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NEVEL v. OCWEN FEDERAL BANK FSB

January 19, 2005.

IRA T. NEVEL, Plaintiff,
v.
OCWEN FEDERAL BANK FSB, Defendant.



The opinion of the court was delivered by: MATTHEW KENNELLY, District Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Ira Nevel, a Chicago attorney, sued Ocwen Federal Bank FSB, a Florida-based bank, in Illinois state court, seeking to recover unpaid legal fees he claimed Ocwen owed him. Ocwen removed the case to federal court based on diversity of citizenship. The Court held a bench trial from October 27 through November 2, 2004. Nevel testified at the trial. Ocwen presented the testimony of Ronald Osimani, a former associate with Nevel's firm, as well as the deposition testimony of several present and former Ocwen personnel who had dealt with Nevel and his firm. This constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

Nevel, who has been practicing law since 1983, concentrates his practice in real estate matters, including mortgage foreclosures, real estate closings, and bankruptcy-related real estate matters. He began performing legal services for Ocwen's predecessor, Berkley Bank, in around 1994, and continued to do legal work for the bank after it changed its name to Ocwen*fn1 in 1999. By the late 1990's, Nevel was handling most of Ocwen's foreclosure-related legal work in Illinois. Ocwen consistently had high regard for the quality of Nevel's work.

  Nevel's claim in this case involves bills for legal services that he alleges his firm rendered and out of pocket expenses that he says the firm incurred in matters on which Ocwen retained him. The claim involves bills in several categories of cases: foreclosure and evictions, bankruptcy matters, real estate closings, a so-called "special tax project" which we will describe later, and several miscellaneous matters. Nevel seeks to recover $153,422.87 on unpaid invoices, lost profits of $27,500, and prejudgment interest in the approximate amount of $46,000.

  1. Foreclosures and evictions

  Nevel's bills to Ocwen for foreclosure matters typically included a flat fee for a legal services — unless the matter involved services beyond the norm — plus charges for out of pocket expenses, such as filing fees, fees for publishing notice, and so on. On evictions, Nevel's invoices typically reflected a flat fee for an eviction plus out of pocket expenses. In some instances, more than one flat fee was charged; these were situations when it became necessary to commence multiple eviction actions with regard to a particular property.

  Nevel testified that the work reflected in the foreclosure and eviction invoices was authorized by Ocwen (with the exception noted on the next page), the work was performed, and the billed expenses were incurred.*fn2 The testimony was credible, and there was no reliable contrary evidence. The evidence also establishes that the amounts that Nevel claims are still due are in fact due. The invoices themselves reflect the making of partial payments by Ocwen and the amount remaining due. Nevel also offered in evidence ledger cards (for some, but not all, of the invoices) reflecting amounts billed and payments made.

  The Court finds the invoices and ledger cards to be accurate records of payments received and amounts remaining due. Ocwen's only contrary evidence, defendant's exhibit 27, a spreadsheet prepared by one of its personnel, Christina Weimer, was not shown to be reliable concerning instances where it indicated payments had been made in addition to those reflected on Nevel's ledger cards. Weimer had no personal knowledge of the matters on the spreadsheet but rather extracted them from an Ocwen database the reliability of which was not shown.

  Nevel is entitled to recover for the entirety of the amounts due on the foreclosure and eviction invoices, with one series of exceptions. Several of the invoices — plaintiff's exhibits 115, 116, 118, 125, and 126 — included charges for sale commissions in various amounts, totaling $1,700. Nevel did not explain these charges at trial. The Court has not been provided with a basis in the evidence sufficient to warrant a finding that these amounts are owed to Nevel for services for which Ocwen had expressly or impliedly agreed to pay. Thus the total amount owed for the foreclosure and eviction matters is $32,504.19, calculated as follows: $24,120.39 billed for foreclosures, plus $10,083.80 billed for evictions, less $1,700.00 for commissions from the five referenced invoices.

  2. Bankruptcy matters

  Nevel's bankruptcy invoices involved, for the most part, charges for reviewing proposed Chapter 13 plans submitted by debtors in bankruptcy to ensure that Ocwen's interests were dealt with appropriately. Nevel billed Ocwen a flat fee of $150 for this work. He testified credibly that Ocwen had consistently paid $150 for these services but that at some point it unilaterally reduced its payment to $50.

  Nevel's testimony that the work reflected in the bankruptcy invoices*fn3 was authorized by Ocwen and performed by his firm, and that the expenses reflected were actually incurred, was credible. Nearly all the bankruptcy invoices at issue in this case are invoices on which Nevel billed $150 but Ocwen paid only $50. The only explanation provided by Ocwen was that it had determined that it wished to pay only $50 for these services.*fn4 But Nevel's testimony sufficiently established that the parties had an express or at least an implied agreement for a fee of $150, which the Court finds was a reasonable fee under the circumstances. Ocwen was not entitled to engage Nevel's services pursuant to this understanding and then unilaterally decide to pay less. Nevel is entitled to recover the entire amount of these invoices (one of which involves a fee for reviewing or preparing a reaffirmation agreement), a total of $7,025.00.

  3. Special tax project

  The "special tax project" was conceived by Ocwen because it had lost a significant number of properties due to nonpayment of property taxes because it had not made the payments necessary to redeem the properties. Ocwen retained Nevel to investigate and obtain information regarding taxes due on a number of properties and take the steps necessary to redeem the properties. Once retained, Nevel's firm obtained from Cook County, at a cost of $22 per parcel, tax searches going back ten years, and where taxes were due, obtained from the County, at a cost of $10 per parcel, an estimate of the amount needed for redemption. Nevel billed Ocwen for legal fees for the work performed, typically for one ...


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