## Facts

- Monette E. Saccameno defaulted on a home mortgage, and foreclosure proceedings were initiated.
- She filed Chapter 13 bankruptcy and obtained confirmation of a plan requiring her to cure arrears and make ongoing payments over 42 months.
- Ocwen Loan Servicing, LLC became the loan servicer during the bankruptcy.
- Saccameno completed the plan payments; Ocwen’s statements near the end reflected she was current or paid ahead.
- The bankruptcy court issued notice of completion and entered a discharge order; Ocwen did not object.
- After discharge, Ocwen erroneously coded the case as “dismissed” rather than “discharged,” causing its system to treat the loan as in default and to restart foreclosure activity.
- Ocwen sent statements and letters asserting significant default and escalating amounts due, despite receiving repeated documentation of plan compliance and discharge from Saccameno and her attorney.
- The foreclosure process remained active, and Ocwen later rejected Saccameno’s payments.
- Saccameno reported substantial emotional distress and related harms from prolonged wrongful collection and renewed threats of losing her home.

## Issues

1. Whether the evidence supported liability and compensatory damages on breach of contract, FDCPA, and RESPA claims arising from post-discharge collection and foreclosure activity.
2. Whether admitting evidence of Ocwen’s prior regulatory consent orders was an abuse of discretion that required a new trial.
3. Whether a $3,000,000 punitive-damages award under the Illinois Consumer Fraud and Deceptive Business Practices Act violated due process as unconstitutionally excessive.

## Decision

- The court affirmed the judgment as to liability and compensatory damages.
- The court held the evidence supported findings that Saccameno completed the Chapter 13 plan, received a discharge, and was nevertheless subjected to wrongful collection and foreclosure activity.
- The court held admission of regulatory consent orders was not reversible error given relevance to unfairness and limiting instructions.
- The court held the $3,000,000 punitive-damages award on the consumer-fraud claim was excessive under due process and vacated that portion.
- The court remanded for remittitur or a new trial limited to punitive damages.

## Legal Principles

- Post-bankruptcy servicing and collection conduct may support contract and consumer-protection liability when a servicer seeks amounts not owed and pursues foreclosure despite discharge and documented compliance.
- Compensatory damages may include emotional-distress harms when supported by credited testimony and causation evidence tied to the defendant’s conduct.
- Prior regulatory consent orders may be admissible for limited purposes, including contextual proof relevant to statutory “unfairness,” if the trial court manages prejudice through limiting instructions.
- Due process constrains punitive damages; courts evaluate (1) reprehensibility, (2) the punitive-to-compensatory ratio, and (3) comparable statutory penalties.
- A punitive award with a very high multiplier over compensatory damages, particularly where compensatory damages already include substantial non-economic components, may exceed constitutional limits and require reduction or retrial.

## Conclusion

The Seventh Circuit sustained verdicts holding the trustee and servicer responsible for wrongful post-discharge mortgage collection and foreclosure activity and left compensatory awards intact, but it set aside a $3 million consumer-fraud punitive award as constitutionally excessive and sent the case back for a reduced punitive award or a new punitive-only trial.


Saccameno v. U.S. Bank Nat'l Ass'n, 943 F.3d 1071 (7th Cir. 2019)