MRS V JPMC Doc 385 Response Re (351) Rule 56.1, Statement, Apr. 19, 2019

Case 1:15-cv-00293-LTS-RWL Document 385 Filed 04/19/19 Page 1 of 101
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
-------------------------------- x
S & A CAPITAL PARTNERS, INC., :
MORTGAGE RESOLUTION SERVICING, :
LLC, and 1ST FIDELITY LOAN :
SERVICING, LLC, : No. 15-cv-00293-LTS-RWL
Plaintiffs, :
:
- v. - :
:
JPMORGAN CHASE BANK, N.A., :
JPMORGAN CHASE & CO., and CHASE :
HOME FINANCE LLC, :
:
Defendants. :
-------------------------------- x
DEFENDANTS’ RESPONSES TO PLAINTIFFS’ STATEMENT OF FACTS

PURSUANT TO LOCAL RULE 56.1(B)
Robert D. Wick
Christian J. Pistilli
Laura Brookover
Philip J. Levitz
Jessica Merry Samuels
COVINGTON & BURLING LLP
One CityCenter, 850 Tenth Street, NW
Washington, DC 20001-4956
(202) 662-6000
Michael C. Nicholson
The New York Times Building
620 Eighth Avenue
New York, New York 10018-1405
(212) 841-1000
Attorneys for Defendants

Pursuant to Local Rule 56.1(b) of the United States District Courts for the Southern and
Eastern Districts of New York, Defendant JPMorgan Chase Bank, N.A., individually and as
successor by merger to Chase Home Finance LLC, and Defendant JPMorgan Chase & Co.
(collectively, “Chase”) submit the following Responses to Plaintiffs’ “Statement of Undisputed
Material Facts” (“SOF”) in support of their “Motion for Summary Judgment on Liability as to
Plaintiffs’ Breach of Contract Claims” (“Motion”).
The Recovery Department and RCV1
Chase has a department within its Home Lending division called “Recovery
Operations” or “Recovery.” Ex. 1 (JPMC-MRS-00319625).1
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. The cited
evidence does not establish that “Recovery Operations” or “Recovery” is within a division
titled “Home Lending.”
Recovery Operations is “responsible for the collection of post-charge off
deficiency balances.” Id.
RESPONSE: Chase does not dispute that the quoted language appears in Exhibit 1.
This statement is irrelevant to Plaintiffs’ Motion.
In order to “collect and document recovery activities for Investor and Bank
Owned portfolios,” Recovery utilizes a records system and computer application known as
“Recovery One” (hereinafter “RCV1”). Id.
RESPONSE: Chase does not dispute that the quoted language appears in Exhibit 1.
This statement is irrelevant to Plaintiffs’ Motion.
1
Exhibit references are to the exhibits attached to the Declaration of Roberto L. Di Marco, Esq.
1
RCV1 is a High Risk ranked mainframe-based application supported by HL
Technology used in other lines of business, including Auto, Business Banking and Asset
Management. Id.
RESPONSE: Chase does not dispute that the language in Paragraph 4 appears in Exhibit
1. This statement is irrelevant to Plaintiffs’ Motion.
RCV1 is an electronic database of loans, including first lien walks. Ex. 2
(Deposition of Launi Solomon, 21:22-22:6).
RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. Chase
does not dispute that “RCV1” is an electronic database of loans, including first lien loans that
Chase has determined have no foreclosure value, that have been charged off by Chase. To the
extent that “first lien walks” means something different, Chase disputes this statement.
The RCV1 database is comprised of loans that Chase has “charged off” and that
are no longer being serviced by Chase, although collection activities continue on these loans.
Ex. 3 (Deposition of Victor Fox, 16:1-4; 30:23-32:19; 40:2-6); Ex. 2 (Deposition of Launi
Solomon, 22:5-12); Ex. 4 (Deposition of Omar Kassem, 47:1-9).
does not dispute that RCV1 contains “charged off loans” that are no longer serviced in the same
way as active non-charged-off loans (i.e., the borrowers do not automatically receive periodic
statements, the loans are not subject to foreclosure, and servicing associated with those events is
not necessary). Chase disputes that there was no servicing in RCV1 and that collection activities
continued on all RCV1 loans. Pl. Ex. 3 (Deposition of Victor Fox, 16:1-4; 30:23-32:19; 40:2-6);
Pl. Ex. 2 Solomon Dep., 22:5-12); Pl. Ex. 4 (Deposition of Omar Kassem, 47:1-9).
2
The Recovery Department manages the liquidation of charged off assets. Ex. 5
(Deposition of Mike Boyle, 19:16-24, 20:1-3; 21:8-9). Such assets are no longer active and do
not receive regular billing, accounting or record updates. Id.
RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.
Chase disputes that the cited evidence establishes that charged-off loans did not receive
“regular” “accounting or record updates.” Chase does not dispute that Boyle testified that
“Recovery is an organization that manages the liquidation of assets after they are charged off.
And ‘charged off’ being defined as an accounting entry which basically takes them off of
active status.” Pl. Ex. 5 (Boyle Dep. 19:17-21). Chase does not dispute that Boyle testified
that charged-off loans were “not getting regular billings for, you know, current payment, that
kind of thing.” Id. (Boyle Dep. 19:22-24).
After failing to collect through collection agencies, loans within Recovery were
placed in “a parking lot or a holding pen” and received no daily activity, no outbound calls or
letters. Ex. 5 (Deposition of Mike Boyle, 25:1-13). Loans are sent for collection through both in
house and third-party collectors. Ex. 1 (JPMC-MRS-00319625).
Boyle’s testimony cited in Paragraph 8 did not specifically discuss the loans at issue in Plaintiffs’
Motion. Boyle’s deposition testimony concerned those loans on which Chase’s in-house and
external collectors were “unable to secure any assets or any liquidation,” not all loans in
Recovery One. Pl. Ex. 5 (Boyle Dep. 25:5-6).
The second sentence in Paragraph 8 is disputed to the extent it refers to loans outside the
Recovery system.
3
The RCV1 database does not possess the capability to service loans. Ex. 6
(JPMC-MRS-00040530 at JPMC-MRS-00040531).
Although Chase admits that Recovery One did not have the full range of servicing capability
required for non-charged-off loans (for which periodic statements needed to be sent, escrow
accounts needed to be managed and accounted for, and interest and fees needed to be applied),
Chase disputes that Recovery One lacked the capability to provide the limited servicing required
for charged-off loans. See Pistilli Decl. Ex. 1 (Kassem Dep. 141:3-6) (“We followed the legal
requirements at the time.”). MRS has not identified what type of “servicing” of charged-off
loans was allegedly required and not provided.
On August 1, 2011, an internal Audit Report by Chase of its Recovery
Department from March 26, 2006 determined: “The current operational and technology controls
over Recovery operations are not sufficient to ensure compliance with bank policies, laws and
regulations, therefore, an Inadequate rating is assigned. Issues were identified that could cause
legal and reputational risk, in particular, relating to the execution of sworn documents and the
need for personal knowledge prior to signing assertions. Issues were also identified relating to
data integrity, risk management and access administration.” Ex. 1 (JPMC-MRS-00319625).
Chase disputes that the audit is from “March 26, 2006,” as the cited document makes clear that
the report was from August 1, 2011 and that the previous report was from March 29, 2006, in
which Chase received a “Satisfactory” rating. Pl. Ex. 1. Nothing in the cited document indicates
that it applies to the loans at issue in Plaintiffs’ Motion or suggests that any alleged problems
existed at the time that Chase sold loans to MRS. The document also states that “Management
4
has developed action plans to address the issues contained within this report and target dates are
scheduled. Several operational enhancements have already been and continue to be implemented
to address self identified and audit identified issues.” Pl. Ex. 1 (JPMC-MRS-00319627).
RCV1 is riddled with data integrity issues. Ex. 7 (JPMC-MRS-00053749).
email chain is from January 2014, at least four years after the loans at issue in this case were sold
to Plaintiffs, and does not discuss the loans at issue in Plaintiffs’ Motion. Chase disputes that
this email establishes any problems with Recovery One as it existed when Chase sold loans to
Plaintiffs. Chase does not dispute that Cecelia Barbieri stated that “We are going to review loans
in Recovery 1 in full outside of just our system of record as R1 is riddled with data integrity
issues.” Pl. Ex. 7 (JPMC-MRS-00053749).
The Recovery Department sold loans to third parties and was supposed to follow
defined procedures when doing so. Ex. 8 (JPMC-MRS-LOANFILES-00072408).
disputes that the cited evidence establishes that the Recovery Department was “supposed to
followed defined procedures” when selling loans to third parties. Plaintiffs’ Exhibit 8 is a single
note sale file that does not purport to establish general procedures for one-off note sales or for
bulk loan sales. Chase does not dispute that the Recovery Department sold loans to third parties.
According to Chase, the definition of a “note sale” is the sale of only “secured
liens on property.” Ex. 9 (JPMC-MRS-00113944).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Chase
disputes that the cited evidence established any requirements for a “note sale.” Plaintiffs’
Exhibit 9 states only that “At this time Recovery representatives can offer accounts for purchase
5
to investors that have secured liens on the property only.” Pl. Ex. 9 (JPMC-MRS-00113944).
Chase does not dispute that the document states that a “note sale is when Chase sells an account
in whole to an approved 3rd party investor, therefore releasing their legal right to collect on an
account.” Id.
The procedure to be utilized by the Recovery Department was defined within
Chase’s “Note Sale Procedure,” and each Recovery sales agent was required to complete a
checklist to ensure that the transaction conformed to what Chase defined as a “note sale.” Ex. 9
(JPMC-MRS-00113944); Ex. 8 (JPMC-MRS-LOANFILES-00072408).
Plaintiffs’ Exhibits 8 and 9 concern single, one-off note sales. Chase does not dispute that
Plaintiffs’ Exhibit 9 contains general guidelines as of 2010 for such single, one-off note sales.
When selling a loan to a third-party investor through RCV1, Chase was required
to release its legal right to the loan. Ex. 9 (JPMC-MRS-00113944).
document does not support the proposition.
According to the “Note Sale Procedure,” Recovery representatives could only
offer accounts for purchase to 3rd party investors that had secured liens on the property.” Id.
disputes that the cited evidence established any requirements for a “note sale.” Plaintiffs’
Exhibit 9 states only that “At this time Recovery representatives can offer accounts for purchase
to investors that have secured liens on the property only.” Pl. Ex. 9 (JPMC-MRS-00113944).
Exhibit 9 is dated 2010, after most of the note sales at issue in this case. See id. Plaintiffs have
6
not shown that Exhibit 9, Chase’s “Note Sale Procedure,” applied to bulk sales such as the
MLPA sale.
Liability Expert Richard W. Payne, III, opines:
A Mortgage Loan Purchase Agreement is used to define the obligations of both the
Purchaser and the Seller of the Mortgage Loans. It is used to set the expectations
of both parties as to the profile of the assets being bought and sold. If the assets
fall outside of this profile, they should not be included in the transaction. A
Mortgage Loan Purchase Agreement should not be used to allow a Seller to convey
problem assets and transfer their obligations regarding compliance with state and
federal regulations, as well as the inability to service the assets, to an unwitting
Purchaser unless these deficiencies were adequately disclosed. Ex. 10 (Expert
Report of Richard W. Payne III, p. 10).
RESPONSE: Disputed in part. Chase does not dispute that Richard W. Payne, III made
the above-referenced statement in his expert report in this case. But MRS cites no admissible
evidence for Payne’s statement. It relies on an expert report, which provides an inadmissible
legal conclusion. Marx & Co., Inc. v. Diners’ Club, Inc., 550 F.2d 505, 509-10 (2d Cir. 1977);
see also United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991) (“[A]n expert’s legal
opinion on the meaning of certain contract terms was outside the witness’ area of expertise and
was also an invasion of the court’s authority to instruct the jury on the applicable law.”).
Chase knew, prior to entering into the Mortgage Loan Purchase Agreement
(“MLPA”) with Plaintiff MRS, that the RCV1 lacked data, such as property addresses, and could
not identify a source from where the information could definitively be found. Ex. 11 (JPMC-
MRS-00005122 (“street address is not in RCV1”)); Ex. 12 (JPMC-MRS-00005207 (“those
[sources] are our only options”)); Ex. 13 (JPMC-MRS-00003098 (“I did not get 100% coverage
and it may be due to the amount of time that the account has been charged off”)).
RESPONSE: Disputed. The cited exhibits do not show that Chase knew RCV1 lacked
data to comply with the MLPA or that Chase could not identify a source where the information
could definitively be found. The emails discuss only Chase’s efforts to compile addresses for
7
properties. Pl. Ex. 11 (JPMC-MRS-00005122) (“street address is not in RCV1”); Pl. Ex. 12
(JPMC-MRS-00005207) (“[those sources are] our only options”); Pl. Ex. 13 (JPMC- MRS-
00003098) (“I did not get 100% coverage and it may be due to the amount of time that the
account has been charged off”). The emails show that Chase was “pulling [the information]
together from other sources” if it could not be found in RCV1. Pl. Ex. 11 (JPMC-MRS-
00005122). Plaintiffs’ Exhibit 12 identifies those sources as “FORTRACS-HE,” “FORTRACS-
PRIME,” and “DRI.” Pl. Ex. 12 (JPMC-MRS-0005207). Chase further disputes that it had any
obligation under the MLPA to provide MRS with information that was not reasonably available
or in its possession. MRS acknowledged in the MLPA that it had the opportunity to conduct due
diligence regarding the loans prior to execution of the agreement. Pl. Ex. 55 (MLPA) § 4. MRS
also was aware that certain information and documentation was lacking as to the MLPA loan
pool. See infra ¶ 87 (“I understand that . . . there are no . . . representations or warranties as to
the information, quality or availability as to any of the collateral documentation whatsoever.”).
The only loan information that Chase was obligated to provide MRS was the “outstanding
principal balance” amount for each loan. Pl. Ex. 55 (MLPA) § 2.
In September 2008, Chase entered into a Purchase and Assumption Agreement
with the Federal Deposit Insurance Corporation for the sale of Washington Mutual Bank,
pursuant to which Chase represented and warrantied that it was in compliance with all relevant
federal, state and local laws and regulations. Ex. 14 (Purchase and Assumption Agreement).
RESPONSE: This statement is irrelevant to Plaintiffs’ Motion. Chase does not
dispute that it entered into a Purchase and Assumption Agreement with the Federal Deposit
Insurance Corporation for the sale of Washington Mutual Bank, and refers the Court to that
agreement for a full and complete statement of its terms.
8
In a March 16, 2012 overview of the system, Chase acknowledged that “Recovery
One lacks the tools to support portfolio sale activities.” Ex. 15 (JPMC-MRS-00243311 at
JPMC-MRS-00243316).
RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion, in part
because it post-dates Chase’s sale of the loans at issue in this case by at least two years. Pl. Ex.
15.
In October 2014, Patrick Boyle, Chase Mortgage Banking Vice President, Home
Equity Collections, Loss Mitigation and National Recovery, certified to the United States
Government that Chase had been able to verify the lien status of loans in Recovery and that,
except for limited exceptions, “the closed-end, charged-off first and second lien liens on the
Recovery One Platform have been resolved through the Lien Release Project.” Ex. 16 (JPMC-
MRS-00368707).
RESPONSE: Undisputed. This statement is irrelevant to Plaintiffs’ Motion.
Despite evidence otherwise, in August and November 2015, Patrick Boyle, then
Executive Director, Chase Credit Card, certified to the United States Government that Chase had
been able to verify the lien status of loans in Recovery. Ex. 17 (JPMC-MRS-00159554); Ex. 18
(JPMC-MRS-00057617).
does not dispute that the certifications attached as Pl. Ex. 17 (JPMC-MRS-00159554) and Pl. Ex.
18 (JPMC-MRS-00057617) were made to the United States government. Chase disputes that
there was any certification as to the lien status of all loans in Recovery or that the certifications
contradicted “evidence otherwise,” and the statement is not supported by any evidence.
9
Business Dealings Between Plaintiffs MRS, S&A and 1st Fidelity and Defendants
Laurence Schneider (“Schneider”) is a principal in Plaintiffs S&A, MRS and 1st
Fidelity. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 1).
RESPONSE: Undisputed.
Plaintiffs’ business strategy is to purchase distressed mortgage loans (loans in
default) from financial institutions, such as the Defendants, at highly discounted prices. Ex. 20
(Expert Report of Jeffrey S. Andrien, ¶11). Once they acquire loans, the Plaintiffs typically
contact the borrowers directly to work out mutually agreeable payment solutions. Id. Plaintiffs’
philosophy is to find a solution that allows borrowers to remain in their homes. Id. The
difference between the cost to acquire the mortgages and the total outstanding principal on the
respective loans represents the potential profits that the Plaintiffs can earn on their investments.
Id. S&A and 1st Fidelity (hereinafter “SA&F”) have demonstrated their ability to generate
significant profits via this strategy. Id.
Plaintiffs cite only an expert report for factual information within Plaintiffs’ possession. The
expert report is not admissible evidence supporting this statement. See Scott v. Chipotle Mexican
Grill, Inc., 315 F.R.D. 33, 43 (S.D.N.Y. 2016) (expert testimony must “concern[] matters that the
average juror is not capable of understanding on his or her own” (quoting United States v. Mejia,
545 F.3d 179, 194 (2d Cir. 2008))).
Chase disputes that the “difference between the cost to acquire the mortgages and the
total outstanding principal on the respective loans represents the potential profits that the
Plaintiffs can earn on their investments” as neither the expert report nor the deposition testimony
cited in the expert report establishes that proposition. Pl. Ex. 20 ¶ 11. In addition, to the extent
10
the total balance due on a loan at default includes amounts separate from and in addition to the
outstanding loan principal, those additional amounts are also recoverable by Plaintiffs. See infra
¶ 171.
Chase also disputes that “S&A and 1st Fidelity have demonstrated their ability to
generate significant profits via this strategy,” because the statement is not supported by any
evidence. Id.
Starting in March 2004, Plaintiffs SA&F purchased mortgage loans from Chase
under two separate Master Mortgage Loan Sale Agreements (“MMLSA”). See Ex. 20 (Expert
Report of Jeffrey S. Andrien, ¶17-18), Ex. 21 (JPMC-MRS-00007926), Ex 22 (JPMC-MRS-
00002034).
RESPONSE: Disputed in part. Plaintiffs’ Exhibit 20 states that 1st Fidelity did not start
purchasing mortgages until May 2009 and that S&A Capital started in 2003. Pl. Ex. 20 ¶¶ 17-18.
It also states that S&A entered a Master Mortgage Loan Sale Agreement in April 2005 and 1st
Fidelity did so in September 2010. Id.
From April 2005 to June 2010, S&A acquired approximately 650 individual first
and second lien mortgage loans from Chase that were in RCV1. See Ex. 20 (Expert Report of
Jeffrey S. Andrien, ¶17).
RESPONSE: Disputed in part, because the cited evidence does not establish the dates in
which S&A purchased the loans, and because putative expert testimony is not admissible to
establish lay factual matters. Pl. Ex. 20 ¶ 17.
Between May 2008 and November 2010, 1st Fidelity acquired approximately 350
individual first and second lien mortgage loans from Chase that were in RCV1. Id. ¶ 18.
11
RESPONSE: Disputed in part. The evidence states that 1st Fidelity began purchasing
mortgage loans in May 2009, and does not establish the dates in which 1st Fidelity stopped
purchasing the loans. Pl. Ex. 20 ¶ 18. In addition, putative expert testimony is not admissible to
establish lay factual matters. See Dibella v. Hopkins, 2002 WL 31427362, at *4 (S.D.N.Y. Oct.
30, 2002) (experts cannot opine on lay factual issues like “what actually happened, what the
parties said, and what they thought”); S.E.C. v. Tourre, 950 F. Supp. 2d 666, 675 (S.D.N.Y.
2013) (experts may not “act[] simply as a narrator of the facts”).
S&A and 1st Fidelity together purchased 1,005 individual first and second lien
mortgages from Chase that were in RCV1. Id.
RESPONSE: Disputed in part. The assertion that the loans were from RCV1 is not
supported by the cited evidence. See Pl. Ex. 20 ¶ 18. In addition, putative expert testimony is
not admissible to establish lay factual matters. Chase does not dispute that between 2005 and
2010, Chase made approximately 1,000 one-off loan sales to S&A and 1st Fidelity. See Pistilli
Decl. Ex. 2 (Schneider Dep. Ex. 122).
Prior to the execution of the MLPA, Chase sent pre charge-off history, post-
charge history, if there was one, the original file and all documents within it, including the
assignment, borrower payments or payment history, RESPA goodbye-letters and the assignments
on all loans sold to S&A and 1st Fidelity. Ex. 2 (Deposition of Launi Solomon, 101:11-25,102:1-
18).
disputes that Solomon’s testimony concerned bulk loan sales like the MLPA. Solomon testified
about “one-off” note sales, as the questions was “when you did a note sale, what would you
include . . . with the package or file that you would send to somebody like Larry, let’s say, on a
12
one-off basis, not a bulk sale?” Pl. Ex. 2 (Solomon Dep. 101:11-14). Chase disputes that
Solomon was testifying about “all loans sold to S&A and 1st Fidelity.” She was asked only
about the general process and Plaintiffs have not provided evidence about what S&A and 1st
Fidelity received on each loan. Chase does not dispute that Solomon replied (regarding one-off
note sales): “[t]his is the precharge-off history, we would send this, any postcharge-off history,
if there is one, the original file and . . . the assignment.” Id. (Solomon Dep. 101:15-19).
When dealing with S&A and 1st Fidelity, a Recovery One employee would
typically contact Schneider with a list of loans being offered for purchase in which the Recovery
representatives had already completed their internal Note Sale Checklist. Ex. 8 (JPMC-MRS-
LOANFILES-00072408). Such list included information for Schneider to investigate each loan.
Id.
RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. The
cited evidence does not establish that “a Recovery One employee would typically contact
Laurence Schneider with a list of loans being offered for purchase.” Plaintiffs again cite to
one loan file, and only the first page, in an attempt to establish Chase’s general process with
S&A and 1st Fidelity. Pl. Ex. 8 (JPMC-MRS- LOANFILES-00072408). Such evidence does
not support the broad proposition asserted in Paragraph 30. In fact, Schneider would contact
Chase in an attempt to purchase loans. See Pl. Ex. 30 (JPMC-MRS-00000439) (asking
Guerrero “if there are going to be any note lists for this month”). The cited evidence does not
establish that, when dealing with S&A and 1st Fidelity, “Recovery representatives had
already completed their internal Note Sale Checklist.” Id. Chase does not dispute that one
page of Plaintiffs’ Exhibit 8 is titled “Note Sale Checklist.” Pl. Ex. 8 (JPMC-MRS-
LOANFILES-00072409).
13
In each of the completed mortgage purchases made by S&A and 1st Fidelity as
described herein, Chase always provided a boarding document along with the sales agreement,
which provided the information Schneider’s companies needed to board and service the loans, as
required under RESPA. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 11).
RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. No
competent evidence supports the assertion that “Chase always provided a boarding document
along with the sales agreement, which provided the information Schneider’s companies needed
to board and service the loans, as required under RESPA.” See also Pl. Ex. 19 ¶ 11. The
assertion is also inconsistent with the parties’ document productions in this case and, in
particular, with Plaintiffs’ failure to produce a “boarding document” for every loan purchased by
Plaintiffs from Chase.
Before the MLPA, in each of the mortgage purchases made by S&A and 1st
Fidelity, Chase sent S&A and 1st Fidelity a copy of the RESPA letter Chase sent to the
borrower. Ex. 19, (ECF 262-3 (Declaration of Laurence Schneider) ¶¶ 14-18); Ex. 23
(Deposition of Caroline Iacino, 68:9-69:5).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. This
statement is inconsistent with the parties’ document productions in this case and, in particular,
with Plaintiffs’ failure to produce a “RESPA letter” for every loan purchased by Plaintiffs from
Chase.
Before and after the MLPA, in each of the mortgage purchases made by S&A and
1st Fidelity, Chase also sent the collateral file, which included a fully executed and notarized
assignment of mortgage, the original note, the original recorded mortgage, and the “view
summary” document, which showed balance, next due date, and sometimes payment history, and
14
borrower contact information, all of which is necessary to service the loan. Ex. 19 (ECF 262-3
(Declaration of Laurence Schneider), ¶¶ 14-18); Ex. 23 (Deposition of Caroline Iacino,
68:9¬69:5); Ex. 24 (Deposition of Jeff McGrane, 70:18-24).
disputes this statement, as Caroline Iacino, an employee at S&A and 1st Fidelity, stated that
“[s]ometimes we were missing documents” in the collateral files Chase sent over. Pl. Ex. 23
(Deposition of Caroline Iacino, 68:9-69:5). And S&A employee Brad Axel testified that
“there was really no consistency as far as what we received” with respect to documents from
Chase for loan sales. Pl. Ex. 26 (Axel Dep. 88:22-25). Jeff McGrane testified “I don’t recall
what was sent over to a buyer,” Pl. Ex. 24 (McGrane Dep. 70:16). And though he also
testified that “[f]rom what I can recall, I believe [the original note and original mortgage]
w[ere] a document,” id. (McGrane Dep. 70:18-24), he was not testifying specifically about
S&A and 1st Fidelity loans. Id. Paragraph 38 is also inconsistent with the parties’ document
productions in this case and, in particular, with Plaintiffs’ failure to produce the referenced
materials for every loan purchased by Plaintiffs from Chase.
1st Fidelity, Chase informed S&A and/or 1st Fidelity of all pertinent information in full
compliance with the Recovery One Note Sale Procedure handbook. Ex. 9 (JPMC-MRS-
00113944); Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 8-16).
cited evidence does not state that Chase informed S&A and/or 1st Fidelity of “all pertinent
information.” Chase does not dispute that it typically provided S&A and/or 1st Fidelity with the
15
information contemplated by the Recovery One Note Sale Procedure handbook when Chase sold
individual notes to S&A and/or 1st Fidelity.
1st Fidelity, after receipt of the sales agreement, boarding document, collateral file, and
assignments provided by Chase, S&A and 1st Fidelity successfully serviced all of the loans
purchased. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 14-18); Ex. 23
(Deposition of Caroline Iacino, 68:9-69:5).
disputes that the cited exhibits establish that S&A and 1st Fidelity “service[d] the loans” for
“each of the approximate 1,005 mortgage purchases made by S&A and 1st Fidelity before the
MLPA.” The cited paragraphs from Schneider’s declaration and the cited portions of Iacino’s
deposition do not state that S&A and 1st Fidelity serviced, much less successfully serviced, each
of the loans. See Pl. Ex. 19 ¶¶ 14-18; Pl. Ex. 23.
The above referenced loan information and documentation that Chase historically
provided is needed to properly board and service a loan. Ex. 25 (Deposition of Richard W.
Payne, III, 213-216).
portions of Payne’s deposition do not state that all of the information and documentation
referenced above is needed to properly board and service a loan. See Pl. Ex. 25 (Deposition of
Richard Payne, 213-216). Mortgage expert Marsha Courchane has opined that, “the only
information Mr. Schneider would have needed to begin the collections process for a given loan
number is (1) the borrower’s name, (2) the property address, and (3) the balance due.” Pl. Ex. 94
(Expert Report of Marsha Courchane ¶ 43); Pl. Ex. 93 (Deposition of Marsha Courchane, 57:8-
16
15). Payne admitted at his deposition that Chase was not required to provide MRS with the
information and documents referenced above under the terms of the MLPA. Pistilli Decl. Ex. 3
(Payne Dep. 103:15-105:8, 181:11-182:16, 199:17-200:11).
Prior to the MLPA loan purchase, when S&A and 1st Fidelity discovered that
documents were missing from the collateral files, Chase always assisted in locating and
transferring these “trailing documents” so that the loans could be serviced. Ex. 26 (Deposition of
Brad Axel, 87:8-89:6).
Although Chase does not dispute that it assisted in attempting to locate and transfer documents
requested by Plaintiffs, Chase disputes that the evidence establishes that it was always successful
in locating and transferring documents requested by Plaintiffs. Axel testified that “there was
really no consistency as far as what we received.” Pl. Ex. 26 (Deposition of Brad Axel, 88:22-
89:6).
Chase was aware of the requirements for sufficient analysis of, and proper
research necessary to support, the accuracy of documentation recorded to establish loan
ownership and monies due and owing to various parties. Ex. 27 (Expert Report of Zachary
Bumpus, p 16).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Mr.
Bumpus’s testimony on this point is inadmissible because he cannot opine on what “Chase was
aware of,” which is an issue for the jury. See Aventis Env’l Sci. USA LP v. Scotts Co., 383 F.
Supp. 2d 488, 516 (S.D.N.Y. 2005) (excluding expert testimony on the parties’ “state of mind”
because such issues are “within the capabilities of an average juror and not a proper subject of
expert testimony”); SLSJ, LLC v. Kleban, 277 F. Supp. 3d 258, 284 (D. Conn. 2017) (excluding
17
expert testimony on a party’s “motives and what he knew,” because those “are factual issues to
be decided by the jury”). Moreover, the expert’s opinion as to what “Chase was aware of” is not
supported by sufficient facts or data under Fed. R. Evid. 702. Thus, Plaintiffs do not cite any
admissible evidence in support of Paragraph 38.
Negotiation and Execution of the MLPA
Chase was aware of the passage of Government issued consumer relief
requirements through the Making Home Affordable (“MHA”) Program and Home Affordable
Modification Program (“HAMP”) while the MLPA was being negotiated. [CITE]. The loans
marketed and sold to MRS represented roadblocks for Chase to qualify for the programs’
incentive payments and for Chase to receive credits under the National Mortgage Settlement
(“NMS”) and Residential Mortgage-Backed Securities Settlement (“RMBS Settlement”),
together worth additional millions of dollars (collectively, the “Lender Settlements”). Ex. 20
(Expert Report of Jeffrey S. Andrien, ¶¶ 47-59).
RESPONSE: Disputed. These statements are irrelevant to Plaintiffs’ Motion.
Paragraph 39 is not supported by any admissible evidence, as evidenced by the placeholder
“[CITE]” that appears in Plaintiffs’ statement. The cited expert report is not admissible on these
issues because (1) an expert witness cannot testify on a party’s state of mind, see In re Rezulin
Prod. Liab. Litig., 309 F. Supp. 2d 531, 547 (S.D.N.Y. 2004) (“Inferences about the intent or
motive of parties or others lie outside the bounds of expert testimony.”); and (2) the putative
expert report is not based on sufficient facts or data concerning these federal mortgage programs
and settlements. Plaintiffs’ expert admitted that: “I lack the information to determine which
individual loans were submitted to the Trustee for credit against the consumer relief
requirements of the Lender Settlements . . . .” Pl. Ex. 20 ¶ 58 n.188.
18
Furthermore, the timing of these programs, most of which post-dated the MLPA,
contradicts Plaintiffs’ assertions. MHA and HAMP were introduced in February 2009, cf. Pl.
Ex. 20 ¶ 49; the National Mortgage Settlement was finalized in April 2012, cf. Pl. Ex. 20 ¶ 53;
and the Residential Mortgage-Backed Securities Settlement was finalized in November 2013,
which was over four years after the MLPA was signed, cf. Pl. Ex. 20 ¶ 55. Victor Fox, who
signed the MLPA on behalf of Chase, was asked, “Were there any governmental deadlines that
you knew of that had to be met in order -- for this transaction?” and he responded “Not to my
knowledge. Not that I remember.” Pistilli Decl. Ex. 4 (Fox Dep. 134:7-11).
Finally, mortgage expert Dr. Marsha Courchane disputes that the MLPA loans could have
or would have had any effect on Chase’s eligibility to receive HAMP payments or settlement
credits. Pistilli Decl. Ex. 5 (Courchane Rep. ¶¶ 105-08).
When Chase first contacted Schneider to discuss the MLPA, Chase was fully
engaged in a “lien release project” to rid itself of exposure to properties that represented a
liability to the bank. See Ex. 28 (JPMC-MRS-00021453). As part of this project, Victor Fox,
Head of Recovery Operation for Chase, assembled a list of more than 20,000 loans from RCV1
that he believed represented such a liability. Id.
RESPONSE: Disputed. Paragraph 40 is irrelevant to Plaintiffs’ Motion. The
cited evidence does not establish that Chase “first” contacted Schneider to discuss the
MLPA, and Chase disputes this fact. Rather, Schneider contacted Chase to discuss
purchasing a loan pool. See Pistilli Decl. Ex. 4 (Fox Dep. 60:22-24) (“My recollection is
Mr. Schneider or his company approached us about doing a larger purchase of loans.”); see
also id. 66:2-67:4 (“[W]e weren’t looking to sell a pool of loans.”); 92:15-21 (“Larry’s
19
group wanted to purchase these loans. They did all the leg work on it, they did the due
diligence on it, and to pay a nominal fee for them . . . .”).
The cited evidence also does not establish that Chase was “fully engaged in a ‘lien
release project’ to rid itself of exposure to properties that represented a liability to the
bank.” The participants on the email chain discussed the lien statuses of certain RCV1
loans as part of an effort to identify a smaller set of loans (i.e., “further reduce the
number”) that “could become a risk to the bank.” Pl. Ex. 28 (JPMC-MRS00021453).
Nothing in the email chain suggests that Fox assembled the list because he believed the
20,000 loans “represented a liability” to Chase. In fact, the email chain does not establish
how the list of 20,000 loans was originally created, for what purpose, or how the loans on
the list are related, if at all. Id.
Chase does not dispute that the subject line of the email chain in Exhibit 28
contained the phrase “lien release project.” However, from the contents of the email chain,
the subject line is ambiguous as to whether the reference was to a “project” already
completed, underway at the time, to be undertaken in the future, or merely being proposed.
As early as July 2008, Chase began creating a pool of knowingly problematic or
fraudulent loans from within the RCV1 system. See Ex. 29 (SA00277780).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Paragraph 41
is not supported by the evidence cited. The email chain is from 2010 and concerns two loans
that had been fraudulently applied for and obtained. Pl. Ex. 29 (SA00277780). It does not
establish that at any point prior to execution of the MLPA in February 2009, Chase “creat[ed] a
pool of knowingly problematic or fraudulent loans from within the RCV1 system.”
20
In addition to the lien release project, Chase considered several methods of
ridding itself of these problem loans which could prevent them from receiving government
credits, including selling them. See Ex. 13 (JPMC-MRS-00003098) (“We will be sending [the
loan list] out to vendor to validate lien position/intact and then will be asking for offers to buy
the 1st liens.”).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Plaintiffs
do not identify what the phrase “these problem loans” refers to. Chase disputes that it was
“consider[ing] several methods of ridding itself” of any loans as unsupported by the cited
evidence. Pl. Ex. 13 (JPMC-MRS-00003100). Rather, the evidence supports only that Chase
was considering selling certain loans. Id. Chase disputes that any loans referenced in
Plaintiffs’ Exhibit 13 would have “prevent[ed] them from receiving government credits.”
Chase further disputes Plaintiffs’ implication that the MLPA was Chase’s idea, as
Schneider approached Chase to purchase a pool of the “worst of the worst” loans. Pistilli
Decl. Ex. 6 (Schneider Dep. Ex. 124); id. Ex. 7 (Schneider Dep. 107:12-17); id. (Schneider
Dep. 114:8-9) (“I was looking to buy a pool of loans.”); see also id. Ex. 4 (Fox Dep. 60:22-24)
(“My recollection is Mr. Schneider or his company approached us about doing a larger
purchase of loans,”); see also id. 66:2-67:4 (“[W]e weren’t looking to sell a pool of loans.”);
92:15-16 (“Larry’s group wanted to purchase these loans. They did all the leg work on it, they
did the due diligence on it, and to pay a nominal fee for them . . . .”).
In conformance with Chase’s plan to rid itself of these problematic loans, Eddie
Guerrero, Real Estate Recovery Supervisor, reached out to Schneider in September of 2008
stating that, after a period of inactivity, he was “laying the groundwork for a strong note sale
21
push and [he was] pretty sure that senior management [is] in agreement.” Ex. 30 (JPMC-MRS-
00000439).
RESPONSE: Disputed. Chase disputes that it had a “plan to rid itself of these
problematic loans,” and that putative fact is unsupported by the cited evidence. In addition,
the Guerrero email was about individual note sales, not a bulk sale like the MLPA. See Pl.
Ex. 30 (JPMC-MRS-00000439) (“Deals will have to be sent out by email on an individual
basis.”). Also, despite the implication in Paragraph 43, there is no apparent connection
between the individual note sales contemplated by Guerrero in Plaintiffs’ Exhibit 30, and the
unspecified “loans” discussed in Paragraphs 41 and 42. Furthermore, Guerrero did not “reach
out” to Schneider in the cited email; rather, Guerrero was responding to an email from
Schneider inquiring about “note lists” and potential “deals.” Id. Finally, Chase disputes that
there was any “period of inactivity,” and that putative fact is unsupported by the cited
evidence.
Contrary to the putative facts set forth in Paragraph 43, it was Schneider who
approached Chase in October 2008 about purchasing a loan pool in a bulk sale, stating: “I am
seriously looking into buying the worst of the worst loans for a new group of investors that I
have been talking to. As crazy as it sounds, I would consider buying all of the secured
loans . . . . I am very, very serious about this. We could both look like heroes!!!” Pistilli
Decl. Ex. 6 (Schneider Dep. Ex. 124); id.. Ex. 7 (Schneider Dep. 107:12-17); id. (Schneider
Dep. 114:8-9) (“I was looking to buy a pool of loans.”); Schneider Dep. 122:5-6 (“I’d be
interested in possibly buying a pool of firsts . . . .”); see also supra ¶ 42 (citing Fox deposition
testimony). Guerrero agreed to look into Schneider’s request. See Pistilli Decl. Ex. 6
(Schneider Dep. Ex. 124).
22
The “first lien release” list, once clear of loans that Chase allegedly confirmed
were previously released, became the “first lien walk” list that Chase provided to Schneider to
scrub for unsecured loans, and eventually became the MLPA list. See Ex. 31 (JPMC-MRS-
00005108).
RESPONSE: Disputed in part. In the cited email, Victor Fox explained only that the
subject list of loans was a “pare down from the original lists that you [Sam Brown] were
providing to us for the first lien releases.” Ex. 31 (JPMC-MRS-00005108). Fox did not explain
how the list had been “pare[d] down,” and Plaintiffs’ contention that it was “clear of loans that
Chase allegedly confirmed were previously released” is unsupported by the cited evidence.
Chase does not dispute that Schneider offered to scrub a list of loans if he “receive[d]
first right of refusal on sale.” Pl. Ex. 31 (JPMC-MRS-00005109). Chase also does not dispute
that it provided a list of loans to Schneider to scrub, which formed the basis for Exhibit A to the
MLPA pursuant to the parties’ common understanding and expectation. Schneider expected the
roughly 3,500 loans in the MLPA to be “drawn from” the approximately 6,000 loans on which
he conducted a due diligence review in November 2008 (the “November Data Tape”). Pistilli
Decl. Ex. 8 (Schneider Decl. (Dec. 11, 2017), Dkt. 262-3 ¶ 32). Schneider stated in a sworn
declaration in this action that “it was the intent of both parties that the [MLPA loans] would
consist of 3,529 loans . . . drawn from the November 2008 list.” Id. All of the MLPA loans did
in fact come from the November Data Tape. See Pistilli Decl. Ex. 9 (Lord Decl. (Dec. 11, 2017),
Dkt. 262-26 ¶ 6); id. Ex. 10 (Dkt. 322 ¶ 82 (MRS’s Statement of Facts)) (“The final list of loans
was approximately 3,500 loans, down from the original 6,000.”).
23
In an email on October 29, 2008 from Guerrero to Chad Paxton, subject First
Lien Walks, Guerrero admits that Chase had no idea how many of the “4000+ first lien walk
accounts [were] still secured.” Ex. 32 (JPMC-MRS-00003335).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Exhibit 32
does not establish that Guerrero “admit[ted] that Chase had no idea” how many of the loans were
secured. Instead, Guerrero wrote that he had a “possible remedy for finding out how many” of
those loans were secured, which was that “[o]ur investor from S&A Capital”—Schneider—was
“willing to scrub the file and let us know which accounts are unsecured, but he would also like
the opportunity to bid on the accounts as one off note sales.” Pl. Ex. 32 (JPMC-MRS-
00003335).
In an email on October 30, 2008, subject Emailing: First Lien Walks Bank
Owned.xls, Guerrero sent Schneider a list of loans related to their discussions about the sale of a
pool of first lien mortgages, and offered to provide any information that was needed. Ex. 33
(JPMC-MRS-00000791).
RESPONSE: Disputed in part. Chase does not dispute that Guerrero “sent Schneider
a list of loans” on October 30, 2008. Chase disputes the rest of the statement as unsupported
by the evidence. Nothing in Plaintiffs’ Exhibit 33 indicates that Guerrero’s email was related
to discussions about the sale of only “first liens,” nor did Guerrero “offer[ ] to provide any
information that was needed.” Pl. Ex. 33. Instead, Guerrero stated only: “Hey Larry, Here
you go, let me know if you need field descriptions or if you have any questions.” Pl. Ex. 33
(JPMC-MRS-00000792).
Schneider immediately pointed out that the list was missing street addresses,
which prevented him from doing any due diligence. Id. Guerrero replied “I am working on it,”
24
promising to provide the missing information “asap” and further adding that the necessary
information was “cut out prior to me receiving” which establishes that Chase intentionally
removed the information from the data tapes sent to Schneider. Id.
RESPONSE: Disputed in part. Chase disputes that the lack of street addresses
prevented Schneider from doing “any” due diligence, and the assertion is unsupported by the
cited evidence. In addition, Guerrero’s full reply is: “I am working on it, I thought I had this
done but after you told me that I went through all of the spreadsheets I was provided and realized
that info was cut out prior to me receiving. I will get it to you asap.” Pl. Ex. 33 (JPMC-MRS-
00000791). Plaintiffs’ Exhibit 33 does not establish that “Chase intentionally removed the
information” from the list. To the contrary, Guerrero soon followed up with a list of loans
“including full collateral address” and told Schneider that “[s]ome of them are missing the full
address or name on account.” Pl. Ex. 36 (JPMC-MRS-00000814).
At this time, Guerrero was also simultaneously discussing with Schneider a
separate and distinct pool of loans consisting of second lien mortgage loans (PSECDP Sale) and,
in providing Schneider with information on the pool, Guerrero included a spreadsheet that
contained all of the elements necessary to service mortgage loans. Ex. 34 (JPMC-MRS-
00000120); Ex. 35 (JPMC-MRS-00369034).
disputes that the cited emails show that Guerrero was discussing “a separate and distinct pool of
loans consisting of second lien mortgage loans,” as Guerrero’s email does not discuss whether
the loans all had second liens. See Pl. Ex. 34 (JPMC-MRS-00000120). The spreadsheet
excerpted in Plaintiffs’ Exhibit 35 does not identify the loans as second liens anywhere in the
document. Chase disputes that the spreadsheet “contained all of the elements necessary to
25
service mortgage loans” as unsupported by the cited evidence. Pl. Ex. 35 (JPMC-MRS-
00369034).
On November 5, 2008, Guerrero sent Schneider a spreadsheet titled First Lien
Walks Bank Owned Revised (also known as the “November Data Tape”), which contained
approximately 6,000 loans and a data field indicating that all of the loans were first lien
mortgages. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 26). Guerrero further
stated that he would help to fill in the missing information. Ex. 36 (JPMC-MRS-00000812).
RESPONSE: Disputed in part. To the extent Plaintiffs are contending that the
November Data Tape contained a data field indicating that all the loans were currently secured
by intact first liens, that is inaccurate and unsupported by the cited evidence. See Pl. Ex. 19, ¶ 26
(ECF 262-3 (Declaration of Laurence Schneider)); Pl. Ex. 36 (JPMC-MRS-00000812). The
November Data Tape was provided to Schneider so that he could perform a “lien verification” on
the listed loans—that is, so that he could determine whether the listed loans had intact liens. Pl.
Ex. 36; see also supra ¶ 44 (referring to Schneider’s offer to “scrub” the loans for lien status).
Schneider confirmed to Chase that he would determine, for each loan on the November Data
Tape, whether the loan was “foreclosed/unsecured” or had a “valid lien.” Pl. Ex. 37 (JPMC-
MRS-00000101) (emphasis added). There was no representation, nor did Schneider at the time
believe there was any representation, that the listed loans were currently secured by intact first
liens. Id.
Schneider subsequently confirmed that most of the November Data Tape loans were not
secured by intact first liens. See Pl. Ex. 39 (JPMC-MRS-00005285) (email on November 10,
2008) (reporting to Chase that “2,082 Prime Loans” and “482 Subprime Loans” were “no longer
secure”); Pl. Ex. 40 (JPMC-MRS-00001028) (email on November 13, 2008) (“We are up to
26
$100 million in ‘Prime’ loans that are no longer secure.”). In the end, Schneider concluded that
“about 95% of the pool” was “truly unsecured and just a huge potential liability.” Pl. Ex. 41
(JPMC-MRS-00003425). Schneider told Chase that he still wanted to buy the pool: “I
understand that the loans are non performing, both secure and unsecure loans . . . . We know
exactly what we are getting in this loan pool and have completed our due diligence and we are
willing to sign anything that you put in front of us.” Pistilli Decl. Ex. 11 (Schneider Dep. Ex.
133).
Soon after, Schneider contacted Guerrero to inform him that the November 2008
“1st Lien” data tape was still missing essential information, and requested that the information be
provided so he could begin conducting due diligence, and followed up with an email asking for
more information so that his team could commence research on the loans. Ex. 19 (ECF 262-3
(Declaration of Laurence Schneider), ¶¶ 25 & 27); Ex. 37 (JPMC-MRS-00000101).
RESPONSE: Disputed in part. Chase disputes that Schneider was unable to conduct
due diligence upon receiving the November Data Tape. When Guerrero sent the November Data
Tape on November 5, 2008, he acknowledged that “some” of the loans were missing full address
or name, and advised that Schneider start with “the ones that have the info first and we will go
from there.” Pl. Ex. 37 (JPMC-MRS-00000106). In Schneider’s response the next day, he
explained that he had already started his diligence: “I brought in 3 temps to start this morning
doing data entry. I am hoping to do my first round of due diligence just to see if the name
matches and they are still the owner and have all 6000 completed by this weekend.” Pl. Ex. 37
(JPMC-MRS-00000102).
Schneider also had sufficient information to complete his due diligence. On November
19, 2008, Schneider updated Guerrero that he had completed diligence on thousands of loans
27
listed in the November Data Tape and determined that the vast majority was unsecured. Pl. Ex.
41 (JPMC-MRS-00003424–25) (Schneider explaining that, based on the “unsecured portion” of
loans he had found so far, “I project about 95% of the pool is truly unsecured”). As for the
remaining loans, Schneider told Guerrero that he and his employees would “finish our due
diligence” in order to “determine which loans are still secure and provide JPMChase a list.” Pl.
Ex. 41 (JPMC-MRS-00003425). Later, in an email on January 28, 2009, Schneider wrote to
Guerrero: “We know exactly what we are getting in this loan pool and have completed our due
diligence and we are willing to sign anything that you put in front of us.” Pistilli Decl. Ex. 11
(Schneider Dep. Ex. 133) (emphasis added). In the MLPA, MRS acknowledged that it had “an
opportunity to conduct a due diligence review of each Mortgage Loan.” Pl. Ex. 55 (MLPA) § 4.
Finally, Plaintiffs cite a portion of the Schneider declaration that discussed a different
data tape sent on October 30, 2008. See Pl. Ex. 19 ¶¶ 24-25. The cited evidence does not
support Paragraph 50, which concerns the November Data Tape.
Guerrero reassured Schneider that he would get the information and that Guerrero
was promoting Schneider to the hierarchy at Chase. Ex. 37 (JPMC-MRS-00000101). Guerrero
praised Schneider, stating that he was being made to “look like a god send” and that his due
diligence was an “important issue for the way higher ups, so it makes [Guerrero] look like a hero
and should help [Schneider] get some great deals.” Id. Guerrero’s emphasis was that because
this was an “important issue” for the higher level management, Schneider’s help would place
him in excellent position to receive more business opportunities in the future. Id.
Chase disputes that “Guerrero reassured Schneider that he would get the information.” The
evidence cited by Plaintiffs is an email from Schneider to Guerrero, not the other way around.
28
The only statement by Guerrero about loan information is in the earliest email in the exchange.
Pl. Ex. 37 (JPMC-MRS-00000106). Guerrero acknowledges that the November Data Tape is
missing some information and advises Schneider to start his diligence on the loans “that have
the info first.” Id. Guerrero says that he can “help out” with the missing borrower names and
“possibly” the collateral address “if need be.” Id. Guerrero did not “reassure” Schneider nor
make any promises to provide additional information.
In addition, Chase disputes that Guerrero told Schneider that he would be placed “in
[an] excellent position to receive more business opportunities in the future.” See Pl. Ex. 37.
Neither that statement, nor anything equivalent to it, appears in the cited email exchange.
Guerrero said only that Schneider’s diligence work on the November Data Tape “should help
you get some great deals.” Id. (JPMC-MRS-00000102).
The lien position of the loans in the pool was represented to be set forth in the
spread sheet of loans. Ex. 36 (JPMC-MRS-00000812).
RESPONSE: Disputed. The November Data Tape did not represent the then-current
lien position as of loans. The sole evidence that Plaintiffs cite for their putative fact is the
email from Guerrero attaching the November Data Tape, which does not support the assertion.
Pl. Ex. 36 (JPMC-MRS-00000812) (referring to Schneider’s offer to “scrub” a list of loans to
determine whether they were secured by intact first liens); see also supra ¶ 44 (discussing
Schneider’s lien diligence).
The November Data Tape was given to Schneider so that he could perform a “lien
verification” on the loans—i.e., determine whether the loans still had intact liens. Pl. Ex. 36.
Schneider confirmed to Chase that he would determine, for each loan on the November Data
Tape, whether the loan was “foreclosed/unsecured” or had a “valid lien.” Pl. Ex. 37 (JPMC-
29
MRS-00000101) (emphasis added). There was no representation, nor did Schneider believe
there to be any representation, that the loans were still secured by intact first liens. Id.
Schneider subsequently confirmed that most of the loans in the November Data Tape
were not secured by intact first liens. See Pl. Ex. 39 (JPMC-MRS-00005285) (email on
November 10, 2008) (reporting to Chase that “2,082 Prime Loans” and “482 Subprime Loans”
were “no longer secure”); Pl. Ex. 40 (JPMC-MRS-00001028) (email on November 13, 2008)
(“We are up to $100 million in ‘Prime’ loans that are no longer secure.”). In the end, he
concluded—and reported back to Chase—that “about 95% of the pool” was “truly unsecured,”
which meant they had no intact first lien. Pl. Ex. 41 (JPMC-MRS-00003425). Schneider told
Chase that he wanted to buy the pool anyway: “I understand that the loans are non
performing, both secure and unsecure loans . . . . We know exactly what we are getting in this
loan pool and have completed our due diligence and we are willing to sign anything that you
put in front of us.” Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133).
After discussing his progress with Schneider, Guerrero relayed to Fox the serious
problems with the loan pool in an email dated November 6, 2008, stating that “5 out of 6 loans”
in the November Data Tape were either unsecured or 2nd liens. Ex. 38 (JPMC-MRS-00003289).
RESPONSE: Disputed in part. In the cited email, Guerrero did not state that there
were “serious problems” with the November Data Tape loans, nor anything equivalent to that
statement. Pl. Ex. 38. Rather, Guerrero merely summarized for Fox what he had been told by
Schneider about the loans. Id. The cited email confirms that Schneider told Chase that most of
the November Data Tape loans (“5 out of 6”) were not secured by intact first liens and that
Schneider expected that only about 1000 loans would turn out to be “first lien secured.” Id.
30
Guerrero also confirmed the inability of RCV1 to pull out data and eliminate
loans that had already been sold from the system, adding in his email “some of the accounts in
that 1st lien file have already been sold to investors. [Schneider] gave me an example of one that
was on the list and we had sold it to him back in January.” Id.
RESPONSE: Disputed. Guerrero did not confirm the purported “inability of RCV1” to
“pull out data” and eliminate loans that had been sold, and the cited evidence does not support
that putative fact. See Pl. Ex. 38. Rather, the cited evidence at most indicates that the November
Data Tape mistakenly included a single loan that had previously been sold. Id. There is no
evidence of a systemic “inability” in RCV1, as Plaintiffs assert in Paragraph 54.
Clearly, numerous Chase employees knew that the proposed 1st Lien data tape
did not come from a complete servicing system of records. Ex. 10 (Expert Report of Richard W.
Payne III, p 15).
RESPONSE: Disputed. Chase disputes that any Chase employee “knew” this putative
fact, and also disputes that the underlying fact (“the proposed 1st Lien data tape did not come
from a complete servicing system of records”) is itself true. In support, Plaintiffs cite only the
report of their expert, Richard Payne. Payne did not interview any Chase employees, and he
therefore lacks sufficient facts or data to offer this assertion. In addition, the expert’s
testimony on this point is inadmissible because an expert cannot testify on a person’s state of
mind. See Pl. Ex. 10 at 15; In re Rezulin, 309 F. Supp. 2d at 547 (S.D.N.Y. 2004). Finally,
expert testimony is not a proper vehicle for introducing lay evidence. See Dibella, 2002 WL
31427362, at *4; Tourre, 950 F. Supp. 2d at 675. Accordingly, Plaintiffs have not cited any
admissible evidence to support Paragraph 55.
31
After reviewing the file further, Schneider determined that roughly 2,500 of the
6,000 loans were unsecured. Ex. 39 (JPMC-MRS-00005284). He informed Guerrero, in an
email, subject First Lien Walk update, who passed that information on to Fox. Id. Fox replied
to Guerrero, in an email dated November 11, 2008, stating that the 2,500 unsecured loans
represented “no risk/liability to Chase.” Id.
RESPONSE: Disputed in part. In the cited evidence, Fox did not indicate “that the
2,500 unsecured loans represented ‘no risk/liability to Chase.’” Pl. Ex. 39. Rather, Fox posed a
question to that effect, and the evidence cited does not show whether Fox received an answer.
Id. (JPMC-MRS-00005284).
Chase also disputes that Schneider determined that only 2,500 of the 6,000 loans were
unsecured. In support, Plaintiffs cite an email dated November 10, 2008. Pl. Ex. 39 (JPMC-
MRS-000052845). In later emails, Schneider explained that a much larger portion was
unsecured. On November 19, 2008, Schneider stated that about “95% of the pool is truly
unsecured,” which is far more than Plaintiffs assert in Paragraph 56. Pl. Ex. 41 (JPMC-MRS-
00003425). Schneider’s November 19 report to Chase was consistent with what Schneider
expected from the beginning of the project. On November 6, 2008, Guerrero reported that
Schneider had told him that “it appears that 5 out of 6 loans” in the November Data Tape did not
have intact first liens, and that Schneider thought “only about 1000 will be true first lien secured”
mortgage loans. Pl. Ex. 38.
Schneider discovered that most of the 6,000 loans on the November Data Tape
were not first lien mortgages and wrote Guerrero to inform him that he was not interested in
making a bid, specifically stating “There is not one deal to bid on... .” Ex. 40 (JPMC-MRS-
00001028).
32
RESPONSE: Disputed in part. Chase admits that Schneider knew that most of the
6,000 loans lacked intact first liens based on his own diligence, the results of which he reported
to Chase. Pl. Ex. 41 (JPMC-MRS-00003425); see also supra ¶¶ 49, 52 (describing Schneider’s
due diligence). Chase also admits that Schneider wrote on November 13, 2008 to Guerrero that
were was “not one deal to bid on” in an email with the ambiguous subject line of “Pool.” Pl. Ex.
40. Contrary to Plaintiffs’ suggestion, Schneider was interested in making a bid on the
November Data Tape loans, as evidenced by his subsequent offer to purchase the entire loan
pool; on November 19, 2008, Schneider made Chase an offer to buy all loans on the November
Data Tape for $100,000. Pl. Ex. 41 (JPMC-MRS-00003425). Schneider tried to persuade Chase
to accept this offer by reporting that “about 95% of the pool is truly unsecured” and “worthless.”
Id. Chase countered with an offer to sell a subset of the loans at a higher price, $200,000. Pistilli
Decl. Ex. 4 (Fox Dep. 109:5–23). Schneider agreed to Chase’s counteroffer. Pl. Ex. 55
(MLPA).
Fox admitted that the pool of loans being offered to Schneider was "not worth
marketing... .” Ex. 41 (JPMC-MRS-00003422).
RESPONSE: Disputed in part. Earlier in the cited email discussion, Guerrero told Fox
that Schneider was “adamant about not having anyone other than Chase” see the results of his
lien diligence, “as he doesn’t want his expense and time utilized for the benefit of a third party.”
Pl. Ex. 41 (JPMC- MRS-00003422). Because Chase was relying on Schneider’s research and
did not have its own diligence results to share with other potential purchasers, Fox replied that “I
don’t think it’s worth marketing.” Id. (JPMC- MRS-00003422). To the extent Plaintiffs are
suggesting in Paragraph 58 that Chase did not believe it could find another purchaser, that is
inaccurate and not supported by the cited evidence. Rather, Fox noted that, based on Schneider’s
33
reports that almost the entire pool was “worthless,” and based on Schneider’s insistence that no
competing bidders shared benefits from his due diligence, he was willing to agree not to market
the pool. Id. (JPMC-MRS-00003425).
Chase’s internal notes clearly indicated that the pool included loans that were
likely fraudulently originated. See Ex. 29 (SA00277780).
RESPONSE: Disputed in part. Chase does not dispute that one loan, the Syed loan,
appeared to have been obtained by someone posing as the borrower using a stolen ID (i.e., “True
ID Theft” fraud). Pl. Ex. 29 (SA00277781). Solomon also appears to have concluded that the
same individual posed as the borrower for the Salinas loan. Id. (SA00277780). Chase disputes
that any loans were fraudulently originated by Chase, and the cited evidence does not support
that assertion.
When Solomon informed Schneider that the Syed loan was fraudulently obtained and
asked him to please close the account, Schneider responded: “No problem.” Id. Later, when
Schneider tried to negotiate another similar deal, he proposed the “same terms” as the MLPA,
which he described as “‘any loan needed to be pulled back by Chase agreed to for any reason
whatsoever.’” Infra ¶ 174.
Moreover, Plaintiffs neglect to mention that Schneider was aware that the Syed and
Salinas loans were fraudulently obtained no later than November 13, 2008, when Schneider sent
Chase a spreadsheet with a notation of “fraud” next to these loans. See Pistilli Decl. Ex. 12
(JPMC-MRS-00021333) (spreadsheet notating Salinas and Syed loans as “FRAUD PER
EDDIE”).
Because Schneider told Guerrero that he was not interested in the pool because it
contained such poor loans; to resurrect the deal, Guerrero told Schneider that Chase was
34
scrubbing the list of loans on the November Data Tape to ensure that only closed end first lien
mortgages were included, and that the final list would be provided after the MLPA was signed.
Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 32).
RESPONSE: Disputed. Chase disputes that Schneider was “not interested” in the
pool. Supra ¶ 57 (discussing Schneider’s offer to purchase the entire pool). For Plaintiffs’
assertion that Guerrero supposedly said he would “scrub” the November Data Tape to include
only loans with intact first liens, the only evidence cited in support is Schneider’s
uncorroborated declaration. Pl. Ex. 19. But Schneider himself has testified that he did not
“recall any oral promises” made by Guerrero about the types of loans that Chase would
provide, and Schneider also disavowed reliance “on oral representation[s].” Pistilli Decl. Ex.
7 (Schneider Dep. 307:8-16, 309:17-310:7). A fact based on an uncorroborated declaration,
and about which the declarant has provided contradictory testimony, is not undisputed for
purposes of summary judgment. See Mack v. United States, 814 F.2d 120, 124 (2d Cir. 1987).
Moreover, Schneider knew from his own diligence that the November Data Tape—for
which the MLPA loans were drawn, consistent with Schneider’s expectation—did not contain
3,529 loans with intact first liens. Schneider previously told Chase that, at most, there were
only 1,000 loans with intact first liens on the November 2008 Data Tape, Pl. Ex. 38 (Schneider
telling Chase that “5 out of 6 loans” on the November Data Tape did not have intact first liens
and “only about 1000 will be true first lien secured”), and he “underst[oo]d” that the MLPA
pool would include “both secure and unsecure loans,” Pistilli Decl. Ex. 11 (Schneider Dep. Ex.
133); see also supra ¶ 44 (sworn testimony by Schneider that he understood and expected that
the MLPA loans would be drawn from the November 2008 data tape). Thus, Guerrero’s
supposed statement in Paragraph 60 would have been a mathematical impossibility, which
35
Schneider knew at the time. Supra ¶ 57 (agreeing that “Schneider discovered, prior to
executing the MLPA, that most of the 6,000 loans from which the MLPA pool would be
drawn lacked intact first liens”).
Because Chase had always performed as agreed when selling loans to S&A and
1st Fidelity, Schneider believed the representations and promises made by Guerrero. Id.
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Plaintiffs’
only evidence of “representations and promises” by Guerrero is Schneider’s uncorroborated
declaration. Pl. Ex. 19 ¶ 32. Schneider stated in his declaration that Guerrero said that Exhibit
A to the MLPA would include only loans secured by intact first liens. Id. But Schneider
himself has provided contradictory evidence on this point. At deposition, he testified that he
did not “recall any oral promises” made by Guerrero about the types of loans that Chase would
provide, and Schneider also disavowed reliance “on oral representation[s].” Pistilli Decl. Ex. 7
(Schneider Dep. 307:8-16, 309:17- 310:7). Plaintiffs do not identify any written statement
from Guerrero in support of Paragraph 61. A fact based on an uncorroborated declaration, and
about which the declarant has provided contradictory testimony, is not undisputed for purposes
of summary judgment. See Mack, 814 F.2d at 124.
Moreover, Schneider could not have believed the representations that Guerrero
supposedly made, because Schneider’s own contemporaneous statements contradicted them.
As reported by Schneider, the November Data Tape had at most 1,000 loans secured by intact
first liens. Pl. Ex. 38; see also supra ¶ 60. It was not possible to draw 3,529 loans secured by
intact first liens from the November Data Tape. Pl. Ex. 19 ¶ 32. Schneider also
“underst[oo]d” that the MLPA pool would include “both secure and unsecure loans.” Pistilli
Decl. Ex. 11 (Schneider Dep. Ex. 133).
36
Finally, before the MLPA was executed, Schneider pressured Chase to close the deal
quickly. Pistilli Decl. Ex. 13 (JPMC-MRS-00000483) (“Let’s just get the agreement
signed.”); id. Ex. 14 (JPMC-MRS-00000488) (“I really need this deal done ASAP as I am
using it as a reference for [another] deal. Please do whatever you can today.”). To that end,
Schneider disclaimed the existence of any “representations or warranties” about the loans in an
email to Guerrero on January 28, 2009. Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133).
Schneider also represented that he was aware that “the loans” would include “both secured and
unsecure loans.” Id.; id. Ex. 15 (Dkt. 311 ¶ 16 (MRS’s Response to Chase’s Statement of
Facts)).
The final list of loans was approximately 3,500 loans, down from the original
6,000. Ex. 42 (Deposition of Laurence Schneider, 189:23-190:5). Chase represented that the
reduction was the result of Chase removing loans that were not first lien walks. Id.
RESPONSE: Disputed in part. It is true that the approximately 3,500 loans conveyed in
the MLPA were drawn from the approximately 6,000 loans in the November Data Tape. Chase
disputes that the reduction was the result of removing “loans that were not first lien walks,” and
Plaintiffs’ assertion is supported only by Schneider’s uncorroborated deposition testimony. Prior
to contract execution, Schneider knew that the approximately 3,500 loans conveyed in the
MLPA would include loans that did not have intact first liens. See also supra ¶¶ 60–61.
During all conversations regarding the purchase of the MLPA loan pool, Chase
represented, and Schneider insisted, that all loans would be first lien intact mortgages. Ex. 19
(ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 23-32); Ex. 42 (Deposition of Laurence
Schneider, 397:22-398:12).
37
RESPONSE: Disputed. Plaintiffs cite no competent evidence of representations by
Chase that all loans sold in the MLPA would be secured by intact first liens. The vague and
conclusory, post-deposition declaration of Laurence Schneider does not establish this factual
proposition. See Pl. Ex. 19.
Plaintiffs cite no written evidence of representations by Chase that all loans sold in the
MLPA would be secured by intact first liens. Moreover, when asked at his deposition about
any oral representations or promises from Chase on which he relied in agreeing to the MLPA,
Schneider did not identify any. He testified that his understanding about intact first liens was
“based on the bid agreement which laid out the terms in which I would be willing to purchase
the loans . . . . [a]nd then in which I was buying the MLPA.” Pl. Ex. 42 (397:22-398:12).
Schneider also testified that he did not “recall any oral promises,” and that he “wouldn’t rely
on oral representation” because “the expectations are in a formal contract.” Pistilli Decl. Ex. 7
(Schneider Dep. 310:6).
Moreover, prior to execution of the MLPA, Schneider knew that the loan pool included
unsecured loans. Based on his due diligence, Schneider had reported to Chase that “5 out of 6
loans” on the November Data Tape did not have intact first liens, Pl. Ex. 38, and “about 95%
of the pool” was “truly unsecured,” Pl. Ex. 41. In addition, in a January 28, 2009 email,
Schneider wrote to Guerrero that he “underst[ood] that the loans are non performing, both
secure and unsecure.” Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133); id. Ex. 15 (Dkt. 311 ¶ 16
(MRS’s Response to Chase’s Statement of Facts)); see also supra ¶¶ 60-61.
Plaintiffs’ Expert, Richard Payne, III, opined that a much lower amount of loan
level due diligence is completed on loans acquired in bulk transactions because such transactions
are typically governed by an MLPA, which allows the purchaser to rely on certain loan level
38
representations and warranties without having to inspect every loan file. Ex. 43 (Rebuttal Report
of Richard W. Payne, III, p. 3). It would not be reasonable, nor customary, to have such a lower
amount of loan level due diligence and also not have enforceable terms in an MLPA. Id. In fact,
the idea that an MLPA would serve to reduce the amount of due diligence done, and then not be
enforceable by its exact terms is illogical, and not acceptable within any standard business
dealing concerning the bulk sale of mortgage loans. Id. at p. 5.
the above-referenced statements in his expert report in this case, but the opinions are not
admissible because they constitute impermissible legal conclusions by an expert and irrelevant
extrinsic evidence on the meaning of the parties’ contract. See Marx, 550 F.2d at 509-10;
Bilzerian, 926 F.2d at 1294. Any assertion as to industry custom is disputed by the testimony of
mortgage expert Dr. Marsha Courchane, who opined that she “would not have expected most or
all MLPA loans to have intact first liens.” Pl. Ex. 94 (Expert Report of Marsha Courchane ¶ 40).
In an email from Guerrero to Jason Oquendo, Guerrero wrote “Here is the most
recent list of First Lien Walks that are out with agency. Please recall all accounts that don’t have
a working arrangement and send the list of recalled accounts to Sandra to be moved into the
4SALE queue.” Ex. 44 (JPMC-MRS-00003499).
Schneider delivered a cashier’s check to Chase on December 18, 2008 in the
amount of $200,000, the agreed upon purchase price according to the MLPA. Ex. 45 (JPMC-
MRS-00006140).
39
On December 23, 2008, Schneider made clear exactly what information he
needed from Chase to board the loans, including loan number, name, address, social security
number, principal balance and last payment. Ex. 46 (JPMC-MRS-00000486). Guerrero replied
that he would “have that data pulled into a new spread sheet.” Id.
RESPONSE: Disputed. The evidence does not show that Schneider “made clear
exactly what information he needed from Chase to board the loans.” Plaintiffs’ Exhibit 46 is a
request from Schneider to Guerrero for certain information, which he concludes by asking
Guerrero: “What are your thoughts?” Pl. Ex. 46 (JPMC-MRS-00000486). The evidence does
not show that Guerrero committed to providing the data, as he replied: “I will see if I can reach
out to someone and have that data pulled into a new spreadsheet.” Id.
On January 5, 2009, Guerrero emailed Schneider, “Please let me know what info
will be needed for quick boarding. I have started a list below.
Borrower name
Co-borrower (If one exists)
Collateral Address (If available)
Balance
Mailing Address
Phone Number.” Ex. 47 (JPMC-MRS-00369484).
Schneider responded that day with a more complete list of necessary information.
Ex. 48 (JPMC-MRS-00003418). For initial boarding and RESPA, Schneider required, in
addition to the above, social security number and loan number. Id. In order to board and service
40
the loan, Schneider required information regarding the monthly payment, interest rate, last
payment made, next payment due, and payoff amount. Id.
does not dispute that Schneider requested information in the cited email, but Chase disputes that
the information was “necessary” or “required.” As Plaintiffs’ expert, Mr. Payne admitted, the
information was not required under the terms of the MLPA, which states only that “[t]he
Mortgage Loan Schedule shall set forth for each Mortgage Loan the outstanding principal
balance.” Pl. Ex. 55 (MLPA) § 2; see also infra ¶ 78. In addition, this information was not
required for Schneider to collect payments (supra ¶ 36) or send RESPA letters (infra ¶ 94), and
Plaintiffs’ damages expert opined that Schneider made more than $1.6 million in proceeds on the
MLPA loans (infra ¶ 144). Finally, Schneider himself agreed that collateral address would only
be provided “[i]f available,” Pl. Ex. 48 (JPMC-MRS-00003418), and that he “could request
individual [sic] if needed,” id. (JPMC-MRS-00003419).
Plaintiffs’ Expert, Richard W. Payne, III, opined that in a standard sale and
transfer of mortgage loans, the following, additional information is essential, at a minimum, to be
obtained on all of the loans being transferred:
• Property address (needed to perfect lien, check for lien deficiencies, to protect
property from hazards/maintain property and lien search);
• Original balance (needed to properly amortize the loan);
• Note date (needed to properly amortize the loan);
• Property type (for maintenance and legal purposes);
• Payment history (to analyze payment profile);
• Interest Rate (needed to properly amortize the loan); and
41
• Mortgage Payment (needed to properly amortize the loan). Ex. 10 (Expert Report of
Richard Payne III, p. 14).
RESPONSE: Disputed. Chase does not dispute that Richard W. Payne, III made the
above-referenced statements in his expert report in this case, but these opinions are not
admissible because they constitute impermissible legal conclusions by an expert and irrelevant
extrinsic evidence on the meaning of the parties’ contract. See Marx, 550 F.2d at 509-10;
Bilzerian, 926 F.2d at 1294. Moreover, the expert’s opinion on a “standard sale and transfer”
does not “help the trier of fact” under Fed. R. Evid. 702(a) because it is not relevant to the
agreement at issue in this case. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 591 (1993)
(“Expert testimony which does not relate to any issue in the case is not relevant and, ergo, non-
helpful.”). The MLPA was not a “standard sale” of mortgage loans; it was a bulk sale of the
“worst of the worst” of Chase’s charged off loans for a “nominal price” that did not include
many aspects of a “standard sale.” See Pl. Ex. 41.
In addition, Paragraph 70 is extrinsic evidence that is not relevant to the MLPA. The
MLPA unambiguously states only that the “Mortgage Loan Schedule shall set forth for each
Mortgage Loan the outstanding principal balance.” Pl. Ex. 55 (MLPA). Paragraph 70 is also
inadmissible under Fed. R. Evid. 702 because the expert opinions are not based on sufficient
facts or data. Moreover, Plaintiffs’ expert Richard Payne concedes that the only loan information
that Chase was required to provide under the MLPA was an Exhibit A setting forth the
“outstanding principal balance” for each loan. Pistilli Decl. Ex. 3 (Payne Dep. 103:15-105:8,
181:11-182:16, 199:17-200:11). Mr. Payne also testified that he is not offering the opinions that
Exhibit A failed to conform with Chase’s obligations under the MLPA, id. (Payne Dep. 210:12-
211:17, 212:22-213:10, 230:7-231:18), that Chase breached an obligation to provide principal
42
balance information, id. (Payne Dep. 223:8-14), or that Chase breached the MLPA by failing to
provide escrow-related information, id. (Payne Dep. 102:10-103:14, 225:2-6).
On February 4, 2009, Matthew D. Simon from Chase’s legal department prepared
the MLPA and Guerrero delivered it to Schneider on that same day for his review and signature.
Ex. 49 (JPMC-MRS-00001041).
RESPONSE: Disputed in part. The “MLPA” referenced in Paragraph 71 was not the
version executed by the parties. See Pl. Ex. 55 (signed MLPA). Chase also disputes Paragraph
71 to the extent it suggests that Schneider did not participate in drafting the MLPA. At his
deposition, Schneider was asked: “Was [the MLPA] based on a bid letter that you had submitted
to Chase in December of 2008?” He answered: “Certainly there were some of the same
requirements as what I was intending to purchase and some standard verbiage that was requiring
representations and warranties, and stuff like that. Compliance.” Pistilli Decl. Ex. 7 (Schneider
Dep. 281:20-282:7).
This initial draft of the MLPA was for 4,271 loans with an outstanding aggregate
principal balance of more than $172 million, and represented that each loan complied with all
relevant federal and state laws. Ex. 50 (JPMC-MRS-00002826).
RESPONSE: Disputed in part. Paragraph 72 paraphrases draft language that speaks
for itself. This assertion is irrelevant to Plaintiffs’ Motion.
Schneider immediately responded, requesting an Exhibit “A.” Ex. 51 (JPMC-
MRS-00003109).
RESPONSE: Disputed in part. Chase disputes that Schneider “immediately responded,”
as the email from Guerrero is time-stamped at 11:08 am, and Schneider’s response is at 4:15 pm.
Pl. Ex. 51 (JPMC-MRS-00003109).
43
Email exchanges between Chase employees in early February of 2009
demonstrate that Chase had no system in place to document what loans it would be releasing to
Schneider, and that Chase was trying to figure out how to accomplish that, so that, as Fox stated,
they could “put this baby to bed. Cheers boys.” Ex. 52 (JPMC-MRS-00003268).
cited email exchange occurred more than two weeks before the MLPA was signed. See Pl. Ex.
52. Plaintiffs omit more recent evidence indicating that Chase had such a “system in place” by
the time of the MLPA. Two days before MLPA execution, Guerrero wrote to Fox that “[o]nce
both parties sign, we have the accounts ready to be moved to a sold queue where they will be
stamped with contact info for the purchaser. We have a spreadsheet with all pertinent data that
will also be sent to the purchaser so he can board the accounts and send the RESPA
notifications.” Pistilli Decl. Ex. 16 (JPMC-MRS-00005300).
It became apparent through emails that Chase employees who were putting the
pool together were unfamiliar with fundamental aspects of the proposed agreement, with Jason
Richard, the Recovery Site Administrator, asking the team, “Can someone send me what
constitutes a 1st lien walk and what if any checks or balances we want to do... .” Id. Guerrero
responds by suggesting that they “talk it out instead of creating a chain email” to ensure there
was no evidence of their misrepresentations to Schneider. Id.
RESPONSE: Disputed. Paragraph 75 mischaracterizes and is not supported by the cited
evidence. In particular, Plaintiffs’ Exhibit 52 does not support Plaintiffs’ assertion that Chase
employees sought to “ensure there was no evidence of their misrepresentations to Schneider.”
Plaintiffs do not explain what these purported “misrepresentations” were. Regardless, Chase
disputes that there were any “misrepresentations” to Schneider on any topic whatsoever.
44
Schneider fully understood all relevant facts of the deal, writing to Chase in January 2009: “I
understand that the loans are non performing, both secure and unsecure loans and that there are
no buybacks, credits, representations, or warranties as to the information, quality, or availability
as to any of the collateral documentation whatsoever.” Pistilli Decl. Ex. 11 (Schneider Dep. Ex.
133); id. Ex. 15 (Dkt. 311 ¶ 16 (MRS’s Response to Chase’s Statement of Facts)). And Victor
Fox, who signed the MLPA, testified that “everyone knew what they were getting” in the MLPA
loan pool. Pistilli Decl. Ex. 4 (Fox Dep. 83:24-84:1).
Fox agreed that they should speak and not send emails, and added that the key “is
to avoid a future fire drill like we went through on the old first lien walks... .” Ex. 53 (JPMC-
MRS-00005036).
RESPONSE: Disputed. Fox’s email in Plaintiffs’ Exhibit 53 reads in full: “Agree, Chad
set it up, I do NOT have to be involved but would like to see what the final process is. The key
here is to avoid a future fire drill like we went through on the old first lien walks.” Pl. Ex. 53
(JPMC- MRS-00005036). As for the mode of communication, Fox was merely agreeing that a
conference call would be helpful. See id.
In an email on February 23, 2009, Guerrero told Fox that he was “trying to wrap
up the 1st Lien Walk sale and be done with it once and for all.” Ex. 54 (JPMC-MRS-00003022).
Guerrero gave Fox the breakdown of the loans to be sold, including 1,111 subprime accounts and
2,419 HE accounts. Id. “HE” in this context refers to home equity, or open end, loans. Ex. 28
(JPMC-MRS-00021453 at JPMC-MRS-00021464). Guerrero also told Fox that “We have a
spreadsheet with all pertinent data that will also be sent to the purchaser so he can board the
accounts and send the RESPA notifications.” Ex. 54 (JPMC-MRS-00003022).
45
RESPONSE: Disputed in part. Chase does not dispute the authenticity of Plaintiffs’
Exhibit 54 (JPMC-MRS-00003022), but disputes Plaintiffs’ characterization of the exhibit as
unsupported by the cited evidence.
Pursuant to the MLPA, the Agreement was to contain an “Exhibit A,” which
Exhibit was to contain the information necessary to service all of the first lien loans MRS was
purchasing. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 32).
RESPONSE: Disputed. The requirements of the MLPA are a legal, not a factual,
matter. Chase disputes that Exhibit A “was to contain the information necessary to service all
of the first-lien loans MRS was purchasing.” The MLPA states only that “Seller and
Purchaser hereby agree that the Mortgage Loans to be purchased under this Agreement are
described in the schedule (the ‘Mortgage Loan Schedule’) attached hereto as Exhibit A. The
Mortgage Loan Schedule shall set forth for each Mortgage Loan the outstanding principal
balance . . . .” Pl. Ex. 55 (MLPA) § 2. The MLPA did not require Chase to provide “the
information necessary to service” the loans. Id. Instead, MLPA stated that the loans were
being sold with no representations or warranties on an “as is, where is, with all faults” basis.
Id. § 6.c.
Chase altered the terms of the contract several times prior to its execution,
changing the number of loans and the amount of outstanding principle balances it intended to
include in the sale, but never once changed the MLPA’s requirement that all loans be closed end
first liens. Ex. 43 (Rebuttal Report of Richard W. Payne, III, pp. 3-4); Ex. 54 (JPMC-MRS-
00003022).
RESPONSE: Disputed. Paragraph 79 is unsupported by the evidence cited. Plaintiffs’
Exhibit 43 is a putative expert report, see Pl. Ex. 43, which is inadmissible to support this
46
assertion because an expert cannot testify on a person’s state of mind. In re Rezulin., 309 F.
Supp. 2d at 547. The report is also inadmissible because expert testimony is not a proper vehicle
for introducing evidence on lay factual issues. Dibella, 2002 WL 31427362, at *4; Tourre, 950
F. Supp. 2d at 675. Plaintiffs’ Exhibit 54 is an email from Eddie Guerrero to Victor Fox, dated
February 23, 2009. See Pl. Ex. 54. It does not support the proposition that Chase altered the
MLPA “several times.”
Chase further disputes that the MLPA “require[d] that all loans be closed end first liens.”
The meaning of the MLPA is a legal, not factual, matter. The contract’s use of the term
“impaired” meant that the liens securing the loans need not be intact. In addition, Schneider
knew from his own diligence that he would be purchasing unsecured loans under the MLPA.
See Pl. Ex. 37 (JPMC-MRS-00000101) (email on November 6, 2008) (Schneider acknowledging
that loans may be “foreclosed/unsecure”); Pl. Ex. 38 (Schneider telling Chase that “5 out of 6
loans” on the November Data Tape did not have intact first liens and “only about 1000 will be
true first lien secured”); Pl. Ex. 40 (JPMC-MRS-00001028) (email on November 13, 2008) (“We
are up to $100 million in ‘Prime’ loans that are no longer secure.”); Pl. Ex. 41 (JPMC-MRS-
00003425) (email on November 19, 2008) (Schneider concluding that “about 95% of the pool is
truly unsecured”); Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133) (email on January 28, 2009) (“I
understand that the loans are non performing, both secure and unsecure loans.”); see also supra
¶ 60 (establishing Schneider’s contemporaneous knowledge that it was factually impossible for
the MLPA to convey 3,529 intact first-lien mortgages).
Schneider eventually agreed to purchase 3,529 closed end first lien mortgages for
$200,000, which he believed were “scrubbed” from the initial pool of 6,000 loans (the November
Date Tape), with an aggregate principal balance of $156,324,399.24, but he only did so based
47
upon the assurances of Chase that he would receive (and that Chase could provide) all the
information needed to service the first lien loans. Ex. 19 (ECF 262-3 (Declaration of Laurence
Schneider), ¶¶ 23-32).
RESPONSE: Disputed. Schneider knew from his own diligence that it was
mathematically impossible for the MLPA loans, which would be drawn from the November
Data Tape, to consist of 3,529 mortgages with intact first liens. Pl. Ex. 38 (Schneider telling
Chase that “5 out of 6 loans” on the November Data Tape did not have intact first liens and
“only about 1000 will be true first lien secured”); see also supra ¶ 60 (establishing Schneider’s
contemporaneous knowledge that it was impossible for the MLPA to convey 3,529 intact first-
lien mortgages).
Chase also did not assure Schneider that “he would receive (and that Chase could
provide) all the information needed to service the first-lien loans.” No written evidence
supports Plaintiffs’ assertion that Chase provided Schneider with assurances “that he would
receive (and that Chase could provide) all the information needed to service the first lien
loans.” And Schneider testified at his deposition that he did not rely on oral representations.
Pistilli Decl. Ex. 7 (Schneider Dep. 310:6) (“I wouldn’t rely on oral representation[s]” because
the “expectations are in a formal contract.”); see also supra ¶ 63. This assertion is also
contradicted by Schneider’s January 28, 2009 statement to Guerrero: “I understand that the
loans are non performing, both secure and unsecure loans and that there are no buybacks,
credits, representations, or warranties as to the information, quality, or availability as to any of
the collateral documentation whatsoever.” Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133); id.
Ex. 15 (Dkt. 311 ¶ 16 (MRS’s Response to Chase’s Statement of Facts) (emphasis added)).
Finally, it is contradicted by the MLPA itself, which stated that the loans were being sold with
48
no representations or warranties on an “as is, where is, with all faults” basis. Pl. Ex. 55
(MLPA) § 6.c.
Victor Fox executed the final MLPA on behalf of Chase on February 25, 2009,
which agreement was for the sale of 3,529 closed end first lien mortgages with an aggregate
principal balance of $156,324,399.24, and included a blank Exhibit A. Ex. 55 (ECF 292-4).
RESPONSE: Disputed in part. The meaning of the MLPA is a legal, not a factual,
matter. Paragraph 81 does not accurately describe the loans sold under the MLPA. The MLPA
was for the sale of “certain nonperforming and/or impaired closed end first lien mortgage loans
that are or have been delinquent for 180 days or more and have been or may otherwise be in
default . . . .” Pl. Ex. 55 (preamble).
Later that day, Eddie Guerrero emailed Schneider the data tape for Exhibit A,
stating “All yours.” Ex. 56 (JPMC-MRS-00369108).
Chad Paxton’s email to Guerrero regarding the completed sale to Schneider
evidences that Chase knew it was harming Schneider for its own financial benefit as Paxton
writes “this will be a KISS to the Overall department goal for [you] this month,” adding
“LUCKY LUCKY LUCKY!!!!!!! FREEEEEE MONEY!!!” Ex. 57 (JPMC-MRS-00002809).
RESPONSE: Disputed. Chase did not know “it was harming Schneider for its own
financial benefit,” nor did Chase in fact do so, and the assertion is not supported by the cited
evidence. See Pl. Ex. 57. Victor Fox testified about this email: “That’s Chad being Chad,” and
that Chad “could be a little over the top.” Pistilli Decl. Ex. 4 (Fox Dep. 129:5-14).
Liability expert Richard Payne opines that a Mortgage Loan Purchase Agreement
is used to define the obligations of both the Purchaser and the Seller of Mortgage Loans. Ex. 10
49
(Expert Report of Richard W. Payne III, p 10). It sets the expectations of both parties as to the
profile of the assets being bought and sold, and if the assets fall outside of the profile, they
should not be included in the transaction. Id. A Mortgage Loan Purchase Agreement should not
be used to allow a Seller to convey problem assets and transfer its obligations regarding
compliance with state and federal regulations, as well as the inability to service the assets, to an
unwitting Purchaser unless these deficiencies are adequately disclosed. Id.
the above-referenced statements in his expert report in this case. However, Paragraph 84 is not
supported by admissible evidence. The cited expert opinions are inadmissible because they
consist of improper legal conclusions as to the meaning and effect of the MLPA and irrelevant
extrinsic evidence, and are not supported by sufficient facts or data under Fed. R. Evid. 702. See
Marx, 550 F.2d at 509-10; Bilzerian, 926 F.2d at 1294.
Mr. Payne opined that, under the MLPA, “all [the loans] were supposed to be first
lien mortgages.” Ex. 25 (Deposition of Richard W. Payne, III, 218:14-16). Instead, Chase took
a “kitchen sink” approach to the selection of assets included in the subject transaction and then
attempted to avoid liability by relying upon the language in Sections 4 and 6c of the MLPA that
the assets were being sold with no recourse to the Seller. Id, p 11.
RESPONSE: Disputed. Paragraph 85 is not supported by admissible evidence. The
cited putative expert testimony is inadmissible because it contains (1) legal conclusions,
(2) improper factual narrative not based on competent evidence, and (3) improper opinion on the
parties’ state of mind. Marx, 550 F.2d at 509-10; In re Rezulin., 309 F. Supp. 2d at 547; Tourre,
950 F. Supp. 2d at 675. Even if it were admissible, the cited testimony does not support the
50
assertions in Paragraph 85. See Pl. Ex. 25. Under the plain terms of the MLPA, Chase was not
obligated to convey loans with intact liens.
It is clear from Chase’s own internal documentation that many of the loans in the
MLPA sale were unsaleable and fraudulent. See Ex. 29 (SA00277780) (“Don’t be sorry it was
our fault we sold it... it was clearly in the notes that its fraud.”).
RESPONSE: Disputed. The cited evidence does not establish that “many of the loans in
the MLPA were unsaleable and fraudulent,” nor that Chase’s “internal documentation” indicated
as much. Chase does not dispute that one loan, the Syed loan, appeared from internal Chase
records to have been obtained by someone posing as the borrower using a stolen ID (i.e., “True
ID Theft” fraud). Pl. Ex. 29 (SA00277782). Chase employee Launi Solomon suggested that the
same individual posed as the borrower for the Salinas loan. Id. Chase disputes that any loans
were fraudulently originated by Chase, and the cited evidence does not support that assertion.
When Solomon and asked Schneider to close the account because the Syed loan had been
fraudulently obtained, Schneider responded: “No problem.” Id. Schneider had never requested
an assignment on the Syed loan. Id.
In addition, Schneider knew that the Syed and Salinas loans were associated with fraud
several months before he signed the MLPA. See Pistilli Decl. Ex. 12 (JPMC-MRS-00021333)
(spreadsheet prepared by Schneider notating Salinas and Syed loans as “FRAUD PER EDDIE”);
supra ¶ 59 (collecting evidence).
Payne opined that , the sale ultimately included second liens, unsecured loans
because the liens were released by Defendants and, even worse, loans where the liens were
released by Defendants and then vacated, essentially rendering the loan uncollectible. Ex. 10
(Expert Report of Richard W. Payne III, p. 12).
51
RESPONSE: Disputed. Paragraph 87 is not supported by admissible evidence. Expert
testimony is not admissible to establish lay factual matters such as these. Dibella, 2002 WL
31427362, at *4; Tourre, 950 F. Supp. 2d at 675. Nor is there any basis for the assertion that a
vacation of a lien release renders a loan uncollectible.
In addition, in a January 28, 2009 email prior to MLPA execution, Schneider told Chase:
. . . I understand that the loans are non performing, both secure

and unsecure loans and that there are no buybacks, credits,
representations or warranties as to the information, quality or
availability as to any of the collateral documentation whatsoever.
. . . We know exactly what we are getting in this loan pool and have
completed our due diligence and we are willing to sign anything
that you put in front of us.
Pistilli Decl. Ex. 11 (Schneider Dep. Ex. 133) (emphasis added).
In breach of the agreement for the sale of only first lien mortgage loans, Chase
included “104 second liens, 4 third liens, 725 unsecured loans and 282 loans” that did not even
designate lien status, or for which Chase could not identify any lien status. Ex 25 (Deposition of
Richard W. Payne, III, 218:21-25).
RESPONSE: Disputed. The meaning of the MLPA is a legal, not factual, matter.
Paragraph 88 is not supported by admissible evidence. Expert testimony is not admissible
(1) for legal conclusions, (2) to opine on the ultimate issue of whether a party “breached” a
contract, and (3) to establish lay factual matters such as these. Marx, 550 F.2d at 509-10;
Bilzerian, 926 F.2d at 1294; Dibella, 2002 WL 31427362, at *4; Tourre, 950 F. Supp. 2d at
675.
PERFORMANCE UNDER THE MLPA
Upon his initial review of MLPA Exhibit A, which he received only after the deal
was finalized, Schneider discovered that essential loan information was missing, despite
52
Guerrero’s pre-execution assurances that Exhibit A would contain information previously
identified as essential to board and service the loans. See Ex. 42 (Deposition of Laurence
Schneider, 435:20-436:2).
RESPONSE: Disputed. The meaning of the MLPA is a legal, not factual, matter.
Chase disputes that “essential loan information was missing” from Exhibit A. The MLPA states
only that Chase will provide “outstanding principal balance” for each loan, which it did. Pl. Ex.
55 (MLPA) § 2; Pistilli Decl. Ex. 17 (MLPA Ex. A [JPMC-MRS-00014130], column C). The
MLPA did not require Exhibit A to include information “essential to board and service the
loans.” In the MLPA, Schneider disclaimed the existence of any representations or warranties by
Chase other than those explicitly set forth therein. Pl. Ex. 55 (MLPA) § 6.c.
Chase also disputes that Guerrero made any such “pre-execution assurances.” Plaintiffs
cite Schneider’s deposition testimony as support, but Schneider testified that he did not “recall
any oral promises” made by Guerrero, and disavowed reliance “on oral representation[s].”
Pistilli Decl. Ex. 7 (Schneider Dep. 309:17-310:7); see also id. (Schneider Dep. 310:6) (“I
wouldn’t rely on oral representation[s]” because the “expectations are in a formal contract.”).
Plaintiffs do not identify any written statement from Guerrero assuring Schneider about the type
of information Exhibit A would contain. When asked at his deposition who misled him at Chase,
Schneider responded: “I’m not really sure who within Chase provides data sheets and who
provided the contract. I don’t know if there was one person that controlled all of those different
facets, and putting the list together. So, it is possible that Mr. Guerrero didn’t know. I just don’t
know. I don't know the interworkings at Chase during that time period.” Pistilli Decl. Ex. 7
(Schneider Dep. 418:10-18).
53
Finally, Schneider had the information he needed to collect payments from borrowers.
Mortgage expert Dr. Marsha Courchane has opined that “the only information Mr. Schneider
would have needed to begin the collections process for a given loan number is (1) the borrower’s
name, (2) the property address, and (3) the balance due.” Pistilli Decl. Ex. 5 (Courchane Rep.
¶ 43).
Guerrero and other Chase employees promised to provide all the necessary but
missing information and, in fact, Chase did work with Schneider to provide some additional
information, albeit Chase never fully complied with the MLPA. Ex. 19, ¶¶ 37, 39, 41, 43, 45 &
48 (ECF 262-3 (Declaration of Laurence Schneider).
RESPONSE: Disputed in part. The meaning of the MLPA is a legal, not factual, matter.
Chase disputes that (i) there was any “necessary” information other than that explicitly set forth
in the MLPA and (ii) any information required to be provided under the MLPA was “missing.”
Supra ¶ 89. Chase fully complied with the MLPA.
Chase also disputes that Guerrero or any other Chase employee “promised” to provide
information to Schneider. Plaintiffs cite only the uncorroborated post-deposition declaration of
Laurence Schneider in support, which lacks any specifics on the purported promises. See supra
¶ 89.
It is true that, after the MLPA was executed, Chase employees provided Schneider with
the loan information he requested. See Pl. Ex. 61 (JPMC-MRS-00000578) (email from Chase
employee Launi Solomon to Schneider: “Hey Larry- you are getting the whole file . . . I asked
them to send all original docs in their original file, we no longer need them, so it will all be
yours . . . So everything you get, is everything we have”); Pistilli Decl. Ex. 18 (Solomon Decl.
¶¶ 4-6) (Solomon testifying that she provided Schneider with everything he requested); id. Ex.
54
19 (Solomon Dep. 161:12-164:9). For example, Ms. Solomon testified that she provided MRS
with all of “the documents and data they requested from Chase, including original loan files, to
the extent they existed within Chase.” Pistilli Decl. Ex. 18 (Solomon Decl. ¶ 3); see also id. Ex.
19 (Solomon Dep. 161:20-164:9). This was done pursuant to the parties’ agreement that
Schneider would request loan information on an “as needed” basis. Pistilli Decl. Ex. 18
(Solomon Decl. ¶ 4). Later, when Schneider tried to repeat the MLPA deal with Chase, he
proposed to follow this same practice of “only request[ing] files from storage as needed.” Pistilli
Decl. Ex. 20 (Schneider Dep. Ex. 139); see also infra ¶¶ 174-75.
In an email dated March 16, 2009, Schneider told Guerrero that Chase needed to
start ordering files and assignments for the MLPA loans. Ex. 58 (JPMC-MRS-00000562).
RESPONSE: Disputed. Paragraph 91 does not accurately describe the cited email.
Schneider told Guerrero that he, Schneider (not Chase) “need[s] to start ordering file and
assignments for this deal” and asked who his “contact” could be. See Pl. Ex. 58.
Guerrero told Schneider that Chase could send him 200 “1st lien files” per day.
See Ex. 59 (JPMC-MRS-00000793).
RESPONSE: Disputed. In Plaintiffs’ Exhibit 59, Guerrero says only that “200 a day is
good to go.” Pl. Ex. 59 (JPMC-MRS-00000793).
Liability Expert Richard Payne opined that a purchased mortgage loan is of no
value without the assignment and transfer of the collateral securing it. Ex. 25 (Deposition of
Richard W. Payne, III, 142:13-145:3); Ex. 10 (Expert Report of Richard W. Payne III, p. 22).
Further, without proper assignment, MRS could not effectively claim ownership. Id.
RESPONSE: Disputed. Paragraph 93 is not supported by the cited evidence. The cited
expert deposition testimony and report do not discuss these matters. The assertions are also
55
irrelevant to Plaintiffs’ Motion and inadmissible. See Marx, 550 F.2d at 509-10; Dibella, 2002
WL 31427362, at *4; Tourre, 950 F. Supp. 2d at 675.
In an email dated March 17, 2009, Schneider requested to talk to Chase IT to get
an Exhibit A that included charge off date and principal balance. Both before and after the
execution of the MLPA, Schneider informed Guerrero that his servicing software requires that
information to board the loans and to send the RESPA letters. See Ex. 59 (JPMC-MRS-
00000793).
Schneider did not tell Guerrero that his servicing software required information to send RESPA
letters. See Pl. Ex. 59 (JPMC-MRS-00000793). In addition, “RESPA letters” can be sent
without first boarding loans onto “servicing software.” As Plaintiffs’ mortgage expert Richard
Payne admits, MRS had all the information from Chase it needed to send RESPA notices:
borrower name and mailing address. Pistilli Decl. Ex. 3 (Payne Dep. 172:20-174:2). In addition,
the information required to be contained in a RESPA “Notice of Servicing Transfer” is a legal,
not factual, matter, established by regulation. See 12 C.F.R. § 1024.33 (requirements for notices
to borrowers of mortgage servicing transfers).
Schneider followed up the next day to insist on the urgency of Chase producing
an Exhibit A that would permit him to board and service the loans. See Ex. 60 (JPMC-MRS-
00000581).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion.
Paragraph 95 does not accurately describe the referenced communication. On March 18,
2009, Schneider emailed Guerrero stating only: “Please try to get me the new spreadsheet
today. Its urgent.” See Pl. Ex. 60 (JPMC-MRS-00000581). Chase disputes that the “new
56
spreadsheet” was necessary for Schneider to board or service the loans. Supra ¶¶ 89-90, 94.
In addition, Exhibit A to the MLPA had already been provided to Schneider with the required
information. See Pl. Ex. 55 (MLPA) §§ 2, 6(a); supra ¶¶ 78, 82, 89.
As Schneider attempted to service the loans, he noticed that many loans were
facing imminent foreclosure in tax sales. See Ex. 61 (JPMC-MRS-00000575). Schneider
reached out to Solomon to get assignments in order to protect his interest in these properties. Id.
Solomon responded that Guerrero had told her that there should have been a blanket assignment
for all MLPA loans, and that they were not prepared to processes all of the individual
assignments. Id.
RESPONSE: Disputed. Chase disputes that Schneider noticed “many” MLPA loans
were facing imminent foreclosure. He stated only that “some” properties were being
foreclosed due to back taxes. Pl. Ex. 61 (JPMC-MRS-00000575) (emphasis added).
Chase also disputes Plaintiffs’ characterization of Solomon’s statement. Schneider
reminded Solomon that, under the MLPA there was no blanket assignment, and asked: “Is it a
big deal to get some assignments done? What if I paid the attorneys directly for preparing
some assignments. Im only going to need about 25% of them?” Solomon responded: “No, its
not a big deal - I don’t think, I just don’t think we were prepared... cuz we thought it was taken
care of by the blanket assignment. How many are 25%, then I’ll let you know if its ok or not.
LOL we only have one attorney.” Pl. Ex. 61 (JPMC-MRS-00000576-77). Schneider then
asked “What if I prepared the assignment after I get the file and you just sign them,” to which
Guerrero agreed. Id.
Plaintiffs’ Exhibit 61 reflects the parties’ agreement that Schneider would request formal
loan assignments only for certain loans as “necessary.” Pistilli Decl. Ex. 18 (Solomon Decl. ¶ 6).
57
Consistent with this approach, a few weeks after contract execution Schneider notified Chase
that he would begin “ordering” assignments for the MLPA loans. Pl. Ex. 58. Shortly thereafter,
he requested the assignment of an individual loan. Pl. Ex. 61 (JPMC-MRS-00000577). The
parties reiterated their agreement that Schneider would prepare any assignments that he needed,
and Chase would sign them. Pl. Ex. 61 (JPMC-MRS-00000577). Schneider explained that his
intent was to “save[] Chase the time and resources required to handle the coordination of such.”
Pistill Decl. Ex. 20, at SA00267006 (Schneider Dep. Ex. 139). He also observed that Chase had
assigned about 1,500 of the approximately 3,500 MLPA loans pursuant to the parties’ agreement.
Id.
Later, in 2010, Schneider referred again to the parties’ agreement to handle assignments
on a loan-by-loan basis. In an email, Schneider explained that, as “a gesture of good will for
future business,” he and his firm had agreed to “prepare assignments” for MLPA loans “as we
need them and send them to [Chase] for execution.” Pistill Decl. Ex. 21 (JPMC-MRS-
00001530).
Despite having the ability to process assignments for large bulk sales, and despite
having done so with other investors, Chase paid outside counsel to process the assignments. Ex.
2 (Solomon Dep., 111:5-25: 112 1-11.)
RESPONSE: Disputed. Paragraph 97 is not supported by the cited evidence. In fact,
the deposition testimony is to the contrary: Solomon explained that she did not remember any
other bulk sales by Chase and was not herself involved in any. Pl. Ex. 2.
As early as 2008, Solomon, as Support Supervisor for post-sale servicing, knew
of the bulk sale of loans sold to Schneider, yet was never instructed to send assignments to MRS
following the bulk sale. Id, 19:23-25; 20:1-11, 20-22.
58
RESPONSE: Disputed in part. Paragraph 98 implies that, because Solomon was not
instructed to send assignments to MRS, no one at Chase issued any assignments. Yet Schneider
acknowledged in November 2009 that Chase had assigned about 1,500 of the approximately
3,500 MLPA loans. Pistill Decl. Ex. 20 (Schneider Dep. Ex. 139). This was pursuant to the
parties’ agreement that MRS, not Chase, would prepare any assignments for execution that it
deemed necessary for the MLPA loans. See Pistilli Decl. Ex. 18 (Solomon Decl. ¶ 6); Pl. Ex. 61
(JPMC-MRS-00000575-76); Pistilli Decl. Ex. 7 (Schneider Dep. 387:6-23); supra ¶ 96
(discussing parties’ agreement as to assignments).
Plaintiffs’ expert, Richard Payne, concedes that there was not a single instance in which
MRS requested an assignment, and Chase failed to issue one. Pistilli Decl. Ex. 3 (Payne Dep.
193:21-24).
On March 23, 2009, Schneider asked Guerrero if he knew when Chase would be
sending its RESPA, or “Goodbye” letters. Ex. 62 (JPMC-MRS-00000555). Guerrero replied
that he was “still trying to tie it down.” Id.
RESPONSE: Disputed in part. This statement is not relevant to Plaintiffs’ Motion.
Chase disputes Paragraph 99 to the extent it suggests that Chase was under any legal requirement
to send RESPA letters as of March 23, 2009. The RESPA mortgage servicing transfer
requirements are a legal, not factual, matter. See 12 C.F.R. § 1024.33 (tying transfer notice
requirement to date on which new servicer would begin accepting loan payments).
Chase sent “updated” data tapes to Schneider on March 18, 2009, December 28,
2009 and December 29, 2009. Ex. 19 (ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 37,
39, 41, 43, 45 & 48).
59
RESPONSE: Disputed in part. Chase does not dispute that its employees sent
Schneider spreadsheets with loan information on March 18, 2008, and December 28 and 29,
2009, but Chase disputes that the spreadsheets were “updated data tapes,” which is unsupported
by the cited evidence. See Pl. Ex. 19 ¶¶ 37, 39, 41, 43, 45, 48.
The December 28, 2009 data tape contained 3,693 loans. Ex. 20 (Expert Report
of Jeffrey S. Andrien, ¶ 30).
RESPONSE: Disputed. Chase disputes the characterization of the December 28, 2009
spreadsheet as a “data tape.” Paragraph 101 is not supported by admissible evidence. Expert
testimony is not admissible to establish lay factual matters, such as the contents of a spreadsheet.
Dibella, 2002 WL 31427362, at *4; Tourre, 950 F. Supp. 2d at 675.
The December 29, 2009 data tape contained 4,387 rows of data with hundreds of
duplicates. Id.
RESPONSE: Disputed. Chase disputes the characterization of the December 28, 2009
spreadsheet as a “data tape.” Paragraph 102 is not supported by admissible evidence. Expert
testimony is not admissible to establish lay factual matters, such as the contents of a spreadsheet
or the existence of “duplicates” within a spreadsheet. Dibella, 2002 WL 31427362, at *4;
Tourre, 950 F. Supp. 2d at 675.
None of the above data tapes provided the Plaintiffs with the necessary
information to board and service the loans purchased through the MLPA. Ex. 19 (ECF 262-3
(Declaration of Laurence Schneider), ¶¶ 37, 39, 41, 43, 45 & 48).
disputes that it failed to provide information sufficient to board and service the MLPA loans.
For example, Schneider testified at his deposition that MRS sent out RESPA letters on some
60
MLPA loans in March 2009. Pistilli Decl. Ex. 7 (Schneider Dep. 340:2-6). He also testified
“[w]ithin the first few months of being able to ascertain the Exhibit A in the contract, the loans
we were able to identify, those went out immediately or as quick as we could if we had to type it
into the mortgage servicing software.” Pistilli Decl. Ex. 7 (Schneider Dep. 340:9-16). In fact,
Schneider testified that he was able to collect on some of the MLPA loans. See Pistilli Decl. Ex.
7 (Schneider Dep. 347:12-349:14) (“There were times, a few times in which the borrower had
responded to the RESPA letter and said hey, yeah, we want to make payments, at which time we
worked out a deal with them; we were able to get the specific information.”).
Chase also disputes Paragraph 103 to the extent it suggests that Chase withheld any
requested loan information in its possession that was reasonably available. See Pl. Ex. 61
(JPMC-MRS-00000578) (email from Solomon to Schneider “Hey Larry- you are getting the
whole file . . . I asked them to send all original docs in their original file, we no longer need
them, so it will all be yours . . . So everything you get, is everything we have”); id. Ex. 19
(Solomon Dep. 40:8-41:3). Chase also disputes Paragraph 103 to the extent it suggests that the
MLPA required Chase to provide loan information beyond what was expressly to be included in
the Mortgage Loan Schedule attached as Exhibit A. See Pl. Ex. 55 (MLPA) § 2.
It was not until May 29, 2013 that MRS received an Exhibit A that allowed it to
determine what it actually received from Chase. Ex. 25 (Deposition of Richard W. Payne, III,
218:21-22).
RESPONSE: Disputed. Chase disputes that MRS did not “determine what it actually
received from Chase” until May 29, 2013. Rather, MRS knew what it received from Chase upon
receipt of Exhibit A on February 25, 2009. Pl. Ex. 56; see also supra ¶¶ 49, 52 (responding to
Plaintiffs’ putative facts concerning Schneider’s November Data Tape diligence). For example,
61
Schneider knew from the day the MLPA was signed that the MLPA loans lacked intact first
liens. Pistilli Decl. Ex. 7 (Schneider Dep. 435:13-436:3).
In addition, the expert opinion cited in support of Paragraph 104 is not admissible
because it was not disclosed in an expert report in compliance with Rule 26(a)(2)(B), it is not
based on sufficient facts or data under Fed. R. Evid. 702, and it impermissibly opines on lay
factual matters. Dibella, 2002 WL 31427362, at *4; Tourre, 950 F. Supp. 2d at 675.
Finally, even if the opinion were admissible, the cited deposition testimony does not
support the assertion in Paragraph 104. Payne testified only that he reviewed the May 29, 2013
loan list in connection with his report. Id. at 218:21-22.
Chase employee Launi Solomon admitted that without all the loan information,
the sale was worthless, and that MRS, as purchaser of the loans, was entitled to all original
documentation for each file. Ex. 61 (JPMC-MRS-00000575).
RESPONSE: Disputed. Chase disputes that Launi Solomon “admitted that without all
the loan information, the sale was worthless,” and the cited evidence does not support this
assertion. Pl. Ex. 61.
Chase also disputes that Launi Solomon made any determination as to the loan
information MRS was “entitled” to, and the cited evidence does not support this assertion. Pl.
Ex. 61. Solomon only told Schneider that he would receive the “whole [loan] file” with “all
original docs in their original file.” Id. She also told Schneider that he was getting “everything
we have” in terms of loan documentation. Id. The rest of the cited email exchange concerned
loan assignments, which is irrelevant to Paragraph 105.
62
Chase’s purported damages expert, Arthur P. Baines states in his report that only
1,587 of the 3,529 loans Chase sold to MRS under the MLPA were first liens. Ex. 63 (Expert
Report of Arthur P. Baines, ¶ 18).
RESPONSE: Disputed. Chase’s expert Arthur Baines assumed for purposes of his
analysis that 1,587 of the 3,529 loans Chase sold to MRS had intact first liens as of the time of
sale. Pl. Ex. 63 ¶ 18.
After the MLPA was executed, Chase repeatedly told Schneider that it would
continue to work with him and to sell him more loans. See Ex. 64 (ECF 310 (Declaration of
Laurence Schneider), ¶ 20). Schneider met with Chase representatives in Las Vegas to discuss
the issues with the incomplete MLPA data and future deals. Id.
RESPONSE: Disputed. Chase disputes that it repeatedly told Schneider that it would
continue to work with him and to sell him more loans. Plaintiffs cite only a vague and
conclusory sentence from Schneider’s declaration, which contains no specific facts. See Pl. Ex.
64 ¶ 20. Schneider does not identify when the supposed statements were made, by whom, or the
substance of the statements. In addition, Schneider’s declaration statement is not corroborated
by any evidence that such statements were made by Chase.
Chase also disputes that Schneider and Chase representatives met in Las Vegas “to
discuss the issues with the incomplete MLPA data and future deals.” That assertion is
unsupported by the cited evidence, in which Schneider states only that “we” went on a business
trip to Las Vegas, without identifying who “we” are or the purpose of the business trip.
In fact, SA&F continued to buy hundreds of loans from Chase after the execution
of the MLPA, always receiving the necessary and contracted for information to board and
service the loans. See Ex. 65 (ECF 292-1); Ex. 66 (SA00112504).
63
RESPONSE: Disputed in part. This statement is irrelevant to MRS’s Motion. The
cited evidence does not establish that S&A and 1st Fidelity “always receiv[ed] the necessary
information to board and service the loans.” Plaintiffs’ Exhibit 65 is a spreadsheet of loans
purchased by S&A and 1st Fidelity with no information about boarding and servicing the
loans. The spreadsheet was originally attached to Plaintiffs’ Fourth Amended Complaint and
has not been authenticated. Plaintiffs’ Exhibit 66 is a single note sale file and does not
represent every transaction between Chase and S&A or 1st Fidelity.
Chase admits that S&A and 1st Fidelity bought loans from Chase after the MLPA.
CHASE’S ACTIONS REGARDING LOANS IT SOLD TO PLAINTIFFS
Contrary to the terms of the MLPA, Chase attempted to sell MRS mortgage loans
that had been foreclosed on and/or already sold to third parties (i.e. – not first liens). See Ex. 67
(JPMC-MRS-00014130 (Exhibit A to MLPA, “DEFICIENCY”)); Ex. 68 (JPMC-MRS-
00369491).
RESPONSE: Disputed. The terms of the MLPA did not require Chase to provide loans
with intact liens. Nor is there any evidence that Chase sold MRS loans that had been previously
sold to others. Plaintiffs’ Exhibit 68 does not support that proposition because Eddie Guerrero
explained that the account he believes was previously sold should be removed from the list of
loans sold to MRS.
Chase has offered no evidence that it sent RESPA letters to borrowers, nor did
Chase otherwise notify borrowers that their loans had been sold to MRS. Ex. 10 (Expert Report
of Richard W. Payne III, p. 20).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Plaintiffs cite
no admissible evidence in support of this statement. Expert testimony is not admissible evidence
64
to establish lay factual matters. Dibella, 2002 WL 31427362, at *4; Tourre, 950 F. Supp. 2d at
675.
Expert Richard Payne opines that “without such transfer information, MRS could
not engage in collection activity regardless of the amount of records or information received
from Chase.” Ex. 43 (Rebuttal Report of Richard W. Payne III, p. 4).
RESPONSE: Disputed. MRS had sufficient information to engage in collection activity
on the MLPA loans, and MRS did collect payments on the MLPA loans. Plaintiffs’ damages
expert Jeffrey Andrien opines that MRS made more than $1.6 million in proceeds from the
MLPA loans. Pl. Ex. 20 (Andrien Rep.) ¶ 45. Chase’s mortgage expert Dr. Marsha Courchane
opines that “the only information Mr. Schneider would have needed to begin the collections
process for a given loan number is (1) the borrower’s name, (2) the property address, and (3) the
balance due.” Pl. Ex. 94 (Expert Report of Marsha Courchane ¶ 43); Pl. Ex. 93 (Deposition of
Marsha Courchane, 57:8-15). MRS had this information. Id.
On December 18, 2009, Launi Solomon emailed Schneider informing him of
payments due to MRS that Chase had been retaining, only to renege on that promise days later,
stating that some payments would not be coming because a code was changed and it was “not
reversible.” Ex. 69 (SA00277358); Ex. 70 (SA00277863).
RESPONSE: Disputed. Plaintiffs’ Exhibit 69 does not support Paragraph 112
because it is simply a list of payments for an account number. Chase disputes Plaintiffs’
incorrect characterization of the emails. Solomon told Schneider that some of the payments “I
told you were coming are on ‘hold’ I wanted to let you know which. They are saying they’re
not actual payments and can[’]t be sent . . . .” Pl. Ex. 70 (SA00277863) (emphasis added).
65
The email referred to corporate advances, which are not actual payments and thus were not due
to Schneider or MRS. Id.; Pistilli Decl. Ex. 19 (Solomon Dep. 44:11-19, 45:24-46:4).
Chase further continued collection efforts on loans sold to MRS, sending letters
and having collection agencies send letters to borrowers directing them to make payments to
Chase rather than MRS. Ex. 71 (JPMC-MRS-LOANFILES-00007306).
RESPONSE: Disputed. The cited exhibit is a letter from Chase to a single borrower,
but the letter does not indicate that the loan was sold to MRS. Pl. Ex. 71. In discovery, Chase
produced post-charge-off payment data that would record any payments received by Chase on
loans after they were sold to Plaintiffs. That data does not show any payments received by
Chase on the loan number referenced in Plaintiffs’ Exhibit 71. Pistilli Decl. Ex. 22 (JPMC-
MRS-00387298, Post CO Pyts tab).
Chase proceeded to conduct a short sale on a loan sold to S&A, the Lossow Loan,
and then refused to speak with Schneider or credit him any of the monies received in the sale,
despite crediting the loan it had sold to S&A on Chase’s books. See Ex. 72 (JPMC-MRS-
00016274); Ex. 73 (SA00127495).
RESPONSE: Disputed. The cited evidence does not indicate that Chase refused to
speak with Schneider or credit him any monies received related to the Lossow loan. Plaintiffs’
Exhibit 72 indicates that Omar Kassem of Chase did respond to Schneider regarding this loan.
Chase pulled back over $5 million worth of loans, citing various reasons
including fraud in the origination, and promised to exchange the pulled back loans for others of
comparable value. Ex. 74 (JPMC-MRS-00001356). Chase never provided the promised
replacement loans. Id.
66
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Plaintiffs’
Exhibit 74 does not support Paragraph 115 because it contains only an unsupported and
uncorroborated email from Schneider saying that he was “supposed to be reimbursed” for “$5M
or so in loans” that were “‘fraud’ loans.” Exhibit 74 does not indicate that Chase promised to
exchange those loans for others “of comparable value,” or that Chase never provided
replacement loans.
As part of its settlement with various agencies for misconduct in the home
mortgage market, Chase was given the opportunity to receive credits toward its settlement
obligations by releasing homeowners from their debt obligations. Ex. 75 (JPMC-MRS-
00043503); Ex. 76 (JPMC-MRS-00024325). Chase’s upper management made maximizing
these credits a very high priority for the RCV1 department. Id.
Plaintiffs do not identify what settlement it is referring to or provide a copy of that settlement.
Plaintiffs do not identify who constitutes “upper management” at Chase or how the cited
evidence shows that such managers made maximizing credits “a very high priority.” Plaintiffs’
Exhibit 75 is from March 2012, at least two years after Plaintiffs purchased the loans at issue in
this case. Similarly, Plaintiffs’ Exhibit 76 is from July 2012, also at least two years after
Plaintiffs purchased the loans at issue in this case.
Chase issued 27 debt cancellation letters and released the liens of 788 borrowers
whose loans it previously sold to MRS, S&A and/or 1st Fidelity. Ex. 77 (Exhibit 5 to the
Supplemental Responses of Plaintiffs S&A and 1st Fidelity to Defendant's Third Set of
Interrogatories).
67
RESPONSE: Disputed. Plaintiffs may not rely on their own discovery responses as
admissible evidence. See, e.g., Int’l Bus. Machines Corp. v. BGC Partners, Inc., 2013 WL
1775367, at *8 (S.D.N.Y. Apr. 25, 2013) (“[T]o the extent [a party] seeks to introduce statements
from [its] own answers to interrogatories to prove the truth of the matters they assert, these
statements are inadmissible hearsay.” (internal quotation marks omitted)); Morangelli v. Chemed
Corp., 922 F. Supp. 2d 278, 309 (E.D.N.Y. 2013) (“[A] party may not rely upon its own answers
to interrogatories as affirmative evidence.”). Moreover, neither Exhibit 77 nor the admissible
record supports this assertion. Plaintiffs do not cite actual debt cancellation letters or lien
releases for most of the loans referenced in Exhibit 77.
Chase’s third-party document preparer, NTC, did not engage in any quality
control prior to creating the lien release documents, had no personal knowledge of the contents
of the documents and did not check to determine if Defendants owned the mortgage prior to
releasing the lien. Ex. 27 (Expert Report of Zachary Bumpus, p 13). With neither Chase nor
NTC engaging in any quality control, there appears to have been no checks on how sworn
documents were verified before execution and recording. Id.
only on an expert report which is inadmissible because experts cannot opine on lay factual issues
such as “what actually happened.” Dibella, 2002 WL 31427362, at *4 (experts cannot opine on
lay factual issues like “what actually happened, what the parties said, and what they thought”);
Tourre, 950 F. Supp. 2d at 675 (similar). In addition, Paragraph 124 is not a statement of fact, as
Plaintiffs state only that it “appears” that there were no checks on how sworn documents were
verified. Nor is there any record evidence that Chase failed to engage in any quality control prior
to releasing liens. Mr. Bumpus testified that he did not know all the quality control mechanisms
68
Chase or NTC had in place, and he was not of the opinion that Chase’s procedures were
inadequately designed to prevent loans that had been sold from subsequently being lien released.
Pistilli Decl. Ex. 23 (Bumpus Dep. 137:15-139:4, 145:18-147:20, 161:12-16). Mr. Bumpus
testified that he did not dispute that Chase had a system in place to ensure that it owned liens
prior to releasing them. Id. at 144:14-18.
Chase did not send the original recorded documents to the borrower. See Ex. 78
(Erika Lance Deposition, 59:8-13).
testimony does not establish that Chase did not send original recorded documents to any
borrowers. Pl. Ex. 78 (Erika Lance Deposition, 59:8-13). Nor is there any basis to the
suggestion that original recorded documents are supposed to be sent to borrowers.
In order to maintain relationships with the municipalities, Chase did not send
letters to municipalities and avoided alerting impacted municipalities of lien releases due to the
negative impact that lien releases have on blighted and abandoned properties. Ex. 73 (JPMC-
MRS-00155219 at JPMC-MRS-00155227-00155231).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Neither
Plaintiffs’ Exhibit 73 nor JPMC-MRS-00155219 at JPMC-MRS-00155227-00155231 (Plaintiffs’
Exhibit 79) establishes the assertions in Paragraph 120. Exhibit 73 is wholly unrelated to
Paragraph 120. Exhibit 79 states that “[t]he municipalities impacted by the Lien Release
decision will likely take issue with our determination to release the liens on this number of
properties, causing potential reputational risk. Note that a number of municipalities have
banking relationships with the firm.” Pl. Ex. 79 (JPMC-MRS-00155227). The exhibit also
states that “[c]ommunications will be drafted to address questions around the lien release process
69
within the scope of this project. A separate project will be established to address blight by
[p]artnering with communities to limit any negative repercussions.” Id.
In its Answer to the Fourth Amended Complaint, Chase admits that it sent debt
forgiveness letters to debtors whose loans it sold and were then owned by 1st Fidelity or S&A.
See Ex. 80 (Answer to the Fourth Amended Complaint, ECF 295, ¶¶ 192-193).
RESPONSE: Chase admits that it mistakenly sent debt forgiveness letters to 23
borrowers whose loans were sold to 1st Fidelity or S&A. See infra ¶ 180.
In its Answer to the Fourth Amended Complaint, Chase also admits that it
released liens on loans sold to and owned by MRS, S&A and/or 1st Fidelity. Id., ¶¶ 271-273.
Chase’s execution of lien releases on loans owned by MRS represents at least a
17% error rate for asserting ownership where Defendants cannot assert ownership. Ex. 27
(Expert Report of Zachary Bumpus, p. 20).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Neither
Plaintiffs nor their experts explain how they calculated this supposed “error rate.” Pl. Ex. 27 at
20.
Schneider was informed by Jeffery McGrane that Chase had released liens on
loans owned by Schneider’s entities. See Ex. 81 (McGrane Deposition, Ex. 30). McGrane told
him “Don’t worry your [sic] still the 1st one they thought about and said ‘shit’... As a reminder
your [sic] about to get fucked the most and left on the corner.” Id.
RESPONSE: Disputed in part. Chase disputes that Plaintiffs’ Exhibit 81 demonstrates
that Chase had released liens on loans owned by Schneider’s entities as Exhibit 81 does not
discuss lien releases.
70
Defendants engaged in consumer relief initiatives on loans previously sold to the
Plaintiffs. Ex. 20 (Expert Report of Jeffrey S. Andrien, ¶ 9). The principal balance on these
loans totaled approximately $16.18 million, although for loans with principal balances totaling
$10.14 million the consumer relief actions were rescinded or vacated. Id. To the extent that
these loans were used to satisfy the consumer relief requirements, under the terms of the various
settlement agreements the Defendants entered into with the U.S. Government (the “Lender
Settlements”), the Defendants benefitted by their wrongdoing by at least $6.04 million. Id.
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion, as the
Magistrate Judge ruled in denying Plaintiffs’ motion to compel seeking discovery related to
Chase’s settlements with the U.S. Government. See Pistilli Decl. Ex. 24 (Dkt. 184 at 4); id. Ex.
25 (Dkt. 111 at 11-12). Plaintiffs cite no competent evidence to support the allegations in
Paragraph 125. The single paragraph cited from the expert report cites no facts and is
inadmissible. Pl. Ex. 20 ¶ 9. Plaintiffs cannot identify a single loan they owned (i) on which
Chase allegedly “engaged in consumer relief initiatives” or (ii) that was “used to satisfy the
consumer relief requirements.” See id. Mr. Andrien acknowledges that he has no evidence that
Chase “engaged in consumer relief initiatives on loans previously sold” to Plaintiffs. See id. He
admitted that he “lack[s] the information to determine which individuals loans were submitted to
the Trustee for credit against the consumer relief requirements of the Lender Settlements.” Pl.
Ex. 20 p. 49 n.188. He nonetheless “assumed” with no evidence “that all loans affected from
March 1, 2012 onward were used to satisfy these commitments.” Id. Likewise, for the HAMP
incentive payments, Mr. Andrien has no evidence that Chase did not comply with HAMP, saying
only that “if the Plaintiffs allegations are found to be true, the Defendants would have been
ineligible to participate in the MHA program and receive HAMP incentives.” Pl. Ex. 20 ¶ 51.
71
Schneider also filed a False Claims Act suit against Chase, claiming that Chase improperly
received credits under the Lender Settlements and improperly sought HAMP incentive payments.
The D.C. Circuit affirmed the dismissal of the Lender Settlement claims with prejudice. United
States ex rel. Schneider v. JPMorgan Chase Bank, Nat’l Ass’n, 878 F.3d 309, 312 (D.C. Cir.
2017). The government thereafter moved, under 31 U.S.C. § 3730(c)(2)(A), to dismiss
Schneider’s HAMP claims with prejudice, explaining that “the United States believes that
[Schneider]’s specific HAMP Claims lack substantial merit.” Br. of United States at 5, United
States ex rel. Schneider v. Chase, Dkt. 135, No. 14-cv-01047 (D.D.C. Nov. 13, 2018) (emphasis
added). The district court subsequently dismissed Schneider’s HAMP claims with prejudice.
Schneider, Dkt. 138, No. 14-1047 (D.D.C. March 6, 2019), appeal filed, Dkt. 141, No. 14-1047
(D.D.C. March 6, 2019).
Chase received in excess of $557 million from the Government through MHS,
HAMP, NMS and RMBS by issuing debt forgiveness letters and lien releases to borrowers
whose loans it sold to MRS, S&A and/or 1st Fidelity. Id.
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion and
unsupported by any competent evidence. See supra ¶ 125.
SA&F has been unable to service loans since borrowers now claim said loans
have been satisfied or released. Ex. 82 (SA00236339); Ex. 83 (JPMC-MRS-00017505).
RESPONSE: Disputed. The cited evidence does not support Paragraph 127. The cited
evidence refers only to a single loan, and does not refer to that loan having been satisfied or
released.
SA&F have been forced to defend against accusations that their attempts to
service the loans they purchased are unlawful due to acts taken by Chase. Id.
72
RESPONSE: Disputed. The cited evidence does not support Paragraph 128. The cited
evidence refers only to a single loan, and does not indicate that Plaintiffs were required to
“defend against accusations that their attempts to service” that loan “are unlawful due to acts
taken by Chase.”
S&A acquired a loan secured by a second mortgage from Chase on January 14,
2010 with a properly recorded assignment. Ex. 84 (SA00190157 at SA00190189 and
SA00190341).
RESPONSE: Disputed in part. Chase does not dispute that S&A acquired a loan from
Chase on or around January 14, 2010 with a recorded assignment. Plaintiffs’ Exhibit 84 does not
specify whether this loan was secured by a second mortgage.
Schneider worked with the borrower of the January 14, 2010 mortgage (“Preis”)
concerning payment arrangements and the borrower entered into an agreement with S&A. Id at
SA00190234.
RESPONSE: Disputed in part. Chase does not dispute that borrower Maureen Preis
entered a stipulation agreement with S&A. The cited stipulation agreement does not indicate
that Schneider worked with Preis concerning payment arrangements, and in fact does not
reference Schneider.
In September of 2012, Preis received correspondence from Real Time Resolutions
(“Real Time”), stating that Chase had transferred the right to collect loan payments to Real Time.
Id at SA00190232.
Preis sought clarification with Chase and Real Time. Id at SA00190209 and
SA00190213.
73
RESPONSE: Disputed in part. Chase does not dispute that Chase and Real Time
responded to inquiries from Preis and that copies of responses appear at the cited pages of
Plaintiffs’ Exhibit 84.
Chase informed Preis in writing that it owned the loan and that Real Time was the
agent authorized to service the loan. Id at SA00190214.
RESPONSE: Disputed in part. Chase does not dispute that it informed Preis in writing
that Real Time was the authorized agent for her loan. The cited evidence does not indicate that
Chase informed Preis that it owned the loan, but only that Chase was the servicer of the loan.
See Pl. Ex. 84 (SA00190214).
Preis retained counsel and threatened legal action against S&A. Id at
SA00190303.
RESPONSE: Disputed in part. Chase does not dispute that Preis’s counsel contacted
S&A and stated that, “If l do not receive confirmation of receipt of this letter and the requested
information [a breakdown of payments and disbursement on Preis’s account] within 30 days,
additional legal action may be taken by my client.” Pl. Ex. 84 (SA00190303). Preis’s counsel
subsequently contacted S&A and “request[ed] to continue the settlement agreement” such that
“[m]y client can continue the payments” to S&A. Pl. Ex. 84 (SA00190224-25). The collections
data Plaintiffs produced indicates that Preis subsequently paid S&A over $13,000, Pistilli Decl.
Ex. 26 (Plaintiffs’ Loan Performance Data). This is nearly three times the $4500 price S&A paid
Chase to purchase the loan. Pl. Ex. 84 (SA00190189).
Preis’s counsel received direction from Real Time that the Preis should cease all
payments to S&A and demanded that all payments made to date be returned. Id at SA00190224-
SA00190225.
74
RESPONSE: Disputed in part. Chase does not dispute that Preis’s counsel stated that he
was directed by Real Time “to have my client cease payments to SA Capital.” Pl. Ex. 84, at
SA00190224. The cited evidence does not indicate that Real Time “demanded that all payments
made to date be returned.” In Plaintiffs’ Exhibit 84, Preis’s counsel also “request[ed] to continue
the settlement agreement” such that “[m]y client can continue the payments” to S&A. Pl. Ex. 84,
at SA190224-25. The collections data Plaintiffs produced indicates that Preis subsequently paid
S&A over $13,000, Pistilli Decl. Ex. 26 (Plaintiffs’ Loan Performance Data). This is nearly
three times the $4500 price S&A paid Chase to purchase the loan. Pl. Ex. 84 (SA00190189).
In June of 2008, Chase submitted a lender’s insurance claim for $264,980.08 on
the Kevorkyants loan, which Chase sold to MRS under the MLPA. Ex. 85 (JPMC-MRS-
00010573); Ex. 87 (JPMC-MRS-00005516).
RESPONSE: Disputed in part. Chase does not dispute that it submitted a lender’s
insurance claim in or around June 2008 on a loan to borrower Vahe Kevorkyants and that this
loan was included in the MLPA sale to MRS. The cited evidence does not indicate that the
insurance claim was for $264,980.08. See Pl. Ex. 85; Pl. Ex 87.
An internal Chase email in October of 2008 suggests that Chase may have
withdrawn its insurance claim. Ex. 86 (JPMC-MRS-LOANFILES-00410720).
However, in January of 2010, Chase confirmed that its insurance claim had been
approved and the funds had been paid. Ex. 87 (JPMC-MRS-00005516).
RESPONSE: Disputed. Plaintiffs’ Exhibit 87 indicates that “in order to get [lenders’
insurance] funds” the mortgage would need to be assigned to the insurance carrier, and this
assignment would need to be completed by the purchaser (MRS), not Chase. Pl. Ex. 87 (JPMC-
75
MRS-00005516). The cited evidence does not indicate that the mortgage was assigned to the
insurance carrier or that insurance funds had been paid. Id.
Schneider never received those funds from Chase, despite repeated inquiries and
Chase’s acknowledgment that the funds rightfully belonged to Schneider. Ex. 88 (JPMC-MRS-
00009688); Ex. 87 (JPMC-MRS-00005516).
RESPONSE: Disputed in part. The cited evidence does not indicate that Chase received
any insurance funds on the Kevorkyants loan. In discovery, Chase produced to Plaintiffs data
that would record any payments received by Chase on any of the MLPA loans after they were
sold to Plaintiffs. For the Kevorkyants loan, the data does not show any post-sale payments
received by Chase. Pistilli Decl. Ex. 22 (JPMC-MRS-00387298, Post CO Pyts tab). Plaintiffs’
cited evidence indicates that Schneider inquired about the insurance claim on the Kevorykants
loan only once, on December 15, 2010, to which Chase employee Launi Solomon responded that
she “d[id] not see any notes about anything or anyone” related to the insurance claim. Pl. Ex. 88.
The cited evidence does not indicate that Mr. Schneider responded to Ms. Solomon or inquired
further.
Chase represented during the course of this litigation that it would “ring fence”
Plaintiffs’ loans, and take no actions of any kind toward them. Ex. 89 (ECF 202).
does not dispute that it represented during the course of this litigation that it would create a “ring
fence” around loans that had been identified in the litigation as loans Plaintiffs purchased. Pl.
Ex. 89. Chase did not represent that it would “take no actions of any kind” toward the loans in
the ring fence. See id. Chase vice president Michael Zeeb stated that the ring fence “should be
sufficient to ensure that (1) no lien releases are processed for loans [in the ring fence] (without
76
approval of counsel), and (2) no payments are accepted by Chase for any loans [in the ring
fence].” Pl. Ex. 89 ¶ 5. Zeeb stated that he was “not aware of any reasonable, additional steps
that could be taken by Chase to materially increase the likelihood that payments will not be
accepted and lien releases will not be processed for these accounts.” Id.
Correspondence on July 23, 2018 and the related documents show that, as
recently as July 2, 2018, Chase assigned and recorded a mortgage issued to Betty Brooks to S&A
without contacting and/or otherwise notifying Schneider, MRS or S&A. See Ex. 90 (Letter from
Roberto Di Marco to Christian Pistilli dated July 23, 2018). Such mortgage was actually sold to
MRS under the MLPA. Id.
RESPONSE: Disputed in part. Chase does not dispute that it sold the Betty Brooks loan
to MRS or that it executed an assignment of the Brooks loan to MRS’s affiliate, S&A. Plaintiffs
do not cite any competent evidence in support of the assertion that Chase recorded the
assignment without contacting and/or otherwise notifying Schneider, MRS or S&A. There is no
evidence that Plaintiffs were harmed by the assignment of the Brooks loan to S&A rather than its
affiliate MRS. Pistilli Decl. Ex. 23 (Bumpus Dep. 132:14-22).
Chase made the Brooks’ assignment after it was informed that there was a dispute
over the loan with the City of El Centro regarding a foreclosure payoff, in an effort to avoid
litigation expenses and force Plaintiffs to incur same. Id.
RESPONSE: Disputed. The cited document does not support this assertion, and there is
no evidence that Chase assigned the loan to Plaintiffs in an effort to avoid litigation expenses.
On July 20, 2018, Chase notified Plaintiffs that a quiet title action had been
initiated by a tax sale purchaser regarding a mortgage issued to Stephen McCarthy. Ex. 91
(Letter from Christian Pistilli to Roberto Di Marco dated July 20, 2018). In that letter, counsel
77
for Chase misrepresented the express terms of the MLPA claiming that Plaintiffs had to request
assignments for loans MRS purchased, and had never requested an assignment for the McCarthy
loan. See id.; Ex. 90 (Letter from Roberto Di Marco to Christian Pistilli dated July 23, 2018).
does not dispute that it notified Plaintiffs, through counsel, that a quiet title action had been
initiated by a tax sale purchaser regarding a mortgage issued to Stephen McCarthy. See Pl. Ex.
91. Paragraph 143 does not identify any “express terms of the MLPA” that Chase allegedly
misrepresented in its letter, and there are none. See Pl. Ex. 55 (MLPA).
CHASE’S ACTIONS PREVENT NORMAL SERVICING OF MLPA LOANS
Because of the inaccuracies and inadequacy of Exhibit A, MRS was forced to
invest an enormous amount of personnel time to research borrower identities, property locations,
and occupancy status. Ex. 92 (SA00468717). Nevertheless, MRS, despite its best efforts, was
unable to service a majority of the loans it received from Chase. Id.
RESPONSE: Disputed. Plaintiffs’ Exhibit 92 is a chart labeled “Transaction Detail by
Account,” with no information about its provenance or purpose. See Pl. Ex. 92. The chart does
not establish any “inaccuracies” or “inadequacy” with respect to Exhibit A, nor does it establish
that MRS was “forced” to do anything. Under the MLPA, Chase was required only to provide
an Exhibit A that “set forth for each Mortgage Loan the outstanding principal balance.” Pl. Ex.
55 (MLPA) § 2.
Chase disputes that MRS was not able “to service a majority of the loans,” and the
assertion is not supported by the cited evidence. Pl. Ex. 92. Chase also disputes Paragraph 144
to the extent it implies that MRS wanted or intended to service all the loans it purchased under
the MLPA. Rather, Schneider told Chase that he would request assignments for only “about
78
25%” of the loans. Pl. Ex. 61 (JPMC-MRS-00000577); see also Pl. Ex. 41 (JPMC-MRS-
00003425) (Schneider indicating that his goal in purchasing the loans was to find so-called
“cherries” within the otherwise worthless November Data Tape loans). Consistent with this
plan, Schneider extracted payments from certain of the MLPA loans. Plaintiffs’ damages expert
Jeffrey Andrien concluded that MRS made more than $1.6 million in proceeds from the MLPA
loans. Pl. Ex. 20 (Andrien Rep.) ¶ 45. Schneider also testified that he was able to collect on the
MLPA loans. Pistilli Decl. Ex. 7 (Schneider Dep. 347:12-349:14).
The original claimed total value of Exhibit A did not note the outstanding
principal balance of each loan. Ex. 67 (JPMC-MRS-00014130). Instead, Exhibit A referenced
the amount Chase “charged off,” which comingled the outstanding principal balance, any pre
charge off interest, post charge off interest, late fees, property tax advances, and customary
default servicing fees, a figure significantly higher than the outstanding loan balance, which was
the only amount from which MRS stood to extract any value. Id.
RESPONSE: Disputed. Plaintiffs’ Exhibit 67 has not been authenticated and material
facts such as whether it was sent to Schneider, when it was sent, who sent it, or what document it
was attached to have not been established. See Pl. Ex. 67 (JPMC-MRS-00014130). Exhibit 67
says nothing about the “total value of Exhibit A,” nor does it show what the data fields represent.
In addition, it does not refer to “the amount Chase charged off,” or what any such amount may or
may not have included. Chase further disputes that “the amount Chase charged off” is “higher
than the outstanding loan balance,” because upon default (which occurred for all loans in Exhibit
A), the entire amount of indebtedness on the account becomes due and recoverable. See infra
¶ 171.
79
The loan balances in Exhibit A total $156,324,613.80, slightly more than the amount
required under the MLPA. Pistilli Decl. Ex. 17 (MLPA Ex. A [JPMC-MRS-00014130]).
Chase’s purported expert, Dr. Marsha J. Courchane (“Courchane”), states in her
deposition that charge off balance and outstanding principal balance are meaningfully different
terms. Ex. 93 (Deposition of Marsha J. Courchane, 33:13-35:3).
RESPONSE: Disputed. Nowhere in the cited testimony does Dr. Courchane state or
otherwise suggest that “charge off balance and outstanding principal balance are meaningfully
different.” Pl. Ex. 93. Rather, Dr. Courchane testified that the meaning of “charge-off balance”
“depends upon regulatory guidance” and how the balance is calculated “for accounting
purposes.” Id. at 34:2-14. Moreover, Dr. Courchane’s testimony establishes that there is no
single definition of “charge-off balance.” Id. at 34-35. Finally, Chase disputes Paragraph 146 to
the extent it suggests that Dr. Courchane opined on whether any balance in Exhibit A to the
MLPA was a “charge off balance.”
In all note sales to S&A and 1st Fidelity, prior to and after the signing of the
MLPA, the above breakdown is clearly defined in the View Summary screen which was
provided to S&A and 1st Fidelity, evidencing that such information is ascertainable if Chase
tried. Ex. 2 (Deposition of Launi Solomon, 101:11-25,102:1-18, 150:20-25:151:1-2); Ex. 19
(ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 11, 14-18); Ex. 23 (Deposition of Caroline
Iacino, 68:9-69:5).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion, as the MLPA
defines the extent of Chase’s obligations to provide loan-related information. None of the cited
evidence purports to describe what may or may not have happened in “all note sales to S&A and
1st Fidelity, prior to and after the signing of the MLPA.” See Pl. Ex. 2 (101:11-25, 102:1-18,
80
150:20-25, 151:1-2); Pl. Ex. 19 ¶¶ 11, 14-18; Ex. 23 (68:9-69:5). Nor does this testimony
describe any “breakdown” that is “clearly defined in the View Summary,” or whether “such
information is ascertainable if Chase tried.” Id.
Apart from the few payments forwarded to MRS by Chase in the months
following the execution of the MLPA, and other minimal funds received from borrowers, MRS
was unable to fully service any loans purchased under the MLPA. See Ex. 42 (Deposition of
Laurence Schneider, 342:21-343:11).
RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion; the question
is whether Chase complied with the terms of the MLPA, not whether Plaintiffs were able to
“fully service” the MLPA loans. Chase disputes that MRS was unable to “fully service,” or
“service,” the MLPA loans, and the cited evidence does not support this assertion. Paragraph
148 does not state what “fully service” means. Paragraph 148 is contradicted by evidence that
MRS earned proceeds from the MLPA loans and reached modification agreements with
borrowers. Supra ¶ 144 (citing Plaintiffs’ expert testimony that MRS made $1.6 million in
proceeds on the MLPA loans and Schneider’s deposition testimony that he worked out modified
payment terms with MLPA loan borrowers).
Courchane argues in her report that MRS received sufficient information to
pursue collections. Ex. 94 (Expert Report of Marsha J. Courchane, ¶¶ 41-45.)
RESPONSE: Disputed in part as to the characterization that Dr. Courchane “argue[d]”
this point in her report. Dr. Courchane opines that Plaintiffs had sufficient records to obtain
payments from borrowers on the MLPA loans. See Pl. Ex. 94.
Courchane later stated in her deposition that MRS had enough information to
begin to collect on the loans. Ex. 93 (Deposition of Marsha J. Courchane, 57:8-58:11).
81
RESPONSE: Disputed in part. In the cited testimony, Dr. Courchane agrees with the
conclusion in her report “that Mr. Schneider did not, in fact, need all of the information listed
above [from Schneider’s declaration and deposition] in order to begin to collect on the MLPA
bulk loans.” Pl. Ex. 93 (Courchane Dep. 57:8-15); see Pl. Ex. 94 (Courchane Rep.) ¶¶ 41-42.
Plaintiffs’ expert, Richard Payne, opines that MRS was not able to properly
service the loans with only the information provided “because they wouldn’t know what the
principal balance was, they wouldn’t know what the payments due were, they wouldn’t know if
they have – if they have funds to pay real estate taxes or funds to pay hazard insurance, wouldn’t
know how to properly amortize the loan, just to name several divisions.” Ex. 25 (Deposition of
Richard W. Payne, III, 213: 9-214:5).
RESPONSE: Disputed in part. Chase does not dispute that Richard W. Payne, III
offered the above-quoted opinions. But those opinions are irrelevant to Plaintiffs’ Motion; the
question is whether Chase complied with the terms of the MLPA, not whether Plaintiffs were
“able to properly service the loans with only the information provided.”
In addition, the only evidence cited in support of this statement is expert testimony. That
testimony is not admissible because it was not disclosed in an expert report in compliance with
Rule 26(a)(2)(B), and it is not based on sufficient facts or data or a reliable method under Fed. R.
Evid. 702.
Even if it were admissible, the cited testimony does not discuss what MRS was or was
not able to do. See Pl. Ex. 25 at 213:9-214:5. Rather, the testimony discusses what “a servicer”
is or is not able to do as a general proposition. Id. In addition, Dr. Courchane opined that MRS
had sufficient information to pursue collections on the MLPA loans. See Pl. Ex. 94 ¶ 43.
CHASE CEASES PERFORMANCE UNDER THE MLPA
82
Based upon Chase’s continued assurances that it would comply with the MLPA,
and Chase’s various rationales for its delay in provided necessary information, Schneider did not
consider litigation, or consider Chase in breach of the agreement until Omar Kassem sent him an
email on February 26, 2013 stating “I’ve been asked to step aside as it doesn’t appear we’re
going to get things resolved as we originally intended per the original agreement.” Ex. 95
(JPMC-MRS-00002079); see Ex. 64 (ECF 310 (Declaration of Laurence Schneider), ¶ 24).
Omar Kassem followed up on March 1, 2013 stating that “quite honestly [he wasn’t] sure what
to expect from [Chase’s legal team] regarding [Schneider’s] concerns regarding outstanding
documents... .” Ex. 95 (JPMC-MRS-00002079).
RESPONSE: Disputed. Chase disputes that it made “continued assurances that it
would comply with the MLPA” or that it expressed “various rationales for its delay,” and the
cited evidence does not support these assertions. Nor does the cited evidence show “that
Schneider did not consider litigation, or consider Chase in breach of the agreement and/or
suspect that he had been defrauded until Omar Kassem sent him an email on March 1, 2013.”
The only evidence cited is (1) Plaintiffs’ Exhibit 95, which is a 2013 email exchange
between Schneider and Chase employee Omar Kassem and (2) a self-serving and uncorroborated
declaration raising new information in response to Chase’s July 20, 2018 motion for summary
judgment (Dkt. 301). Neither establishes the assertions in Paragraph 152. Schneider’s
conclusory sentence in his declaration is an improper attempt to contradict his deposition
testimony and documentary evidence. Pl. Ex. 64 ¶ 24. Schneider testified at deposition that he
believed, as of February 25, 2009, that Chase had breached the MLPA and had committed fraud.
See Pl. Ex. 39 (Schneider Dep. 435:6-436:3); see also Pistilli Decl. Ex. 7 (Schneider Dep.
417:16-22).
83
In addition, Exhibit 95 is irrelevant to these assertions because it does not pertain to the
MLPA. Rather, the email exchange deals with loans sold to 1st Fidelity and S&A Capital for
which Chase sent debt forgiveness letters by mistake. See Pl. Ex. 95; Pistilli Decl. Ex. 27 (Dkt.
293 ¶¶ 192, 193); id. Ex. 7 (Schneider Dep. 503:18-505:8) (Schneider acknowledging that
Exhibit 95 addresses debt forgiveness letters on loans sold to 1st Fidelity and S&A Capital).
After mistakenly sending debt forgiveness letters to certain 1st Fidelity and S&A borrowers in
late 2012, Chase offered to remedy its mistake by either sending retraction letters or buying back
the affected loans. See, e.g., Pistilli Decl. Ex. 27 (Dkt. 293 ¶ 194).
But on February 21, 2013, Schneider sent Kassem an e-mail complaining that (i) “Chase
did not send out formal retraction/apology letters to any 1st Fidelity borrowers,” and (ii) he was
missing documentation on an additional 1st Fidelity loan purchased on October 29, 2010. Pl. Ex.
95 (JPMC-MRS-00002081) (emphasis added). Schneider announced that he was therefore
refusing to send Chase certain documents it had requested on the 1st Fidelity loans that it had
bought back, and was turning the matter over to his counsel, “who will be contacting Chase
counsel directly.” Id. Schneider’s email specifically refers to agreements “dated December 5th,
2012,” which is not the date of the MLPA with MRS. Id. Kassem responded a few days later—
in the e-mail selectively quoted in Plaintiffs’ Paragraph 152—by stating that he had been asked
to “step aside” so that Chase counsel could address the matter with Schneider’s counsel. Id. at
JPMC-MRS-00002079. Schneider was the one who proposed that “this needs to get wrapped up
attorney to attorney,” and he told Kassem “[p]lease don’t take it personally, sticky situations like
this are exactly what attorneys are for.” Pl. Ex. 95 (JPMC-MRS-00002081).
To the extent Paragraph 152 suggests that debt forgiveness letters were sent for MRS
loans, Chase disputes that assertion as wholly unsupported by the record evidence. See Pistilli
84
Decl. Ex. 35 (7/11/18 Supp. Resp. of MRS to Third Set of Interrogatories, Ex. 4) (identifying
loans owned by S&A and 1st Fidelity as receiving debt forgiveness letters, but failing to identify
any loans purchased by MRS as receiving debt forgiveness letters); id. Ex. 43 (JPMC-MRS-
00017467) and Ex. 44 (JPMC-MRS-00017471) (copies of letters sent to S&A and 1st Fidelity
about debt forgiveness letters, but not MRS); see also id. Ex. 27 (Dkt. 293 ¶ 193 (“On December
5th, 2012, Chase notified the Schneider Entities that it had incorrectly sent debt forgiveness
letters to 23 debtors where the loan was owned by 1st Fidelity or S&A and not Chase.”).
Solomon admits in her May 29, 2013 email to Schneider that Chase did not
supply the information he needed to service the loans stating “You bought the loans, shoot the
least that can happen is you are given the information you need to do something with them... .”
Ex. 90 (SA00277670). She then sent Schneider another list. Id.
RESPONSE: Disputed in part. The cited evidence, Plaintiffs’ Exhibit 90, is a letter
dated July 23, 2018 from Plaintiffs’ counsel to Chase’s counsel and does not support these
putative facts. See Pl. Ex. 90. To the extent Plaintiffs intended to cite their Exhibit 96, nothing
in that email is an admission from Solomon that “Chase did not supply the information
[Schneider] needed to service the loans.” See Pl. Ex. 96. Chase admits that Ms. Solomon
responded to Schneider’s request by voluntarily sending him available loan information.
The May 29, 2013 Loan List provided by the Defendants indicated that 1,599 of
the 2,714 records reported on this List were first liens. Ex. 10 (Expert Report of Richard W.
Payne III, p. 12). The remaining loans consisted of 104 second liens, 4 third liens, 725 loans
labeled as “0,” or unsecured, and 282 loans not identified (i.e., blank). Id.
only expert testimony in support of this statement, see Pl. Ex. 10, but that testimony is
85
inadmissible to establish lay factual matters. Dibella, 2002 WL 31427362, at *4; Tourre, 950 F.
Supp. 2d at 675.
In August 2013, Solomon told Schneider that she got in trouble for trying to help
him and that she could no longer talk to him. Ex. 97 (SA00277590).
RESPONSE: Disputed in part. Chase disputes that Ms. Solomon got “in trouble” for
“trying to help” Schneider. Rather, Ms. Solomon was informed that she should not communicate
with Schneider directly after he threatened litigation against Chase. Pl. Ex. 97 (SA00277590);
see also Pistilli Decl. Ex. 19 (Solomon Dep. 161:12-19 (answering “Yes” to question, “So he
was still permitted to request support but that the request needed to go through the legal
department?”)); Pl. Ex. 95 (JPMC-MRS-0002081) (Solomon explaining to Schneider that he
should direct communications to “Legal”). In response to Schneider’s threat of litigation in
February 2013 and his request that the parties communicate through counsel, Chase employees
were instructed to direct communications from Schneider to Chase’s legal department. See Pl.
Ex. 95 (JPMC-MRS-00002081) (email from Schneider to Kassem stating “this needs to get
wrapped up attorney to attorney” and “[i]f you can provide me with a point person in the legal
department, we can probably get things moving even faster”).
PLAINTIFFS HAVE BEEN DAMAGED BY CHASE
As a result of Chase taking action on loans sold to MRS under the MLPA,
Plaintiffs have had to defend numerous law suits, respond to inquiries from Attorneys General
and expend hundreds of employee man hours managing relationships with disgruntled
borrowers. Ex. 98 (ECF 191(Declaration of Laurence Schneider), ¶ 13).
RESPONSE: Disputed. Chase disputes that, “as a result” of Chase’s alleged conduct,
“Plaintiffs have had to defend numerous law suits, respond to inquiries from Attorneys General
86
and expend hundreds of employee man hours managing relationships with disgruntled
borrowers” as unsupported by competent evidence. See Pl. Ex. 98. Plaintiffs cite only the self-
serving declaration of Schneider; they do not provide any specifics or any evidence of the
supposed lawsuits, regulatory inquiries or “employee man hours.” Moreover, Chase earlier
described how various allegations described in Schneider’s earlier declaration, Pl. Ex. 98, were
successfully resolved. See Pistilli Decl. Ex. 28 (Dkt. 199 at 7-9 (Chase’s brief in opposition to
Plaintiffs’ motion for preliminary injunction) (citing Dkt. 191-5, Dkt. 191-6)).
In fact, Plaintiffs have abandoned their usual business of mortgage investment in
order to manage the difficulties brought about by Chase’s breach of the MLPA transaction. See
Ex. 64 (ECF 310 (Declaration of Laurence Schneider), ¶ 33).
RESPONSE: Disputed. Chase disputes this statement as it is supported only by a
conclusory statement in Schneider’s declaration without any specific evidence. See Pl. Ex. 64
(ECF 310 (Declaration of Laurence Schneider), ¶ 33). The declaration does not explain why
S&A and 1st Fidelity would need to stop their businesses to deal with issues concerning a
separate corporate entity. See id.
Plaintiffs’ liability expert, Jeffrey Andrien, opines that Chase’s failure to complete
its obligations under the MLPA had a direct economic impact on MRS in excess of $31 Million.
Ex. 20 (Expert Report of Jeffrey S. Andrien, ¶ 9).
RESPONSE: This is not a statement of fact, as MRS acknowledges that it is an opinion.
See Pl. Ex. 20 ¶ 9. Chase does not dispute that Mr. Andrien reached that opinion but it does
dispute both the substance of that opinion and Andrien’s competence to offer it.
87
Mr. Andrien goes on to opine that MRS has incurred damages as a result of
Defendants’ misrepresentations far beyond the $200,000 purchase price for the mortgage loans.
Ex. 20 (Expert Report of Jeffrey S. Andrien, ¶ 9).
RESPONSE: Disputed. The single paragraph in Andrien’s expert report does not
establish that “MRS has incurred damages as a result of Defendants’ misrepresentations.” That
paragraph does not identify any misrepresentations relied on by MRS, or which
misrepresentations allegedly caused damage to MRS. See Pl. Ex. 20 ¶ 9. Nor does Andrien’s
report attempt to quantify any harm to MRS resulting from any Chase conduct other than the
alleged failure to deliver only loans with intact first liens. Pl. Ex. 20 ¶ 37 (calculating proceeds
based on comparable portfolio of “first lien mortgages”). Chase’s damages expert, Mr. Arthur
Baines, has opined that it is unlikely that MRS would have collected more than the $1.6 million
it has already collected on the MLPA loan pool if all of the loans had intact first liens. Pl. Ex. 63
¶ 113 (Baines Rep.).
Similarly, both S&A and 1st Fidelity have suffered damages as a result of Chase
issuing lien releases and debt forgiveness letters to borrowers, which actions have caused
borrowers to stop paying Plaintiffs, sue Plaintiffs and/or otherwise embroil Plaintiffs in costly
litigation, all of which have and continue to cause Plaintiffs significant monetary damages. Ex.
98 (ECF 191(Declaration of Laurence Schneider), ¶ 13).
RESPONSE: Disputed. Chase disputes that “as a result” of Chase’s alleged conduct,
“borrowers . . . stop[ped] paying Plaintiffs, sue[d] Plaintiffs and/or otherwise embroil[ed]
Plaintiffs in costly litigation” as unsupported by competent evidence. See Pl. Ex. 98. Plaintiffs’
Exhibit 98 offers no specifics of any alleged monetary damages. See Pl. Ex. 98. S&A and 1st
Fidelity’s supplemental discovery responses did not identify any compensable damages they
88
suffered in connection with loans sold to them. See Pistilli Decl. Ex. 29 (7/11/18 Supp. Resp. of
S&A and 1st Fidelity to Third Set of Interrog., Resps. 7); see also supra ¶ 156. While Plaintiffs’
responses identified legal fees incurred in connection with this lawsuit, neither the MLPA nor
any other contract between the parties contains a fee-shifting provision, and so Plaintiffs are not
entitled to recover their fees and costs in this action. Plaintiffs’ only damages expert, Mr.
Andrien, admitted that he did not quantify any damages incurred by S&A or 1st Fidelity. Pistilli
Decl. Ex. 30 (Andrien Dep. 111:15-18).
89
DEFENDANTS’ COUNTERSTATEMENT OF
ADDITIONAL MATERIAL FACTS
Pursuant to Local Civil Rule 56.1(b), in addition to the genuine issues of fact above,
Chase sets forth the following additional facts that preclude summary judgment.
Laurence Schneider is the primary owner of the three Plaintiff entities in this
action: MRS, S&A, and 1st Fidelity. Pistilli Decl. Ex. 7 (Schneider Dep. 34:11-35:6, 39:12-
18).2
PLAINTIFFS’ DISCOVERY OMISSIONS
At the conclusion of fact discovery, Chase served Interrogatories asking Plaintiffs
to identify: (a) the MLPA loans that Plaintiffs contend were non-conforming, including any loans
that were not owned by Chase at the time of sale, Pistilli Decl. Ex. 31 (Third Set of
Interrogatories to MRS, Req. Nos. 5-6); (b) any payments that Plaintiffs contend Chase
improperly retained, id. (Third Set of Interrogatories to MRS, Req. No. 7); id. Ex. 32 (Third Set
of Interrogatories to S&A and 1st Fidelity, Req. No. 6); (c) the loans on which Plaintiffs contend
that Chase improperly sent debt forgiveness letters or released liens, and any occasion when
Plaintiffs contend that a borrower’s payments to Plaintiffs ceased or were interrupted by a debt
forgiveness letter or lien release, Pistilli Decl. Ex. 31 (Third Set of Interrog. to MRS, Req. Nos.
1, 3-4); id. Ex. 32 (Third Set of Interrog. to S&A and 1st Fidelity, Req. Nos. 2, 4-5); and (d) any
expenses or costs that Plaintiffs contend they incurred as a result of Chase’s alleged wrongdoing
and that Plaintiffs claim as damages, Pistilli Decl. Ex. 31 (Third Set of Interrog. to MRS, Req.
No. 8); id. Ex. 32 (Third Set of Interrog. to S&A and 1st Fidelity, Req. No. 7).
2
Exhibit references are to the exhibits attached to the Pistilli Declaration filed herewith.
90
Plaintiffs did not provide substantive answers to these Interrogatories. Pistilli
Decl. Ex. 33 (9/20/17 Responses to Third Sets of Interrog. to MRS); id. Ex. 34 (9/20/17
Responses to Third Set of Interrog. to S&A and 1st Fidelity). Plaintiffs objected in part that their
responses were premature before expert discovery. Id. Chase moved to compel. See Dkt. 256.
The Magistrate Judge ordered Plaintiffs to provide the requested information when they served
their expert reports. See Dkt. 267 at 2-3.
In their supplemental answers to these Interrogatories after the close of fact
discovery, Plaintiffs responded as follows:
a. When asked to “[i]dentify each MLPA Loan that You contend was not owned by
Chase at the time of sale,” Plaintiffs stated that “it is impossible to answer this
question,” and failed to identify any loans. Pistilli Decl. Ex. 35 (7/11/18 Supp.
Resp. of MRS to Third Set of Interrogatories, Resp. No. 6).
b. When asked to “[i]dentify . . . each instance in which You contend that Chase
improperly accepted and retained a payment,” Plaintiffs stated that “Plaintiff [sic]
is not now in possession of such information.” Pistilli Decl. Ex. 35 (7/11/18
Supp. Resp. of MRS to Third Set of Interrog., Resp. No. 7); id. Ex. 29 (7/11/18
Supp. Resp. of S&A and 1st Fidelity to Third Set of Interrog., Resp. No. 6)
(emphasis added).
c. When asked to identify each “Loan with respect to which You contend that Chase
sent the borrower a Debt Forgiveness Letter,” Plaintiffs stated that they “attached
a list of loans for which they are presently aware that Defendant sent a Debt
Forgiveness Letter (identified as ‘DFL’ on the list) (Exhibit 4); which includes
DFLs previously disclosed within Attachment VIII of Mr. Andrien’s Report
91
(Exhibit 2). Exhibit 4 identifies 23 loans on the ‘Discovery List’ where a DFL
was issued by Defendant.” Pistilli Decl. Ex. 35 (7/11/18 Supp. Resp. of MRS to
Third Set of Interrog., Resp. No. 3). None of the 23 loans identified as “DFL” on
the Exhibit 4 list are listed as loans sold to MRS. See id. Ex. 4.
d. When asked to identify “each instance in which You contend that a borrower’s
payments to You ceased or were interrupted by (i) the borrower receiving a Debt
Forgiveness Letter from Chase or (ii) Chase’s recordation of a Lien Release with
respect to the loan,” Plaintiffs stated that they “cannot ascertain with any certainly
why payments received from borrowers stopped and or were interrupted as a
result of either: (i) the borrower receiving a Debt Forgiveness Letter from Chase
or (ii) Chase’s recordation of a Lien Release with respect to the loan because such
information could only be determined if: a) Chase provided such information to
the Plaintiff, which Chase has indicated they cannot do and or b) the borrower
informed Plaintiff of that fact. That being said, Plaintiff is aware that this
happened from time to time, but is unable to specifically identify any particular
loan number at this time.” Pistilli Decl. Ex. 29 (7/11/18 Supp. Resp. of S&A and
1st Fidelity to Third Set of Interrog., Resp. No. 5) (emphasis added); id. Ex. 35
(7/11/18 Supp. Resp. of MRS to Third Set of Interrog., Resp. No. 4) (emphasis
added).
e. When asked to identify “any expenses or costs, including but not limited to legal
fees or extra staff or overhead costs, that You contend You incurred as a result of
Chase’s alleged wrongdoing and that You claim as damages in this case,”
Plaintiffs stated that “the Report of Mr. Andrien outlines costs anticipated and or
92
incurred by MRS as a result of the MLPA Transaction, as well as costs associated
with Defendant’s breach (Exhibit 2, p. 30-36 (Table 5)). Mr. Andrien’s Report
also details the expenses anticipated and incurred, and discusses that certain
expenses were in fact transferred to and or absorbed by S&A or 1st Fidelity
(Exhibit 2). Also included in Mr. Andrien’s Report as Attachment VI A and VI B
are the Profit and Loss Statements for S&A and 1st Fidelity for the Fiscal Years
2009 – 2018YTD, which outline expenses incurred (Exhibit 2). Plaintiff has also
previously disclosed legal expenses (SA00449478-503). That disclosure was for
expenses through July 2017 for Tantillo Law PLLC and October 2016 for Walker
& Di Marco, P.C., and totaled $1,891,459. Obviously, further legal expenses
have been incurred since July 2017 and October 2016 respectively, including
costs associates with the preparation of the Expert Reports exchanged on July 9,
2018, for which Plaintiff has yet to receive an invoice,” Pistilli Decl. Ex. 35
(7/11/18 Supp. Resp. of MRS to Third Set of Interrog., Resp. No. 8); id. Ex. 29
(7/11/18 Supp. Resp. of S&A and 1st Fidelity to Third Set of Interrog., Resp. No.
7). Plaintiffs failed to identify any expense or cost Plaintiffs incurred as a result
of Chase’s alleged wrongdoing other than MRS’s asserted lost-profit damages
quantified by their damages expert, Mr. Andrien, and attorneys’ fees and costs for
this action. See id.
MRS AND ITS PERFORMANCE UNDER THE MLPA
Prior to the MLPA, Schneider repeatedly pressed Chase to close the deal. Pistilli
Decl. Ex. 13 (JPMC-MRS-00000483); id. Ex. 14 (JPMC-MRS-00000487-88), id. Ex. 7
(Schneider Dep. 236:9-10).
93
Schneider created a new entity, MRS, to complete the MLPA purchase, “[d]ue to
the deteriorated underlying assets within the pool.” Pistilli Decl. Ex. 36 (Schneider Dep. Ex.
131).
Chase made only three warranties in the MLPA: (1) that a prior “data tape” (the
November Data Tape) provided by Chase was true and correct in material respects; (2) that
Chase was the sole owner of the MLPA loans; and (3) that the MLPA loans complied in material
respects with certain laws. Pl Ex. 55 (MLPA) § 6(a).
The loans in the MLPA pool were taken from Chase’s database of defaulted loans
for which Chase had determined there was zero foreclosure value. Pistilli Decl. Ex. 5
(Courchane Rep. ¶¶ 13, 14); id. Ex. 37 (Boyle Dep. 36:5-15, 63:20-21); id. Ex. 4 (Fox Dep.
22:10-13, 29:5-14); id. Ex. 3 (Payne Dep. 119:7-10).
The reference to “impaired” in the MLPA meant that the loans’ liens may no
longer be intact. Pistilli Decl. Ex. 38 (Courchane Dep. 265:6-22, 372:17-373:6, 374:2-9). For
example, mortgage expert Dr. Marsha Courchane opines that the reference to “impaired” in the
MLPA “could certainly indicate that the first lien is not intact.” Id. at 265:6–16.
Mr. Payne testified that MLPA Section 7, entitled “Expenses,” does not “create
independent obligations as to the contents of the servicing file”; it merely specifies “[a]s between
Chase and MRS who bears the delivery costs.” Pistilli Decl. Ex. 3 (Payne Dep. 185:22-186:12).
Underlying agreements with borrowers for MLPA loans provided that, upon
default, the full amount of indebtedness became due, and interest would be charged on the full
amount until satisfaction. Pistilli Decl. Ex. 39 (JPMC-MRS-LOANFILES-00270891); id. Ex. 40
(JPMC-MRS-LOANFILES-00193308); see also Pistilli Decl. Ex. 17 (MLPA Ex. A [JPMC-
MRS-00014130]).
94
The same day that the MLPA was signed—February 25, 2009—Chase sent
Schneider the Exhibit A, which listed loans with balances adding up to $156,324,613.80. Pistilli
Decl. Ex. 7 (Schneider Dep. 312:16-18, 314:7-20); id. Ex. 17 (MLPA Ex. A [JPMC-MRS-
00014130]); id. Ex. 41 (Andrien Rep. ¶ 28).
For years after the MLPA, Schneider did not complain that the liens on the MLPA
loans were no longer intact. Pistilli Decl. Ex. 42 (SA00256961-71). This is despite the fact that
Schneider knew from the day the MLPA was signed that the MLPA loans lacked intact first
liens. Supra ¶ 104.
Instead, in November 2009, Schneider approached Chase to do another deal
“similar” to the MLPA transaction, in which Schneider would purchase a “new 1st lien pool.”
Pistilli Decl. Ex. 42 (SA00256969). As with the MLPA, Schneider offered to do “due diligence”
on a bulk loan pool, after which he would present his offer to buy “whatever loans are in the
pool, whether secure or unsecure under the same terms of ‘no buybacks for any reason
whatsoever’ and ‘any loan needed to be pulled back by Chase agreed to for any reason
whatsoever.’” Id. Schneider assured Chase that he was “prepared to make this next transaction
as seamless as the prior deal.” Id. He also insisted that the deal could “essentially be closed in a
day,” that all he needed from Chase was a “spreadsheet generated with the name, address, loan
number and loan amount,” and that the parties could follow the same practice from the MLPA of
“only request[ing] [loan] files from storage as needed.” Id.
Over the course of several months, Schneider continued to press for another
MLPA-like deal, explaining that, as before, his firm could “help Chase determine which loans
were still secured and which were gone.” Pistilli Decl. Ex. 42 (SA00256962). As late as March
2010, Schneider urged Chase to let him “help identify” the “secure vs. unsecure status” of loans
95
it proposed to sell, explaining: “You won’t be able to beat the price of $0.00 per file to provide
you with a data tape and backup proof.” Id. Chase did not accept his offer.
No borrowers on loans sold to MRS received any debt forgiveness letters. Chase
served an Interrogatory asking MRS to “[i]dentify each MLPA Loan with respect to which You
contend that Chase sent the borrower a Debt Forgiveness Letter.” Pistilli Decl. Ex. 31 (Third Set
of Interrog. to MRS, Req. No. 3). MRS identified no MRS loans in response. See Pistilli Ex. 35
(7/11/18 Supp. Resp. of MRS to Third Set of Interrog., Resp. No. 3 & Ex. 4); see also supra
¶ 164(c).
Chase forwarded payments to MRS if Chase received payments after MRS had
purchased the loans, and there never came a point in time when that practice ceased. Pistilli
Decl. Ex. 19 (Solomon Dep. 43:20-44:2).
S&A AND 1ST FIDELITY
Between approximately 2012 and 2014, in connection with a number of projects
related to compliance with new regulations and a settlement with the federal government, Chase
sent tens of thousands of debt forgiveness letters and released tens of thousands of liens on
charged-off loans. Pistilli Decl. Ex. 43 (JPMC-MRS-00017467); id. Ex. 44 JPMC-MRS-
00017471; id. Ex. 45 (Schneider PI Decl. (Dkt. 191) ¶¶ 40, 47-48).
Chase later determined that it had inadvertently sent 23 debt forgiveness letters to
borrowers whose loans Chase had sold to S&A or 1st Fidelity in the course of sending the much
larger number of debt forgiveness letters. Pistilli Decl. Ex. 43 (JPMC-MRS-00017467); id. Ex.
44 JPMC-MRS-00017471).
Upon discovering this error, Chase offered to buy back the affected loans at a
50% premium over the purchase price and/or to send a retraction letter to the affected borrowers.
96
Pistilli Decl. Ex. 43 (JPMC-MRS-00017467); id. Ex. 44 (JPMC-MRS-00017471); id. Ex. 1
(Kassem Dep. 77:11-14).
Pursuant to that offer, S&A and 1st Fidelity agreed that Chase would repurchase
16 of the affected loans and send retractions on the remainder. Id.; Pistilli Decl. Ex. 46
(SA00256831); see also, e.g., Pistilli Decl. Ex. 47 (JPMC-MRS-LOANFILES-00572977; JPMC-
MRS-LOANFILES-00557817; JPMC-MRS-LOANFILES-00170151; JPMC-MRS-
LOANFILES-00152007; JPMC-MRS-LOANFILES-00098760).
For three of the repurchases, Chase agreed to pay the full remaining balance on
the loans—a total of approximately $428,000. Pistilli Decl. Ex. 46 (SA00256831). This
$428,000 was more than 15 times the price for which the loans were purchased. See id.; Pistilli
Decl. Ex. 48 (JPMC-MRS-00007725-26). Chase manager Omar Kassem testified that no other
investors whose borrowers received mistaken debt forgiveness letters asked for the full face
value “probably because they purchased [the loans] for pennies on the dollar and full UPB
maybe to them didn’t seem reasonable.” Pistilli Decl. Ex. 1 (Kassem Dep. 131:24-132:14).
Chase determined that it inadvertently released the liens on certain loans it had
sold to Plaintiffs in the course of releasing a much larger number of liens to comply with new
regulations and a settlement with the government. See Pistilli Decl. Ex. 45 (Schneider PI Decl.
(Dkt. 191) ¶ 48); id. Ex. 27 (Dkt. 293 ¶ 34); id. Ex. 49 (Adamovic Dep. 190:1-15; 209:9-17).
Upon discovering this error, Chase made efforts “as quickly as possible[ to] pull
the brake and try to stop these lien releases from occurring and to rescind any that [it] could.”
Pistilli Decl. Ex. 49 (Adamovic Dep. 171:13-172:5).
Plaintiffs have recognized that Chase worked to vacate or rescind lien releases on
loans that Chase had sold to them. Pistilli Decl. Ex. 35 (7/11/18 Supp. Resp. of MRS to Third
97
Set of Interrog., Resp. No. 2); id. Ex. 29 (7/11/18 Supp. Resp. of S&A and 1st Fidelity to Third
Set of Interrog., Resp. No. 3); id. Ex. 41 (Andrien Rep. Attachment VIII (listing “YES” under
“Rescissions” for most MRS loans on list of purported lien releases)).
Plaintiffs’ liability expert, Mr. Payne, testified that he would not opine that Chase
included loans in the MLPA transaction that it did not own. Pistilli Decl. Ex. 3 (Payne Dep.
135:9-22). Payne did not identify any evidence in support of any such opinion, and based on his
review of the record, Payne testified that the loan ownership question “was unclear.” Id.
Plaintiffs have collected substantial amounts on the loans they opted to keep after
Chase mistakenly sent the borrowers debt forgiveness letters. Pistilli Decl. Ex. 26 (Plaintiffs’
Loan Performance Data). On one of those loans, 1st Fidelity collected around $32,000 from the
borrowers, Vito and Nicolette Derosa, after the forgiveness letter was sent in September 2012.
Id. (Plaintiffs’ Loan Performance Data). 1st Fidelity paid $5,000 to purchase that loan. Id. Ex.
50 (JPMC-MRS-LOANFILES-00434106). On another of the loans, 1st Fidelity collected
around $21,000 from the borrowers, George and Theresa Lawwill, after the September 2012
forgiveness letter. Id. Ex. 26 (Plaintiffs’ Loan Performance Data). 1st Fidelity paid $3,000 to
purchase that loan. Id. Ex. 48 (JPMC-MRS-00007725).
Although Plaintiffs claim that borrower Maureen Preis received a collections
letter from Real Time Resolutions sent on Chase’s behalf after her loan was sold to S&A, supra
¶¶ 130-135, in the data from Chase’s system of record produced in discovery, there are no
payments to Chase for Preis’s loan number after the loan was sold to S&A in January 2010.
Pistilli Decl. Ex. 22 (JPMC-MRS-00387298, Post CO Pyts tab).
98
PLAINTIFFS’ LACK OF DAMAGES EVIDENCE
Plaintiffs’ damages expert, Jeffrey Andrien, did not provide any estimate of
compensatory damages for the claims of S&A or 1st Fidelity. Pistilli Decl. Ex. 41 (Andrien
Rep.); id. Ex. 51 (Andrien Rebuttal Rep.). Mr. Andrien testified that he is not opining on
damages suffered by Plaintiffs S&A or 1st Fidelity. Id. Ex. 30 (Andrien Dep. 111:15-18).
Plaintiffs recognized in their interrogatory responses that lien releases were
recorded “without notice to the homeowners thus impacted.” Pistilli Decl. Ex. 35 (7/11/18 Supp.
Resp. of MRS to Third Set of Interrog., Resp. No. 2); id. Ex. 29 (7/11/18 Supp. Resp. of S&A
and 1st Fidelity to Third Set of Interrog., Resp. No. 3).
Plaintiffs’ experts did not quantify any damages attributable specifically to lien
releases. Pistilli Decl. Ex. 30 (Andrien Dep. 110:4-22, 113:13-16); id. Ex. 3 (Payne Dep. 129:4-
131:8).
Plaintiffs have not offered any evidence that Chase claimed or received any
settlement credits under national mortgage settlements or incentive payments under HAMP for
loans owned by the Plaintiffs in this case.
99
Dated: Washington, DC Respectfully submitted,

April 19, 2019
By: s/ Robert D. Wick
Robert D. Wick
Christian J. Pistilli
Laura Brookover
Philip J. Levitz
Jessica Merry Samuels
One CityCenter, 850 Tenth Street, NW
Washington, DC 20001-4956
Telephone: (202) 662-6000
Facsimile: (202) 662-6291
rwick@cov.com
cpistilli@cov.com
lbrookover@cov.com
plevitz@cov.com
jsamuels@cov.com
Michael C. Nicholson
The New York Times Building
620 Eighth Avenue
New York, New York 10018-1405
Telephone: (212) 841-1000
mcnicholson@cov.com
Attorneys for Defendants
100

MRS V JPMC Doc 385 Response Re (351) Rule 56.1, Statement, Apr. 19, 2019

Uploaded by

Copyright:

Available Formats

You might also like

MRS V JPMC Doc 385 Response Re (351) Rule 56.1, Statement, Apr. 19, 2019

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MRS V JPMC Doc 385 Response Re (351) Rule 56.1, Statement, Apr. 19, 2019

Uploaded by

Copyright:

Available Formats

Case 1:15-cv-00293-LTS-RWL Document 385 Filed 04/19/19 Page 1 of 101

UNITED STATES DISTRICT COURT

DEFENDANTS’ RESPONSES TO PLAINTIFFS’ STATEMENT OF FACTS

Attorneys for Defendants

(collectively, “Chase”) submit the following Responses to Plaintiffs’ “Statement of Undisputed

Plaintiffs’ Breach of Contract Claims” (“Motion”).

The Recovery Department and RCV1

Operations” or “Recovery.” Ex. 1 (JPMC-MRS-00319625).1

RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. The cited

titled “Home Lending.”

Recovery Operations is “responsible for the collection of post-charge off

deficiency balances.” Id.

This statement is irrelevant to Plaintiffs’ Motion.

“Recovery One” (hereinafter “RCV1”). Id.

This statement is irrelevant to Plaintiffs’ Motion.

RCV1 is a High Risk ranked mainframe-based application supported by HL

1. This statement is irrelevant to Plaintiffs’ Motion.

RCV1 is an electronic database of loans, including first lien walks. Ex. 2

(Deposition of Launi Solomon, 21:22-22:6).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. Chase

Solomon, 22:5-12); Ex. 4 (Deposition of Omar Kassem, 47:1-9).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. Chase

not receive regular billing, accounting or record updates. Id.

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.

kind of thing.” Id. (Boyle Dep. 19:22-24).

house and third-party collectors. Ex. 1 (JPMC-MRS-00319625).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.

Recovery One. Pl. Ex. 5 (Boyle Dep. 25:5-6).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.

loans was allegedly required and not provided.

On August 1, 2011, an internal Audit Report by Chase of its Recovery

data integrity, risk management and access administration.” Ex. 1 (JPMC-MRS-00319625).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.

RCV1 is riddled with data integrity issues. Ex. 7 (JPMC-MRS-00053749).

RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. The cited

issues.” Pl. Ex. 7 (JPMC-MRS-00053749).

defined procedures when doing so. Ex. 8 (JPMC-MRS-LOANFILES-00072408).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. Chase

liens on property.” Ex. 9 (JPMC-MRS-00113944).

RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. Chase

The procedure to be utilized by the Recovery Department was defined within

(JPMC-MRS-00113944); Ex. 8 (JPMC-MRS-LOANFILES-00072408).

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion.

to release its legal right to the loan. Ex. 9 (JPMC-MRS-00113944).

RESPONSE: Disputed. This statement is irrelevant to Plaintiffs’ Motion. The cited

document does not support the proposition.

According to the “Note Sale Procedure,” Recovery representatives could only

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion. Chase

Liability Expert Richard W. Payne, III, opines:

MRS-00005122 (“street address is not in RCV1”)); Ex. 12 (JPMC-MRS-00005207 (“those

00005122). Plaintiffs’ Exhibit 12 identifies those sources as “FORTRACS-HE,” “FORTRACS-

the information, quality or availability as to any of the collateral documentation whatsoever.”).

principal balance” amount for each loan. Pl. Ex. 55 (MLPA) § 2.

In September 2008, Chase entered into a Purchase and Assumption Agreement

RESPONSE: This statement is irrelevant to Plaintiffs’ Motion. Chase does not

agreement for a full and complete statement of its terms.

RESPONSE: Disputed in part. This statement is irrelevant to Plaintiffs’ Motion, in part