656 F. App'x 45
6th Cir.2016Background
- Andrea Gilbert fell behind on her mortgage after her husband Donald stopped paying court-ordered support; by early 2010 she was ten payments delinquent.
- Wells Fargo provided a HAMP trial-period plan and prequalified Gilbert but required documentation (divorce decree, proof of ongoing child‑support/alimony) to convert to a permanent modification.
- Gilbert completed the three trial payments and submitted an application listing $1,545/month income (including $845 child support) but could not produce proof of regular child‑support payments because Donald never paid.
- Wells Fargo repeatedly requested income documentation; Gilbert never provided the required proof, so the bank denied the permanent modification and subsequently foreclosed; Freddie Mac acquired the property and filed an unlawful-detainer action when Gilbert refused to vacate.
- In federal court Freddie Mac and Wells Fargo moved for judgment; the district court dismissed many claims, granted summary judgment on the remainder, denied Gilbert’s motion to dismiss removal, and struck/denied her late answer; the Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract (loan modification) | Wells Fargo promised to modify her loan after she was prequalified and made trial payments | No contract formed: application/trial plan expressly conditioned permanent modification on receipt of all required documentation | No contract; summary judgment for Wells Fargo (application is not a contract) |
| Promissory estoppel | Bank’s communications led Gilbert to rely on an alleged promise to modify | Any statements were conditional, non‑specific, and used terms like may/possibly; no clear, definite promise | Estoppel fails—no actual, clear, definite promise; summary judgment affirmed |
| Wrongful foreclosure | Foreclosure was wrongful because bank agreed to modify | Wrongful‑foreclosure claim depends on underlying contract/estoppel claims and those failed | Wrongful foreclosure claim fails as dependent on rejected claims |
| Removal / subject‑matter jurisdiction (Freddie Mac Act removal) | Removal invalid because originating state court lacked jurisdiction, so federal court lacked derivative jurisdiction | Freddie Mac Act grants district courts original jurisdiction and permits removal; state general sessions appeal complied with Tennessee law, so state court had jurisdiction | Federal court had jurisdiction; district court properly denied motion to dismiss removal |
| Denial of leave to file late answer | Excusable neglect; answer should have been allowed | Failure to timely move; prejudice and undue delay; district court properly applied excusable‑neglect factors | Denial of leave to file answer affirmed (no excusable neglect; Rule 6 applies; no default–rule shift not warranted) |
Key Cases Cited
- Thompson v. Bank of Am., N.A., 773 F.3d 741 (6th Cir. 2014) (describing HAMP and trial‑period plan review/delay of foreclosure)
- Travelers Ins. Co. v. Wolfe, 78 F.2d 78 (6th Cir. 1935) (application is not a contract)
- Fed. Ins. Co. v. Winters, 354 S.W.3d 287 (Tenn. 2011) (contract formation principles under Tennessee law)
- Clay v. First Horizon Home Loan Corp., 392 S.W.3d 72 (Tenn. Ct. App. 2012) (wrongful foreclosure not an independent HAMP remedy)
- Breuer v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691 (2003) (federal removal statutes and jurisdiction principles)
- Grubbs v. Gen. Elec. Credit Corp., 405 U.S. 699 (1972) (assessment of whether federal court would have had original jurisdiction)