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Agustin v. The PNC Financial Services Group, Inc.

United States District Court, D. Hawaii

January 16, 2019

ANNETTE AUGUSTIN, Plaintiff,
v.
THE PNC FINANCIAL SERVICES GROUP, INC.; PNC BANK N.A.; PNC MORTGAGE, Defendants.

         ORDER (1) DISMISSING CLAIMS AGAINST PNC MORTGAGE; (2) GRANTING SUMMARY JUDGMENT IN FAVOR OF THE PNC FINANCIAL SERVICES GROUP, INC.; (3) GRANTING SUMMARY JUDGMENT IN FAVOR OF PNC BANK N.A. WITH RESPECT TO THE FAIR DEBT COLLECTION PRACTICES ACT CLAIM ASSERTED IN COUNT TWO AND THE TELEPHONE CONSUMER PROTECTION ACT CLAIM ASSERTED IN COUNT FOUR; AND (4) GRANTING SUMMARY JUDGMENT IN FAVOR OF ANNETTE AUGUST IN WITH RESPECT TO LIABILITY FOR THE BREACH OF CONTRACT CLAIM ASSERTED IN COUNT ONE AND WITH RESPECT TO THE SECTION 480-2 CLAIM ASSERTED IN COUNT THREE

          SUSAN OKI MOLLWAY, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION.

         This is Plaintiff Annette Agustin's second case before this court involving the same residential mortgage loan. In March 2009, she stopped sending payments to Defendant PNC Bank N.A., the loan servicer. Agustin sued PNC Bank N.A. and others over the loan. In June 2011, the parties settled that case, with Agustin agreeing to vacate and surrender the mortgaged property and not to oppose the foreclosure of the mortgage. In return, the settlement agreement required PNC Bank to pay Agustin $5, 000 and to refrain from seeking any deficiency judgment and to release all claims and demands with respect to Agustin's loan. Notwithstanding the settlement agreement, PNC Bank or PNC Mortgage (a division of PNC Bank) continued to send Agustin monthly statements and other correspondence demanding payment, reflecting past due amounts ranging from over $90, 000 to over $135, 000. PNC Bank also called Agustin more than 100 times with respect to the loan.

         Agustin wrote to PNC Mortgage in October 2014, referring to the settlement. In November 2014, PNC Mortgage conceded that its records reflected the settlement and that she “no longer ha[d] personal liability for either the debt or for the property.” PNC Mortgage said it was working diligently to update its system to prevent further communication about the loan, but noted that she might still receive information regarding the loan. The correspondence and calls demanding payment continued.

         Agustin now sues PNC Bank and PNC Mortgage for having made numerous attempts to collect a debt she no longer owed. She also sues The PNC Financial Services Group, Inc., asserting that it is vicariously liable for conduct by PNC Bank and PNC Mortgage. In the First Amended Complaint of September 21, 2017, Agustin asserts claims of breach of the settlement agreement (Count One), violation of the Fair Debt Collection Practices Act (“FDCPA”) (Count Two), violation of section 480-2 of Hawaii Revised Statutes (“UDAP”) (Count Three), and violation of the Telephone Consumer Protection Act (Count Four).

         Defendants move for summary judgment with respect to all counts. See ECF No. 71. Agustin separately moves for summary judgment with respect to the breach of contract and UDAP claims asserted in Counts One and Three. See ECF No. 74. The court dismisses the claims against PNC Mortgage, which Agustin recognizes is not a legal entity separate from PNC Bank. The court grants summary judgment in favor of The PNC Financial Services Group, Inc., with respect to all claims asserted in the First Amended Complaint, as Augustin concedes that she cannot establish any liability on its part. Without objection by Augustin, the court grants summary judgment in favor of PNC Bank with respect to the FDCPA and Telephone Consumer Protection Act claims asserted in Counts Two and Four of the First Amended Complaint. However, the court grants summary judgment in favor of Agustin and against PNC Bank with respect to the breach of contract and UDAP claims asserted in Counts One and Three of the First Amended Complaint. The court leaves for further adjudication the issue of damages resulting from the breach of contract. The court awards statutory damages of $1, 000 to Agustin for the UDAP claim, as well as her reasonable attorney's fees and costs.

         II. BACKGROUND.

         This case arises out of a $278, 400 loan that Plaintiff Annette Agustin and her then-husband, George Agustin, obtained in February 2007 from National City Mortgage. The Agustins executed an Adjustable Rate Note and a Mortgage to secure the loan. See ECF Nos. 73-3 and 73-4. On May 18, 2012, PNC Bank, successor by merger to National City Bank, assigned the loan to HSBC Bank USA, National Association as Trustee for Luminent Mortgage Trust 2007-2. See ECF No. 73-5. PNC Bank and PNC Mortgage, a division of PNC Bank, continued to service the loan. See Corporate Disclosure Statement, ECF No. 19 (“PNC Mortgage is not a legal entity. It is a division of PNC Bank N.A.”).

         The Agustins stopped paying on their loan in March 2009. In September 2009, the Agustins sued The PNC Financial Services Group, Inc., and others, seeking rescission of their loan, recoupment, injunctive relief, and damages under the Truth in Lending Act, Real Estate Settlement Procedures Act, and Hawaii law. See Complaint, Agustin v. PNC Fin. Serv. Group, Inc., Civ. No. 09-00423 SOM/KSC, ECF No. 1. On February 23, 2010, PNC Bank, N.A., filed a Corporate Disclosure Statement, indicating that it, not The PNC Financial Services Group, Inc., was the proper defendant. See Civ. No. 09-00423 SOM/KSC, ECF No. 12.

         In June 2011, PNC Bank and Agustin settled the earlier case. See Settlement Agreement, Waiver, and Mutual Release, ECF No. 100. In relevant part, Agustin agreed to vacate and surrender the mortgaged property to PNC Bank no later than May 18, 2018. Id., PageID # 2753. The settlement agreement allowed PNC Bank to foreclose on the mortgage and barred Agustin from opposing foreclosure proceedings. Id., PageID # 2737. In return, PNC Bank agreed to pay Agustin $5, 000 and agreed not to seek any deficiency judgment. Id., PageID #s 2737 and 2754. PNC Bank also agreed that it would

absolutely and unconditionally release the AGUSTINS . . . from any and all claims, demands, actions or causes of action, of whatever nature or description, known or unknown, now existing or hereafter acquired, and whether or not asserted in the Litigation, which the PNC Releasors ever had, now have, or may hereafter acquire against the AGUSTIN Releasees, arising out of or related in any manner to conduct of the AGUSTIN Releasees regarding the First Note and First Mortgage arising after the date of this Agreement, except for the obligations of the AGUSTINS under the terms and conditions of this Agreement.

Id., PageID # 2738.

         For purposes of these motions, there is no dispute that Agustin complied with her obligations under the settlement agreement. Despite her compliance, PNC Mortgage, as loan servicer, continued to send Agustin monthly statements that demanded payment. For example, a statement dated August 18, 2014, indicated that Agustin owed $91, 152.90, which included interest, an escrow payment for taxes and insurance, new fees and charges, an overdue payment amount, late fees, and other fees. See, e.g., ECF No. 73-6. On August 21, 2014, PNC Mortgage sent Agustin a letter saying, “We understand that borrowers sometimes face challenges when it comes to making their payments.” ECF No. 73-7, PageID # 1601. The letter included the heading “Delinquency Notice Information, ” underneath which the letter stated, “Our records show that mortgage payments of $87, 588.89, plus late charges and other fees and costs of $10, 159.10 for a total of $97, 747.99 January 16, 2019are due . . . . Please note that if you do not make these payments by the late charges assessment date, an additional late fee may be added to your account.” Id.

         On or about October 5, 2014, Agustin sent a letter to PNC Mortgage disputing the debt. She told PNC Mortgage that she did not owe anything because “this matter has already been settle[d] in court. Please see the attached documentation that provides a more detailed breakdown of the court settlement.” ECF No. 74-3, PageID # 1704.

         On or about November 10, 2014, PNC Mortgage responded to the October 5, 2014, letter, stating:

Our records indicate that you entered into a Settlement Agreement with PNC. We have updated the account to reflect that you no longer have personal liability for either the debt or for the property.
On November 6, 2014, we updated the credit reporting showing a full settlement as of May 2011.
PNC is working diligently to update our system to prevent any further communication . . . to you. However, you may continue to receive information about the foreclosure.
We trust that this response will resolve your concerns.

         ECF No. 74-4, PageID # 1709. PNC Mortgage's system was updated on November 6, 2014, to say, “THIS IS A LITIGATED LOAN, AND PER THE TERMS OF THE SETTLEMENT, THE LOAN IS BEING REPORTED AS SATISFIED IN FULL EFFECTIVE 5/11/11.” ECF No. 74-5, PageID # 1711. At no time, however, did PNC Mortgage update its standard delinquency letters, monthly statements, or other correspondence, to reflect that Agustin did not actually have to pay any of the amounts PNC Mortgage was demanding.

         While PNC Bank now says it was required by federal law to send Agustin “information” about her loan obligations, the “information” it sent never acknowledged that PNC Bank was not actually seeking the money from Agustin that the letters kept saying she owed. For example, on November 17, 2014, a week after acknowledging that Agustin had no further liability with respect to the loan, PNC Mortgage sent Agustin a letter that enclosed a one-year hazard insurance policy at a cost of $2, 359.00 that it charged to Agustin's loan account. See ECF No. 73-8.

         PNC Mortgage also continued to send Agustin letters noting, “We understand borrowers sometimes face challenges when it comes to making their payments. . . . please call us to discuss your current loan status. We want to help you explore options to bring your account current and find the best possible solution to resolve any financial hardship. . . . This is an attempt to collect a debt and/or enforce our lien.” ECF No. 98-3, PageID #s 2610-2639 (letters dated from Nov. 11, 2014, through June 13, 2017). Letters continued to threaten additional late fees. ECF No. 98-4, PageID #s 2630-2710 (letters dated from July 10, 2015, through Oct. 10, 2017).

         Each statement listed a “Payment Amount Due, ” “Total Amount Due, ” and “Payment Due Date.” The statements also reflected a past due amount ranging from over $90, 000 to over $135, 000. See ECF No. 98-2. In other words, PNC Mortgage continued to demand payment, even after PNC Mortgage's November 2014 acknowledgment that the loan had been deemed “satisfied” as of May 2011. Beginning in ...


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