united states district court mli/u^k ; gainesville division › media › 691254 › ... · united...

$: UNITED STATES DISTRICT COURT Mli/U^k ; GAINESVILLE DIVISION › media › 691254 › ... · UNITED STATES DISTRICT COURT By \ ' f J I Mli/U^k ; NORTHERN DISTRICT OF GEORGIA , ) ^'HU'f'FJf^$
FILED IN CLERK'S OFFICE U.S.D.C. - Gainesville

SEP - 9 2016 JAMESON. MATTER Qterk

UNITED S T A T E S D I S T R I C T C O U R T By; \ ' f J I Mli/U^k N O R T H E R N D I S T R I C T O F G E O R G I A , ) ^ ' H U ' f ' F J f ^

G A I N E S V I L L E DIVISION |

SARAH FELIX, formerly known as SARAH M. ELLIS, individually and on behalf of a class,

Plaintiff,

V.

SUNTRUST MORTGAGE, INC.,

Defendant.

rimOM)i]ED1 ORDER PRELIMINARILY CERTIFYING A CLASS AND PRELIMINARILY APPROVING THE CLASS SETTLEMENT

Plaintiff Sarah Felix ("Plaintiff) and SunTrust Mortgage, Inc. ("SunTrust") have entered

into a settlement agreement (the "Settlement") which, i f approved by this Court, will resolve

Plaintiffs and the class's claims against SunTrust as alleged in the Complaint. Pursuant to Rule

23 ofthe Federal Rules of Civil Procedure, Plaintiff has made application with this Court for an

order certifying a class for purposes of effectuating the Settlement, and approving the Settlement

of this action.

Having reviewed the Settlement and the Motion for Preliminary Approval, the Court

finds that the Motion for Preliminary Approval should be GRANTED. The Court hereby gives

its preliminary approval to the Settlement, subject to the Final Approval Hearing for purposes of

deciding whether to grant fmal approval to the Settlement.

NOW, THEREFORE, IT IS HEREBY ORDERED that:

Civil Action No. 2:16-CV-00066-RWS

CLASS ACTION JURY TRIAL

Case 2:16-cv-00066-RWS Document 36 Filed 09/09/16 Page 1 of 25

1. The Court preliminarily approves the Settlement as fair, just, reasonable and

adequate as to the members of the Class, subject to further consideration at the Final Approval

Hearing described below.

2. Pursuant to Rules 23(a) and 23(b)(3) ofthe Federal Rules of Civil Procedure, and

for the purposes ofthe Settlement only and contingent upon the Settlement being fmally

approved, this action is hereby certified as a class action. The "Class" is defined as:

Any person who had a FHA-insured loan for which (i) the date ofthe note is during a period beginning on June 1, 1996 and ending on January 20, 2015; (ii) SunTrust or a SunTrust affiliate - as ofthe date the total amount due on the loan was brought to zero -was the lender, mortgagee, or otherwise held legal title to the note; (iii) SunTrust collected interest for any period after the total amount due on the loan was brought to zero (i.e., SunTrust collected "post-payment interest"); and (iv) SunTrust collected post-payment interest during the statute of limitations period applicable for the loan as shown by Exhibit A attached hereto.'

3. For the purposes of the Settlement, the Court finds that the requirements of a class

action under Rules 23(a) and 23(b)(3) ofthe Federal Rules of Civil Procedure have been satisfied

in that: (a) the number of Class members is so numerous that joinder of all members thereof is

impracticable; (b) there are questions of law and fact common to the Class; (c) the claims ofthe

Plaintiff are typical ofthe claims ofthe Class she seeks to represent; (d) the Plaintiff will fairly

and adequately represent the interests ofthe Class; (e) the questions of law and fact common to

the members ofthe Class predominate over any questions affecting only individual members of

the Class; and (f) a class action is superior to other available methods for the fair and efficient

adjudication ofthe controversy.

Based on these criteria and SunTrust's business practices, excluded from the Class are persons who had a loan brought to zero on the last calendar day of a month or on the first business day of a month. Further, excluded from the Class is anyone who received a payoff form SunTrust began using on or after April 1, 2016.

2


4. With respect to numerosity, the Court has reviewed an affidavit provided by

SunTrust indicating that the Class consists of at least 40,000 members, making joinder

impracticable. Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546,1553 (11* Cir. 1986).

("[W]hile there is no fixed numerosity rule, generally less than twenty-one is inadequate, more

than forty adequate, with numbers between varying according to other factors."). Thus,

numerosity is satisfied.

5. "To satisfy the commonality requirement, Plaintiff must show the presence of

questions of law or fact common to the entire class." In re Tri-State Crematory Litig., 215 F.R.D

660, 690 (N.D. Ga. 2003). The Eleventh Circuit has described the commonality requirement as a

"low hurdle" to overcome. Williams v. MohawliIndus., Inc., 568 F.3d 1350,1356 (11* Cir.

2009). The Court finds that there are numerous material common questions of law and fact,

including, but not limited to:

* Whether the uniform note SunTrust entered into with Plaintiff and the Class

prohibits the collection of post-payment interest unless such interest is collected

"as permitted by regulations of the [HUD] Secretary";

* Whether, in response to an inquiry, request for payoff figures or tenders of

prepayment, the note requires SunTrust to provide certain disclosures relating to

post-payment interest in "a form approved by the [HUD] Commissioner";

* Whether Plaintiff and the Class can assert a claim against SunTrust for breach of

; HUD regulations incorporated in the uniform note ;̂

Although SunTrust may have pooled one or more FHA-insured loans into a security that was sold to investors, the proceeds of which were guaranteed by Ginnie Mae, SunTrust retained legal title to the notes. See HUD Letter to General Reserve Board referenced in 74 F.R. 60143, 60146.

3


* Whether the form discussing post-payment interest that SunTrust provided

to borrowers with FHA-insured loans in response to inquiries, requests for payoff

figures or tenders of prepayment was approved by the FHA or HUD

Commissioner; and

* Whether post-payment interest is a "pre-payment penalty" not stipulated in the

uniform note which would violate Georgia's usury law, O.C.G.A. § 7-4-10.

6. With respect to typicality, that requirement is satisfied when the Plaintiffs claims

and the Class's claims "arise from the same event or pattern or practice and are based on the

same legal theory." Romberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332, 1337 (11* Cir.

1984). To satisfy typicality, the Plaintiffs "interest in prosecuting [her] own case must

simultaneously tend to advance the interests ofthe absent class members." Deiter v. Microsoft

Corp., 436 F.3d 461, 466 (4* Cir. 2006). However, "[t]he interests and claims of Named

Plaintiffs and class members need not be identical to satisfy typicality." Anderson v. City of

Albuquerque, 690 F.2d 796, 800 (10'" Cir. 1982).

Here, Plaintiff, like the Class members, requested payoff figures and contends that she

was not provided with disclosures regarding post-payment interest in a form approved by the

Commissioner, and thus SunTrust breached its contract with her when it nonetheless collected

post-payment interest. Accordingly, Plaintiffs claims are typical ofthe claims ofthe Class.

7. With respect to adequacy, the Court finds no conflict or other reason why the

Plaintiff is not adequate to represent the Class, and the Court is satisfied that Class Counsel are

adequate and competent to serve as class counsel. The Court notes that Class Counsel has

litigated dozens of class actions representing both the plaintiff and the defendant.

4


8. The requirements of 23(b)(3) are also satisfied. In the settlement context, the

"Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to

warrant adjudication by representation." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623

(1997). However, the "district court need not inquire whether the case, if tried, would present

intractable management problems, for the proposal is that there be no trial." Id. at 620. Thus,

any manageability issues that might or might not arise at trial fi'om proving injury and damages

on behalf of the class members are not relevant to certification of a settlement class.

Rule 23(b)(3) requires that "the questions of law or fact common to the class members

predominate over any questions affecting individual members, and that a class action is superior

to other available methods to fairly and efficiently adjudicating the controversy." Fed. R. Civ. P.

23(b)(3). Here, the common questions predominate. Plaintiffs individual claim, and each Class

member's claim, largely stands or falls on the common question of whether the form SunTrust

provided them in response to inquiries, requests for payoff figures or tenders of prepayment was

approved by the FHA or HUD and whether such a form was required.

Further, because the average Class member's damages are a few hundred dollars, this

case involves a "negative value suit"; i.e., a case where an individual suit will cost a Class

member more than he or she could recover. One ofthe "most compelling rationale[s] for finding

superiority in a class action" is "the existence of a negative value suit." Castano v. Am. Tobacco

Co., 84 F.3d 734, 738 (5* Cir. 1996). That is because where, as here, the costs of litigating

exceed the potential recovery, there is no altemative to class actions for "fairly and efficiently

adjudicating the controversy." Fed. R. Civ. P. 23(b)(3)). Further, even i f the cost of individual

lawsuits did not exceed the potential recovery, proceeding on an individual basis would result in

duplicative, unnecessary work for the parties and the Court. Indeed, the facts and evidence

5


relevant to show that the form document SunTrust provided borrowers in response to inquiries,

requests for payoff figures or tenders of prepayment was not approved by the FHA or HUD is

the same for every member of the Class. It would be a waste ofthe parties' and this Court's time

and resources i f every one ofthe over 40,000 class members needed to conduct discovery on the

issue of whether SunTrust's form was not FHA approved.

9. For the purposes ofthe Settlement, Plaintiff Sarah Felix is certified as the Class

Representative.

10. The Court hereby appoints the following attorneys as Class Counsel for the Class:

Steven J. Rosenwasser Naveen Ramachandrappa Frederic J. Bold, Jr. BONDURANT, MIXSON & ELMORE, LLP 3900 One Atlantic Center 1201 West Peachtree Street, N.W. Atlanta, Georgia 30309-3417

Adam Hoipkemier Jeff DeLoach Kevin Epps EPPS. HOLLOWAY, DELOACH 8c HOIPKEMIER, LLC 6 Concourse Parkway, #2920 Atlanta, Georgia 30328

11. A hearing pursuant to Rule 23(e) ofthe Federal Rules of Civil Procedure shall be

held before this Court on February ^ , 2017 ("Final Approval Hearing") for the following

purposes:

a. to fmally determine whether the Settlement is fair, reasonable, and adequate to the

Class, and should be approved by the Court;

b. to consider any application by Class Counsel for payment or reimbursement of

attorneys' fees, costs and expenses;

6


c. to consider any application for a Class Representative Service Award;

d. to consider whether to enter, without material alteration, the fmal judgments

contemplated in the Settlement and to determine whether the release by the Class

of the Released Claims, as set forth in the Settlement, should be provided; and

e. to rule upon such other matters as the Court may deem appropriate.

12. The Parties shall inform the Court within ten calendar days of the entity they

request serve as Administrator in this case.

13. The Court approves the form and substance of the Mailed Notice (attached hereto

as Exhibit B) and the Publication Notice (attached hereto as Exhibit C).

14. The Administrator shall cause the Mailed Notice, substantially in the form

attached hereto, to be mailed, by first class mail, postage prepaid, on or before November 1,

2016 to all members ofthe Class whose names and last known addresses are readily

ascertainable fi-om the electronic data provided by SunTrust pursuant to the Settlement. Upon

hiring the Administrator, SunTrust will provide the Administrator with the following information

for each Class Member: (i) name; (ii) last known address; (iii) social security number (to the

extent reasonably available); and (iv) the amount of post-payment interest SunTrust collected.

Prior to mailing, the Administrator shall attempt to update the last known addresses of the Class

Members through the National Change of Address system or similar databases. With respect to

any Notices that are returned as undelivered, the Administrator shall attempt one trace and, i f the

trace establishes an alternate address, attempt one additional mailing of the Notice to the

alternate address. The Court further directs that any notices returned by the Postal Service with

forwarding addresses be promptly re-mailed to the provided forwarding address. Additional

7


copies ofthe Mailed Notice shall be made available to any individual who requests a copy from

the Administrator. The Administrator shall not be obligated to undertake additional traces or

additional mailing efforts. SunTrust's counsel shall, at or before the Final Approval Hearing, file

with the Court proof of mailing ofthe Mailed Notice.

15. The Court directs that the Administrator shall submit the Publication Notice to be

published in the Wall Street Journal and USA Today on or before November 15, 2016. The

Publication Notice shall run for three consecutive days and be no smaller than 1/8 of a page.

SunTrust's counsel shall, at or before the Fairness Hearing, file with the Court proof of

publication of the Publication Notice.

16. The form and content ofthe Mailed Notice and the Publication Notice, and the

method set forth herein of notifying members ofthe Class ofthe Settlement and its terms and

conditions, meet the requirements of Rule 23 of the Federal Rules of Civil Procedure and due

process. The Court fmds that the Mailed Notice and Publication Notice constitute the best notice

practicable under the circumstances, and that they are reasonably calculated, under the

circumstances, to apprise members of the Class ofthe pendency ofthis action and their right to

object or exclude themselves fi'om the Settlement, and shall constitute due and sufficient notice

to all persons and entities entitled thereto.

17. The Administrator shall also set up a website, on or before November 1, 2016,

which shall be accessible to the public and contain at least the following pleadings when

available: (i) the Complaint; (ii) the Mailed Notice; (iii) this Order; and (iv) any application for

attorneys' fees and expenses or class representative service award.

8


18. Members of the Class shall be bound by all determinations and judgments in this

action, whether favorable or unfavorable, unless such persons request exclusion from the Class

in a timely and proper manner, as hereinafter provided. A member ofthe Class wishing to make

such request shall mail the request in written form to the address designated in the Notice, and

the request must be received by the Administrator no later than January 2, 2017. The opt-out

statement must be a written, signed, and dated statement indicating that the Class member is

opting out ofthe Class and understands that he or she will receive no money from the Settlement

ofthis Action. To be effective, this opt out statement must include the Class Member's name

and last four digits of their social security number and be personally signed and dated by the

Class Member. The request for exclusion shall not be effective unless it provides the required

information and is made within the time stated above.

19. Members of the Class requesting exclusion shall not be entitled to receive any

payment out ofthe Settlement Fund as described in the Settlement.

20. The Court will consider comments and/or objections to the Settlement only if, on

or before January 2, 2017, such comments or objections and any supporting papers are received

by the Clerk of this Court and copies of all such papers are mailed or delivered to each ofthe

following:

To Plaintiff and the Class:

Steven Rosenwasser Naveen Ramachandrappa Bondurant, Mixson & Elmore, LLP 1201 W. Peachtree Street Suite 3900 Atlanta, GA 30309

9


To SunTrust:

Jeffrey Willis Michael Eber Rogers & Hardin LLP 2700 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303

21. To be valid and considered by the Court, an objection must (i) be received on or

before January 2, 2017; (ii) state each objection the Class Member is raising and the specific

legal and factual bases for each objection; (iii) include proof that the individual is a member of

the Class; (iv) identify, with specificity, each instance in which the Class Member or his or her

counsel has objected to a class action settlement in the past five years; and (v) be personally

signed by the Class Member. All evidence and legal support a Class Member wishes to use to

support an objection must be filed with the Court and sent to the Parties by the Objection

Deadline. An objection will be barred i f the requirements set forth herein are not followed.

22. Attendance at the Final Approval Hearing is not necessary; however, persons

wishing to be heard orally in opposition to the approval of the Settlement are required to indicate

in their written objection their intention to appear at the hearing. Persons who intend to object to

the Settlement and desire to present evidence at the Final Approval Hearing must include in their

written objections the identity of any witnesses they may call to testily and exhibits they intend

to introduce into evidence at the Final Approval Hearing. Members of the Class need not appear

at the hearing or take any other action to indicate their approval of the Settlement. Plaintiff and

SunTrust may file responses to any objections that are submitted.

10


23. Any member ofthe Class may enter an appearance in the Action, at his, her or its

own expense, individually or through counsel of choice, provided that the Class member timely

files and serves an objection and also files a Notice of Intention to Appear with the Clerk of

Court no later than twenty (20) days before the final approval Hearing. A Class Member who

wishes to appear at the final approval Hearing must also send a copy ofthe Notice of Intention to

Appear to SunTrust's Counsel and to Class Counsel twenty (20) days before the final approval

Hearing. Failure to adhere to the requirements ofthis Section will bar a Class Member from

being heard at the final approval hearing, either individually or through an attorney, unless the

Court otherwise so orders. Class members who do not enter an appearance will be represented

by Class Counsel.

24. Pending fmal determination of whether the Settlement should be approved, the

Plaintiff, all Class members, and each of them, and anyone who acts or purports to act on their

behalf, shall not institute and are preliminarily enjoined: (i) fi-om filing, commencing,

prosecuting, intervening in, or participating as plaintiff, claimant or class member in any other

lawsuit or administrative, regulatory, arbitration or other proceeding in any jurisdiction against

SunTrust as those entities are defined in the Settlement based on, relating to, or arising out of the

claims and causes of action in the Complaint or the Released Claims; and (ii) from filing,

commencing or prosecuting a lawsuit or administrative, regulatory, arbitration or other

proceeding against SunTrust as a class action on behalf of any members ofthe Class who have

not timely excluded themselves (including by seeking to amend a pending complaint to include

class allegations or seeking class certification in a pending action), based on, relating to, or

arising out of the claims and causes of action in the Complaint or the Released Claims.

11


25. I f the Settlement is terminated by SunTrust then this Order certifying the Class

and the class representatives for purposes ofthe Settlement shall be null and void, automatically

vacated, of no fiirther force or effect and without prejudice to any party, and may not be

introduced as evidence or referred to in any actions or proceedings by any person or entity, and

each party shall be restored to his, her or its respective litigation positions as they existed on the

date before entering into the Settlement.

26. I f the Settlement is finally approved, the Court shall enter a Final Stipulated

Judgment Terminating Action, which judgment shall be binding upon all members ofthe Class

who have not previously requested exclusion in accordance with this Order and the terms ofthe

Settlement.

27. In the event that the proposed Settlement is not approved by the Court, or entry of

a Final Stipulated Judgment Terminating Action does not occur for any reason, then the

Settlement, all drafts, negotiations, discussions, and documentation relating thereto, and all

orders entered by the Court in connection therewith, shall become null and void, and shall not be

used or referred to for any purpose in this action or in any other proceeding. In such event, the

Settlement and all negotiations and proceedings relating thereto shall be withdrawn without

prejudice to the rights of any ofthe Parties thereto, who shall be restored to their respective

positions as they existed on the date before execution of the Settlement.

28. Class Counsel is not applying for an award of attorneys' fees and expenses or a

class representative service award at this time, but rather will make such an application prior to

the disbursement of the Net Settlement Fund. The Court will consider Class Counsel's

applications when submitted.

12


29. Any application by Class Counsel for payment or reimbursement of litigation

costs or expenses or for a class representative service award shall be filed with the Court no later

than December 16, 2016.

30. The Court retains exclusive jurisdiction over the Action to consider all further

matters arising out of or connected with the Settlement.

I T IS SO O R D E R E D

Dated: ^dge, United'^tates District Coui Northem District of Georgia J Gainesville Division

13


EXHIBIT A - STATUTE OF LIMITATIONS


: state . VViittcii : state . Gontract

Alabama 6 years Ala. Code § 6-2-34

Alaska 3 years Alaska Stat. § 09.10.053

Arizona 6 years Ariz Rev, Stat. § 12-548

Arkansas 5 years Ark. Code Ann, S 16-56-111

Califomia 4 years Cal, Civ. Proc. Code § 337

Colorado 3 years Colo, Rev. Stat. § 13-80-101

Connecticul 6 years Conn, Gen, Stat, § 52-576

Delaware 3 years Del. Code Ann. 10 §8106

D.C. 3 years D.C. Code § 12-301

Florida 5 years Fla. Stat. Ann. §95,11

Georgia 6 years O.C.G.A. § 9-3-24

(jiiam 4 years 7 OCA § 11303

Hawaii 6 years Haw, Rev, Stat. § 657-1

Idaho 5 years Idaho Code §5-216

Illinois 10 years 735 III, Comp. Stat 5/13-206

Indiana 6 years Ind. Code Ann, §34-11-2-9

Iowa 10 years Iowa Cock § 614,1

Kansas 5 years Kan. Stat. Ann. § 60-511

Kentucky 10 years Ky. Rev, Stat. Ann, §413.160

Louisiana 10 years U. Civil Code § 3499

Mahie 6 years 14 Me. Rev, Stat. Ann. 14 § 752

Maryland 3 years Md. Courts & Jud, Proc. Code § 5-101

Massachusetts 6 years Mass. Ann. Uws. Ch. 260 § 2

Michigan 6 years Mich. Comp. liiws § 600.5807

Minnesota 6 years Minn. Stat, Ann, § 541,05

Mississippi 3 years Miss. Code Ann, § 15-1-49

Missouri 10 years Mo, Rev, Stat. § 516.110

Montana 8 years Mont. Code Ann. § 27-2-202

Nebraska 5 years Neb, Rev, Stiit. § 25-205

Nevada 6 years Nev. Rev. Slat. Ann, § 11.190

New Hampshire 3 years N,H, Rev. Siai. Ann, § 508:4

New Jersey 6 years NJ. Stat. Ann, § 2a: 14-1

New Mexico 6 years H M . Stat. Ann. § 37-1-3

New Yoi-k 6 years N,Y. Civ. Prac, Onvs& Rules § 213

North Carolina 3 years N.C. Gen. Stat, § 1-52

North Dakota 6 years N.D. Cent. Code § 28-01-16

Ohio 8 years Ohio Rev, Code Ann. §2305.06

Oklahoma 5 years Okla. Stat. Ann, til. 12 § 95

Oregon 6 years Or. Rev. Stat. § 12.080

Pennsylvania 4 years 42 Pa. Cons. Stat, Ann. § 5525

Puerto Rico 15 yeai's 31 L.P.R.A. § 5294

Rhode Island 10 years R.l, Gen, Laws § 9-1-13

South Carolina 3 years S,C. Code Ann. § 13-3-530

141)8166


South Dakota 6 years S.D. Codified Laws Ann. § 15-2-13

Tennessee 6 years Tenn. Code Ann. § 28-3-109

Texas 4 years Tex. Civ, Prac. & Rem. Code § 16.004

Utah 6 years Utah Code Ann. § 780-2-309

Vermont 6 years Vt. Stat. Ann. tit. 12 §511

Virgin Islands 6 years 5V.I.C, §31

Virginia 5 years Va. Code Ann. §8.01-246

Washington 6 years Wash, Rev. Code Ann, § 4.16.040

West Virginia 10 years W. Va. Code § 55-2-6

Wisconsin 6 years Wis, Stat. Ann. § 893,43

Wyoming 10 years Wyo. Stat. § 1-3-105

1468166


EXHIBIT B - NOTICE


UNITED STATES DISTRIC T COURT NORTHERN DISTRICT OF GEORGIA

GAINESVILLE DIVISION

SARAH FELIX, foimerly known as SARAH M. ELLIS, inclivitiually and on behalf of u class,

Plaintiff,

V,


Defendant.

NOTICE OF PROPOSED CLASS ACTION SET TLEIVIENI AND RELEASE OF CLAIMS

IF YOU PREPAID AN I 'llA-mUHED LOAN WITH SUNTRUST, YOUR LEGAL RIGHTS MA Y RE AFFECTED, AND YOU MAY BE ENTITLED TO BENEFITS FROM A PROPOSED CLASS ACTION

SETTLEMENT

**TMs Is Not A Solkllalioit -A Fedeml Court Authorized This Notice**

• A selllcnient has been reached in a class action lawsuit alleging that SunTrust Mortgage, Inc. ("SunTrust") improperly collected post-payment interest (t.e,, interest for a time period after tlie loan was paid in full) on FHA-insured loans entered into between June 1,1996 and January 20,201S. Without admitting liability, SunTrust has agreed to a settlement with the plaintiff and a class (tho "Settlement").

The federal district court overseeing the action has preliminarily approved the proposed Settlement as fair, adequate and reasonable, The Court will liold a F«irn«s.s Hearing on February 6,2017 to determine whether to give flnal ap|)roval to the proposed settlement. I f finally approved, the Settlement wil l provide cash payments to members ofthe Class and require SunTrust to provide disclosures relating to post-payment interest in a form approved by the FHA/HUD Commissioner for a period of three years.

• You have the right to opt-out ofthe Settlement or to submit written comments upon or objections to (1) the proposed Settlement, (2) the request for attorney fees and reimbursement of expenses incurred by the lawyers who are representing the Class and/or (3) the request for a service award for the plaintiff, All opt outs, comments and objections must meet the requirements described In this Notice (Paragraph 7-9) and must be received no

later than January 2, i o 17.

BASIC INFORMATION

I \Miv did I I 'd ihN N o i K i '

I fyou received this Notice and it is addressed to you. then the parties believe thatyou may be a member ofthe

Class.

12 ^^h I t l^ Ihi" I m s n i i ill ( u f

On April 4,2016, Plaintiff Sarah Felix filed a lawsuit in the U.S. District Court for the Northem District of Georgii

Civil Action No. 2:16-CV-000(56-R\VS



entitled Sarah Felix, et al v. Suit7his( Mortgage, Inc,, No. 2; 16-CV-00066-RWS {"Felix") asserting individual and class-wido claims for brcaoli of contract against SunTrust.

Tlie lawsuit claims that SunTrust breached a uniform note it entered into with Plaintiff and the Class when it collected post-payment interest on FHA-insured loans that were (i) entered into between June 1,2006 and January 20,2015 and (ii) prepaid within the stdtuto of limitations applicable to the loan. Plaintiff contends that under tho uniform note SunTnist entered into with her and the class, SunTrust can only collect post-payment interest as permitted by HUD regulations incorporated into the note, and that SunTrust did not comply with those regulations. In particular. Plaintiff'contends that, in response to inquiries, requests for payoff figures and tenders of pre-pay ment, SunTrust did not comply with the HUD regulation requiring it lo provide borrowers with certain infonnation about post-payment interest in a form approved by the FHA/HUD Commissioner. Plaintiff contends that because SunTrust did not comply with HUD regulations incorporated into the note, SunTrust had no right to collect post-payment interest, and breached the note by doing so, Plaintiff also contends that SunTrust violated Georgia's usury laws by collecting post-payment interest when it was not permitted to do so under the note. SunTrust denies Plaintiffs and the Class's claims, and denies that it is liable for any ofthe claims asserted In the lawsuit.

3 \Mi. i t is , i i l is>. ict l (>n'

In a class action lawsuit, one or more people called class representatives sue on behalf of other people that allegedly have similar claims. Al l ofthe people who have claims similar to the class representatives are a "class" or "class members," except for those who exclude themselves from the class.

4. \ \ hii I- m Ihi ( I ISS ((.1 l i i l .d l)v thi I nui t '

On September^, 2016, for purposes of seulement only, the Court preliminarily certified a class defined as;

Any person who had a FHA-insured loan for which (i) the date ofthe note is during a period beginning on June 1, 1996 and ending on January 20,2015; (ii) SunTnist or a SunTrust affiliate - as of tlie date the total amount due on the loan was brought lo zero - was the lender, mortgagee, or otherwise held legal title to the note; (iii) SunTrust collected interest for any period after the total amount due on the loan was brought to zero (i.e„ SunTrust collected "post-payment interest"); and (iv) SunTrust collected post-payment hrterest during the statute of limitations period applicable for the loan as shown by Exhibit A (the "Class"), Persons who had a loan brought to zero on the last calendar day of a month or on tlie first business day of a monti) are not included in the Class. Also excluded from the Class is anyone who received a payoff fonn SunTrust began using on or after April 1,2016.

You can view Exhibit A at vvw4.--"^.com or request a copy by contacting the Administrator at tlie address below.

Any person who meets the definition above is a "Class Member.

THE TKRMS OF THE SK ITI-EMKNT

S \ \ ll It d us tni S i itu m nt pi u\ KU

The Settlement provides that SunTrust will provide injunctive and monctaiy relief as follows;

Injunctive Relief

For a period of three years from tlic Effective Date, SunTrust agrees that in response to a pre-payment inquiiy, request for payoff figures or tender of pre-payment, it wi l l provide the required disclosures relating to post-payment interest In a fonn approved by the FHA/HUD Commissioner. The injunctive relief component ofthe settlement applies only to borrowers witli FHA-insured loans entered into between June 1,1996 and January 20,2015, Further, nothing in the injunctive relief requires Sun'f rust to violate any law or regulation.

Monetary Relief

SunTrust agrees to pay Three Million Five Hundred Thousand Dollars ($3,500,000) to settle the class action (the

-2-


"Settlement Fund"), The Settlement Fund will be used to pay Class Members their settlement proceeds, as well as to pay any Class Representative Service Award (see Paragraph 11 below) and any Fee & Expense Award (see Paragraph 11 below), SunTrust also agrees to pay all fees, costs and expenses associated with providing notice and administering the settlement, which shall be in addition to the $3,5 million seUlemcnt payment above.

Class Member Awards - Each Class Member who does not timely opt out of the Settlement wil l be entitled to receive a "Class Member Award." The amoimt ofthe Class Member Award will be detennined as follows:

(i) First, the Adtninistralor will sum the total amount of post-payment interest SunTrust collected from all Class Members who do not opt-out ofthe Settleinent;

(ii) Second, the Administrator will divide each Class Member's individual post-payment interest by the sum of all post-payment interest collected by SunTrust as calculated in (1) immediately above; and

(iii) Third, the Administrator wil l multiply the percentage calculated in (ii) immediately above by the Net Settlement Fund, with that number constituting the Class Member Award,

Thus, by way of hypothetical example, i f SunTrust collected SlOO in post-payment interest from Class Member X, $10,000,000 from all Class Members who do not opt-out and the Net Settlement Fund is $2.5 million, then Class Member A's recovery would be $25; i.e. 1/10,000,000 x $2,5 million. The "Net Settlement Fund" is tite amount of the S3,5million Settlement Fund remaining after deductions for any Class Representative Service Award and Fee & Expense Award (see Paragraph 11 below).

I f the Settlement is finally approved, all Class Members who do not timely opt out shall be doomed fo have released, relinquished and forever discharged SunTrust as well as its past, present and future parent corporatlon(s), wholly and majority-owned company(ies), affiliates, subsidiaries, predecessors, successors, succcssors-in-interest, and assigns, as well as any lender, mortgagee or other title holder (the "Released Parties") of any notes of a Class member. For clarity, the notes referenced in the preceding sentence pertain to only those notes for which SunTrust or a Sun'frust affiliate was the lender, mortgagee, or othei-wise was the holder of legal title at the time the outstanding balance was paid to zero, from all ofthe "Released Claims," as that term is defined in the Settlement Agreement. All Class Members who do not opt out wil l agree not to institute, assign, maintain, collect on or prosecute any further action against the Released Parlies arising out of, based upon, or relating in any way to the Released Claims, The Released Claims include all claims, whether known or unknown, that relate to SunTrust collecting post-payment interest on FHA-insured loans that you prepaid within the statute of limitations. You may review the entire release and the definitions of "Released Claims" in the Settlement Agreement, which you can find

at www,-——r--.com.

b lIoH ll 11 |.i.t 11 jvmint ll in ll I . S i i i U n u i 11 iind wid n l i i n \>ill I ^ i l l l '

I f the Settlement is approved by the Court after the Fairness Hearing (see Paragraphs 12-14 below) and becomes final, the Settlement funds will be distributed to Class Members under a schedule and distribution procedure approved by the Court. Tho Settlement will not become final until the lime to appeal the Court's approval has expired or any appeals of that approval are resolved,

YOUR RIGHTS AND OPTIONS IN RESPONSE TO THIS NOTICE

" How do I ip to i i i olthe S i t l l i i i n n l '

I fyou wish to remain In the Class you do not need to do anything at this time. Class Members who do not timely and validly exclude themselves from the Class in the manner described below will be bound by the proposed Settlement and judgment, including the release of claims described above.

You have the right to exclude yourself from the Settlement and the Class. I f you do so, you will not be bound by the proposed Settlement or judgment, including the release of claims described above, and you will not be entitled to any of

-3-


the benefits of tlie proposed Settlement, including any right to receive a share ofthe Settlement Fund. Further, i f y o u exclude yourself from the Settlement and the Class, you wil l not be entitled to object to the terms ofthe proposed Settlement. To exclude yourself from the Settlement and tho Class, you must send or deliver a written request slating your election to do so to the Administrator at the following address;

[n order for vour ont-out to be valid, the written statement vou provide to the Administratoi- nuist meet the following requirements: (i) it must be in writing; (ii) include your name and last four digits of your social security number; (ill) personally signed and dated by the Class Member; (iv) received by the Administrator no Inter (hau Januai-\^v20il7:and (v) clearly state that you are opting out ofthe Class and understand thatyou will receive no money from the Settlement,

S l l im do I riliji.i.t torn i immmt u| i in I h i S i l l U i n u i l

I fyou are a member ofthe Class you may comment upon or object to the Settlement, For example, i fyou do not believe that the Setdement is fair, reasonable or adequate, you may fde an objection to the Settlement, You may also comment upon or object to the motions by Class Counsel for reimbursement of expenses, for an award of attorneys' fees or for Plaintiff to receive a service award (see Paragraph 11),

I f y o u want your comment or objection to be considered by the Court, you must send a letter that contains all

of the following:

« The name ofthe lawsuit, Felix, et al v. StmTrust Mortgage, Inc., No, 2:16-CV-00066-RWS;

• A statement that you object to or wish to comment upon the Sculoment or the motions by Class Counsel for

reimbursement of expenses, for an award ofaltorneys' fees or for a service award for the Plaintiff (see

Paragraph 11); t A statement ofthe specific legal and factual basis for each objection; • Copies of any evidence or documents you want the Court to consider; • A statement, and documentation, demonstrating that you are a member ofthe Class; . Identification, with specificity, of eoch instance in which you or your counsel has objected to a class action

settlement in the last five years;

• I f you (or your lawyer) want to appear and speak at fhe Fairness Hearing, a statentenl that you wish to

appear and speak; and • The identity of any witnes,scs you want to call to teslify at Ihe Fairness Hearing

Your objection must be ncr.<on»Uv sianed bv vou and must be mailed to the Court and received ^o lifter than

.liiiiMiirv 2.2017. The Court's address is:

United Slates Courthouse & Federal Building 121 Spring Sireet, SE

Room 201 Oainesville, GA 30501

Copies of your objection nuist also be mailed to the following lawyers and received no loiter thitn jrpmfjiry 2̂ 21

Steven Rosenwasser BONDURANT, MIXSON & ELMORE, LLP 3900 One Atlantic Center 1201 West Peachtree St„ NW Atlanta, Georgia 30309-3417

Jeffrey Willis ROGERS & HARDIN LLP 2700 International Tower 229 Peachtree Street, N,E. Atlanta, GA 30303

Claxs Counsel SunTrust's Counsel


I fyou file a timely and valid objection or comment, tlie Court will consider your views. I f the Courl overrules your objection and approves the Settlement, you will still be bound by the terms of the Settlement and you may still participate in the Settlement,

*), ( in 1 .ii>pi.ti in tlii> I i » i m t t ! i i i i u j i i n \ o w n l m M i '

I fyou are a Class Member you may (but do not have to) appear in this lawsuit and speak to the Court about the Settlement. This is called making an appearance. You may make an appearance on your own, or you may have your own lawyer do so at your own expense, I fyou want your own lawyer to appear and speak to the Court about the Settlemcnl, your lawyer must file a "Notice of Appearance" with the Court no later than Jaiiuarv 2; 2017 and send copies to tlio lawyers listed in Paragraph 8 above.

T H E L A W V E K S REPRESENTING V O D

10 D i i J h i v i 11 iwvi i I I I this I i s i?

Yes, The Court has appointed the following lawyers lo represent you and all Class Members;

Steven Rosenwasser Naveen Ramachandrappa Pre<lerioJ,Bold,Jr, Bondurant Mixson & Elmore 3900 One Atlantic Center 1201 VVest Peaciilrce Street Atlanta, OA 30309-3417

Adam lloipkemer

Kevin Epps JelTDeEoach Epps, Holioway, DeLoacii & Hoipkemier, LLC 1220 Langford Dr, Bldg. 200 Suite 101 Watkinsville, GA 30677

Together, these lawyers are called Class Counsel. Fees for Class Counsel's work will be paid from the Settlement Fund in an amount to be approved by the Court, Paragraphs 5 and 11 explain how Class Counsel's fees and expenses will be deducted from the Settlement Fund,

| ] III H niuih will ( I i-s < nniMLl li. |i i i d ' N\hat will i h t ( l i > - lvt | i i t s fnl . i t ius R u t i M '

At the final approval I learing, Class Counsel will ask the Court to approve payment of attorneys' fees and expenses

of no more than 33% ofthe Settlement Fund (the "Fee & Expense Award"), The Court may approve this amount or

a lower amount.

In return for the Plaintiffs contributions to the lawsuit, including reviewing and providing records, providing insight and opinions regarding the case and Settlement, and otherwise bearing the burdens of assisting the prosecution of this lawsuit, the Plainti f f intends to ask the Court for a service award not to exceed S7,500 (tho "Class ReprescnlalivB Service Award"). Payment ofthis amount requires Court approval and would be in addition to any payment Plaintiff would receive from the Settlement Fund.

As Slated above, any Fee & Expense Award and/or Class Representative Service Award will be deducted from fhe

Settlement Fund, and the amount remaining to pay Class Member Awards after those deductions is the Net

Settlement Fimd,

The motion of Class Counsel for an award of attorneys' fees and for reimbursement of expenses, as well as any motion for a service award to the Plaintiff, as described above, will be filed with the Court by December 16,2016, These documents will be available from the PACER website, the Court or Class Counsel,

THIS Coimr's FINAI, APPKOVAI, HEAHING


The Court wil) hold a hearing to consider everyone's views and to decide whether to finally approve the Settlement. You may attend and you may ask to speak, but you don't have to.

12, Wlicii and where will llu- C o u i l deudr whether fo uppro \L Hie SLt i lL i i i i i i t >

The Court wil l hold a flnal approval hearing on Kcbhiary;*fe;2017. The Court is located at the United States Courthouse & Federal Building, 121 Spring Sireet, SE, Room 201, Gainesville, GA 30501, and the hearing will be hold before Judge Richard Story, A l the hearing, the Court will consider all timely and valid objections, and will consider whetlier the Settlement is fair, adequate and reasonable. The Court wil l also consider tlie motions of Class Counsel for a Pec & Expense Award and for a Class Representative Service Award as described in Paragraph 11. The Court will listen to people who have timely imd validly asked to speak at the hearing. After fhe hearing, the

Courl wil l decide whether lo approve fhe Settlement,

I J Dn 1 h iv i . l o k i m u K i l h i I i n i l \ p p M i \ i i l l l L 11111}.̂ |

You don't have to come to the final approval hearing. But you and/or your lawyer are welcome to come at your

own expense. I fyou send a timely and valid written objection or comment, you don't have to come lo the hearing

for the Court to consider it,

N ( in 1 sp i i l l .1 t l i L I i n l l \ p p i u \ l l 111 n h v '

I fyou send a timely and valid objection, you can ask lo speak about it at the final approval hearing. To do so, your objection must say thatyou want to speal< al the hearing as described in Paragraphs 8 and 9 above.

C H A N O E O F A l ) D U t : S S

11 \ \ h i l s h m i l d l d i i i r i i i \ iddii.<-<. is d i l l i u n l lU I I I I U M '

Please remember that vou must notify the Administrator of anv chanee of address after vou receive this Noticg. You

can contact the Administrator, [ENTER NAME] by yyrillhg to []•

G E I T I N G M O R E I N F O R M A T I O N

' I S \ I I . i i u i i d L t i i l s ll u t i h i l i w s u l t n i i d l h i S i t i l i m i n l i v i l l i l i K '

This Notice summarizes tlie lawsuit and Settlement, More details are in the pleadings and other documents filed in this lawsuit. You can read tliese documents on the PACER federal court website or at the Office ofthe Clerk, Uniied States District Court for llie Northern District ofGeorgia, located Uniied Slates Courthouse & Federal Building, 121 Spring Street, SE, Room 201, Gainesville, GA 30501, Further information can also be found at

www,--":""*--com.

Please do not contact the Clerk or the Court, as thev cannot answer anv (iucslion,s about the lawsuit or fhe Settlement,

-6-


EXHIBIT C PUBLICATION NOTICE


IF YOU PREPAID AN FHA-INSURED LOAN WITH SUNTRUST YOUR L E G A L RIGHTS MAY BE AFFECTED BY A PROPOSED CLASS ACTION SETTLEMENT

What is this Notice About?

A fcdoral court lias preliminarily certified a class of borrowers who prepaid FHA-insured loans with SunTrust Mortgage, Inc. ("SunTnist") in the matter of Sarah Felix, ct al. v. SunTrust Mortaaac. Inc.. No, 2;l6-CV-00066-R\VS, pending in the United States District Court for the Northern District of Georgia, Gainesville Division (the "Action"),

Tlie Aciion claims that Sun'frust breached the notes il entered Into with Plainti IT and the Class when it charged post-payment interest (i.e., interesi for a time period after the loan was paid in full) in a manner that violated the MUD regulations incoiporntcd Into the notes. Plaintiff also claims that SunTrust violated Georgia's usury laws, SunTrust denies liability.

In Augu,st 2016, the parties reached a settlement which the Court preliminarily approved on September <|, 2016, The Court will hold a final approval hearing on February fe,, 2017.

This Noike Is onh a siiiimmrv of your legal rights ami choices. For more complete Information, please rem! the full Notice, which you can obtain by visiting •—~,com.

Am I a Member of the Class?

The Class consists of any person who hod a FHA-insured loan for svhich (i) the date of the note is during a period beginning on June 1, 1996 and ending on January 20, 2015; (ii) SunTnist or a SunTrust afPiliate- as ofthe date the total amount due on the loan was brought to zero - was the lender, mortgagee, or oiherwi."ie held legal title to the note; (iii) SunTrost collected interest for any period after the total amount due on the loan was brought lo zero (i.e., SunTnist collected "post-paymcnl interest"); and (iv) SunTrust collected post-payment interest during the statute of limitations period applicable for the loan as shown by Exhibit A to the Settlement Agreement (a copy of which can be obtained by visiting .com). Pcr-sons who had a loan brought to zero on llie last calendar day of a month or on the first business day of a month arc not included in the Class. Also excluded from the Class is anyone who received a payoff form SunTrust began using on or after April 1,2016,

If you believe you are a Class member, but you did jmi receive a copy of liie full Notice in the mail, you must contact the Administrator ininicdiatelv bv writing to:

What Are The Terms of the Settlement?

The Settlement requires that SunTrust pay Three Million Five Hundred Thousand Dollars ($3,500,000) (the "Seulement F\md"), 'fhe Settlement Fund will be used to pay Class members, as well as to pay Class Counsel's attorneys* fees and expenses and for a service award for the Plaintitf, Class Member Awards will be calculated as follows: (i) First, the AdministratDr will sum the total amount of post-payment interest SunTrust collected from all Class Members who do not opt-out ofthe Settlement; (ii) Second,

Ihe Administrator will divide each Class Member's individual post-payment interest by tho total amount of post-paymcnl interest SunTrust collecied from all Class Members who do not opt-out of the SeUlemcnt os calculated in (i) immediately above; and (iii) Third, the Administrator will multiply the percentage calculated in (ii) immediately obove by the Net Scttlemenl Fund, with the calculation constituting the Class Member Award. Thus, by way of example, if SunTrust collected SlOO in post-payment interest from Class Member X, $10,000,000 frmn all Class Members who do not opt-out and the Net Settlement I'lind is S2.5 million, then Class Member X's Class Member Award would be $25; 100/10,000,000 x S2,5 million.

Plaintiff intends to seek a Class Representative Service Award from the Settlement Fund, which requires Court approval and will not exceed S7,500. Class Counsel will seek to have ilieir expenses reimbursed and an award of attorneys' fees (a "Fee & E.xpenscs Award"), which requires Court approval and will noi exceed 33% of the Settlement Fund or $1,155,000, The "Net Settlement Fund" is the amount of the $3.5 million SeUlemcnt Fund remaining after deductions for any Class Representative Service Award and Fee & Expense Award,

In addition lo the monetary benefits, SunTrust agrees lo certain injunctive relief as described in the Settlement.

What Are My Rights?

Stay jn the lliieniion a.<s a class member To stay in tlic Class, you

don't neal to do anydiing, By staying in die Class, you are bound by all ofthe court's orders and have the right to recover from the Scttlemenl Fund. You will give up any right you might have to sue SunTrust individually for all claims relating to post-payment iiucrest, Ifyou stay in the Class, you have the right to object to the Setdement, The process for objecting is described in the full Notice and the Settlement Agreement.

Exclude Yourself. If you don't want to bo a part of the Class and want to keep any riglil to individually assert claims against SunTrust that you would otherwise give up by staying in the Class, you must exclude yourself from the Class by sending a valid exclusion request that is received by the Administrator by January 2; 20l7, i f you exclude yourself from the Class, you wilt not be bound by any of the Court's orders and you will not be able to participate in the Setdement The lull Notice explains how to opt out.

Appear in the lawsuit, I fyou stay in the Class, you may, but are not required to, appear through your own attorney (at your expense). Otherwise, Class counsel will represent you.

Please read the full Notice carefully for ndditlonal details on how to exclude yourself or oblecf, Vou cim obtain the full Notice at ww\».-^.coni.


UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA

GAINESVILLE DIVISION

SARAH FELIX, formerly known as SARAH M. ELLIS, individually and on behalf of a class,

Plaintiff,

v.


Defendant.

Civil Action No. 2: 16-CV -00066-R WS


[~)ORDER

Presently before this Court is the Joint Motion Relating to Preliminary Approval of Class

Settlement. After reviewing that motion, the Court hereby designates Kurtzman Carson

Consultants as the Administrator of the proposed class settlement. The Court further holds that

the Final Approval Hearing shall b~ ·tl~id' at //;(K}adJ~n February 6, 2017, and that the deadline

for Plaintiff to file her motion for final approval of the settlement is January 13, 2017.

IT IS SO ORDERED

Dated: M;~ ,2(?/~

1465442.1


united states district court mli/u^k ; gainesville division › media › 691254 › ... · united...

Documents