De Vera v. Bank of America, N.A.
2:12-cv-00017
E.D. Va.Jun 25, 2012Background
- Plaintiff owns real property at 703 Shadowberry Crest in Chesapeake, Virginia, pledged by a mortgage and deed of trust in 2007.
- Plaintiff sought a loan modification from Bank of America (BOA) after income decline, which BOA began reviewing but never completed.
- A foreclosure sale was scheduled to proceed by Professional Foreclosure Corporation of Virginia unless modification was approved.
- Plaintiff amended the complaint to add claims for breach of the covenant of good faith and fair dealing, duty to mitigate damages, and breach of the deed of trust, and sought an injunction.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); Plaintiff did not respond to the motions, and the court granted dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff states breach of implied covenant of good faith and fair dealing. | Plaintiff argues BOA breached implied covenant by failing to review or assist with modification. | BOA contends no such duty exists absent an enforceable contract or modification terms. | Count dismissed; no independent implied covenant claim under contract. |
| Whether plaintiff states a valid duty-to-mitigate damages claim under § 5219(a)(1). | Plaintiff claims foreclosures must be mitigated when modification is pursued. | Statute does not create private right or require grant of modification; no mitigation duty arising from §5219(a)(1). | Count dismissed; no private right to damages mitigation under HAMP. |
| Whether plaintiff states a breach of the Deed of Trust under HAMP claims. | Defendants allegedly breached the Deed of Trust by not delaying foreclosure pending review. | HAMP does not create private rights against servicers; statute does not impose such breach duties. | Count dismissed; no viable HAMP-based breach of contract claim. |
| Whether plaintiff can assert a private action for HAMP-related claims against service providers. | Private rights exist for modification discussions and benefits. | No private right of action for HAMP claims against servicers or lenders. | Motions granted; no private HAMP claims; dismissal of related counts. |
Key Cases Cited
- Parks v. BAC Home Loan Servicing, LP, 825 F. Supp. 2d 713 (E.D. Va. 2011) (HAMP-related claims lack private right of action; modification review not guaranteed.)
- Sherman v. Litton Loan Servicing, L.P., 796 F. Supp. 2d 753 (E.D. Va. 2011) (HAMP application is not a binding contract to modify; mere offer to apply.)
- Edwards v. Aurora Loan Servicing, LLC, 791 F. Supp. 2d 144 (D.D.C. 2011) (HAMP compliance not enforceable as third-party beneficiary claim.)
- Edwards v. Aurora Loan Servicing, LLC, 791 F. Supp. 2d 144 (D.D.C. 2011) (HAMP claims generally not privately enforceable.)
- E. Shore Markets, Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175 (4th Cir. 2000) (Implied covenants are not broad rights beyond contractual terms.)
- Sunrise Continuing Care, LLC v. Wright, 671 S.E.2d 132 (Va. 2009) (Virginia breach of contract elements applied to implied duties.)