(15-00293 402) Response

Case 1:15-cv-00293-LTS-RWL Document 402 Filed 05/10/19 Page 1 of 72
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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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. :
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DEFENDANTS’ RESPONSES TO PLAINTIFFS’

COUNTERSTATEMENT OF FACTS
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

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’ “Counterstatement of Facts” in support of their
opposition to Chase’s Motion for Partial Summary Judgment on Plaintiffs’ Contract and
Damages Claims (“Motion”). Chase’s responses below are provided solely for purposes of its
Motion and are not concessions for any other purposes or concessions that any of Plaintiffs’
purportedly material facts are relevant to its claims against Chase or to Chase’s defenses, or are
material to Chase’s pending Motion. Chase’s failure to dispute any statement below is not an
admission that may be used against it in other proceedings or at any later stages of this
proceeding.
Business Dealings Between Plaintiffs S&A and 1st Fidelity and Defendants
1. Laurence Schneider (“Schneider”) is a principal in Plaintiffs S&A, MRS and 1st
Fidelity. Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 1).
RESPONSE: Undisputed.
2. Plaintiffs’ business strategy is to purchase distressed mortgage loans (loans in
default) from financial institutions, such as the Defendants, at highly discounted prices. Pl. Ex.
10 (Expert Report of Jeffrey S. Andrien, ¶11). Once they acquire loans, the Plaintiffs typically
contact the borrowers directly to arrange for 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.
2
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.
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. 10 ¶ 11.1 In addition, to the extent
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
Chase Responses to Plaintiffs’ Statement of Facts (Dkt. 385) ¶ 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.
3. Starting in March 2004, Plaintiffs SA&F purchased mortgage loans from Chase
under two separate Master Mortgage Loan Sale Agreements (“MMLSA”). See Id at ¶ 17-18, Pl.
Ex. 21 (JPMC-MRS-00007926), Pl. Ex. 22 (JPMC-MRS-00002034).
Plaintiffs’ Exhibit 10 states that 1st Fidelity did not start purchasing mortgages until May 2009
1
Chase refers to exhibits attached to the Declaration of Roberto L. DiMarco (Dkt. 389), as
“Plaintiffs’ Exhibit” or “Pl. Ex.”
3
and that S&A Capital started in 2003. Pl. Ex. 10 ¶¶ 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., and those same dates appear in Plaintiffs’ Exhibits 21 and 22, respectively, see Pl. Ex. 21; Pl.
Ex. 22.
4. S&A and 1st Fidelity together purchased 1,005 individual first and second lien
mortgages from Chase. Pl. Ex. 10 (Expert Report of Jeffrey S. Andrien, ¶ 18)
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. 1 (Schneider Dep. Ex. 122).2
5. Prior to the execution of the MLPA, Chase sent pre charge-off history, post-
charge payment history (if applicable), 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. Pl. Ex. 23 (Deposition of Launi Solomon, 101:11-
25,102:1-18).
Chase disputes that Solomon’s testimony concerned bulk loan sales like the MLPA. Solomon
testified about “one-off” note sales, as the question 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 one-off basis, not a bulk sale?” Pl. Ex. 23 (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
2
Chase refers to exhibits attached to the Declaration of Christian J. Pistilli accompanying
Chase’s reply in support of its Motion as “Pistilli Decl. Ex.”
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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).
6. Before and after the MLPA, in each of the mortgage purchases made by S&A and
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. Pl. Ex. 24 (JPMC-MRS-
00113944); Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 8-16).
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. The
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
information contemplated by the Recovery One Note Sale Procedure handbook when Chase sold
individual notes to S&A and/or 1st Fidelity.
7. The above referenced loan information and documentation that Chase historically
provided is needed to properly board and service a loan pursuant to industry practices. Pl. Ex. 25
(Deposition of Richard W. Payne, III, 213-216).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. The cited
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 (Payne Dep.
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. 93 (Courchane Rep.
¶ 43); Pl. Ex. 90 (Courchane Dep. 57:8-15). Payne admitted at his deposition that Chase was not
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required to provide MRS with the information and documents referenced above under the terms
of the MLPA. Pistilli Decl. Ex. 2 (Payne Dep. 103:15-105:8, 181:11-182:16, 199:17-200:11).
8. Prior to the MLPA loan purchase, when S&A and 1st Fidelity discovered that
documents were missing from the collateral files, Chase, without fail, always assisted in locating
and transferring these “trailing documents” so that the loans could be serviced. Pl. 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 (Axel Dep. 88:22-89:6).
9. Chase’s Note Sale Procedure handbook instructs agents to utilize its “Note Sale
Calculator” “[t]o perform initial calculations on the Minimum and Incentive values and/or to
submit the account for investors’ consideration.” Pl. Ex. 24 (JPMC-MRS-00113944). The
handbook further instructs agents to “Keep in Mind” the “Recovery 1 Score,” Id, and “Exception
Calculator.” Id at JPMC-MRS-00113946.
Paragraph 9 inaccurately and incompletely quotes language that speaks for itself.
10. The Note Sale Procedure handbook states that the results of the Note Sale
Calculator are calculated in the following manner:
The calculator looks at lien position, recovery score and equity and calculates a
minimum based on a combination historical and expected liquidation rates for
both straight servicing and models. A minimum ‘floor’ is also established and
is used in the event that the initial calculation goes below our floor. Id at
JPMC-MRS-00113951.
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Paragraph 10 inaccurately and incompletely quotes language that speaks for itself.
Negotiation and Execution of the MLPA
11. 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. 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”). Pl. Ex. 10 (Expert Report
of Jeffrey S. Andrien, ¶¶ 47-59).
RESPONSE: Disputed. These statements are not material to Chase’s Motion. 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. 10
¶ 58 n.188.
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. 10 ¶ 49; the National Mortgage Settlement was finalized in April 2012, cf. Pl. Ex. 10 ¶ 53;
and the Residential Mortgage-Backed Securities Settlement was finalized in November 2013,
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which was over four years after the MLPA was signed, cf. Pl. Ex. 10 ¶ 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. 3 (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. 4 (Courchane Rep. ¶¶ 105-08).
12. 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 Pl. Ex. 19 (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. This statement is not material to Chase’s 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. 3 (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.”); id. 92:15-21 (“Larry’s group wanted to purchase these loans.
They did all the leg work on it, they did the due diligence on it, and wanted 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
8
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. 19 (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 19 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.
13. 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 Pl. 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 not material to Chase’s 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. See Pl. Ex. 13. 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. 5 (Schneider Dep. Ex. 124); id. Ex. 6 (Schneider Dep. 107:12-17); id. (Schneider Dep.
9
114:8-9) (“I was looking to buy a pool of loans.”); see also id. Ex. 3 (Fox Dep. 60:22-24) (“My
recollection is Mr. Schneider or his company approached us about doing a larger purchase of
loans.”); id. 66:2-67:4 (“[W]e weren’t looking to sell a pool of loans.”); id. 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 wanted to pay a nominal fee for them . . . .”).
14. 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
push and [he was] pretty sure that senior management [is] in agreement.” Pl. Ex. 7 (JPMC-
MRS-00000439).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 7 (JPMC-MRS-00000439) (“Deals will have to
be sent out by email on an individual basis.”). Also, despite the implication in Paragraph 14,
there is no apparent connection between the individual note sales contemplated by Guerrero in
Plaintiffs’ Exhibit 7, and the unspecified “loans” discussed in Paragraph 13. 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 14, it was Schneider who
approached Chase in October 2008 about purchasing a loan pool in a bulk sale, stating: “I am
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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. 5
(Schneider Dep. Ex. 124); id. Ex. 6 (Schneider Dep. 107:12-17); id. (Schneider Dep. 114:8-9) (“I
was looking to buy a pool of loans.”); id. (Schneider Dep. 122:5-6) (“I’d be interested in possibly
buying a pool of firsts . . . .”); see also supra ¶ 13 (citing Fox deposition testimony). Guerrero
agreed to look into Schneider’s request. See Pistilli Decl. Ex. 5 (Schneider Dep. Ex. 124).
15. In an email to Chase employee Jason Oquendo in October of 2008, as part of
ongoing negotiations regarding several different potential loan pools, Schneider clearly and
comprehensively described the business model of his entities, including the success he achieved
implementing his strategy of purchasing distressed mortgages and offering the borrowers
payment plans that large financial institutions are unable to offer. Pl. Ex. 27 (JPMC-MRS-
00007918).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. Plaintiffs’
Exhibit 27 does not discuss or otherwise refer to “ongoing negotiations regarding several
different potential loan pools” or “payment plans that large financial institutions are unable to
offer.” In addition, the financial information in the exhibit does not indicate that Schneider’s
entities had experienced “success.”
16. 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. Pl. Ex. 28
(JPMC-MRS-00000791).
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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 28 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. 28.
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. 28 (JPMC-MRS-00000792).
17. 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,”
promising to provide the missing information “asap” and further adding that the necessary
information was “cut out prior to me receiving.” Id.
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. 28 (JPMC-MRS-00000791).
18. 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. Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 26). Guerrero further
stated that he would help to fill in the missing information. Pl. Ex. 29 (JPMC-MRS-00000812).
12
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. 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. 20, ¶ 26 (ECF 262-3 (Declaration of Laurence
Schneider)); Pl. Ex. 29 (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. 29. Schneider confirmed to
Chase that he would determine, for each loan on the November Data Tape, whether the loan was
“foreclosed/unsecure” or had a “valid lien.” Pl. Ex. 30 (JPMCMRS-00000101). 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 Pistilli Decl. Ex. 7 (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. 31 (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, Schneider
concluded that “about 95% of the pool” was “truly unsecured and just a huge potential liability.”
Pl. Ex. 32 (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. 8 (Schneider Dep. Ex.
133).
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19. 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. Pl. Ex. 20 (ECF 262-3
(Declaration of Laurence Schneider), ¶¶ 25 & 27); Pl. Ex. 30 (JPMC-MRS-00000101).
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 “[s]ome” 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. 30
(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. 30 (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
listed in the November Data Tape and determined that the vast majority was unsecured. Pl. Ex.
32 (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. 32 (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
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diligence and we are willing to sign anything that you put in front of us.” Pistilli Decl. Ex. 8
(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. 39 (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. 20 ¶¶ 24-25. The cited evidence does not
support Paragraph 19, which concerns the November Data Tape.
20. Guerrero reassured Schneider that he would get the information and that Guerrero
was promoting Schneider to the hierarchy at Chase. Pl. Ex. 30 (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.
The only statement by Guerrero about loan information is in the earliest email in the exchange.
Pl. Ex. 30 (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.
15
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. 30.
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).
21. 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… .” Pl. Ex. 31 (JPMC-MRS-
00001028).
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. 32 (JPMC-MRS-
00003425); see also supra ¶ 18 (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. 31 (JPMC-MRS-00001028). 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. 32 (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. 3 (Fox
Dep. 109:5-23). Schneider agreed to Chase’s counteroffer. Pl. Ex. 39 (MLPA).
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22. Fox admitted that the pool of loans being offered to Schneider was “not worth
marketing… .” Pl. Ex. 32 (JPMC-MRS-00003422).
RESPONSE: Disputed in part. This statement is not material to Chase’s motion.
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. 32 (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.
To the extent Plaintiffs are suggesting in Paragraph 22 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 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).
23. After 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
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.
Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 32).
RESPONSE: Disputed. This statement is not material to Chase’s motion. Chase
disputes that Schneider was “not interested” in the pool. Supra ¶ 21 (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. 20. But Schneider
17
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. 6 (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, Pistilli Decl. Ex. 9 (JPMC-
MRS-00003289) (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. 8 (Schneider Dep. Ex. 133); see also Pl. Ex. 20 (Schneider Decl. (Dec. 11, 2017), Dkt.
262-3 ¶ 32) (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 23 would have been a mathematical impossibility, which Schneider knew
at the time. Supra ¶ 21 (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).
24. The final list of loans was approximately 3,500 loans, down from the original
6,000. Pl. Ex. 1 (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.
18
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. 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 ¶ 23.
25. 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
representations and warranties without having to inspect every loan file. Pl. Ex. 33 (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 while simultaneously not having 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 contradictory and illogical, and not
acceptable within any standard business dealing concerning the bulk sale of mortgage loans. Id.
at p. 5.
Chase does not dispute that Richard W. Payne, III made 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 & Co. v. Diners’ Club Inc., 550 F.2d 505, 509-10 (2d Cir. 1977);
United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991). Any assertion as to industry
19
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. 93
(Courchane Rep. ¶ 40).
26. 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. Pl. Ex. 3 (JPMC-MRS-00000486). Guerrero
replied that he would “have that data pulled into a new spread sheet.” Id.
RESPONSE: Disputed. This statement is not material to Chase’s Motion. The
evidence does not show that Schneider “made clear exactly what information he needed from
Chase to board the loans.” Plaintiffs’ Exhibit 3 is a request from Schneider to Guerrero for
certain information, which he concludes by asking Guerrero: “What are your thoughts?” Pl. Ex.
3 (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.
27. 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
20
• Mortgage Payment (needed to properly amortize the loan). Pl. Ex. 34 (Expert
Report of Richard Payne III, p. 14).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 32.
In addition, Paragraph 27 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. 39 (MLPA). Paragraph 27 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. 2 (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
21
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).
28. 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.
Pl. Ex. 35 (JPMC-MRS-00001041).
“MLPA” referenced in Paragraph 28 was not the version executed by the parties. See Pl. Ex. 39
(signed MLPA). Chase also disputes Paragraph 28 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. 6 (Schneider Dep. 281:20-282:7).
29. 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. Pl. Ex. 36 (JPMC-MRS-00002826).
Paragraph 29 paraphrases draft language that speaks for itself.
30. Schneider immediately responded, requesting an Exhibit “A.” Pl. Ex. 37 (JPMC-
MRS-00003109).
Chase disputes that Schneider “immediately responded,” as the email from Guerrero is time-
22
stamped at 11:08 am, and Schneider’s response is at 4:15 pm. Pl. Ex. 37 (JPMC-MRS-
00003109).
31. 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. Pl. Ex. 33 (Rebuttal Report of Richard W. Payne, III, pp. 3-4); Pl. Ex. 38 (JPMC-
MRS-00003022).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. Paragraph
31 is unsupported by the evidence cited. Plaintiffs’ Exhibit 33 is a putative expert report, see Pl.
Ex. 33, which is inadmissible to support this 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 v. Hopkins, 2002 WL 31427362, at *4 (S.D.N.Y. Oct. 30, 2002); S.E.C. v. Tourre, 950 F.
Supp. 2d 666, 675 (S.D.N.Y. 2013). Plaintiffs’ Exhibit 38 is an email from Eddie Guerrero to
Victor Fox, dated February 23, 2009. See Pl. Ex. 38. 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. 30 (JPMC-MRS-00000101) (email on November 6, 2008) (Schneider acknowledging
that loans may be “foreclosed/unsecure”); Pistilli Decl. Ex. 9 (JPMC-MRS-00003289)
(Schneider telling Chase that “5 out of 6 loans” on the November Data Tape did not have intact
23
first liens and “only about 1000 will be true first lien secured”); Pl. Ex. 31 (JPMC-MRS-
00001028) (email on November 13, 2008) (“We are up to $100 million in ‘Prime’ loans that are
no longer secure.”); Pl. Ex. 32 (JPMC-MRS-00003425) (email on November 19, 2008)
(Schneider concluding that “about 95% of the pool is truly unsecured”); Pistilli Decl. Ex. 8
(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 ¶ 23 (establishing Schneider’s
contemporaneous knowledge that it was factually impossible for the MLPA to convey 3,529
intact first-lien mortgages).
32. 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
ate Tape), with an aggregate principal balance of $156,324,399.24. Pl. Ex. 20 (ECF 262-3
(Declaration of Laurence Schneider), ¶¶ 23-32).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. Pistilli Decl. Ex. 9 (JPMC-MRS-00003289) (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 ¶ 23 (establishing Schneider’s contemporaneous
knowledge that it was impossible for the MLPA to convey 3,529 intact first lien mortgages).
In addition, Schneider testified at his deposition that he did not rely on oral
representations. Pistilli Decl. Ex. 6 (Schneider Dep. 310:6-7) (“I wouldn’t rely on oral
representation[s]” because the “expectations are in a formal contract.”).
24
33. 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. Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 32).
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. 39 (MLPA) § 2. The MLPA did not
require Chase to provide “the information necessary to service” the loans. Id. Instead, the
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.
34. 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. Pl. Ex. 39 (ECF 292-4).
meaning of the MLPA is a legal, not a factual, matter. Paragraph 34 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. 39 (preamble).
35. Later that day, Eddie Guerrero emailed Schneider the data tape for Exhibit A,
stating “All yours.” Pl. Ex. 40 (JPMC-MRS-00369108).
25
RESPONSE: This statement is not material to Chase’s Motion. Undisputed.
36. Chad Paxton emailed to Guerrero regarding the completed sale to Schneider, “this
will be a KISS to the Overall department goal for [you] this month,” adding “LUCKY LUCKY
LUCKY!!!!!!! FREEEEEE MONEY!!!” Pl. Ex. 41 (JPMC-MRS-00002809).
Paragraph 36 quotes language that speaks for itself. Victor Fox testified about this email:
“That’s Chad being Chad,” and that Chad “could be a little over the top.” Pistilli Decl. Ex. 3
(Fox Dep. 129:5-14).
37. 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. Pl. Ex.
34 (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.
Chase does not dispute that Richard W. Payne, III made the above-referenced statements in his
expert report in this case. However, Paragraph 37 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.
26
38. Mr. Payne opined that, under the MLPA, “all [the loans] were supposed to be first
lien mortgages.” Pl. 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. Pl. Ex. 34 (Expert Report of
Richard W. Payne III, p 11).
38 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 evidence does not support the assertions in Paragraph 38. See Pl. Ex. 25; Pl. Ex. 34.
Under the plain terms of the MLPA, Chase was not obligated to convey loans with intact liens.
39. It is clear from Chase’s own internal documentation that many of the loans in the
MLPA sale were knowingly unsaleable and fraudulent. See Pl. Ex. 42 (SA00277780) (“Don’t be
sorry it was our fault we sold it… it was clearly in the notes that its fraud.”).
evidence does not establish that “many of the loans in the MLPA sale were knowingly
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. 42 (SA00277781). 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
27
originated by Chase, and the cited evidence does not support that assertion. When Solomon
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. 10 (JPMC-MRS-00021333)
(spreadsheet prepared by Schneider notating Salinas and Syed loans as “FRAUD PER EDDIE”).
40. 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. Pl. Ex. 34
(Expert Report of Richard W. Payne III, p. 12).
40 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. 8 (Schneider Dep. Ex. 133) (emphasis added).
28
41. 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. Pl. Ex. 25
(Deposition of Richard W. Payne, III, 218:21-25).
meaning of the MLPA is a legal, not factual, matter. Paragraph 41 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
42. 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
Guerrero’s pre-execution assurances that Exhibit A would contain information previously
identified as essential to board and service the loans. See Pl. Ex. 1 (Deposition of Laurence
Schneider, 435:20-436:2).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 39 (MLPA) § 2; Pistilli Decl. Ex. 11 (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. 39 (MLPA) § 6.c.
29
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. 6 (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. 6
(Schneider Dep. 418:10-18).
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.” Pl. Ex. 93 (Courchane Rep. ¶ 43).
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. Pl. Ex. 20, ¶¶ 37, 39, 41, 43, 45
& 48 (ECF 262-3 (Declaration of Laurence Schneider).
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
30
required to be provided under the MLPA was “missing.” Supra ¶ 42. 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
¶ 42.
It is true that, after the MLPA was executed, Chase employees provided Schneider with
the loan information he requested. See Pl. Ex. 46 (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. 12 (Solomon Decl. ¶¶ 4-6)
(Solomon testifying that she provided Schneider with everything he requested); id. Ex. 13
(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. 12 (Solomon Decl. ¶ 3); see also id. Ex. 13
(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. 12 (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. 14
(Schneider Dep. Ex. 139); see also Chase Responses to Plaintiffs’ Statement of Facts (Dkt. 385)
¶¶ 174-75.
44. In an email dated March 16, 2009, Schneider told Guerrero that Chase needed to
start ordering files and assignments for the MLPA loans. Pl. Ex. 43 (JPMC-MRS-00000562).
31
44 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. 43.
45. Guerrero told Schneider that Chase could send him 200 “1st lien files” per day.
See Pl. Ex. 44 (JPMC-MRS-00000793).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. In
Plaintiffs’ Exhibit 44, Guerrero says only that “200 a day is good to go.” Pl. Ex. 44 (JPMC-
MRS-00000793).
46. Liability Expert Richard Payne opined that a purchased mortgage loan is of no
value without the assignment and transfer of the collateral securing it. Pl. Ex. 25 (Deposition of
Richard W. Payne, III, 142:13-145:3); Pl. Ex. 34 (Expert Report of Richard W. Payne III, p. 22).
Further, without proper assignment, MRS could not effectively claim ownership. Id.
46 is not supported by the cited evidence. The cited expert deposition testimony and report do
not discuss these matters. The assertions are also inadmissible. See Marx, 550 F.2d at 509-10;
Dibella, 2002 WL 31427362, at *4; Tourre, 950 F. Supp. 2d at 675.
47. 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 Pl. Ex. 44 (JPMC-MRS-
00000793).
32
Schneider did not tell Guerrero that his servicing software required information to send RESPA
letters. See Pl. Ex. 44 (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. 2 (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).
48. 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 Pl. Ex. 45 (JPMC-MRS-
00000581).
48 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. 45 (JPMC-MRS-00000581). Chase disputes that the “new spreadsheet” was necessary
for Schneider to board or service the loans. Supra ¶¶ 42-43, 47. In addition, Exhibit A to the
MLPA had already been provided to Schneider with the required information. See Pl. Ex. 39
(MLPA) §§ 2, 6(a); supra ¶¶ 33, 35, 42.
49. As Schneider attempted to service the loans, he noticed that many loans were
facing imminent foreclosure in tax sales. See Pl. Ex. 46 (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
33
for all MLPA loans, and that they were not prepared to processes all of the individual
assignments. Id.
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. 46 (JPMC-
MRS-00000576).
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. I’m only going to need about 25% of them?” Solomon responded: “No, it’s 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. 46 (JPMC-MRS-00000575-77). Schneider then asked “What if
I prepared the assignments after I get the file and you just sign them,” to which Guerrero agreed.
Id.
Plaintiffs’ Exhibit 46 reflects the parties’ agreement that Schneider would request
formal loan assignments only for certain loans as “necessary.” Pistilli Decl. Ex. 12 (Solomon
Decl. ¶ 6). 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. 43
(JPMC-MRS-00000562). Shortly thereafter, he requested the assignment of an individual loan.
Pl. Ex. 46 (JPMC-MRS-00000577-78). The parties reiterated their agreement that Schneider
would prepare any assignments that he needed, and Chase would sign them. Pl. Ex. 46 (JPMC-
MRS-00000575-76). Schneider explained that his intent was to “save[] Chase the time and
34
resources required to handle the coordination of such.” Pistilli Decl. Ex. 14, 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.” Pistilli Decl. Ex. 15 (JPMC-MRS-
00001530).
50. On March 23, 2009, Schneider asked Guerrero if he knew when Chase would be
sending its RESPA, or “Goodbye” letters. Pl. Ex. 47 (JPMC-MRS-00000555). Guerrero replied
that he was “still trying to tie it down.” Id.
Chase disputes Paragraph 50 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).
51. 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. Pl. Ex. 34 (Expert
Report of Richard W. Payne III, p. 20).
cite no admissible evidence in support of this statement. Expert testimony is not admissible
evidence to establish lay factual matters. Dibella, 2002 WL 31427362, at *4; Tourre, 950 F.
Supp. 2d at 675.
35
52. 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.” Pl. Ex. 33 (Rebuttal Report of Richard W. Payne III, p. 4).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 10 (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. 93 (Courchane Rep. ¶ 43); Pl.
Ex. 90 (Courchane Dep. 57:8-15). MRS had this information. Id.
53. Chase sent “updated” data tapes to Schneider on March 18, 2009, December 28,
2009 and December 29, 2009. Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider),
¶¶ 37, 39, 41, 43, 45 & 48).
Chase does not dispute that its employees sent Schneider spreadsheets with loan information on
March 18, 2009, 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. 20 ¶¶ 37, 39, 41,
43, 45, 48.
54. The December 28, 2009 data tape contained 3,693 loans. Pl. Ex. 10 (Expert
Report of Jeffrey S. Andrien, ¶ 30).
disputes the characterization of the December 28, 2009 spreadsheet as a “data tape.” Paragraph
36
factual matters, such as the contents of a spreadsheet. Dibella, 2002 WL 31427362, at *4;
Tourre, 950 F. Supp. 2d at 675.
55. The December 29, 2009 data tape contained 4,387 rows of data with hundreds of
duplicates. Id.
disputes the characterization of the December 28, 2009 spreadsheet as a “data tape.” Paragraph
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.
56. None of the above data tapes provided the Plaintiffs with the necessary
information to board and service the loans purchased through the MLPA. Pl. Ex. 20 (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
MLPA loans in March 2009. Pistilli Decl. Ex. 6 (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. 6 (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.
6 (Schneider Dep. 347:12-349:14) (“There were times, a few times in which the borrower had
37
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 56 to the extent it suggests that Chase withheld any
requested loan information in its possession that was reasonably available. See Pl. Ex. 46
(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. 13
(Solomon Dep. 40:8-41:3). Chase further disputes Paragraph 56 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. 39 (MLPA) § 2.
57. It was not until May 29, 2013 that MRS received an Exhibit A that allowed it to
determine what it actually received from Chase. Pl. Ex. 25 (Deposition of Richard W. Payne, III,
218:21-22).
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. 40; see also supra ¶¶ 18-19, 21 (responding to Plaintiffs’ putative facts concerning
Schneider’s November Data Tape diligence). For example, Schneider knew from the day the
MLPA was signed that the MLPA loans lacked intact first liens. Pistilli Decl. Ex. 6 (Schneider
Dep. 435:13-436:3).
In addition, the expert opinion cited in support of Paragraph 57 is not admissible
because it was not disclosed in an expert report in compliance with Rule 26(a)(2)(B), it is not
38
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 57. Payne testified only that he reviewed the May 29, 2013
loan list in connection with his report. Pl. Ex. 25 (Payne Dep. 218:21-22).
58. 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. Pl. Ex. 46 (JPMC-MRS-00000575).
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. 46.
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. 46. Solomon only told Schneider that he would receive the “whole [loan] file” with “all
original docs in their original file.” Id. (JPMC-MRS-00000578). 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 58.
59. 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. Pl. Ex. 48 (Expert
Report of Arthur P. Baines, ¶ 18).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 48 ¶ 18.
39
CHASE’S ACTIONS REGARDING LOANS IT SOLD TO PLAINTIFFS
60. 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.” Pl. Ex. 14 (SA00277358); Pl. Ex. 49 (SA00277863).
Exhibit 14 does not support Paragraph 60 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. 49
(SA00277863) (emphasis added). The email referred to corporate advances, which are not actual
payments and thus were not due to Schneider or MRS. Id.; Pistilli Decl. Ex. 13 (Solomon Dep.
44:11-19, 45:24-46:4).
61. 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. Pl. Ex. 50 (JPMC-MRS-LOANFILES-00007306).
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. 50. 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 50. Pistilli Decl. Ex. 16 (JPMC-MRS-00387298, Post CO Pyts tab).
62. 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,
40
despite crediting the loan it had sold to S&A on Chase’s books. See Pl. Ex. 51 (JPMC-MRS-
00016274); Pl. Ex. 52 (SA00127495).
RESPONSE: Disputed. This statement is not supported by the cited evidence. The
two exhibits do not indicate that Chase refused to speak with Schneider or credit him any monies
received related to the Lossow loan. Plaintiffs’ Exhibit 51 indicates that Omar Kassem of Chase
did respond to Schneider regarding this loan.
63. 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. Pl. Ex. 53 (JPMC-MRS-00001356). Chase never provided the promised
replacement loans. Id.
Exhibit 53 does not support Paragraph 63 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.” See Pl. Ex. 53 (JPMC-MRS-00001358). Exhibit 53
does not indicate that Chase promised to exchange those loans for others “of comparable value,”
or that Chase never provided replacement loans.
64. 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. Pl. Ex. 16 (JPMC-MRS-
00043503); Pl. Ex. 17 (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.
41
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 16 is from March 2012, at least two years after Plaintiffs purchased the loans at issue in
this case. Similarly, Plaintiffs’ Exhibit 17 is from July 2012, also at least two years after
Plaintiffs purchased the loans at issue in this case.
65. 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.” Pl. Ex. 54 (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. 54 (JPMC-MRS-00319625). Nothing in
the cited document indicates that it applies to the loans at issue in this litigation or suggests that
any alleged problems existed at relevant times. The document also states that “Management 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. 54 (JPMC-MRS-00319627).
66. Chase issued 27 debt forgiveness letters and released the liens of 788 borrowers
whose loans it previously sold to MRS, S&A and/or 1st Fidelity, which together had unpaid
42
principle balances totaling millions of dollars. Pl. Ex. 18 (Exhibit 5 to the Supplemental
Responses of Plaintiffs S&A and 1st Fidelity to Defendant’s Third Set of Interrogatories).
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 18 nor the admissible record supports this assertion.
Plaintiffs do not cite actual debt forgiveness letters or lien releases for most of the loans
referenced in Exhibit 18.
67. The individuals at Chase who were responsible for executing the lien releases did
not confirm that the assertions contained therein were accurate, including Chase’s ownership of
the loan. Pl. Ex. 55 (JPMC-MRS-00096383) (“I only sign the documents. I do not do any
research on the documents”).
Exhibit 55 refers to a single lien release and does not discuss which “individuals at Chase . . .
were responsible for executing the lien releases” or what those individuals may or may not have
done as a general matter.
68. 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
43
releasing the lien. Pl. Ex. 56 (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.
cite 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 68 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 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. 17 (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.
69. Chase did not send the original recorded documents to the borrower. See Pl. Ex.
57 (Erika Lance Deposition, 59:8-13).
testimony does not establish that Chase did not send original recorded documents to any
borrowers. Pl. Ex. 57 (Lance Dep. 59:8-13). Nor is there any basis to the suggestion that
original recorded documents are supposed to be sent to borrowers.
44
70. 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. Pl. Ex. 58 (JPMC-
MRS-00155219 at JPMC-MRS-00155227-00155231).
Exhibit 58 does not establish the assertions in Paragraph 70. Exhibit 58 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. 58
(JPMC-MRS-00155227). The exhibit also states that “[c]ommunications will be drafted to
address questions around the lien release process 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.
71. 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 Pl. Ex. 59 (Answer to the Fourth Amended Complaint, ECF 295, ¶¶ 192-193).
RESPONSE: This statement is not material to Chase’s Motion. Chase admits that it
mistakenly sent debt forgiveness letters to 23 borrowers whose loans were sold to 1st Fidelity or
S&A. See Chase Responses to Plaintiffs’ Statement of Facts (Dkt. 385) ¶ 180.
72. 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.
RESPONSE: This statement is not material to Chase’s Motion. Undisputed.
45
73. Chase engaged in consumer relief initiatives on loans previously sold to the
Plaintiffs. Pl. Ex. 10 (Expert Report of Jeffrey S. Andrien, ¶ 9). Chase identified in discovery
621 lien releases and 23 debt forgiveness letters for mortgages owned by the Plaintiffs, 363 of
which occurred after March 1, 2012. Pl. Ex. 10 (Expert Report of Jeffrey S. Andrien, ¶ 58).
Based on a review of other documents produced in discovery, 171 additional loans owned by the
Plaintiffs received some form of consumer relief by Chase, 36 of which occurred on or after
March 1, 2012. Id. Together, Chase granted some form of consumer relief after March 1, 2012
for 399 loans with a total outstanding balance of $16.18 million owned by the Plaintiffs. 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
Defendants benefitted by their wrongdoing by at least $6.04 million. Id.
assertions in Paragraph 73 are not relevant to this case, 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. 18 (Dkt. 184), at 4; id. Ex. 19 (Dkt. 111), at 11-12. Plaintiffs
cite no competent evidence to support the allegations in Paragraph 73. The expert report is not
admissible evidence supporting the statements because it is not based on sufficient facts or data
or a reliable method under Fed. R. Evid. 702. Pl. Ex. 10 ¶¶ 9, 58. 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
46
relief requirements of the Lender Settlements.” Pl. Ex. 10, at 48 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. 10 ¶ 51. 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).
74. 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 not material to Chase’s Motion and
unsupported by any competent evidence. See supra ¶ 73.
75. SA&F has been unable to service loans since borrowers now claim said loans
have been satisfied or released. Pl. Ex. 60 (SA00236339); Pl. Ex. 61 (JPMC-MRS-00017505).
47
evidence does not support Paragraph 75. The cited evidence refers only to a single loan, and
does not refer to that loan having been satisfied or released.
76. 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.
evidence does not support Paragraph 76. 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.”
77. S&A acquired a loan secured by a second mortgage from Chase on January 14,
2010 with a properly recorded assignment. Pl. Ex. 62 (SA00190157 at SA00190189 and
SA00190341). Schneider worked with the borrower of the mortgage (“Preis”) concerning
payment arrangements and the borrower entered into an agreement with S&A. Id at
SA00190234.
Chase does not dispute that S&A acquired a loan from Chase on or around January 14, 2010 with
a recorded assignment. The cited testimony does not support the assertion that the loan was
secured by a second mortgage.
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.
78. 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.
48
Id at SA00190232. Preis sought clarification with Chase and Real Time. Id at SA00190209 and
SA00190213. 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.
Chase does not dispute that Chase and Real Time responded to inquiries from Preis regarding a
September 2012 letter and that the September 2012 letter and copies of responses appear at the
cited pages of Plaintiffs’ Exhibit 62. 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. 62
(SA00190214).
79. Preis retained counsel and threatened legal action against S&A. Id at
SA00190303. 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.
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. 62 (SA00190303). 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. 62, at
SA00190224. The cited evidence does not indicate that Real Time “demanded that all payments
made to date be returned.”
Thereafter, Preis’s counsel “request[ed] to continue the settlement agreement” such that
“[m]y client[] can continue the payments” to S&A. Pl. Ex. 62, at SA00190224-25. The
49
collections data Plaintiffs produced indicates that Preis subsequently paid S&A over $13,000,
Pistilli Decl. Ex. 20 (Plaintiffs’ Loan Performance Data). This is nearly three times the $4,500
price S&A paid Chase to purchase the loan. Pl. Ex. 62 (SA00190189).
80. 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. Pl. Ex. 63 (JPMC-MRS-
00010573); Pl. Ex. 64 (JPMC-MRS-00005516).
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.
63; Pl. Ex 64.
81. In January of 2010, Chase confirmed that its insurance claim had been approved
and the funds had been paid. Pl. Ex. 64 (JPMC-MRS-00005516).
Chase does not dispute that the cited page states that “Chase applied for and got Lenders
Insurance Claim funds.” Pl. Ex. 64, at JPMC-MRS-0005516. However, the following sentence
states that “In order to get those funds Chase has to assign the mortgage to the insurance carrier.”
See id. The cited evidence does not show that Chase assigned the Kevorkyants mortgage to the
insurance carrier. See id.
82. Schneider never received those funds from Chase, despite repeated inquiries and
Chase’s acknowledgment that the funds rightfully belonged to Schneider. Pl. Ex. 65 (JPMC-
MRS-00009688); Pl. Ex. 64 (JPMC-MRS-00005516).
50
First, although MRS purchased certain loans under the MLPA, the MLPA does not provide that
MRS also purchased any insurance policies applicable to those loans. The loans purchased
under the MLPA are distinct and separate assets from any insurance policies applicable to the
loans, and the latter assets were not purchased under the MLPA. Second, Plaintiffs’ cited
evidence indicates that Schneider inquired about the insurance claim on the Kevorkyants 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. 65.
The cited evidence does not indicate that Mr. Schneider responded to Ms. Solomon or inquired
further.
83. A borrower took out mortgage as Olga Kushner in 2004. Pl. Ex. 66
(SA00433958). She married and changed her surname to Sedykh in 2005. Id. S&A purchased
the loan in 2010. Id. The allonge to the note executed by Chase referred to the borrower as
“Olga Sedykh aka Olga Kushner.” Id. Borrower alleged in adversary proceeding in bankruptcy
that because her name could not have been “Sedykh” at the time she executed the note, the
allonge was a forgery and S&A was therefore not a valid creditor. Id. S&A was eventually
forced to settle the case and release the indebtedness. Id.
Chase does not dispute that S&A purchased the referenced loan from Chase in 2010. Paragraph
83 otherwise is not supported by admissible evidence. The cited exhibit does not include the
referenced 2004 mortgage or allonge, and discusses them only in “Factual Allegations” in a
complaint. See Pl. Ex. 66, at SA00434032-33. The cited exhibit also does not indicate that S&A
was forced to settle any case or release indebtedness related to the referenced loan. See id.
51
84. 1st Fidelity purchased the Dubniczki loan in 2009. Pl. Ex. 67 (JPMC-MRS-
00013091). In 2012 Real Time Resolutions, a collection agency for Chase, filed a transfer of
claim in the bankruptcy case through which 1st Fidelity had been receiving regular payments.
Pl. Ex. 68 (JPMC-MRS-00013098). Pursuant to that transfer, the bankruptcy court sent
payments to RTR instead of 1st Fidelity. Id.
Chase does not dispute that 1st Fidelity purchased a loan to borrower Peter Dubniczki in 2009.
The cited exhibit states that, upon learning that the loan had been sold to 1st Fidelity, Chase
“recalled this [loan] from [Real Time Resolutions]” and worked to “have it closed in their system
within 24 hours.” Pl. Ex. 68 (JPMC-MRS-00013099). The cited exhibit further states that
Chase told 1st Fidelity about the payment Real Time Resolutions allegedly received from the
bankruptcy trustee and assured 1st Fidelity that “we’ll get all that handled too.” Id. (JPMC-
MRS-00013098). The post-charge-off payment data Chase produced in discovery indicates that,
after recording receipt of a payment of $1170.89 on the Dubniczki loan number in August 2012,
Chase reversed the $1170.89 payment and sent the money to 1st Fidelity shortly thereafter. See
Pl. Ex. 68; Pistilli Decl. Ex. 21 (JPMCMRS-00387337, Post CO Pyts tab).
85. Borrowers Sophia and Enrique Garcia, whose loan 1st Fidelity had purchased
from Chase, were contacted by Chase and told that Chase “has the loan again” and that payments
should be made to Chase and not 1st Fidelity. Pl. Ex. 69 (JPMC-MRS-00007489). Chase had
included this loan in its lien release program, and if Chase hadn’t been aggressively collecting on
loans in the program before the releases were sent, this loan would have had its lien released. Id.
Chase does not dispute that 1st Fidelity purchased a loan to Sophia and Enrique Garcia from
52
Chase. The cited exhibit indicates that Chase removed the Garcia loan from the “DOJ queue”
upon learning that the loan had been sold to 1st Fidelity. Pl. Ex. 69, at JPMC-MRS-00007489.
The second sentence of Paragraph 85 is not a statement of fact, as Plaintiffs state only that it is
their opinion that the loan “would” have had its lien released. To be clear, the lien was not
released, and Plaintiffs do not contend otherwise.
86. Chase included the mortgage loan of Willie Holmes in the MLPA sale to MRS.
Pl. Ex. 70 (JPMC-MRS-00014130). A RESPA letter was sent but Chase did not execute an
assignment, and provided no servicing file. Pl. Ex. 71 (SA00433888). Further, Chase sent
borrower documents that indicated that Chase still in possession of the loan and zero balance,
which complicated efforts to negotiate and execute a satisfaction of mortgage and permit the
borrower to sell the home and avoid a tax foreclosure. Id.
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. Chase
does not dispute that MRS purchased a mortgage loan to Willie Holmes from Chase or that a
RESPA letter was sent on that loan. Chase executed an assignment on the Holmes loan when
requested by MRS, see Pistilli Decl. Ex. 22 (Schneider Decl. (June 15, 2017), Ex. 6, Dkt. 191-6),
at 4, per the parties’ agreement, see, e.g., Pistilli Decl. Ex. 12 (Solomon Decl. ¶ 6); Pistilli Decl.
Ex. 15 (JPMC-MRS-00001530). Plaintiffs’ Exhibit 71 does not indicate that Chase provided “no
servicing file”; “that Chase sent borrower documents that indicated that Chase [was] still in
possession of the loan”; or that any actions by Chase “complicated efforts to negotiate and
execute a satisfaction of mortgage and permit the borrower to sell the home and avoid a tax
foreclosure.”
87. 1st Fidelity purchased the mortgage loan of Arnold Donnat from Chase. Pl. Ex.
72 (SA00433851). Chase released the lien securing the mortgage in November, 2013. Id. The
53
homeowners’ association foreclosed for unpaid fees and sold the property to a third party. Id.
Effort will now need to be made to quiet title on the lien and reestablish the mortgage on an
innocent third party, resulting in substantial reputational damage in addition to expenses. Id.
Chase does not dispute that 1st Fidelity purchased a mortgage loan to borrower Arnold Donnat
from Chase. The cited exhibit indicates that Chase rescinded the mistaken lien release on the
Donnat loan. Pl. Ex. 72, at SA00433854. The collections data Plaintiffs produced in discovery
indicates that 1st Fidelity collected $10,687 on the Donnat loan through at least April 30, 2015,
long after the mistaken lien release in 2013. See Pistilli Decl. Ex. 16 (JPMCMRS-00387298,
Post CO Pyts tab). No admissible evidence supports the last two sentences of Paragraph 87, as
the only source is a hearsay email from Mr. Schneider drafted years after the alleged actions that
are referenced in the email. See id. at SA00433857. The final sentence of Paragraph 87 is not a
statement of fact, as Plaintiffs only speculate that they expect that effort “will” need to be made,
not that effort has been made or that reputation damage or expenses have in fact resulted.
88. S&A purchased the mortgage loan of Frank Guzman in February 2010, later
transferring to 1st Fidelity. Pl. Ex. 73 (SA00433866). Chase recorded lien release in October
2013. Id. In December 2014, 1st Fidelity advanced more than $5K to prevent tax foreclosure
and secure the property. Id. When servicer was given authorization to foreclose, they were
unable to because of the lien release. Id.
Chase does not dispute that S&A purchased a mortgage loan to borrower Frank Guzman in or
around February 2010. No admissible evidence supports the last three sentences of Paragraph
54
88, as the only source is a hearsay email from Mr. Schneider drafted years after the alleged
actions that are referenced in the email. See Pl. Ex. 73, at SA00433882-83.
89. Chase sold Mary Schmidt’s home equity line of credit to MRS in the MLPA
transaction. Pl. Ex. 74 (SA00434123). MRS attempted to assist client in securing a satisfaction
in order to sell property, but could not without an assignment from Chase. Id. Chase at first
refused to acknowledge the sale, and then sent a “robo-signed” assignment executed by someone
without proper corporate authority or knowledge of the documents to which they were attesting.
Id. Ms. Schmidt commended MRS for their repeated assistance in the face of Chase’s obstinacy.
Id.
Chase does not dispute that Mary Schmidt’s loan was included in the MLPA sale to MRS.
Chase disputes that anyone without proper authority or knowledge executed an assignment of the
Schmidt loan, and Plaintiffs’ assertion is in any event an inadmissible legal conclusion
unsupported by any evidence or authority. Plaintiffs’ Exhibit 74 cite also confirms that Chase
executed a second, hand-signed assignment of the Schmidt loan at MRS’s request. Pl. Ex. 74, at
SA00434126-28. The same exhibit includes a letter from Ms. Schmidt commending the Chase
team she worked with for “quickly resolving [a] seemingly impossible challenge.” Id. at
SA00434123.
90. Chase foreclosed on the borrower, Robin Liekhus in August 2008, which left a
deficiency. Pl. Ex. 75 (SA00007114). The borrower then filed for bankruptcy in October 2008,
discharging the deficiency. Id. Nevertheless, Chase sold the discharged deficiency to MRS in
the MLPA transaction, told the borrower that the full amount of the loan was owed, not just the
deficiency, and reported as much to the credit agencies. Id. When an understandably upset
55
borrower explained as much to MRS after receiving the transfer notification, and threatened to
report MRS to the attorney general, all collection activity was ceased. Id.
Chase does not dispute that Robin Liekhus’s loan was included in the MLPA sale to MRS.
Plaintiffs’ Exhibit 75 indicates that the discharge of the referenced Liekhus loan was filed on
March 22, 2009, Pl. Ex. 75, at SA00007118-19, after MRS acquired the loan in the February 5,
2009 MLPA, Pl. Ex. 36. Plaintiffs also confirmed in the MLPA that they had an opportunity for
due diligence on the Liekhus loan. See Pl. Ex. 39 (MLPA) § 4. No evidence supports the
assertion that Chase “told the borrower that the full amount of the loan was owed, not just the
deficiency, and reported as much to the credit agencies” or that MRS ceased “all collection
activity” on the Liekhus loan. See Pl. Ex. 75.
91. Chase included the home equity line of credit of Joseph Davis in the MLPA
transaction, but did not send an executed assignment. Pl. Ex. 76 (ECF 191-4). Believing he had
closed the account in 2006, Mr. Davis was unaware it was still open until he was so informed
when applying for another home equity line of credit. Id. He contacted Chase who directed him
to MRS. Id. He attempted to secure a payoff or release from MRS, but such action was
impossible absent a valid assignment of mortgage from Chase. Id. Instead of providing one,
however, Chase recorded another robo-signed assignment, upon which MRS could not in good
faith rely to take action on the Davis loan, for fear of perpetuating Chase’s violations. Id.
Chase does not dispute that Joseph Davis’s loan was included in the MLPA sale to MRS and that
Chase executed an assignment of that loan to MRS. Plaintiffs’ statements that the assignment
was invalid or robo-signed, that “a payoff or release from MRS . . . was impossible absent a valid
56
assignment of mortgage from Chase,” that the assignment Chase provided could not be relied
upon by MRS, and that Chase engaged in unspecified “violations,” are inadmissible legal
conclusions unsupported by any evidence or authority.
92. 1st Fidelity purchased the mortgage loan of Mark Damstra from Chase in late
2010. Pl. Ex. 77 (SA00423299). In 2011, 1st Fidelity instituted foreclosure proceedings. Pl. Ex.
78 (Damstra Appeal Brief and Exhibits). On October 23, 2013, Chase executed a discharge of
the first mortgage sold by Chase to 1st Fidelity, which was recorded on November 13, 2013. Pl.
Ex. 77 (SA00423299). This made it impossible for 1st Fidelity to foreclose, and borrower
continues to this day to assert in court proceedings that the discharge prevents 1st Fidelity from
legally collecting on the loan. Pl. Ex. 78 (Damstra Appeal Brief and Exhibits). As a result, 1st
Fidelity has been forced to expend thousands of dollars in legal fees. Pl. Ex. 79 (Legal bills).
The most recent invoices in the ongoing litigation, all received after March 1, 2019, total
$3,567.50. Id. The value of the collateral at the time 1st Fidelity purchased the mortgage in
2010 was $283,312. Pl. Ex. 80 (SA00114473).
RESPONSE: Disputed in part. Chase does not dispute that 1st Fidelity purchased a
loan to borrower Mark Damstra from Chase in or around 2010. Plaintiffs’ statement that a
discharge of the Damstra mortgage “made it impossible for 1st Fidelity to foreclose” is an
inadmissible legal conclusion unsupported by any competent evidence or authority. Plaintiffs’
Exhibits 78 and 79 were not produced to Chase in discovery (even as a supplement pursuant to
Fed. R. Civ. P. 26(e)(1)(A)), and thus cannot be used in summary judgment. See, e.g., Fed.
Hous. Fin. Agency v. HSBC N. Am. Holdings Inc., 2014 WL 584300, at *2 (S.D.N.Y. Feb. 14,
2014) (“[I]t would subvert the discovery process in these actions to allow a party to use during
summary judgment practice or at trial documents . . . that were not produced in these actions.”).
57
Exhibit 78, moreover, indicates that Plaintiffs did successfully foreclose on the Damstra
property.
93. S&A purchased a first mortgage loan to Patricia King from Chase in January
2010. Pl. Ex. 81 (SA00433932). In October 2013, S&A commenced foreclosure proceedings
because King was in default. Id. On November 6, 2013, Chase executed a discharge of the first
mortgage and recorded the discharge on November 19, 2013, despite the fact that Chase no
longer owned the loan, which dramatically diminished Plaintiffs’ ability to effectively foreclose.
Id.
Chase does not dispute that S&A purchased a loan to borrower Patricia King in or around
January 2010. The cited exhibit indicates that Chase rescinded the mistaken lien release on the
King loan. See Pl. Ex. 81, at SA00433946. The cited exhibit does not support Plaintiffs’
statement that the rescinded lien release “dramatically diminished Plaintiffs’ ability to effectively
foreclose.” See id. Plaintiffs’ own collections data produced in discovery indicates that S&A
continued collecting on Ms. King’s loan for at least two years after the mistaken lien release.
See Pistilli Decl. Ex. 23 (Plaintiffs’ Loan Performance Data).
94. Chase represented during the course of this litigation that it would “ring fence”
Plaintiffs’ loans, and take no actions of any kind toward them. Pl. Ex. 82 (ECF 202).
Chase 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 may have
purchased. Pl. Ex. 82. 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
58
ring fence “should be sufficient to ensure that (1) no lien releases are processed for loans [in the
ring fence] (without approval of counsel), and (2) no payments are accepted by Chase for any
loans [in the ring fence].” Pl. Ex. 82 ¶ 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.
95. Correspondence on July 23, 2018 and the related documents show that, as
recently as July 2, 2018, Chase recorded an assignment of a mortgage to S&A for a mortgage
from Betty Brooks to Chase without contacting and/or otherwise notifying Schneider, MRS or
S&A. See Pl. Ex. 83 (Letter from Roberto Di Marco to Christian Pistilli dated July 23, 2018).
Such mortgage was actually sold to MRS under the MLPA. Id.
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. 17 (Bumpus Dep. 132:14-22).
96. 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.
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.
59
97. 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. Pl. Ex. 84
(Letter from Christian Pistilli to Roberto Di Marco dated July 20, 2018). In that letter, counsel
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.; Pl. Ex. 83 (Letter from Roberto Di Marco to Christian Pistilli dated July 23, 2018).
Chase 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. 84. Paragraph 97 does not identify any “express terms of the MLPA” that Chase allegedly
misrepresented in its letter, and there are none. See Pl. Ex. 39 (MLPA).
98. Chase sold to 1st Fidelity, in late 2009, a second mortgage on property owned by
Robert W. Warwick and Lauren D. Warwick. Pl. Ex. 85 (SA00316950). Chase executed an
assignment of mortgage to 1st Fidelity, which was recorded on December 11, 2009. Pl. Ex. 86
(SA00316995). The borrowers entered into a payment plan with 1st Fidelity and were making
monthly payments in accordance with that plan. Pl. Ex. 85 (SA00316950).
Chase does not dispute that 1st Fidelity purchased a mortgage loan to Robert and Lauren
Warwick in or around 2009 and executed an assignment of that mortgage to 1st Fidelity recorded
on or around December 11, 2009. The cited exhibit does not state that the Warwicks were
making monthly payments in accordance with a payment plan with 1st Fidelity. See Pl. Ex. 85.
60
99. On September 13, 2012, 34 months after selling the loan to 1st Fidelity, Chase
sent the Warwicks a letter extinguishing the second mortgage and canceling the debt in the
amount of $167,003.51. Id.
Chase does not dispute that it mistakenly sent the Warwicks a debt forgiveness letter on or
around September 13, 2012. At 1st Fidelity’s request, Chase subsequently repurchased the
Warwick loan for its full face value of $167,003.51, see Pistilli Decl. Ex. 24, at SA00256831,
more than 16 times 1st Fidelity’s original purchase price of $10,000, see Pistilli Decl. Ex. 25, at
JPMC-MRS-00007725).
100. On October 5, 2012, Schneider notified Kassem that the Warwicks had ceased
making payments to 1st Fidelity and he asked Kassem to send a retraction letter to the Warwicks.
Kassem refused to do so, offering only Schneider’s release of the liens as a potential solution.
Pl. Ex. 87 (JPMC-MRS-00016232).
Chase does not dispute that Mr. Schneider asserted in an October 5, 2012 email to Mr. Kassem
of Chase that the Warwicks had ceased making payments to 1st Fidelity. The cited exhibit does
not indicate that Mr. Kassem refused to send a retraction letter for the Warwick loan. See Pl. Ex.
87. The cited exhibit indicates that Mr. Kassem offered to repurchase the Warwick loan. See id.
At 1st Fidelity’s request, Chase subsequently did repurchase the Warwick loan for its full face
value of $167,003.51, see Pistilli Decl. Ex. 24, at SA00256831, more than 16 times 1st Fidelity’s
original purchase price of $10,000, see Pistilli Decl. Ex. 25, at JPMC-MRS-00007725.
101. On December 12, 2012, 1st Fidelity received a letter from the State of Maryland,
Department of Labor, Licensing and Regulation, Division of Financial Regulation stating that the
61
Warwicks had filed a complaint against Chase and requesting that 1st Fidelity cease all
collection activity until the investigation was completed. Enclosed with the letter was a
statement by an investigator for the State of Maryland questioning “whether Chase is somehow
getting credit from a write off they never actually have to honor.” Pl. Ex. 85 (SA00316950).
cited December 12, 2012 letter does not state that the Warwicks filed a complaint against Chase,
and requests that 1st Fidelity temporarily cease foreclosure activities, not collection activities.
See Pl. Ex. 85, at SA00316950. Chase does not dispute that the text quoted in the last sentence
of Paragraph 101 appears in the cited exhibit; however, the text appears in an email from Kristin
F. Jones, who is identified in the email as an employee of Maryland’s legislature, not an
investigator for the State of Maryland. See Pl. Ex. 85, at SA00316952.
102. On January 28, 2013, Chase agreed to repurchase from 1st Fidelity, the Warwick
second mortgage loan along with two other loans with similar circumstances for their full-face
value totaling $428,053.61. Pl. Ex. 88 (JPMC-MRS-00002142).
RESPONSE: Disputed in part. Chase does not dispute that, in January 2013, Chase
agreed to repurchase from 1st Fidelity the Warwick loan along with two other loans for their full-
face value totaling approximately $428,000. See Pl. Ex. 88. The cited exhibit in which Chase
agrees to repurchase the loans is dated January 9, 2013, not January 28, 2013. See id.
CHASE’S ACTIONS PREVENT NORMAL SERVICING OF MLPA LOANS
103. 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. Pl. Ex. 89 (SA00468717). Nevertheless, MRS, despite its best efforts,
was unable to service a majority of the loans it received from Chase. Id. See Pl. Ex. 1
(Deposition of Laurence Schneider, 342:21-343:11).
62
Exhibit 89 is a chart labeled “Transaction Detail by Account,” with no information about its
provenance or purpose. See Pl. Ex. 89. 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. 39 (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. See Pl. Ex. 89; Pl. Ex. 1. Chase also disputes
Paragraph 103 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 25%” of the loans. Pl. Ex. 46 (JPMC-MRS-00000577); see also Pl. Ex. 32 (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. 10 (Andrien Rep. ¶ 45). Schneider also testified that he was able to collect on the
MLPA loans. Pistilli Decl. Ex. 6 (Schneider Dep. 347:12-349:14).
104. The original claimed total value of Exhibit A did not note the outstanding
principal balance of each loan. Pl. Ex. 70 (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.
63
Exhibit 70 has not been authenticated and 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.
70 (JPMC-MRS-00014130). Exhibit 70 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 Chase Responses to Plaintiffs’ Statement of Facts
(Dkt. 385) ¶ 171.
The loan balances in Exhibit A total $156,324,613.80, slightly more than the amount
required under the MLPA. Pistilli Decl. Ex. 11 (MLPA Ex. A [JPMC-MRS-00014130]).
105. Chase’s purported expert, Dr. Marsha J. Courchane (“Courchane”), admitted in
her deposition that charge off balance and outstanding principal balance are meaningfully
different terms. Pl. Ex. 90 (Deposition of Marsha J. Courchane, 33:13-35:3).
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 90. 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 105 to the extent it suggests that Dr. Courchane opined on
whether any balance in Exhibit A to the MLPA was a “charge off balance.”
64
106. At the May 10, 2017 hearing on Plaintiffs’ Motion to Compel (Docket No. 146)
and Defendants’ Motion for Protective Order (Docket No. 152), counsel for Defendants
represented that after a loan is ported to RCV1, “no interest will accrue on it.” Pl. Ex. 91 (May
10 Hearing Transcript, 24:12-13).
Chase does not dispute that counsel made the quoted statement at the hearing, but the transcript
does not include any reference to the time period being described.
107. Chase does charge interest on loans in RCV1. Pl. Ex. 92 (JPMC-MRS-
00320925); Pl. Ex. 23 (Solomon Dep., 150:12-151:7).
evidence does not support the assertion that Chase charges interest on loans in RCV1. Plaintiffs’
Exhibit 92 refers only to data inaccuracies from 2010. See Pl. Ex. 92. In the cited testimony in
Plaintiffs’ Exhibit 23, Ms. Solomon stated that interest may have accrued after charge-off “back
in 2007, not today.” Pl. Ex. 23 (Solomon Dep. 151:3-5).
108. Courchane argues in her report that MRS received sufficient information to
pursue collections. Pl. Ex. 93 (Expert Report of Marsha J. Courchane, ¶¶ 41-45).
Chase disputes 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. 93.
109. Courchane later stated in her deposition that MRS had enough information to
begin to collect on the loans. Pl. Ex. 90 (Deposition of Marsha J. Courchane, 57:8-58:11).
65
RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. 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. 90 (Courchane Dep.
57:8-15); see Pl. Ex. 93 (Courchane Rep. ¶¶ 41-42).
110. 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.” Pl. Ex. 25 (Deposition
of Richard W. Payne, III, 213: 9-214:5).
Chase does not dispute that Richard W. Payne, III offered the above-quoted opinions, but those
opinions are not material to Chase’s Motion.
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. 93 (Courchane
Rep. ¶ 43).
66
CHASE CEASES PERFORMANCE UNDER THE MLPA
111. 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.” Pl. Ex. 15
(JPMC-MRS-00002079); see Pl. Ex. 12 (ECF 310 (Declaration of Laurence Schneider), ¶ 24).
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… .” Pl. Ex. 15 (JPMC-MRS-00002079).
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 until Omar Kassem sent him an email on February 26,
2013.”
The only evidence cited is (1) Plaintiffs’ Exhibit 15, 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. 310). Neither establishes the assertions in Paragraph 111. Schneider’s
conclusory sentence in his declaration is an improper attempt to contradict his deposition
testimony and documentary evidence. Pl. Ex. 12 ¶ 24. Schneider testified at deposition that he
believed, as of February 25, 2009, that Chase had breached the MLPA and had committed fraud.
See Pistilli Decl. Ex. 6 (Schneider Dep. 435:6-436:3); see also id. (Schneider Dep. 417:16-22).
67
In addition, Exhibit 15 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. 15; Pistilli Decl. Ex. 26 (Dkt.
293 ¶¶ 192, 193); id. Ex. 7 (Schneider Dep. 503:18-505:8) (Schneider acknowledging that
Exhibit 15 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. 26 (Dkt. 293 ¶ 194).
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.
15 (JPMC-MRS-00002081). 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 111—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. 5 (JPMC-MRS-00002081).
To the extent Paragraph 111 suggests that debt forgiveness letters were sent for MRS
loans, Chase disputes that assertion as wholly unsupported by the record evidence. See Pistilli
68
Decl. Ex. 27 (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. 28 (JPMC-MRS-
00017467) and Ex. 29 (JPMC-MRS-00017471) (copies of letters sent to S&A and 1st Fidelity
about debt forgiveness letters, but not MRS); see also id. Ex. 26 (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.”).
112. Kassem also stated in the March 1, 2013 email that:
I’ve always had the authority to resolve but within limits. It was my
authority (not anyone else’s) that cut you your checks to remediate
the DOJ loans…. [T]he impetus to pay you off on full…..was also
my decision because of the circumstances, I thought it made the
most sense and thought it would help make up for any
inconveniences resulting from the letters being sent. Id.
RESPONSE: This statement is not material to Chase’s Motion. Chase does not
dispute that the quoted language appears in Plaintiffs’ Exhibit 15.
113. 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… .”
Pl. Ex. 94 (SA00277670). She then sent Schneider another list. Id.
Nothing in Plaintiffs’ Exhibit 94 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.
69
PLAINTIFFS HAVE BEEN DAMAGED BY CHASE
114. As a result of Chase’s 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. Pl. Ex. 95
(ECF 191(Declaration of Laurence Schneider), ¶ 13).
RESPONSE: Disputed. This statement is not supported by the cited paragraph of
Schneider’s uncorroborated declaration. Nor is it supported by any other competent evidence.
115. 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
Pl. Ex. 12 (ECF 310 (Declaration of Laurence Schneider), ¶ 33).
disputes this statement as it is supported only by a conclusory statement in Schneider’s
declaration without any specific evidence. See Pl. Ex. 12 (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.
116. 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.
Pl. Ex. 10 (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. 10 ¶ 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.
117. 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.
Pl. Ex. 10 (Expert Report of Jeffrey S. Andrien, ¶ 9).
70
RESPONSE: Disputed. This statement is not material to Chase’s Motion. 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. 10 ¶ 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. 10 ¶ 37 (calculating proceeds based on comparable portfolio of “first lien
mortgages”).
118. 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. Pl.
Ex. 96 (SA00257052); Pl. Ex. 95 (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. S&A and 1st Fidelity’s
supplemental discovery responses did not identify any compensable damages they suffered in
connection with loans sold to them. See Pistilli Decl. Ex. 30 (7/11/18 Supp. Resp. of S&A and
1st Fidelity to Third Set of Interrog., Resp. No. 7); see also supra ¶ 114. 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.
71
Andrien, admitted that he did not quantify any damages incurred by S&A or 1st Fidelity. Pistilli
Decl. Ex. 31 (Andrien Dep. 111:15-18).
Dated: Washington, DC Respectfully submitted,

May 10, 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
72

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Case 1:15-cv-00293-LTS-RWL Document 402 Filed 05/10/19 Page 1 of 72

UNITED STATES DISTRICT COURT

DEFENDANTS’ RESPONSES TO PLAINTIFFS’

Attorneys for Defendants

Defendant JPMorgan Chase Bank, N.A., individually and as successor by merger to

submit the following Responses to Plaintiffs’ “Counterstatement of Facts” in support of their

1. Laurence Schneider (“Schneider”) is a principal in Plaintiffs S&A, MRS and 1st

Fidelity. Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶ 1).

2. Plaintiffs’ business strategy is to purchase distressed mortgage loans (loans in

generate significant profits via this strategy. Id.

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

545 F.3d 179, 194 (2d Cir. 2008))).

Chase Responses to Plaintiffs’ Statement of Facts (Dkt. 385) ¶ 171.

Ex. 21 (JPMC-MRS-00007926), Pl. Ex. 22 (JPMC-MRS-00002034).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

00113944); Pl. Ex. 20 (ECF 262-3 (Declaration of Laurence Schneider), ¶¶ 8-16).

individual notes to S&A and/or 1st Fidelity.

(Deposition of Richard W. Payne, III, 213-216).

(Deposition of Brad Axel, 87:8-89:6).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

Calculator are calculated in the following manner:

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

Negotiation and Execution of the MLPA

Residential Mortgage-Backed Securities Settlement (“RMBS Settlement”), together worth

of Jeffrey S. Andrien, ¶¶ 47-59).

settlement credits. Pistilli Decl. Ex. 4 (Courchane Rep. ¶¶ 105-08).

that he believed represented such a liability. Id.

for them . . . .”).

time, to be undertaken in the future, or merely being proposed.

buy the 1st liens.”).

RESPONSE: Disputed. This statement is not material to Chase’s Motion. Plaintiffs

“prevent[ed] them from receiving government credits.”

on it, and wanted to pay a nominal fee for them . . . .”).

RESPONSE: Disputed. This statement is not material to Chase’s Motion. Chase

15. In an email to Chase employee Jason Oquendo in October of 2008, as part of

RESPONSE: Disputed. This statement is not material to Chase’s Motion. Plaintiffs’

entities had experienced “success.”

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

descriptions or if you have any questions.” Pl. Ex. 28 (JPMC-MRS-00000792).

information was “cut out prior to me receiving.” Id.

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

will get it to you asap.” Pl. Ex. 28 (JPMC-MRS-00000791).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion. To

“foreclosed/unsecure” or had a “valid lien.” Pl. Ex. 30 (JPMCMRS-00000101). There was no

loans were currently secured by intact first liens. Id.

(Declaration of Laurence Schneider), ¶¶ 25 & 27); Pl. Ex. 30 (JPMC-MRS-00000101).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

have all 6000 completed by this weekend.” Pl. Ex. 30 (JPMC-MRS-00000102).

32 (JPMC-MRS-00003424-25) (Schneider explaining that, based on the “unsecured portion” of

Ex. 32 (JPMC-MRS-00003425). Later, in an email on January 28, 2009, Schneider wrote to

support Paragraph 19, which concerns the November Data Tape.

was promoting Schneider to the hierarchy at Chase. Pl. Ex. 30 (JPMC-MRS-00000101).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

make any promises to provide additional information.

you get some great deals.” Id. (JPMC-MRS-00000102).

RESPONSE: Disputed in part. This statement is not material to Chase’s Motion.

Dep. 109:5-23). Schneider agreed to Chase’s counteroffer. Pl. Ex. 39 (MLPA).

marketing… .” Pl. Ex. 32 (JPMC-MRS-00003422).

RESPONSE: Disputed in part. This statement is not material to Chase’s motion.