Acord v. Open Mortgage
4:20-cv-00050
D. Mont.Oct 8, 2020Background
- Nathan and Saibeen Acord applied for a home loan through Open Mortgage in Dec. 2019 and were reportedly pre‑approved for $320,000 after providing financial documents (including Nathan’s divorce decree).
- Open Mortgage later denied the loan (Feb. 24, 2020), citing delinquencies of Nathan’s ex‑wife on her mortgage and later property taxes; it required plaintiffs to cure those delinquencies and separate business/personal debt.
- Nathan paid $1,367 to bring the ex‑wife current; plaintiffs allege Open Mortgage then represented the loan was approved but delayed closing to early March.
- Plaintiffs sold their home, moved into the new house on Feb. 28, 2020, and agreed to a daily occupancy payment; without financing they could not make required payments and were forced to move in with Nathan’s parents.
- Plaintiffs sued in state court; Open Mortgage removed the case to federal court and moved to dismiss under Fed. R. Civ. P. 12(b)(6).
- The court construed all well‑pleaded facts as true and denied the motion to dismiss as to all pleaded counts, finding each claim adequately alleged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Montana Consumer Protection Act (Count 1) | Acords: Open Mortgage engaged in unfair/deceptive bait‑and‑switch pre‑approval practices. | Open Mortgage: claim fails to state an MCPA claim (move to dismiss under Rule 12(b)(6)). | Denied — MCPA claim adequately pleaded. |
| Deceit / Fraud (Count 2) | Acords: Open Mortgage willfully misrepresented pre‑approval to induce reliance. | Open Mortgage: insufficient factual allegations to show willful deception. | Denied — deceit claim adequately pleaded. |
| Negligent Misrepresentation (Count 3) | Acords: false material representation of pre‑approval; reasonable reliance caused harm. | Open Mortgage: allegations insufficient to state negligent misrepresentation. | Denied — negligent misrepresentation adequately pleaded. |
| Negligence (Count 5) | Acords: Open Mortgage breached duties (reasonable care; Montana Mortgage Act) by misrepresentations. | Open Mortgage: failure to plead duty/breach/causation with sufficient facts. | Denied — negligence claim adequately pleaded. |
| Breach of Contract (Count 4) | Acords: a contract existed to provide a loan up to $320,000; Open Mortgage breached by failing to fund. | Open Mortgage: contract claim insufficiently pleaded. | Denied — breach of contract adequately pleaded. |
| Promissory Estoppel (Count 6) | Acords: reasonable, foreseeable reliance on promise to fund caused injury. | Open Mortgage: insufficient facts to show enforceable promise/reliance. | Denied — promissory estoppel adequately pleaded. |
Key Cases Cited
- Barker v. Riverside County Office of Education, 584 F.3d 821 (9th Cir. 2009) (pleading stage: courts presume well‑pleaded allegations true and resolve inferences for nonmoving party)
- In re Tracht Gut, LLC, 836 F.3d 1146 (9th Cir. 2016) (Rule 12(b)(6) dismissal appropriate only if no cognizable legal theory or insufficient facts)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) (standards for evaluating pleadings and inferences; used here for fair‑notice pleading analysis)