Court Error – RESPA Violation

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WI Court of Appeals – District IV

Case Name: Wilmington Savings Fund Society FSB

Case No.: 2018AP508

Officials: Lundsten, P.J., Kloppenburg and Fitzpatrick, JJ.

Focus: Court Error – RESPA Violation

This case arises from a foreclosure action filed by Wilmington Savings Fund Society FSB against Alisha and William Ayres. At issue on appeal are counterclaims asserted by the Ayreses against Wilmington, which are premised on Wilmington’s handling of the Ayreses’ application for a loan modification prior to the commencement of the foreclosure action. The Ayreses assert that Wilmington’s handling of their loan modification application breached Wilmington’s contractual duty of good faith and fair dealing. In addition, the Ayreses assert that Wilmington also violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601-17 (2012), in handling the loan modification application. Both the duty of good faith and fair dealing claim and the RESPA claim were tried to a jury.

The questions presented on appeal are: (1) whether the circuit court erred by overturning the jury’s verdict awarding the Ayreses damages for Wilmington’s breach of the duty of good faith and fair dealing; (2) whether the court erred by declining to change the jury’s negative answer to a special verdict question asking whether Wilmington violated RESPA in its handling of the Ayreses’ loan modification appeal; and (3) whether the court erred by allowing Wilmington’s corporate representative to testify based on notes he had prepared for trial summarizing Wilmington’s business records without also producing those records.

As to the first issue, we conclude that the circuit court properly overturned the jury’s verdict on the duty of good faith and fair dealing claim. In doing so, we explain that the Ayreses have not shown that a contract existed between them and Wilmington under which Wilmington had a duty of good faith and fair dealing with respect to the Ayreses’ loan modification application. As to the second issue, we conclude that the court correctly declined to change the jury’s special verdict answer concerning the loan modification appeal because credible evidence supports the jury’s verdict. Finally, as to the third issue, we assume without deciding that the court erred by permitting Wilmington’s representative to testify based on his notes of Wilmington’s business records without producing those records, but we conclude that the error was harmless. Accordingly, we affirm.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.