                         NOT RECOMMENDED FOR PUBLICATION
                                File Name: 19a0582n.06

                                           No. 18-3709

                            UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
                                                                                    FILED
                                                                              Nov 26, 2019
 RONALD and CYNTHIA LANTON,                              )
                                                                          DEBORAH S. HUNT, Clerk
                                                         )
          Plaintiffs-Appellants,                         )
                                                         )      ON APPEAL FROM THE
 v.                                                      )      UNITED STATES DISTRICT
                                                         )      COURT FOR THE
 OCWEN LOAN SERVICING, LLC, et al.,                      )      SOUTHERN DISTRICT OF
                                                         )      OHIO
          Defendants-Appellees.                          )
                                                         )



BEFORE:         BOGGS, MOORE, and STRANCH, Circuit Judges.

         BOGGS, Circuit Judge. Plaintiffs Ronald and Cynthia Lanton appeal the district court’s

grant of summary judgment in favor of Defendants Ocwen Loan Servicing, LLC and U.S. Bank

National Association. As explained below, we affirm the district court’s opinion in part and vacate

it in part.

                                                 I

         On September 8, 1998, Ronald and Cynthia Lanton (“the Lantons”) executed a promissory

note and mortgage in favor of Heartland Home Finance, Inc. (“Heartland”) for the purpose of

refinancing their residential property located in Xenia, Ohio. The note and mortgage did not

require or authorize Heartland to escrow amounts for payments of real-estate taxes and insurance.

In early 2000, Litton Mortgage Servicing Center, Inc. (“Litton”) began servicing the note and the
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


mortgage. U.S. Bank National Association (“U.S. Bank”) is the current owner and holder of the

note and mortgage.

           On or about February 8, 2002, Cynthia Lanton filed for relief under Chapter 13 of the

United States Bankruptcy Code. While Cynthia was under bankruptcy protection, mortgage

payments for their property were made to U.S. Bank by the Trustee in Bankruptcy in the amount

of $454.18 per month. Cynthia completed her repayment plan and received a discharge from the

bankruptcy court in June 2007.

           On April 18, 2008, Litton sent a letter to the Lantons, notifying them that Litton had paid

$11,536.99 in tax and insurance expenses incurred between 2001 and 2006. Litton advised the

Lantons that, to ensure repayment of the costs thus advanced, their mortgage payments would be

increased to $591.53 per month beginning June 14, 2008 and lasting 84 months altogether. The

Lantons agreed, and paid the increased mortgage payment. Although they maintained that several

payments were improperly applied to their account, the Lantons continued to make regular and

complete payments pursuant to the adjusted schedule.

           On September 14, 2011, Ocwen Loan Servicing, LLC (“Ocwen”) took over servicing of

the Lantons’ loan from Litton. In 2014, Ocwen reviewed the account and determined that the

escrow advance was not going to be paid in full over the original 84 months that Litton had

anticipated.1 On December 4, 2014, Ocwen sent a letter to the Lantons advising them that their

mortgage payment would be increased by $161.03 per month to cover these deficiencies.

           Meanwhile in 2014, Ms. Lanton and Blue Ocean Ambulette Services, LLC (“Blue Ocean”),

a small business owned wholly by Ms. Lanton, applied for and were denied a small-business loan,

allegedly because a credit report, created by former Defendant Equifax Information Services LLC



1
    Specifically, Ocwen claims it was forced to make an additional $1,932.27 in property tax and insurance payments.

                                                          -2-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


(“Equifax”), stated that Ms. Lanton “was under Chapter 7 bankruptcy protection.”                 This

information was allegedly based upon information provided by Ocwen to Equifax. Ms. Lanton

claimed that she also lost business opportunities because she was unable to finance the purchase

of additional equipment, such as an ambulette, for her business.

       On August 3, 2015, the Lantons mailed a qualified written request (“QWR”) to Ocwen

under the Real Estate Settlement Procedures Act (“RESPA”). The QWR included a statement that

the payments made during Ms. Lanton’s bankruptcy and thereafter, including those applied to the

alleged escrow deficiency, were misapplied. The Lantons requested that Ocwen correct the

account by properly applying those payments. Additionally, the Lantons stated that the 84-month

escrow shortage agreement was assessed in error and contained improper charges. Because of

this, the Lantons disputed all fees, charges, corporate advances, the principal balance, interest, and

escrow amounts charged on the account.

       By a letter dated August 14, 2015, Ocwen responded to the QWR. Ocwen informed the

Lantons that it could not respond to their request for information about the origination of their

loan, as Ocwen was not involved in the loan’s origination. Ocwen also stated that it is “obligated

to service the loan in accordance with the terms of the Notes and Mortgage signed by the

borrower(s). A review of the Note indicates that the borrower’s [sic] (Ronald Lanton and Cynthia

Lanton) have signed it and [are] responsible for the debt. As such, the above loan is valid.” Ocwen

ultimately provided the Lantons with the loan payment history from August 2011 (when it began

servicing the loan) but never provided the payment history from when the loan was being serviced

by Litton.

       On October 12, 2015, the Lantons commenced this action in the district court. The Lantons

ultimately brought suit against Ocwen, U.S. Bank, and other defendants alleging several causes of



                                                 -3-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


action, including (1) violations of the Real Estate Settlement Procedures Act against Ocwen,

(2) violations of the Federal Debt Collection Practices Act (“FDCPA”) against Ocwen and

variously against U.S. Bank, and (3) state-law breach of contract against Ocwen and U.S. Bank.

In her deposition, Cynthia testified as follows:

        Q.       Okay. So I want to make a clear record, so I am going to repeat the question, if
                 that’s okay.
                 Is it your testimony today that the only actual damages that you are seeking redress
                 for in this litigation is the denial of the loan or loans for the purchase of the
                 ambulette?
        A.       Yes.

Following discovery, the Lantons moved for partial summary judgment as to liability on the

RESPA and FDCPA claims, and Defendants moved for summary judgment on all claims. On June

26, 2018, the district court granted Defendants’ motion for summary judgment on the Lantons’

claims and dismissed the Lantons’ motion for partial summary judgment. The Lantons appealed

to this court.

                                                   II

        This court reviews the district court’s order granting summary judgment “under a de novo

standard of review, without deference to the decision of the lower court.” See Brannam v.

Huntington Mortgage Co., 287 F.3d 601, 603 (6th Cir. 2002) (citations omitted). “The court shall

grant summary judgment 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.” Fed. R. Civ. P. 56(a). The district

court’s obligation is to determine “whether the evidence presents a sufficient disagreement to

require submission to a jury or whether it is so one-sided that one party must prevail as a matter of

law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

        This court reviews the district court’s refusal to exercise pendent jurisdiction over

appellants’ state-law breach-of-contract claim under an abuse-of-discretion standard. See Moon v.
                                                   -4-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


Harrison Piping Supply, 465 F.3d 719, 728 (6th Cir. 2006). An abuse of discretion occurs where

the district court “relies on clearly erroneous findings of fact, improperly applies the law, or uses

an erroneous legal standard.” United States v. Chambers, 441 F.3d 438, 446 (6th Cir. 2006)

(citation omitted).

                                                         III

         RESPA allows an individual to recover for a violation of its terms as follows:

         Whoever fails to comply with any provision of this section shall be liable to the borrower
         for each such failure in the following amounts:

         (1) . . . In the case of any action by an individual, an amount equal to the sum of—
         (A) any actual damages to the borrower as a result of the failure; and
         (B) any additional damages, as the court may allow, in the case of a pattern or practice of
             noncompliance with the requirements of this section, in an amount not to exceed
             $2,000.

12 U.S.C. § 2605(f). The statute therefore requires a plaintiff to prove “actual damages” relating

to any alleged violation of RESPA.

         In granting summary judgment for the Defendants, the district court explained that, because

RESPA is a consumer-protection statute, damages “related to a business endeavor are not

recoverable.” Because Mrs. Lanton testified in her deposition that “the only damages [the

Lantons] are seeking redress for in this litigation is the denial of the loan or loans for the purchase

of the ambulette” for Blue Ocean, the district court held that “there is undisputed evidence of

record that the only damages sought are business-related” and that therefore “Plaintiffs have no

evidence of damages recoverable under RESPA.”2

         We find that the district court should not have relied on that evidence alone in coming to

its holding on actual damages. Ms. Lanton, as a layperson, cannot be expected to have known the



2
 Because the Lantons do not challenge the district court’s characterization that damages related to a business endeavor
would not be recoverable under RESPA, we do not address that argument here.

                                                         -5-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


legal meaning of “actual damages.” Regardless, elsewhere in that same deposition she testified

that she incurred damages in the form of an “exceptionally high mortgage balance” and “the

interest that has accrued with the misapplied or non-applied payments.” Moreover, this circuit has

held that, under some circumstances, the cost of preparing a QWR that is inadequately responded

to may sometimes constitute actual damages. See Marais v. Chase Home Finance LLC, 736 F.3d

711, 721 (6th Cir. 2013) (directing the district court to “consider th[e] argument” that “costs [the

plaintiff] incurred associated with preparing her QWR . . . became actual damages when Chase

ignored its statutory duties to adequately respond”).

       We emphasize that we pass no judgment today on the strength of the Lantons’ underlying

RESPA claim. It is certainly possible that, even considering the entirety of the record, the Lantons

still have not pled actual damages sufficient to survive summary judgment. But being unable to

articulate the legal nuances of what damages flow from a legal claim does not make those damages

disappear, should they exist. We therefore hold that the district court erred by making Ms. Lanton’s

statement from her deposition regarding actual damages dispositive on the issue. Accordingly, we

instruct the district court to consider the entirety of the record in determining whether the Lantons’

RESPA claim survives summary judgment.

       Thus, we VACATE section IV.B. of the district court’s summary-judgment decision and

REMAND to the district court to proceed as directed above.

                                                 IV

       Next, the Lantons claim the district court also erred in granting summary judgment on their

FDCPA claim against Ocwen. On this claim, however, the district court ruled correctly.

       The Lantons insist that the FDCPA is a “strict liability” statute and that the Lantons need

not show actual damages to prevail. Based on that understanding, the Lantons’ summary-judgment



                                                 -6-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


motion simply sought “actual damages to be determined at trial,” as well as statutory damages and

attorney’s fees.

        We clarified in Hagy v. Demers & Adams, however, that a plaintiff may not recover

statutory damages under the FDCPA absent a showing of actual harm suffered. 882 F.3d 616, 621

(6th Cir. 2018) (noting that, in the context of the FDCPA, “[t]o satisfy the injury in fact

requirement, the [plaintiffs] must point to some harm other than the fact of a bare procedural

violation”) (citation and internal quotation marks omitted). Even if the plaintiffs have plausibly

alleged actual damages relating to their FDCPA claim, they have failed to provide enough evidence

to overcome summary judgment on the FDCPA claim.3 Accordingly, we AFFIRM the district

court’s grant of summary judgment in favor of Ocwen on the FDCPA claim.

                                                        V

        Finally, the Lantons challenge the district court’s decision not to exercise supplemental

jurisdiction over their claim for breach of contract against Ocwen and U.S. Bank. “[A] federal

court should typically decline to exercise pendent jurisdiction over a plaintiff’s state-law claims

after dismissing the plaintiff’s federal claims.” Brown v. Cassens Transport Co., 546 F.3d 347,

363 (6th Cir. 2008) (citations omitted). Federal district courts should maintain supplemental

jurisdiction over state-law claims only where “the interests of judicial economy and the avoidance

of multiplicity of litigation” require it. Moon, 465 F.3d at 728 (citation omitted).

        Here, the district court dismissed the Lantons’ state-law breach-of-contract claim because

it had granted summary judgment to the Defendants on all claims arising under federal law.

Because we have directed the district court to consider more closely the Lantons’ RESPA claim,



3
 Indeed, as Ocwen points out in its briefing, “the ‘actual damages’ Appellants claim under RESPA—increased interest
charges due to failure to correct an allegedly incorrect balance and costs of preparing and sending a QWR—have no
causal connection to an alleged FDCPA violation.”

                                                       -7-
No. 18-3709, Lanton, et al., v. Ocwen Loan Servicing, LLC, et al.


however, this is no longer the case. Should the district court find on reconsideration that the

Lantons’ RESPA claim survives summary judgment, it should consider whether to exercise

supplemental jurisdiction over the breach-of-contract claim in the interests of judicial economy.

Accordingly, we also VACATE section IV.D. of the district court’s summary-judgment decision

pending further consideration of the Lantons’ RESPA claim.




                                               -8-
