ONE DAY BEFORE THE DEADLINE, NON SUITED (DISMISSAL WITH PREJUDICE)
LIT UPDATE; Aug 17, 2021
It ain’t over. Within 60 days, this case may be reignited in front of Judge Al Bennett, per the Aug. 10, 2021 Order.
LIT UPDATE; July 16, 2021
A Notice of Settlement was filed on July 14. Ain’t it amazing how this has happened after the mortgage file request was granted to plaintiffs by Judge Bennett, who would then deny the Burkes request for access to these sealed files. The Foreclosure Industry and the Federal Courts continue their shady secret practices. We call it corruption.
JOINT NOTICE OF SETTLEMENT
Pursuant to Local Rule 16.3, Plaintiff Jacqueline S. Halliburton (“Plaintiff”) and Defendants PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC (“PHH”), NewRez Mortgage, LLC (“NewRez”), and The Bank of New York Mellon Trust Company, National Association as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2004-KR2 (“BONY Mellon”) (collectively, “Defendants”) hereby notify the Court that they have reached a settlement. The parties are in the process of preparing final settlement documentation, and anticipate submitting dismissal papers to the Court within sixty (60) days of the date of the filing of this notice.
Accordingly, the parties respectfully request that the Court cancel all upcoming deadlines in this case in order to allow the parties time to finalize the settlement and submit Plaintiff’s dismissal.
Respectfully submitted,
By: /s/ Rachel Sechelski (w/permission)
Richard Tomlinson
State Bar No. 20123500
rtomlinson@lonestarlegalaid.org
Rachel Sechelski
State Bar No. 24096053
rsechelski@lonestarlegalaid.org
LONE STAR LEGAL AID
1415 Fannin St.
Houston, Texas 77002
Phone: 713-652-0077 Ext. 1056
Facsimile: 713-652-0044
Attorneys for Plaintiff
LIT UPDATE
No movement since Leave to File Document (after rejection of summary judgment filing) on June 21, 2021. And, Knox so good for PHH, foreclosure mill lawyer Matthew Knox has departed from McGlinchey. We wonder if it had anything to do with this case and the failed summary judgment and now settlement?
July 12, 2021
https://t.co/dgB2UsEfvL‘s summary judgment is stricken https://t.co/KjSVNMW6Qj
Who’s the award winning foreclosure mill lawyers who failed the basics?
These two wannabe legal beagles at McGlinchey Stafford, PLLC https://t.co/MExG5s8h4X pic.twitter.com/B8QBcNBZUl
— LawsInTexas (@lawsintexasusa) June 22, 2021
On Friday, 30 April, after a Phone conference based on 2 “letters” submitted to the court by both sets of counsel, yet not on the docket, subsequently a second amended complaint was filed in Halliburton v. PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC (4:20-cv-00919)
District Court, S.D. Texas
MAY 3, 2021
Halliburton v. PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC (4:20-cv-00919)
District Court, S.D. Texas
APR 15, 2021
PLAINTIFF’S FIRST AMENDED COMPLAINT
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Jacqueline S. Halliburton, Plaintiff, filing this First Amended Complaint against Ocwen Loan Servicing, LLC, PHH Mortgage Corporation, NewRez Mortgage LLC, and The Bank of New York Mellon Trust Company, National Association fka The Bank of New York Trust Company, N.A. as successor to JPMorgan Chase Bank, as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2004-KR2, Defendants, pursuant to a stipulation between all parties that Plaintiff have until December 31, 2020 to amend the pleadings, and for causes of action would respectfully show the Court the following:
I. PRELIMINARY STATEMENT
1. Jacqueline S. Halliburton, a 73-year old homeowner, brings this action for damages from breach of contract and violations of the Texas Debt Collection Act (hereinafter “TDCA”), the Fair Debt Collection Practices Act (hereinafter “FDCPA”), the Real Estate Settlement Procedures Act (hereinafter “RESPA”), the Truth in Lending Act (hereinafter “TILA”), and the Fair Credit Reporting Act (hereinafter “FCRA”).
2. All of the claims stated herein stem from the pattern of inaccurate and wrongful servicing methods and debt collection activities related to Ms. Halliburton’s mortgage loan on her homestead.
II. JURISDICTION AND VENUE
3. This Court has subject-matter jurisdiction over this action under 28 U.S.C. §1331 for the federal questions, with supplemental jurisdiction for matters of state law under 28 U.S.C. §1367.
4. This Court also has jurisdiction over this action under 28 U.S.C. §1332 for diversity in parties.
5. Venue in this district is proper under 28 U.S.C. §1391(b)(2) in that Defendants transact business in this district, the conduct complained of occurred in this district, and the property that is the subject of this action is situated in this district.
III. PARTIES
6. Plaintiff, Jacqueline S. Halliburton, is an individual who resides at 1361 Country Place Drive, Houston, Harris County, Texas 77079. Plaintiff is the Borrower on a Purchase Money Mortgage Deed of Trust on which Defendants are attempting to foreclose so that they may sell her homestead.
7. Defendant Ocwen Loan Servicing, LLC (hereinafter “Ocwen”) is a foreign limited liability company which does business in the State of Texas. Ocwen was the Servicer for BONY when the Notice of Default was sent to Plaintiff.
8. Defendant PHH Mortgage Corporation (hereinafter “PHH”) is a foreign limited partnership which does business in the State of Texas. PHH is the current Servicer of the above- referenced Deed of Trust.
9. Defendant NewRez Mortgage LLC (hereinafter “NewRez”) is a limited liability company which does business in the State of Texas. NewRez is the current Servicer c/o PHH.
10. Defendant The Bank of New York Mellon Trust Company, National Association fka The Bank of New York Trust Company, N.A. as successor to JPMorgan Chase Bank, as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass- Through Certificates, Series 2004-KR2 (hereinafter “BONY”) is a foreign entity doing business in Texas. BONY is the Mortgagee/Investor for the above-referenced Deed of Trust. BONY is vicariously liable for the actions of Ocwen, PHH, and NewRez in this matter.
IV. FACTUAL BACKGROUND
A. Ms. Halliburton entered in to a mortgage contract in 2004.
11. The property in question, hereinafter “the Property,” is located at 1361 Country Place Dr., Houston, Texas 77079. The legal description of the Property is:
LOT FOUR (4), IN BLOCK NINE (9), OF MEMORIAL CLUB TOWNHOUSES, SECTION ONE (1), A SUBDIVISION IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN VOLUME 174, PAGE 82 OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS.
12. Plaintiff purchased the Property on or about June 3, 2004. In order to purchase the Property, she took out a mortgage with Southtrust Mortgage Corporation in the amount of $116,700.00. See attached Deed of Trust as Exhibit 1. GMAC became the servicer of the Plaintiff’s loan in August 2004. Plaintiff was notified of the change in the servicer, but not as to who owned her note. See attached Affidavit of Jacqueline S. Halliburton as Exhibit 2. Ocwen became the servicer for the lender in 2013 until 2019 when PHH took over. Plaintiff never received any documentation as to how NewRez became involved. Id. Plaintiff just started receiving mortgage statements with NewRez’s name on them. Id.
13. Plaintiff is a 73-year-old woman whose only sources of income are Social Security Retirement and an amount she makes each month from part-time employment. Id. She has been paying this loan on her homestead for approximately sixteen years.
14. From June 2004 forward, Plaintiff Jacqueline S. Halliburton has lived in the Property and has claimed the Property as her homestead and Harris County Appraisal District has listed her as the owner of the property. Id.
B. Ms. Halliburton continues to experience servicing issues and sues Ocwen in 2015; the case settles with a Loan Modification Agreement in 2016.
15. Plaintiff filed suit against Defendant Ocwen Loan Servicing, LLC in April 2015 alleging Breach of Contract, Negligence, Conversion, Declaratory Judgment, etc. due to incorrect accounting and misapplication of her payments by Ocwen. That case was removed to federal court by Ocwen Loan Servicing, LLC in June 2015 where the parties eventually settled those claims after mediation.
16. As part of the settlement, Plaintiff signed a Loan Modification Agreement with Ocwen on April 28, 2016 which included the Present Holder of the Note and Lien: BONY. See attached Loan Modification Agreement as Exhibit 3. The new principal and interest portion of the Plaintiff’s payment was $484.76 and the tax and insurance portion of payment was $15.35 for a total monthly payment of $500.11. Id.
17. Plaintiff has maintained homeowner’s insurance with State Farm insurance since 2007. See Exhibit 2. State Farm has annually provided evidence of this policy to each of the servicers of the Plaintiff’s loan, which the various servicer Defendants ignored and continued to ignore. Id. Plaintiff learned the $15.35 payment was supposed to be going into her escrow account which was the amount of the Spring Branch ISD property taxes for the year of 2016 divided by 12. Id. Plaintiff’s school district taxes are lower due to her homestead’s lower value and her multiple property tax exemptions that have been in place since 2011. Id.
C. Ocwen force-placed an insurance policy on Ms. Halliburton’s account after receiving proof of her own insurance policy.
18. After the settlement in 2016, Plaintiff set up an ACH deposit with Amegy Bank specifically to make mortgage payments to Defendants Ocwen and BONY. Id. During 2017, Plaintiff found that Defendant Ocwen had continued to make accounting errors on her loan account, added unnecessary fees, and conducted a pattern of deceptive, predatory behavior which included false reporting to credit reporting agencies. Id. The false reporting prevented Plaintiff from being able to refinance the mortgage on her homestead. Id. This led Plaintiff to close her Amegy Bank account and begin sending most, if not all, of her payments to Ocwen via check sent by certified mail, return receipt requested. Id.
19. In November 2017, Ocwen began receiving Plaintiff’s mortgage payments via check, and began a practice of stamping them as received, and returning them to Plaintiff uncashed. Id.
D. Defendants’ purchase an unnecessary insurance policy, creating a default on Ms. Halliburton’s account, starting a multi-year process of attempted unlawful foreclosures
20. From November 2017 to March 2019, Plaintiff continued to send her mortgage payments to Ocwen via check. She sent checks for the past payments that had been returned and current payments. All checks were either stamped as received and returned to Plaintiff or went missing and were never returned, cashed, or applied to her mortgage loan account. Id. In April 2019, NewRez c/o PHH replaced Ocwen as servicer for Plaintiff’s loan and began cashing Plaintiff’s mortgage payments and placing them in a suspense account rather than applying the payments to her outstanding principal and accruing interest. Id.
21. Defendants scheduled foreclosure sales for July 2018, October 2018, and February 2019 in attempts to sell the Plaintiff’s homestead. Defendants most recently had set the Plaintiff’s homestead for the foreclosure sale scheduled for March 3, 2020. See attached Notice of Substitute Trustee’s Sale as Exhibit 4. The three previous foreclosures were all based on a defective Notice of Default letter dated January 26, 2018. See attached Notice of Default as Exhibit 5. Plaintiff’s prior counsel sent counsel for Ocwen correspondence relaying the issues with the default letter and the accounting errors prior to each of the scheduled foreclosure sales. See Exhibit 2. The attorney for Ocwen cancelled the sales after receiving these letters. Id. PHH and NewRez are new servicers to Plaintiff’s loan, but appear to be attempting to foreclose and sell Plaintiff’s homestead using this same defective January 2018 notice of default. This is the fourth illegally attempted foreclosure sought against Plaintiff, and the first time she has had to seek injunctive relief to protect her home.
22. The Notice of Default letter dated January 26, 2018 was sent by Ocwen. See Exhibit 5. The total amount alleged in default is not correct. Id. Ocwen created the default when it refused to accept Plaintiff’s timely submitted mortgage payments. Plaintiff sent checks for the amount of the principal and interest owed each month per the modification agreement she signed. See Exhibit 2. An additional escrow account for homeowner’s insurance was not necessary to be collected by Ocwen since Plaintiff had proven to Defendants that she had her own insurance policy which she paid for each month. Additionally, Plaintiff provided Defendants with evidence that she kept her Spring Branch ISD property taxes paid annually. Id. Defendants were adding escrow charges of their own volition, creating a default where there was none, which is why they alleged they were not required to accept partial payments from the Plaintiff.
V. CAUSES OF ACTION
Count 1—Breach of Contract
23. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
24. Plaintiff signed a mortgage contract in 2004 and a subsequent loan modification agreement in 2016. See attached Deed of Trust as Exhibit 1 and Loan Modification Agreement as Exhibit 3. This agreement states that “the insurance carrier providing the insurance shall be chosen by you [Borrower] subject Ocwen’s approval which shall not be unreasonably withheld.”
25. The modification agreement also tacitly acknowledged Plaintiff’s payments for her homeowner’s insurance policy as it only set the escrow amount at $15.35 to pay for the Spring Branch ISD taxes for the year the agreement was signed.
26. Plaintiff has had State Farm insurance since 2007, however Defendants continued to add insurance amounts to the annual escrow accounting statements which served to double charge Plaintiff for insurance. Defendants tacitly approved Plaintiff paying for her own insurance policy, yet continued to seek to collect the premium via the Plaintiff’s escrow account.
27. Defendants breached the contract by overcharging Plaintiff and manufacturing late charges which proximately caused Plaintiff’s alleged default amount to increase over time.
28. Ocwen breached the contract by failing to apply payments to interest and principal before escrow and fees and then failing to accept payments.
29. PHH and NewRez breached the contract by holding unapplied funds and not applying the funds to the principal balance or returning them to Plaintiff within a reasonable amount of time.
30. The loan modification agreement specifies that Defendants must institute foreclosure proceedings subject to applicable law. Here, Texas law requires sending a proper notice of default under Texas Property Code § 51.002(d). Defendants did not institute foreclosure proceedings subject to Texas law, as required by the contract. Specifically, Defendants did not send a proper notice of default under Texas law, as further discussed under Count 2, paragraphs 32-37.
31. The essential elements in a breach of contract claim are as follows: (1) the existence of a valid contract; (2) that the plaintiff performed or tendered performance; (3) that the defendant breached the contract; and (4) that the plaintiff was damaged as a result of the breach. Frost Nat’l Bank v. Burge, 29 S.W.3d 580, 593 (Tex. App.—Houston [14th Dist.] 2000, no pet.).
32. Plaintiff performed under the contract by tendering principal and interest payments to Defendants under the modification agreement. BONY is the holder of the note in question and Ocwen, PHH, and NewRez acted as servicing agents on BONY’s behalf in the servicing of this loan. Defendants’ breached the modification agreement when they continued to add insurance amounts to the annual escrow accounting statements which served to double charge Plaintiff for insurance; overcharged Plaintiff and manufactured late charges; failed to apply payments to interest and principal before escrow and fees and then failed to accept payments; held unapplied funds and did not apply the funds to the principal balance or return them to Plaintiff within a reasonable amount of time; and did not institute foreclosure proceedings subject to Texas law.
33. Defendants’ material breaches of contract damaged Plaintiff as they lead to unnecessary fees, the inevitable default due to Defendants’ actions, and the wrongful attempts at foreclosure of Plaintiff’s home.
Count 2—Violation of the Texas Property Code
34. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
35. Texas Property Code § 51.002(d), states the following:
“Notwithstanding any agreement to the contrary, the mortgage servicer of the debt shall serve a debtor in default under a deed of trust or other contract lien on real property used as the debtor’s residence with written notice by certified mail stating that the debtor is in default under the deed of trust or other contract lien and giving the debtor at least 20 days to cure the default before notice of sale can be given under Subsection (b).”
36. Here, Ocwen is no longer the current mortgage servicer of the debt, therefore the notice of default letter sent to Plaintiff on January 26, 2018 is a deficient notice.
37. Assuming arguendo that the new loan servicers may rely upon the January 2018 notice sent by Ocwen, the notice itself fails to comply with the requirements of 51.002(d). The notice of default sent by Ocwen incorrectly stated the alleged amount owed and is therefore deficient.
Count 3—Violation of the Texas Debt Collection Act (“TDCA”)
38. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
39. The subject debt in this case qualifies as consumer debt under the TDCA since it is an obligation primarily for personal, family, or household purposes. Tex. Fin. Code § 392.001(2).
40. Ocwen, PHH, NewRez, and BONY are considered debt collectors under the TDCA. Tex. Fin. Code § 392.001(6).
41. The applicable TDCA provision violated by Defendants states: “a debt collector may not use a fraudulent, deceptive, or misleading representation that employs the following practices: misrepresenting the character, extent, or amount of a consumer debt.” Tex. Fin. Code § 392.304(a)(8).
42. The actions of Defendants Ocwen, PHH, NewRez, and BONY violated the TDCA when they misrepresented the character, extent, and amount of the debt alleged in the January 26, 2018 Notice of Default letter (See attached Exhibit 4.), as well as other correspondence to Plaintiff.
43. Defendants violated the TDCA by misrepresenting the character, extent, and amount of consumer debt to both Ms. Halliburton, as well as credit reporting agencies.
44. Pursuant to §392.403(b) of the Texas Finance Code, Plaintiff is requesting reasonable attorney’s fees.
Count 4—Violation of the Fair Debt Collection Practices Act (“FDCPA”)
45. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
46. Plaintiff is a “consumer” as defined by 15 U.S.C.A. § 1692a(3).
47. The subject debt and the unauthorized fees and costs qualify as a “debt” as defined by 15 U.S.C.A. § 1692a(5) as they are alleged obligations which arise out of a transaction for personal, family, or household purposes.
48. PHH and NewRez are “debt collectors” as defined by 15 U.S.C.A. § 1692a(6) because both entities regularly collect debts and use the mail and/or telephone to collect delinquent consumer accounts. PHH and NewRez are “debt collectors” under the FDCPA because the mortgage loan in question was in alleged default at the time PHH and NewRez began servicing the loan.
49. The FDCPA prohibits the use of “conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” 15 U.S.C.A. § 1692d.
50. The FDCPA prohibits the use of “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C.A. § 1692e.
51. The FDCPA further prohibits the use of “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C.A. § 1692f.
52. Defendants violated 15 U.S.C.A. §§1692d, e(2), e(8), f and f(1) through their debt collection efforts.
Violations of 1692d
53. PHH and NewRez violated 15 U.S.C.A. § 1692d when they engaged in abusive and oppressive conduct within one year of the filing of the Complaint through (i) unethical mismanagement of the escrow account; (ii) refusal to correct their accounting errors after repeated disputes over the past 3 years; (iii) misrepresenting the amounts owed for escrow; (iv) declaring the loan in delinquent or default status; (v) threatening a foreclosure sale four times; and (vi) reporting false information and reporting the loan delinquent to credit bureaus.
Violations of 1692e
54. PHH and NewRez violated 15 U.S.C.A. § 1692e(2) when they misrepresented the character, amount, or legal status of the subject debt by (i) misrepresenting the amounts owed for escrow; (ii) declaring the loan in delinquent or default status; and (iii) threatening four foreclosure sales.
55. PHH and NewRez violated 15 U.S.C.A. §1692e(8) by reporting false information to third parties when it reported Ms. Halliburton’s loan as delinquent to the credit bureaus. Violations of 1692f
56. PHH and NewRez violated 15 U.S.C.A. §1692f by employing unfair and unconscionable means to collect the subject debt by (i) misrepresenting the amounts owed for escrow, (ii) declaring the loan in delinquent or default status; (iii) threatening four foreclosure sales; and (iv) reporting false information and reporting the loan delinquent to credit bureaus.
57. PHH and NewRez violated 15 U.S.C.A. §1692f(1) by (i) misrepresenting the amounts owed for escrow; (ii) declaring the loan in delinquent or default status; (iii) threatening four foreclosures sales; and (iv) reporting false information and reporting the loan delinquent to credit bureaus.
58. Pursuant to 15 U.S.C. §1692k, Plaintiff is requesting costs and reasonable attorney’s fees.
Count 5—Violation of Regulation X of the Real Estate Settlement Procedures Act of 1974 (“RESPA”)
59. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
60. The subject loan is a “federally related mortgage” under RESPA.
61. Ocwen, PHH, and NewRez each qualify as a “servicer” under 12 U.S.C.A. §2605(i)(2).
62. The force-placed insurance provision of RESPA states: “A servicer may not assess on a borrower a premium charge or fee related to force-placed insurance unless the servicer has a reasonable basis to believe that the borrower has failed to comply with the mortgage loan contract’s requirement to maintain hazard insurance.” 12 CFR § 1024.37(b).
63. Defendants had no reasonable basis to believe Plaintiff had failed to comply with maintaining hazard insurance, therefore their annual escrow analysis was incorrect and their actions violate RESPA. Defendants implicitly approved Plaintiff paying for her own insurance policy, yet continued to assess on Plaintiff a premium charge or fee for insurance.
64. When Plaintiff only paid the contractual amount for her principal and interest, Defendants began improperly returning her checks due to alleged partial payment even though they were full payments. Defendants’ failure to comply with RESPA’s force place insurance regulations manufactured defaults on the Plaintiff’s mortgage account that never existed.
65. Defendants also violated RESPA by (i) demanding escrow payments that significantly exceeded the actual amount required for insurance and taxes; (ii) demanding, assessing, charging, and funding Plaintiff’s escrow account with more than the 1/6th cushion allowed under RESPA; (iii) failing to refund an escrow surplus of over $50; and (iv) failing to correct the wrongful escrow increase, charge, or deductions for taxes and insurance in accordance with RESPA. 12 U.S.C.A. §2609(a).
66. Plaintiff requests that this Court award Plaintiff reasonable attorney’s fees and costs pursuant to 12 U.S.C.A. §2605(f).
Count 6—Violation of Regulation Z of the Truth in Lending Act (“TILA”) of 1968
67. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
68. One provision of TILA states the following:
“The creditor, assignee, or servicer with respect to any residential mortgage loan shall transmit to the obligor, for each billing cycle, a statement setting forth each of the following items, to the extent applicable, in a conspicuous and prominent manner: (A) The amount of the principal obligation under the mortgage; (B) The current interest rate in effect for the loan; (C) The date on which the interest rate may next reset or adjust; (D) The amount of any prepayment fee to be charged, if any; (E) A description of any late payment fees; (F) A telephone number and electronic mail address that may be used by the obligor to obtain information regarding the mortgage; (G) The names, addresses, telephone numbers, and Internet addresses of counseling agencies or programs reasonably available to the consumer that have been certified or approved and made publicly available by the Secretary of Housing and Urban Development or a State housing finance authority (as defined in section 1441a–1 of title 12); and (H) Such other information as the Board [2] may prescribe in regulations.” 15 U.S. Code § 1638(f)(1).
69. Defendants (creditors, assignees, and servicers under TILA) violated TILA by failing to send Plaintiff all required periodic statements since 2018. Periodic statements were sent intermittently until April 2020 when they stopped being sent to Plaintiff. Plaintiff has had no way of knowing how her payments were being applied, if at all, for several months.
70. Additionally, the Payment Processing provision under Servicing Practices of Regulation Z states:
“No servicer shall fail to credit a periodic payment to the consumer’s loan account as of the date of receipt, except when a delay in crediting does not result in any charge to the consumer or in the reporting of negative information to a consumer reporting agency, or except as provided in paragraph (c)(1)(iii) of this section. A periodic payment, as used in this paragraph (c), is an amount sufficient to cover principal, interest, and escrow (if applicable) for a given billing cycle. A payment qualifies as a periodic payment even if it does not include amounts required to cover late fees, other fees, or non-escrow payments a servicer has advanced on a consumer’s behalf.” 12 CFR § 1026.36(c)(1)(i).
71. Defendants again violated TILA by failing to credit periodic payments made by Plaintiff as of the date of receipt beginning in November 2017 continuing until present day. If Plaintiff’s payments had been properly credited, she would not have been charged additional late fees and other related fees and the alleged default would not have occurred.
72. Plaintiff is entitled to actual damages under 15 U.S.C. § 1640 for these violations.
Count 7—Violation of the Fair Credit Reporting Act (“FCRA”)
73. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
74. Furnishers of information to consumer reporting agencies have a duty to report accurate information. Servicers who report information to consumer reporting agencies are considered furnishers under the FCRA. Ocwen, PHH, and NewRez are all furnishers under the FCRA.
75. If a consumer believes inaccurate information has been reported to consumer reporting agencies, that consumer can send a letter disputing the errors. The FCRA specifically says: “After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall—(A) conduct an investigation with respect to the disputed information; (B) review all relevant information provided by the consumer reporting agency pursuant to section 1681i(a)(2) of this title; (C) report the results of the investigation to the consumer reporting agency; (D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and (E) if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1), for purposes of reporting to a consumer reporting agency only, as appropriate, based on the results of the reinvestigation promptly—(i) modify that item of information; (ii) delete that item of information; or (iii) permanently block the reporting of that item of information.” 15 U.S. Code § 1681s–2(b).
76. Plaintiff has disputed the credit reporting regarding her mortgage loan since February 2018. She has sent letters to both the consumer reporting agencies and Defendants. Plaintiff completed an online dispute with Transunion on July 31, 2020 and never received a response. Plaintiff sent another detailed dispute letter via certified mail to Experian on or about November 21, 2020. Plaintiff included approximately 300 pages of evidence showing her payments were sent to Defendants timely and were wrongly reported as past due. Experian provided this dispute letter to the furnishers which responded by sending a report back to Experian.
77. Experian responded to Plaintiff’s dispute letter on December 15, 2020 with the following language: “We have contacted the company reporting the information you disputed.” In this Experian report, it shows a before/after view of Plaintiff’s Ocwen and PHH Loan account’s recorded history. See attached Dispute Report as Exhibit 7. Ocwen continues to allege Plaintiff was 30 and 60 days past due between May and July 2017 even though Plaintiff provided evidence of timely payments. Ocwen also did not make changes for payments made 2018 and after. PHH did not make any changes regarding the disputes.
78. Under the FCRA, the recent dispute report provided to Plaintiff shows the Defendants failed to conduct a reasonable investigation and review all provided information in order to provide an accurate report of Plaintiff’s payments to the consumer reporting agencies. Additionally, the report provided does not actually detail what investigation, if any, was done.
79. Plaintiff’s credit score has been destroyed by Ocwen and PHH’s negative, inaccurate, and misleading credit reporting. Plaintiff has had several credit applications denied due to the damage inflicted by Defendants to her credit report. Plaintiff has suffered emotional damages due to having to repeatedly dispute Defendant’s credit reporting and every denial of credit has been harmful to Plaintiff’s reputation.
80. Plaintiff is entitled to actual damages, attorney’s fees, and costs under 15 U.S. Code § 1681o for a furnisher’s negligent failure to comply with the above listed FCRA provision. And if the violation is willful, the furnisher is liable for actual damages or minimum statutory damages between $100 and $1000, for punitive damages, as well as for costs and attorney fees. 15 U.S. Code § 1681n.
81. At the minimum, Defendants’ actions as furnishers were negligent in this case. Since Defendants knew there was a dispute in February 2018 from Plaintiff and were provided evidence in a second dispute and did not correct the inaccurate information, their actions of failing to reasonably reinvestigate Plaintiff’s allegations were willful and therefore subject to punitive damages.
Count 8—Declaratory Judgment
82. Plaintiff incorporates by reference the factual allegations contained in the preceding paragraphs.
83. Plaintiff seeks a declaration that Defendants have materially breached the mortgage contract.
84. Plaintiff seeks a declaration that the Defendants have violated the TDCA by misrepresenting the character, extent, or amount of debt to both Plaintiff and credit bureaus.
85. Plaintiff seeks a declaration that Defendants have violated the FDCPA by repeatedly misrepresenting the amounts owed for escrow; (ii) declaring the loan in delinquent or default status; (iii) scheduling and noticing four foreclosures sales; and (iv) reporting false information and reporting the loan delinquent to credit bureaus.
86. Plaintiff seeks a declaration that the Defendants incorrectly forced insurance premiums on Plaintiff which proximately caused incorrect fees to accrue.
87. Plaintiff seeks a declaration that the Defendants failed to send required periodic statements to Plaintiff each billing period.
88. Plaintiff seeks a declaration that Defendants wrongly returned payments to Plaintiff instead of crediting these payments her mortgage loan account.
89. Plaintiff further seeks a declaration that Defendants failed to reasonably reinvestigate Plaintiff’s credit disputes and did not review all relevant provided information, therefore violating the FCRA.
90. Pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code, Plaintiff requests reasonable and necessary attorney’s fees.
PRAYER
I. Plaintiff respectfully requests that the Defendants be cited to appear and answer and that, on final hearing, the Plaintiff have judgment as follows:
1. Declaration that Defendants have materially breached the mortgage contract;
2. Declaration that the Defendants have violated the TDCA by misrepresenting the character, extent, or amount of debt to both Plaintiff and credit bureaus;
3. Declaration that Defendants have violated the FDCPA by repeatedly misrepresenting the amounts owed for escrow; (ii) declaring the loan in delinquent or default status; (iii) threatening four foreclosures sales; and (iv) reporting false information and reporting the loan delinquent to credit bureaus;
4. Declaration that the Defendants incorrectly forced insurance premiums on Plaintiff which proximately caused incorrect fees to accrue;
5. Declaration that the Defendants failed to send required periodic statements to Plaintiff each billing period;
6. Declaration that Defendants wrongly returned payments to Plaintiff instead of crediting her account;
7. Declaration that Defendants failed to reasonably reinvestigate Plaintiff’s credit disputes and did not review all relevant provided information, therefore violating the FCRA;
8. Order Defendants to delete all adverse credit reporting related to the loan and report corrections to payment history showing payments as current since the loan modification in 2016;
9. Damages against Defendants for their breach of the modification agreement;
10. Actual, compensatory, punitive, and statutory damages against Defendants for their violations of the TDCA, FDCPA, RESPA, TILA, and the FCRA, where available and applicable;
11. Pre and post judgment interest;
12. Costs and reasonable and necessary attorney’s fees; and
13. Such other and further relief to which Plaintiff may be justly entitled.
Plaintiff demands trial by jury.
Respectfully submitted,
Lone Star Legal Aid
/s/ Rachel Sechelski
Rachel Sechelski
Attorney-in-Charge
State Bar No: 24096053
S.D. Tex. Bar No: 3471424
rsechelski@lonestarlegal.org
Amir Befroui
State Bar No: 24073547
S.D. Tex. Bar No: 1692397
abefroui@lonestarlegal.org
500 Jefferson, 17th Floor
Houston, TX 77002
Telephone: (713) 652-0077 Ext. 1056
Fax: (713) 652-0044
ATTORNEYS FOR PLAINTIFF
CERTIFICATE OF SERVICE
I hereby certify that on December 29, 2020, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system and I hereby certify that I have served the foregoing on all counsel of record as follows:
Via ECF and/or CMRRR
Matthew A. Knox
McGlinchey Stafford, PLLC
1001 McKinney, Suite 1500
Houston, Texas 77002
mknox@mcglinchey.com
Emily Stroope
McGlinchey Stafford, PLLC
6688 North Central Expressway, Suite 400
Dallas, Texas 75206
estroope@mcglinchey.com
ATTORNEYS FOR DEFENDANTS
/s/ Rachel Sechelski
Sharon Davis, aka Bladen, aka Svetlana Pestova, aka Pestova Holdings LLC TRO Stops ONITY Foreclosure
LIT Investigates:11615 SAGEHOLLOW LN HOUSTON TX 77089-4732 is subject to a purported sales contract with Svetlana Pestova.
Homeowner Strikes Back: Counters Wolves Predatory Legal Scheme to Protract Litigation Until Death
Discover Josef Lamell’s battle against predatory legal tactics: at age 74, he stands against a scheme which has seen many meet untimely ends.
Foreclosure Wolf Mark Cronenwett for US Bank Takes a Bite at Lamell’s Time Expired Argument
This is a state case not a federal case as the PNC v. Howard Supreme Court decision affirmed. It has no place being decided relying upon erie.
PHH Response (General Denial) to Halliburton’s First Amended Complaint.
U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:20-cv-00919
| Halliburton v. PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC et al Assigned to: Judge Alfred H Bennett
Cause: 28:1332 Diversity-Notice of Removal |
Date Filed: 03/12/2020 Jury Demand: Plaintiff Nature of Suit: 220 Real Property: Foreclosure Jurisdiction: Diversity |
| Plaintiff | ||
| Jacqueline S Halliburton | represented by | Amir Befroui Lone Star Legal Aid 1415 Fannin St. Houston, TX 77002 713-652-0077 Ex. 1115 Email: abefroui@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICEDErnest W Brown Lone Star Legal Aid 900 Austin Ave 7th Floor Waco, TX 76701 254-756-7944 Email: tbrown@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICEDRachel Leigh Sechelski Lone Star Legal Aid 500 Jefferson 17th Floor Houston, TX 77002 713-652-0077 Email: rsechelski@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICED |
| V. | ||
| Defendant | ||
| PHH Mortgage Corporation on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC |
represented by | Emily G Stroope McGlinchey Stafford PLLC Three Energy Square 6688 North Central Expressway, Suite 400 Dallas, TX 75206 214-445-2427 Fax: 214-445-2450 Email: estroope@mcglinchey.com LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox McGlinchey Stafford PLLC 1001 McKinney St., Suite 1500 Houston, TX 77002 713-520-1900 Fax: 713-520-1025 Email: mknox@mcglinchey.com ATTORNEY TO BE NOTICED |
| Defendant | ||
| NewRez Mortgage, LLC | represented by | Emily G Stroope (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
| Defendant | ||
| The Bank of New York Mellon Trust Company, National Association as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2004-KR2 |
represented by | Emily G Stroope (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
| Defendant | ||
| Ocwen Loan Servicing, LLC | represented by | Matthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
| Date Filed | # | Docket Text |
|---|---|---|
| 02/12/2021 | 14 |
ANSWER to 9 Amended Complaint/Counterclaim/Crossclaim etc., by NewRez Mortgage, LLC, Ocwen Loan Servicing, LLC, PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC, The Bank of New York Mellon Trust Company, National Association as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2004-KR2, filed.(Knox, Matthew) (Entered: 02/12/2021) |
| 03/09/2021 | 15 | Joint MOTION for Continuance of Discovery deadline. by Jacqueline S Halliburton, filed. Motion Docket Date 3/30/2021. (Attachments: # 1 Exhibit, # 2 Proposed Order)(Sechelski, Rachel) (Entered: 03/09/2021) |
| 03/23/2021 | 16 |
ORDER granting 15 Motion for Continuance Discovery due by 5/3/2021..(Signed by Judge Alfred H Bennett) Parties notified.(ledwards, 4) (Entered: 03/23/2021) |
| 04/13/2021 | 17 | NOTICE of Setting. Parties notified. Telephone Conference set for 4/16/2021 at 11:00 AM by telephone before Judge Alfred H Bennett, filed. (ledwards, 4) (Entered: 04/13/2021) |
MATTHEW KNOX BIO FROM MCGLINCHEY WEBSITE
Good strategy requires a sort of tactical insight: I have to put myself in the shoes of the opposing counsel and plaintiff and consider their motivations and incentives. In every case, I have to make a prediction about the world, and then see if I was right.
Matthew Knox represents mortgage servicers and lenders in a wide variety of commercial litigation and consumer financial services litigation. His clients include national and state banks, mortgage loan servicers and investors, automobile finance companies, and other providers of consumer financial services. Matt’s primary focus is defending consumer litigation claims in lender liability actions in state and federal courts.
Matt handles matters involving fraud, wrongful foreclosure, breach of fiduciary duty, unfair competition, negligence, and breach of contract. He assists clients with contested foreclosures, real estate and title issues, and claims of federal and state regulatory violations, and adversarial proceedings filed in bankruptcy court. He represents banks and financial institutions in disputes involving state and federal consumer protection, licensing, lending, usury, leasing, and sales laws, and regularly defends claims arising under the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Home Ownership and Equity Protection Act (HOEPA), and Fair Credit Reporting Act (FCRA), among others. He also represents lenders in litigation relating to the Equal Credit Opportunity Act (ECOA), Civil Rights Act, and state counterparts to these statutes.
His work consists of the integration of two markedly different competencies: administrative and operational efficiency, and the development of an overall case strategy. With respect to the administrative element, Matt operates with extensive support from a team of specialized legal assistants and paralegals. This infrastructure means that assembly of documents, preparation of minor pleadings and so on are handled systematically, which allows him to efficiently manage a steady pipeline of fundamentally similar cases and resolve them as quickly and inexpensively as possible. Matt’s time and attention is reserved for more significant pleadings, such as Motions for Summary Judgment, and settlement discussions with opposing counsel.
With respect to the judgment work of assessing the merits of his client’s case, Matt begins by analyzing the pleadings and the borrower’s alleged facts and claims. Based on the analysis of those documents and allegations, he develops a litigation strategy that he communicates to and discusses with the client. Once the client has approved the strategy, he proceeds with the litigation accordingly, periodically updating the client and obtaining further input if necessary.
A key part of strategy development is determining the posture and expectations of opposing counsel, asking questions such as “Is opposing counsel reasonable? Are the plaintiff’s claims grounded in realistic outcomes?” and determining whether they have a deep understanding of the merits of their case, the applicable law, and the judicial process at hand. A student of behavioral economics and game theory, Matt tries to employ the lessons from those subjects in his work. He evaluates what he knows about the law, the opposing counsel, the judge, and other factors to determine whether and how he can apply that information to the case to achieve a good outcome for the client.
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
JACQUELINE HALLIBURTON, Plaintiff
VS.
PHH MORTGAGE CORPORATION, et al., Defendants
CIVIL ACTION NO. 4:20-CV-0919
Doc. 19, 26 Apr., 2021, Judge Alfred Bennett, Jr.
AGREED STIPULATED CONFIDENTIALITY ORDER AND ORDER TO COMPEL PRODUCTION
I. AGREED STIPULATED CONFIDENTIALITY ORDER
WHEREAS, it is anticipated that the parties to this lawsuit will be producing documents and supplying information, which a party may regard as proprietary or otherwise confidential, during the discove1y phase of this action;
WHEREAS, it is also anticipated that court filings in this matter will include references to documents or information that a party may regard as proprietary or otherwise confidential;
WHEREAS, it is further anticipated that deposition testimony in this matter will include references to documents or information that a party may regard as proprietary or otherwise confidential;
WHEREAS, the parties to this action desire to protect the confidentiality of any such proprietary or otherwise confidential documents or testimony furnished in the course of this action; IT IS HEREBY stipulated and made an Order of the Court that-until this Stipulated Confidentiality Order is amended or superseded all parties and their agents, including their employees and counsel, who are provided with Confidential Information (as defined below) shall follow the procedures set forth below with respect to certain documents, information, or testimony provided or exchanged in this action.
A. Scope
1. This Order shall govern all documents and information produced by any party to this action, whether produced informally or pursuant to a formal discovery request, and shall also include all documents or information revealed during a deposition, in any interrogatory answer, or otherwise disclosed via discovery.
2. Nothing in this Order precludes any party from seeking relief from the Court with regard to the production of documents or information.
3. This Order does not alter any confidentiality obligations that a party may have at law or under another agreement.
4. Nothing in this Order shall be construed as an agreement or acknowledgment by the non-producing party that any document, testimony, or other information designated as “Confidential” or “Confidential-Attorneys’ Eyes Only” (as those phrases are defined below) constitutes a trade secret or is in fact confidential.
B. Confidential Information
1. Materials that contain sensitive information may be designated as “Confidential” or as “Confidential Attorneys’ Eyes Only.” The producing party will make such a designation only for those documents or discovery responses that are in good faith believed to contain or constitute valuable confidential, proprietary, trade secret, or othe1wise sensitive information.
Materials so designated are referred to herein as “Confidential Information,”
and that includes the servicing notes associated with Plaintiffs mortgage account with Defendants since April 28, 2016.
2. Documents shall be designated as Confidential Information by marking or stamping each page of any such document as “Confidential” or “Confidential Attorneys’ Eyes Only,” or otherwise identifying such documents by Bates production numbers or other unequivocal identifier in writing to each party receiving the Confidential Information. In lieu of marking the originals of documents, any party may mark the copies of such documents that are produced or exchanged.
Bates Numbers
3. With respect to deposition testimony that constitutes or references Confidential Information, confidential portions of the transcript may be designated as such on the record at the time the testimony is given, and additional portions of the testimony may be designated as “Confidential” or “Confidential-Attorneys’ Eyes Only” within ten (10) days of receipt of the transcript. Until the ten-day period has expired, the entire transcript shall be treated as Confidential Inf01mation if any p01tions had been so designated on the record. Additionally, in any deposition in which documents designated as containing Confidential Information are marked as exhibits, shown to the deponent, or othe1wise employed, those documents shall be considered confidential and subject to the provisions of this Order.
C. Treatment of Confidential Information
1. Except as othe1wise provided in this Order or subsequent court rulings, documents designated as “Confidential” shall not be disclosed or shown to anyone other than:
(a) The parties, their employees, and their agents to whom it is necessary that Confidential Inf0rmation be shown for purposes of this proceeding;
(b) Outside counsel for the parties, their employees, and their agents to whom it is necessary that Confidential Information be shown for purposes of this proceeding;
(c) In-house counsel for the patties, their employees, and their agents to whom it is necessary that Confidential Information be shown for purposes of this proceeding;
(d) Persons employed by any patty or by counsel solely for the purpose of assisting in the preparation of this action for trial, including but not limited to expe1ts, their staff, and support personnel to whom it is necessary that Confidential Information be shown for purposes of assisting in such preparation;
(e) The Court or persons employed by the Court, including the jury;
(f) Duly qualified court reporters and videographers participating in these proceedings;
(g) Persons who were the authors or recipients of the documents in the ordinary course of business;
(h) Witnesses in preparation for or in the course of depositions or the trial of this matter; and
(i) Persons who, in addition to those identified above, are permitted access by either order of the Court or stipulation.
U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:20-cv-00919
| Halliburton v. PHH Mortgage Corporation, on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC et al Assigned to: Judge Alfred H Bennett
Cause: 28:1332 Diversity-Notice of Removal |
Date Filed: 03/12/2020 Jury Demand: Plaintiff Nature of Suit: 220 Real Property: Foreclosure Jurisdiction: Diversity |
| Plaintiff | ||
| Jacqueline S Halliburton | represented by | Amir Befroui Lone Star Legal Aid 1415 Fannin St. Houston, TX 77002 713-652-0077 Ex. 1115 Email: abefroui@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICEDErnest W Brown Lone Star Legal Aid 900 Austin Ave 7th Floor Waco, TX 76701 254-756-7944 Email: tbrown@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICEDRachel Leigh Sechelski Lone Star Legal Aid 500 Jefferson 17th Floor Houston, TX 77002 713-652-0077 Email: rsechelski@lonestarlegal.org LEAD ATTORNEY ATTORNEY TO BE NOTICED |
| V. | ||
| Defendant | ||
| PHH Mortgage Corporation on its own behalf and as successor-by-merger to Ocwen Loan Servicing, LLC |
represented by | Emily G Stroope McGlinchey Stafford PLLC Three Energy Square 6688 North Central Expressway, Suite 400 Dallas, TX 75206 214-445-2427 Fax: 214-445-2450 Email: estroope@mcglinchey.com LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox McGlinchey Stafford PLLC 1001 McKinney St., Suite 1500 Houston, TX 77002 713-520-1900 Fax: 713-520-1025 Email: mknox@mcglinchey.com ATTORNEY TO BE NOTICED |
| Defendant | ||
| NewRez Mortgage, LLC | represented by | Emily G Stroope (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
| Defendant | ||
| The Bank of New York Mellon Trust Company, National Association as Trustee for Residential Asset Mortgage Products, Inc., Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2004-KR2 |
represented by | Emily G Stroope (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICEDMatthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
| Defendant | ||
| Ocwen Loan Servicing, LLC | represented by | Matthew Alexander Knox (See above for address) ATTORNEY TO BE NOTICED |
There are proceedings for case 4:20-cv-00919 but none satisfy the selection criteria. Search for Doc. 28, none found, July 12, 2021.
2. In the event that documents or testimony are designated as “Confidential Attomeys’ Eyes Only,” such inf0rmation shall not be disclosed or shown to anyone other than the persons described in paragraph C.1(b), C.1(d), C.1(e), C.1(f), C. 1(g), and C.1(i).
3. Confidential Information shall be used by the receiving party solely for the prosecution or defense of this litigation and only as provided in this Stipulated Confidentiality Order.
Confidential Information shall not be used or employed for any other action, proceeding, or purpose whatsoever.
4. Before disclosing Confidential Information to any third patty pursuant to this Order, the disclosing party must provide prior written notice to the producing pa1ty or any other party designating the information as Confidential Information.
Such disclosure shall not be made until (1) such party consents to the disclosure; or (2) the court resolves any objections to the disclosure, whichever is earlier. Any objections to such disclosure shall be made in writing to the court within ten (10) business days of receipt of the notice.
5. Notwithstanding anything to the contrary in the foregoing paragraphs, any patty may use without restriction:
(a) its own documents or information; and
(b) documents or information developed or obtained by a receiving party independently of discovery in this action.
6. Each person given access to designated Confidential Information shall be advised that the information is being disclosed pursuant and subject to the terms of this Stipulated Confidentiality Order. To the extent such person is neither a party nor employed by a party, such person shall sign an agreement to be bound to this Order before any Confidential Information is disclosed.
7. No Confidential Information shall be filed with the Court or used in a hearing unless the pa1ty seeking to file or use the Confidential Information has provided, at least five (5) business days before the filing or hearing, written notice to all parties and any person designating the information as Confidential Information.
This pre-filing notice shall identify the specific information that the party intends to file or use. Any objections to such filing or use shall be made in writing to the Court within the five-day period with a request for an expedited hearing. If objections are lodged, the Confidential Information must not be filed or used until further instruction from the Court, unless the information is filed pursuant to the Court’s procedures for filing documents under seal.
8. The inadvertent or unintentional disclosure of Confidential Information, regardless of whether the information was so designated at the time of the disclosure, shall not be deemed a waiver of a party’s claim of confidentiality, either as to the specific information disclosed or as to any other information relating thereto on the same or related subject matter if, within ten (10) days of discovering the inadvertent failure to designate the material as confidential, the person or entity that provided the Confidential Information identifies the material produced and amends the designation.
9. Within thirty (30) days of the settlement or final adjudication, including appeals, of the action in which the documents have been produced, all Confidential lnformation supplied by the parties and non-parties and all copies thereof shall, upon request, be certified to have been destroyed or deleted.
However, it is understood that each party may retain a complete file of all litigation documents filed with the Court in these actions and that work product in the possession or control of counsel for any party that reflects or includes information derived from documents or testimony designated as confidential will not be destroyed or deleted.
10. Any dispute concerning the application of this Stipulated Confidentiality Order shall be heard by the Court upon motion by the objecting party. Any violation of this Stipulated Confidentiality Order may result in sanctions and costs.
II. Order to compel
On April 16, 2021, this Court held a teleconference to consider a letter request from Plaintiff for an order to compel the production of servicing notes related to Plaintiff’s account with Defendants after April 28, 2016 and a letter from Defendants opposing this relief.
After considering the letters and argument of counsel, this Court finds that an order to compel is appropriate.
IT IS, THEREFORE, ORDERED that Defendants shall produce their servicing notes related to Plaintiff’s account after April 28, 2016 to Plaintiff within 2 weeks from the date of this order.
IT IS FURTHER ORDERED that Defendants are hereby authorized to redact all attorney-client communications in the servicing notes to be produced under this order.
It is so ORDERED.
Attorney Privilege Does Not Apply to… https://t.co/KHiKqCmY1V
and…
Watch video…#OperationWhiteout pic.twitter.com/ywHzU52tQz— LawsInTexas (@lawsintexasusa) April 28, 2021
“But increasingly, courts are sealing documents in run-of-the-mill cases where the parties simply prefer to keep things under wraps.”
REPUBLISHED BY LIT ON APR 28, 2021
Having decided the substantive issues [in this executive employment dispute], we hasten to add a peripheral-yet-essential point:
Judicial records are public records. And public records, by definition, presume public access.
In this case, the district court granted an agreed protective order, authorizing the sealing, in perpetuity, of any documents that the parties themselves labeled confidential. Result: nearly three-quarters of the record—3,202 of 4,391 pages—is hidden from public view, for no discernable reason other than both parties wanted it that way.
The public deserves better. The presumption of openness is Law 101: “The public’s right of access to judicial records is a fundamental element of the rule of law.” Openness is also Civics 101. The Constitution’s first three words make clear that ultimate sovereignty is wielded not by government but by the governed. And because “We the People” are not meant to be bystanders, the default expectation is transparency—that what happens in the halls of government happens in public view. Americans cannot keep a watchful eye, either in capitols or in courthouses, if they are wearing blindfolds.
“Providing public access to judicial records is the duty and responsibility of the Judicial Branch.” Why is this important? Because accessibility enhances legitimacy, the assurance that things are on the level. Article III courts are independent, and it is “particularly because they are independent” that the access presumption is so vital—it gives the federal judiciary “a measure of accountability,” in turn giving the public “confidence in the administration of justice.”19 Put simply, protecting the public’s right of access is “important to maintaining the integrity and legitimacy of an independent Judicial Branch.” And hopefully, more access to judicial records means more trust in judicial officers and more respect for judicial orders.
Judicial records belong to the American people; they are public, not private, documents. Certainly, some cases involve sensitive information that, if disclosed, could endanger lives or threaten national security. But increasingly, courts are sealing documents in run-of-the-mill cases where the parties simply prefer to keep things under wraps.
This is such a case. The secrecy is consensual, and neither party frets that 73 percent of the record is sealed. But we do, for three reasons. First, courts are duty-bound to protect public access to judicial proceedings and records. Second, that duty is easy to overlook in stipulated sealings like this one, where the parties agree, the busy district court accommodates, and nobody is left in the courtroom to question whether the decision satisfied the substantive requirements. Third, this case is not unique, but consistent with the growing practice of parties agreeing to private discovery and presuming that whatever satisfies the lenient protective-order standard will necessarily satisfy the stringent sealing-order standard. Below, we review the interests at stake and the exacting standard for sealing that protects those interests. Then, we explain the concerns raised by the sealings in this case….
[J]udges must protect public accessibility for three mutually reinforcing reasons: (1) the public has a right to monitor the exercise of judicial authority; (2) judges are “the primary representative[s] of the public interest in the judicial process”; and (3) the judiciary’s institutional legitimacy depends on public trust. Public trust cannot coexist with a system wherein “important judicial decisions are made behind closed doors” and, worse, private litigants do the closing.
In our view, courts should be ungenerous with their discretion to seal judicial records, which plays out in two legal standards relevant here. The first standard, requiring only “good cause,” applies to protective orders sealing documents produced in discovery. The second standard, a stricter balancing test, applies “[o]nce a document is filed on the public record”—when a document “becomes a ‘judicial record.'” Under both standards, the working presumption is that judicial records should not be sealed. That must be the default because the opposite would be unworkable: “With automatic sealing, the public may never know a document has been filed that might be of interest.”
True, even under the stricter balancing standard, litigants sometimes have good reasons to file documents (or portions of them) under seal, such as protecting trade secrets or the identities of confidential informants. But “[m]ost litigants have no incentive to protect the public’s right of access.” That’s why “judges, not litigants” must undertake a case-by-case, “document-by-document,” “line-by-line” balancing of “the public’s common law right of access against the interests favoring nondisclosure.” Sealings must be explained at “a level of detail that will allow for this Court’s review.” And a court abuses its discretion if it “ma[kes] no mention of the presumption in favor of the public’s access to judicial records” and fails to “articulate any reasons that would support sealing.”
Here, there is no separate sealing order at all. There is only the protective order entered for purposes of “discovery in this matter.” That order granted the parties wide latitude to designate “Confidential” any information they believed in good faith was “not generally known” and would ordinarily be revealed in confidence or not at all. In addition, if confidential information appeared “in any affidavits, briefs, memoranda of law or other papers filed in court in this action,” the entire document was filed under seal. {Practically speaking, this provision of the parties’ agreed protective order doubles as the court’s sealing order. It authorizes sealing for “all documents and all transcripts of deposition testimony,” labeled confidential “in whole or in part,” “including all pleadings, deposition transcripts, exhibits, discovery responses or memoranda purporting to reproduce or paraphrase such information.”} Not only that, the order “survive[s] the final termination of this action.” In other words, the parties decided unilaterally what judicial records to keep secret, and their decision was permanent; once sealed, the records would stay that way.
And because there is no sealing order, there is no sealing analysis—no reasons given, no authorities cited, no document-by-document inquiry. Instead, the parties wielded nigh-boundless discretion to label things confidential. And again, the secrecy they granted is “perpetual” and “wholesale.” Perhaps most disquieting, documents marked confidential provided the basis for summary judgment—a dispositive order adjudicating the litigants’ substantive rights (essentially a substitute for trial)—yet there was “no mention of the presumption in favor of the public’s access to judicial records.” There was no grappling with public and private interests, no consideration of less drastic alternatives. There was no assurance that the extent of sealing was congruent to the need.
At the discovery stage, when parties are exchanging information, a stipulated protective order under Rule 26(c) may well be proper. Party-agreed secrecy has its place—for example, honoring legitimate privacy interests and facilitating the efficient exchange of information. But at the adjudicative stage, when materials enter the court record, the standard for shielding records from public view is far more arduous. This conflation error—equating the standard for keeping unfiled discovery confidential with the standard for placing filed materials under seal—is a common one and one that over-privileges secrecy and devalues transparency.
Given the judiciary’s solemn duty to promote judicial transparency, we must be alert to conflation errors (extending protective-order standards to material filed with the court). The secrecy of judicial records, including stipulated secrecy, must be justified and weighed against the presumption of openness that can be rebutted only by compelling countervailing interests favoring nondisclosure. All too often, judicial records are sealed without any showing that secrecy is warranted or why the public’s presumptive right of access is subordinated. This mistake harms the public interest, however interested the public is likely to be.
Sealings are no less rampant in low-profile cases (like this one) than in high-profile cases featured on the front page (like Bill Cosby’s deposition testimony) or the Oscars stage (like records detailing the cover-up of child sexual abuse, as depicted in 2016 Best Picture Winner Spotlight). And a steady flow of unjustified low-profile sealings is capable of far greater damage—a gradual, sub silentio erosion of public access to the judiciary, erosion that occurs with such drop-by-drop gentleness as to be imperceptible….
The Judicial Branch belongs to the American people. And our processes should facilitate public scrutiny rather than frustrate it.
Excessive secrecy—particularly displacing the high bar for sealing orders with the low bar for protective orders—undercuts the public’s right of access and thus undermines the public’s faith in our justice system.
Legal arguments, and the documents underlying them, belong in the public domain.
American courts are not private tribunals summoned to resolve disputes confidentially at taxpayer expense. When it comes to protecting the right of access, the judge is the public interest’s principal champion. And when the parties are mutually interested in secrecy, the judge is its only champion.
To be sure, entrenched litigation practices harden over time, including overbroad sealing practices that shield judicial records from public view for unconvincing (or unarticulated) reasons. Such stipulated sealings are not uncommon. But they are often unjustified.
With great respect, we urge litigants and our judicial colleagues to zealously guard the public’s right of access to judicial records—their judicial records—so “that justice may not be done in a corner.”
UPDATE: I originally wrote that Judge Carolyn Dineen King joined the opinion, but it turns out (see footnote 1) that she only concurred in the judgment. Thanks to The Turtle Dove for pointing this out.
