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Jordan v. Nationstar Mortgage, LLC

United States District Court, E.D. Washington

November 21, 2017

LAURA ZAMORA JORDAN, as her separate estate, and on behalf of others similarly situated, Plaintiff,
NATIONSTAR MORTGAGE, LLC, a Delaware limited liability company, Defendant, and FEDERAL HOUSING FINANCE AGENCY, Intervenor.


         BEFORE THE COURT is Plaintiff's Motion for Partial Summary Judgment. ECF No. 217. This matter was submitted for consideration with oral argument on November 15, 2017. The Court has reviewed the motion, the record and files herein, and is fully informed. For the reasons discussed below, Plaintiff's Motion for Partial Summary Judgment (ECF No. 217) is GRANTED in part.


         This case arises from actions taken by Defendant Nationstar Mortgage LLC (“Nationstar”) affecting Washington homeowners' residential properties in default. ECF No. 2-4. Plaintiff and Class Representative Laura Zamora Jordan (“Ms. Jordan”) seeks summary judgment for a common law trespass claim, [1] Washington Consumer Protection Act (CPA) claim, and damages for injury to property caused by the lock changes. ECF No. 217.


          A. Facts Relating to Ms. Jordan

         On April 4, 2011, Nationstar drilled out and replaced the lock on Ms. Jordan's front door after she defaulted on her mortgage payments. ECF Nos. 218 at ¶ 1; 227 at ¶ 1; 166-1 at 3 (Ex. 1). Nationstar admits it did not issue a notice of default. ECF Nos. 218 at ¶ 2; 227 at 2. Ms. Jordan called Nationstar and asked how to gain access to the property so that she could move out her personal items. ECF No. 3-5 at 73 (Ex. 38). Nationstar then provided Ms. Jordan with the code to the lockbox so that she could enter her home to obtain her items. Id. at 73-74. She asked if she should put the key back in the lockbox after removing her items, to which Nationstar responded yes. Id. at 74. Ms. Jordan spent the night in her house and moved out her items the next day. ECF No. 166-1 at 9 (Ex. 1). She testified that she believed Nationstar wanted her out of the property because of the lockbox and it made her feel like she needed to move out. Id. at 8-9.

         On December 29, 2011, Ms. Jordan's attorney sent a letter to Nationstar demanding the immediate return of her property, restoration of the original locks, and compensation for damages suffered. ECF No. 116-2 at 2 (Ex. 2). The Vice President for Property Preservation at Nationstar, Jaime Burgess, declared that Nationstar would instruct the vendor to remove the lockbox and provide the sole key to the borrower if the borrower informs the vendor or Nationstar that the property is occupied by the borrower. Alternatively, Mr. Burgess stated Nationstar would rekey the same door and provide the sole key to the borrower if the borrower prefers. ECF No. 225 at ¶¶ 1, 13. Yet, Ms. Jordan argues that this statement is false and Nationstar refused to remove the lockbox or provide the key to her after the December 29, 2011 letter. ECF No. 240 at ¶ 6.

         B. Nationstar's Alleged Uniform Practice

          Nationstar claimed it was entitled to enter Ms. Jordan and Class members' homes because of “entry provisions” in their deeds of trust allowing the lender to enter, change the locks, and maintain the property after default but before foreclosure. ECF Nos. 218 at ¶ 9; 227 at ¶ 9; 3-5 at 61 (Ex. 19). Plaintiff alleges that Nationstar employed a uniform policy of rekeying properties, Nationstar claims that a number of the Class members' properties were not rekeyed. Nationstar concedes that it ceased rekeying properties in July 2016. ECF Nos. 218 at ¶ 13; 227 at ¶ 13. Nationstar also performed “property preservation” measures, which included property inspections, rekeying and winterizing property, and boarding up doors and windows. ECF Nos. 218 at ¶ 14; 227 at ¶ 14.

         Nationstar admits it has no policy requiring it to contact the borrower immediately before rekeying the property, but asserts that all borrowers gave Nationstar permission to enter their property prior to foreclosure. ECF No. 227 at ¶ 16. Nationstar maintains records of property preservation activities and produced a list of 5, 131 properties that were reported vacant prior to foreclosure sale. ECF Nos. 217 at ¶¶ 18-19; 227 at ¶¶ 18-19. Nationstar charged lock-change fees totaling $535, 376 to 3, 433 loans on the Class list and property preservation fees totaling $8, 904, 077.16 to 4, 680 of the loans on the Class list. ECF Nos. 217 at ¶¶ 21-22; 277 at ¶¶ 21-22. The parties dispute whether Class members' money or property was used to pay the assessed property preservation fees. ECF Nos. 217 at ¶ 23; 227 at ¶ 23.

         C. Procedural History

         On April 3, 2012, Ms. Jordan filed her Complaint against Nationstar in Chelan County Superior Court. ECF No. 2-4. Ms. Jordan subsequently filed a First and Second Amended Complaint seeking class action relief. ECF Nos. 2-13; 2-19. In her Second Amended Complaint, Ms. Jordan asserted the following causes of action: trespass; intentional trespass, RCW 4.24.630; violation of the Consumer Protection Act, RCW 19.86 et seq.; and breach of contract. ECF No. 2-19 at 10-16. Ms. Jordan also asserted a violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., but the Court dismissed Ms. Jordan's individual FDCPA claim on August 10, 2015. ECF Nos. 2-19 at 11; 71 at 2. On May 9, 2014, the Chelan County Superior Court certified the Class, pursuant to Washington Court Rules 23(a), 23(b)(1), and 23(b)(3). ECF No. 1-3 (Ex. C). Thereafter, Defendant removed the action to this Court. ECF No. 1.

         Nationstar then filed a partial summary judgment motion asking the Court to find that entry provisions are enforceable under Washington law. ECF No. 45 at 8-9. Ms. Jordan moved for partial summary judgment requesting the Court to find that before a lender can lawfully act upon the entry provisions, the lender is first required to obtain the borrower's post-default consent or permission from a court. ECF No. 61 at 8. The Court certified both questions to the Washington Supreme Court and stayed the case. ECF No. 72 at 3, 9-10.

         On July 7, 2016, the Washington Supreme Court entered its decision finding the entry provisions in direct conflict with Washington law and, therefore, unenforceable. ECF No. 89 at 5. Further, the Washington Supreme Court determined that receivership, as defined by chapter 7.60 RCW, is not the exclusive remedy for a lender to gain access to a borrower's property. Id. As a result, on July 21, 2016, this Court denied the parties' cross-motions for partial summary judgment (ECF Nos. 45 and 61), and lifted the stay. ECF No. 80. Nationstar then moved to reconsider the denial of its partial summary judgment motion (ECF No. 82), which the Washington Supreme Court denied and filed its Certificate of Finality on September 2, 2016. ECF No. 89.

         On September 6, 2017, this Court denied Defendant's Motion to Decertify Class and certified a slightly redefined Class. ECF No. 207. Ms. Jordan then filed a Motion for Partial Summary Judgment. ECF No. 217.


         Summary judgment as to a “claim or defense-or the part of each claim or defense” is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). For purposes of summary judgment, a fact is “material” if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A material fact is “genuine” where the evidence is such that a reasonable jury could find in favor of the non-moving party. Id. The moving party bears the initial burden of showing the absence of any genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to identify specific facts showing there is a genuine issue of material fact. Anderson, 477 U.S. at 256.

         In ruling on a motion for summary judgment, the court views the facts, as well as all rational inferences therefrom, in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). The court must only consider admissible evidence. Orr v. Bank of America, NT & SA, 285 F.3d 764 (9th Cir. 2002). There must be evidence on which a jury could reasonably find for the plaintiff and a “mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252.

         Nationstar contends that to prevail on summary judgment, Ms. Jordan must prove each element of every Class member's claim. ECF No. 222 at 10 (citing Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036, 1051 (2016) (Roberts, C.J., concurring)). In Justice Robert's concurring opinion, he stated that respondents had to establish the amount of compensable time for each individual plaintiff to prove liability and damages. Yet, Justice Roberts agreed with the Court that despite the differences in time for each class member, respondents could prove the amount of time through generalized, class-wide proof using a study and representative evidence. Tyson Foods, 136 S.Ct. at 1051. Nationstar misinterprets the necessity of proving each element of each class member's claim when the Supreme Court concluded that generalized, class-wide proof was sufficient to establish damages.

         A. Applicable Class Members Affected by this Motion

         The Court first addresses the parties' dispute as to which Class members are included in this Motion. While Nationstar contends that Ms. Jordan must prove every element for each Class member, the Court finds that partial summary judgment is appropriate for some Class members so as to narrow the issues for trial. The Court determines that the instant Motion only applies to those Class members who had their locks rekeyed prior to foreclosure.

         Nationstar argues that at least one-third of the Class members did not have their locks rekeyed. ECF No. 222 at 11. According to Ms. Jordan, 3, 433 loans were charged with lock-change fees totaling $535, 376. ECF No. 218 at ¶ 21. Nationstar emphasizes that there were 5, 132 properties identified as vacant and so Ms. Jordan fails to present evidence that locks were changed on the other 1, 699 properties. ECF No. 222 at 11. In reply, Ms. Jordan asserts that Nationstar's summary data shows it changed the locks on the homes of 3, 066 Class members while they owned their homes. ECF Nos. 237 at 9; 239 at ¶¶ 5-6.

         Ms. Jordan concedes that there is a triable issue of fact for the rest of the Class on whether their locks were changed and she plans to present evidence at trial from Nationstar's records proving it performed lock changes on additional homes. ECF No. 237 at 9. Ms. Jordan further admits that any Class member who sold or disposed of his or her property prior to the lock change was not injured and suffered no damage. Id. at 10. Nationstar asserted that there were 115 such properties and Ms. Jordan's expert segregates these properties from its calculation of damages. Id.; 224 at ¶ 2. At oral argument, Ms. Jordan further clarified that the Class is only seeking partial summary judgment for those members who had their locks changed prior to foreclosure.

         Nationstar asserts that there is a triable issue as to whether Ms. Jordan and other borrowers consented to the rekeying of their properties. ECF No. 222 at 12. Nationstar cites that, in February 2011, Ms. Jordan told Nationstar that she did not intend to make future payments, had no interest in keeping the property, and wanted to foreclose. Id. Yet, Ms. Jordan merely stated that “she had used up all her savings. And has no intent to pay …” ECF Nos. 3-3 at 15 (Ex. 50); see 166-1 at 3 (Ex. 1). There is no evidence that she consented to the lock change, which made her believe she had to move out of her home. ECF No. 166-1 at 9 (Ex. 1). Additionally, Nationstar contends that other borrowers arguably consented to Nationstar's rekeying of their doors, such as Steven Siegfried, Stacy Powers, and David Lalonde. ECF No. 222 at 13.

         At oral argument, Ms. Jordan asserted that the issue of consent is not relevant to the instant motion, but should be asserted as an affirmative defense at trial. However, borrowers who consented to the rekeying of their homes are already excluded from the Class definition, which states “entering a Class member's property without notice to the Class member; and/or without the express contemporaneous consent of the Class member; and/or without permission of the court…” ECF No. 207 at 26. Therefore, the Court's ruling on this Motion only applies to those Class members who did not consent to the rekeying of their homes, thereby fitting within the Class definition, and at trial Nationstar may assert evidence of any individual class member's consent as a defense.

         Additionally, Nationstar argues that Ms. Jordan fails to prove that some Class members have standing because approximately 547 Class members filed Chapter 7 bankruptcy petitions. ECF Nos. 222 at 12; 226 at ¶ 4. Ms. Jordan concedes that it may be appropriate to narrow the Class to exclude members who filed for bankruptcy after a lockout and enter ...

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