United States District Court, S.D. Indiana, Indianapolis Division
SUZANNE E. CANNON, and JEFFREY A. CANNON, JR., Plaintiffs,
UNITED GUARANTY RESIDENTIAL INSURANCE CO., KOCH LAW FIRM, P.C., and JASON MCAULTY, Defendants.
ENTRY ON DEFENDANTS' MOTIONS FOR SUMMARY
RICHARD L. YOUNG, JUDGE United State District Court
action, Plaintiffs Suzanne E. Cannon and Jeffrey A. Cannon,
Jr. (“Plaintiffs”) allege in Counts I, III and
IV, that United Guaranty Residential Insurance Co.
(“United”) violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq., and in Counts II and V, violated the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. 1681
et seq. United has moved for summary judgment as to
each Count. In addition, Plaintiffs assert in Count IV that
the Koch Law Firm, P.C. (“Koch”) and Jason
McAuley (collectively, “Koch Defendants”)
violated the FDCPA. The Koch Defendants have moved for
summary judgment on Count IV.
reasons set forth below, United's Motion for Summary
Judgment is GRANTED; and the Koch Defendants' Motion for
Summary Judgment is GRANTED.
motion is for summary judgment brought by the Defendants, the
court must take the facts and all reasonable inferences that
arise therefrom in the light most favorable to Plaintiffs.
Estate of Cole v. Fromm, 94 F.3d 254, 257 (7th Cir.
is a private mortgage insurance company that provides an
array of insurance products and services, including
first-lien mortgage guaranty insurance. (Affidavit of Dale
Priddy (“Priddy Aff.”) ¶ 4). It also insures
lenders against the increased risk of borrower default
related to mortgages with high loan-to-value ratios. When a
borrower on an insured loan fails to make their mortgage
payments, the lender files an insurance claim with United
and, if allowed, United then issues a claim payment covering
the lender's loss. Upon making a claim payment, United
attempts to recoup its payment to the lender pursuant to the
terms of the insurance policy. United does not furnish
information to credit reporting agencies. (Id.).
insured Plaintiffs' mortgage under United Guarantee
Certificate # 12059506 (the “Policy”).
(Id. ¶ 9). On or about April 1, 2011, Wells
Fargo instituted foreclosure proceedings against Plaintiffs
in the Hamilton Superior Court, under Cause Number
29D03-11-8-MF-008642. Wells Fargo obtained summary judgment
in its favor on July 26, 2012, and a Decree of Foreclosure
was entered. The mortgaged property was sold at a
Sheriff's sale on November 8, 2012.
the sale of the property, on September 4, 2013, Wells Fargo
submitted a claim under the Policy; United paid $25, 488.77
to Wells Fargo in accordance with the Policy. (Priddy Aff.
to the Policy, United was entitled to recoup its payments
(a) (i) The Company shall be subrogated, as set forth in
Section 6.2(a)(ii) to the Insured's rights of recovery
against the Borrower and any other Person relating to the
Loan or to the Property, unless such subrogation rights are
prohibited as a matter of law or pursuant to Section
6.2(b)(i) the Company has determined not to pursue such
rights. The Insured shall execute and deliver at the request
of the Company such instruments and papers and undertake such
actions as may be necessary to transfer, assign and secure
such rights. The Insured shall refrain from any action,
either before or after payment of a Loss hereunder, that
shall prejudice such rights.
(Id. ¶¶ 9, 11; Id. Ex. A at 30).
However, pursuant to Indiana law, United was only permitted
to collect the deficiency balance from the debtor, which in
this case was $21, 161.79. United then sought to recoup the
$21, 161.79 from Plaintiffs. (Priddy Aff. ¶ 11).
on October 14, 2013, United sent a letter to Plaintiffs
regarding the amount they owed and demanded that Plaintiffs
reimburse United $21, 161.79 that it had paid under the
Policy. (Id. ¶ 12). The letter stated, in part,
This letter concerns the deficiency remaining on the
above-referenced loan. As the private mortgage insurer of the
loan, United Guaranty Residential Insurance Company
(“United Guaranty”) has paid a claim on behalf of
its insured, FHLMC, and has been assigned and/or is fully
subrogated to the rights of its insured to assert claims
against you as a result of your default in payment on the
loan and the resulting deficiency after the foreclosure sale.
(Filing No. 42-2 at 2). Plaintiffs sent United a letter on
October 16, 2013, that sought validation of the debt;
however, United has nothing in its records indicating that it
received such a letter, (Priddy ...