Geesey v. Citimortgage, Inc.
135 F. Supp. 3d 332
W.D. Pa.2015Background
- Kenneth and Wendy Geesey obtained a mortgage in 2007 that was assigned to CitiMortgage; they sought a loan modification and were told they had to be behind on payments to qualify, so they intentionally missed three months.
- In October 2009 multiple CitiMortgage agents communicated different HAMP-related modification terms (e.g., 4.00% and 5.20%), and Plaintiffs allege conflicting representations about eligibility; Plaintiffs’ counsel then sent a December 1, 2009 letter enclosing a check and stating cashing the check would represent acceptance of a modification.
- CitiMortgage cashed the check and cashed reduced payments for five months but later returned the sixth payment as insufficient and demanded a large sum; the mortgage was assigned to Selene Finance and foreclosure followed.
- Plaintiffs sued in state court asserting breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and a UTPCPL claim; Defendant removed the case to federal court and moved to dismiss Counts I–III and IV.
- The court held HAMP does not create a private right of action but that HAMP does not automatically bar state-law claims that are sufficiently independent of HAMP; it dismissed Counts I–III for failure to state claims but denied dismissal as to the UTPCPL catchall claim (Count IV).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — existence and essential terms | December 1, 2009 letter + cashing check formed a modification/accord and satisfaction | No enforceable contract: essential terms (term, payment amount, rate) not alleged; Statute of Frauds/consideration issues | Dismissed — Plaintiffs failed to plead essential terms and thus no plausible contract claim |
| Breach of implied covenant of good faith and fair dealing | CitiMortgage acted in bad faith in loss mitigation, supervision, representations and enforcement | No enforceable modification contract; no duty to modify under mortgage or HAMP; enforcing contractual rights is not bad faith | Dismissed — claim fails because no contract to which duty could attach and allegations don’t show bad faith |
| Promissory estoppel | Citi’s agents made promises (eligibility and rates); Plaintiffs relied by defaulting and suffered detriment | No express promise to permanently modify; reliance not reasonable; cannot convert HAMP into private cause of action | Dismissed — Plaintiffs did not plead an express promise or reasonable justifiable reliance |
| UTPCPL catchall (Section 201‑2(4)(xxi)) | Deceptive representations induced Plaintiffs to default and caused ascertainable loss (foreclosure) | No standing; gist/economic loss doctrines bar UTPCPL; failure to plead common-law fraud elements | Denied — Plaintiffs have standing, the gist/economic‑loss defenses are fact‑dependent, and catchall does not require proving all elements of common‑law fraud; plausible UTPCPL claim pleaded |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (Sup. Ct. 2009) (pleading standard: must plead plausible entitlement to relief)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Sup. Ct. 2007) (requires more than labels and conclusions to survive dismissal)
- Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (two‑step framework for Rule 12(b)(6) analysis)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (HAMP does not create a private right of action)
- Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002) (economic loss doctrine can bar tort recovery for purely economic harms)
- Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) (UTPCPL private plaintiff must show justifiable reliance and causation)
- Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145 (Pa. Super. Ct. 2012) (post‑1996 UTPCPL catchall encompasses deceptive conduct and need not plead common‑law fraud in full)
- Ware v. Rodale Press, Inc., 322 F.3d 218 (3d Cir. 2003) (elements required to plead breach of contract under Pennsylvania law)
- Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418 (Pa. 2001) (implied covenant of good faith is tied to contractual duties)