Patrick White v. Jpmorgan Chase & Co.
702 F. App'x 642
| 9th Cir. | 2017Background
- Patrick and Nelda White applied for loan modifications through Chase and servicer Select Portfolio Servicing (SPS) after phone calls where employees told Mr. White they were “eligible” and “qualified,” subject to verification.
- The Whites submitted modification applications and supporting documents after each call; both Chase and SPS ultimately denied the applications.
- The Whites sued for fraud and promissory estoppel, alleging they relied on the representations that they were eligible/qualified for a modification.
- The district court dismissed the first amended complaint (FAC) without leave to amend for failing to plead fraud with particularity under Rule 9(b) and for failing to allege justifiable reliance; it also found amendment futile.
- The Whites appealed; the Ninth Circuit reviewed dismissal de novo and denial of leave to amend for abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Whites pleaded actionable fraud/negligent misrepresentation | Chase/SPS represented Whites were “eligible” and “qualified,” inducing reliance and damages | Statements were conditional (subject to verification), not false guarantees; Whites actually relied on their own optimism | Dismissed — no justifiable reliance; statements were conditional and non‑actionable |
| Whether statements supported promissory estoppel | Alleged promises that Whites would receive modification | Statements were not clear, unambiguous promises of modification | Dismissed — statements not sufficiently clear to support promissory estoppel |
| Adequacy under Rule 9(b) (particularity) | Alleged phone calls and representations—sufficient detail alleged | Plaintiffs failed to plead the circumstances of the alleged fraud with required particularity | Dismissed for failure to meet Rule 9(b); conditional nature undermined fraud claim |
| Whether leave to amend was required or amendment futile | Plaintiffs could cure defects if given chance | Amendment would be futile (no basis to allege unconditional promise or HAMP eligibility) | Denial of leave to amend affirmed as not an abuse of discretion |
Key Cases Cited
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (elements of fraud and justifiable reliance)
- Levitt v. Yelp! Inc., 765 F.3d 1123 (9th Cir. 2014) (standard of review for dismissal)
- Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522 (9th Cir. 2008) (abuse-of-discretion review for denial of leave to amend)
- Ragland v. U.S. Bank N.A., 147 Cal. Rptr. 3d 41 (Cal. Ct. App. 2012) (fraud vs. negligent misrepresentation standard)
- U.S. Ecology, Inc. v. State, 28 Cal. Rptr. 3d 894 (Cal. Ct. App. 2005) (promissory estoppel requires clear and unambiguous promise)
- Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) (futility as ground to deny leave to amend)
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (standards for granting leave to amend)
- Majd v. Bank of Am., N.A., 197 Cal. Rptr. 3d 151 (Cal. Ct. App. 2015) (HAMP eligibility and limits)