Samvel Topchian v. JPMorgan Chase Bank, N.A.
2014 U.S. App. LEXIS 14280
| 8th Cir. | 2014Background
- Topchian, a pro se mortgagor, entered Chase’s HAMP modification process: he signed and returned a Trial Period Plan (TPP) and later signed a permanent modification agreement (the Agreement) sent by Chase.
- The Agreement provided it would become effective only if Chase signed and returned a copy; Topchian mailed his signed Agreement before the deadline and made required TPP payments.
- Chase initially rejected one payment, then an executive director (Freeman) told Topchian Chase had accepted the Agreement and would not provide a signed copy; Chase thereafter accepted monthly payments for ten months.
- Chase later instructed Topchian to stop payments during paperwork updates, denied the modification request, and attempted foreclosure; Topchian sued in state court for $3 million; Chase removed to federal court.
- The district court dismissed Topchian’s amended complaint for failure to state claims (finding no HAMP private right, and that Missouri-law tort/contract claims were not plausibly pled); Topchian appealed.
- The Eighth Circuit considered whether Topchian’s pleaded facts (and the attached Agreement) stated claims for breach of contract, fraudulent misrepresentation, negligent misrepresentation, and unjust enrichment under Missouri law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — formation/enforceability | Topchian argued his signed return and Chase’s conduct (oral acceptance, payment acceptance) formed an enforceable modification or waived the condition of Chase’s signature | Chase argued no contract because it never signed/returned the Agreement and the Agreement required Chase’s signed return as the mode/condition of acceptance | Court: Breach claim survives. The Agreement was an offer; Topchian accepted. Chase’s signature requirement is a condition precedent or mode of acceptance that Chase waived by (1) Freeman’s assurances and (2) accepting payments; partial performance also overcomes statute of frauds. |
| Fraudulent misrepresentation — Freeman’s statement | Topchian alleged Freeman falsely told him Chase had accepted the Agreement and would not provide a signed copy, inducing payments | Chase argued there was no basis to infer Freeman knew the statement was false | Court: Claim dismissed. Pleading lacks facts to show Freeman knew or was reckless about falsity, so fraud not plausibly alleged. |
| Negligent misrepresentation — duty/care | Topchian argued Freeman negligently misrepresented acceptance | Chase argued no facts show Freeman failed to exercise reasonable care in making the statement | Court: Claim dismissed. Complaint does not plead facts showing Freeman failed to exercise reasonable care. |
| Unjust enrichment — retention of payments | Topchian argued payments were retained despite no enforceable modification and foreclosure attempts made retention inequitable | Chase argued express contract(s) (original loan and/or modification) preclude unjust enrichment and payments were not an unjust benefit | Court: Claim dismissed. An express contract exists (original loan and/or alleged modification); Topchian did not allege a benefit conferred that Chase was not entitled to retain. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleading)
- Bell Atlantic v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim)
- Keveney v. Mo. Military Acad., 304 S.W.3d 98 (Mo. 2010) (elements of breach of contract under Missouri law)
- Renaissance Leasing, LLC v. Vermeer Mfg. Co., 322 S.W.3d 112 (Mo. 2010) (elements of fraudulent and negligent misrepresentation under Missouri law)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (TPP/ HAMP modification obligations and process)
- Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013) (TPP leading to permanent modification when conditions met)