Litton Loan Servicing

This narrative is composed of allegations taken from the complaint filed by the plaintiffs.

         Ms. Dixie Arthur, age 78, and Ms. Carletta Davis, age 56, are mother and daughter. They have fixed monthly incomes of $720 and $568, respectively, from Social Security. Each is in poor health. Other than their home and furnishings, they have no significant assets. They live together in a home they own.

On October 29, 1999, Ms. Arthur and Ms. Davis borrowed $33,600 from Contimortgage Corporation. They granted it a first lien against their home. Their promissory note was subsequently assigned to a mortgage pool. In May 2000, Litton assumed the servicing of their loan.

On April 29, 2002, the trustee under the deed of trust started foreclosure proceedings against Ms. Arthur and Ms. Davis. This was not the first written threat of foreclosure. Previously begun proceedings were withdrawn after Ms. Arthur and Ms. Davis engaged an accountant to furnish exhaustive proof of full payment.

Nor was it the only written threat by Litton of foreclosure. On January 16, 2002, an unsigned letter from an unnamed representative of Litton, sent by certified mail, return receipt requested, demanded payment of $3,395.18 within 30 days or Litton would accelerate the maturity of the note, declare all amounts under the note immediately due, and then foreclose. One day later, a second unsigned letter sent by another unnamed representative of Litton, also by certified mail, demanded payment of only $1,566.08 with similar consequences for non-payment.

Ms. Arthur and Ms. Davis have never been in default, either to Litton or its predecessor. Payments to the predecessor were made by direct charges against their bank account. They paid Litton by money order and cashiers or certified check, sending payments by certified mail.

Despite the sterling and timely record of payments by the Plaintiffs, Litton and its representatives engaged in a series of actions designed to collect payments that Ms. Arthur and Ms. Davis did not owe. To illustrate, they engaged in telephone conversations repeatedly and continuously with the intent to annoy, abuse, and harass Ms. Arthur and Ms. Davis. These calls began almost as soon as Litton commenced servicing of the lean. Over time, the telephone calls became uglier and uglier, as explained in more detail below.

In addition, the representatives of Litton called without meaningful disclosure of the callers’ identities. Ms. Arthur and Ms. Davis estimate that 18 different persons called in behalf of Litton but only “John,” “Michelle,” and “Steve Jetter” gave their names.

Litton and its representatives communicated with Ms. Arthur and Ms. Davis at unusual times and places and at times and places they should have known were inconvenient. Starting in November 2001 and continuing until a few days before we commenced litigation to prevent foreclosure, Ms. Arthur and Ms. Davis received repeated telephone calls before 8:00 a.m., usually between 7:00 a.m. and 7:30 a.m., demanding payment of amounts not owed. Similar calls were made between 9:00 p.m. and 10:00 p.m. These telephone calls occurred sometimes as often as twice a day, frequently once a day, and occasionally on Saturday.

Litton and its representatives communicated with Ms. Arthur and Ms. Davis after they knew the borrowers had engaged an attorney with respect to the debt Litton was seeking to collect. They advised Litton on many occasions that they had a lawyer. The repeated response was: “Why do you need a lawyer?” Ms. Arthur and Ms. Davis answered continually: “Because you have one.” Usually, Litton and its representatives made no further response, though they kept insisting upon payment, but on one occasion “Candice” at the office of Litton’s attorney said that they didn’t need an attorney.

In March 2002, Ms. Arthur and Ms. Davis advised Litton orally and in writing that they no longer wanted to talk with it or its representatives. Instead, they wanted Litton to contact their attorney. Litton nevertheless communicated further with them regarding the debt on or about the 15^th of each month, as had been the practice since Litton assumed the servicing of the loan two years previously. It and its representatives said again and again that Ms. Arthur and Ms. Davis were behind in payments. Ms. Arthur and Ms. Davis responded that they had certified mail receipts to prove that they had made all payments in a timely manner. These offers of proof prompted no responses or, alternatively, sarcastic replies. On one occasion, Litton’s representative “John” responded that he wasn’t a postman.

The representatives of Litton used obscenity or profanity. Ms. Davis was called “a bitch,” then a “son of a bitch” despite the fact that she is a female, later a “f---ing bitch,” and finally a “g— d—— bitch.” They called her “white trash” and an “airhead.”

The representatives of Litton threatened to put the house of Ms. Arthur and Ms. Davis up for sale with or without their consent, implying that this was an even more drastic remedy than the foreclosure that they repeatedly mentioned. They falsely represented that the debt was unpaid and would be referred to an attorney for immediate legal action.

After they received a written notice from Litton containing the information required by law concerning their rights to dispute the debt, Plaintiffs notified Litton’s lawyer in writing within the 30-day period that they disputed it. Litton continued collection efforts just as it had previously. Its representatives suggested that the best interest of Ms. Arthur and Ms. Davis would be served instead by paying the debt as soon as possible, despite the fact that they had 30 days to challenge its validity. Ms. Arthur and Ms. Davis received a follow-up notice demanding that they pay the debt within 30 days of the initial notice.

These actions of Litton and its representatives caused emotional distress and physical injury to Ms. Arthur. She initially consulted Dr. Lee Hamilton at the Chattanooga Lifestyle Center about stomach ailments after referral to him by her cardiologist, Dr. Michael Greer, whom she had consulted about her heart condition that was becoming worse as a consequence of the actions of Litton and its representatives. She told Dr. Hamilton about the lack of sleep and other distress she was experiencing during the day but particularly during the evening. He put her on medications for depression and anxiety, believing these problems to be caused by her financial problems with Litton.

These actions of Litton and its representatives caused emotional distress and physical injury to Ms. Davis. She became excited, angry, and hurt on repeated occasions when she and her mother were contacted by mail and telephone. She has suffered congestive heart failure and three heart attacks during the period that Litton has been servicing the loan. She was hospitalized on the four occasions of these heart problems. She developed head aches, back pain, and nerve disorders. All of these medical problems were caused or made worse by the treatment she received from Litton and its representatives.

Ms. Arthur and Ms. Davis filed suit in June 2002, seeking an injunction and damages for intentional infliction of emotional distress, and violations of the Tennessee Consumer Protection Act and Federal Fair Debt Collection Practices Act. Foreclosure has been enjoined preliminarily.