JP Morgan Chase Bank, National Ass'n v. Ilardo
940 N.Y.S.2d 829
N.Y. Sup. Ct.2012Background
- Llardo defendants foreclose on 2004 mortgage for $320,000 on Centerport, NY property; complaint filed July 13, 2011 and counterclaims added.
- Defendants moved December 7, 2011 for summary judgment and a permanent HAMP modification, alleging entitlement under a September 2009 Trial Period Plan (TPP).
- Allegations focus on Chase Bank’s handling of the HAMP process, alleged misrepresentations, and whether a permanent modification should be compelled.
- Plaintiff contends TPP does not create a permanent modification obligation; NPV and 31% gross income tests govern eligibility, with modification contingent on future events.
- Court adopts federal and New York rulings holding HAMP does not create an entitlement to permanent modification; no breach of contract or waiver proven.
- Court denies motion for summary judgment in defendants’ favor and awards summary judgment to plaintiff dismissing counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HAMP/TPP creates a permanent modification entitlement | Llardo not entitled; HAMP not mandatory; TPP not a contract for permanent modification. | LLardo rely on TPP language to demand permanent modification and elimination of interest. | No entitlement to permanent modification; TPP not a binding contract. |
| Whether plaintiff breached TPP or engaged in bad faith | No breach; NPV analysis and conditions control; no obligation to modify. | Bad faith negotiations and deceptive conduct required judicial modification. | No breach or bad faith; no judicially imposed modification warranted. |
| Whether common-law contract, promissory estoppel, or equitable estoppel support modification | Not supported by law; TPP not a contract; no estoppel due to unilateral terms. | Promissory/equitable estoppel bars foreclosure or requires modification. | Claims rejected; no equitable or estoppel basis to compel modification. |
| Whether failure to file an RJI justifies dismissal or relief | RJI timing not required upon service; no dismissal for procedural lapse. | Procedural defect warrants relief. | Procedural noncompliance not a basis for relief; no dismissal. |
| What governs HAMP modification relief in New York foreclosure context | HAMP and state contract principles do not mandate modification; court should not override contract. | Court should enforce fairness and order a permanent modification. | Court declines to impose modification; follows contract and equity limits. |
Key Cases Cited
- Hart v. Countrywide Home Loans, Inc., 735 F. Supp. 2d 741 (E.D. Mich. 2010) (HAMP modification not mandatory; no entitlement)
- Thomas v. JPMorgan Chase & Co., 811 F. Supp. 2d 781 (S.D.N.Y. 2011) (TPP not binding contract for permanent modification)
- Senter v. JPMorgan Chase Bank, N.A., 810 F. Supp. 2d 1339 (S.D. Fla. 2011) (state contract claims premised on TPP generally not viable)
- Graf v. Hope Bldg. Corp., 254 N.Y.1 (N.Y. 1928) (stability of contract obligations; equity not to override clear contract)
- Beal Sav. Bank v. Sommer, 8 N.Y.3d 318 (N.Y. 2007) (contract interpretation; enforceability of covenants)
- Red Tulip, LLC v. Neiva, 44 A.D.3d 204 (1st Dept 2007) (estoppel principles require clear, unambiguous promises)