Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Pa.: Chase cleared of fraudulent conduct surrounding foreclosure, (Aug 19, 2014)

By Greg Hammond, J.D.

Chase Home Finance LLC did not engage in deceptive or fraudulent practices that resulted in the foreclosure of a consumer’s residential property. In granting Chase summary judgment over the homeowner’s Pennsylvania Unfair Trade Practices Consumer Protection Law (UTPCPL) claims, the federal district court in Philadelphia determined that the consumer’s “pattern of defaults,” not Chase’s alleged misrepresentations, led to foreclosure (Tanenbaum v. Chase Home Finance LLC, August 18, 2014, McHugh, G.).

Background. Susan and Alan Tannenbaum refinanced their mortgage with Chase in 2001, and signed a “Waiver of Escrow Account.” However, in 2007, they failed to pay taxes for their property. Chase paid the delinquent taxes in 2009, after sending multiple letters to the Tannenbaums requesting payment. An escrow account was consequently established for the homeowners, to collect and pay for the Tannenbaums’ future and past-due tax payments. The mortgage payments accordingly increased from $1,958.48 to $4,349.27. Thereafter, the Tannenbaums fell behind on payments, and insufficient payments were rejected by Chase. At one point, Susan Tannenbaum submitted a check for $8,127.68 to bring her up to date on payments, pursuant to an alleged telephone conversation with a Chase representative, but the payment fell short. After failing to pay property taxes for two years and having requested forbearance and missing mortgage payments, Chase rejected the Tannenbaums’ payments, as they failed to bring their account current. Instead, Chase filed for foreclosure. The Tannenbaums brought suit, alleging—in part—violations of Pennsylvania’s UTPCPL, and Chase moved for summary judgment.

UTPCPL claims. The Tannenbaums argued that Chase engaged in two practices that violated the UTPCPL: (1) practices causing likelihood of confusion or misunderstanding as to affiliation, connection, or association with another, and (2) “other” fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding.

First, the court determined that there were no facts in the record that suggested Chase engaged in conduct that could lead to confusion regarding Chase’s affiliation, connection, or association with another. Second, even if there was a factual dispute about whether Chase engaged in “other fraudulent or deceptive conduct” regarding the $8,127.68 payment, it determined that the alleged misrepresentation did not cause the foreclosure. Rather, the court concluded that it was the Tannenbaums’ “repeated pattern of defaults” that occurred before and after the $8, 127.68 payment that caused foreclosure proceedings. Consequently, Chase’s motion for summary judgment was granted.

The case number is 13-4132.

Attorneys: Michael H. Gaier (Shaffer & Gaier) for Susan Tannenbaum. Brett L. Messinger (Duane Morris LLP) for Chase Home Finance LLC.

Companies: Chase Home Finance LLC

Cases: StateUnfairTradePractices PennsylvaniaNews