Kilgore v. Ocwen Loan Servicing, LLC
89 F. Supp. 3d 526
E.D.N.Y2015Background
- Kilgore, homeowner in Westbury, NY, applied to Ocwen’s loan-servicing modification program after HAMP; alleges he submitted a completed application and expected trial-modification terms that could become permanent.
- He claims Ocwen operated a deceptive/insincere modification program and used a pre-screening process to deny qualified applicants, causing him to default.
- Kilgore sent a Qualified Written Request (QWR) disputing his debt and seeking servicing information; he alleges Ocwen failed to respond as required by RESPA.
- He asserted seven causes of action: breach of contract; breach of implied covenant; promissory estoppel; fraudulent concealment; New York GBL § 349; unjust enrichment; and RESPA violations.
- Ocwen moved to dismiss under Rule 12(b)(6). The court found the complaint largely conclusory and lacking required factual particularity, dismissed all claims, but granted leave to amend all claims except unjust enrichment (dismissed with prejudice).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — did a modification contract exist? | Kilgore alleges submission of documents and that he satisfied conditions precedent, creating a binding modification agreement or at least an enforceable trial plan. | Submission of an application does not create a binding contract; plaintiff failed to plead the contract terms or who formed any agreement. | Dismissed for failure to plead existence/terms of a contract. Leave to amend. |
| Breach of implied covenant — tied to contract existence | Kilgore claims Ocwen’s conduct frustrated modification performance. | No underlying enforceable contract was alleged, so the covenant claim fails. | Dismissed (derivative of contract claim). Leave to amend. |
| Promissory estoppel — was there a clear, enforceable promise? | Plaintiff points to Ocwen’s representations about trial modifications and conversion to permanent mods if payments made. | Alleged promises are vague/generalized and not clear and unambiguous. | Dismissed for failure to plead a clear, unambiguous promise. Leave to amend. |
| Fraudulent concealment / GBL § 349 / RESPA — were pleading particularity, consumer‑wide deception, and RESPA damages alleged? | Kilgore alleges affirmative and concealment misrepresentations, consumer-wide deceptive practices, and a QWR with resulting emotional and financial harm. | Allegations are conclusory, lack particularity (fraud requires who/what/when), lack specific facts showing consumer‑wide deception, QWR not pled with required specificity, and damages/proximate causation are not pleaded. | All claims dismissed: fraud and GBL § 349 dismissed for lack of particularity and failure to show public impact/cause; RESPA dismissed for insufficient QWR detail and failure to plead actual proximate damages. Leave to amend except unjust enrichment. |
Key Cases Cited
- Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86 (2d Cir. 2010) (pleading standard and inference-drawing under Rule 12(b)(6))
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (distinguishing conclusory legal statements from well-pleaded facts)
- Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522 (2d Cir. 1994) (elements of breach of contract claim)
- Vacold LLC v. Cerami, 545 F.3d 114 (2d Cir. 2008) (existence of agreement is a legal question)
- Kaye v. Grossman, 202 F.3d 611 (2d Cir. 2000) (elements of promissory estoppel)
- Oswego Laborers’ Local 211 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (1995) (GBL § 349 requires consumer-wide impact)
- Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573 (2d Cir. 2006) (elements of unjust enrichment)