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Cave v. Saxon Mortgage Services, Inc.

United States District Court, E.D. Pennsylvania

February 8, 2017

LISA and SCOTT CAVE, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
SAXON MORTGAGE SERVICES, INC., Defendant. WILLIAM D. CAVE, on behalf of himself and all others similarly situated, Plaintiffs,
v.
SAXON MORTGAGE SERVICES, INC., Defendant.

          MEMORANDUM

          JOHN R. PADOVA, JUDGE.

         I. INTRODUCTION

         The class certification motions of Plaintiffs Lisa and Scott Cave in Civil Action Number 11-4586 and Plaintiff William D. Cave in Civil Action Number 12-5366 were denied in an Opinion dated October 11, 2016. (See Docket Entry 191 (“Class Cert. Opinion”).[1]) William D. Cave (“Cave”) now moves for reconsideration of that decision. He argues that we erred in concluding that he could not meet the predominance element of Fed.R.Civ.P. 23(b). He also argues that we erred in finding that he was an atypical and inadequate representative for the class under Rule 23(a). As there was no manifest error in our predominance determination that the putative class members' eligibility for a permanent Home Affordable Modification Program (“HAMP”) modification was an individual determination that could not be shown through common evidence or in our finding that Cave's individual situation made him atypical of the Class he sought to represent, there is no cause to reconsider our decision.

         II. LEGAL STANDARD

         ‘“The purpose of a motion for reconsideration . . . is to correct manifest errors of law or fact or to present newly discovered evidence.”' Howard Hess Dental Labs. Inc. v. Dentsply Int'l, Inc., 602 F.3d 237, 251 (3d Cir. 2010) (quoting Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (quoting Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985))). A proper motion for reconsideration under Fed.R.Civ.P. 59(e) ‘“must rely on one of three grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice.”' Wiest v. Lynch, 710 F.3d 121, 128 (3d Cir. 2013) (quoting Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010) (quotation omitted)). “Because federal courts have a strong interest in finality of judgments, motions for reconsideration should be granted sparingly.” Continental Cas. Co. v. Diversified Indus., Inc., 884 F.Supp. 937, 943 (E.D. Pa. 1995). It is improper on a motion for reconsideration to ask the Court to ‘“rethink what it had already thought through - rightly or wrongly.'” In re Blood Reagents Antitrust Litig., 756 F.Supp.2d 637, 640 (E.D. Pa. 2010) (quoting Glendon Energy Co. v. Borough of Glendon, 836 F.Supp. 1109, 1122 (E.D. Pa. 1993)). Therefore, “[m]ere dissatisfaction with the Court's ruling . . . is not a proper basis for reconsideration.” Progressive Cas. Ins. Co. v. PNC Bank, N.A., 73 F.Supp.2d 485, 487 (E.D. Pa. 1999).

         III. THE PREDOMINANCE ISSUE

         Cave argues that we made an error of law when we determined that the question of whether class members had satisfied the two conditions precedent to receive a permanent modification could not be shown using evidence that was common to the class. (Class Cert. Opinion at 41.) In making this argument he does not contest that these conditions precedent were applicable to class members' entitlement to receive a permanent modification, but he argues that we “did not consider which party is contractually obligated to verify the truth and accuracy of the borrower's financial information.” (Docket Entry 195, Pl. Mem. in Support of Mot. for Reconsideration (“Pl. Mem.”) at 8.) He argues that under Section 2.F of the Temporary Payment Plan agreement (“TPP”), Saxon was obligated to verify by his Modification Effective Date (“MED”) that his prior verbal representations remained true and accurate during the trial period. Cave contends that “the Court has improperly shifted this verification obligation to the borrower and also ignored Saxon's obligation to provide written notice by the MED if the borrower did not qualify.” (Id. at 8-9.)

         This argument provides no basis to reconsider our decision. First, the TPP language from which the Class claim flows is not only Section 2F, but also from the first sentence of the TPP, as reiterated later in Section 3. These provisions set out the two conditions precedent that a borrower was required to satisfy to receive a permanent modification after the completion of his trial period: (1) making each trial period payment in full and on time, and (2) the continued validity of financial information the borrower orally submitted when initially applying for the TPP. (See TPP (Pl. Ex. 22 (“If I am in compliance with this [TPP] and my representations in Section 1 continue to be true in all material respects, then the Lender will provide me with a [Modification Agreement] as set forth in Section 3 . . .”)).) (emphases added). In earlier decisions we held that an initial communication from Saxon that a borrower “qualified” for a TPP based on his verbal representations - in the form of countersigning the TPP and returning it to the borrower - made that agreement a binding contract, but that a permanent modification provided by Saxon was explicitly subject to these two conditions precedent. (See Cave v. Saxon Mortg. Servs., Inc., Civ. A. No. 11-4586, 2016 WL 4203864, at *2 (E.D. Pa. Mar. 4, 2016) (“March 2016 Opinion”) (quoting Cave v. Saxon Mortg. Servs., Inc., Civ. A. No. 11-4586, 2012 WL 1957588, at *5 (E.D. Pa. May 30, 2012) (“May 2012 Opinion”) (“We therefore conclude that the TPP contains a clear promise that Saxon will provide Plaintiffs with a permanent modification if several conditions precedent are met. However, it is clear that Saxon was only obligated to provide a permanent modification if Plaintiffs qualified.”); March 2016 Opinion at *6 (“Saxon's countersigning the Cave II Plaintiff's TPP and returning it to the borrower formed a binding obligation so long as the two conditions precedent were satisfied. . . .”) Cave v. Saxon Mortg. Servs., Inc., Civ. A. No. 11-4586, 2015 WL 6153754, at *2, 4-5, 8 (E.D. Pa. Oct. 20, 2015) (“In deciding Saxon's earlier motions to dismiss the Cave I and Cave II complaints, we determined that the Plaintiffs had plausibly alleged breach of contract claims based upon the allegation that Saxon's countersigning a borrowers' TPP (1) constituted a determination that the borrower qualified for a HAMP modification, and (2) created a binding obligation to make the modification subject to two conditions precedent.”). The Class Cert. Opinion reaffirmed this ruling, stating that “to be ‘actually eligible' for a permanent modification, each borrower had to satisfy [the same] two conditions precedent.” (Class Cert. Opinion at 41.)

         We held that predominance was lacking because there was no way to determine from evidence that was common to the class whether a borrower's representations were in fact true in all material respects. Rather, an evaluation of the individual statements and submissions of each borrower was required to determine whether they satisfied the conditions precedent to a permanent modification. Id. (“Whether a borrower submitted accurate financial information and whether that information remained true during the course of the trial plan period requires evaluation of each borrower's verbal representations and their follow-up document submissions.”). Cave's contention that we did not consider which party is contractually obligated to verify the truth and accuracy of the borrower's financial information, does not address the discrete focus of our predominance holding that each class member had the obligation to submit accurate information to satisfy the TPP's conditions precedent to recover on their claim, and that determining whether submitted information was accurate was incapable of being shown by common evidence.[2]

         Cave also argues that we erred in concluding that “actual eligibility” for a HAMP modification was “a definitional element of the Class.” (Pl. Mem. at 9 (“Moreover, the Court is incorrect in concluding that ‘actual eligibility' for a HAMP modification is a definitional element of the Class”).) He argues that he included the “did not receive a permanent modification” term in the proposed class definition “because that is one of the events that caused harm to Plaintiff and the Class members.” (Id.) He asserts that in the absence of a timely eligibility determination by Saxon and provision of written notice to the borrower terminating the trial period, Saxon's voluntary countersignature of the TPP at the beginning of the HAMP process conclusively establishes the borrower's HAMP eligibility and no further common evidence of an individual borrower's purported “actual eligibility” for a permanent modification is required. (Id. at 10.)

         Cave's assertion that we erred by “redefining” the proposed class is not cause to reconsider our decision. The Class proposed by William Cave included all borrowers in certain states whose loans had been serviced by Saxon and who, “during the period between April 2009 and October 2009: (i) entered into TPP Contracts with Saxon that are substantially similar to Plaintiff William Cave's TPP Contract and that Saxon counter-signed and returned to the borrowers, (ii) made all monthly payments as required by their respective TPP Contracts, (iii) and did not receive permanent Home Affordable Modifications by the Modification Effective Date set forth in their respective TPP Contracts.” (Docket Entry 64, Cave II SAC at ¶ 94a.) Because of the conditions precedent, we concluded that the claim could not be shown by evidence that was common to the class:

Whether a borrower submitted accurate financial information to Saxon is a condition precedent to receiving a permanent modification under the terms of the TPP and the HAMP regulations and, we find, is an individual issue not capable of proof with evidence that is common to the class. Plaintiffs have proposed a class definition for the Cave II Class that premises membership on eligibility for a HAMP modification - i.e., “not receiving a permanent modification” - but that fails to incorporate both requirements for receiving a permanent modification. We find that this makes class treatment of the claim ultimately unworkable since common questions cannot predominate and individual issues concerning whether each member of the proposed class satisfied the eligibility requirements for a permanent modification overwhelms questions that are common to the class.

(Class Cert. Opinion at 41-42 (internal citation and footnote omitted).)

         Based on this quoted language, Cave asserts that we concluded that actual eligibility was “a definitional element of the Class.” (Pl. Mem. at 9.) This is inaccurate. We did not change the proposed Cave II Class definition. We held that the definition, as proposed, could not qualify for class treatment because it failed to incorporate the requirement set out in each member's TPP to “submit accurate financial information, ” which was a necessary element of the underlying claim that the Class would have to prove as part of its liability case. (Class Cert. Opinion at 41 (“To resolve this Rule 23(b)(3) predominance issue, we must first determine what Plaintiffs need to prove at trial to establish their claim, since it is the elements of the underlying legal claim - and not the class definition - which plaintiffs must demonstrate are “capable of proof at trial through evidence that is common to the class rather than individual to its members.”) (citations omitted).) Since the Class had not shown that this element could be proven by evidence that was common to the class, we rejected the ...


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