Citimortgage, Inc. v. Crawford
2013 WL 1225387
S.D. Ohio2013Background
- Defendants sought to proceed on counterclaims arising from foreclosure related to a HAMP-based modification process.
- Defendants allege breach of contract, implied covenant, promissory estoppel, and DTPA violations tied to a Trial Period Plan (TPP).
- The TPP was presented as part of HAMP; it stated it would not take effect until signed by both parties and the lender provided a signed copy.
- Defendants signed and performed some TPP-related obligations; Plaintiff continued with foreclosure despite said performance.
- The court treats the motion to dismiss under Rule 12(b)(6) to test whether the counterclaims plausibly state a claim.
- Court concludes the TPP was not a binding contract because it was unsigned by Plaintiff, among other reasons, and dismisses all counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the TPP a binding contract? | Plaintiff did not sign; solicitation requires both parties to sign for enforceability. | The TPP, as part of HAMP process, creates rights upon defendants’ compliance and modification potential. | No binding contract; TPP never ripened. |
| Can acceptance of TPP payments create enforceable contract? | Acceptance of payments does not demonstrate a valid contract or waiver of rights. | Payments and performance could create contractual obligations under TPP. | Acceptance of payments does not create binding contract or waiver. |
| Does Ohio’s statute of frauds bar the claim? | No signed writing by plaintiff; statute of frauds applies. | TPP should be treated as modifiying loan; unsigned means no enforceable modification. | Statute of frauds bars the claim. |
| Was there valid consideration for a TPP modification? | TPP payments and documents do not constitute consideration. | TPP performance constitutes consideration sufficient to modify the loan. | No valid consideration; TPP lacks enforceable modification. |
| Did Defendants have standing to pursue DTPA claim? | DTPA standing requirement not met; plaintiffs lack consumer standing. | Counterclaims rely on DTPA theory; standing exists as consumer-related action. | DTPA claim dismissed for lack of standing. |
Key Cases Cited
- Lonberg v. Freddie Mac, 776 F. Supp. 2d 1202 (D. Or. 2011) (TPP payments do not bind where process requires signed modification)
- Mehta v. Wells Fargo, 737 F. Supp. 2d 1185 (S.D. Cal. 2010) (consideration in mortgage modification is not satisfied by document submission)
- Ford Motor Credit Co. v. Ryan, 189 Ohio App.3d 560, 939 N.E.2d 891 (Ohio App. 2010) (antiwaiver clauses enforced as written terms)