The OCWEN Story 

The $11.5 million dollar verdict on a $31,000 loan.

Updated April 25, 2012 by popular request


Texas Jury Rules Against Ocwen

Sealy Davis vs. Ocwen


Friday, December 02, 2005

A jury in Galveston, Texas, has awarded $11.5 million to a customer of Ocwen Financial Corp. and its former Ocwen Federal Bank subsidiary, after determining they committed fraud in servicing her home equity loan.

The verdict against West Palm Beach-based Ocwen Financial (NYSE: OCN) and Ocwen Federal was issued Tuesday in Texas's 212th District Court. The jury ordered the Ocwen companies to pay Sealy Davis $10 million in actual damages and about $1.5 million for mental anguish and economic damages.

Ocwen Financial had $1.3 billion in assets on Sept. 30, according to its Securities and Exchange Commission filings.

The jury found the Ocwen companies made fraudulent, deceptive and misleading representations to Davis after she missed a loan payment while hospitalized in 2003.

Documents filed in the civil suit assert Ocwen began demanding additional money to make up for the missed payment and then began foreclosure proceedings on Davis's home in Texas City, Texas.

Davis retained the home after filing for Chapter 13 bankruptcy protection, court documents state.

Davis, in 2002, got a $31,000 home equity loan from Aames Home Loan with Deutsche Bank as trustee. Ocwen Federal Bank serviced the loan, including collecting payments.

The jury determined Ocwen contributed 100 percent to a wrongful foreclosure and none of that activity was attributable to the other defendants, Deutsche Bank, its law firm Baxter & Schwartz and several attorneys with that firm.

William Erbey, Ocwen's chairman and chief executive officer, and Kelly Herzik, a Wichita, Kan.-based attorney who represented Ocwen, did not return phone calls.

The Business Journal's questions included whether Ocwen might appeal the verdict to a Texas court of appeals.

Ocwen "has a specific plan and scheme to take homes that have equity in them," said Robert Hilliard, a partner in Corpus Christi, Texas-based Hilliard & Munoz, which represented Davis.

Hilliard said he represents about 100 people who are considering similar suits against Ocwen in Texas state courts.

In April 2004, Ocwen Federal Bank, which was based in Fort Lee, N.J., signed a written agreement with the U.S. Office of Thrift Supervision, agreeing to improve its compliance with the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

The OTS written agreement is no longer in force because Ocwen Federal has ceased operations, OTS spokeswoman Erin Hickman said. Nearly six months ago, the OTS approved Ocwen Financial's request for "voluntary dissolution" of Ocwen Federal.

In that arrangement, Ocwen Financial sold the bank's Fort Lee office to Marathon National Bank of Astoria, N.Y., and transferred its assets and liabilities to several other banks.

Ocwen Financial's activities include servicing commercial and residential loans, and conducting activities for companies that are attempting to recover unsecured receivables, including credit cards.

This article was brought to you by the Bank Fraud Victim Center.

Our mission is to educate homeowners about predatory lending practices, bank fraud and the legal options available to them. 



We believe that if you don't know your rights, you don’t know your options.


Originally posted on March 31, 2008

Original Source: Voice of the People

Ocwen, Allegations of Fraud, Malice, Misrepresentation and Manipulation. 

Ocwen Financial Corporation ("Ocwen") is a vertically integrated multi-billion dollar, publicly traded (NYSE: OCN) financial services holding company, engaged in a variety of businesses related to mortgage servicing, real estate asset management, asset recovery and technology. Headquartered in  West Palm Beach ,  Florida ,

Within a 12 month period this company has lost two major lawsuits alleging fraud, malice, misrepresentation and manipulation totaling $14.5M. Other allegations have been made by former and current employees including the intentional destruction of information, and document forgery.

Why do so many people claim that Ocwen is ripping them off and wrongfully foreclosing on their homes?

Is Ocwen really the bad guy? 

Or are their customers failing to meet their obligations and looking for a quick court buck?

This is the first in a series of stories about this company, Ocwen services sub-prime mortgages. This means they service mortgages for people that have had trouble paying their bills in the past. And Ocwen services a lot of these, nearly 400,000 customers. 

As part of this investigation we decided to review a typical Ocwen customer, and a not so typical Ocwen customer. We will call them Mr. Smith and Mr. Jones (these are real Ocwen customers) who have ask to not be identified because of pending legal action.

Mr. Smith just had the loan servicing rights acquired by Ocwen in August of 2005. Mr. Smith has homeowners insurance through Prudential, his premiums are paid and current. In September of 2005 Mr. Smith paid his regular monthly bill to Ocwen with his old account #. 

Mr. Smith had not received his new payment information from Ocwen and did not want to be late on his payment. Ocwen cashed this payment and on Sept 22nd sent him a letter (to the wrong address), stating he was late on house payment this letter did not contain his new account and payment information.

Mr. Smith contacted Ocwen numerous times in writing and on the phone trying to resolve this matter. Many times Mr. Smith would be routed to customer representatives that spoke very poor or unintelligible English or would be disconnected.

In October Mr. Smith still had not received his new payment information and again sent another payment to Ocwen, which again they cashed and again sent a letter, this time threatening foreclosure.

In November of 2005 Mr. Smith finally received his payment information, the statement showed he was 4 months behind (yes 4 months when he had only been a customer for 3) in his payments and fees had been added that he did not understand, such as homeowners insurance and legal fees and late payment fees, totaling almost $2600. Mr. Smith made another payment in Nov 2005 which was returned by Ocwen stating they could not accept partial payments.

Mr. Smith was now receiving nearly daily calls from Ocwen collections, and Mr. Smith responded in writing trying to rectify the situation. In December Mr. Smith received another statement again with a promise of foreclosure and new fees added in order to become current Ocwen now claimed he had to pay a sum of almost $3600.

Now these fees were different from the statement he had received the month before for the same items. Homeowners insurance went up $120, legal fees increased by $277 and the house payment itself went down by $38.

Mr. Smith wanted to refinance, but it appears Ocwen has already contacted the Credit Bureaus and reported him being late, he can’t get refinanced.

How is this possible?

A former employee claims he knows exactly how it’s possible. “The RealServicing software used by Ocwen and the Nightly Processing that reconciles the loan accounts doesn’t work and hasn’t for several years. That’s why customers get different payment information from month to month. It was a running joke in IT on how long the system would be down everyday when it ran. This whole process generated huge error logs that no one ever reviewed and it had been clear to everyone involved in the process that it has major problems”.

Ocwen has sued a former consultant that performed a review on this software claiming he has posted confidential information on the Internet and reported this information to Government Agencies and this consultant has already testified in a case against the company in which Ocwen was hit with a $3 Million verdict in Guzman V. Ocwen. This testimony was specific on the problems with Ocwen software and account reconciliation. 

We contacted this consultant for comment and were informed that because of an Injunction granted to Ocwen he could not discuss the matter, and was prevented from testifying in another case in which he was listed as a witness and the jury awarded the plaintiff $11.5 Million in damages in Davis V. Ocwen. However a hearing was being set to Vacate the Injunction that prevented the consultant from discussing the details of his work at the company. 

Other former and current employees have confirmed this information and noted that Management has been aware of these issues at the highest levels inside the company. Two employees have even tried to get the company to take action to resolve the problems but have not been successful.

WOW. If the company is aware of these problems why haven’t they done something to fix it?

Ocwen has not responded to these specific issues yet but has commented and currently claim that they are not intentionally foreclosing on homes. The CEO William Ereby has stated publicly that the company doesn’t make money on foreclosures that their profit comes from servicing the loans themselves.

If this is true then why are their an overwhelming number of reports freely available on the internet that confirm the Mr. Smith experience with the company?

Why are there so many lawsuits pending against Ocwen?

Next month we will continue this series on Ocwen and report on Mr. Jones a very unusual Ocwen customer.



A Texas jury awarded a Texas City woman $11.5 million from Ocwen Federal Bank. The jury found that Ocwen engaged in “a scheme of unfair, unlawful and deceptive business practices” in loan servicing. Ocwen Federal Bank is and remains the sole managing contractor for all Veteran’s Administration REO in the country.

At trial, a former Ocwen employee testified to the company’s unfair practices, including paying incentives to its loan collectors for moving properties with equity into foreclosure. Evidence also showed that the company engaged in predatory servicing by not informing borrowers of how to make their loans current and failing to give credit for payments when they were made.

Hilliard & Munoz, L.L.P. :: Florida Bank Hit With $11.5 Million Verdict; Galveston Jury Says Ocwen Federal Bank Forced Woman Into Bankruptcy

GALVESTON, Texas, Nov. 29 /PRNewswire/ — A Galveston County jury has awarded a Texas City woman $11.5 million after finding that West Palm Beach, Fla.-based Ocwen Federal Bank engaged in a scheme of unfair, unlawful and deceptive business practices in its servicing of her home equity loan.

The jury verdict, handed down in Judge Susan Criss’ 212th District Court on Nov. 29, followed eight days of trial and two days of deliberation in Sealy Davis v. Ocwen Federal Bank, et al.

In February 2002, Ms. Davis, 64, took out a $31,000 home equity loan on the Texas City residence where she had lived since 1942. Ocwen acted as the servicing agent on the loan.

In 2003, Ms. Davis became ill and spent four days in the hospital, which forced her to miss one loan payment. Ocwen told her it would put her on a payment plan, but never did. Ocwen also failed to credit Ms. Davis for the money she paid, and began to foreclose on her house while continuing to assure her she was on a payment plan.

Ocwen eventually foreclosed on Ms. Davis’ home, and she filed for Chapter 13 bankruptcy in the hopes of ending Ocwen’s harassment. During the bankruptcy, however, Ocwen requested an additional $390 to cover its costs and fees related to the default she already cured.

“We’re pleased the jury decided that Ocwen should be held liable for what it did to Ms. Davis,” said attorney Robert Hilliard, lead counsel for Ms. Davis and name partner in Corpus Christi’s Hilliard & Munoz, L.L.P. “Home loan companies should help people own a place to live, but Ocwen apparently is more interested in taking away the homes of its customers.”

At trial, a former Ocwen employee testified to the company’s unfair practices, including paying incentives to its loan collectors for moving properties with equity into foreclosure. Evidence also showed that the company engaged in predatory servicing by not informing borrowers of how to make their loans current and failing to give credit for payments when they were made.

In a 10-2 vote, the jury found that Ocwen knowingly and intentionally deceived Ms. Davis, and awarded her $10 million in punitive damages and $1.15 million in attorneys fees.

Mr. Hilliard currently represents more than 100 additional homeowners in lawsuits against Ocwen, and previously received a $3 million verdict in a similar case in Corpus Christi. Also representing Ms. Davis were William H. Oliver of San Antonio’s Pipkin, Oliver & Bradley, L.L.P., and Edward M. Carstarphen of Houston’s Ellis, Carstarphen, Dougherty & Goldenthal, P.C.

For more information, please call Alan Bentrup at 214.559.4630, cell 817.366.0442 or



Source: MoreLaw

Date: 11-29-2005

Case Style: Davis v. Ocwen Federal Bank, et al.

Case Number: Unknown

Judge: Susan Criss

Court: 212th District Court, Galveston County, Texas

Plaintiff's Attorney:

Robert Hilliard of Hilliard & Munoz, L.L.P., Corpus Christi, Texas; William H. Oliver of Pipkin, Oliver & Bradley, L.L.P., San Antonio, Texas; and Edward M. Carstarphen of Ellis, Carstarphen, Dougherty & Goldenthal, P.C., Houston, Texas

Defendant's Attorney: Unknown


In February 2002, Sealy Davis, 64, took out a $31,000 home equity loan on the Texas City residence where she had lived since 1942. Ocwen acted as the servicing agent on the loan.

In 2003, Ms. Davis became ill and spent four days in the hospital, which forced her to miss one loan payment. Ocwen told her it would put her on a payment plan, but never did. Ocwen also failed to credit Ms. Davis for the money she paid, and began to foreclose on her house while continuing to assure her she was on a payment plan.

Ocwen eventually foreclosed on Ms. Davis' home, and she filed for Chapter 13 bankruptcy in the hopes of ending Ocwen's harassment. During the bankruptcy, however, Ocwen requested an additional $390 to cover its costs and fees related to the default she already cured.

"We're pleased the jury decided that Ocwen should be held liable for what it did to Ms. Davis," said attorney Robert Hilliard, lead counsel for Ms. Davis and name partner in Corpus Christi's Hilliard & Munoz, L.L.P. "Home loan companies should help people own a place to live, but Ocwen apparently is more interested in taking away the homes of its customers."

At trial, a former Ocwen employee testified to the company's unfair practices, including paying incentives to its loan collectors for moving properties with equity into foreclosure. Evidence also showed that the company engaged in predatory servicing by not informing borrowers of how to make their loans current and failing to give credit for payments when they were made.

Outcome: In a 10-2 vote, the jury found that Ocwen knowingly and intentionally deceived Ms. Davis, and awarded her $10 million in punitive damages and $1.15 million in attorneys fees.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown


Initial Brief: Appellee-Respondent


2 of 100 DOCUMENTS






SEALY DAVIS, Appellee.

 NO. 01-06-00363-CV


 2006 TX App. Ct. Briefs 363C; 2006 TX App. Ct. Briefs LEXIS 949

 October 30, 2006

 On Appeal from the 212th District Court, Galveston County, Texas,

the Honorable Susan Criss presiding.

 Initial Brief: Appellee-Respondent

 COUNSEL:  [**1]  William H. Oliver, State Bar No. 15265200, Federal ID No. 13375, PIPKIN, OLIVER & BRADLEY, L.L.P., 1020 N.E. Loop 410, Ste. 810, San Antonio, Texas 78209, Telephone: (210) 820.0082, Telecopier: (210) 820.0077.

EDWARD M. CARSTARPHEN, State Bar No. 03906700, ELLIS, CARSTARPHEN, DOUGHERTY & GOLDENTHAL, P.C., 5847 San Felipe, Suite 1900, Houston, Texas 77057, Telephone: (713) 647-6800, Telecopier: (713) 647-6884.

Kevin W. Grillo, Of Counsel, State Bar No. 08493500, So. District I.D. No. 4647, Robert C. Hilliard, HILLIARD & MUNOZ, L.L.P., 719 S. Shoreline Boulevard, Suite 500, Corpus Christi, Texas 78401, Telephone: (361) 882-1612, Telecopier: (361) 882-3015, ATTORNEYS FOR APPELLEE.



Appellee requests oral argument. See TEX. R. APP. P. 39.1.


This case has as its origin, the predatory lending practices of Ocwen Loan Servicing, LLC ("Ocwen"), and its various financing partners, which, in this case, was Deutsche Bank National Trust Company ("Deutsche Bank"). The predatory lending practices of Ocwen led to the United States Office of Thrift Supervision requiring Ocwen to enter a consent decree to force Ocwen to cease its practices similar to those that contributed [**8]  to the wrongful foreclosure, Texas Deceptive Trade Practices Act ("DTPA"), and Texas Debt Collection Act ("DCA") claims made by Plaintiff in this case. (RR, Vol. 10c, P's Ex. 9.1). n1 (Consent Decree, Appendix, Ex. 1).

 n1 It may be somewhat confusing as to the Ocwen entity that is the Defendant. At the start of this litigation, Ocwen was Ocwen Federal Bank, F.S.B. After entering the Consent Decree in 2004, Ocwen elected to "debank" and was no longer subject to supervision of the Office of Thrift Supervision or subject to the Consent Decree. Ocwen then became Ocwen Loan Servicing, LLC. (RR 5, pp. 13-15, 53)

 Plaintiff filed a Petition and Application for Temporary Restraining Order ("TRO") to prevent Ocwen from evicting her from her home and obtained a TRO. (CR I, p. 2) (CR I, p. 19). Ocwen and its representatives violated that order by filing a Forcible Entry and Detainer ('FED") suit, and sending a sheriff to Plaintiff's 800 square foot home to force her out of the home her father built. (RR, Vol 10C, P's [**9]  Ex. 28, 29, 30). Eventually, Ocwen and its counsel and representatives finally followed Texas law and complied with the temporary injunction precluding Ocwen from evicting Plaintiff.

Prior to the trial scheduled for November 14, 2005, Ocwen requested injunctive relief never granted anywhere in the United States - seeking to enjoin Plaintiff's counsel from:

 Litigation or otherwise participating in any pending or future lawsuit in a federal or state court that asserts mortgage servicing allegations encompassed within the Consolidated Complaint in MDL NO. 1604, until  [*2]  such time as pretrial proceedings in MDL No. 1604 are completed, or until further Order of the Court.

Judge Charles Norgle of the United States District Court for the Northern District of Illinois, MDL No. 1604, granted Ocwen's requested injunctive relief on November 9, 2005. (CR IX, pp. 1654-1670). The United States Court of Appeals for the Seventh Circuit granted Plaintiff's counsel's emergency motion for stay of injunction pending appeal on November 10, 2005, allowing this case to go to trial. (Appendix, Ex. 2). On December 13, 2005, the Seventh Circuit vacated Ocwen's injunction in its entirety.  [**10]  (Appendix, Ex. 3).

Based on the evidence admitted at trial, including the unrebutted testimony of a former Ocwen employee, Ron Davis, the jury answered yes to DTPA, DCA and wrongful foreclosure questions and awarded damages. (CR XI, 2063). The Court entered judgment based on the jury verdict, including the attorneys' fees, which included setting aside Ocwen's wrongful injunction obtained in Chicago, Illinois.


 (1) If the unrebutted testimony of a former employee of the mortgage servicer, Ocwen, is that Ocwen has a business practice of lying, losing payments, delaying credit payments or not crediting payments with the intent to make a homeowner homeless, or forcing the homeowner to live under a bridge or in a cardboard box, and the defense attorney argues to the jury that Plaintiff won't be kicked out for at least a week if the jury renders a defense verdict, can any discussion of fiduciary duty, even if error, be sufficiently harmful to cause a improper judgment?

 (2) Whether a Plaintiff qualifies as a consumer if she purchases home improvement goods with a home improvement loan in accordance with Flenniken v. Longview Bank & Trust Co, 661 S.W.2d 705 (Tex. 1983)? [**11]

 (3) Whether an agreed order in bankruptcy court signed by defendant modifies the underlying loan documents?

 (4) Whether claims arising after the filing of a Chapter 7 bankruptcy petition belongs to the bankruptcy estate or the Plaintiff?

 (5) Whether a Debt Collection Act consumer who asserts a claim under the DTPA pursuant to the DTPA tie-in section, 17.50(h), and does not rely on a consumer section of the DTPA, must also be a "consumer" as defined in the DTPA? 

(6) Whether factually sufficient evidence exists that Ocwen misrepresented the extent, character or amount of a consumer debt by representing in bankruptcy court it would accept payments, refusing to accept and credit them, and then claim Plaintiff is in default and foreclosing?

  [*4]  (7) Whether factually sufficient evidence exists to support an award of $ 700,000 for attorneys through trial, where the unrebutted and uncross-examined testimony is that $ 150,000 was incurred just to fight Ocwen's wrongful injunction issued in the Ocwen MDL, and where the jury awarded less than one-third of the amount that unrebutted testimony established would be reasonable based on the factors identified in Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)? [**12]

 (8) Whether factually sufficient evidence supports the award of appellate fees when the evidence was not rebutted or cross examined?

 (9) Whether Ocwen acted as a fiduciary under the facts of this case and whether factually sufficient evidence supports the jury's finding?

 (10) Whether claiming Plaintiff to be in default because Ocwen refused to accept and credit payments as ordered by the Bankruptcy Court, and proceeding to foreclose constitutes wrongful foreclosure?


Sealy Davis, 62 at the time of trial, was the owner of her home at 5330 Campbell Street, Texas City, Texas. The 884 square foot home was built by her father in 1943. Ms. Davis was raised in that house, inherited it from her father, and proceeded to raise eight children in the home. From 1972 to 1999, Ms. Davis was employed at Shriner's Hospital as a burn technician, which required her to debride burned children admitted to the hospital. In 1999, she had to retire due to health reasons. From that time on, she was on a fixed income consisting of social security and a $ 226 monthly pension. (RR 5, p. 57-76, 96).

Ms. Davis received an unsolicited offer in 2002 for a home [**13]  equity loan from Aames Funding Corp., d/b/a Aames Home Loan ("Aames"). (RR 5, p. 78). Aames works with Ocwen to obtain loans, then, sends them to Ocwen for servicing via a pooling agreement. (RR 10A, P's Ex. 6). Even though Galveston County had appraised Ms. Davis's home at $ 19,000, Aames was able to obtain an appraisal of her home for $ 47,000. (Def. Ex. 9). Based on that appraisal, Aames offered Ms. Davis a $ 35,000 home equity loan. (RR 5, 78). The $ 35,000 figure was based on a contractor estimate as to what would be necessary to fix up her home to comply with city standards. (RR 5, 78). Ms. Davis signed the loan papers and received a check for $ 19,000. (RR 5, 79-80). Ms. Davis used that money for home improvements, including aluminum windows, blinds, leveling the house, replacing the roof and adding aluminum siding. (RR 5, pp. 80-81). Pursuant to Aames's agreement with Ocwen, Aames immediately transferred the loan to Ocwen. Ms. Davis began making her payments to Ocwen until September 2003, when she became ill. (RR 5, pp. 82-83). Once she got  [*6]  behind because of her illness, Ocwen began following a pattern of harassment, not calling back or giving misleading information,  [**14]  activities that were the same type of conduct that led to the consent agreement with the OTS. (RR 5, pp. 83-94). Ms. Davis then filed a complaint with the Texas Attorney General's office (RR 5, pp. 94-97) (RR 10-A, P's Ex. 9).

Ocwen replied to the Attorney General implying it would conduct an internal market analysis and review her situation and see if it could rework her loan. (RR 10A, P's Ex. 11). However, Ocwen failed to take any of the actions it told the Attorney General it would undertake. (RR 5, pp. 23-24, 26, 31, 33).

In order to address some of the late or missed payments, Ocwen told Ms. Davis to send a $ 600 catch up payment to Ocwen California. Ms. Davis borrowed the $ 600 for the payment from her daughter (RR 4, pp. 28, 53-54). Ms. Davis then sent the payment to Ocwen California as instructed. Ms. Davis later found out that Ocwen Florida claimed it never received payment. (RR 5, p. 102). Loss of the $ 600 to a low income person such as Ms. Davis only exacerbated her ability to catch up on payments.

When Ocwen continued to pressure her to make payments, Ms. Davis used the money she was reserving for her medicine to pay Ocwen. This led to Ms. Davis becoming ill and having [**15]  to go to the emergency room. (RR 5, pp. 131-132).

Ocwen's own records established that Ms. Davis was approved for a payment plan and Ocwen requested another catch up payment. Ms. Davis sent in the requested payment but Ocwen did not set up the promised plan. (RR 5, pp. 92-94) (RR 10A, P's Ex. 7, 8) (Appendix, Ex. 4). The forbearance agreement would have had the effect of allowing Ms. Davis to make lower payments for a certain length of time. (RR 5, p. 92-94).  [*7]  Ultimately, Ms. Davis filed for bankruptcy. As part of the bankruptcy proceeding, Ocwen represented it would accept payments on the home improvement loan. (RR 7, pp. 54-56). In fact, the bankruptcy court modified Ms. Davis' loan requirements to allow her to make a specified payment during bankruptcy, which Ocwen represented, and agreed, it would accept. These representations also proved to be false. Ron Gipson, Ms. Davis's bankruptcy attorney, testified that Ocwen failed to credit payments sent in by Ms. Davis during bankruptcy, even though Ocwen agreed to the order, which required it to credit those payments. (RR 7, pp. 38-41).

This scheme of Ocwen, of losing payments, refusing to accept payments and making misrepresentations [**16]  to Sealy Davis, was revealed as a standard business practice in stunning testimony by Ron Davis, a former Loan Resolution Consultant and Supervisor of Ocwen. Ron Davis confirmed that during the time frame Ms. Davis was being harassed by calls, misled and lied to, it was Ocwen's policy to deceive customers, use automated dialers for harassment, lie about adjusting their loans, lose payments from customers or post them late. (RR 3, pp. 93, 94, 99, 107-108, 196). As Mr. Davis admitted, Ocwen's collection personnel, such as Mr. Davis, would: "call the customers and ask them what bridge they were going to live under or the next cardboard box they would have to cut out, what curb they would be kicked to, ..." (RR 3, pp.103-104). Ocwen would reward its Loan Resolution Consultants for this activity by giving them kickbacks or "bumps" based on the money they made from foreclosed property. (RR 3, pp. 93-94, 99-100). No Ocwen representative was called to dispute Mr. Davis' testimony.

 [*8]  Plaintiff filed suit to stop Ocwen's eviction proceeding and requested a temporary restraining order ("TRO") and temporary injunction. (CR I, 1, 2). Judge Frank Carmona, acting as visiting judge, granted [**17]  the TRO. (CR I, 19). The TRO was immediately forwarded to Ocwen's agent, Baxter & Schwartz. (RR, 10C, P's Ex. 28, 29. 30). Ocwen and its agent then violated the TRO. That violation became the subject of a Motion for Sanctions, which was taken under advisement by the Court. (CR I, 48). Ocwen then began refusing to provide discovery, which became the subject of motions to compel. (CR III, 537, 544). Rather than produce discovery, Ocwen sought and obtained injunctive relief from the Ocwen MDL Judge. (CR IX, 1654). Plaintiff's counsel was forced by Ocwen to retain local counsel in Chicago, Illinois, retain Columbia University Law Professor Henry Monaghan, attend a hearing in Chicago, to ultimately have the U.S. Court of Appeals for the Seventh Circuit set aside the injunction. See Appendix 2, 3 and RR 3, pp. 208-210. After Ocwen's injunction was set aside by the Seventh Circuit, the case went to trial on November 14, 2005.

After having heard testimony from Ron Davis about Ocwen's business scheme and hearing Ocwen's counsel telling the jury that Ms. Davis wouldn't be kicked out for at least a week if it rendered a defense verdict (RR 9, p. 60), the jury returned a verdict of approximately [**18]  $ 12,000,000. It was reduced in accordance with Texas law and judgment entered.


The jury heard unrebutted testimony of a former employee, Ron Davis, that Ocwen's business practice included losing checks (like was done with Ms. Davis), not  [*9]  crediting checks at all or timely (like was done with Ms. Davis), lying to the customers and promising them help, modification or forbearance agreements while never intending to live up to these responsibilities and proceeding to foreclosure (like happened with Ms. Davis). Ocwen's own documents acknowledge that it acts as a counselor to assist its customers. Ocwen also acts as an escrow agent (a fiduciary) with responsibility to insure funds sent to it as part of its counseling of its customers, are properly accepted, credited and applied. Ocwen then directs the trustee/substitute trustee to foreclose, even when Ocwen is guilty of malfeasance. The substitute trustee is a special agent entrusted with fiduciary-type responsibilities. The evidence supports the finding of the jury that Ocwen acted as fiduciary. Further, any harm related to use of the term "fiduciary" could never outweigh the harm of Ocwen [**19]  not calling an employee to rebut the testimony of Ron Davis regarding Ocwen's scheme, plan or business practice nor the harm of defense counsel suggesting Ms. Davis would be kicked out if there was a defense verdict.

Plaintiff was a consumer as to her DTPA claim since the purpose of her loan was to acquire home improvement goods, such as a new roof and aluminum siding. The evidence described above fully supports the jury's finding that Ocwen failed to disclose information, whether the original transaction with Aames or with the order in bankruptcy which changed the terms of the original note, which Ms. Davis would have acted on. Further, the same facts are factually sufficient to support the "unconscionable" finding under the DTPA.

The facts establish that Ocwen misrepresented the character, extent or amount of debt Ocwen claimed was owed, by not crediting money received or by losing  [*10]  payments. Further, Ocwen misrepresented the consumer debt status, character or extent to the bankruptcy court by failing to credit payments as Ocwen represented it would.

The jury's assessment of the credibility of Ms. Davis and her testimony and the testimony of her daughter, provide factually [**20]  sufficient evidence to support the award of mental anguish for Plaintiff.

Ocwen's actions in representing and agreeing to accept payments while Ms. Davis was in bankruptcy and then refusing to represent them, establish that Ocwen failed to comply with its agreed modification and acts as a basis for wrongful foreclosure.

Plaintiff agrees to a remittitur of the Fifty Thousand Dollars award of damages for wrongful foreclosure. The award of the home because of wrongful foreclosure was correct. Ocwen and Deutsche never sought a finding of any delinquency on the indebtedness nor assert at trial a counterclaim, deficiency or reinstatement of the loan and have waived any claim to same.



A. Plaintiff has Standing as a Consumer Under the Texas Deceptive Practices Act.

The Texas Deceptive Trade Practices Act ("DTPA") requires that a person listed in Tex. Bus. & Comm. Code § 17.45(4), sought or acquired, by purchase or lease, goods or services. The undisputed evidence in this case is that Plaintiff sought a home  [*11]  improvement loan for the purpose [**21]  of home improvement, not a mere loan of money. Ms. Davis testified that she learned of Aames because she wanted to make home improvements on her home. (RR 5, p. 78). She asked a contractor what it would take to get her home into compliance with Texas City codes and was told about $ 35,000. (RR 5, p. 78). She then sought $ 35,000 from Aames. After she signed the papers with Aames, Ms. Davis was given a check for $ 19,000. Once she got the check, she purchased aluminum windows, blinds, had her house leveled, had a roof put on and aluminum siding. (RR 5, pp. 80-81).

Obviously, if the same goods were purchased through a retail installment contact, there would be no question that Ms. Davis would have standing as a consumer under the DTPA. See Knight v. International Harvestor Credit Corp., 627 S.W.2d 382, 389 (Tex. 1982). The Texas Supreme Court has made it clear, the issue of whether a person is a consumer turns on whether one sought only to borrow money, or that the money in the transaction was to be used to purchase goods or services. In Flenniken v. Longview Bank & Trust Co., 661 S.W.2d 705 (Tex. 1983), the Court noted that if one seeks only money [**22]  in a transaction, or the sole complaint is the failure to make a loan, then the person would not be a consumer. See Flenniken, supra at 707-708 (citing Riverside Nat'l. Bank v. Lewis). Here, unlike the Riverside case and cases cited by Ocwen, the express purpose of the home improvement loan was home improvement and the evidence establishes the proceeds were used for the home improvement. The transaction is similar to getting a mortgage to buy a home. See Norwest Mortgage v. Salinas, 999 S.W.2d 846, 855 (Tex. App.--Corpus Christi 1999, pet. denied). The only  [*12]  difference is that the house is already purchased, but the consumer is purchasing goods to "improve" the home.

 B. No Privity is Required.

Ocwen attempts to assert that it is not responsible for Aames' actions. However, any privity requirement for DTPA claims has long been abolished. As the Supreme Court noted in Flenniken: "Privity between the plaintiff and defendant is not a consideration in deciding the Plaintiff's status as a consumer under the DTPA." See Flenniken at 707. Further, the deceptive act does not have to occur simultaneous with the transaction [**23]  in question. Id.

 If, in context of a transaction in goods or services, any person engages in an unconscionable course of action which adversely affects a consumer, that person is subject to liability under the DTPA (citations omitted).

 See Flenniken, supra at 707. In Flenniken, the bank's unconscionable cause of action occurred after the original note was assigned to the bank.

In this case, Aames and Ocwen and Deutsche are inextricably intertwined as noted in the Pool Servicing Agreement. Aames signs up the note, takes their ($ 16,000) cut, and assigns the note to Ocwen, who then services the note, benefiting Aames, Ocwen and Deutsche. (RR 10A, P's Ex. 6). It was known to Ocwen and Aames that Ocwen, not Aames, would service the loan. Ms. Davis was not informed of this. Examples of Ocwen's unconscionable course of action can be seen in the admissions in its e-mails (RR 10A, P's Ex. 7, 8). The e-mails state that Ocwen agreed to a forbearance agreement with Ms. Davis (which Ocwen immediately recants in responding to the Texas Attorney General), yet never provided the promised forbearance agreement. Ocwen's unconscionable course of action is also [**24]  shown in the  [*13]  bankruptcy action where Ocwen represents it will credit payments received from Ms. Davis but then refuses to do so (RR 7, pp. 38-41). All of Ocwen's unconscionable and deceptive acts were committed in the context of the home improvement purchases.

In addition to the home improvement purchase, Ocwen's dealings with Ms. Davis grew to the point when it was providing services to Ms. Davis. As Ron Davis testified (former Ocwen Loan Resolution Consultant), Ocwen could modify loans (RR 3, pp. 94, 97), and would help a customer:

 If the loan had, based on no equity, a lifeless loan, we would call it, we would change it to add more food, more electricity, any expense that would be for the home. If they put down cable, we would tell them we would erase it. That didn't count towards the affordability of their payment. So, we helped them with their financials based on the equity in the home, the amount of equity. That's what we did.

 (RR 3, pp. 195-96) (emphasis added).

Not one Ocwen representative was called to contradict Mr. Davis.

In addition to the service, counseling and assistance described by Mr. Davis, Ocwen's own e-mails indicate "She is approved [**25]  for a payment plan." (RR 10A, P's Ex. 7, 8) (Appendix, Ex. 4). However, after Ocwen sent its letter to the Attorney General (RR 10A, P's Ex. 11), it simply failed to live up to its representations to Ms. Davis and the Attorney General. The services provided by Ocwen are also set out in the guidelines produced by Ocwen's consumer Ombudsman's deposition. (P. Ex. 31) ("Once the counselor has determined the customer's willingness and ability to pay, they will act as a consultant to help the customer restructure and reprioritize their financial obligations"). Consequently, in addition to the home improvement purchases, Ocwen's actions in providing financial information, advise and counseling constitute a service  [*14]  sufficient to convey standing. See e.g. First Fed. Savings and Loan Assn. V. Ritenour, 704 S.W.2d 895, 899-900 (Tex. App.--Corpus Christi 1986, writ ref'd. n.r.e.); Federal Deposit Ins. Corp. v. F&A Equip. Leasing, 854 S.W.2d 681, 690-91 (Tex. App.--Dallas 1993, no writ).

 C. Ocwen's Actions Were Deceptive and Unconscionable.

There should be no dispute that Ocwen's actions are deceptive. Ocwen was acting as servicing [**26]  agent for Deutsche Bank. The Deutsche Bank representative made judicial admissions that:

 (1) Ocwen has authority to modify Sealy Davis's loan (RR 4, p. 63);

 (2) Ocwen has authority to waive fees (RR 4, p. 67).

 Deutsche Bank's representative also testified:

 Q: If Ocwen approved Sealy Davis for a forbearance plan, according to your testimony, then under the agreement with Mr. Madole's client, Deutsche Bank, that would be deceptive, correct?


A: Yes, if it violated the terms of the agreement (RR 4, p. 133).

Q: Would it be deceptive to promise to put her in a plan and then not fulfill that promise? (RR 3, p. 141).


A: It is not deceptive if the terms of the deal aren't made. (RR 3, p. 141).


Q: If the terms are met?


A: Then Ocwen should honor the forbearance.


Q: And if they do not, that's deceptive?


A: In your hypothetical of that agreement, this agreement with the deal, yes.


Q: Finally, yes, it is deceptive?


 [*15]  A: Yes.

 (RR. 3, p. 144).

The evidence factually supports the fact that Ms. Davis was not informed of Ocwen's participation in this matter, that Ocwen had a business practice of losing payments,  [**27]  failing to credit payments, credit them late, lying about helping a customer while proceeding with foreclosure, or that once in bankruptcy court, Ocwen would not live up to the representations about crediting payments. Had Ms. Davis been informed of this, Ms. Davis would never have become entangled with Ocwen, Deutsche or Aames. The same evidence heard by the jury factually supports the jury's finding that Ocwen acted unconscionably. See Weiler v. United Savings Asso. of Texas, FSB, 887 S.W.2d 155 (Tex. App.--Texarkana 1994, writ den.).

 D. Ocwen's Violation of The Texas Debt Collection Act is "Actionable" Under the DTPA.

A plaintiff can maintain a DTPA suit based on the violations of other "consumer protection statutes that have been incorporated in the DTPA (tie-in statutes)." See generally, O'Connor, Texas Causes of Action 2006, pp. 192-193 (2006). Further, when a tie-in statute allows recovery of actual damages, such damages can include personal injury or death. See TEX. BUS. & COMM. CODE § 17.50(h). The tie-in statute allows recovery of "actual damages" rather than only DTPA damages.

It is illogical to assume as Ocwen suggests, that if two [**28]  persons suffer identical Debt Collection Act ("DCA") violations, but one claim involves a good or service and the other a non DTPA consumer claim, that only the DTPA consumer gets to use the DTPA remedies. That is not how the statutes are written. As the Revisor's Note states in the  [*16]  Debt Collection Act, "An accepted general principal of statutory construction requires a statute to be given cumulative effect with other statutes unless it provides otherwise or unless the statutes conflict." See TEX. BUS & COMM. CODE § 392.404 (Revisor's Note) (Vernon's 1998).

This interpretation is consistent with the line of cases that don't require consumer status for certain violations of 17.46(b). For example, in Webb v. International Trucking Company, Inc., 909 S.W.2d 220, 227-28 (Tex. App.--San Antonio 1995, no writ), DTPA consumer status was not required under DTPA section 17.46(b)(12). Similarly, as to misrepresenting the character, extent or amount of a debt against a consumer (DCA consumer), no DTPA consumer requirement exists. Consequently, Sealy Davis is not required to be a DTPA consumer as to a violation of TEX. FIN. CODE § 392.304 (8) to obtain the cumulative [**29]  remedies set out in the DTPA and DCA. Although Judge Buckmeyer offered a contrary opinion in Marketic v. U.S. Bank National Assoc., 2006 WL 166 7985 (N.D. Tex. 2006), his opinion fails to undertake any analysis of how he came to his opinion. His opinion is contrary to the language of the tie-in section of the DTPA as well as inconsistent with the use of tie-in statute with the DTPA and is in conflict with the portion of the tie-in section which states "notwithstanding any other provisions of this chapter". Further, the case Judge Buckmeyer relies on, Mendoza v. American Nat'l Ins. Co., 392 S.W.2d 605, 608 (Tex. App.--San Antonio 1996, no writ), confirms that even if a Plaintiff is not a DTPA consumer, he can rely on sections of 17.46 that don't require DTPA consumer status. Id at 608. Sealy Davis is a consumer under the DCA, and, pursuant to the TEX. BUS. & COMM. CODE § 17.50(h), is entitled to recover damages based on the Jury's answer to Question No. 1.

  [*17]  E. The DTPA Violations, and Debt Collection Act Violations, Were a Producing and Proximate Cause of Plaintiff's Damages.

The actions of Ocwen, whether [**30]  the numerous lies, misrepresentations, "lost" payments, or actions leading to foreclosure as described by Ron Davis, and Ocwen's representation that it would credit payments after bankruptcy was filed, and its subsequent refusal to credit payments, are factually supported by the evidence. Further, there should be no dispute that Ocwen's actions were a producing cause of the foreclosure which occurred in 2005.

Ocwen's complaint regarding the damages caused by these deceptive acts is not well founded. Ocwen acquired this loan from Aames pursuant to its agreement with Aames. Aames obtained an appraisal for Ms. Davis's house for $ 47,000 (RR 10C, Def's Ex. 9). Ms. Davis obtained a loan for $ 35,000. If Aames makes a loan to Sealy Davis for $ 35,000 based on Aames obtaining an appraisal of $ 47,000 on Sealy Davis' house, and Ocwen assumes all of the matters relied on by Aames, Ocwen should be estopped to now claim the value of the house is not $ 47,000, the amount Aames claimed it was. See Wheeler v. American National Bank, 347 S.W.2d 920, 921 (Tex. 1961) (banks estopped to urge falsity of own statements); Franco v. Slavonic Mut. Fire Ins. Assn., 154 S.W.3d 777, 787 [**31]  (Tex. App.--Houston [14<th> Dist.] 2004, no pet.). Ocwen claimed that Ms. Davis owed approximately $ 36,000 on the note. That would still leave equity, based on Ocwen's records, in excess of Five Thousand Dollars. Even though Ms. Davis was somewhat behind in payments, any attempts to catch up or make payments were thwarted by Ocwen's actions. Certainly, Mr. Gipson's testimony that Ocwen violated the bankruptcy order requiring Ocwen to accept and credit payments  [*18]  was a direct cause of Ocwen then seeking to foreclose on Ms. Davis. (RR 7, pp.38-41). Ms. Davis lost her home to Ocwen's foreclosure because of Ocwen's actions. Consequently, factually sufficient evidence exists to support the award of $ 5,000 actual damages.

 F. The Evidence Factually Supports the Award of Mental Anguish.

Similarly, Ocwen's position that Ms. Davis has not suffered any mental anguish sufficient to support the jury's award defies imagination. Here, the evidence is that this home was built by Ms. Davis's father, she was raised in the home with her siblings, she raised her eight children there, and now, was threatened with the loss of the house despite her sending payments that were [**32]  lost by Ocwen, despite Ocwen representing to her and the bankruptcy court it would credit payments and then refusing to credit payments so it could then seek to foreclose on her.

Ms. Davis testified:

 I became extremely irritated. I go to the point where I don't know what was going to happen day after day. I became extremely worried not only about the house, but about myself because I wasn't myself. I didn't want to talk to anybody and I kind of secluded myself in the house. I stopped going to church. I was just sort of withdrawn like. (RR 5, p. 98).


It hurt me to have to do it to the point that I just stayed sick all the time. And my children were constantly coming down to see me. And it hurt me to worry like that. And my daughter would come and cry. (RR 5, p. 103).


In February 04, I sent everything that came to me through them, and I could not afford to pay my medication. Therefore, I went through without medicine in the month of February. (RR 5, p 106-107).

Then, after Ocwen's agents and representatives were notified that a Temporary Restraining Order was in effect, Ocwen and its agents violated that order and proceeded to try to evict Ms. Davis.

  [*19]   [**33]  A: I became so hysterical, my blood pressure went up and I had to lay down. And two or three hours later, I don't know who it was, someone knocked on the door. And I got behind the bed - I became afraid, and I wouldn't answer the door. And I got behind the bed and hid in the house.


Q: Why were you afraid to answer the door?


A: Because I thought it was a - the constable coming back. And I just hid in the house.


Q: And what were you afraid he was going to do?


A: Take me out of my home.

 (RR 5, p. 107-108).

Although the record doesn't fully reflect what happened in the courtroom, the jury was able to see the fear and anguish associated with Ms. Davis reliving the Ocwen nightmare, breaking down in tears and sobbing. Ms. Davis's daughter, Trenell Strachan, testified:

 I was getting calls back in Dallas when my mother was just getting sick and stuff and they were calling me in. And I was asking her, "Why is all these incidents happening? Why you always wind up in the emergency room and blood pressure up?" And she call telling me they were threatening to take her home, this and that.

 (RR 4, p. 27). There was other testimony by Ms. Davis's daughter [**34]  regarding mental anguish that was heard by the jury. (RR 4, pp. 29-30, 35).

Factually sufficient evidence supports the award of mental anguish under the DTPA or Debt Collection Act. See Brown v. Oaklawn Bank, 718 S.W.2d 6778, 680-81 (Tex. 1986) ("seriously upset, difficulty eating and sleeping", "affect on work performance" some evidence of actual damages); Campbell v. Beneficial Finance Co.,  [*20]  616 S.W.2d 373, 375 (Tex. Civ. App.--Texarkana 1981, writ denied) ("no physical illness or injury required to recover damages under Debt Collection Act).

 G. Factually Sufficient Evidence Supports Plaintiff's Texas Debt Collection Act Claim.

There is no dispute that Plaintiff is a consumer under the Debt Collection Act, (TEX. FIN. CODE § 392.001(1)), that this debt is a consumer debt, (TEX. FIN. CODE § 392.001(2)), or that Ocwen and its agents are debt collectors. Ocwen's only complaint as to the jury's findings was that Plaintiff "failed to introduce sufficient evidence." Yet, the record is replete with evidence that Ms. Davis sent payments in, Ocwen lost the payments (as Ron Davis testified was the practice), or, did not post items,  [**35]  or sent them back after representing it would accept the payments. The facts of this case as to Ocwen's continued misrepresentations as to the character, extent or amount of debt, are remarkably consistent with that in Waterfield Mortgage Co., Inc. v. Rodriguez, 929 S.W.2d 641, 642 (Tex. App.--San Antonio 1996, no wit). In that case, there were claims by the Plaintiff of calling the mortgage company, promises that no foreclosure would take place if money was sent, then the mortgage company denies the conversation taking place, money being sent and then returned after agreeing to accept it, and ultimately foreclosing. The trial judge found those actions were evidence of a violation of "misrepresenting the character, extent, or amount of a debt against a consumer." The San Antonio Court of Appeals affirmed that finding. See also Gonzalez v. Temple Inland Mortgage Corp., 28 S.W.3d 622 (Tex. App.--San Antonio 2000, no pet.).

 [*21]  The evidence in this case is: "Send 600 to Ocwen California- then it's lost; send in a payment and you will have a forbearance plan, doesn't happen; send in payments and we will credit them, doesn't happen. Then Ocwen represents [**36]  that Ms. Davis won't make any payment, even though Ocwen wrongfully refuses them.

The testimony of Ronald Gipson, Ms. Davis's bankruptcy attorney, may be most telling. He noted Ocwen represented that "if debtor provides proof of post petition payments not credited, Movant will credit those payments and reduce the monthly payments." (RR 7, pp. 38-39). Yet, Ocwen did not credit her for the payments, thus misrepresenting the character, extent or amount of debt. (RR 7, pp. 34, 40, 41, 54).

 When the servicing agent of Ocwen started sending payments back after the bankruptcy was filed, they are required under the bankruptcy law to accept those payments. When they sent them back to her, they charged her a late fee and never gave her credit by reducing that late fee. She also made two other payments which were on the list over there that they never gave her credit for.

 Our agreement in the bankruptcy was they would reduce the amount she had to pay. The agreement set out in the order we looked at was she would resume her regular monthly payments to Ocwen, which she did, and made all those on time. And she would also make a second payment to Ocwen every month for six months called [**37]  a cure payment to cure her post-petition default.


The agreement with Ocwen set out in the order if we provided proof she made the payment, and were talking three months of September, October and November, that they would reduce the amount she had to pay every month. They did not do that. I mailed Ocwen copies of the proof of payment in a timely manner. I had one of my office staff call their people another couple of weeks after that, and they never credited her for any of those payments.


When they were demanding that she cure the default, they were demanding that she pay an amount which was more than she would have had to pay. And in my opinion, a women at her level of income, that difference was very significant.

  [*22]  (RR 7, pp. 54-55).

There is factually sufficient evidence of a violation of the Debt Collection Act, whether it was the character, extent or amount of a debt, or, misrepresenting the debt status in a judicial proceeding. Certainly, Ocwen misrepresented the debt, and proceeded to foreclose on Ms. Davis, causing her loss of equity on her house and mental anguish as described above.


  A. The Attorneys' Fees Were Reasonable, Particularly in Light of Actions Taken by Ocwen in Enjoining Plaintiff's Case.

Although Ocwen seeks to minimize this case as a "one plaintiff wrongful foreclosure action", Ocwen made it into a case national in scope by attempting to keep Plaintiff's counsel from practicing law in the United States. Ocwen helped drive Plaintiff's fees and should not now be allowed to complain.

Pursuant to the jury verdict, Plaintiff was the prevailing party. Consequently, Plaintiff was entitled to submit a jury issue regarding attorneys' fees.

The evidence regarding attorneys' fees was provided through the testimony of Bill Oliver. Mr. Oliver testified regarding his background, qualifications and his first hand, personal knowledge of the fees. See Goad v. Goad, 768 S.W.2d 356, 359 (Tex. App.--Texarkana 1989, writ denied). No objection was made to Mr. Oliver's qualifications. Mr. Oliver testified that his firm and two other firms were involved in the representation of Ms. Davis. (RR 3, pp. 207-209). Oliver further testified [**39]  that Ms. Davis's attorneys had to hire a local attorney in Chicago, Illinois, as well as Columbia  [*23]  Law Professor Henry Monaghan to respond to the injunction obtained by Ocwen. (RR 3, pp.208-210). Mr. Oliver specifically addressed the Anderson factors, as required by the Texas Supreme Court. See Arthur Anderson Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997). Mr. Oliver reviewed the number of hours and hourly rate (lodestar amount). Mr. Oliver testified, without objection, that that amount of $ 460,087.50, for his firm, Hilliard & Munoz, Ellis Carstarphen firm, Andrew Porter in Chicago, Henry Monaghan, Columbia University Law School, Ervin Apfel's firm, David Salyer and Fred Raschke's firm, was the reasonable fees incurred in this case. (RR 4, p. 6). Mr. Oliver also addressed the fact there this case was taken on a contingency, that $ 150,000 in hourly fees had been paid out for the Chicago lawyers, Professor Monaghan and the Apfel firm, the preclusion of other employment, the attorneys' fees customarily charged, experience and reputation of Plaintiff's attorneys and their co-counsel. (RR 4, p. 7-11).

In addition to the foregoing, unobjected to [**40]  testimony, Mr. Oliver provided an opinion that the amount of fees should be adjusted based on the Anderson factors. (RR 4, pp. 11-15). Mr. Oliver's opinion was that, based on the contingent nature of the fee and other Anderson factors, the fee should be adjusted by 6, for a total of $ 2,760,525. (RR 4, p. 13). The jury only awarded $ 700,000 for fees through trial, approximately a 1-1/2 times adjustment: This adjustment by the jury was reasonable based on the testimony provided by Mr. Oliver. See Haggar Apparel Co. v. Leal, 100 S.W.3d 303, 315 (Tex. App.--Corpus Christi 2002, rev'd on other grounds 154 S.W.3d 98 (Tex. 2004); Guity v. C.C.I. Enterprise Co., 54 S.W.3d 526, 528-29 (Tex. App.--Houston [1<st> Dist] 2001, no pet.).

 [*24]  What may be more important than what Mr. Oliver testified to, is that there was no cross examination of Mr. Oliver which in any way attempted to discredit or question Mr. Oliver's opinion. The cross-examination consisted of questions whether the contingency contract with Ms. Davis was 40% or 50% (RR 4, pp. 15-17), who makes settlement decisions (RR 4, p. 17-19), and if the foreclosure was valid,  [**41]  there would be no fee. (RR 4, p. 19). Not only was there no relevant cross-examination, no testimony was offered by any defendant to contradict any of the testimony of Mr. Oliver.

Mr. Oliver offered uncontradicted testimony that a reasonable appellate fee would be $ 450,000 and explained the basis for his opinion. (RR 4, pp. 13-15). The testimony of Mr. Oliver was not only uncontradicted by any other testimony, it was not even cross-examined. Factually sufficient evidence supports the award of attorneys' fees in this case, particularly in light of no cross-examination and no contrary testimony offered by any of the defendants.

 B. Plaintiff's Attorneys' Fees Were not Required To be Segregated Because of Intertwined Claims.

No objection was made during Bill Oliver's testimony relating to reasonable and necessary attorneys' fees, that the fees were not segregated. Ordinarily, that could result in waiver of such objection. See Aero Energy v. Circle C. Drilling Co., 699 S.W.2d 821, 823 (Tex. 1985). However, Mr. Oliver testified at the close of evidence that the claims arise out of the same set of facts and were so related that there would be no way to [**42]  segregate the claims. (RR 7, pp. 83-84). This testimony was never contradicted. The only evidence in this trial was the fees were intertwined with all claims and could not be segregated. See Stewart Title Guaranty Co. v. Sterling, 822 S.W.2d 1, 10-11  [*25]  (Tex. 1991); Stamp-Ad, Inc. v. Barton Raben, Inc., 915 S.W.3d 932, 937-38 (Tex. App.--Houston [1<st> Dist.] 1996, no writ).


 A. Bankruptcy Filing Does Not Bar Post-Petition Chapter 7 Claims.

Defendant fails to explain how a Chapter 7 post petition claim can be barred. It is not. As Mr. Gipson explained, Plaintiff's wrongful foreclosure was not in existence at the time the Chapter 13 was converted to 7. In fact, under Texas law, there is no attempted wrongful foreclosure. See Port City State Bank v. Leyco Constr. Co, Inc., 561 S.W.2d 546, 547 (Tex. Civ. App.--Beaumont 1977, no writ). Further, causes of action that arise after filing of a Chapter 7 are not part of the bankruptcy. (RR 7, p. 59). Ocwen's lawyers were there for that testimony. Yet, they argue frivolously to the Court that this is not the law.  [**43]

Bankruptcy Code § 103(g) makes the provision of Chapter 11 inapplicable to Chapter 13, unless they are specifically incorporated in Chapter 13. The res judicata effect of a Chapter 13 confirmation order is vacated if the case is converted to another Chapter. See In Re Nash, 765 F.2d 1410 (9th Cir. 1985); In Re Doyle, 11 Bank R. 110, (Bankr. E.D. Pa. 1981).

The effect of conversion to a 7 is that the case is treated as being filed when the original filing for the 13 occurred. See In Re Redick, 81 B.R. 881, 884 (E.D. Mich. 1987). Claims that arise after the filing date in a Chapter 7 are not part of the estate. See In Re Peters, B.R., 44 B.R. 68 (Bankr. M.D. Tenn. (1984). See Ron Gipson testimony, (CRR 7, p. 59). All representations after the filing, and the wrongful  [*26]  foreclosure, which occurred after the filing, are not part of the estate and cannot be barred.

 B. None of the Elements of Judicial Estoppel or Collateral Estoppel or Res Judicata are Met in This Case.

Ms. Davis's actions do not fit into the requirements to support judicial estoppel. First, listing a debt on a plan is not [**44]  taking a position regarding the viability of claims. Secondly, the Court did not accept the previous position. See Reynolds v. Commission of IRS 861 F.2d 469, 473 (6th Cir. 1988). Third, any non disclosure was clearly inadvertent. See Johnson Serv. Co. v. Transamerica Ins. Co., 485 F.2d 164, 175 (5th Cir. 1973) (applying Texas law in judicial estoppel: "the rule looks toward cold manipulation and not unthinking or confused blunder.") None of the elements of judicial estoppel are met.

Further, the failure to disclose a cause of action that does not exist cannot support a judicial estoppel argument. See In Re Wakefield, 312 B.R. 333 (N. D. Tex. 2004).

Ocwen mischaracterized what the bankruptcy code required. Ms. Davis did not list her debts as valid and accrued. It is a list of what creditors claim they are owed - not a list of what she claims to owe creditors. The debtor is to file schedules of assets and liabilities. 11 U.S.C. § 521(1). The Bankruptcy Code contemplates a process of allowance or disallowance. 11 U.S.C. § 502. The Bankruptcy Code allows the debtor in Chapter 13 to object [**45]  to scheduled claims. They do not have to be listed as disputed or contingent. Ms. Davis would have no reason to object because the Chapter 13 was converted to a 7 and no longer res judicata. A Chapter 7 "no asset" case would make  [*27]  an objection only on academic exercise. Thus, the schedule is not inconsistent with objection to the foreclosure, particularly when Ocwen violated its own representations to the bankruptcy court that it would credit Ms. Davis's payments.

Additionally, the order related to the relief from the automatic stay confers no res judicata or collateral or judicial estoppel effect. Pursuant to the Local Rules of the Bankruptcy Court for the Southern District of Texas, "Motion for Relief from Stay shall never be combined with a request for any other relief except for a request for adequate protection." See Local Rule 4001(a)(3), Bankr. Ct., S.D. Tex. Because of the local rule and the expedited timeline for a motion for relief, the res judicata affect of an order modifying the automatic stay is not given the same effect as a final judgment after trial. See D-1 Enterprises, Inc. v. Commercial State Bank, 864 F.2d 36, 38-39 (5th Cir. 1989). [**46]

Ocwen is wrong. Plaintiff's claims are not barred.


As the Texas Supreme Court noted, "tort damages are not precluded simply because a fraudulent representation claim causes only an economic loss. See Formosa Plastics Corp. USA v. Presido Eng. & Contr., Inc., 960 S.W.2d 41, 47 (Tex. 1998). Further, the fact that a contract may exist does not insulate a defendant from DTPA or Debt Collection Act claims for misrepresentation or violation of the Act. See Clay Corp. v. Smith, 949 S.W.2d 452, 463-64 (Tex. App.--Fort Worth 1997, pet. denied) (duty to refrain from making misrepresentations imposed by law, not contract). See also Bekins Moving & Storage Co. v. Williams, 947 S.W.2d 568, 577-78 (Tex. App.--Texarkana 1997, no writ). Similar, misrepresentations made by a defendant can arise to  [*28]  more than a mere failure to perform. See Munawar v. Cadle Co., 2 S.W.3d 12, 18-19 (Tex. App.--Corpus Christi 1999, pet denied).

Similarly, Defendants' statue of frauds argument fails as to the DTPA claim. The Texas Supreme Court [**47]  has held that neither the parol evidence rule nor the statute of frauds would bar admission of representations, which are the basis of a DTPA claim. See Weitzel v. Barnes, 691 S.W.2d 598, 600 (Tex. 1985). Certainly, none of the cases cited by Defendants support its position that the mere existence of a contract would somehow bar a debt collection act claim. In fact, the existence of a contract will likely always be the basis of a debt collection act claim.


Defendant spends a great deal of time criticizing the trial judge in this matter rather than addressing the merits. Yet, how can the background of the Plaintiff be disregarded when Plaintiff has the burden to show damages, including mental anguish, without providing information to the jury to assess Ms. Davis, assess the threatened loss of her home she lived in her entire life, that was built by her father, when she was dealing with a company that even the Office of Thrift Supervision criticized for using the exact same practices Ocwen was using on Sealy Davis. But, the real harm is not the action of the trial court, but Ocwen itself.  [**48]  If it was not true that Ocwen lied to its customers, lost payments, would make promises it would not keep with the intent to make the Plaintiff homeless living under a bridge or in a cardboard box, why did Ocwen not call one single witness to rebut the testimony of Ron Davis. (RR 3 pp. 93-94, 99, 107-108, 196). In fact, Ocwen did not even allow a corporate representative to appear  [*29]  in court towards the end of the jury trial for fear of what he would have to admit. There was no erroneous admission of evidence. Ocwen overlooks that it may be Ocwen and the defense attorneys' trial strategy that may have contributed to the jury verdict. As Judge Criss noted:

 One of the things that I thought was significant in the trial, one of the most memorable moments that occurred, when I heard what I heard and I looked up and I could see that it made the same impression on every lawyer in the room because I could see it in their eyes, it was during Luke Madole's argument when in fact he told the jury that if they prevailed basically she wouldn't be kicked out for at least three or four days, a certain length of time. And I had the impression that might have been why, what I suspected [**49]  that might be where the jury came up with the idea of awarding a little over 11 million dollars in damages.

 (Supp. RR Vol. 1, p. 28 - entitled motions, April 12, 2006).

 In light of the uncontradicted evidence of the evil business scheme of Ocwen as described by Ron Davis, and defense counsel's argument to the jury, any erroneous omission of evidence was harmless and did not cause an improper rendition of judgment. See Tex. Dept. of Transp. V. Able, 35 S.W.3d 608, 617 (Tex. 2000).


Ocwen's responsibility in this matter was to service Ms. Davis's home equity loan. In that process, Ocwen was charged with the responsibility of insuring payments were properly received, properly applied and that it credited accounts as it represented it would. Although no formal escrow was established during their relationship, Ocwen acted in a manner consistent with an escrow agent. Escrow agents owe a fiduciary duty to both parties to a contract. See Watkins v. Williamson, 869 S.W.2d 383, 387 (Tex. App.--Dallas 1983, no writ);  [**50]  Trevino v. Brookhill Capital Res., Inc., 782 S.W.2d 278, 281  [*30]  (Tex. App.--Houston [1<st> Dist.] 1989, writ denied). Here, not only did Ocwen not properly account for monies or credit monies received, it intentionally misled Ms. Davis by forcing her to send $ 600 to the "wrong" address, put her further in default, refusing to credit payments received as it had represented, and undertaking this action to put her under a bridge or in a cardboard box." Ocwen breached its duty of full disclosure to Ms Davis and duty of loyalty. See City of Fort Worth v. Pippen, 439 S.W.2d 660, 665 (Tex. 1969); Watkins, supra at 387.

In addition to the escrow responsibilities, Ocwen was responsible for the acts of its agents. Here, Baxter & Schwartz, and Chad Rausch, acted as trustee or substitute trustees for Ocwen.

The trustee/substitute trustee acts as a special agent for both parties, and must act with absolute impartiality and fairness to the mortgager (Plaintiff) in carrying out duties under a deed of trust. See Hammonds v. Holmes, 559 S.W.2d 345, 347 (Tex. 1977); Bonilla v. Roberson, 918 S.W.2d 17, 21 [**51]  (Tex. App.--Corpus Christi 1996, no writ). Ocwen's agent, the trustee and substitute trustee, was specifically informed of the request for a Temporary Restraining Order (TRO) by letter dated December 27, 2004. (RR 10c, P's Ex. 23). (P's Ex. 25, P's Ex. 26, P's Ex. 28). Further, Ocwen and its agents, the trustee/substitute trustee violated the TRO by attempting to evict Ms. Davis and send a constable to her house, which forced her to cower in fear behind her bed. (P's Ex. 28, P's Ex. 30).

Certainly, Ocwen assumed greater responsibilities sufficient to impose fiduciary duties. Ocwen "counsels" the customer regarding their account. (RR 10c, P's Ex. 31). Ocwen then acts as a "consultant" to "restructure and reprioritize" the customer's  [*31]  financial obligation. (Id.) Consequently, Ms. Davis being counseled by Ocwen, had to arrange her finances with Ocwen, and must rely on Ocwen with a high degree of trust, influence or confidence. See Crim Truck & Tractor Co. v. Navister Intl. Transp. Corp., 823 S.W.2d 591, 544 (Tex. 1992). Evidence introduced at trial supports the jury's finding that Ocwen acted as a fiduciary under the facts of this case.


When a defendant refers to itself as a "counselor" and acts as a "consultant to help the customer restructure and reprioritize their financial obligation", acts as de facto escrow agent in holding money for the Plaintiff to be properly applied and does not, and sends the substitute trustee to foreclose and evict in violation of a TRO, while losing payments or not crediting payments, it was reasonable for Plaintiff to assert Ocwen acted as a fiduciary and submit an issue regarding that issue. In light of unrebuted testimony that Ocwen has a business plan to lose payments, not credit payments, lie and cheat customers, any mention of fiduciary duty would not cause an improper judgment. See - Tex. Dept. of Transp. v. Able, supra, at 617.


This wrongful action began when Ocwen's pooling agreement partner, Aames, induced Sealy Davis to enter into a home improvement loan by obtaining an appraisal for $ 47,000 on her home. Then, Aames provided Sealy Davis $ 19,000 out of a $ 35,000 loan for home improvements. The underlying [**53]  note was immediately transferred to Ocwen as part of the pooling agreement between Aames and Ocwen. As Sealy Davis  [*32]  testified, she became ill and informed Ocwen she would likely miss some payments due to costs associated with her illness. Yet, Ocwen then thwarted her at every turn when she tried to catch up. Sealy Davis sent $ 600 as a catch up payment to Ocwen but it was (as Ron Davis suggested was a standard Ocwen practice), lost by Ocwen. Other attempts by Sealy Davis to catch up her payments were thwarted by Ocwen saying they would give her a forbearance agreement, telling the Attorney General that Ocwen would reevaluate her, and then Ocwen would move toward foreclosure (another business practice testified to by Ron Davis).

Once Sealy Davis filed bankruptcy, Ocwen represented and agreed that it would accept and credit the payments she made. Certainly, the written order agreed to by Ocwen that it would accept the payments, modified any prior notes or agreements. See Wieler v. United Savings Assoc. of Texas, FSB, 887 S.W.2d 155 (Tex.App.--Texarkana 1994, writ den.). As Ms. Davis's bankruptcy attorney testified, Ocwen refused to accept the payments despite [**54]  the language in the order. (RR 7, pp. 38-41). The result of refusing to accept the payments and credit them was that Ocwen put Sealy Davis in default of the agreed order. Any actions afterward, notices of intent to accelerate the debt, notices of acceleration and notice of foreclosure based on the default manipulated by Ocwen, would constitute irregularities in the foreclosure process. Generally, irregularities in the foreclosure process can invalidate a sale in a foreclosure proceeding. See Shearer v. Allied Live Oak Bank, 758 S.W.2d 940. 942 (Tex. App.--Corpus Christi 1998, writ denied).

In a remarkably similar fact pattern, in Wieler v. United Savings Association of Texas, FSB, 887 S.W.2d 155 (Tex.App.--Texarkana 1994, no pet.), the Plaintiffs  [*33]  sought protection in bankruptcy court regarding their house. The bankruptcy court modified the payment obligations and the Plaintiffs attempted to meet increasing obligations imposed by their bank. Id. at 157. Ultimately, it was determined the Defendants' actions deprived them of any right to cure. Id. at 158. In this case, it was Ocwen's actions that led to the [**55]  default of the bankruptcy payments by refusing to accept payments. Such action is unconscionable under the DTPA and serves as a basis for wrongful foreclosure. See Wieler, supra at 159-160.

Ocwen's numerous pages of argument in its brief regarding oral modifications, no evidence regarding wrongful foreclosure becomes meaningless in light of Ron Gipson's testimony that Ocwen violated the order (and thus the loan terms) by refusing to credit the payments sent in by Ms. Davis (RR 7, pp. 38-41). As noted in the Wieler case, this was not only evidence of wrongful foreclosure, but supported the jury's findings of unconscionability. 


Although Plaintiff does not agree the judgment results in a double recovery, Plaintiff agrees to remit the $ 50,000 awarded as wrongful foreclosure damages, if the judgment requiring the house to be reconveyed to Ms. Davis is affirmed.

Plaintiff was required to submit a issue on wrongful foreclosure to seek return of her house. Neither the DTPA nor Debt Collection Act specifically provide her that relief. However, to avoid any argument about the recovery for wrongful foreclosure is a double recovery,  [**56]  Plaintiff agrees to remit the $ 50,000 damages award by the jury and request  [*34]  the judgment be reduced by that amount, if the judgment requiring the house be reconveyed to Ms. Davis is affirmed.

However, the fact remains that the jury determined that the foreclosure was wrongful. Accordingly, it was appropriate for the court to award return of the house to Sealy Davis. See Klein v. Garth, 677 S.W. 2d 712, 717 (Tex. App.--Tyler 1984, ref. n.r.e.).

Deutsche Bank complains in its brief that the jury did not find it did anything wrong. However, Deutsche cannot escape the language of the Pooling and Servicing Agreement (RR 10A, P's Ex. 6, p. 53) which allows Ocwen to sue on behalf of the Deutsche. Further, Deutsche Bank's representative, David Co. confirmed that, under the Pooling Agreement, Ocwen has authority to modify Sealy Davis's obligations under the loan (RR 4, pp. 62-63, 140-142). Further, if Ocwen forecloses, Deutsche holds the property (RR 4, pp. 70-71). Consequently, for the purpose of this case, the Pooling and Servicing Agreement allows Ocwen to act as the agent for Deutsche in servicing the loan and foreclosing. The jury found that Ocwen, who was [**57]  authorized by Deutsche to act on its behalf, wrongfully foreclosed on Sealy Davis. This evidence establishes as a matter of law that Ocwen was the agent for Duetshe, particularly because Ocwen transferred the property to Deutsche and Deutsche is the holder of the title to the house. (RR 4, pp. 54-55). See Republic Bankers Life Ins. Co. v. Wood, 792 S.W.2d 768, 778 (Tex. App.--Fort Worth 1990, den.). In addition, neither Ocwen nor Deutsche sought reinstatement of the loan nor did they seek a deficiency. Such claim arose out of same set of facts which Plaintiff's claims arose. Those Defendants have waived any right to assert such claim. See Jack H. Brown & Co. v. Northwest Sign Co., 718 S.W.2d 397, 398-99  [*35]  (Tex. Civ. App.--Dallas 1986, writ den. n.r.e.). Consequently, the evidence supports the court's order that the house should be reconveyed to Sealy Davis because of the wrongful foreclosure.

PRAYERaintiff agrees to a remittitur of $ 50,000.00 related to the wrongful foreclosure damages if the portion of the judgment conveying the home to Sealy Davis is affirmed, and prays, subject to the remittitur, the judgment be affirmed.  [**58]

Respectfully submitted,




State Bar No. 08493500


719 S. Shoreline Boulevard, Suite 500

Corpus Christi, Texas 78401

Telephone No.: 361-882-1612

Telecopier No.: 361-882-3015


Robert C. Hilliard

State Bar No. 09677700


719 S. Shoreline Boulevard, Suite 500

Corpus Christi, Texas 78401

Telephone No.: 361-882-1612

Telecopier No.: 361-882-3015


William H. Oliver

State Bar No. 15265200


1020 N.E. Loop 410, Ste. 810

San Antonio, Texas 78209

Telephone No.: 210-820-0082

Telecopier No.: 210-820-0077


 [*36]  Edward M. Carstarphen

State Bar No. 03906700

David B. Mantor

State Bar No. 12957533



5847 San Felipe, Suite 1900

Houston, Texas 77057

Telephone No.: 713-647-6800

Telecopier No.: 713-647-6884







I hereby certify that a true and correct copy of the above and foregoing instrument has been forwarded to all counsel of record, via certified mail, return receipt requested,  [**59]  on this the 27<th> day of October, 2006, pursuant to Texas Rule of Appellate Procedure 6.3 and 9.5(b), (d), (e).


Via CM/RRR 7006 0810 0001 0927 9941

Mr. David Schenck

Ms. Michelle A. Morgan

Ms. Angela Colmenero


2727 N. Harwood Street

Dallas, Texas 75201-1515


Via CM/RRR 7006 0810 0001 0927 9972

Mr. Scott D. Daniel

Greer, Herz & Adams, LLP

One Moody Plaza, 18<th> Floor

Galveston, Texas 77550


Via CM/RRR 7006 0810 0001 0927 9989

Ms. Kelly S. Herzik

Morris, Laing, Evans, Brock & Kennedy, Chtd

Old Town Square

300 N. Mead, Suite 200

Wichita, KS 67202