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McNamee v. Nationstar Mortgage, LLC

United States District Court, S.D. Ohio, Eastern Division

March 30, 2018

CHARLES D. MCNAMEE, et al., Plaintiffs,
v.
NATIONSTAR MORTGAGE, LLC, Defendant

          Vascura Magistrate Judge.

          OPINION & ORDER

          ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiffs' Motion to Certify Class. (ECF No. 48). The Court held a Class Certification Hearing on Thursday, March 29, 2018 at 10:00 a.m. (ECF No. 56). After consideration of the memoranda related to class certification and the oral argument of the parties, and for the reasons set forth below, the Court GRANTS the Motion and certifies the classes.

         I. BACKGROUND

         A. Factual Background

         This case concerns Fair Debt Collection Practices Act ("FDCPA") consequences of letters that Defendant Nationstar Mortgage sent to Plaintiff Charles McNamee and others similarly situated.

         Nearly a decade ago, Mr. McNamee took out a mortgage on his home in Mechanicsburg, Ohio, through American Eagle Mortgage Company. (ECF No. 1). He executed a Note in the amount of $181, 936.00, payable to American Eagle. (Id.). Eventually, American Eagle endorsed the Note to an intermediary mortgage company, which, in turn, endorsed the Note to Bank of America, N.A. (At).

         In 2012, Mr. McNamee found himself in default on the Note. (Id.). He and his wife filed jointly for voluntary Chapter 7 bankruptcy. (Id.). As part of the bankruptcy proceedings, Mr. McNamee filed a Statement of Intention pursuant to 11 U.S.C. § 52l(a)(2)(A) informing Bank of America that he and his wife intended to surrender the Mechanicsburg property. (Id.). They physically vacated the property as the bankruptcy proceedings continued. (Id.). Mr. McNamee received a Chapter 7 discharge in September 2012, and, upon the request of Bank of America, the Chapter 7 Trustee abandoned the bankruptcy estate's interest in the property. (Id.).

         After the bankruptcy, Bank of America assigned the mortgage on the property to Defendant Nationstar. (Id.).

         Nationstar began to send Mr. McNamee correspondence that would ultimately become the focal point of this litigation. Specifically, it sent Mr. McNamee two letters on December 17, 2012, informing him that it took over debt servicing for the mortgage. (Id.). On December 31, 2012, it sent a letter indicating that it was seeking to collect $22, 439.32 on the mortgage on behalf of Ginnie Mae. (Id.). And once a month from January 2013 to January 2015, Nationstar sent Mr. McNamee a "Mortgage Loan Statement" that specified, among other things, an "Amount Due" and "Payment Due Date, " and warned him not to delay payment lest Nationstar report his account to credit bureaus. (Id.).

         As it continued to send the Mortgage Loan Statement letters to Mr. McNamee, Nationstar commenced an in rem foreclosure proceeding in the Champaign County Court of Common Pleas. (Id.). In October 2013, it obtained a final decree of foreclosure on the property. (Id.).

         Nationstar then acquired force-placed insurance on the property, advancing $4, 552.00 to pay for coverage. (Id.). The company began sending Mr. McNamee Forced-Placed Insurance letters telling him that the cost of the insurance would result in costs to him. (Id.)

         As of the time Mr. McNamee filed his Motion for Class Certification, Nationstar has not yet sold the house. (Id.)

         It is Mr. NcNamee's contention that the Mortgage Loan Statements and the Force-Placed Insurance communications were in the nature of debt collection, and that the "continuous and voluminous collection activity" against him after he vacated the house was in violation of the FDCPA and 11 U.S.C. §524(a). Specifically, he contends that the communications violated 15 U.S.C. §1692e(2)(A) "because they gave Plaintiff a false and misleading impression that his debt serviced by Nationstar remained collectible even though such debt was lawfully discharged in his U.S. Bankruptcy proceeding, " violated 15 U.S.C. §1692e(5) and (8) "because they falsely represented that Nationstar could or would actually report 'late payments' and 'other defaults' about Plaintiff to the credit bureaus" and violated 11 U.S.C. §524(a) "because they constitute attempts to collect discharged debts and obligations." (ECF No. 48 at 13). He therefore wishes to represent "those individuals who, like him, vacated the surrendered residences and continued to receive the Mortgage Loan Statements, and Force-Placed Insurance communications thereafter." (Id. at 15).

         B. Procedural History

         In 2013, Mr. McNamee filed suit against Nationstar in the United States Bankruptcy Court for the Southern District of Ohio, seeking an order of contempt and sanctions on behalf of himself and those similarly situated. Nationstar filed a Motion to Dismiss, which the Bankruptcy Court granted as to Mr. McNamee's request to represent a nationwide class but denied as to Mr. McNamee's request to represent a district-wide class.

         Mr. McNamee then filed this FDCPA class action in October 2014, alleging claims under 15 U.S.C. §l692e, which generally proscribes false and misleading representations in debt collection, and §1692f, which prohibits the use of unfair or unconscionable means to collect or attempt to collect debts. (ECF No. 1). Nationstar moved to dismiss Mr. McNamee's §1692f claims; this Court granted the motion on September 4, 2015. (ECF No. 20). Only the §1692e claims remain.

         Plaintiffs now seek to certify the following classes as to the § l692e claims:

Class 1 (Nationwide): as to the Issues of FDCPA Liability and Statutory Damages; Any person who (i) who received a Chapter 7 bankruptcy discharge in a bankruptcy case filed in the U.S. Bankruptcy Courts on or after January 1, 2012 and on or before January 31, 2015; (ii) who filed and served a Statement of Intention therein pursuant to 11 U.S.C. §521 (a)(2)(A) stating an intention to surrender residential real property that was/is security for a debt serviced by Nationstar; and (iii) who, after vacating the real property, were mailed by Nationstar, one or more Mortgage Loan Statements of the type exemplified by the attached Exemplar Exhibit A;
CLASS 2 (Nationwide): as to the Issues of FDCPA Liability and Statutory Damages: Any person who (i) received a Chapter 7 bankruptcy discharge in a bankruptcy case filed in the U.S. Bankruptcy Courts on or after January 1, 2012 and the present; (ii) who filed and served a Statement of Intention pursuant to 11 U.S.C. §521(a)(2)(A) stating an intention to surrender residential real property that was/is security for a debt serviced by Nationstar; and (iii) who, after vacating the real property, were mailed by Nationstar, at least one Force-Placed Insurance letter of the type exemplified by the attached Exemplar Exhibits B and C;
CLASS 3 (S.D. Ohio): as to the Issue of Whether Nationstar Violated 11 U.S.C. §524(a): Any person who (i) who received a Chapter 7 bankruptcy discharge in a bankruptcy case filed in the U.S. Bankruptcy Courts for the S.D. Ohio on or after January 1, 2012 and on or before January 31, 2015; (ii) who filed and served a Statement of Intention therein pursuant to 11 U.S.C. §521(a)(2)(A) stating an intention to surrender residential real property that was/is security for a debt serviced by Nationstar, and (iii) who, after vacating the real property, were mailed by Nationstar, one or more Mortgage Loan Statements of the type exemplified by the attached Exemplar Exhibit A;
CLASS 4 (S.D. Ohio): as to the Issue of Whether Nationstar Violated 11 U.S.C. §524(a): Any person who (i) received a Chapter 7 bankruptcy discharge in a bankruptcy case filed in the U.S. Bankruptcy Courts for the S.D. Ohio on or after January 1, 2012 and the present; (ii) who filed and served a Statement of Intention pursuant to 11 U.S.C. §521(a)(2)(A) stating an intention to surrender residential real property that was/is security for a debt serviced by Nationstar; and (iii) who, after vacating the real property, were ...

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