Labrant v. Mortgage Electronic Registration Systems, Inc., 870 F. Supp. 2d 671

Plaintiffs purchased a Minnesota home in May 2004 and executed a mortgage to Prime Mortgage Corp., later transferred to CitiMortgage; note amount was $247,250 and monthly payment was $1,350.
Plaintiffs faced financial hardship due to medical issues; they sought a loan modification but were told to default first.
CitiMortgage allegedly misplaced modification materials; servicing was transferred to PennyMac in May 2010 which increased payments to $1,600.
PennyMac foreclosed after Plaintiffs fell behind, with a Notice of Foreclosure Sale on Feb. 2, 2011; Plaintiffs filed a Notice of Postponement but the sale proceeded as planned.
Plaintiffs alleged multiple issues in state court including declaratory relief on an oral agreement, foreclosure statute compliance, tolling of redemption, promissory estoppel, negligent misrepresentation, unjust enrichment, and fiduciary duties; CitiMortgage moved to dismiss under Rule 12(b)(6).
Magistrate Judge Brisbois recommended granting the motions to dismiss with prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether promissory estoppel and declaratory judgment can enforce an oral loan modification	Plaintiffs claim an oral modification was promised.	Modification falls under Minn. Stat. § 513.33 and must be in writing.	Promissory estoppel and declaratory judgment barred by statute; complaint dismissed.
Whether the negligent misrepresentation claim is viable	CitiMortgage allegedly promised modification would be offered	Promises to modify are not compensable as negligent misrepresentation absent existing facts	Dismissed for lack of particularity and failure to allege a false current fact.
Whether unjust enrichment is plausible based on mortgage payments received	Defendants benefited from payments unjustly	Payments under a contract do not establish unjust enrichment without improper receipt	Dismissed for failure to plead plausible unjust enrichment facts.
Whether claims under Minn. Stat. § 580 (foreclosure and fiduciary duty) survive	Defendants breached foreclosure and fiduciary duties	Section 580 does not impose a fiduciary duty and notice defects are inadequately pled	Counts II and IV dismissed for lack of factual basis and no fiduciary duty under the statute.
Whether the injunctive relief claim is cognizable as a separate claim	Seek tolling of redemption	Injunction is a remedy, not a standalone claim	Dismissed as a remedy, not a cause of action.

Myrlie v. Countrywide Bank, 775 F.Supp.2d 1100 (D.Minn.2011) (loan modification constitutes a credit agreement barred by § 513.33)
Greuling v. Wells Fargo Home Mortgage, Inc., 690 N.W.2d 757 (Minn. Ct. App.2005) (modification of an existing credit agreement cannot bypass statute of frauds)
Sovis v. Bank of New York Mellon, 2012 WL 733758 (D.Minn.2012) (loan modification; promissory estoppel barred when modification not in writing)
Cox v. Mortgage Electronic Registration Sys., Inc., 794 F.Supp.2d 1060 (D.Minn.2011) (foreclosure statute § 580.11 does not impose fiduciary duty)
Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359 (Minn.2009) (negligent misrepresentation elements)