Zurich American Insurance Company v. Ocwen Financial Corporation

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

ZURICH AMERICAN INSURANCE ) COMPANY and AMERICAN ) GUARANTEE AND LIABILITY ) INSURANCE COMPANY, ) ) Plaintiffs, ) ) v. ) Case No.: 1:17-CV-2873 ) OCWEN FINANCIAL CORPORATION, ) OCWEN LOAN SERVICING, LLC, ) TRACEE A. BEECROFT, SUSAN ) MANSANAREZ and KEITH SNYDER, ) ) Defendants. )

JOINT MOTION FOR ENTRY OF AMENDED JUDGMENT Pursuant to Federal Rule of Civil Procedure 58(d), Plaintiffs Zurich American Insurance Company and American Guarantee and Liability Insurance Company (collectively, “Zurich”) and Defendants Ocwen Financial Corporation and Ocwen Loan Servicing, LLC (collectively, “Ocwen”) (with Zurich, the “Parties”) hereby move for the entry of an amended judgment in ac- cordance with the Seventh Circuit’s April 6, 2020 Order in Case No. 19-3052, and the standards set out in Greenhill v. Vartanian, 917 F.3d 984 (7th Cir. 2019). 1. On April 17, 2017, Zurich filed a complaint in this Court seeking a declaration that it had no obligation to defend or indemnify Ocwen under certain commercial general liabil- ity and umbrella policies. (ECF No. 1). Zurich named as additional defendants Keith Snyder, Tracee A. Beecroft, and Susan Mansanarez. (Id. ¶¶ 6–8). 2. On August 30, 2017, Ocwen filed counterclaims against Zurich for breach of con- tract. (ECF No. 28 at 14–30). 3. On October 30, 2017, Zurich filed an amended complaint, seeking the same relief against the same parties. (ECF No. 49). 4. On October 11, 2018, the Court entered summary judgment for Zurich. (ECF No. 73 at 27). In its Memorandum Order, the Court stated, “the Court finds that Zurich has not duty to defend Ocwen in the underlying action. Because there is not coverage available to Ocwen, summary judgment in the entire case is granted in Zurch’s favor.” (Id.).

5. On September 10, 2019, after the Court denied Ocwen’s motion for reconsidera- tion, the Clerk of Court entered a judgment on a form that stated: “Judgment entered in favor of Zurich and against Ocwen.” (ECF No. 106). 6. On October 9, 2019, Ocwen filed a timely notice of appeal. (ECF No. 107). 7. On October 18, 2019, the Seventh Circuit (Case No. 19-3052) issued an order stating that “[a] preliminary review of the short record indicates that the order appealed from may not be a final appealable judgment within the meaning of 28 U.S.C. § 1291, or at the very least may not be ready for appellate review.” (App. ECF No. 2 at 1). The Seventh Circuit also ordered the parties to file “a brief memorandum stating why this appeal should not be dismissed

for lack of jurisdiction, or sent back to the district court” as was done in Greenhill, 917 F.3d 984. (Id. at 2). 8. On April 6, 2020, after the parties submitted brief memoranda on the Seventh Cir- cuit’s appellate jurisdiction, the Seventh Circuit issued a remand order, stating “this appeal is REMANDED to the district court to enter a judgment that fully and completely implements its decisions, including the counterclaim of the Ocwen defendants and the dispositions of plaintiffs’ claims against all five of the named defendants.” (App. ECF No. 12). 9. On April 9, 2020, the Clerk of Court entered a minute order stating “MOTION by Plaintiffs Zurich American Insurance Company and American Guarantee and Liability Insurance Company to dismiss Defendants Tracee Beecroft, Susan Mansanarez, and Keith Snyder is grant- ed.” (ECF No. 114). 10. That same day, the Clerk of Court entered a separate minute order stating “MO- TION by Plaintiffs for judgment on the pleadings [ECF No.] 56 is granted for the reasons deline- ated in our memorandum opinion dated 10/5/2019 [ECF No.] 73. Having found that Plaintiffs

had no duty to defend Ocwen Financial Corporation and Ocwen Loan Servicing LLC (“Ocwen Defendants”) in the underlying action, the Court grants judgment on the Ocwen Defendants’ counterclaim for breach of contract in Plaintiffs’ favor and against the Ocwen Defendants pursu- ant to this Court’s memorandum opinion dated 10/5/2019 [ECF No.] 73.” (ECF No. 115). 11. Also on April 9, 2020, the Clerk of Court entered an amended judgment with a form that stated: “Judgment is entered on Defendants Ocwen Financial Corporation and Ocwen Loan Servicing LLC's (“Ocwen Defendants”) counterclaim for breach of contract in Plaintiffs’ favor and against the Ocwen Defendants.” (ECF No. 116). 12. To ensure compliance with the Federal Rules of Civil Procedure and the Seventh

Circuit’s standards for final judgments and appellate jurisdiction, the Parties submit the enclosed Amended Judgment for the Court’s approval and signature. 13. According to the Seventh Circuit, Rule 58(b)(2) requires that a judgment on a complaint for declaratory relief be reviewed and approved by a judge rather than a clerk of court, as was done in both the original and amended judgments here. See Greenhill, 917 F.3d at 987 (stating that the Seventh Circuit was required to remand where the district court used a form to enter judgment on a declaratory action because the form did “not show that it was reviewed and approved by the judge, although Rule 58(b)(2) provides that the judge, not a clerk, must approve decisions of this kind.”) (Easterbrook, J.). 14. In moving for the entry of an amended judgment, Ocwen does not forfeit, waive, or abandon its position that the Court erred on the merits of Zurich’s and Ocwen’s claims. Ocwen disagrees with the Court’s determinations, which is why Ocwen has appealed. WHEREFORE, the Parties respectfully request that the Court approve and sign the en- closed Amended Judgment.

Dated: April 17, 2020 Respectfully submitted,

REED SMITH LLP

/s/ Kevin B. Dreher Kevin B. Dreher 10 S. Wacker Dr., 40th Fl. Chicago, IL 60606 Tel: 312-207-2778 kdreher@reedsmith.com

Counsel for Defendants / Counterclaimants Ocwen Financial Corporation and Ocwen Loan Servicing, LLC

AKERMAN LLP

/s/ Anthony W. Morris Anthony W. Morris 999 Peachtree Street NE, Suite 1700 Atlanta, GA 30309 Tel: 404-733-9809 Anthony.morris@akerman.com

Counsel for Plaintiffs Zurich American Insurance Company and American Guarantee and Liability Insurance Company CERTIFICATE OF SERVICE I, Kevin B. Dreher, an attorney, hereby certify that, on April 17, 2020, the foregoing was electronically filed using the ECF system, which will send notification of such filing to all parties of record in that above-captioned matter.

/s/ Kevin B. Dreher Kevin B. Dreher