Groh v. JPMorgan Chase Bank, N.A.
4:14-cv-00578
W.D. Mo.Jan 5, 2015Background
- Groh obtained a home loan from Chase in 2008 secured by a deed of trust; payments were timely until 2009.
- In 2009 Groh entered a Loan Workout Plan (HAMP trial period) requiring three reduced trial payments of $1,243.13; upon successful completion Chase agreed to provide a written Loan Modification Agreement.
- Groh timely made the three trial payments and thereafter continued making the reduced payment amount for fifteen months while Chase delayed issuing the permanent modification.
- During that delay Chase reported Groh as 150 days delinquent to consumer reporting agencies; Groh disputed the report and Chase allegedly failed to investigate or correct it.
- Chase eventually executed a written loan modification in September 2010; Groh filed suit in 2013 asserting eight counts (negligent misrepresentation; unjust enrichment; FCRA violation; intentional interference with credit expectancy; defamation; breach of contract; declaratory judgment; MMPA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligent misrepresentation (Count I) | Chase promised a permanent modification and misrepresented intent by not timely performing | Alleged failure was a contract breach, not an actionable misrepresentation; oral promises barred by statute of frauds | Dismissed — mere breach of contract (and statute of frauds) cannot support negligent misrepresentation |
| Unjust enrichment (Count II) | Chase was unjustly enriched by collecting amounts/fees during the delay | An express contract (Home Loan and workout plan) governs payments; unjust enrichment unavailable where express contract exists | Dismissed — claim rests on an express contract or barred oral modification |
| FCRA failure to investigate (Count III) | Chase failed to investigate or correct disputed reporting after CRAs notified it | Investigation would have confirmed the report was accurate; no liability | Survives — Section 1681s-2(b) requires investigation; defendant’s belief does not excuse noncompliance |
| Intentional interference with credit expectancy (Count IV) | False delinquency report caused denial of refinancing | Report was legally justified because Groh was contractually delinquent after trial period; any oral modification barred by statute of frauds | Dismissed — reporting was justified (not false); FCRA failure did not cause the asserted denial |
| Defamation (Count V) | Publishing false delinquency damaged Groh’s reputation and credit | Statement was true (Groh was in arrears under original loan terms) | Dismissed — truth defeats defamation claim |
| Breach of contract (Count VI) | Chase breached the Loan Workout Plan by not promptly providing the permanent modification after conditions were met | Plaintiff failed to plead specific provision breached or proof of compliance with conditions | Survives — allegation that Groh satisfied conditions and delay was unreasonable states a claim |
| Declaratory judgment (Count VII) | Seeks declaration that Chase damaged Groh’s creditworthiness | Request is too vague and not tied to concrete legal relations | Dismissed — no concrete, justiciable dispute suitable for declaratory relief |
| MMPA (Count VIII) | Chase’s failure to timely finalize modification constituted an unfair/deceptive practice | Loan modification negotiations were not “in connection with” the original loan sale; no actionable representation at time of sale; oral promises barred | Dismissed — claim not tied to original loan sale and theories based on oral modification are barred |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading requires more than labels and conclusions)
- Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843 (Missouri law bars unjust enrichment where express contract governs)
- Smithrud v. City of St. Paul, 746 F.3d 391 (court ignores matters outside pleadings on Rule 12(b)(6))
- Titan Constr. Co. v. Mark Twain Kan. City Bank, 887 S.W.2d 454 (breach of promise alone does not establish misrepresentation)
- Hargis v. JLB Corp., 357 S.W.3d 574 (elements of unjust enrichment under Missouri law)
- Wycoff Co. v. Pub. Serv. Comm’n, 344 U.S. 237 (declaratory judgment requires concrete dispute)
- Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (case-or-controversy requirement for declaratory relief)