By Rachel O’Brien, Law360 | Sept. 23, 2020
A proposed class of consumers who had mortgages with Ocwen Loan Servicing LLC and PHH Mortgage Corp. urged a Florida federal judge Tuesday to bar a group of lawyers from using “obstruction ploys” and intervening in their $12.6 million settlement over claims the mortgage servicers charged illegal processing fees for making phone or online payments.
Shortly before consumers sought approval for the deal in August, several individuals filed a motion to intervene in and stay the case, which the consumers on Tuesday said would undo months of work that ended in a proposed settlement for the class and would circumvent the Rules of Civil Procedure. They asked the judge not to grant intervention.
“Obviously, movants’ counsel’s position is frivolous, dangerous and this court should reject these tactics, deny movant’s motions and allow the settlement process to proceed, so that all of the class members can voice their own opinions,” the response to the motion to intervene said.
The proposed settlement class are those customers of Ocwen Loan Servicing LLC and PHH Mortgage Corp. who paid fees of either $7.50 or $17.50 for phone and internet mortgage payments between March 25, 2016, and Aug. 21, 2020.
The $12.6 million settlement fund would refund class members either 28% of the convenience fees they paid — if their mortgages were not owned by Ocwen or PHH but were being serviced by the companies when the loans were more than 30 days delinquent — or 18% for other class members.
The consumers’ August deal with Ocwen and PHH — which merged in 2018 — would give 30% of the settlement to plaintiffs’ attorney fees and costs, according to the motion.
The intervening group, which the class of consumers dubbed “The Kauffman Group,” comprises plaintiff’s lawyers litigating proposed class actions against some of the same defendants over the same issue of convenience fees and seeks to “delay and disrupt the settlement proceedings before this court in favor of litigating their own cases,” Tuesday’s filing said.
Both the consumers and the mortgage company opposed the intervention, arguing the individuals in the motion admitted to not being settlement class members because the class doesn’t include people who have another case pending, as these individuals do.
The Kaufmann Group represents a few people, out of a settlement class of almost 1 million borrowers, the filing noted, and intervention would “only prejudice the original parties to this action, as it could turn back months of hard-fought, arm’s-length negotiations that culminated in settlement, and would undermine the distribution of valuable relief to the nationwide class,” the filing said.
Adam M. Moskowitz, counsel for the consumers, told Law360 on Wednesday that he hopes U.S. District Judge Rodney Smith will deny the motions to intervene.
“Fortunately, this type of delay tactic is not that common in class actions and we very much look forward to Judge Smith granting preliminary approval so all almost 1 million members of the class can have their say,” he said.
The plaintiffs are represented by Adam M. Moskowitz, Howard M. Bushman, Joseph M. Kaye and Barbara C. Lewis of The Moskowitz Law Firm PLLC and Josh Migdal and Yaniv Adar of Mark Migdal & Hayden.
The interveners are represented by James L. Kauffman of Bailey & Glasser LLP, Michael J. Higer of Berger Singerman LLP, Randall K. Pulliam and Edwin Lee Lowther of Carney Bates & Pulliam PLLC and Darren R. Newhart of Newhart Legal PA.
PHH/Ocwen is represented by Michael R. Pennington and Timothy Allen Andreu of Bradley Arant Boult Cummings LLP.
The case is Morris v. PHH Mortgage Corp., case number 0:20-cv-60633, in the U.S. District Court for the Southern District of Florida.
