Paul and Barbara Miller v. Bank of America Home Loan Servicing, L.P.
110 A.3d 137
| N.J. Super. Ct. App. Div. | 2015Background
- Plaintiffs Paul and Barbara Miller refinanced in 2006 with a $540,000 adjustable-rate loan from Old Merchants Mortgage.
- When payments increased, the Millers stopped paying and were informed in 2009 about loan modification consideration under HAMP.
- Countrywide mailed them a Trial Period Plan (TPP) under HAMP requiring timely payments and documentation to qualify for a modification.
- TPP payments were to be made May–July 2009; if fulfilled, lender would determine a final modification and suspend foreclosure during review.
- Countrywide suspended foreclosure during the trial period, but after payments, defendant Bank of America Home Loan Servicing, L.P. denied modification due to not meeting all TPP conditions, and foreclosure proceedings commenced.
- The Millers sued for breach of contract, CFA, promissory estoppel, and breach of the covenant of good faith and fair dealing; summary judgment was granted for defendant, dismissing all claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HAMP precludes private state-law claims. | Miller argues state-law claims continue despite HAMP. | Bank contends no private right of action under HAMP preempts state claims. | HAMP preclusion does not preempt state-law claims arising from the TPP. |
| Whether the record shows timely performance under the TPP for a potential modification. | Millers timely paid according to TPP and disputes defendant's records. | Defendant's records show missed/late TPP payments; no timely performance. | No genuine issue as to timely performance; records show non-timely payments and no evidentiary proof of timely compliance. |
| Whether the contract claims (breach of contract and covenant, promissory estoppel) survive given the TPP. | TPP created a contractual pathway to modification; noncompliance by defendant breached it. | No modification obligation unless all TPP conditions were met and executed. | No material factual dispute; failure to meet TPP conditions bars contract and related claims. |
| Whether CFA claims were properly pled and supported. | Defendant engaged in unlawful practices by accepting TPP payments then denying modification. | There were no unlawful CFA practices or actionable misrepresentations; terms of TPP controlled. | CFA claim fails for lack of identifiable unlawful conduct and reliance under Rule 4:5-8(a). |
Key Cases Cited
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (HAMP does not create a private right of action or preempt viable state-law claims)
- Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013) (TPP read as offer of permanent modification contingent on timely compliance)
- Arias v. Elite Mortgage Group, Inc.,, N.J. Super. (2015) ( adopts view that TPP is unilateral offer; private state-law claims permitted if arising from TPP terms)
- Cox v. Sears Roebuck & Co., 138 N.J. 2 (1994) (elements of CFA claims and deceptive practices guidance)
- Hoffman v. Hampshire Labs, Inc., 405 N.J. Super. 105 (2009) (Rule 4:5-8(a) specificity requirement for misrepresentation claims)
- Sickels v. Cabot Corp., 379 N.J. Super. 100 (App. Div. 2005) (dismissal of complaints lacking legal basis; standard for summary judgment)
- Globe Motor Co. v. Igdalev, 436 N.J. Super. 594 (App. Div. 2014) (summary judgment posture; need for evidentiary support to create material dispute)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (standard for reviewing issues of law on summary judgment)