Caires v. JP Morgan Chase Bank, N.A.
880 F. Supp. 2d 288
D. Conn.2012Background
- Chase moved to dismiss Caires's amended complaint under Rule 12(b)(6) asserting failure to state a claim.
- Plaintiff pleads five causes of action: CUTPA, unfair debt collection practices under CUTPA, breach of contract/good faith, third-party beneficiary breach, and unjust enrichment.
- Case was removed from state court; earlier complaints and amendments were dismissed or struck, with instructions to limit claims related to loan servicing not subject to FDIC exhaustion.
- Factual background centers on a 2006 construction loan and a 2007 Residential Construction/Permanent Loan with WAMU, later acquired by Chase after FDIC receivership.
- Plaintiff alleges post-acquisition mismanagement, extension requests, draw issues, fees, and failure to convert to a lower interest rate, among other grievances.
- Court analyzes whether CUTPA claims survive given absence of asserted aggravating circumstances, nonexistence of SPA/consent order at the time, and third-party beneficiary status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CutPA viability based on SPA/consent order | Chase violated CUTPA via SPA and consent orders benefiting Caires. | No viable CUTPA claim from SPA/consent order; actions predate those instruments; mere contract breach insufficient. | CUTPA based on SPA/consent order dismissed. |
| Aggravating circumstances for CUTPA breach of contract | Pre- and post-SPA conduct showed aggravating, deceptive behavior. | No plausible aggravating conduct tied to post-SPA breaches; allegations are conclusory. | No plausible aggravating circumstances; CUTPA claim for contract breach dismissed. |
| Third-party beneficiary status of SPA/consent order | Caires is intended third-party beneficiary of SPA under HAMP. | Public beneficiaries are incidental; SPA language precludes private enforcement; not a HAMP-eligible borrower. | Caires not a third-party beneficiary; CUTPA claim predicated on SPA/consent order dismissed. |
| FDCPA applicability to Chase as creditor | FDCPA violations extend to CUTPA violations. | FDCPA applies to debt collectors, not creditors collecting their own debt. | FDCPA does not apply; second cause of action dismissed. |
| Breach of implied covenant of good faith and fair dealing | Oral and written terms imply a duty to act in good faith in loan servicing. | No basis to claim breach given lack of contract terms; and failure to convert to lower rate not supported by contract. | Third cause of action dismissed; no plausible bad-faith allegations. |
| Unjust enrichment | Chase unjustly enriched through fees and misrepresentations. | Alleged payments occurred under the mortgage agreement; extensions discretionary per addenda; no unjust enrichment. | Fifth cause of action dismissed. |
Key Cases Cited
- Boulevard Associates v. Sovereign Hotels, Inc., 72 F.3d 1029 (2d Cir. 1995) (simple contract breach alone not CUTPA violation)
- Aztec Energy Partners, Inc. v. Sensor Switch, Inc., 531 F. Supp. 2d 226 (D. Conn. 2007) (simple contract breach insufficient for CUTPA)
- Emlee Equip. Leasing Corp. v. Waterbury Transmission, Inc., 580 A.2d (Conn. Super. Ct. 1991) (Conn. Super. Ct. 1991) (requires substantial aggravating circumstances for CUTPA)
- Beckenstein Enterprises-Prestige Park, LLC v. Keller, 115 Conn. App. 680 (Conn. App. Ct. 2009) (implied covenant and public policy considerations in contract disputes)
- McKenna v. Woods, 21 Conn. App. 528 (Conn. App. Ct. 1990) (anticipatory breach may discharge duties to perform)