Biltcliffe v. Citimortgage, Inc.
952 F. Supp. 2d 371
D. Mass.2013Background
- Loan originated 2004; Biltcliffes’ mortgage assigned to CitiMortgage; 2008 default and notices alleging possible acceleration and sale.
- 2011 HAMP modification proposed; Biltcliffes paid amounts in line with proposed modification but CitiMortgage did not sign or finalize.
- 2010 acceleration notice issued; Biltcliffes claim they never received it and authenticity is contested.
- 2011 bankruptcy filing; 2011 modification package signed by Biltcliffes but not executed by CitiMortgage; modification never consummated.
- 2012 complaint asserting breach of contract, unjust enrichment, and breach of the implied covenant; case removed to federal court; motion for judgment on the pleadings treated as summary judgment and granted to CitiMortgage.
- Foreclosure sale notice issued August 8, 2012; foreclosure completed following acceleration and sale
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a breach of notice before acceleration/foreclosure? | Biltcliffe argues improper acceleration due to defective/absent notices and waiver by partial payments. | CitiMortgage argues notices complied with contract and statute; partial payments did not waive acceleration rights. | No breach; notices satisfied contract and statute; partial payments did not waive acceleration. |
| Does unjust enrichment lie where partial payments were under modification? | Partial payments under proposed modification create unjust enrichment by defendant. | Payments were under the mortgage terms and did not confer unjust enrichment; no excess benefit. | Dismissed; no unjust enrichment given proper contract remedy. |
| Did CitiMortgage breach the implied covenant of good faith and fair dealing? | Accelerating and foreclosing without proper notice after accepting partial payments breached the covenant. | Defendant had authority to foreclose after accepting partial payments; no deprivation of contract protections. | No breach; implied covenant not violated given statutory rights and kept contract protections. |
Key Cases Cited
- Shane v. Winter Hill Fed. Sav. & Loan Assn., 397 Mass. 479, 492 N.E.2d 92 (Mass. 1986) (notice alone does not equal acceleration; need positive act)
- Wilshire Enterprises, Inc. v. Taunton Pearl Works, Inc., 356 Mass. 675, 255 N.E.2d 375 (Mass. 1970) (positive act required to accelerate)
- Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 805 N.E.2d 957 (Mass. 2004) (implied covenant depends on contract; not a separate term)
- Massachusetts v. Schering-Plough Corp., 779 F. Supp. 2d 224 (D. Mass. 2011) (limits on improvident use of implied covenants)
- Speakman v. Allmerica Fin. Life Ins., 367 F. Supp. 2d 122 (D. Mass. 2005) (assessing duty of good faith in performance)
- Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47 (1st Cir. 2009) (implied covenant and contract remedies interplay)
- Coll v. PB Diagnostic Sys., 50 F.3d 1115 (1st Cir. 1995) (summary judgment standards in contract cases)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard; burden on movant)