Kruse v. Bank of New York Mellon
936 F. Supp. 2d 790
N.D. Tex.2013Background
- Kruses refinanced their Dallas home in 2004 with Countrywide for $2,944,403.00.
- In 2007, the Kruses’ business suffered losses, causing them to fall behind on mortgage payments.
- Foreclosure proceedings were initiated by the Defendants in 2011.
- Kruses allege they contacted Bank of America about a loan modification and were told foreclosure could be postponed to allow repayment information.
- They allege multiple unreturned calls and an agreed postponement to submit financial information, followed by foreclosure notices.
- Plaintiffs originally asserted breach-related claims; remaining claims are under the Texas Debt Collection Act (TDCA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misleading statement under TDCA | Kruse asserts Bank of America affirmatively promised to postpone foreclosure. | Bank of America did not promise a postponement; no false statement was made. | Genuine issue of material fact exists on whether a false or misleading affirmative statement was made. |
| Statute of Frauds applicability to TDCA claim | SOF does not bar TDCA; TDCA concerns collection methods. | SOF bars oral agreements to delay foreclosure affecting loan terms. | SOF may bar the TDCA claim to the extent it relies on an unenforceable oral promise; otherwise, broader analysis required. |
| Damages under TDCA and related claims | Damages include out-of-pocket losses from reliance on alleged representations. | Plaintiffs fail to show damages attributable to TDCA violations; misrepresentation tied to unenforceable promise. | Summary judgment granted on damages-related aspects; no recoverable TDCA damages. |
Key Cases Cited
- Hugh Symons Group v. Motorola, Inc., 292 F.3d 466 (5th Cir. 2002) (out-of-contract damages may be recoverable when tied to misrepresentation)
- Haase v. Glazner, 62 S.W.3d 795 (Tex. 2001) (statute of frauds and contract-based claims; exceptions for independent misrepresentation)
- Keriotis v. Lombardo Rental Trust, 607 S.W.2d 44 (Tex.Civ.App.-Beaumont 1980) (DTPA-related misrepresentation; warns against indirect enforcement of unenforceable promises)
- McClure v. Duggan, 674 F.Supp. 211 (N.D. Tex. 1987) (DTPA claims may survive if a misrepresentation is independent of unenforceable contract)
- Singh v. JP Morgan Chase Bank, NA, 2012 WL 3904827 (E.D. Tex. 2012) (statute of frauds considerations in TDCA-related discussions (unofficial reporter))