defs. 56.1 Resp. ¶ 87.) Plaintiff asserts that she
spoke with an OLS representative on May 20, 2012, and that on
May 22, 2012, she submitted documents that the representative
requested in support of her loan modification application.
(Pl. 56.1 ¶ 88.) Defendants again acknowledges that
OLS' “log entries cited by Plaintiff” reflect
that a call with an OLS representative took place on May 20,
2012, and agrees that Plaintiff submitted documents on or
about May 22, 2012, but disputes “Plaintiff's
characterization of the substance of the conversation”
with the OLS representative, and disputes her
characterization of the documents submitted. (Defs. 56.1
Resp. ¶ 88.) The parties agree that OLS sent Plaintiff
additional letters dated May 24, 2012 and June 1, 2012, but
dispute whether those letters reflect additional requests for
purportedly missing documents to support Plaintiff's loan
modification application. (See Pl. 56.1 ¶¶ 89, 91;
Defs. 56.1 Resp. ¶¶ 89, 91.) There is no dispute
that on May 24, 2012, OLS assessed Plaintiff three
foreclosure fees of $600, $175 and $550, respectively. (Pl.
56.1 ¶ 90; Defs. 56.1 Resp. ¶ 90.)
sent Plaintiff a letter dated July 8, 2012. (Letter dated
July 8, 2012, annexed to Harwood Opp'n Decl. as Ex. 15,
Docket Entry No. 137-10.) The header of the letter reads
“Final Notice, ” and states that:
It has been thirty (30) days since we sent you notification
specifying outstanding conditions that have not allowed us to
complete the review of your modification application. If the
documents identified in REQUIRED DOCUMENTS are not received
by DUE DATE, we will have no other option but to deny your
application under the Making Home Affordable Modification
Program. Please act quickly to take advantage of this
opportunity to modify your mortgage loan.
(Id. at 2; Pl. 56.1 ¶ 93; Defs. 56.1 Resp.
¶ 93.) In the July 8, 2012 letter, OLS also requested
that Plaintiff submit certain additional documents by July
23, 2012, and that “[f]ailure to provide these
documents within the timeline will result in the denial of
your modification application and you will not be able to
re-apply for the Making Home Affordable Modification.”
(Letter dated July 8, 2012 at 2.)
then sent Plaintiff another letter, dated July 11, 2012.
(Letter dated July 11, 2012, annexed to Harwood Opp'n
Decl. as Ex. 16, Docket Entry No. 137-11.) The header on the
July 11, 2012 letter reads: “YOU COULD LOSE YOUR HOME.
PLEASE READ THE FOLLOWING NOTICE CAREFULLY.”
(Id.) The July 11, 2012 letter further states:
As of July 11, 2012, your home loan is 345 days in default.
Under New York state law, we are required to send you this
notice to inform you that you are at risk of losing your
home. You can cure this default by making the payment of 32,
116.04 dollars by 10/02/2012.
(Id. at 2; see also Defs. 56.1 Resp. ¶ 94; Pl.
56.1 ¶ 94.)
testified that around this time, she “realized that it
appeared to [her] that there was not going to be a resolution
to the loan modification to help me save my home.” (Pl.
56.1 ¶ 96.) Plaintiff filed for Chapter 13 Bankruptcy in
December of 2012. (Pl. 56.1 ¶ 98.) To date, Defendants
have not obtained a foreclosure judgment against Plaintiff,
and Plaintiff still resides at the property. (Defs. 56.1
¶ 67; Pl. 56.1 ¶ 67.)
removed this action from New York state court on September
30, 2013. (Notice of Removal.) Defendants thereafter moved to
dismiss the Complaint on February 7, 2014, which the Court
granted in part and denied in part. See Harte I, 2014 WL
4677120 at *1.
subsequently twice amended the Complaint. (See Am. Compl.,
Docket Entry No. 54; Sec. Am. Compl. (“SAC”),
Docket Entry No. 60.) In the SAC, Plaintiff asserts claims
for breach of contract, promissory estoppel and violation of
section 349. (SAC ¶¶ 123-50.)
Memorandum and Order dated July 1, 2016, the Court dismissed
Plaintiff's breach of contract claim. Harte III, 2016 WL
to the present dispute, Plaintiff filed a letter on January
6, 2017,  indicating her intent to move for class
certification. (Pl. Letter dated Jan. 6, 2017, Docket Entry
No. 97.) The letter states, among other things, that
Plaintiff planned to seek certification of the following
class and subclasses:
All New York homeowners with a residential mortgage serviced
by Ocwen who, between August 14, 2007 and the present: (a)
applied for a loan modification, were directed by an Ocwen
representative to withhold payments while the application was
pending, and then were penalized for doing so (the
“Payments Subclass”); (b) against whom Ocwen
commenced the foreclosure proceedings prior to service of a
90-day demand letter (the “90-day Demand
Subclass”); or (c) against whom Ocwen pursued
foreclosure while loan a [sic] modification application was
pending (the “Dual-Tracking Subclass”).
(Id. at 1.) Defendants responded on January 13,
2017. (Defs. Letter dated Jan. 13, 2017, Docket Entry No.
98.) In their letter, Defendants asserted that class
certification is improper as to all claims, and argued that:
Plaintiff defines the 90-day Demand Subclass as consisting of
borrowers as to whom OLS allegedly “commenced
foreclosure proceedings prior to service of a 90-day demand
letter.” While Plaintiff had pled a breach of contract
claim based on similar allegations, which claim was
dismissed, a demand letter issue is not otherwise pled in her
only remaining claims, [section] 349 and promissory estoppel.
Absent a viable claim based on the alleged lack of a demand
letter, Plaintiff cannot represent this class.
(Id. at 2 (internal citations omitted).)
reiterated their argument that Plaintiff did not plead a
“[ninety]-day notice claim” in a pre-motion
conference letter to the Court dated March 29, 2017, in
anticipation of their motion for summary judgment. (Defs.
Letter dated Mar. 29, 2017 at 1-2, Docket Entry No. 107.)
Plaintiff responded by letter dated April 13, 2017, arguing
principally that “[c]laims for violations of GBL
[section] 349 based on Ocwen's practice of foreclosing
without notice are alleged in the SAC.” (Pl. Letter
dated Apr. 13, 2017 at 2, Docket Entry No. 109.)
23, 2017, after the close of discovery targeted toward
Plaintiff's remaining individual claims and “class
certification issues, ” Plaintiff moved for class
certification. (Pl. Mot. for Class Cert. (“Pl.
Mot.”), Docket Entry No. 125; Pl. Mem. in Supp. of Pl.
Mot. (“Pl. Mem.”), Docket Entry No. 126; Decl. of
Robert I. Harwood in Supp. of Pl. Mot. (“Harwood
Decl.”), Docket Entry No. 127.) Defendants moved for
summary judgment on July 24, 2017. (Defs. Mot. for Summary J.
(“Defs. Mot.”), Docket Entry No. 133; First
Forbes Decl., Docket Entry No. 134; Second Decl. of Brian M.
Forbes (“Second Forbes Decl.”), Docket Entry No.
135; Defs. 56.1; Defs. Mem. in Supp. of Defs. Mot.