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Ocasio v. Ocwen Loan Servicing

March 13, 2009


The opinion of the court was delivered by: Bartle, C.J.


The plaintiff, Iris Ocasio, brings this lawsuit claiming she was the victim of predatory lending and consumer fraud by defendants, Ocwen Loan Servicing, LLC ("Ocwen"), American Business Credit, Inc., American Business Credit Corporation and The Bank of New York ("BONY"). She seeks rescission of the loan and termination of any security interest of defendants in her home, as well as statutory and punitive damages, forfeiture and return of loan proceeds, and attorneys' fees.

In July of 2008, we granted in part and denied in part the motion of Ocwen and BONY to dismiss the plaintiff's second amended complaint pursuant to Rules 12(b) and 9(b) of the Federal Rules of Civil Procedure and for more definite statement pursuant to Rule 12(e). We dismissed the plaintiff's claims for violations of: (1) the Federal Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. (Count I); (2) the Home Ownership and Equity Protection Act, 15 U.S.C. § 1639, (Count II); (3) the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. (Count III); (4) the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq. (Count IV); (5) the Fair Credit Reporting Act, 15 U.S.C. § 1681 (Count V); and (6) the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (Count VI). We also dismissed the plaintiff's state law claims for fraud and fraudulent misrepresentation (Count IX), breach of fiduciary duty (Count XIII), and conspiracy, acting in concert, and aiding and abetting (Count XIV).

Now pending before the court is the motion of defendants, BONY and Ocwen, for summary judgment with respect to the plaintiff's remaining claims for relief under the Pennsylvania Fair Credit Extension Uniformity Act ("FCEUA"), 73 Pa. Cons. Stat. § 2270.1, et seq. (Count VII) and the Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 Pa. Cons. Stat. § 201-1, et seq. (Count VIII). They additionally move for summary judgment with respect to the plaintiff's state common law causes of action for: (1) for breach of contract and warranty (Count X); (2) negligence, negligent misrepresentation and improvident (negligent) lending (Count XI); and (3) breach of the covenant of good faith and fair dealing (Count XII).

The plaintiff's claims under numerous federal statutes, including the Truth-in-Lending Act, originally formed the basis for federal jurisdiction in this matter. 28 U.S.C. § 1331. The plaintiff's federal claims have all been dismissed by virtue of our Order dated July 23, 2008 as to the motion of Ocwen and BONY to dismiss and for a more definite statement. We exercise supplemental jurisdiction over the plaintiff's remaining state law causes of action pursuant to 28 U.S.C. § 1367.


Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment should be "rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is material when it "might affect the outcome of the suit under the governing law." Id. After reviewing the evidence, the court makes all reasonable inferences in the light most favorable to the non-movant. In re Flat Glass Antitrust Litig., 385 F.3d 350, 357 (3d Cir. 2004).

Where the nonmoving party bears the "burden of persuasion at trial, the moving party may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry that burden." Wetzel v. Tucker, 139 F.3d 380, 383 (3d Cir. 1998). A genuine issue of material fact is created if the nonmoving party "provides sufficient evidence to allow a reasonable jury to find for him at trial." Id. The evidence submitted and relied upon must be admissible at trial. Id.


The plaintiff's second amended complaint, filed in April 2008, contained fourteen causes of action founded on the defendants' alleged predatory lending and fraud in connection with a loan she obtained from the originating lenders, American Business Credit, Inc. and American Business Credit Corporation. It alleges the loan amount was $20,000, while the Promissory Note clearly reflects a loan amount of $28,000 secured by a mortgage on the plaintiff's real estate at 3501 North Water Street in Philadelphia, Pennsylvania. See Sec. Am. Compl. ¶ 15. The Promissory Note is signed by Iris B. Ocasio, as "Individual and Proprietor t/a Arco Iris Beauty Salon." The Mortgage is signed by Iris B. Ocasio, "Individual." The Settlement Statement for the Mortgage lists Iris Molina n/k/a Iris B. Ocasio as the borrower on the first page but the second page lists "Iris B. Ocasio t/a Arco Iris Beauty Salon" as the borrower. The second page is signed by the plaintiff above a line describing her as "Iris B. Ocasio, Individual & Proprietor." The loan application, dated August 22, 2001, identifies Iris Ocasio as the loan applicant and the business name is listed as Arco Iris Beauty Salon at 3501 N. Water Street, Philadelphia.

BONY is the current assignee holder of the Note and Mortgage and the assignee owner of the Note. According to the affidavit of Gina Johnson, an Ocwen Senior Loan Analyst, Ocwen is the servicer and attorney in fact for BONY. BONY became the assignee owner of the Note in April of 2005, and Ocwen began servicing the loan at the same time. See Johnson Aff. ¶¶ 8, 13.

The plaintiff asserts the loan contained a 10 year fixed rate term requiring monthly payments in the amount of $416.13. The Promissory Note provides for:

Principal payments, together with interest calculated at a rate of 16.2500% per annum, payable in One Hundred Nineteen (119) equal, consecutive monthly installments of $416.13 each, beginning on November 5, 2001, and continuing on the same day of each month thereafter, with a final, One Hundred Twentieth (120), installment of $17,433.94 [t]ogether with any unpaid principal, interest, costs, fees or other sums due hereunder accrued in connection herewith. [emphasis added].

The Note further provides for the imposition of various charges, such as returned check fees and late ...

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