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Appeals panel slashes $2.5M from award for woman 'tormented' by Ocwen, despite completing bankruptcy

Federal Court

By Jonathan Bilyk | Dec 4, 2019

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A woman who suffered “torment” at the hands of loan servicer Ocwen in its attempt to collect debts from her, despite her successful completion of Chapter 13 bankruptcy, will still be able to make the company pay.

But a federal appeals panel says the woman should collect $2.5 million less than a jury said she should receive.

On Nov. 27, a three-judge panel of the U.S. Seventh Circuit Court of Appeals ruled a federal jury had correctly ruled in favor of plaintiff Monette Saccameno in her dispute with Ocwen Loan Servicing. But the judges said the jury overstepped the law in awarding Saccameno $3 million, slashing that award to $582,000.

Seventh Circuit Judge Amy J. St. Eve authored the panel’s opinion. Judges William J. Bauer and Michael B. Brennan concurred in the decision.

The case landed in federal court in 2015, when Saccameno filed suit, accusing Ocwen of essentially ignoring the discharge of her Chapter 13 bankruptcy, threatening her repeatedly and attempting to foreclose on her home.

According to the appeals judges’ decision, Ocwen kept up its alleged harrassment of Saccameno for nearly four years. The debt collection actions continued even after Saccameno had repeatedly provided evidence she had made all of the payments required under the terms of her Chapter 13 proceedings, and her bankruptcy had been discharged, meaning there was no more debt to collect, the judges said.

The problems allegedly began when an Ocwen employee, identified only as “Marla,” incorrectly coded Saccameno’s bankruptcy discharge as a “dismissal,” signaling to Ocwen there was still a debt to collect.

However, even after that was corrected, Ocwen then asserted Saccameno had missed several payments, and continued to pursue Saccameno.

Ocwen continued to maintain Saccameno owed them money, up until its own corporate witness “counted to 42” on the witness stand, affirming to the jury Saccameno had made all 42 payments required under her Chapter 13 plan.

“We are not sure how many human errors a company like Ocwen gets before a jury can reasonably infer a conscious disregard of a person’s rights, but we are certain Ocwen passed it,” Judge St. Eve wrote. “The record is replete with evidence that Ocwen’s servicing of Saccameno’s loan was chaos from the moment Ocwen began working on the loan in 2011 to the day of the jury’s verdict nearly seven years later.”

When the case went to the jury, jurors awarded Saccameno $500,000 in compensatory damages for her first three counts. But the jury then went further, awarding $82,000 in compensatory damages under the Illinois Consumer Fraud and Deceptive Practices Act and $3 million more in punitive damages to “punish” Ocwen for its conduct.

A federal district judge refused to overturn the verdict, and Ocwen appealed, asserting the damages were excessive and couldn’t be allowed under Illinois law.

St. Eve said the appeals judges agreed the jury was right to seek to punish Ocwen for its treatment of Saccameno.

However, she said the appeals judges determined Ocwen was correct in arguing the jury had improperly inflated the punitive damages by comparing it to the total compensatory award, rather than to just the $82,000 awarded under the Illinois consumer fraud law.

In this case, St. Eve said, the punitive damages shouldn’t exceed the total compensatory award of $582,000.

“Here … $582,000 is a considerable compensatory award for the indifferent, not malicious, mistreatment of a single $135,000 mortgage,” St.  Eve wrote. “Moreover, nearly all this award reflected emotional distress damages that ‘already contain [a] punitive element.’

“… An award of this size punishes Ocwen’s atrocious recordkeeping and service of Saccameno’s loan without equating its indifference to intentional malice.”

While siding with Ocwen on this question, however, the panel rejected its request for a new trial, saying the question of whether damages are excessive and unconstitutional “is a question of law no within the province of the jury, and thus a court is empowered to decide the maximum permissible amount without offering a new trial.”

Saccameno has been represented in the action by attorney Nick H. Wooten, of Conway, Ark.; attorney Majdi Y. Hijazin, of Lombard; Daniel J. McGarry, of Whiteside & Goldberg Ltd., of Chicago; and attorneys Ahmad T. Sulaiman, Joseph F. Davidson, Mohammed O. Badwan and Ross M. Zambon, of the Sulaiman Law Group Ltd., of Chicago.

Ocwen has been represented by attorneys with the firm of Duane Morris LLP, of Philadelphia.

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Organizations in this Story

Sulaiman Law Group, Ltd.Duane Morris LLPU.S. District Court for the Northern District of IllinoisU.S. Court of Appeals for the Seventh CircuitWhiteside and GoldbergOcwen Loan Servicing LLC

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