Joanna Burke v. Ocwen Financial Corporation ( 2020 )

USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 1 of 15
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-13015
Non-Argument Calendar
________________________
D.C. Docket No. 9:17-cv-80495-KAM
JOANNA BURKE,
JOHN BURKE,
Interested Parties - Appellants,
CONSUMER FINANCIAL PROTECTION BUREAU,
Plaintiff,
OFFICE OF THE ATTORNEY GENERAL,
State of Florida, Department of Legal Affairs, et al.,
Consolidated Plaintiffs,
versus
OCWEN FINANCIAL CORPORATION,
a Florida corporation,
OCWEN LOAN SERVICING LLC,
a Delaware limited liability company,
OCWEN MORTGAGE SERVICING INC.,
a U. S. Virgin Islands corporation,
Defendants - Appellees.
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 2 of 15
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(November 2, 2020)
Before NEWSOM, GRANT, and LAGOA, Circuit Judges.
PER CURIAM:
John and Joanna Burke, proceeding pro se, appeal from the denial of their
motions to intervene as of right and by permission and for reconsideration in an
action brought by the Consumer Financial Protection Bureau (CFPB) against
Ocwen Financial Corporation, Ocwen Mortgage Serving, Inc., and Ocwen Loan
Serving, LLC (collectively, Ocwen).1 After careful review, we affirm the district
court’s rulings.
I
The CFPB sued Ocwen, alleging violations of: (1) the Consumer Financial
Protection Act, 12 U.S.C. §§ 5531, 5536; (2) the Fair Debt Collection Practices
Act, 15 U.S.C. §§ 1692e(2)(a), 1692e(10), 1692f; (3) the Real Estate Settlement
Procedures Act, 12 U.S.C. §§ 2605, 2617; (4) the Truth in Lending Act, 15 U.S.C.
§ 1604(a); and (5) the Homeowners Protection Act of 1998, 12 U.S.C. § 4902(b).
1
Although a motion for intervention is not an appealable final order, we have provisional
jurisdiction to determine whether the denial was proper. See AAL High Yield Bond Fund v.
Deloitte & Touche LLP, 361 F.3d 1305, 1309 n.4 (11th Cir. 2004).
2
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 3 of 15
Separately, the Burkes were involved in two cases implicating their
property. First, in April 2011, Deutsche Bank initiated an action to foreclose the
Burkes’ property. Deutsche Bank Nat’l Tr. Co. v. Burke, 902 F.3d 548, 550 (5th
Cir. 2018). That action concluded when the Fifth Circuit held that the foreclosure
of the Burkes’ property could proceed. Id. at 551–52. Second, after the Fifth
Circuit’s decision on foreclosure, the Burkes sued Ocwen, alleging that Ocwen
violated federal and state law in servicing their loan. Burke et al v. Ocwen Loan
Servicing, LLC, 18-cv-04544, Dkt. 1 (S.D. Tex.).
After the CFPB and Ocwen had already conducted extensive discovery,
including filings under seal, the Burkes moved pro se to intervene in the case, both
as of right and permissively. The Burkes asserted that Ocwen was the mortgage
servicer for their mortgage with Deutsche Bank, that they were under wrongful
foreclosure, and that they were separately litigating against Ocwen in the Southern
District of Texas. The Burkes argued that they had direct knowledge of facts that
would help the CFPB’s case and explained that they were intervening because they
wanted to “(1) make a ‘material’ impact on this Florida case, (2) help save their
own homestead from wrongful foreclosure and (3) help homeowners in ‘distress’
nationwide.” The Burkes further contended that they had a right to intervene and
that their motion was timely because the CFPB’s case had not reached trial. They
asserted that they had an interest in the suit, citing their Texas litigation against
3
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 4 of 15
Ocwen, and claiming that they would be impaired if not allowed to intervene. The
Burkes also argued that they satisfied the requirements for permissive intervention.
Without their participation, the Burkes contended, the CFPB’s case would likely
lead to a “political charade” of a settlement that would not actually compensate the
victims.
The CFPB and Ocwen jointly opposed the Burkes’ intervention, and the
Burkes filed a reply. By May 2019, when their motion to intervene was still
pending, the Burkes inquired with the district court about the status of the motion.
In that inquiry, the Burkes also asserted that they should be allowed to intervene to
access sealed documents that would be useful in their separate litigation.
The district court denied the Burkes’ motion to intervene. The Burkes then
moved for reconsideration, raising a new argument not in their motion to
intervene—that the district court should allow the Burkes to intervene to obtain
information that they could use in their litigation against Ocwen. The district court
denied the Burkes’ motion for reconsideration, which it categorized as a motion
under Federal Rule of Civil Procedure 59(e). The Burkes now appeal both the
denial of their motion to intervene and their motion for reconsideration.
II
A
4
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 5 of 15
We begin with the Burkes’ motion to intervene as of right. Federal Rule of
Civil Procedure 24 provides, in pertinent part:
(a) Intervention of Right. On timely motion, the court must permit
anyone to intervene who: . . .
(2) claims an interest relating to the property or transaction that
is the subject of the action, and is so situated that disposing of the
action may as a practical matter impair or impede the movant’s
ability to protect its interest, unless existing parties adequately
represent that interest.
This Court has interpreted Rule 24(a)(2) to require a party seeking intervention as a
right to demonstrate that:
(1) [their] application to intervene is timely; (2) [they have] an
interest relating to the property or transaction which is the subject
of the action; (3) [they are] so situated that disposition of the action,
as a practical matter, may impede or impair [their] ability to protect
that interest; and (4) [their] interest is represented inadequately by
the existing parties to the suit.
Tech. Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692, 695–96 (11th
Cir. 2017) (quoting Stone v. First Union Corp., 371 F.3d 1305, 1308–09 (11th Cir.
2004)). Putative intervenors—here, the Burkes—bear the burden of proof to
establish all four bases for intervention as a matter of right. Chiles v. Thornburgh,
865 F.2d 1197, 1213 (11th Cir. 1989); Stone, 371 F.3d at 1308. We review the
denial of a motion to intervene de novo, but subsidiary findings of fact for clear
error. Tech. Training Assocs., 874 F.3d at 695.
5
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 6 of 15
The district court’s analysis focused on the third and fourth requirements—
impairment and adequate representation. Specifically, it noted that the Burkes
“failed to establish that their interests, if any, would be impaired by the disposition
of this action,” and that “their interests, if any, would be adequately represented by
CFPB, who seeks to hold Ocwen accountable for allegedly wrongfully foreclosing
upon property based upon inadequate information.” The district court also
indirectly addressed timeliness, noting that discovery had been “underway for over
a year when the motion to intervene was filed.” We will address each of the four
factors in turn.
First we consider timeliness. When evaluating timeliness, we look to:
[t]he length of time during which the would-be intervenor actually
knew or reasonably should have known of his interest in the case before
he petitioned for leave to intervene[;] 2. The extent of the prejudice
that the existing parties to the litigation may suffer as a result of the
would-be intervenor’s failure to apply for intervention as soon as he
actually knew or reasonably should have known of his interest in the
case[;] 3. The extent of the prejudice that the would-be intervenor may
suffer if his petition for leave to intervene is denied[;] and 4. The
existence of unusual circumstances militating either for or against a
determination that the application is timely.
Salvors, Inc. v. Unidentified Wrecked & Abandoned Vessel, 861 F.3d 1278, 1294
(11th Cir. 2017). Although the district court did not directly address timeliness,
“[t]his court may affirm a decision of the district court on any ground supported by
the record.” Krutzig v. Pulte Home Corp., 602 F.3d 1231, 1234 (11th Cir. 2010).
6
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 7 of 15
Here, the CFPB filed its complaint on April 20, 2017; the Burkes first
moved to intervene on January 4, 2019. On those facts alone, the Burkes’ motion
was probably untimely. But the Burkes could, and did, argue that they “actually
knew, or reasonably should have known of their interest in the case” much later
than April 20, 2017. See Salvors, 861 F.3d at 1294. The Burkes emphasized that
they filed their motion to intervene “only a month or so” after the entry of
judgment of foreclosure in their Texas case.
But the Burkes first made this argument in their motion to reconsider—not
their motion to intervene. We have long held that litigants may not use motions to
reconsider to “relitigate old matters, raise argument or present evidence that could
have been raised prior to the entry of judgment.” Michael Linet, Inc. v. Vill. of
Wellington, Fla., 408 F.3d 757, 763 (11th Cir. 2005); Stone v. Wall, 135 F.3d
1438, 1442 (11th Cir. 1998); Mays v. U.S. Postal Serv., 122 F.3d 43, 46 (11th Cir.
1997). In any event, even if the Burkes had properly raised this argument in their
motion to intervene, it remains unclear whether they would meet their burden on
timeliness. The Burkes do not explain why they could not have moved to
intervene before the judgment of foreclosure in their Texas case, which
commenced in 2011. The Burkes state conclusorily that they “could not have
intervened any earlier in law as the judgment of foreclosure in their case was by
plaintiff Deutsche Bank National Trust Company.” Further, they cite to “the
7
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 8 of 15
recent Fifth Circuit decision in Riddle” for the proposition that “they had to sue
Ocwen [] independently to show a direct and legally protectable interest.”
Although the Burkes don’t provide a citation, we assume they mean Christiana Tr.
v. Riddle, 911 F.3d 799 (5th Cir. 2018). In any event, they fail to elaborate further
on how the foreclosure and Riddle relate to the timing of their motion to intervene.
The Burkes thus have not satisfied their burden.
The Burkes also contend that the district court acted in an untimely manner.
The Burkes note that the district court took six months to rule on their motion to
intervene, even after the Burkes had reminded the court to rule on the motion. This
point is simply irrelevant. Whether or not the district court ruled quickly on the
Burkes’ motion to intervene does not bear on whether the Burkes’ motion was
timely. Timeliness concerns the putative intervenor’s actions, not those of the
district court. See Salvors, 861 F.3d at 1294. Accordingly, we conclude that the
Burkes’ motion was untimely.2
Second, we consider whether the Burkes possess an interest relating to the
property or transaction. To have a necessary interest, the putative intervenor “must
be at least a real party in interest in the transaction which is the subject of the
2
We also note, as the district court did, that “the potential for prejudice to both the existing
parties and the putative intervenor” bears on timeliness. Salvors, 861 F.3d at 1294. Ocwen has
already conducted extensive discovery. Should the CFPB and Ocwen be required to participate
in expanded discovery, the likelihood of prejudice to them is real.
8
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 9 of 15
proceeding.” Purcell v. BankAtlantic Fin. Corp., 85 F.3d 1508, 1512 (11th Cir.
1996). The interest must be “direct, substantial, [and] legally protectable,” id., and
a generalized grievance is insufficient, see Chiles, 865 F.2d at 1212–13. The
interest must be more than purely economic and cannot be speculative. Mt.
Hawley Ins. Co. v. Sandy Lake Properties, Inc., 425 F.3d 1308, 1311 (11th Cir.
2005).
The Burkes’ motion identifies three possible interests: to “(1) make a
material impact on this Florida case, (2) help save their own homestead from
wrongful foreclosure and (3) help homeowners in distress nationwide.” The desire
to make a material impact on a case does not, on its own, constitute a “direct,
substantial, [and] legally protectable interest sufficient” to intervene by right.
Purcell, 85 F.3d at 1512. Further, because generalized grievances do not amount
to sufficient interests in the context of Rule 24, see Chiles, 865 F.2d at 1212–1213,
the Burkes’ third putative interest, helping homeowners nationwide, is unavailing.
Although it is possible that the Burkes’ homestead would constitute an interest
within the meaning of Rule 24, the motion to intervene offers no description of the
Burkes’ interest in their homestead, and instead only cites to their Texas case. The
Burkes’ reply brief in support of their motion to intervene provides hardly any
elaboration on the homestead, stating only that “a homestead is personally at risk
9
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 10 of 15
for the Applicants if this application is denied.” Accordingly, the Burkes have not
established an interest for the purposes of Rule 24(a)(2).
Third, we consider whether the Burkes have established the possibility of
impairment absent their intervention. They have not. The Burkes may separately
litigate, and they have done so here. This Court has noted that the ability to
separately litigate defeats the impairment element. See Worlds v. Dep’t of Health
& Rehab. Servs., State of Fla., 929 F.2d 591, 594 (11th Cir. 1991); see also
Anderson Columbia Envtl., Inc. v. United States, 42 Fed. Cl. 880, 882 (1999) (“A
prospective intervenor is also not likely to suffer impairment of its interests where
it is free to assert its rights in a separate action.”).
Finally, we consider whether the CFPB adequately represents the Burkes’
interest in this case. This court “presume[s] that a proposed intervenor’s interest is
adequately represented when an existing party pursues the same ultimate objective
as the party seeking intervention.” Fed. Sav. & Loan Ins. Corp. v. Falls Chase
Special Taxing Dist., 983 F.2d 211, 215 (11th Cir. 1993). When, as here, that
existing party is a government entity, “[w]e presume that the government entity
adequately represents the public, and we require the party seeking to intervene to
make a strong showing of inadequate representation.” FTC v. Johnson, 800 F.3d
448, 452 (8th Cir. 2015) (quotations omitted).
10
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 11 of 15
The CFPB’s complaint seeks relief “necessary to redress injury to
consumers, including, but not limited to, rescission or reform of contracts; refund
of moneys; restitution; and payment of damages or other monetary relief.” The
CFPB’s complaint also seeks relief under the Homeowners Protection Act, among
other statutes. The Burkes share the same ultimate objective—“to protect
homeowners in ‘distress’ nationwide.” Although the presumption of adequate
representation is “weak and can be overcome if the plaintiffs present some
evidence to the contrary,” Stone, 371 F.3d at 1311, the Burkes have identified no
such evidence here, so the presumption remains.3
To sum up, the Burkes have failed to establish (1) that their intervention is
timely, (2) that they have a necessary interest, (3) that failure to intervene would
impair that interest, and (4) that their interest would not be adequately protected
absent intervention. Accordingly, we hold that the district court did not err in
denying the Burke’s motion to intervene as of right.
3
The Burkes raise an additional basis for intervention as of right in their brief: “to ensure if
Ocwens’ motion to dismiss on the Constitutionality question was granted (which was pending
before the lower court at the time), it could allow the Burkes to become the lead Plaintiffs[] in
the case.” The Burkes first raised this argument in their reply brief, so it is not properly before
this Court. See United States v. Oakley, 744 F.2d 1553, 1556 (11th Cir. 1984).
11
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 12 of 15
B
We next consider whether the district court abused its discretion in
denying permissive intervention. Federal Rule of Civil Procedure 24(b)
provides, in relevant part:
(b) Permissive Intervention.
(1) In General. On timely motion, the court may permit anyone
to intervene who: . . .
(B) has a claim or defense that shares with the main action
a common question of law or fact . . .
(3) Delay or Prejudice. In exercising its discretion, the court
must consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties’ rights.
“If there is no right to intervene as of right under Rule 24(a), it is wholly
discretionary with the court whether to allow intervention under Rule 24(b) and
even though there is a common question of law or fact, or the requirements of Rule
24(b) are otherwise satisfied, the court may refuse to allow intervention.” Worlds,
929 F.2d at 595 (quotations and citations omitted).
We review the denial of a motion for permissive intervention for an
abuse of discretion. Purcell, 85 F.3d at 1513. A district court abuses it
discretion when it makes a clear error of judgment or applies the incorrect
legal standard. Id. At the appellate stage, the requirements for permissive
intervention are “not really the focus of our inquiry, because we do not
address the matter in the first instance.” Id. Rather, “we are concerned only
12
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 13 of 15
with ‘clear error [s] of judgment’ that the district court may have made, or
with ‘incorrect legal standard[s]’ that it may have applied.” Id. (quoting
SunAmerica Corp. v. Sun Life Assurance Co. of Canada, 77 F.3d 1325, 1333
(11th Cir. 1996)).
In denying permissive intervention, the district court concluded:
In the Motion to Intervene, the proposed Intervenors fail to identify a
common question of fact or law in support of permissive intervention.
Even if there were some overlap between CFPB’s case and the claims
of the proposed Intervenors, the present parties in this action would
suffer prejudice and undue delay if the proposed Intervenors were
permitted to intervene in this case. Permitting intervention would
inevitably force the parties in this case to litigate factual questions not
present at issue, and the scope of discovery, which had already been
underway for over a year when the Motion to Intervene was filed,
would necessarily expand to include those new issues. Therefore the
Court in its discretion finds that permissive intervention is not
warranted.
The district court applied the right legal standard under Rule 24(b)—whether or
not the Burkes identified a common question of fact or law. Further, the Burkes
discussed the existence of a common question of fact only in a brief, vague
manner, and did not adequately connect their foreclosure to the issues underlying
the CFPB’s suit. We cannot say that the district court made a clear error of
judgment in concluding that the Burkes did not identify a common question of fact
or law.
Even if, as they claim, the Burkes properly identified a common question of
fact, the district court did not abuse its discretion for two independent reasons.
13
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 14 of 15
First, the Burkes have other means of asserting their right—specifically, their
lawsuit. This Court has held that “[w]hen an appellant has other adequate means
of asserting its rights, a charge of abuse of discretion in the denial of a motion for
permissive intervention would appear to be almost untenable on its face.” Worlds,
929 F.2d at 595 n. 20 (quoting Korioth v. Brisco, 523 F.2d 1271, 1279 n. 25 (5th
Cir. 1975)).
Second, the district court applied the right legal standard and did not make a
clear error of judgment, by considering the possibility of undue prejudice and
delay. Rule 24 provided the district court with authority to make this
determination. Rule 24(b)(3) specifically provides that courts “must consider
whether the intervention will unduly delay or prejudice the adjudication of the
original parties’ rights.” Given the inevitability of expanded discovery, and the
possibility that the existing parties would be forced to litigate new issues, the
district court did not make a clear error of judgment in determining that the
existing parties would suffer prejudice and undue delay had the Burkes intervened.
Finally, the Burkes argue that, in any event, they may intervene for the
purpose of gaining access to sealed files and protected documents. But the Burkes
raised this argument for the first time in their motion to reconsider. For the reasons
explained above, we decline to consider the Burkes’ argument. Michael Linet,
Inc., 408 F.3d at 763 (noting that litigants cannot use motions to reconsider to
14
USCA11 Case: 19-13015 Date Filed: 11/02/2020 Page: 15 of 15
“relitigate old matters, raise argument or present evidence that could have been
raised prior to the entry of judgment.”).
Because the district court applied the right legal standard and did not commit
a clear error of legal judgment, we hold that the district court acted within its
discretion in denying the Burkes’ motion for permissive intervention.4
III
For the foregoing reasons, we conclude that the district court: (1) did not err
in denying the motion to intervene as a right because the Burkes: (a) did not file a
timely motion to intervene, (b) lacked a sufficient interest in the case, (c) would
not be impaired by the litigation continuing without them, and (d) were adequately
represented by the CFPB; (2) did not abuse its discretion in denying the motion for
permissive intervention because it applied the correct legal standard and did not
make a clear error of judgment; and (3) did not abuse its discretion in denying the
motion to reconsider because it applied the correct legal standard and did not make
a clear error of judgment.
AFFIRMED.
4
We review a district court’s denial of a Rule 59(e) motion to reconsider for abuse of discretion.
Sanderlin v. Seminole Tribe of Fla., 243 F.3d 1282, 1285 (11th Cir. 2001). The district court
applied the correct legal standard in its denial of the Burkes’ motion to reconsider. Further, for
reasons similar to those described above, the district court did not make a clear error of
judgment.
15