Dionne, et al. v. Federal National Mortgage Assoc,. et al.

2016 DNH 155

• Court: District Court, D. New Hampshire
• Decided: August 31, 2016
• Docket: Civil No. 15-cv-056-LM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Jason S. Dionne, et al.

v. Civil No. 15-cv-056-LM Opinion No. 2016 DNH 155 Federal National Mortgage Association and JPMorgan Chase Bank, N.A.

O R D E R

Plaintiffs originally filed this mortgage foreclosure

dispute in New Hampshire Superior Court, Hillsborough County,

Southern District. Defendants Federal National Mortgage

Association (“Fannie Mae”) and JPMorgan Chase Bank, N.A.

(“Chase”) removed the lawsuit to this court. Defendants move to

exclude the opinions and proposed testimony of plaintiffs’

proposed expert, Diane Cipollone. Plaintiffs object.

Background1

Denise Dionne has lived at her home at 40 Tallant Road in

Pelham, New Hampshire (the “property”) since 1977. In 2005,

Denise added her son, Jason Dionne, to the property’s deed. In

2006, Denise, Jason, and Jason’s wife, Kathy Dionne

(collectively, the “Dionnes”), took out a loan, which was

1 The facts are summarized in detail in the court’s order granting in part and denying in part defendants’ motion to dismiss. See doc. no. 37. The court provides only a brief summary of the facts here. secured by a mortgage on the property. The mortgage states that

Mortgage Electronic Registration Systems, Inc. (“MERS”) is the

mortgagee as nominee for the lender, Domestic Bank.

MERS assigned the mortgage and note to Washington Mutual

Bank (“Mutual Bank”) in 2008. Chase obtained the mortgage and

note when it acquired Mutual Bank later in 2008. In 2010, Chase

assigned the mortgage to Fannie Mae. Chase also acted as the

loan servicer at all times relevant to this case. The Dionnes

allege that they were in default on their obligations under the

note when Mutual Bank and Chase obtained the loan, and when

Chase began servicing the loan.

In 2010, the Dionnes’ loan was modified after they fell

behind on their loan payments. Sometime after the 2010 loan

modification, the Dionnes again fell behind on their modified

loan payment obligations.

In August 2014, Chase sent the Dionnes2 a letter informing

them that “the foreclosure sale date has been rescheduled” for

October 1, 2014.3 Doc. no. 21-2 at 1. Chase did not serve or

deliver the letter via registered or certified mail. After

2 The various communications from Chase are addressed to either Denise or both Denise and Jason. For simplicity, the court will refer to the recipients of the communications as “the Dionnes.”

3 It is unclear whether the Dionnes had been notified of a foreclosure sale prior to August 2014.

2 receiving the letter informing them of the rescheduled

foreclosure date, the Dionnes completed a loss mitigation

application (which they downloaded from Chase’s

website) seeking a modification of their loan.

Over the next several months, the Dionnes submitted and

resubmitted various documents Chase requested with regard to the

loan modification application. Chase sent several contradictory

letters over that time frame to the Dionnes, with some

indicating that it had received all the necessary documents and

others indicating that it had not received certain documents and

requesting those documents from the Dionnes.

On January 12, 2015, the Dionnes’ home was sold at a

foreclosure sale, despite their pending loan modification

application. Fannie Mae purchased the property at the sale.

Discussion

The claims remaining in this case are: (i) violation of

Regulation X of the Real Estate Settlement and Procedures Act

(“RESPA”), 12 C.F.R. § 1024.41 (against Chase); (ii) violation

of the Equal Credit Opportunity Act, 15 U.S.C. § 1691(d)(1)

(against both Chase and Fannie Mae); (iii) violation of the Fair

Debt Collection Practices Act, 15 U.S.C. §§ 1692 et. seq.

(against Chase); (iv) violation of the Unfair Deceptive, or

Unreasonable Collection Practices Act, N.H. Rev. Stat. Ann.

3 (“RSA”) § 358-C (against both Chase and Fannie Mae); and (v)

violation of the New Hampshire Consumer Protection Act, RSA 358-

A (against Fannie Mae).

Defendants move to exclude the opinion and testimony of

Diane Cipollone, the Dionnes’ expert. The Dionnes object.

I. Applicable Standard

Federal Rule of Evidence 702 is “[t]he touchstone for the

admission of expert testimony in federal court litigation . . . .”

Crowe v. Marchand, 506 F.3d 13, 17 (1st Cir. 2007). Under that

rule, an expert witness may offer opinion testimony if: (a) the

expert’s scientific, technical, or other specialized knowledge

will help the trier of fact to understand the evidence or to

determine a fact in issue; (b) the testimony is based on

sufficient facts or data; (c) the testimony is the product of

reliable principles and methods; and (d) the expert has reliably

applied the principles and methods to the facts of the case. Fed.

R. Evid. 702. As the structure of this rule suggests, before the

factfinder in a case can consider expert testimony over the

adverse party’s objection, the trial judge, serving as

“gatekeeper,” must determine whether the testimony satisfies the

relevant foundational requirements. See Daubert v. Merrell Dow

Pharm. Inc., 509 U.S. 579, 597 (1993). The party who is the

proponent of the expert opinion bears the burden of showing that

4 it is admissible. United States v. Tetioukhine, 725 F.3d 1, 6

(1st Cir. 2013).

II. Cipollone’s Opinions

Cipollone offers two opinions in her expert report:

1) JPMorgan Chase Bank Received a Complete Loss Mitigation Application Pursuant to RESPA Regulation X No Later Than October 17, 2014;

2) In the Alternative, Chase Should Have Regarded Plaintiffs’ Application as “Facially Complete” as of October 17, 2014, Pursuant to RESPA Regulation X.

Defendants argue that Cipollone’s opinions merely summarize

facts in the record and offer a conclusion that certain legal

standards were met. They argue that Cipollone’s opinions are

not based on specialized knowledge. Defendants further argue

that even if Cipollone’s opinions are based on specialized

knowledge, she offers impermissible legal conclusions.

A. Cipollone’s First Opinion: Complete Application Under

RESPA

The Dionnes argue that Cipollone’s first opinion, that

Chase received a complete loss mitigation application on or

before October 17, 2014, is based on specialized knowledge.

They contend that Cipollone uses her expertise in mortgage loan

servicing and loss mitigation issues

to explain to the jury what [Chase’s] servicing notes mean with regard to what documents Chase told Plaintiffs it needed to deem Plaintiffs’ loss

5 mitigation application complete, what information Chase knew that altered Chase’s list of required documentation and when it knew it, and when Chase received each requested document.

Doc. no. 42-1 at 5.

The Dionnes’ argument has several problems. First, these

questions are factual in nature. The Dionnes received at least

eight letters from Chase concerning their loan modification

application, and many of the letters referenced documents Chase

claimed it needed to properly review the application. Expert

testimony is not necessary to explain the content of those

letters.

Second, the Dionnes argue that Cipollone’s testimony is

necessary to explain Chase’s loan servicing records to the jury

because they “contain short-hand notes, codes, and jargon unique

to the mortgage loan servicing industry.” Doc. no. 42-1 at 2.

A review of Chase’s records, however, which were included with

the Dionnes’ objection, shows that the records are easily

understandable to a lay person.

For example, in her expert report, Cipollone references

several of Chase’s records which “indicate that pay stubs for

Accountemps were missing and needed for underwriting the loan

modification.” Doc. no. 42-2 at 5. Rather than codes or

industry jargon, the records referenced by Cipollone use plain

language. See doc. no. 42-3 at 15 (“DOCS STILL NEEDED: 2 MOST

6 CURRENT PAYSTUBS DENISE FROM ACCOUNTEMPTS [sic]. ONE DOC ON FILE

NOT LEGIBLE;” id. at 11 (“STILL NEED . . . ADDITIONAL PAYSTUB

FROM ACCOUNTEMPS”); id. at 5, 8-10, 12-14. Cipollone does not

interpret Chase’s loan servicing documents; she merely

paraphrases them. Such testimony would not “assist the trier of

fact to understand or determine a fact in issue.” Ruiz–Troche

v. Pepsi Cola of Puerto Rico Bottling Co., 161 F.3d 77, 81 (1st

Cir. 1998) (citing Daubert, 509 U.S. at 591-92); see also In re

Novatel Wireless Sec. Litig., No. 08cv1689 AJB (RBB), 2011 WL

5827198, at *4 (S.D. Cal. Nov. 17, 2011) (“The documents in

this instance are not complicated and speak for themselves.

Expert testimony is inadmissible if it addresses lay matters

which a jury is capable of understanding and deciding without

the expert’s help.” (internal quotation marks and citations

omitted)).

Even if Cipollone’s testimony could be useful in

interpreting Chase’s servicing records, she did not disclose an

opinion on that subject. The Dionnes cite two cases from the

Southern District of Mississippi, see Ishee v. Fed. Nat’l Mortg.

Ass’n, No. 2:13-CV-234-KS-MTP, 2015 WL 224800, at *6 (S.D. Miss.

Jan. 15, 2015) and Neel v. Fannie Mae, No. 1:12CV311-HSO-RHW,

2014 WL 1117247, at *4 (S.D. Miss. Mar 20, 2014), which they

assert hold that “the question of what a mortgage servicer’s

loan servicing records show is appropriate subject matter of

7 expert testimony.” Doc. no. 42-1 at 5. The problem for the

Dionnes is that the experts in both those cases were “certified

fraud examiners,” who were specifically asked, as part of their

opinions, to provide a forensic accounting investigation of the

records and offer findings and conclusions. See Ishee, 2015 WL

224800, at *2 (noting that expert was asked to “provide a

forensic accounting investigation, examination, and analysis of

the mortgage loan transactions during the life of the subject

mortgage loan and offer his findings and conclusions”

(alterations omitted)); Neel, 2014 WL 1117247, at *1

(plaintiff’s expert was retained to provide a “forensic analysis

of the data contained in” defendants’ servicing notes and

records of plaintiff’s payment history).

Unlike the experts in Ishee and Neel, Cipollone did not

provide an opinion based on a forensic investigation of Chase’s

records. Cipollone cannot testify about an opinion that the

Dionnes failed to disclose. See Fed. R. Civ. P. 26(a)(2)(B)(i).

B. Cipollone’s Second Opinion: Facially Complete

Application Under RESPA

The Dionnes also argue that Cipollone’s second opinion,

that Chase should have regarded the Dionnes’ application as

“facially complete,” is appropriate expert testimony. Although

the Dionnes concede that Cipollone’s opinion is “couched in

8 terms of the applicable regulatory scheme,” they argue that the

opinion itself is “squarely factual” and, therefore, admissible.

Doc. no. 42-1 at 6.

“Expert testimony that consists of legal conclusions cannot

properly assist the trier of fact . . . .” Nieves–Villanueva v.

Soto–Rivera, 133 F.3d 92, 100 (1st Cir. 1997) (internal

quotation marks and citation omitted). “This is because the

judge’s expert knowledge of the law makes any such assistance at

best cumulative, and at worst prejudicial.” Id. (citing

Burkhart v. Washington Metro. Area Transit Auth., 112 F.3d 1207,

1213 (D.C. Cir. 1997) (“Each courtroom comes equipped with a

‘legal expert,’ called a judge, and it is his or her province

alone to instruct the jury on the relevant legal standards.”)).

Cipollone’s second opinion merely quotes various

subsections of RESPA’s Regulation X, and concludes with the

following language:

Consistent with this provision of the loss mitigation regulation, if Chase determined after receipt of Plaintiffs’ documents submitted through October 17, 2014 that additional documentation was needed to make the application complete, Chase was required to promptly notify Plaintiffs of the missing documents and treat the application as complete until the Plaintiffs were given a reasonable opportunity to complete the application. Compliance with the facially complete regulation would have afforded Plaintiffs substantial protections to enable them to submit any such additional documentation so that the application would be timely reviewed.

9 Doc. no. 42-2 at 7. In other words, Cipollone’s second

“opinion” simply paraphrases the language of RESPA. Such expert

testimony is improper. See, e.g., Stewart Title Ins. Co. v.

Credit Suisse, No. 1:11-cv-227-BLW, 2015 WL 4250704, at *15 (D.

Idaho July 13, 2015) (excluding expert’s opinion because “they

simply describe the law”).4

Conclusion

For the foregoing reasons, defendants’ motion to exclude

the opinions of Diane Cipollone (doc. no. 39) is granted.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge

August 31, 2016

cc: David E. Buckley, Esq. Nathan Reed Fennessy, Esq. Gary Goldberg, Esq. Andrea Bopp Stark, Esq.

4The Dionnes cite Darling v. IndyMac Bank, F.S.B., No. 06- 123-B-W, 2007 WL 4276903, at *3-5 (D. Me. Dec. 3, 2007), in which expert opinion on the Truth In Lending Act’s regulatory framework was allowed with strict limits. While expert opinion may be admissible in some regulatory contexts, the Dionnes have not shown that to be the case here.