Scott v. Bank of America, N.A.
597 F. App'x 223
1st Cir.2014Background
- Scott defaulted on her mortgage; Bank of America held the deed of trust and initiated foreclosure.
- Bank sent a November 9, 2011 HAMP-related letter stating that during HAMP evaluation "no foreclosure sale will be conducted and you will not lose your home," and requested documents by November 24.
- Scott did not submit documents until February 15, 2012; she provided more documents in March. The bank postponed an April 3 sale to May 1, then later to June 5 while requesting additional materials.
- On April 6 the bank sent a letter warning the property remained subject to foreclosure until a completed Borrower Response Package was received and that late submissions might not stop a sale. Scott submitted some requested documents but failed to provide additional items requested by May 12.
- Foreclosure sale occurred June 5; Fannie Mae purchased the property. Scott sued Bank of America and Fannie Mae on multiple theories; the district court granted summary judgment to defendants and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bank formed a unilateral contract/promise not to foreclose | Scott: bank communications (including November letter) promised no foreclosure during HAMP review and created an enforceable written promise | Bank: no signed writing by bank promising to delay/cancel foreclosure; ambiguous/conditional communications; statute of frauds applies | Court: Statute of frauds bars claim — no signed writing by the party to be charged promising to refrain from foreclosure |
| Whether promissory estoppel saves unwritten promise | Scott: relied on bank’s promise and delayed submission, causing harm | Bank: no written promise and no evidence bank agreed to reduce any oral promise to writing; statute of frauds bars estoppel claim | Court: Promissory estoppel cannot avoid statute of frauds absent evidence bank promised to memorialize the agreement in writing |
| Whether bank breached duty of good faith and fair dealing | Scott: special relationship existed (bank’s superior knowledge and her reliance/trust) creating duty | Bank: no special relationship; ordinary mortgagor–mortgagee relationship doesn’t impose such duty | Court: No special relationship; Texas does not recognize general duty between mortgagor and mortgagee, summary judgment proper |
| Whether bank violated Texas Debt Collection Practices Act (TDCPA) | Scott: bank’s conduct was unfair, unconscionable, misleading in debt collection context | Bank: actions do not fall within TDCPA’s enumerated prohibitions | Court: Scott failed to identify conduct prohibited by TDCPA; summary judgment proper |
Key Cases Cited
- QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439 (5th Cir. 2009) (standard of review for summary judgment)
- Sterrett v. Jacobs, 118 S.W.3d 877 (Tex. App.—Texarkana 2003) (writing must be signed by party to be charged and complete in material details to satisfy statute of frauds)
- FDIC v. Coleman, 795 S.W.2d 706 (Tex. 1990) (no duty of good faith between mortgagor and mortgagee absent special relationship)
- Clay v. FDIC, 934 F.2d 69 (5th Cir. 1991) (factors weighing against finding a special relationship include representation by competent counsel)
- Jhaver v. Zapata Off-Shore Co., 903 F.2d 381 (5th Cir. 1990) (describing when parties’ relationship may require trust and confidence)