Senter v. JPMorgan Chase Bank, N.A.
810 F. Supp. 2d 1339
S.D. Fla.2011Background
- Plaintiffs Mindy Senter and Gustavo Franco allege JPMorgan Chase Bank and Chase Home Finance failed to provide permanent loan modifications after trial period plans (TPP) under HAMP.
- Defendants participated in the U.S. Treasury’s TARP program and signed a Servicer Participation Agreement in July 2009 to participate in HAMP.
- Plaintiffs entered TPPs: Senter’s TPP began Feb 1, 2010 with three $1,240 payments; Franco’s TPP began Sept 1, 2009 with three $1,395 payments; both involved additional documentation and conditions.
- Plaintiffs complied with TPP terms and documentation requests, but were later denied permanent modifications and received acceleration notices.
- Plaintiffs filed a class-action complaint asserting four counts: breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and unjust enrichment, asserting class-wide damages; court granted in part and dismissed three counts with prejudice, allowed one count to amend.
- The court ordered the plaintiffs to file a Second Amended Complaint by September 9, 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TPPs are valid contracts | Senter/Franco contend TPPS constitute contracts entitling a permanent modification. | Chase asserts TPPS lack consideration and are unenforceable agreements to agree. | TPPS not sufficiently pled as valid contracts; lack of valid consideration; counts dismissed. |
| If TPPS are contracts, does failure to offer a permanent modification breach | Defendants promised permanent mods upon qualification. | No guaranteed modification; discretion to determine qualification; terms indefinite. | Court found no binding contract to guarantee permanent modifications; dismissal of breach claim. |
| Whether the implied covenant claim survives without an enforceable contract | Covenant breached by failing to provide modification; independent claim. | No valid contract means no implied covenant claim. | Count II dismissed for lack of a valid contract. |
| Whether promissory estoppel lies given alleged reliance | Relied on promise of modification to make trial payments and avoid short sale. | No unambiguous promise; reliance questioned; discovery needed to assess internal steps. | Count III dismissed without prejudice; leave to amend after discovery. |
| Whether unjust enrichment lies given mortgage-based benefits | Defendants retained fees and interest beyond what mortgages authorized. | Benefits authorized by mortgage; no unjust enrichment. | Count IV dismissed. |
Key Cases Cited
- St. Joe Corp. v. McIver, 875 So.2d 375 (Fla. 2004) (elements of contract; essential terms; consideration)
- Dorman v. Publix-Saenger-Sparks Theatres, 135 Fla. 284, 184 So. 886 (1938) (consideration may be a detriment or benefit; preexisting dity rule)
- Henderson v. Kendrick, 82 Fla. 110, 89 So. 635 (1921) (definition of consideration; inducement to transact)
- Real Estate World Fla. Commercial, Inc. v. Piemat, Inc., 920 So.2d 704 (Fla. 4th DCA 2006) (Florida contract formation; consideration and terms)