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Lippner v. Deutsche Bank National Trust Co.

September 9, 2008

KELLIE LIPPNER, PLAINTIFF,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Plaintiff Kellie Lippner's ("Lippner") motion for summary judgment on damages. For the reasons stated below, we grant in part and deny in part the motion. BACKGROUND

Lippner alleges that on June 25, 2004, she obtained a $161,000 mortgage loan ("Loan") from Residential Mortgage Assistance Enterprise, LLC ("Residential Mortgage"), a mortgage assistance company, in order to refinance her prior existing loan obligations. The Loan was allegedly secured by Lippner's home in New Lenox, Illinois. Lippner further states that at some point during the life of the Loan, Defendant Litton Loan Servicing, L.P. ("Litton") obtained a legal interest in the Loan and asserted a right to collect payment under the terms of the adjustable rate note ("Note") that Lippner signed in connection with her Loan. Lippner also alleges that Defendant Deutsche Bank National Trust Co. ("Deutsche") subsequently retained an interest in the Loan.

According to Lippner, at the closing of the Loan she was provided with a Truth in Lending Disclosure Statement ("Disclosure Statement") and a Notice of Right to Cancel ("NORTC"). Lippner claims that the Disclosure Statement she received was incomplete in violation of Federal Reserve Board Regulation Z, 12 C.F.R. § 226 ("Regulation Z"), since it did not include a complete payment schedule. Lippner also alleges that she did not receive enough copies of the NORTC and that the copy she did receive was incomplete, also in violation of Regulation Z. Lippner alleges that the violations with respect to the Disclosure Statement and the NORTC extended the period of time in which she had a legal right to cancel the Note and rescind the Loan.

Lippner alleges that she exercised her right to cancel the Note within the extended time period. Defendants allegedly refused to acknowledge Lippner's loan cancellation, return the funds received, and void the security interest held in Lippner's property. Lippner brought the instant action to rescind the Loan and recover damages for alleged violations of the Truth in Lending Act, 15 U.S.C. § 1601, et seq. ("TILA"). Residential Mortgage, which was originally a defendant in the instant action, was voluntarily dismissed by Lippner after it filed for Chapter 11 Bankruptcy.

On February 26, 2008, in a memorandum opinion, we granted Litton's motion for summary judgment with respect to all claims, denied Deutsche's motion for summary judgment on liability with respect to all claims, and we granted summary judgment in favor of Lippner on liability with respect to Lippner's claims against Deutsche. Since John Doe was named in the initial complaint, but was never identified or properly served by Lippner, we now dismiss John Doe from the action. At the time of our ruling on the motions for summary judgment, the parties had not fully briefed the issues of remedies and calculation of damages and the court did not rule on those issues. On March 12, 2008, Lippner filed the instant supplement to the motion for summary judgment, specifically addressing remedies and calculation of damages ("Lippner Damages Supplement"). Deutsche has filed a brief opposing Lippner's calculation of damages ("Deutsche Damages Supplement") and both parties have filed additional supplemental briefs specifically pertaining to the issue of the balance on the Loan.

LEGAL STANDARD

Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In seeking a grant of summary judgment, the moving party must identify "those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). This initial burden may be satisfied by presenting specific evidence on a particular issue or by pointing out "an absence of evidence to support the non-moving party's case." Id. at 325. Once the movant has met this burden, the non-moving party cannot simply rest on the allegations in the pleadings, but, "by affidavits or as otherwise provided for in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). A "genuine issue" in the context of a motion for summary judgment is not simply a "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). The court must consider the record as a whole, in a light most favorable to the non-moving party, and draw all reasonable inferences that favor the non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000).

DISCUSSION

The parties agree that Lippner has an outstanding balance that she owes on the subject Loan and that, pursuant to this court's ruling, Lippner is entitled to rescission of that Loan. In the Lippner Damages Supplement, she argues: (1) that the total tender amount after taking into consideration the principal loan amount, closing costs, and loan payments should be calculated at $109,477.31, (2) that Lippner is entitled to $4,482.50 of actual damages incurred in the form of attorney's fees for a state foreclosure action relating to the Loan ("State Case"), (3) that Lippner is entitled to $4,000 in statutory damages, (4) that the total remaining balance owed by Lippner to Deutsche after taking into consideration actual and statutory damages should be $100,994.81, and (5) that all adverse credit information relating to the Loan be deleted. In the Deutsche Damages Supplement, Deutsche argues: (1) that the total tender amount after taking into consideration the principal loan amount, closing costs, the loan payments, and real estate taxes and insurance that were paid by Deutsche on Lippner's behalf should be calculated at $138,329.57, (2) that Lippner is not entitled to actual damages incurred in the form of attorney's fees from the State Case, (3) that Lippner is entitled to only $2,000 in statutory damages, (4) that the total remaining balance owed by Lippner to Deutsche after taking into consideration actual and statutory damages should be $136,329.57, and (5) that Deutsche should have no obligation to remove adverse credit information.

I. Total Tender Amount Owed by Lippner After Rescission

The parties reach differing figures on the total tender amount that Lippner will owe after rescission has occurred. Deutsche and Lippner agree that the total principal balance of the Loan was $161,000. Deutsche and Lippner further agree that, pursuant to TILA, the closing costs of $1,289.57 should be subtracted from the principal loan amount. However, the parties dispute the total amount that Lippner has paid on the Loan to date. Lippner alleged in the Lippner Damages Supplement that she has paid $50,233.12 of the Loan and that this amount should be deducted from the total tender amount. Deutsche argues in the Deutsche Damages Supplement that Lippner was incorrect regarding the amount she has paid on the Loan and that Lippner's figure did not take into account payments that were reversed due to non-payment for insufficient funds. Deutsche argues that the actual amount that Lippner has paid towards the loan is $41,636.56. Deutsche further argues that payments were made on Lippner's behalf for real estate taxes and insurance in the amount of $20,255.70 and this amount should be added to the total tender amount Lippner would owe after rescission.

A. Payments Made By Lippner

Deutsche and Lippner agree that Lippner made payments on the Loan over a period of time prior to her demand for rescission. Deutsche and Lippner however disagree over the amount of payments that were made by Lippner on the Loan. The court ordered the parties to submit supplemental briefing on the issue, and in the supplemental briefing submitted by Lippner, she states that she can prove that she paid at least $47,191.25 towards the Loan. Deutsche, however, continues to allege that Lippner has paid only $41,636.56 towards the Loan. It is not disputed that Lippner made payments on the Loan over a period of years, both to Residential Mortgage and to Litton. ...


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