United States District Court, W.D. New York
DECISION AND ORDER
FRANK P. GERACI, JR. CHIEF JUDGE
Bobbi and Matthew Jackson (“Plaintiffs”) filed a
putative class action complaint on September 30, 2016,
alleging that their mortgage loan servicer, Defendant Bank of
America (“Defendant”), improperly and untimely
processed their mortgage assistance applications so that it
could charge them excessive loan delinquency fees.
Specifically, Plaintiffs alleged Defendant violated the Real
Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. §§ 2601-2617, its implementing regulations,
12 C.F.R. §§ 1024.1-1024.41, and Section 349 of New
York's General Business Law (“GBL”).
moved to dismiss the complaint pursuant to Federal Rule of
Civil Procedure (“Rule”) 12(b)(6). ECF No. 6. On
November 21, 2017, the Court dismissed all of Plaintiffs'
claims except for those relating to the time period between
January 28, 2014 and December 20, 2014, leaving only the
claim that Defendant failed to use “reasonable
diligence” in violation of 12 C.F.R. §
1024.41(b)(1). ECF No. 15. The Court denied leave to amend
the complaint and the parties commenced discovery. ECF No.
before the Court is Plaintiffs' motion to certify a class
pursuant to Rule 23 (ECF No. 77) and Defendant's motion
to strike the purported expert report Plaintiffs submitted in
support of their motion to certify the class (ECF No. 87).
For the reasons stated below, Defendant's motion is
DENIED and Plaintiffs' motion is DENIED.
the 2008 recession, mortgage loan servicers such as Bank of
America struggled to handle the increase in delinquent loans,
mortgage modification requests, and foreclosures they were
required to process. ECF. No. 1 at 11. Servicers were either
too overwhelmed to timely process mortgage assistance
applications, or in some instances, unwilling to. Because
servicers earn revenue from “fees assessed on
borrowers, such as late fees, ” servicers had every
incentive to delay the loss mitigation application process.
Id. In one case, former Bank of America employees
stated that they were “instructed that their job was to
maximize fees for Bof A by delaying and refusing to process
loss mitigation applications, ” and were instructed to
“tell borrowers that their loss mitigation applications
were under review, even though that was not the case or to
falsely claim that documents were incomplete or
missing.” ECF No. 1 at 21.
effort to help borrowers seeking mortgage assistance, the
Consumer Financial Protection Bureau issued final rules under
RESPA requiring servicers to follow strict procedures and
deadlines for processing mortgage assistance applications and
disclose important information to borrowers about the status
of their application. See 12 C.F.R. § 1024.41.
Section 6(f) of RESPA gives borrowers a private right of
action against servicers that fail to comply with any portion
of 12 C.F.R. § 1024.41. ECF No. 1 at 17. Borrowers can
recover actual damages, as well as statutory damages if a
servicer demonstrates a “pattern or practice” of
noncompliance with the rules. Id. at 24. These rules
became effective on January 10, 2014. Id.
purchased their home in 2007. Their initial monthly mortgage
payment was $609.44, and Defendant subsequently became the
servicer of Plaintiffs' mortgage. In 2009, Plaintiffs
fell behind on their mortgage payments after Plaintiff
Matthew Jackson's employer laid him off. In 2010, after
Mr. Jackson found a new job, Plaintiffs attempted to make
partial payments on the overdue amount they owed Defendant.
Defendant rejected the partial payments, demanding instead
that Plaintiffs pay the overdue amount in a single lump sum
or face foreclosure. Plaintiffs could not afford to pay a
lump sum, and repeatedly requested mortgage assistance from
Defendant. Defendant rejected the requests, informing
Plaintiffs that it was missing information from them, even
though Plaintiffs had already submitted the information
Defendant claimed it was missing. Because Defendant would not
grant Plaintiffs mortgage assistance and rejected
Plaintiffs' partial payments, the outstanding amount
Plaintiffs owed on their mortgage continued to grow, and
Defendant assessed late fees, property inspection fees, fees
for mortgage insurance, and other charges to the balance of
what Plaintiffs owed.
beginning of 2014, regulations requiring servicers to comply
with certain procedures when processing borrowers'
mortgage assistance applications went into effect. Plaintiffs
subsequently applied for mortgage assistance on January 28,
2014. On January 30, Defendant acknowledged receipt of
complaint contained numerous allegations of violations of the
2014 regulations, as applied to Plaintiffs' application
for mortgage assistance. However, the Court dismissed all of
Plaintiffs' claims except for the claim arising out of
§ 1024.41(b)(1) that Defendant failed to use reasonable
diligence in obtaining documents and information to complete
a loss mitigation application. ECF No. 15 at 16. None of
Plaintiffs' other claims regarding the mishandling of
their application survive. Therefore, the only remaining claim
alleges that Defendant failed to use reasonable diligence, as
February 1, Defendant sent Plaintiffs a letter claiming that
it could not complete its review because it needed copies of
IRS Form 4506-T, which would allow Defendant to request a
transcript of Plaintiffs' tax return. It also requested a
copy of a social security award letter or benefits letter.
Plaintiffs, however, had already submitted copies of both
documents with their initial application package.
Defendant's letter also asked Plaintiffs to provide
copies of their tax returns, even though Defendant did not
require Plaintiffs to submit their tax returns with their
initial application. Finally, the letter asked for copies of
bank account statements from Plaintiff Bobbi Jackson, even
though Plaintiffs had already provided copies of statements
for their joint bank account, which was the only bank account
sent two additional letters on February 20, 2014 and March 4,
2014 stating that it had received the documentation
Plaintiffs had sent it supporting their request for mortgage
assistance, but that Defendant needed all required
documentation specified in its “initial notice.”
The letters did not identify what information was missing.
Instead, it instructed the Plaintiffs to refer back to their
initial application package or to Defendant's website to
see which documents Defendant had received. The website,
however, did not specify which documents were missing- it
provided only a generic list of all documents a borrower may
need to complete their application.
March 5, Defendant again asked for Ms. Jackson's bank
statements, even though Plaintiffs had already provided
statements for their joint bank account. Defendant next sent
Plaintiffs two identical letters dated March 13 and March 25
stating it had received the documentation supporting their
request for mortgage assistance and referring them back to
their initial application package or Defendant's website
to determine if any information was still missing.
sent Plaintiffs a letter on April 12, 2014, again asking them
to provide an IRS Form 4506-T and copies of their tax
returns-both of which Plaintiffs had already provided on
numerous occasions. It also asked for copies of Mr.
Jackson's pay stubs that Plaintiffs had already
submitted. On April 15, Defendant sent another identical
letter to Plaintiffs.
20, Defendant sent Plaintiffs a letter asking them to submit
another copy of their initial mortgage assistance application
because the required hardship affidavit-a statement
explaining why Plaintiffs were seeking mortgage
assistance-was allegedly missing from their original January
28 application. Plaintiffs had not written the hardship
explanation in the correct spot of the application, and had
not provided enough information about why they needed
mortgage assistance. Plaintiffs then resubmitted their
application, this time with the requested hardship affidavit
in the correct format, and Defendant acknowledged receipt on
May 22 and June 6, 2014.
all this, Defendant sent Plaintiffs a letter on June 28, 2014
stating that it had not received the documentation requested
in its May 20, 2014 letter, and informed Plaintiffs that it
was no longer reviewing their application. Plaintiffs argue
that Defendant did all of the above in violation of §
1024.41(b)(1)'s requirement to exercise “reasonable
diligence” in completing an application.
Motion to Strike Expert Report
seeks to exclude the expert report of Geoffrey A. Oliver,
CPA, CFF, CMB on the basis that he is not qualified to render
an expert opinion in support of Plaintiffs' motion for
class certification because the opinions he expresses in the
expert report do not meet the standards of relevance and
reliability as outlined in Daubert v. Merrell Dow Pharm.,
Inc., 509 U.S. 579 (1993) and its progeny. Oliver's
expert report purports to create a methodology to review
Defendant's failure to comply with 12 C.F.R. §
1024.41 as applied to the putative class.
admissibility of expert testimony is governed by Rule 702 of
the Federal Rules of Evidence, which permits an expert
“qualified . . . by knowledge, skill, experience,
training, or education” to testify if the testimony
would be helpful to the trier of fact, is “based on
sufficient facts or data, ” and is “the product
of reliable principles and methods, ” reliably applied
to the facts of the case. Fed.R.Evid. 702; see Hunter v.
Time Warner Cable Inc., No. 15-CV-6445 (JPO), 2019 WL
3812063, at *4 (S.D.N.Y. Aug. 14, 2019). “When a motion
to exclude expert testimony is made at the class
certification stage, the Daubert standard applies,
but the inquiry is limited to whether or not the expert
reports are admissible to establish the requirements of Rule
23.” Ge Dandong v. Pinnacle Performance Ltd.,
No. 10 CIV. 8086, 2013 WL 5658790, at *13 (S.D.N.Y. Oct. 17,
2013) (quoting another source) (alternation omitted).
“The question is not, therefore, whether a jury at
trial should be permitted to rely on [the expert]'s
report to find facts as to liability, but ...