United States District Court, N.D. Illinois, Eastern Division
HSBC Bank USA, National Association, as Indenture Trustee for People's Choice Home Loan, Securities Trust Series 2005-3 Plaintiff/Counter-Defendant
Ruth Helen Davis, Defendant/Counter-Plaintiff
MEMORANDUM OPINION AND ORDER
ROBERT BLAKEY UNITED STATES DISTRICT JUDGE.
foreclosure action, pro se
Defendant/Counter-Plaintiff Ruth Helen Davis
(“Davis”) has raised various affirmative defenses
and brought multiple counterclaims against
Plaintiff/Counter-Defendant HSBC Bank USA, National
Association, as Indenture Trustee for People's Choice
Home Loan, Securities Trust Series 2005-3
(“HSBC”).  at 1-6 (incorporating
counterclaims originally alleged in ).
has moved for summary judgment on all of Davis'
counterclaims and affirmative defenses. Davis, meanwhile, has
moved to strike the affidavit relied upon by HSBC in its
motion for summary judgment. For the reasons discussed below,
HSBC's motion  is granted, and Davis' motion
 is denied.
March 24, 2005, People's Choice Home Loan, Inc.
(“People's Choice”) lent Davis $161, 500.00,
and Davis executed a note (the “Note”) reflecting
that same amount in favor of People's Choice.  at 2.
That same day, Davis executed a mortgage (the
“Mortgage”) in favor of Mortgage Electronic
Registration Systems, Inc. (“MERS”), as Nominee
for People's Choice, to secure repayment of the loan and
the Note. Id. The property encumbered by the
Mortgage is located at 2202 East 70th Place #204,
Chicago, Illinois 60649. Id. The Mortgage was
recorded with the Cook County Recorder of Deeds on April 11,
to the Mortgage and related documentation, Davis agreed to:
(1) keep any “improvements now existing or hereafter
erected on the property” insured against loss by fire
and other hazards,  at 23; (2) pay into escrow amounts
due for taxes and insurance premiums, id. at 22-23;
and (3) furnish evidence of insurance upon request.
Id. at 38. Davis also agreed that if she did not
provide evidence of insurance upon request, the operative
lender could independently acquire insurance and charge her
account.  at 4;  at 38. HSBC acquired the Note from
People's Choice on June 1, 2005.  at 4.
Loan Servicing LP (“Litton”) originally serviced
the loan for HSBC. Id. at 5. During that time,
Litton maintained an escrow account, into which Davis paid
amounts required for real estate taxes and from which real
estate taxes were paid. Id. at 5.
April 18, 2011, Litton sent Davis an annual escrow statement,
which explained that on June 1, 2011, her monthly escrow
payment would increase to $318.84. Id. at 5.
Accordingly, Davis' monthly payment (including the
relevant principal, interest and escrow) would become $1,
365.26. Id. at 5-6.
October 10, 2011, Litton made real estate tax payments in the
aggregate amount of $1, 270.37. Id. at 6. Following
that payment, the balance on Davis' escrow account was
negative $364.78. Id.
October 18, 2011, Litton advised Davis that the amount
required to bring her loan account current was $2, 302.81.
Id. This total reflected the amount held in a
suspense account for Davis, two monthly payments (including
escrow) of $1, 365.26, and three late charges of $52.32 each.
Id. Davis paid this full amount on October 25, 2011.
November 1, 2011, servicing of the loan transferred from
Litton to Ocwen Loan Servicing, LLC (“OLS”).
Id. at 5. Neither Litton nor OLS nor HSBC ever
waived Davis' escrow obligations. Id. at 7.
The Temporary Insurance
November 13, 2011, OLS sent a notice to Davis, requesting
that she furnish evidence of insurance because her prior
policy was expiring. Id. at 8. Davis did not
December 18, 2011, OLS mailed a second notice to Davis,
advising her that: (1) it had “secured temporary
coverage” over her property for the period from
November 1, 2011 through December 31, 2011,  at 80; and
(2) this temporary policy would be “cancelled at any
time” at no cost to her upon receipt of proof of
insurance. Id. at 81. Davis also failed to respond
to this message.  at 8.
January 21, 2012, OLS mailed a third notice to Davis,
informing her that she would be charged for the
previously-mentioned temporary insurance within 30 days if
she did not produce proof of insurance.  at 85. Davis
did not respond to this letter either.  at 9.
April 5, 2012, OLS sent Davis an annual escrow statement,
which reflected a payment of $1, 605 for lender-placed
insurance.  at 94. This escrow statement also requested
that Davis send a copy of the declaration page from her
current insurance policy, if she thought the information
contained in the escrow statement was incorrect. Id.
April 27, 2012, Davis finally responded to OLS and sent along
her proof of insurance.  at 9. On May 4, 2012, OLS
accordingly inactivated the temporary insurance policy.
Id. At that point OLS had not collected any funds
from Davis related to the temporary insurance policy, such
that no refunds were due. Id. at 9-10.
in approximately February 2012, Davis began making payments
that were lower than required under the Mortgage.
Id. at 7. OLS held these lower payments in
Davis' suspense account until the total in the suspense
account equaled a regular payment, at which time OLS applied
the funds to the loan. Id.
4, 2012, HSBC, though OLS, sent Davis a Notice of Default.
Id. at 7. The Notice of Default advised Davis that
she needed to pay the entire amount due ($2, 937.67) by June
4, 2012, or HSBC would accelerate payment under the Mortgage.
Id. at 7-8.
response to the Notice of Default, Davis sent OLS a personal
check in the amount of $1, 046.42. Id. at 8. On May
24, 2012, OLS returned this check to Davis, explaining that
the check was returned because it did not satisfy the
defaulted amount. Id. Davis sent in another check
for less than the defaulted amount, and OLS returned this
check on July 30, 2012, with the same explanation.
Id. HSBC then initiated this foreclosure action in
August of 2012.  at 1-5.
judgment is appropriate if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law. Spurling v. C
& M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir.
2014). A genuine dispute as to any material fact exists if
“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). The
party seeking summary judgment has the burden of establishing
that there is no genuine dispute as to any material fact.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). In determining whether a genuine issue of material
fact exists, this Court must construe all facts and
reasonable inferences in the light most favorable to the
nonmoving party. See CTL ex rel. Trebatoski v. Ashland
School Dist., 743 F.3d 524, 528 (7th Cir. 2014).