Ridenour v. Bank of America, N.A.
23 F. Supp. 3d 1201
D. Idaho2014Background
- Stephen and Vickey Ridenour obtained a residential mortgage in 2005 and fell into default in 2008; after negotiations a Loan Modification Agreement was sent to them in 2009 with minor misspellings of their first names.
- The Ridenours corrected the misspellings, signed, and returned the modification; the servicer later rejected the signed agreement, triggering years of communications and two lawsuits.
- In this second suit (filed July 19, 2013; prior suit tolled limitations to October 27, 2011), plaintiffs sued Bank of America (and related entities) asserting claims for breach of contract, fraud, promissory estoppel, negligent infliction of emotional distress (NIED), and a claim regarding NPV inputs and trustee sale maintenance.
- Plaintiffs conceded several claims: those against MERS and Re-conTrust, the NPV/ trustee-sale claim, and injunctive relief; they also conceded fraud and promissory estoppel were inadequately pled and sought leave to amend.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court took judicial notice of court and recording documents and treated Bank of America and BAC as a single defendant for remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial notice of public records | Public filings and recorder documents support allegations | These documents are proper for judicial notice | Judicial notice GRANTED (documents are proper and unobjected to) |
| Adequacy of fraud and promissory estoppel pleadings | Alleged misrepresentations and reliance in modification negotiations | Pleadings fail to satisfy Rule 9(b) / Rule 8 | Claims DISMISSED WITHOUT PREJUDICE; leave to amend GRANTED |
| NIED — timeliness | NIED claim accrues on the September 17, 2010 notice of sale, within tolled limitations | Accrual occurred earlier (rejection July 2009) and claim is time-barred | Claim TIMELY as pled (relies on 2010 sale notice); NIED DISMISSED WITHOUT PREJUDICE; leave to amend GRANTED |
| NIED — duty and futility | HAMP guidance and servicer conduct created duties causing foreseeable emotional harm | HAMP guidelines do not create legal duties; no duty owed | HAMP guidelines not a legal duty as promulgated; but other duties (common-law duty to avoid foreseeable harm; statutory NPV-disclosure duty) may be viable; amendment allowed |
| Breach of contract — formation and damages | Signed Loan Modification constituted offer and acceptance; breach caused lost benefit of reduced rate | Acceptance was a rejection/counteroffer (alteration of names) or no right to modification; no damages because in default | Court finds formation plausible (name corrections not material); damages adequately pleaded (lost benefit); BREACH claim survives dismissal |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (Rule 8 pleading standards and conclusory allegations)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (loan-modification promises can support breach/estoppel claims)
- Frogley v. Meridian Joint Sch. Dist. No. 2, 314 P.3d 613 (Idaho standard for negligent infliction of emotional distress)
- Nation v. State, Dep’t of Correction, 158 P.3d 953 (Idaho law on when agency guidelines create legal duties)
- Inland Title Co. v. Comstock, 779 P.2d 15 (contract formation requires meeting of the minds and material terms)
- Mosell Equities, LLC v. Berryhill & Co., Inc., 297 P.3d 232 (elements of breach of contract under Idaho law)
- Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (liberal leave-to-amend standard)
- Harris v. County of Orange, 682 F.3d 1126 (judicial notice of court-filed documents)
- Grant v. Aurora Loan Servs., Inc., 736 F. Supp. 2d 1257 (judicial notice of county recorder filings)
- Suitts v. First Sec. Bank of Idaho, N.A., 867 P.2d 260 (when changes constitute material variance/counteroffer)