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Parker v. Bank of Am., N.A.

United States District Court, D. Columbia.

April 16, 2015

DAVID H. PARKER, Jr., Plaintiff,
v.
BANK OF AMERICA, N.A., Defendant

For DAVID H. PARKER, JR., Plaintiff: Ian Stumpf, LEAD ATTORNEY, JR HOWELL & ASSOCIATES, P.C., Washington, DC; Jimmy R. Howell, Jr., LEAD ATTORNEY, JR HOWELL & ASSOCIATES, Los Angeles, CA.

For BANK OF AMERICA, N.A., Defendant: James W. McGarry, PRO HAC VICE, GOODWIN PROCTER LLP, Boston, MA; Keith E. Levenberg, Sabrina Rose-Smith, LEAD ATTORNEY, GOODWIN PROCTER LLP, Washington, DC.

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MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge.

During the severe economic downturn of the last decade, Plaintiff David H. Parker fell behind in paying his home mortgage. Parker reached an agreement with the loan servicer, Defendant Bank of America (" BOA" ), to modify his monthly mortgage payments; however, unbeknownst to Parker,

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BOA did not implement the terms of the mortgage modification agreement for nearly two years. In the interim, Parker received from BOA a series of foreclosure notices, demands for balloon payments and late fees, and statements threatening to report his alleged delinquency to credit agencies--none of which would have happened if BOA had promptly and properly executed the loan modification agreement. Parker has filed this civil action against BOA, alleging that BOA breached and/or tortiously interfered with the terms of his mortgage modification agreement causing him injury, and that BOA's failure to implement the agreement was the result of uniform and systematic policies that have injured many other borrowers.

Before this Court at present is a motion for class certification that Parker filed on March 4, 2014. Parker seeks to certify a class of borrowers whose valid, binding mortgage modifications were not implemented by BOA in a timely fashion and who, as a result, " experienced the acceleration of their full mortgage balances, derogatory credit reporting, and/or late fees." (Pl.'s Mot. to Certify the Class, Mot. to Appoint Class Counsel, and Mot. to Appoint Class Representative (" Pl.'s Mot." ), ECF No. 62, at 3.)[1] BOA opposes Parker's class certification motion on the grounds that, regardless of the merits of Parker's individual claim, Parker has failed to establish that BOA breached or tortiously interfered with valid, binding mortgage loan modification agreements on a classwide basis.

On March 31, 2014, this Court entered an order that, among other things, DENIED Parker's motion for class certification. (Order, ECF No. 86.) In the instant Memorandum Opinion, the Court explains the reasoning behind that ruling. In short, this Court has concluded that Parker has failed to satisfy the commonality requirement of Federal Rule of Civil Procedure 23(a) because he has not demonstrated that BOA systematically applied common policies or practices to the mortgage modification agreements it entered into with borrowers in a manner that breached those contracts systemically and thereby injured each putative class member in a similar way. Consequently, class certification is not appropriate. The Court has also determined that Parker's related motion to exclude the testimony of BOA's fact witness Michael Sunlin should be DENIED because the record evidence does not support the assertion that Sunlin's testimony is improper and should be stricken. In addition, having denied Parker's motion for class certification on commonality grounds, the Court also DENIED AS MOOT and without prejudice the remaining motions to strike and/or to exclude certain evidence that both parties filed to bolster their other class certification arguments--these motions can be refiled if the same evidentiary issues arise in the context of Parker's individual claim.

I. BACKGROUND

A. Facts Regarding Parker's Mortgage Modification

David Parker is a firefighter with the District of Columbia Fire Department and a District of Columbia resident. (Am. Compl., ECF No. 19, ¶ ¶ 10, 15.) Parker purchased a piece of real estate in the District in 1999, and he currently has two mortgages on that property. (Pl.'s Mem. in Supp. of Pl.'s Mot. (" Pl.'s Mem." ), ECF No. 62, at 17.) Fannie Mae owns Parker's first mortgage--which is the loan at issue

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here--and BOA services that mortgage loan. ( Id. )[2]

In 2008, Parker suffered a number of personal hardships that made it difficult for him to keep up with the monthly mortgage payments, including his wife's discharge from her job and his having to pay considerable additional expenses related to his mother's funeral. ( Id. ) Parker contacted BOA to request a modification of his mortgage loan payments, and Parker and BOA commenced a process designed to result in the modification of the mortgage loan's terms. ( Id. at 17-18; Am. Compl. ¶ 16.)[3] The modification under consideration in Parker's case reduced Parker's monthly mortgage payments by over $400--from $1,761.62 a month to $1,342.74. (Pl.'s Mem. at 18.)

In the summer of 2009, BOA approved Parker's loan modification, and sent him a letter dated July 11, 2009, stating that " [i]n order for the modification to be valid, the enclosed documents need to be signed and returned." (Ex. 7 to Pl.'s Mot., ECF No. 60-13, at 6.) The letter specified that Parker's " new modified monthly payment will be $1,342.74, effective with your September 1, 2009 payment." ( Id. ) The letter also clarified that Parker's interest rate was being reduced from the then-existing market rate of 6% to a " new reduced rate of 4.000%[,]" which would " be effective as of the September 1, 2009 payment." ( Id. ) In addition, the letter specifically instructed Parker to " sign, date, and return one (1) complete set of enclosed documents to us in the re-usable Fed-Ex envelope . . . no later than August 10, 2009[,]" and it warned that " [i]n the event that you do not or cannot fulfill ALL of the terms and conditions of this letter no later than August 10, 2009, we will continue our collections actions without giving you additional notices or response periods." ( Id. at 8).

Parker duly signed and returned the documents, which included copies of the modified mortgage agreement, as instructed. (Pl.'s Mem. at 19.) Parker also called BOA and received confirmation that his documents had been received. (Am. Compl. ¶ 18.) Shortly thereafter, Parker received additional correspondence from BOA, including " documents welcoming him into Defendant's modification plan on a permanent basis[.]" ( Id. ¶ 19.) Parker began making payments in accordance with the modified terms of the mortgage agreement as of September of 2009. (Pl.'s Mem. at 18.)

Notably, the first mortgage statement that Parker received from BOA after the effective date of his modification agreement did not reflect the change to his loan payment terms. ( Id. at 19.) However, the statement did include prominent language to the effect that if the borrower and BOA " have entered into an agreement to address [the borrower's] monthly payments, please make payments in accordance with this agreement." (Ex. 8 to Pl.'s Mot., ECF No. 60-14, at 2 (emphasis added).) Every mortgage statement that arrived in

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Parker's mailbox thereafter would similarly fail to reflect the modified terms, but the statement would also include this language indicating that the borrower should assume that the modification is in effect and should pay in accordance with the modified mortgage agreement. (Pl.'s Mem. at 19.)

On August 2, 2010, nearly twelve months after the modification agreement supposedly had taken effect, Parker received a " Notice of Intent to Accelerate" from BOA. ( Id. at 22.) This letter informed Parker that he was " in serious default" on his mortgage payments, to the tune of more than $23,000. (Ex. 12 to Pl.'s Mot., ECF No. 60-18, at 2.) A week later, Parker received a second " Notice of Intent to Accelerate," and that notice contained a slightly lower calculation of payments due, but still demanded more than $22,000. ( Id. at 4-5.) The amounts in both letters approximated what Parker would have owed if there had not been any modification agreement at all. Furthermore, as another indication that his loan modification agreement was not in effect, Parker received from BOA on August 27, 2010, a proposal to modify the terms of his mortgage loan, and the suggested modification proposed a higher monthly payment amount than the amount Parker was paying pursuant to the 2009 modification agreement. ( See Ex. 14 to Pl.'s Mot., ECF No. 60-20, at 2; Pl.'s Mem. at 23.) Parker also received a letter dated October 6, 2010, from a law firm representing BOA that threatened foreclosure if Parker did not make the required payments. ( See Ex. 13 to Pl.'s Mot., ECF No. 60-19.)

Through all this, Parker repeatedly contacted BOA in an attempt to clear up the apparent misunderstanding regarding the effective terms of his mortgage loan. When Parker first contacted BOA in August of 2010, a BOA representative denied the existence of a modification agreement. (Am. Compl. ¶ 23.) Parker contacted BOA once again in October of 2010, and thereafter he received a letter informing him that, if a modification agreement existed, BOA was not able to locate it. (Ex. 15 to Pl.'s Mot., ECF No. 60-21.) Parker persisted in making monthly payments in accordance with the terms of the 2009 modification agreement until November of 2010, when BOA rejected his payment entirely because his mortgage was considered delinquent. (Am. Compl. ¶ ¶ 26, 29, 31; Pl.'s Mem. at 24.)

B. Procedural History

On February 8, 2011, Parker filed suit in District of Columbia Superior Court seeking to enforce the terms of the agreement that he had made with BOA regarding modification of his mortgage loan payments. Parker's initial complaint alleged breach of contract claims and similar claims that pertained only to his own mortgage modification experience. BOA removed the case to federal court on diversity and federal question grounds ( see Notice of Removal, ECF No. 1), and on July 20, 2011, Parker was permitted to amend his complaint ( see Order, ECF No. 18). In so doing, Parker raised the possibility of classwide claims for the first time. ( See Am. Compl. ¶ ¶ 58-65.)

Parker's amended complaint contained four separate counts against BOA: breach of contract (Count I), tortious interference with contract (Count II), and two violations of the Fair Debt Collection Practices Act (Counts III and IV). ( Id. ¶ ¶ 66-109.) BOA moved to dismiss Counts II, III, and IV shortly after the amended complaint was filed ( see Def.'s Mot. to Dismiss Counts Two, Three, and Four of Pl.'s Am. Compl., ECF No. 23), and the Court granted BOA's motion to dismiss the Federal Debt Collection Practices Act claims

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(Counts III and IV), but denied BOA's motion to dismiss the tortious interference with contract claim (Count II), see Parker v. BAC Home Loans Servicing LP, 831 F.Supp.2d 88, 94-95 (D.D.C. 2011) (Boasberg, J.). Following this ruling, BOA filed an answer to Parker's amended complaint (Am. Answer, ECF No. 40), and the parties entered into class-certification-related discovery, which lasted until November of 2013.

Parker filed a motion for class certification on March 4, 2014. Parker's motion requests certification of two classes--one under Federal Rule of Civil Procedure 23(b)(1)(B) and the other under Rule 23(b)(3)--and the requested class definition is the same for both proposed classes:

(a) All current and former borrowers of residential mortgage loans since August 1, 2008, (b) across the United States of America (c) whose loans were serviced by Defendant BOA, N.A., (d) were coded " Complete" (e) and who despite having paid on time, in full thereunder, (f) experienced the acceleration of their full mortgage balances, derogatory credit reporting, and/or late fees.

(Pl.'s Cert. Mot. at 3.)[4] Parker's class certification motion has now been fully briefed ( see Def.'s Opp'n to Pl.'s Mot. (" Def.'s Opp'n" ), ECF No. 68; Pl.'s Reply in Supp. of Pl.'s Mot. (" Pl.'s Reply" ), ECF No. 77), and in addition, the parties have filed and briefed motions seeking to strike or exclude various witnesses that each side has identified in support of their respective positions regarding class certification.[5] This Court held a hearing on all of the pending motions on December 16, 2014.

C. BOA's Mortgage Modification Process

Significantly for present purposes, the parties' class certification briefs present strikingly different assertions of fact regarding BOA's mortgage modification process. Because there is such stark disagreement about whether, and to what extent, BOA applies a standardized process in a systematic way when it implements loan modification agreements--an issue of fact that lies at the heart of the instant class certification dispute--a brief description of the parties' widely differing views of the applicable mortgage modification procedures is warranted.

1. Parker's View: BOA Uniformly Implements A Staged Post-Modification Review Process

According to Parker, after BOA receives a signed modification agreement back from a borrower, two significant and uniform internal processing steps occur. First, BOA reviews the executed ...


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